Birks Group Reports Solid Fiscal 2022 Results
Birks Group reported its financial results for the fiscal year ended March 26, 2022, achieving a remarkable 26.7% sales growth and a return to profitability. The Company's net sales reached $181.3 million, with a gross profit of $76.2 million, marking a 35.3% increase year-over-year. EBITDA rose significantly by 296% to $10.3 million. Despite temporary store closures affecting approximately 7% of shopping days, comparable store sales soared by 32.5%. The Company has implemented effective pricing strategies, resulting in a 260 basis points increase in gross margin percentage.
- Net sales increased by 26.7% to $181.3 million, up $38.2 million from fiscal 2021.
- Gross profit reached $76.2 million, up 35.3% year-over-year.
- EBITDA improved to $10.3 million, a 296% increase compared to $2.6 million in fiscal 2021.
- Return to profitability with a reported net income of $1.3 million.
- Approximately 7% of shopping days were lost due to temporary store closures, though reduced from 31% in fiscal 2021.
The Company delivered increased sales, expanded gross margins as well as improved profitability and liquidity.
Highlights
All figures presented herein are in Canadian dollars.
During the fiscal year ended
During fiscal 2022, the Company achieved net sales of
The Company’s EBITDA(1) for fiscal 2022 was
Overall, the Company reported a positive net income of
Despite losing approximately
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of
Mr. Bédos further commented: “I believe that the Company today is in a stronger position to achieve its long-term objectives, and I am confident in our potential to achieve meaningful growth as we continue to prioritize investments that we believe will drive shareholder value.”
Financial overview for fiscal 2022:
-
Net sales for fiscal 2022 were
, an increase of$181.3 million , or$38.2 million 26.7% , compared to net sales of in fiscal 2021. The increase in net sales in fiscal 2022 was primarily driven by strong results experienced throughout the Company’s retail channel fueled by improved performance of third party branded timepieces and Bijoux Birks branded jewelry and bridal collections. The increase in net sales in fiscal 2022 was also attributable to the reduced impact of COVID-19 (including government-mandated temporary store closures, traffic declines and capacity limitations) experienced by the Company during fiscal 2022 as compared to fiscal 2021. Approximatively$143.1 million 7% of shopping days were lost due to temporary store closures during fiscal 2022, as compared to approximatively31% during fiscal 2021; -
Comparable store sales increased by
32.5% in fiscal 2022 compared to fiscal 2021. Such increase is primarily related to the reduced impact of COVID-19 (including government-mandated temporary store closures, traffic declines and capacity limitations) experienced by the Company during the period as compared to during fiscal 2021. Comparable store sales as presented in the results of operations below for fiscal 2022 and fiscal 2021 have not been adjusted to remove the impact of any government mandated temporary store closures; -
Gross profit for fiscal 2022 was
, or$76.2 million 42.0% of net sales, compared to , or$56.4 million 39.4% of net sales for fiscal 2021. This increase was primarily driven by the increased sales volume experienced in the period driven by the reduced adverse effects of COVID-19 on the Company’s retail operations in fiscal 2022 as compared to fiscal 2021, as well as by an improvement in gross margin of 260 basis points. The increase in 260 basis points in gross margin percentage was mainly attributable to the Company’s adjusted pricing strategy on Bijoux Birks branded products, as well as its strategic focus on reducing sales promotions and discounting; -
SG&A expenses in fiscal 2022 were
, or$65.9 million 36.3% of net sales, compared to , or$53.7 million 37.5% of net sales in fiscal 2021. SG&A expenses in fiscal 2022 increased by versus SG&A expenses in fiscal 2021. This increase is primarily related to the reduced impact of COVID-19 (including government-mandated temporary store lockdowns, traffic declines and capacity limitations) experienced by the Company during the period as compared to fiscal 2021, and therefore reduced cost containment initiatives undertaken by management in response to the pandemic. The drivers of the increase in SG&A expenses in the period include greater occupancy costs ($12.2 million ) as a result of the re-opening of stores and related non-recurring rent abatements in fiscal 2021, increased marketing costs ($2.2 million ), greater compensation costs ($2.3 million ) due to the re-opening of the stores and related non-recurring temporary lay-offs, and salary reductions in fiscal 2021, as well as higher sales commissions and variable compensation due to increased sales volume and improved operating performance, higher general operating costs and variable costs including credit cards fees ($5.0 million ) driven by increased sales activity and lower wage and rent subsidies ($2.2 million ), partially offset by lower stock-based compensation ($1.3 million ). As a percentage of sales, SG&A expenses in fiscal 2022 have decreased by 120 basis points as compared to fiscal 2021;$0.9 million -
The Company’s EBITDA (1) for fiscal 2022 was
, an increase of$10.3 million , compared to EBITDA(1) of$7.7 million for fiscal 2021;$2.6 million -
The Company’s reported operating income for fiscal 2022 was
, an improvement of$4.5 million , compared to a reported operating loss of$7.3 million for fiscal 2021; and$2.8 million -
The Company recognized net income for fiscal 2022 of
, or$1.3 million share, compared to a net loss for fiscal 2021 of$0.07 , or ($5.8 million ) per share.$0.32
(1) |
This is a non-GAAP financial measure defined below under “Non-GAAP Measures” and accompanied by a reconciliation to the most directly comparable GAAP financial measure. |
About
NON-GAAP MEASURES
The Company reports financial information in accordance with
EBITDA
“EBITDA” is defined as net income (loss) from continuing operations before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.
