Cover
Cover - shares | 3 Months Ended | |
May 02, 2020 | Jul. 27, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | DAVIDsTEA Inc. | |
Entity Central Index Key | 0001627606 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-02 | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | May 2, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 26,103,477 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Current | ||
Cash | $ 39,343 | $ 46,338 |
Accounts and other receivables | 4,371 | 6,062 |
Inventories | 23,450 | 22,363 |
Income tax receivable | 795 | 1,196 |
Prepaid expenses and deposits | 4,928 | 4,542 |
Total current assets | 72,887 | 80,501 |
Property and equipment | 3,657 | 17,737 |
Intangible assets | 6,149 | 6,339 |
Right-of-use assets | 7,139 | 35,082 |
Total assets | 89,832 | 139,659 |
Current | ||
Trade and other payables | 18,000 | 20,794 |
Deferred revenue | 6,560 | 6,852 |
Current portion of lease liabilities | 18,415 | 16,434 |
Total current liabilities | 42,975 | 44,080 |
Non-current portion of lease liabilities | 70,464 | 72,230 |
Total liabilities | 113,439 | 116,310 |
Commitments and contingencies | ||
Equity | ||
Share capital | 112,917 | 112,843 |
Contributed surplus | 1,734 | 1,577 |
Deficit | (137,997) | (92,278) |
Accumulated other comprehensive income | (261) | 1,207 |
Total equity | (23,607) | 23,349 |
Total liabilities and equity | $ 89,832 | $ 139,659 |
CONSOLIDATED STATEMENTS OF LOSS
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited) | ||
Sales | $ 32,242 | $ 44,265 |
Cost of sales | 17,569 | 17,929 |
Gross profit | 14,673 | 26,336 |
Selling, general and administration expenses | 59,034 | 28,020 |
Results from operating activities | (44,361) | (1,684) |
Finance costs | 1,667 | 1,827 |
Finance income | (240) | (191) |
Net loss | (45,788) | (3,320) |
Items to be reclassified subsequently to income: | ||
Cumulative translation adjustment | (1,468) | (497) |
Other comprehensive loss, net of tax | (1,468) | (497) |
Total comprehensive loss | $ (47,256) | $ (3,817) |
Net loss per share: | ||
Basic and fully diluted | $ (1.76) | $ (0.13) |
Weighted average number of shares outstanding | ||
Weighted average number of shares outstanding Basic and fully diluted | 26,088,127 | 26,019,594 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (45,788) | $ (3,320) |
Items not affecting cash: | ||
Depreciation of property and equipment | 1,243 | 1,325 |
Amortization of intangible assets | 512 | 399 |
Amortization of right-of-use assets | 2,239 | 3,102 |
Impairment of property and equipment and right-of-use assets | 39,960 | 0 |
Interest on lease liabilities | 1,629 | 1,827 |
Stock-based compensation expense | 313 | 127 |
Sub-total | 108 | 3,460 |
Net change in other non-cash working capital balances related to operations | (4,164) | (3,100) |
Cash flows (used in) from operating activities | (4,056) | 360 |
FINANCING ACTIVITIES | ||
Payment of lease liabilities | (4,376) | (5,823) |
Cash flows used in financing activities | (4,376) | (5,823) |
INVESTING ACTIVITIES | ||
Additions to property and equipment | (272) | (415) |
Additions to intangible assets | (317) | (705) |
Repayment of loan from a Company controlled by an executive employee | 2,026 | 0 |
Cash flows from (used in) investing activities | 1,437 | (1,120) |
Decrease in cash during the period | (6,995) | (6,583) |
Cash, beginning of the period | 46,338 | 42,074 |
Cash, end of the period | $ 39,343 | 35,491 |
Supplemental Information | ||
Cash paid for: | ||
Interest | $ 50 | 0 |
Income taxes (classified as operating activity) | 0 | 0 |
Interest | 778 | 195 |
Income taxes (classified as operating activity) | $ 2,948 | $ 0 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - CAD ($) $ in Thousands | Total | Share Capital [Member] | Contributed Surplus [Member] | Equity | Accumulated Other Comprehensive Income |
Balance, amount at Feb. 02, 2019 | $ 54,123 | $ 112,519 | $ 1,400 | $ (61,293) | $ 1,497 |
Statement [Line Items] | |||||
Net loss for the three months ended May 2, 2020 | (3,320) | 0 | 0 | (3,320) | 0 |
Other comprehensive loss | (497) | 0 | 0 | 0 | (497) |
Total comprehensive loss | (3,817) | 0 | 0 | (3,320) | (497) |
Common shares issued on vesting of restricted stock units | (69) | 221 | (439) | 149 | 0 |
Stock-based compensation expense | 127 | 0 | 127 | 0 | 0 |
Balance, amount at May. 04, 2019 | 50,364 | 112,740 | 1,088 | (64,464) | 1,000 |
Balance, amount at Feb. 01, 2020 | 23,349 | 112,843 | 1,577 | (92,278) | 1,207 |
Statement [Line Items] | |||||
Net loss for the three months ended May 2, 2020 | (45,788) | 0 | 0 | (45,788) | 0 |
Other comprehensive loss | (1,468) | 0 | 0 | 0 | (1,468) |
Total comprehensive loss | (47,256) | 0 | 0 | (45,788) | (1,468) |
Common shares issued on vesting of restricted stock units | (13) | 74 | (156) | 69 | 0 |
Stock-based compensation expense | 313 | 0 | 313 | 0 | 0 |
Balance, amount at May. 02, 2020 | $ (23,607) | $ 112,917 | $ 1,734 | $ (137,997) | $ (261) |
CORPORATE INFORMATION
CORPORATE INFORMATION | 3 Months Ended |
May 02, 2020 | |
Note 1 - CORPORATE INFORMATION | The unaudited condensed interim consolidated financial statements of DAVIDsTEA Inc. and its subsidiary (collectively, the “Company”) for the three-month period ended May 2, 2020 were authorized for issue in accordance with a resolution of the Board of Directors on July 30, 2020. The Company is incorporated and domiciled in Canada and its shares are publicly traded on the Nasdaq Global Market under the symbol “DTEA”. The registered office is located at 5430 Ferrier St., Town of Mount-Royal, Quebec, Canada, H4P 1M2. We are a branded retailer and growing mass wholesaler of specialty tea, offering a differentiated selection of proprietary loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts and accessories through, at the date hereof, 18 Company-owned and operated retail stores in Canada, as well as our e-commerce platform at www.davidstea.com. A selection of DAVIDsTEA products is also available in more than 2,500 grocery stores and pharmacies across