Cover
Cover - shares | 3 Months Ended | |
May 01, 2021 | Jun. 11, 2021 | |
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 | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | May 1, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 26,255,769 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
INTERIM CONSOLIDATED BALANCE SH
INTERIM CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
ASSETS | ||
Cash | $ 31,321 | $ 30,197 |
Accounts and other receivables | 6,570 | 6,157 |
Inventories | 29,258 | 23,468 |
Income tax receivable | 55 | 55 |
Prepaid expenses and deposits | 11,578 | 14,470 |
Total current assets | 78,782 | 74,347 |
Property and equipment | 1,922 | 2,309 |
Intangible assets | 3,525 | 3,929 |
Right-of-use assets | 498 | 657 |
Total assets | 84,727 | 81,242 |
Current | ||
Trade and other payables | 6,154 | 4,152 |
Deferred revenue | 6,765 | 7,080 |
Liabilities subject to compromise | 98,402 | 100,550 |
Current portion of lease liabilities | 271 | 396 |
Total current liabilities | 111,592 | 112,178 |
Non-current portion of lease liabilities | 307 | 355 |
Total liabilities | 111,899 | 112,533 |
Commitments and contingencies | 0 | 0 |
Equity | ||
Share capital | 113,237 | 113,167 |
Contributed surplus | 1,787 | 1,747 |
Deficit | (144,871) | (148,068) |
Accumulated other comprehensive income | 2,675 | 1,863 |
Total deficiency | (27,172) | (31,291) |
Total liabilities and equity | $ 84,727 | $ 81,242 |
INTERIM CONSOLIDATED STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited) | ||
Sales | $ 23,249 | $ 32,242 |
Cost of sales | 12,481 | 17,569 |
Gross profit | 10,768 | 14,673 |
Selling, general and administration expenses | 9,194 | 21,634 |
Restructuring activities, net | (1,602) | 37,400 |
Results from operating activities | 3,176 | (44,361) |
Finance costs | 10 | 1,667 |
Finance income | (55) | (240) |
Net income (loss) | 3,221 | (45,788) |
Other comprehensive income (loss): | ||
Cumulative translation adjustment | 812 | (1,468) |
Other comprehensive income (loss), net of tax | 812 | (1,468) |
Total comprehensive income (loss) | $ 4,033 | $ (47,256) |
Net earnings (loss) per share: | ||
Basic | $ 0.12 | $ (1.76) |
Fully Diluted | $ 0.12 | $ (1.76) |
Weighted average number of shares outstanding: | ||
Basic | 26,296,690 | 26,088,127 |
Fully Diluted | 27,400,840 | 26,088,127 |
INTERIM CONSOLIDATED STATEMEN_2
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 3,221 | $ (45,788) |
Items not affecting cash: | ||
Depreciation of property and equipment | 388 | 1,243 |
Amortization of intangible assets | 403 | 512 |
Amortization of right-of-use assets | 159 | 2,239 |
Liabilities subject to compromise | (2,148) | 0 |
Interest on lease liabilities | 10 | 1,629 |
Impairment of property and equipment and right-of-use assets | 0 | 39,960 |
Stock-based compensation expense | 182 | 313 |
Sub-total | 2,215 | 108 |
Net change in other non-cash working capital balances related to operations | (908) | (4,164) |
Cash flows from (used in) operating activities | 1,307 | (4,056) |
FINANCING ACTIVITIES | ||
Payment of lease liabilities | (183) | (4,376) |
Cash flows used in financing activities | (183) | (4,376) |
INVESTING ACTIVITIES | ||
Additions to property and equipment | 0 | (272) |
Additions to intangible assets | 0 | (317) |
Repayment of loan from a Company controlled by an executive employee | 0 | 2,026 |
Cash flows from investing activities | 0 | 1,437 |
Increase (decrease) in cash during the period | 1,124 | (6,995) |
Cash, beginning of the period | 30,197 | 46,338 |
Cash, end of the period | 31,321 | 39,343 |
Cash paid for: | ||
Interest | 0 | 50 |
Income taxes | 0 | 0 |
Cash received for: | ||
Interest | 55 | 778 |
Income taxes (classified as operating activity) | $ 0 | $ 2,948 |
INTERIM CONSOLIDATED STATEMEN_3
INTERIM CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (Unaudited) - CAD ($) $ in Thousands | Total | Share Capital | Contributed Surplus | Retained Earnings (Accumulated Deficit) | Accumulated other comprehensive loss |
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) |
Balance, amount at Jan. 30, 2021 | (31,291) | 113,167 | 1,747 | (148,068) | 1,863 |
Statement [Line Items] | |||||
Net loss for the three months ended May 2, 2020 | 3,221 | 0 | 0 | 3,221 | 0 |
Other comprehensive loss | 812 | 0 | 0 | 0 | 812 |
Total comprehensive loss | 4,033 | 0 | 0 | 3,221 | 812 |
Common shares issued on vesting of restricted stock units | (96) | 70 | (142) | (24) | 0 |
Stock-based compensation expense | 182 | 0 | 182 | 0 | 0 |
Balance, amount at May. 01, 2021 | $ (27,172) | $ 113,237 | $ 1,787 | $ (144,871) | $ 2,675 |
CORPORATE INFORMATION
CORPORATE INFORMATION | 3 Months Ended |
May 01, 2021 | |
1. CORPORATE INFORMATION | The unaudited condensed interim consolidated financial statements of DAVIDsTEA Inc. and its subsidiary, DAVIDsTEA (USA) Inc., (collectively, the “Company”) for the three-month period ended May 1, 2021 were authorized for issue in accordance with a resolution of the Board of Directors on June 15, 2021. 