Adjusted EBITDA
The Company evaluates its operating earnings performance using financial measures which exclude expenses associated with impairment losses. The Company believes that such measures provide useful supplemental information with which to assess the Company’s results relative to the corresponding period in the prior year and can result in a more meaningful comparison of the Company’s performance between the periods presented. The table below provides a reconciliation of the non-GAAP measures presented to the most directly comparable financial measures calculated with GAAP.
Total Adjusted Operating Expenses |
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For the fiscal year ended |
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( |
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Total operating expenses (GAAP measure) |
71,751 |
|
59,171 |
|
71,021 |
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as a % of net sales |
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Remove the impact of: |
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Impairment of long-lived assets (a) |
— |
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— |
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-309 |
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Total adjusted operating expenses (non-GAAP measure) |
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as a % of net sales |
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Adjusted operating income (loss) |
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For the fiscal year ended |
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( |
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Operating income (loss) (GAAP measure) |
4,469 |
|
(2,821) |
|
(6,544) |
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as a % of net sales |
|
|
- |
|
- |
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Add the impact of: |
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|
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Impairment of long-lived assets (a) |
— |
|
— |
|
309 |
|
Adjusted operating income (loss) (non-GAAP measure) |
|
|
(2,821) |
|
(6,235) |
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as a % of net sales |
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|
- |
|
- |
EBITDA & Adjusted EBITDA |
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For the fiscal year ended |
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( |
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Net income (loss) from continuing operations (GAAP measure) |
1,287 |
|
(5,838) |
|
(12,227) |
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as a % of net sales |
|
|
- |
|
- |
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Add the impact of: |
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Interest expense and other financing costs |
3,182 |
|
3,017 |
|
5,683 |
|
Income taxes expense (recovery) |
— |
|
— |
|
— |
|
Depreciation and amortization |
5,809 |
|
5,458 |
|
4,845 |
|
EBITDA (non-GAAP measure) |
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(2,637) |
|
(1,699) |
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as a % of net sales |
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|
- |
|
Add the impact of: |
|
|
|
|
|
|
Impairment of long-lived assets (a) |
— |
|
— |
|
309 |
|
Adjusted EBITDA (non-GAAP measure) |
|
|
|
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(1,390) |
|
as a % of net sales |
|
|
|
|
- |
(a) |
Non-cash impairment of long-lived assets in fiscal 2020 related to leasehold improvements that are associated to store leases that have a possibility of early lease termination. |
Forward Looking Statements
This press release contains forward- looking statements which can be identified by their use of words like “plans,” “expects,” “believes,” “will,” “anticipates,” “intends,” “projects,” “estimates,” “could,” “would,” “may,” “planned,” “goal,” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about the Company’s ability to achieve its long-term objectives, achieve meaningful growth, and drive shareholder value are forward-looking statements.
Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward- looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements.