Canada. The results of operations for the interim period are not necessarily indicative of the results of operations for the full year. Sales fluctuate from quarter to quarter. Sales are traditionally higher in the fourth fiscal quarter due to the year-end holiday season and tend to be lowest in the second and third fiscal quarters because of lower customer engagement during the summer months. In March 2020, the outbreak of a novel strain of coronavirus (“COVID-19”) was declared a global pandemic by the World Health Organization and on March 17, 2020, in response to the COVID-19 pandemic, the Company announced the temporary closure of all of its retail stores in Canada and the United States. The Company qualifies for the Canada Emergency Wage Subsidy (“CEWS”) under the COVID-19 Economic Response Plan of the Government of Canada. During the first quarter of Fiscal 2020, the Company recognized payroll subsidies totaling $0.8 million under this wage subsidy program as a reduction in the associated wage costs which the Company incurred, which were recognized in Selling, general and administrative expenses. Subsequent to the first quarter, the Company received the above-mentioned $0.8 million and also received an additional $0.5 million under the CEWS program. On July 8, 2020, the Company announced that it is implementing a restructuring plan (the “Restructuring Plan”) under the Companies’ Creditors Arrangement Act On July 8, 2020, the Company obtained an Initial Order pursuant to the CCAA from the Quebec Superior Court in order to implement the Restructuring Plan (the “Initial Order”). On July 9, 2020, the United States Bankruptcy Court for the District of Delaware entered an order in favor of the Company under Chapter 15 of the United States Bankruptcy Code. The order of the United States Bankruptcy Court provisionally recognized the proceedings under the CCAA and enforced the Initial Order, in effect providing protection to the Company from creditor action against its assets in the United States. As part of its Restructuring Plan and further to obtaining the Initial Order, the Company, on July 10, 2020, sent notices to terminate leases for 82 of its stores in Canada and all 42 stores in the United States. On July 16, 2020, the Company obtained an Amended and Restated Initial Order from the Quebec Superior Court, extending to September 17, 2020 the application of the Initial Order. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada and continues to negotiate with landlords for the remaining 18 stores. The lease terminations will take effect on August 9 , 2020 for the initial 82 stores and August 29, 2020, for the additional 82 stores. |
BASIS OF PREPARATION and GOING
BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY | 3 Months Ended |
May 02, 2020 | |
Note 2 - BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY | These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”). Accordingly, these financial statements do not include all of the financial statement disclosures required for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended February 1, 2020, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB. In management’s opinion, the unaudited condensed interim consolidated financial statements reflect all the adjustments that are necessary for a fair presentation of the results for the interim period presented. These unaudited condensed interim consolidated financial statements have been prepared using the accounting policies and methods of computation as outlined in note 3 of the consolidated financial statements for the year ended February 1, 2020, other than as disclosed in note 3 below. Going Concern Uncertainty In December 2019, a novel strain of coronavirus, responsible for COVID-19, was first reported and was subsequently declared a pandemic by the World Health Organization in March 2020. The measures adopted by the federal, provincial and state governments in order to mitigate the spread of the outbreak required the Company to close all of its retail locations across North America effective March 17, 2020 until further notice. As of the date of this report, the Company has not re-opened any of its stores. On July 8, 2020, the Company announced that it was implementing the Restructuring Plan under applicable laws in both Canada and in the United States in order to accelerate its transition to an online retailer and wholesaler of high-quality tea and accessories. As part of the Restructuring Plan, the Company sent notices to terminate leases for 82 of its stores in Canada and all 42 of its stores in the United States. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada and continues to negotiate with landlords for the remaining 18 stores. Although the Company continues to offer its products directly to consumers through its online store and in supermarkets and drugstores across Canada, it is unlikely that customers will purchase its products at previous volumes through these alternative channels. Furthermore, the duration and impact of the COVID-19 pandemic is unknown and may influence consumer shopping behavior and consumer demand including online shopping. Notwithstanding that the Company expects to emerge from the restructuring process as a leaner organization, there is no assurance that the Restructuring Plan will be successful and that all relevant and required regulatory, creditor and court approvals will be obtained. For the quarter ended May 2, 2020, the Company incurred a net loss of $45.8 million. The Company’s current liabilities total $43.0 million as at May 2, 2020. As at May 2, 2020, the Company held cash and accounts and other receivables of $43.7 million. The Company does not currently have any third-party financing available with which to meet any future financial obligations. The Company’s ability to continue as a going concern is dependent on its ability to stabilize its business from unfavorable trend lines, strengthening its business by focusing on how to grow its product portfolio including sales and