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. The Company offers a specialty branded selection of high-quality proprietary loose-leaf teas, pre-packaged teas, tea sachets, tea-related accessories and gifts through its e-commerce platform at www.davidstea.com and the Amazon Marketplace, its wholesale customers which include over 2,500 grocery stores and pharmacies, and 18 company-owned stores across Canada. We offer primarily proprietary tea blends that are exclusive to the Company, as well as traditional single-origin teas and herbs. Our passion for and knowledge of tea permeates our culture and is rooted in an excitement to explore the taste, health and lifestyle elements of tea. Sales fluctuate from quarter to quarter. Sales are traditionally highest 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. On August 21, 2020, the Company re-opened 18 stores across Canada. The Company qualifies for the Canada Emergency Wage Subsidy (“CEWS”) under the COVID-19 Economic Response Plan of the Government of Canada. During the period ended May 1, 2021, the Company recognized payroll subsidies of $1.1 million (May 2, 2020 - $0.8 million) under this wage subsidy program which was recognized in Selling, general and administration expenses. CCAA Proceedings On July 8, 2020, the Company announced that it was implementing a restructuring plan (the “Restructuring Plan”) under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories and that during the restructuring process, the Company would continue to operate its online business through its e-commerce platform and the Amazon Marketplace as well as its wholesale distribution channel. Following a careful review of available options to stem the losses from its brick-and-mortar footprint, the Company’s management and Board of Directors determined that the formal Restructuring Plan was the best option in the context of an increasingly challenging retail environment, further exacerbated by the COVID-19 pandemic. On July 8, 2020, the Company obtained an Initial Order pursuant to the CCAA from the Québec 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 of its stores in the United States. These lease terminations were effective on August 9, 2020. On July 16, 2020, the Company obtained an Amended and Restated Initial Order from the Québec Superior Court, extending to September 17, 2020 the application of the Initial Order. The Amended and Restated Initial Order also dealt with certain administrative matters, particularly with regards to the lease terminations. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada. These lease terminations were effective on August 29, 2020. On September 17, 2020, the Québec Superior Court extended the stay of all proceedings against the Company to December 15, 2020 and issued a claims process order (the “Claims Process Order”) establishing the claims procedures for the Company’s creditors under the CCAA. The Claims Process Order, among other things, set November 6, 2020 (the “Claims Bar Date”) as the time by which creditors had to submit their claims to PricewaterhouseCoopers (“PwC”), the Court-appointed Monitor. On December 15, 2020, the Québec Superior Court extended the stay of all proceedings against the Company to March 19, 2021. The Court also approved a retention plan for certain key employees (“KERP”) and created a priority charge over the debtors’ assets for the KERP in addition to extending the Claims Bar Date for certain Canadian employees until December 31, 2020. On March 19, 2021, the Québec Superior Court extended the stay of all proceedings against the Company to June 4, 2021, and addressed certain administrative matters. On May 7, 2021, the Company obtained an order from the Québec Superior Court authorizing the Company to file its plan of arrangement (the “Plan of Arrangement”) under the CCAA and to call a creditors’ meeting to be held on June 11, 2021. The Court order also extended to July 16, 2021 the previously-announced stay of all proceedings against the Company under the CCAA. At the creditors’ meeting held on June 11, 2021, subsequent to period-end, the Plan of Arrangement was approved by the requisite majorities of creditors of DAVIDsTEA Inc. and its subsidiary, DAVIDsTEA (USA) Inc., respectively, in accordance with the CCAA, that is, a simple majority of creditors of DAVIDsTEA Inc. and of DAVIDsTEA (USA) Inc., voting separately, whose claims are affected by the Plan of Arrangement, representing in each case at least two-thirds in dollar value of all such claims duly filed in accordance with the CCAA proceedings. The Company will seek a sanction order (the “Sanction Order”) for the Plan of Arrangement from the Québec Superior Court at a hearing scheduled for June 16, 2021. If the Sanction Order is granted, the Company will seek recognition of the Sanction Order from the United States Bankruptcy Court for the District of Delaware under Chapter 15 of the United States Bankruptcy Code at a hearing scheduled for June 17, 2021. The Plan of Arrangement approved by the Company’s creditors on June 11, 2021 provides that DAVIDsTEA Inc. will distribute an aggregate amount of approximately $18.0 million to its creditors and those of DAVIDsTEA (USA) Inc. in full and final settlement of all claims affected by the Plan of Arrangement. Such distribution will take place after, and is conditional upon, the two Court approvals referred to above, the whole as provided in the Plan of Arrangement. The Company can provide no assurance that it will obtain a sanction order for the Plan of Arrangement from the Québec Superior Court or that the sanction order, if any, will be recognized by the United States Bankruptcy Court for the District of Delaware. |
BASIS OF PREPARATION and GOING
BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY | 3 Months Ended |
May 01, 2021 | |