These risks and uncertainties include, but are not limited to the following: (i) the magnitude and length of economic disruption as a result of the worldwide novel coronavirus (COVID-19) outbreak, including its impact on macroeconomic conditions, generally, as well as its impact on the results of operations and financial condition of the Company and the trading price of its shares; (ii) a decline in consumer spending or deterioration in consumer financial position; (iii) economic, political and market conditions, including the economies of
Information concerning factors that could cause actual results to differ materially is set forth under the captions “Risk Factors” and “Operating and Financial Review and Prospects” and elsewhere in the Company’s Annual Report on Form 20-F filed with the
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - AUDITED |
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Fiscal Year Ended |
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(In thousands, except per share amounts) |
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Net sales |
$ |
181,342 |
$ |
143,068 |
|
$ |
169,420 |
|
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Cost of sales |
|
105,122 |
|
|
86,718 |
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|
104,943 |
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Gross profit |
|
76,220 |
|
|
56,350 |
|
|
64,477 |
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Selling, general and administrative expenses |
|
65,942 |
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53,713 |
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65,867 |
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Depreciation and amortization |
|
5,809 |
|
|
5,458 |
|
|
4,845 |
|
|||
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
309 |
|
|||
Total operating expenses |
|
71,751 |
|
|
59,171 |
|
|
71,021 |
|
|||
Operating income (loss) |
|
4,469 |
|
|
(2,821 |
) |
|
(6,544 |
) |
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Interest and other financial costs |
|
3,182 |
|
|
3,017 |
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|
5,683 |
|
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Loss from continuing operations |
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1,287 |
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|
(5,838 |
) |
|
(12,227 |
) |
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Income taxes (benefits) |
|
- |
|
|
- |
|
|
- |
|
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Loss from continuing operations |
|
1,287 |
|
|
(5,838 |
) |
|
(12,227 |
) |
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Discontinued operations: |
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Loss income from discontinued operations, net of tax |
|
- |
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- |
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(552 |
) |
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Gain on disposal of discontinued operations |
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- |
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- |
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- |
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Net (loss) income from discontinued operations, net of tax |
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- |
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- |
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(552 |
) |
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Net (loss) income |
$ |
1,287 |
|
$ |
(5,838 |
) |
$ |
(12,779 |
) |
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Weighted average common shares outstanding: |
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Basic |
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18,346 |
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|
18,005 |
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17,968 |
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Diluted |
|
18,794 |
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|
18,005 |
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|
17,968 |
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Net (loss) income per common share: |
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Basic |
$ |
0.07 |
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$ |
(0.32 |
) |
$ |
(0.71 |
) |
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Diluted |
|
0.07 |
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(0.32 |
) |
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(0.71 |
) |
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Net (loss) income from continuing operations per common share: |
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Basic |
$ |
0.07 |
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$ |
(0.32 |
) |
$ |
(0.68 |
) |
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Diluted |
|
0.07 |
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(0.32 |
) |
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(0.68 |
) |
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CONDENSED CONSOLIDATED BALANCE SHEETS – AUDITED |
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As of |
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(In thousands) |
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Assets |
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Current assets: |
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|
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Cash and cash equivalents |
$ |
2,013 |
|
$ |
1,807 |
|
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Accounts receivable and other receivables |
|
8,037 |
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|
7,307 |
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Inventories |
|
78,907 |
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|
97,789 |
|
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Prepaids and other current assets |
|
1,822 |
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|
2,044 |
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Total current assets |
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90,779 |
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|
108,947 |
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Long-term receivables |
|
5,599 |
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|
5,673 |
|
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Property and equipment |
|
22,781 |
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|
24,496 |
|
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Operating lease right-of-use asset |
|
58,071 |
|
|
57,670 |
|
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Intangible assets and other assets |
|
6,031 |
|
|
4,894 |
|
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Total non-current assets |
|
92,482 |
|
|
92,733 |
|
||
Total assets |
$ |
183,261 |
|
$ |
201,680 |
|
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|
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|
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Liabilities and Stockholders’ Equity |
|
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|
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Current liabilities: |
|
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|
||||
Bank indebtedness |
$ |
43,157 |
|
$ |
53,387 |
|
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Accounts payable |
|
28,291 |
|
|
37,975 |
|
||
Accrued liabilities |
|
8,340 |
|
|
11,209 |
|
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Current portion of long-term debt |
|
2,129 |
|
|
2,960 |
|
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Current portion of operating lease liabilities |
|
6,963 |
|
|
6,298 |
|
||
Total current liabilities |
|
88,880 |
|
|
111,829 |
|
||
|
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|
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Long-term debt |
|
21,371 |
|
|
23,062 |
|
||
Long-term portion of operating lease liabilities |
|
66,757 |
|
|
66,713 |
|
||
Other long-term liabilities |
|
389 |
|
|
1,498 |
|
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Total long-term liabilities |
|
88,517 |
|
|
91,273 |
|
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Stockholders’ equity (deficiency): |
|
|
|
|
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Class A common stock – no par value, unlimited shares authorized, issued and outstanding 10,795,443 (10,610,973 as of |
|
37,883 |
|
|
37,361 |
|
||
Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970 |
|
57,755 |
|
|
57,755 |
|
||
Preferred stock – no par value, unlimited shares authorized, none issued |
|
- |
|
|
– |
|
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Additional paid-in capital |
|
23,669 |
|
|
18,259 |
|
||
Accumulated deficit |
|
(113,413 |
) |
|
(114,700 |
) |
||
Accumulated other comprehensive loss |
|
(30 |
) |
|
(97 |
) |
||
Total stockholders’ equity (deficiency) |
|
5,864 |
|
|
(1,422 |
) |
||
Total liabilities and stockholders’ equity |
$ |
183,261 |
|
$ |
201,680 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220622006049/en/
Company Contacts:
Vice President and Chief Financial Officer
(514) 397-2592
For all press and media inquiries, please contact:
(647) 223-9970
(647) 223-5590
(289) 221-6006
Source:
FAQ
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