customer service execution, and effectively optimizing its North American retail footprint to emerge as a leaner, more sustainable physical presence that complements a growing world-class online and grocery business, all supported by a right-sized support organization. Management believes that there is material uncertainty surrounding the Company’s ability to execute the strategy necessary to return to profitability in the current environment, including the unpredictability surrounding the recovery from the COVID-19 pandemic, changes in consumer behavior and the ability to successfully emerge from the Restructuring Plan process. As a result, these events and conditions indicate that a material uncertainty exists that raises substantial doubt about the Company’s ability to continue as a going concern and, therefore, realize its assets and discharge its liabilities in the normal course of business. These interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These interim condensed consolidated financial statements as at and for the three months ended May 2, 2020 do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may otherwise be required if the going concern basis was not appropriate. Such adjustments could be material. |
CHANGES IN ACCOUNTING POLICIES
CHANGES IN ACCOUNTING POLICIES | 3 Months Ended |
May 02, 2020 | |
Note 3 - CHANGES IN ACCOUNTING POLICIES | Recently Issued Accounting Pronouncements On May 28, 2020, the IASB issued an amendment to IFRS 16, Leases to make it easier for lessees to account for COVID-19-related rent concessions such as rent holidays and temporary rent reductions. The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to account for such rent concessions as if they were not lease modifications. It applies to COVID-19-related rent concessions that reduce lease payments due on or before June 30, 2021. The amendment is effective as of June 1, 2020 but can be applied immediately in any financial statements—interim or annual—not yet authorised for issue. The Company applied the practical expedient to all rent concessions meeting the criteria as set-out in the amendment. With respect to rent concessions not meeting the definition of a lease modification, the Company elected to account for such concessions by continuing to account for the lease liability and right-of-use asset using the rights and obligations of the existing lease and recognising a separate lease payable in the period that the allocated lease cash payment is due. As rent concessions were also received in the three-month period ending August 1, 2020, the Company expects there to be further impacts in the second quarter. The Company is in the process of assessing the impact of the amendment to IFRS 16 on the second quarter ending August 1, 2020. |
SIGNIFICANT ACCOUNTING JUDGEMEN
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS | 3 Months Ended |
May 02, 2020 | |
Note 4 - SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS | The preparation of condensed interim consolidated financial statements requires management to make estimates and assumptions using judgment that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense during the reporting period. Estimates and other judgments are continually evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from those estimates. In preparing these unaudited condensed interim consolidated financial statements, critical judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those referred to in note 5 of the consolidated financial statements for the year ended February 1, 2020, other than as disclosed below. Key sources of estimation uncertainty Recoverability and impairment of non-financial assets The temporary store closures as a result of COVID-19, the associated reduction in operating income during the first quarter of fiscal 2020 and the Restructuring Plan are considered to be indicators of impairment and the Company performed an assessment of recoverability for the property and equipment and right-of-use assets associated with its retail locations. Key judgments in applying accounting principles Valuation of lease liabilities The temporary store closures as a result of COVID-19, and the resulting non-payment of rent for the months of April, May and June, as well as the Restructuring Plan led the Company to make significant judgments with respect to the impacts of these events on the lease liabilities as of May 2, 2020, including considerations such as the accounting for rent concessions, and the timing of recognition of provisions related to defaults of leases and store closures. |
INVENTORIES
INVENTORIES | 3 Months Ended |
May 02, 2020 | |
Note - 5 Inventories | During the quarter ended May 2, 2020, inventories recognized as cost of sales amounted to $8,656 (May 4, 2019 - $11,994). The cost of inventory includes write-downs of $560 (May 4, 2019 - nil) recorded as a result of net realizable value being lower than cost. May 2, February 1, 2020 2020 $ $ Finished goods 20,546 18,590 Goods in transit 527 2,059 Packaging 2,377 1,714 23,450 22,363 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
May 02, 2020 | |