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 January 30, 2021, 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 January 30, 2021. 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 temporarily close all of its retail locations across North America effective March 17, 2020. On July 8, 2020, the Company announced that it was implementing the Restructuring Plan under applicable laws in both Canada and the United States in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories. As part of the Restructuring Plan, in July 2020, the Company sent notices to terminate leases for 164 of its stores in Canada and all 42 of its stores in the United States. On August 21, 2020, the Company re-opened 18 of its stores throughout Canada. 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. The Plan of Arrangement requires approximately $18.0 million to be paid to the Company’s creditors in order to legally emerge from the formal restructuring process. This is expected to place increased risk on the Company’s available liquidity, especially considering the Company does not currently have access to any debt or financing arrangements. For the quarter ended May 1, 2021, the Company reported a net income of $3.2 million. The Company’s current liabilities total $111.6 million as at May 1, 2021. As at May 1, 2021, the Company held cash and accounts and other receivables of $37.9 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, and by focusing on how to grow its product portfolio including sales and customer service execution. The Company expects to transition to a digital-first organization with a leaner, more sustainable physical presence that complements a growing world-class online and grocery business, 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 sustained profitability in the current environment, including the unpredictability surrounding the recovery from the COVID-19 pandemic, and changes in consumer behavior. 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 1, 2021 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 PRINCIPLE
CHANGES IN ACCOUNTING PRINCIPLES | 3 Months Ended |
May 01, 2021 | |
3. CHANGES IN ACCOUNTING PRINCIPLES | Change in the pattern of consumption of intangible assets Intangible assets are initially recorded at cost. Intangible assets with finite lives are amortized over their useful economic life. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. In the first quarter of 2021 the Company reviewed the pattern of consumption of its intangible assets. The Company previously used the declining method at the rate of 30% per annum. The Company changed the method of depreciation for intangible assets to a straight-line basis over the assets useful economic life to better reflect the underlying pattern of consumption. 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. In April 2021, the IASB extended the relief to cover rent concessions that reduce lease payments due on or before June 30, 2022. 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 was effective as of June 1, 2020 but could be applied immediately in any financial statements; interim or annual, not yet authorized for issue. The Company applied the practical expedient to all rent concessions meeting the criteria as set out in the amendment, as of February 2, 2020. 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 recognizing a separate lease payable in the period in which the allocated lease cash payment is due. As a result of the Initial Order obtained from the Québec Superior Court on July 8, 2020, any rent concessions provided by landlords are accordingly nullified. |
SIGNIFICANT ACCOUNTING JUDGEMEN
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS | 3 Months Ended |
May 01, 2021 | |
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 January 30, 2021. |
PROPERTY AND EQUIPMENT AND RIGH
PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS | 3 Months Ended |
May 01, 2021 | |
5. PROPERTY AND EQUIPMENT | As a result of the impairment assessment and the Company’s decision to implement its Restructuring Plan and to accelerate its transition to predominately an online retailer, the Company recorded an impairment loss of its property and equipment and right-of-use assets of $13.0 million and $27.0 million respectively, during the three-month period ended May 2, 2020. Included in the amount above of $40.0 million, $37.4 million relates to the 206 stores permanently closed as a result of the Restructuring Plan, and is recorded in Restructuring plan activities, net (Note 10) in the interim consolidated statement of income (loss) and comprehensive income (loss). The remaining $2.6 million of impairment loss was determined by comparing the carrying amount of the cash-generating units’ net assets with their respective recoverable amounts based on value in use, and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss). For these stores, a value in use of $791 was determined based on management’s best estimate of expected future cash flows from use over the remaining lease terms, considering historical experience and 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%. Depreciation of property and equipment for the three-month period ended May 1, 2021 was $388 (May 2, 2020 - $1,243), and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss). Amortization of right-of-use assets for the three-month period ended May 1, 2021 was $159 (May 2, 2020 - $2,239), and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss). |
LIABILITIES SUBJECT TO COMPROMI
LIABILITIES SUBJECT TO COMPROMISE | 3 Months Ended |
May 01, 2021 | |
6. LIABILITIES SUBJECT TO COMPROMISE | As a result of the Initial Order obtained on July 8, 2020 and subsequent amendments (Note 1), the payment of liabilities owing as of July 8, 2020 is stayed, and the outstanding liabilities, as well as any additional outstanding claims by creditors are subject to compromise pursuant to the Company’s Plan of Arrangement. On September 17, 2020, the Court issued a Claims Process Order establishing the claims procedures for the Company’s creditors under the CCAA. The Claims Process Order, among other things set November 6, 2020 as the time by which creditors had to submit their claims to PwC. Obligations for goods and services provided to the Company after the filing date of July 8, 2020 are discharged based on negotiated terms and are excluded from liabilities subject to compromise. As of May 1, 2021, liabilities subject to compromise are broken down as follows: Disclaimed and modified leases Trade and other payables Severance Costs Liabilities subject to compromise $ $ $ $ Balance as at January 30, 2021 75,310 20,699 4,541 100,550 Reversals (1,771 ) (377 ) — (2,148 ) Balance as at May 1, 2021 73,539 20,322 4,541 98,402 The Plan of Arrangement approved by the Company’s creditors on June 11, 2021 provides that the Company will distribute an aggregate amount of approximately $18.0 million to its creditors in full and final settlement of all claims affected by the Plan of Arrangement. Such distribution will take place after, and is conditional upon, the Court approvals, the whole as provided in the Plan of Arrangement. The Company can provide no assurance that it will obtain a sanction order for the Plan of Arrangement from the Québec Superior Court or that the sanction order, if any, will be recognized by the United States Bankruptcy Court for the District of Delaware. |
SHARE CAPITAL
SHARE CAPITAL | 3 Months Ended |
May 01, 2021 | |
SHARE CAPITAL | |
7. SHARE CAPITAL | Authorized An unlimited number of common shares. Issued and outstanding May 1, January 30, 2021 2021 $ $ Share Capital - 26,255,769 Common shares (January 30, 2021 - 26,234,582) 113,237 113,167 During the three-month period ended May 1, 2021, 21,187 common shares (May 2, 2020 – 13,315 common shares) were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $70, net of tax (May 2, 2020 — $74) and a reduction in contributed surplus of $142 (May 2, 2020 — $156). Stock-based compensation As at May 1, 2021, 1,246,519 (May 2, 2020, 1,533,986) common shares remain available for issuance under the 2015 Omnibus Plan. No stock options were granted during the three-month periods ended May 1, 2021 and May 2, 2020. 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 1, May 2, 2021 2020 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding and exercisable, beginning of year and end of period 17,490 6.32 76,350 8.96 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 1, May 2, 2021 2020 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 1,306,101 1.70 749,522 2.17 Granted — — 332,551 1.48 Forfeitures (24,131 ) 1.45 (28,117 ) 1.48 Vested (21,187 ) 3.32 (13,315 ) 5.59 Vested, withheld for tax (22,065 ) 3.32 (14,458 ) 5.63 Outstanding, end of period 1,238,718 1.65 1,026,183 4.43 _____________ (1) Weighted average fair value per unit as at date of grant. During the three-month period ended May 1, 2021, the Company recognized a stock-based compensation expense of $182 (May 2, 2020 — $313). |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
May 01, 2021 | |
8. 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 1, May 2, 2021 2020 % $ % $ Income tax provision (recovery) — statutory rate 26.4 850 26.8 (12,122 ) Increase (decrease) in income tax provision (recovery) resulting from: Non-deductible items (1.6 ) 52 (0.1 ) 23 Unrecognized (recognized) deferred income tax assets (24.8 ) (902 ) (26.7 ) 12,099 Income tax provision (recovery) — effective tax rate — — — — |
SELLING, GENERAL AND ADMINISTRA
SELLING, GENERAL AND ADMINISTRATION EXPENSES | 3 Months Ended |
May 01, 2021 | |
9. SELLING, GENERAL AND ADMINISTRATION EXPENSES | For the three months ended May 1, May 2, 2021 2020 $ $ Wages, salaries and employee benefits 3,566 9,394 Depreciation of property and equipment 388 1,243 Amortization of intangible assets 403 512 Amortization right-of-use asset 159 2,239 Impairment of property and equipment and right-of-use assets — 2,560 IT expenses 2,212 696 Marketing expenses 945 1,041 Credit card fees 536 616 Professional fees 237 614 Stores supplies 357 766 Stock-based compensation 182 313 Government emergency wage subsidy (1,064 ) (843 ) Other selling, general and administration 1,273 2,483 9,194 21,634 |
RESTRUCTURING PLAN ACTIVITIES,
RESTRUCTURING PLAN ACTIVITIES, NET | 3 Months Ended |
May 01, 2021 | |
10. RESTRUCTURING PLAN ACTIVITIES, NET | Included in Restructuring plan activities, net are the following expenses: For the three months ended May 1, May 2, 2021 2020 $ $ Disclaimed leases (1,771 ) - Trade and other payables (460 ) - Impairment of property and equipment and right-of-use assets - 37,400 Professional fees 546 - Interest and penalties related to unpaid occupancy charges 83 - Restructuring plan activities, net (1,602 ) 37,400 Certain comparative figures have been reclassified to conform to the current period presentation. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
May 01, 2021 | |
Net earnings (loss) per share: | |
11. EARNINGS (LOSS) PER SHARE | Basic earnings (loss) per share (“EPS”) amounts are calculated by dividing the net income (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 income (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 earnings (loss) and share data used in the basic and diluted EPS computations: For the three months ended May 1, May 2, 2021 2020 $ $ Net earnings (loss) for basic EPS 3,221 (45,788 ) Weighted average number of shares outstanding: Basic 26,296,690 26,088,127 Fully diluted 27,400,840 26,088,127 Net earnings (loss) per share: Basic 0.12 (1.76 ) Fully diluted 0.12 (1.76 ) |
RELATED PARTY DISCLOSURES
RELATED PARTY DISCLOSURES | 3 Months Ended |