Note 6 - PROPERTY AND EQUIPMENT | For the three months ended May 2, 2020, an assessment of impairment indicators was performed which caused the Company to review the recoverable amount of the property and equipment for certain cash generating units (“CGUs”) with an indication of impairment. CGUs reviewed included stores to be permanently closed upon the completion of the Restructuring Plan and the remaining stores that are now expected to perform below the Company’s previous projections. As a result of the impairment assessment and the Company’s decision to implement its Restructuring Plan and to accelerate its transition to an online retailer, the Company recorded an impairment loss of $ 13.0 million [May 4, 2019 – nil] of its property and equipment. Included in the amount above is an impairment loss of $12.8 million for the 206 stores to be permanently closed after the completion of the Restructuring Plan. The remaining $0.2 million of impairment loss was determined by comparing the carrying amount of the CGU’s net assets with their respective recoverable amounts based on value in use for 7 of the 18 stores that will remain open. For these stores, a value in use of $791 [May 4, 2019 – nil] was determined based on management’s best estimate of expected future cash flows from use over the remaining lease terms, considering historical experience as well as current economic conditions, including the expected reopening date and the timeframe to foot traffic recovery in those location, and was then discounted using a pre‑tax discount rate of 13.0% [May 4, 2019 – nil]. For the three-month period ended May 2, 2020, the depreciation expense was $1,243 [May 4, 2019 - $1,325]; with $1,040 recorded in the Canada segment [May 4, 2019 - $1,157], $53 recorded in the U.S. segment [May 4, 2019 - $41], and $150 recorded in corporate selling, general and administration expenses [May 4, 2019 - $127]. Depreciation expense, and impairment losses are reported in the consolidated statement of loss and comprehensive loss under Selling, general and administration expenses (Note 10). |
LEASES
LEASES | 3 Months Ended |
May 02, 2020 | |
Note 7 - LEASES | For the three months ended May 2, 2020, an assessment of impairment indicators was performed which caused the Company to review the recoverable amount of the right-of-use assets for certain cash generating units (“CGUs”) with an indication of impairment. CGUs reviewed included stores to be permanently closed upon the completion of the Restructuring Plan and remaining stores that are now expected to perform below the Company’s previous projections. As a result of the impairment assessment and the Company’s decision to implement its Restructuring Plan and to accelerate its transition to an online retailer, the Company recorded an impairment loss of $27.0 million related to the right-of-use assets based on the same assumptions as the impairment loss recorded for the property and equipment (See Note 6). Included in the amount above is an impairment loss of $24.6 million for the 206 stores to be permanently closed after the completion of the Restructuring Plan and the remaining impairment loss of $2.4 million pertain to 7 of the 18 stores that the Company expects to remain open. Depreciation expense and impairment losses related to right-of-use assets have been recorded in Selling, general and administration expenses (Note 10) in the consolidated statement of loss and comprehensive loss. The Company recognized variable lease payments of $49 for the three-month period ended May 2, 2020. In addition, expenses related to leases of low-value assets were $5. These expenses are recorded in Selling, general and administrative expenses (Note 10). |
SHARE CAPITAL
SHARE CAPITAL | 3 Months Ended |
May 02, 2020 | |
Note 8 - SHARE CAPITAL | Authorized An unlimited number of common shares. Issued and outstanding May 2, February 1, 2020 2020 $ $ Share Capital - 26,099,477 Common shares (February 1, 2020 - 26,086,162) 112,917 112,843 During the three-month periods ended May 2, 2020 and May 4, 2019, no stock options were exercised for common shares. In addition, during the three-month period ended May 2, 2020, 13,315 common shares [May 4, 2019 – 39,365 common shares] were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $74, net of tax [May 4, 2019 — $221] and a reduction in contributed surplus of $156 [May 4, 2019 — $439]. Stock-based compensation As at May 2, 2020, 1,533,986 [May 4, 2019, 929,053] common shares remain available for issuance under the 2015 Omnibus Plan. No stock options were granted during the three-month periods ended May 2, 2020 and May 4, 2019. A summary of the status of the Company’s stock option plan and changes during the three-month periods are presented below. For the three months ended May 2, May 4, 2020 2019 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding, beginning of year 76,350 8.96 137,540 7.17 Forfeitures — — (9,020 ) 6.20 Outstanding, end of period 76,350 8.96 128,520 7.20 Exercisable, end of period 76,350 8.96 127,101 7.12 A summary of the status of the Company’s RSU plan and changes during the three-month periods are presented below. For the three months ended May 2, May 4, 2020 2019 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 749,522 2.17 270,976 5.26 Granted 332,551 1.48 — — Forfeitures (28,117 ) 1.48 (21,716 ) 5.73 Vested (13,315 ) 5.59 (42,934 ) 5.15 Vested, withheld for tax (14,458 ) 5.63 (33,865 ) 6.44 Outstanding, end of period 1,026,183 4.43 172,461 5.00 _____________ (1) Weighted average fair value per unit as at date of grant. During the three-month period ended May 2, 2020, the Company recognized a stock-based compensation expense of $313 [May 4, 2019 — $127]. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
May 02, 2020 | |
Note 9 - INCOME TAXES | Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full fiscal year. A reconciliation of the statutory income tax rate to the effective tax rate is as follows: For the three months ended May 2, May 4, 2020 2019 % $ % $ Income tax recovery — statutory rate 26.8 (12,122 ) 26.9 (893 ) Non-deductible items (0.1 ) 23 (1.0 ) 33 Unrecognized deferred income tax assets (26.7 ) 12,099 (25.9 ) 860 Income tax provision (recovery) — effective tax rate — — — — |
SELLING, GENERAL AND ADMINISTRA
SELLING, GENERAL AND ADMINISTRATION EXPENSES | 3 Months Ended |
May 02, 2020 | |
Note 10 - SELLING, GENERAL AND ADMINISTRATION EXPENSES | For the three months ended May 2, May 4, 2020 2019 $ $ Wages, salaries and employee benefits 1 8,551 16,517 Depreciation of property and equipment 1,243 1,325 Amortization of intangible assets 512 399 Amortization right-of-use asset 2,239 3,102 Marketing expenses 1,041 1,111 Stores supplies 766 810 Impairment of property and equipment and right-of-use assets 39,960 — Stock-based compensation 313 127 Other selling, general and administration 4,409 4,629 59,034 28,020 1 Wages, salaries and employee benefits include the grant received for the CEWS under the COVID-19 Economic Response Plan of the Government of Canada of $843. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
May 02, 2020 | |
Net loss per share: | |
Note 11 - EARNINGS PER SHARE | Basic earnings per share (“EPS”) amounts are calculated by dividing the net loss for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS amounts are calculated by dividing the net loss attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares, unless these would be anti‑dilutive. The following reflects the income and share data used in the basic and diluted EPS computations: For the three months ended May 2, May 4, 2020 2019 $ $ Net loss for basic EPS (45,788 ) (3,320 ) Weighted average number of shares outstanding: Basic and fully diluted 26,088,127 26,019,594 Net loss per share: Basic and fully diluted (1.76 ) (0.13 ) As a result of the net loss during the three-month periods ended May 2, 2020 and May 4, 2019, the stock options and restricted stock units disclosed in Note 8 are anti-dilutive. |
RELATED PARTY DISCLOSURES
RELATED PARTY DISCLOSURES | 3 Months Ended |
May 02, 2020 | |
RELATED PARTY DISCLOSURES | |
Note 12 - RELATED PARTY DISCLOSURES | Transactions with related parties are measured at the exchange amount, being the consideration established and agreed to by the related parties. During the three-month period ended May 2, 2020, the Company purchased merchandise for resale amounting to $23 [May 4, 2019 - $15] and provided infrastructure and administrative services of $67 [May 4, 2019 - $18] to a company controlled by one of its executive employees. The Company also spent $44 [May 5, 2019 — nil] for consulting services from a related party of the principal shareholder. Loan to a Company controlled by one of the Company’s executive employees During the second quarter of 2019, the Company entered into a secured loan agreement with Oink Oink Candy Inc., doing business as “Squish”, as borrower, and Rainy Day Investments Ltd. (“RDI”), as guarantor, pursuant to which the Company agreed to lend to Squish an amount of up to $4 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2 million. RDI guaranteed all of Squish’s obligations to the Company and, as security in full for the guarantee, gave a movable hypothec (or lien) in favor of the Company on its shares of the Company. Squish is a company controlled by Sarah Segal, an officer of the Company. RDI, the principal shareholder of the Company, is controlled by Herschel Segal, Executive Chairman, Interim Chief Executive Officer and a director of the Company. The Company and Squish previously entered into a Collaboration and Shared Services Agreement pursuant to which they collaborate on and share various services and infrastructure. During the first quarter of 2020, the loan of $2 million along with accrued interest of $45 were fully repaid. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
May 02, 2020 | |
SEGMENT INFORMATION | |
Note 13 - SEGMENT INFORMATION | An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. The Company has reviewed its operations and determined that each of its retail stores represents an operating segment. However, because its retail stores have similar economic characteristics, sell similar products, have similar types of customers, and use similar distribution channels, the Company has determined that these operating segments can be aggregated at a geographic level. As a result, the Company has concluded that it has two reportable segments, Canada and the U.S., that derive their revenues from the retail and online sale of tea, tea accessories and food and beverages. The Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) makes decisions about resources allocation and assesses performance at the country level, and for which discrete financial information is available. The Company derives revenue from the following products: For the three months ended May 2, May 4, 2020 2019 $ $ Tea 26,095 33,424 Tea accessories 4,620 7,655 Food and beverages 1,527 3,186 32,242 44,265 Property and equipment, right-of-use assets and intangible assets by country are as follows: May 2, February 1, 2020 2020 $ $ Canada 16,807 52,116 US 138 7,042 Total 16,945 59,158 Results from operating activities before corporate expenses per country are as follows: For the three months ended May 2, 2020 Canada US Consolidated $ $ $ Sales 24,045 8,197 32,242 Cost of sales 13,381 4,188 17,569 Gross profit 10,664 4,009 14,673 Selling, general and administration expenses (allocated) 9,531 2,592 12,123 Impairment of property and equipment and right-of-use assets 32,900 7,060 39,960 Results from operating activities before corporate expenses (31,767 ) (5,643 ) (37,410 ) Selling, general and administration expenses (non-allocated) 6,951 Results from operating activities (44,361 ) Finance costs 1,667 Finance income (240 ) Net loss (45,788 ) For the three months ended May 4, 2019 Canada US Consolidated $ $ $ Sales 34,190 10,075 44,265 Cost of sales 14,114 3,815 17,929 Gross profit 20,076 6,260 26,336 Selling, general and administration expenses (allocated) 14,876 4,815 19,691 Results from operating activities before corporate expenses 5,200 1,445 6,645 Selling, general and administration expenses (non-allocated) 8,329 Results from operating activities (1,684 ) Finance costs 1,827 Finance income (191 ) Net loss (3,320 ) |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 3 Months Ended |
May 02, 2020 | |
FINANCIAL RISK MANAGEMENT | |