May 01, 2021 | |
RELATED PARTY DISCLOSURES | |
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 1, 2021, the Company purchased merchandise for resale amounting to $46 (May 2, 2020 - $23) and provided infrastructure and administrative services of $5 (May 2, 2020 - $67) to a company controlled by one of its executive employees. As of May 1, 2021, an amount of $4 was outstanding and presented in Trade and other payables. The Company also spent nil (May 2, 2020 — $44) 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 $4.0 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2.0 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 favour of the Company on its shares of the Company. Squish is a company controlled by Sarah Segal, the Chief Executive Officer and Chief Brand Officer of the Company. RDI, the principal shareholder of the Company, is controlled by Herschel Segal, Chairman of the Board and Strategic Advisor 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 $2.0 million and accrued interest of $45, including $19 which was earned in the first quarter, was fully repaid. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
May 01, 2021 | |
SEGMENT INFORMATION | |
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. During the year ended January 30, 2021, the Company has reviewed its operations and determined that each its operating segments are geographic components. The Company has concluded that it has two operating segments, Canada and the U.S., that derive their revenues from the online, retail and wholesale sale of tea, tea accessories and food and beverages. The Company’s Chief Executive and Brand Officer and President, Chief Financial and Operations Officer (the chief operating decision makers or “CODM”) make decisions about resources to be allocated and assesses performance of these segments, and for which discrete financial information is available. In the prior year the operating segments were the retail premises, and the reportable segments were Canada and US. As a result, there is no impact on prior period information as reportable segments were previously Canada and US. The Company derives revenue from the following products: For the three months ended May 1, May 2, 2021 2020 $ $ Tea 20,469 26,095 Tea accessories 2,780 4,620 Food and beverages - 1,527 23,249 32,242 Property and equipment, right-of-use assets and intangible assets by country are as follows: May 1, May 2, 2021 2020 $ $ Canada 5,945 16,807 U.S. - 138 5,945 16,945 Results from operating activities before corporate expenses per country are as follows: For the three months ended May 1, 2021 Canada US Consolidated $ $ $ Sales 18,133 5,116 23,249 Cost of sales 9,855 2,626 12,481 Gross profit 8,278 2,490 10,768 Selling, general and administration expenses (allocated) 2,263 500 2,763 Results from operating activities before corporate expenses 6,015 1,990 8,005 Selling, general and administration expenses (non-allocated) 6,431 Restructuring plan activities, net (1,602 ) Results from operating activities 3,176 Finance costs 10 Finance income (55 ) Net income before income taxes 3,221 For the three months ended May 2, 2020 Canada US Consolidated $ $ $ Sales 24,260 7,982 32,242 Cost of sales 13,411 4,158 17,569 Gross profit 10,849 3,824 14,673 Selling, general and administration expenses (allocated) 9,598 2,525 12,123 Impairment of property and equipment and right-of-use assets 2,560 — 2,560 Results from operating activities before corporate expenses (1,309 ) 1,299 (10 ) Selling, general and administration expenses (non-allocated) 6,951 Restructuring plan activities, net 37,400 Results from operating activities (44,361 ) Finance costs 1,667 Finance income (240 ) Net loss before income taxes (45,788 ) |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 3 Months Ended |
May 01, 2021 | |
FINANCIAL RISK MANAGEMENT | |
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 income (loss) in the amount of $249 (May 2, 2020 - $41). The Company’s foreign exchange exposure is as follows: May 1, January 30, 2021 2021 US$ US$ Cash 725 630 Accounts and other receivables 472 465 Prepaid expenses and deposits 5,364 5,394 Trade and other payables 1,585 750 The Company’s U.S. subsidiary’s transactions are denominated in U.S. dollars. 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 1, 2021, the Company had $31.3 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 1, 2021, trade and other payables amounted to $6.2 million (January 30, 2021 - $4.2 million) and purchase obligations amounted to $13.0 million, net of $7.2 million of advances (January 30, 2021 - $14.1 million, net of $6.8 million of advances). On July 8, 2020, the Company announced it was implementing a Restructuring Plan and as a result, trade and other payables due as at July 8, 2020 are subject to the Company’s Plan of Arrangement. 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. In light of implementing the Restructuring Plan, the Company expects to use cash on hand to pay for the settlement of obligations, which as a result of creditors accepting the Plan of Arrangement on June 11, 2021, is expected to approximate $18.0 million and become due and payable to our Monitor on June 30, 2021, for ultimate distribution to creditors. 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. |
LIABILITIES SUBJECT TO COMPRO_2
LIABILITIES SUBJECT TO COMPROMISE (Tables) | 3 Months Ended |
May 01, 2021 | |
Schedule of liability subject to compromise | Disclaimed and modified leases Trade and other payables Severance Costs Liabilities subject to compromise $ $ $ $ Balance as at January 30, 2021 75,310 20,699 4,541 100,550 Reversals (1,771 ) (377 ) — (2,148 ) Balance as at May 1, 2021 73,539 20,322 4,541 98,402 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 3 Months Ended |
May 01, 2021 | |
SHARE CAPITAL | |
Summary of authorized, issued, and outstanding shares | May 1, January 30, 2021 2021 $ $ Share Capital - 26,255,769 Common shares (January 30, 2021 - 26,234,582) 113,237 113,167 |
Summary of stock option plan and periodic changes | For the three months ended May 1, May 2, 2021 2020 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding and exercisable, beginning of year and end of period 17,490 6.32 76,350 8.96 |
Summary of the status of the RSU plan and periodic changes | For the three months ended May 1, May 2, 2021 2020 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 1,306,101 1.70 749,522 2.17 Granted — — 332,551 1.48 Forfeitures (24,131 ) 1.45 (28,117 ) 1.48 Vested (21,187 ) 3.32 (13,315 ) 5.59 Vested, withheld for tax (22,065 ) 3.32 (14,458 ) 5.63 Outstanding, end of period 1,238,718 1.65 1,026,183 4.43 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
May 01, 2021 | |
INCOME TAXES (Tables) | |
Schedule of the reconciliation of the statutory income tax rate to the effective tax rate | For the three months ended May 1, May 2, 2021 2020 % $ % $ Income tax provision (recovery) — statutory rate 26.4 850 26.8 (12,122 ) Increase (decrease) in income tax provision (recovery) resulting from: Non-deductible items (1.6 ) 52 (0.1 ) 23 Unrecognized (recognized) deferred income tax assets (24.8 ) (902 ) (26.7 ) 12,099 Income tax provision (recovery) — effective tax rate — — — — |
SELLING GENERAL AND ADMINISTRAT
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | 3 Months Ended |
May 01, 2021 | |
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | |
Schedule of selling, general and administrative expenses | For the three months ended May 1, May 2, 2021 2020 $ $ Wages, salaries and employee benefits 3,566 9,394 Depreciation of property and equipment 388 1,243 Amortization of intangible assets 403 512 Amortization right-of-use asset 159 2,239 Impairment of property and equipment and right-of-use assets — 2,560 IT expenses 2,212 696 Marketing expenses 945 1,041 Credit card fees 536 616 Professional fees 237 614 Stores supplies 357 766 Stock-based compensation 182 313 Government emergency wage subsidy (1,064 ) (843 ) Other selling, general and administration 1,273 2,483 9,194 21,634 |
RESTRUCTURING PLAN ACTIVITIES_2
RESTRUCTURING PLAN ACTIVITIES, NET (Tables) | 3 Months Ended |
May 01, 2021 | |
Summary of restructuring activities | For the three months ended May 1, May 2, 2021 2020 $ $ Disclaimed leases (1,771 ) - Trade and other payables (460 ) - Impairment of property and equipment and right-of-use assets - 37,400 Professional fees 546 - Interest and penalties related to unpaid occupancy charges 83 - Restructuring plan activities, net (1,602 ) 37,400 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
May 01, 2021 | |
Net earnings (loss) per share: | |
Schedule of reconciliation of basic and diluted EPS | For the three months ended May 1, May 2, 2021 2020 $ $ Net earnings (loss) for basic EPS 3,221 (45,788 ) Weighted average number of shares outstanding: Basic 26,296,690 26,088,127 Fully diluted 27,400,840 26,088,127 Net earnings (loss) per share: Basic 0.12 (1.76 ) Fully diluted 0.12 (1.76 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
May 01, 2021 | |
SEGMENT INFORMATION | |
Schedule of revenue by product | For the three months ended May 1, May 2, 2021 2020 $ $ Tea 20,469 26,095 Tea accessories 2,780 4,620 Food and beverages - 1,527 23,249 32,242 |
Schedule of property and equipment and intangible assets by country | May 1, May 2, 2021 2020 $ $ Canada 5,945 16,807 U.S. - 138 5,945 16,945 |
Schedule of gross profit per country | For the three months ended May 1, 2021 Canada US Consolidated $ $ $ Sales 18,133 5,116 23,249 Cost of sales 9,855 2,626 12,481 Gross profit 8,278 2,490 10,768 Selling, general and administration expenses (allocated) 2,263 500 2,763 Results from operating activities before corporate expenses 6,015 1,990 8,005 Selling, general and administration expenses (non-allocated) 6,431 Restructuring plan activities, net (1,602 ) Results from operating activities 3,176 Finance costs 10 Finance income (55 ) Net income before income taxes 3,221 For the three months ended May 2, 2020 Canada US Consolidated $ $ $ Sales 24,260 7,982 32,242 Cost of sales 13,411 4,158 17,569 Gross profit 10,849 3,824 14,673 Selling, general and administration expenses (allocated) 9,598 2,525 12,123 Impairment of property and equipment and right-of-use assets 2,560 — 2,560 Results from operating activities before corporate expenses (1,309 ) 1,299 (10 ) Selling, general and administration expenses (non-allocated) 6,951 Restructuring plan activities, net 37,400 Results from operating activities (44,361 ) Finance costs 1,667 Finance income (240 ) Net loss before income taxes (45,788 ) |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 3 Months Ended |
May 01, 2021 | |
FINANCIAL RISK MANAGEMENT | |
Summary of foreign exchange exposure | May 1, January 30, 2021 2021 US$ US$ Cash 725 630 Accounts and other receivables 472 465 Prepaid expenses and deposits 5,364 5,394 Trade and other payables 1,585 750 |
CORPORATE INFORMATION (Details
CORPORATE INFORMATION (Details Narrative) - CAD ($) $ in Thousands | Jun. 11, 2021 | May 01, 2021 | May 02, 2020 |
Statement [Line Items] | |||
Settlement amount to creditors | $ 18,000 | ||
Selling, general and administrative expenses | $ 9,194 | $ 21,634 | |
Canada Emergency Wage Subsidy [Member] | |||