Note 14 - FINANCIAL RISK MANAGEMENT | The Company’s activities expose it to a variety of financial risks, including risks related to foreign exchange, interest rate, liquidity and credit. Currency Risk — Foreign Exchange Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Given that some of its purchases are denominated in U.S. dollars, the Company is exposed to foreign exchange risk. The Company’s foreign exchange risk is largely limited to currency fluctuations between the Canadian and U.S. dollars. The Company is exposed to currency risk through its cash, accounts receivable and accounts payable denominated in U.S. dollars. Assuming that all other variables remain constant, a revaluation of these monetary assets and liabilities due to a 5% rise or fall in the Canadian dollar against the U.S. dollar would have resulted in an increase or decrease to net loss in the amount of $41. The Company’s foreign exchange exposure is as follows: May 2, February 1, 2020 2020 US$ US$ Cash 668 1,928 Accounts receivable 777 778 Accounts payable 2,270 6,090 The Company’s U.S. subsidiary’s transactions are denominated in U.S. dollars. The Company had no foreign exchange contracts outstanding as at May 2, 2020. Market Risk — Interest Rate Risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial instruments that potentially subject the Company to cash flow interest rate risk include financial assets and liabilities with variable interest rates and consist primarily of cash on hand. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure, to the extent possible, that it will always have sufficient liquidity to meet liabilities when due. The Company’s liquidity follows a seasonal pattern based on the timing of inventory purchases and capital expenditures. The Company is exposed to this risk mainly in respect of its trade and other payables, lease and purchase obligations. As at May 2, 2020, the Company had $39.3 million in cash. The Company expects to finance its working capital needs and investments in infrastructure through cash flows from operations and cash on hand. At May 2, 2020, trade and other payables amounted to $18.0 million (February 1, 2020 - $20.4 million) and purchase obligations amounted to $10.6 million (February 1, 2020 - $11.5 million). On July 8, 2020, the Company announced it is implementing a Restructuring Plan and as a result, trade and other payables due as at July 8, 2020 are subject to a plan of arrangement to be proposed by the Company to its creditors as part of the CCAA proceedings. All trade and other payables from July 9, 2020 onwards are expected to be paid according to negotiated vendor terms or are cash-on-delivery. Refer to note 2 for details with respect to the going concern uncertainty. Credit Risk The Company is exposed to credit risk resulting from the possibility that counterparties may default on their financial obligations to the Company. The Company’s maximum exposure to credit risk at the reporting date is equal to the carrying value of receivables. Accounts receivable primarily consist of receivables from retail customers who pay by credit card, receivables from our wholesale channel sales, recoveries of credits from suppliers for returned or damaged products, and receivables from other companies for sales of products, gift cards and other services. Credit card payments have minimal credit risk and the limited number of corporate receivables is closely monitored. As a result, expected credit loss on these financial assets is not significant. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
May 02, 2020 | |
Note 15 - SUBSEQUENT EVENTS | As part of its Restructuring Plan and further to obtaining the Initial Order, the Company, on July 10, 2020, sent notices to terminate leases for 82 of its stores in Canada and all 42 stores in the United States. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada and continues to negotiate with landlords for the remaining 18 stores. On July 16, 2020, the Company obtained an Amended and Restated Initial Order from the Quebec Superior Court, extending to September 17, 2020 the application of the Initial Order. The Company will continue to assess the impacts of the Restructuring Plan on its consolidated financial statements. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
May 02, 2020 | |
INVENTORIES (Tables) | |
Schedule of Inventory | May 2, February 1, 2020 2020 $ $ Finished goods 20,546 18,590 Goods in transit 527 2,059 Packaging 2,377 1,714 23,450 22,363 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 3 Months Ended |
May 02, 2020 | |
SHARE CAPITAL (Tables) | |
Summary of authorized, issued, and outstanding shares | May 2, February 1, 2020 2020 $ $ Share Capital - 26,099,477 Common shares (February 1, 2020 - 26,086,162) 112,917 112,843 |
Summary of weighted average fair value | For the three months ended May 2, May 4, 2020 2019 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 749,522 2.17 270,976 5.26 Granted 332,551 1.48 — — Forfeitures (28,117 ) 1.48 (21,716 ) 5.73 Vested (13,315 ) 5.59 (42,934 ) 5.15 Vested, withheld for tax (14,458 ) 5.63 (33,865 ) 6.44 Outstanding, end of period 1,026,183 4.43 172,461 5.00 |
Summary of stock option plan and periodic changes | For the three months ended May 2, May 4, 2020 2019 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding, beginning of year 76,350 8.96 137,540 7.17 Forfeitures — — (9,020 ) 6.20 Outstanding, end of period 76,350 8.96 128,520 7.20 Exercisable, end of period 76,350 8.96 127,101 7.12 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
May 02, 2020 | |
INCOME TAXES (Tables) | |
Schedule of the reconciliation of the statutory income tax rate to the effective tax rate | For the three months ended May 2, May 4, 2020 2019 % $ % $ Income tax recovery — statutory rate 26.8 (12,122 ) 26.9 (893 ) Non-deductible items (0.1 ) 23 (1.0 ) 33 Unrecognized deferred income tax assets (26.7 ) 12,099 (25.9 ) 860 Income tax provision (recovery) — effective tax rate — — — — |
SELLING GENERAL AND ADMINISTRAT
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | 3 Months Ended |
May 02, 2020 | |
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | |
Schedule of selling, general and administrative expenses | For the three months ended May 2, May 4, 2020 2019 $ $ Wages, salaries and employee benefits 1 8,551 16,517 Depreciation of property and equipment 1,243 1,325 Amortization of intangible assets 512 399 Amortization right-of-use asset 2,239 3,102 Marketing expenses 1,041 1,111 Stores supplies 766 810 Impairment of property and equipment and right-of-use assets 39,960 — Stock-based compensation 313 127 Other selling, general and administration 4,409 4,629 59,034 28,020 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