Statement [Line Items] | |||
Selling, general and administrative expenses | $ 1,100 | $ 800 |
BASIS OF PREPARATION and GOIN_2
BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY (Details Narrative) - CAD ($) $ in Thousands | Jun. 11, 2021 | Jul. 08, 2020 | May 01, 2021 | May 02, 2020 | Jan. 30, 2021 |
Statement [Line Items] | |||||
Total current liabilities | $ 111,592 | $ 112,178 | |||
Net Income (loss) | 3,221 | $ (45,788) | |||
Settlement amount to creditors | $ 18,000 | ||||
Going Concern Uncertainty [Member] | |||||
Statement [Line Items] | |||||
Cash and accounts and other receivables | $ 37,891 | ||||
Settlement amount to creditors | $ 18,000 |
PROPERTY AND EQUIPMENT AND RI_2
PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Impairment loss of right-of-use assets | $ 27,000 | |
Impairment loss of property and equipment | 13,000 | |
Value in use | $ 791 | |
Pre-tax discount rate | 13.00% | |
Depreciation | $ 388 | 1,243 |
Amortization of right-of-use assets | 159 | 2,239 |
Impairment of property, equipment and right-of-use assets | 0 | 2,560 |
Impairment of property and equipment and right-of-use assets | $ 0 | $ 37,400 |
LIABILITIES SUBJECT TO COMPRO_3
LIABILITIES SUBJECT TO COMPROMISE (Details) $ in Thousands | 3 Months Ended |
May 01, 2021CAD ($) | |
Disclaimed And Modified Leases [Member] | |
Statement [Line Items] | |
Balance, January 30, 2021 | $ 75,310 |
Reversals | (1,771) |
Balance, May 1, 2021 | 73,539 |
Trade and Other Payables [member] | |
Statement [Line Items] | |
Balance, January 30, 2021 | 20,699 |
Reversals | (377) |
Balance, May 1, 2021 | 20,322 |
Severance Costs [member] | |
Statement [Line Items] | |
Balance, January 30, 2021 | 4,541 |
Reversals | 0 |
Balance, May 1, 2021 | 4,541 |
Liabilities Subject To Compromise [Member] | |
Statement [Line Items] | |
Balance, January 30, 2021 | 100,550 |
Reversals | (2,148) |
Balance, May 1, 2021 | $ 98,402 |
LIABILITIES SUBJECT TO COMPRO_4
LIABILITIES SUBJECT TO COMPROMISE (Details Narrative) $ in Thousands | Jun. 11, 2021CAD ($) |
Settlement amount to creditors | $ 18,000 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) - CAD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Share Capital - 26,255,769 Common shares (January 30, 2021 - 26,234,582) | $ 113,237 | $ 113,167 |
SHARE CAPITAL (Details 1)
SHARE CAPITAL (Details 1) - $ / shares | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Options outstanding | ||
Outstanding, beginning of year | 17,490 | 76,350 |
Outstanding, end of period | 17,490 | 76,350 |
Exercisable, end of period | 17,490 | 76,350 |
Weighted average exercise price | ||
Weighted average exercise price, beginning | $ 6.32 | $ 8.96 |
Weighted average exercise price, ending | 6.32 | 8.96 |
Weighted average exercise price, exercisable | $ 6.32 | $ 8.96 |
SHARE CAPITAL (Details 2)
SHARE CAPITAL (Details 2) - $ / shares | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
RSUs outstanding | ||
Outstanding, beginning of year | 1,306,101 | 749,522 |
Granted | 0 | 332,551 |
Forfeitures | (24,131) | (28,117) |
Vested | (21,187) | (13,315) |
Vested, withheld for tax | (22,065) | (14,458) |
Outstanding, end of year | 1,238,718 | 1,026,183 |
Weighted average fair value per unit | ||
Outstanding, beginning of year | $ 1.70 | $ 2.17 |
Granted | 0 | 1.48 |
Forfeitures | 1.45 | 1.48 |
Vested | 3.32 | 5.59 |
Vested, withheld for tax | 3.32 | 5.63 |
Outstanding, end of year | $ 1.65 | $ 4.43 |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Statement [Line Items] | ||
Stock-based compensation expense | $ 182 | $ 313 |
Common shares issued on vesting of restricted stock units, value | $ (96) | $ (13) |
Restricted Stock Units (RUS) [Member] | ||
Statement [Line Items] | ||
Common shares issued on vesting of restricted stock units, shares | 21,187 | 13,315 |
Common shares issued on vesting of restricted stock units, value | $ 70 | $ 74 |
Options [Member] | ||
Statement [Line Items] | ||
Reduction in the contributed surplus | $ 142 | $ 156 |
2015 Omnibus Plan [Member] | ||
Statement [Line Items] | ||
Maximum number of shares available for issuance | 1,246,519 | 1,533,986 |
INCOME TAXES (Details)
INCOME TAXES (Details) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Statutory income tax rate reconciliation, percent | ||
Income tax recovery - statutory rate (as a percent) | 26.40% | 26.80% |
Non-deductible items (as a percent) | (1.60%) | (0.10%) |
Unrecognized (recognized) deferred income tax assets (as a percent) | (24.80%) | (26.70%) |
Income tax provision (recovery) - effective tax rate (as a percent) | 0.00% | 0.00% |
Statutory income tax rate reconciliation, amount | ||
Income tax provision - statutory rate | $ 850 | $ (12,122) |
Non-deductible items | 52 | 23 |
Unrecognized (recognized) deferred income tax asset | (902) | 12,099 |
Income tax recovery - effective tax rate | $ 0 | $ 0 |
SELLING GENERAL AND ADMINISTR_2
SELLING GENERAL AND ADMINISTRATION EXPENSES (Details 1) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables) | ||
Wages, salaries and employee benefits | $ 3,566 | $ 9,394 |
Depreciation of property and equipment | 388 | 1,243 |
Amortization of intangible assets | 403 | 512 |
Amortization right-of-use asset | 159 | 2,239 |
Impairment of property, equipment and right-of-use assets | 0 | 2,560 |
IT expenses | 2,212 | 696 |
Marketing Expenses | 945 | 1,041 |
Credit card fees | 536 | 616 |
Professional fees | 237 | 614 |
Stores Supplies | 357 | 766 |
Stock-based compensation | 182 | 313 |
Government emergency wage subsidy | (1,064) | (843) |
Other selling, general and administration | 1,273 | 2,483 |
Selling, general and administrative expense | $ 9,194 | $ 21,634 |