May 02, 2020 | |
Net loss per share: | |
Schedule of reconciliation of basic and diluted EPS | For the three months ended May 2, May 4, 2020 2019 $ $ Net loss for basic EPS (45,788 ) (3,320 ) Weighted average number of shares outstanding: Basic and fully diluted 26,088,127 26,019,594 Net loss per share: Basic and fully diluted (1.76 ) (0.13 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
May 02, 2020 | |
SEGMENT INFORMATION | |
Schedule of revenue by product | For the three months ended May 2, May 4, 2020 2019 $ $ Tea 26,095 33,424 Tea accessories 4,620 7,655 Food and beverages 1,527 3,186 32,242 44,265 |
Schedule of property and equipment and intangible assets by country | For the three months ended May 2, 2020 Canada US Consolidated $ $ $ Sales 24,045 8,197 32,242 Cost of sales 13,381 4,188 17,569 Gross profit 10,664 4,009 14,673 Selling, general and administration expenses (allocated) 9,531 2,592 12,123 Impairment of property and equipment and right-of-use assets 32,900 7,060 39,960 Results from operating activities before corporate expenses (31,767 ) (5,643 ) (37,410 ) Selling, general and administration expenses (non-allocated) 6,951 Results from operating activities (44,361 ) Finance costs 1,667 Finance income (240 ) Net loss (45,788 ) For the three months ended May 4, 2019 Canada US Consolidated $ $ $ Sales 34,190 10,075 44,265 Cost of sales 14,114 3,815 17,929 Gross profit 20,076 6,260 26,336 Selling, general and administration expenses (allocated) 14,876 4,815 19,691 Results from operating activities before corporate expenses 5,200 1,445 6,645 Selling, general and administration expenses (non-allocated) 8,329 Results from operating activities (1,684 ) Finance costs 1,827 Finance income (191 ) Net loss (3,320 ) |
Schedule of gross profit per country | May 2, February 1, 2020 2020 $ $ Canada 16,807 52,116 US 138 7,042 Total 16,945 59,158 |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 3 Months Ended |
May 02, 2020 | |
FINANCIAL RISK MANAGEMENT | |
Summary of foreign exchange exposure | May 2, February 1, 2020 2020 US$ US$ Cash 668 1,928 Accounts receivable 777 778 Accounts payable 2,270 6,090 |
BASIS OF PREPARATION and GOIN_2
BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |||
May 02, 2020 | May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | |
Statement [Line Items] | ||||
Total current liabilities | $ 42,975 | $ 42,975 | $ 44,080 | |
Net loss | (45,788) | $ (3,320) | ||
Going Concern [Member] | ||||
Statement [Line Items] | ||||
Total current liabilities | $ 43,000 | 43,000 | ||
Cash held and accounts other receivables | 43,700 | |||
Net loss | $ (45,800) |
INVENTORIES (Details)
INVENTORIES (Details) - CAD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Finished goods | $ 20,546 | $ 18,590 |
Goods in transit | 527 | 2,059 |
Packaging | 2,377 | 1,714 |
Total current inventories | $ 23,450 | $ 22,363 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Inventories recognized | $ 8,656 | $ 11,994 |
Inventory includes write-down | $ 560 | $ 0 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Statement [Line Items] | ||
Impairment loss of property and equipment | $ 13,000 | $ 0 |
Pre-tax weighted average cost of capital rate | 13.00% | 0.00% |
Impairment loss reversed | $ 12,800 | |
Depreciation | 1,243 | $ 1,325 |
Value in use | 791 | 0 |
Corporate selling, general and administration expenses | 150 | 127 |
Canada Segment [Member] | ||
Statement [Line Items] | ||
Depreciation | 1,040 | 1,157 |
United States Segment [Member] | ||
Statement [Line Items] | ||
Depreciation | $ 53 | $ 41 |
LEASES (Details Narrative)
LEASES (Details Narrative) $ in Thousands | 3 Months Ended |
May 02, 2020CAD ($) | |
Statement [Line Items] | |
Variable lease payments | $ 49 |
Expenses related to leases of low-value assets | 5 |
Impairment loss reversed | 12,800 |
Restructuring Plan [Member] | |
Statement [Line Items] | |
Impairment Loss | 27,000 |
Remaining impairment loss | 2,400 |
Impairment loss reversed | $ 24,600 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) - CAD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
SHARE CAPITAL (Tables) | ||
Share capital | $ 112,917 | $ 112,843 |
SHARE CAPITAL (Details 1)
SHARE CAPITAL (Details 1) - $ / shares | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Options outstanding | ||
Outstanding, beginning of year | 76,350 | 137,540 |
Forfeitures (in shares) | 0 | (9,020) |
Outstanding, end of period | 76,350 | 128,520 |
Exercisable, end of period | 76,350 | 127,101 |
Weighted average exercise price | ||
Weighted average exercise price, beginning | $ 8.96 | $ 7.17 |
Forfeitures (in dollars per share) | 0 | 6.20 |
Weighted average exercise price, ending | 8.96 | 7.20 |
Weighted average exercise price, exercisable | $ 8.96 | $ 7.12 |
SHARE CAPITAL (Details 2)
SHARE CAPITAL (Details 2) - $ / shares | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
RSUs outstanding | ||
Outstanding, beginning of year | 749,522 | 270,976 |
Granted | 332,551 | |
Forfeitures | (28,117) | (21,716) |
Vested | (13,315) | (42,934) |
Vested, withheld for tax | (14,458) | (33,865) |
Outstanding, end of year | 1,026,183 | 172,461 |
Weighted average fair value per unit | ||
Outstanding, beginning of year | $ 2.17 | $ 5.26 |
Granted | 1.48 | 0 |
Forfeitures | 1.48 | 5.73 |
Vested | 5.59 | 5.15 |
Vested, withheld for tax | 5.63 | 6.44 |
Outstanding, end of year | $ 4.43 | $ 5 |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | May 04, 2019 | |
Statement [Line Items] | |||
Stock-based compensation expense | $ 313 | $ 127 | |
Common shares issued on vesting of restricted stock units | $ (13) | $ (69) | |
Vested (in shares) | (13,315) | (42,934) | |
Restricted Stock Units Rsus [Member] | |||
Statement [Line Items] | |||
Common shares issued on vesting of restricted stock units | $ 74 | $ 221 | |
Vested (in shares) | 13,315 | 39,365 | |
Options [member] | |||
Statement [Line Items] | |||
Reduction in the contributed surplus | $ 156 | $ 439 | |
2015 Omnibus Plan [Member] | |||
Statement [Line Items] | |||
Maximum number of shares available for issuance | 1,533,986 | 929,053 | 929,053 |
INCOME TAXES (Details)
INCOME TAXES (Details) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Statutory income tax rate reconciliation, percent | ||
Income tax recovery - statutory rate (as a percent) | 26.80% | 26.90% |
Non-deductible items (as a percent) | (0.10%) | (1.00%) |
Unrecognized deferred income tax asset (as a percent) | (26.70%) | (25.90%) |
Income tax provision (recovery) - effective tax rate | $ 0 | $ 0 |
Statutory income tax rate reconciliation, amount | ||
Income tax provision - statutory rate | (12,122) | (893) |
Non-deductible items | 23 | 33 |
Unrecognized deferred income tax asset | $ 12,099 | $ 860 |
SELLING GENERAL AND ADMINISTR_2
SELLING GENERAL AND ADMINISTRATION EXPENSES (Details) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | ||
Wages, salaries and employee benefits | $ 8,551 | $ 16,517 |
Marketing Expenses | 1,041 | 1,111 |
Stores Supplies | 766 | 810 |
Depreciation of property and equipment | 1,243 | 1,325 |
Amortization of intangible assets | 512 | 399 |
Amortization right-of-use asset | 2,239 | 3,102 |
Impairment of property, equipment and right-of-use assets | 39,960 | 0 |
Stock-based compensation | 313 | 127 |
Other selling, general and administration | 4,409 | 4,629 |
Selling, general and administrative expense | $ 59,034 | $ 28,020 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - CAD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Net loss per share: | ||
Net loss for basic EPS | $ (45,788) | $ (3,320) |
Weighted average number of shares outstanding: | ||
Basic and fully diluted | 26,088,127 | 26,019,594 |
Net loss per share: | ||
Basic and fully diluted | $ (1.76) | $ (0.13) |
RELATED PARTY DISCLOSURES (Deta
RELATED PARTY DISCLOSURES (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Statement [Line Items] | ||
Merchandise purchased from related party | $ 23 | $ 15 |
Infrastructure and administrative services | 67 | 18 |
Consulting services | $ 44 | $ 0 |
Revolving loan interest rate description | The Company agreed to lend to Squish an amount of up to $4 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2 million. | |
Squish [Member] | ||
Statement [Line Items] | ||
Secured loan agreement amount | $ 4,000 | |
Loan amount repaid | 2,000 | |
Accrued interest repaid | $ 45 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands | 3 Months Ended | ||||
May 02, 2020 | May 02, 2020 | May 04, 2019 | May 04, 2019 | May 04, 2019 | |
Statement [Line Items] | |||||
Revenue | $ 32,242 | $ 32,242 | $ 44,265 | $ 44,265 | $ 44,265 |
Tea [Member] | |||||
Statement [Line Items] | |||||
Revenue | 26,095 | 33,424 | |||
Tea Accessories [Member] | |||||
Statement [Line Items] | |||||
Revenue | 4,620 | 7,655 | |||
Food And Beverages [Member] | |||||
Statement [Line Items] | |||||
Revenue | $ 1,527 | $ 3,186 |
SEGMENT INFORMATION (Details 1)
SEGMENT INFORMATION (Details 1) - CAD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Statement [Line Items] | ||
Property and equipment and intangible assets | $ 16,945 | $ 59,158 |
Canada Segment [Member] | ||
Statement [Line Items] | ||
Property and equipment and intangible assets | 16,807 | 52,116 |
United States Segment [Member] | ||
Statement [Line Items] | ||
Property and equipment and intangible assets | $ 138 | $ 7,042 |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - CAD ($) $ in Thousands | 3 Months Ended | ||||
May 02, 2020 | May 02, 2020 | May 04, 2019 | May 04, 2019 | May 04, 2019 | |
Segment information | |||||
Sales | $ 32,242 | $ 32,242 | $ 44,265 | $ 44,265 | $ 44,265 |
Cost of sales | 17,569 | 17,569 | 17,929 | 17,929 | |
Gross profit | 14,673 | 14,673 | 26,336 | 26,336 | |
Selling, general and administration expenses (allocated) | 12,123 | 19,691 | |||
Impairment of property, equipment and right-of-use assets | 39,960 | ||||
Results from operating activities before corporate expenses | (44,361) | (37,410) | (1,684) | 6,645 | |
Results from operating activities | (44,361) | (1,684) | |||
Finance costs | $ 1,667 | 1,667 | $ 1,827 | 1,827 | |
Finance income | (240) | (191) | |||
Net loss | (45,788) | (3,320) | |||
Operating Segments [Member] | Canada Segment [Member] | |||||
Segment information | |||||
Sales | 24,045 | 34,190 | |||
Cost of sales | 13,381 | 14,114 | |||
Gross profit | 10,664 | 20,076 | |||
Selling, general and administration expenses (allocated) | 9,531 | 14,876 | |||
Impairment of property, equipment and right-of-use assets | 32,900 | ||||
Results from operating activities before corporate expenses | (31,767) | 5,200 | |||
Operating Segments [Member] | United States Segment [Member] | |||||
Segment information | |||||
Sales | 8,197 | 10,075 | |||
Cost of sales | 4,188 | 3,815 | |||
Gross profit | 4,009 | 6,260 | |||
Selling, general and administration expenses (allocated) | 2,592 | 4,815 | |||
Impairment of property, equipment and right-of-use assets | 7,060 | ||||
Results from operating activities before corporate expenses | $ (5,643) | $ 1,445 |
FINANCIAL RISK MANAGEMENT (Deta
FINANCIAL RISK MANAGEMENT (Details) - Currency Risk - Foreign Exchange Risk [Member] - CAD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Statement [Line Items] | ||
Foreign exchange exposure, cash | $ 668 | $ 1,928 |
Foreign exchange exposure, accounts receivable | 777 | 778 |
Foreign exchange exposure, accounts payable | $ 2,270 | $ 6,090 |
FINANCIAL RISK MANAGEMENT (De_2
FINANCIAL RISK MANAGEMENT (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | Feb. 01, 2020 | |
Statement [Line Items] | ||
Cash | $ 39,300 | |
Trade and other payables | 18,000 | $ 20,400 |
Purchase obligations | $ 10,600 | $ 11,500 |
Currency Risk - Foreign Exchange Risk [Member] | ||
Statement [Line Items] | ||
Increase (decrease) in CAD against USD | 5.00% | |
Increase (decrease) in net loss due to change in exchange rate | $ 41 |