RESTRUCTURING PLAN ACTIVITIES N
RESTRUCTURING PLAN ACTIVITIES NET (Details) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Disclaimed leases | $ (1,771) | $ 0 |
Trade and other payables | (460) | 0 |
Impairment of property and equipment and right-of-use assets | 0 | 37,400 |
Professional fees | 546 | 0 |
Interest and penalties related to unpaid occupancy charges | 83 | 0 |
Restructuring plan activities, net | $ (1,602) | $ 37,400 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - CAD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Net earnings (loss) per share: | ||
Net earnings (loss) for basic EPS | $ 3,221 | $ (45,788) |
Weighted average number of shares outstanding: | ||
Basic | 26,296,690 | 26,088,127 |
Fully diluted | 27,400,840 | 26,088,127 |
Net earnings (loss) per share: Basic | $ 0.12 | $ (1.76) |
Net earnings (loss) per share: Diluted | $ 0.12 | $ (1.76) |
RELATED PARTY DISCLOSURES (Deta
RELATED PARTY DISCLOSURES (Details Narrative) - CAD ($) $ in Thousands | 3 Months Ended | |||
May 01, 2021 | May 02, 2020 | Apr. 30, 2020 | Jan. 30, 2021 | |
Statement [Line Items] | ||||
Merchandise purchased from related party | $ 46 | $ 23 | ||
Infrastructure and administrative services | $ 5 | 67 | ||
Perpetual license right | 200 | |||
Revolving loan interest rate Description | the Company agreed to lend to Squish an amount of up to $4.0 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2.0 million. | |||
Consulting services | 44 | |||
Accrued interest | $ 0 | $ 50 | ||
Trade and other payables | 6,200 | $ 4,200 | ||
May 1, 2021 [Member] | ||||
Statement [Line Items] | ||||
Trade and other payables | $ 4 | |||
Squish [Member] | ||||
Statement [Line Items] | ||||
Earned in first quarter | $ 19 | |||
Accrued interest | 45 | |||
Loan amount repaid | $ 2,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Statement [Line Items] | ||
Sales | $ 23,249 | $ 32,242 |
Tea [Member] | ||
Statement [Line Items] | ||
Sales | 20,469 | 26,095 |
Tea Accessories [Member] | ||
Statement [Line Items] | ||
Sales | 2,780 | 4,620 |
Food And Beverages [Member] | ||
Statement [Line Items] | ||
Sales | $ 0 | $ 1,527 |
SEGMENT INFORMATION (Details 1)
SEGMENT INFORMATION (Details 1) - CAD ($) $ in Thousands | May 01, 2021 | May 01, 2020 |
Statement [Line Items] | ||
Property and equipment and intangible assets | $ 5,945 | $ 16,945 |
Canada Segment [Member] | ||
Statement [Line Items] | ||
Property and equipment and intangible assets | 5,945 | 16,807 |
United States Segment [Member] | ||
Statement [Line Items] | ||
Property and equipment and intangible assets | $ 0 | $ 138 |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - CAD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Statement [Line Items] | ||
Sales | $ 23,249 | $ 32,242 |
Cost of sales | 12,481 | 17,569 |
Gross profit | 10,768 | 14,673 |
Results from operating activities | 3,176 | (44,361) |
Net Income (loss) | 3,221 | (45,788) |
Operating Segments [Member] | Consolidated Segments [Member] | ||
Statement [Line Items] | ||
Sales | 23,249 | 32,242 |
Cost of sales | 12,481 | 17,569 |
Gross profit | 10,768 | 14,673 |
Results from operating activities | 3,176 | (44,361) |
Net Income (loss) | 3,221 | (45,788) |
Selling, general and administration expenses (allocated) | 2,763 | 12,123 |
Impairment of property, equipment and right-of-use assets | 2,560 | |
Results from operating activities before corporate expenses | 8,005 | (10) |
Selling, general and administration expenses (non-allocated) | 6,431 | 6,951 |
Restructuring plan activities, net | (1,602) | 37,400 |
Finance costs | 10 | 1,667 |
Finance income | (55) | (240) |
Operating Segments [Member] | Canada Segment [Member] | ||
Statement [Line Items] | ||
Sales | 18,133 | 24,260 |
Cost of sales | 9,855 | 13,411 |
Gross profit | 8,278 | 10,849 |
Selling, general and administration expenses (allocated) | 2,263 | 9,598 |
Impairment of property, equipment and right-of-use assets | 2,560 | |
Results from operating activities before corporate expenses | 6,015 | (1,309) |
Operating Segments [Member] | United States Segment [Member] | ||
Statement [Line Items] | ||
Sales | 5,116 | 7,982 |
Cost of sales | 2,626 | 4,158 |
Gross profit | 2,490 | 3,824 |
Selling, general and administration expenses (allocated) | 500 | 2,525 |
Impairment of property, equipment and right-of-use assets | 0 | 0 |
Results from operating activities before corporate expenses | $ 1,990 | $ 1,299 |
FINANCIAL RISK MANAGEMENT (Deta
FINANCIAL RISK MANAGEMENT (Details) - Estimate For Allowed Claims [Member] - CAD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Statement [Line Items] | ||
Foreign exchange exposure, cash | $ 725 | $ 630 |
Foreign exchange exposure, accounts and other receivable | 472 | 465 |
Foreign exchange exposure, prepaid expense and deposits | 5,364 | 5,394 |
Foreign exchange exposure, Trade and other payable | $ 1,585 | $ 750 |
FINANCIAL RISK MANAGEMENT (De_2
FINANCIAL RISK MANAGEMENT (Details Narrative) - CAD ($) $ in Thousands | Jun. 11, 2021 | May 01, 2021 | May 02, 2020 | Jan. 30, 2021 | Feb. 01, 2020 |
Statement [Line Items] | |||||
Trade and other payables | $ 6,200 | $ 4,200 | |||
Purchase obligations | 13,000 | 14,100 | |||
Purchase obligations, Advances | 7,200 | 6,800 | |||
Settlement of obligations | $ 18,000 | ||||
Cash in hand | $ 31,321 | $ 39,343 | 30,197 | $ 46,338 | |
Estimate For Allowed Claims [Member] | |||||
Statement [Line Items] | |||||
Cash in hand | $ 30,200 | ||||
Change in assets and liabilities due currency translation, percentage | 5.00% | ||||
Increase (decrease) in net loss due to change in exchange rate | $ 249 | $ 41 |