Insolvent beverage company DavidsTea Inc. says its net losses nearly doubled last year on surging losses in the fourth quarter.
The Montreal-based company says it lost $55.9 million or $2.14 per diluted share for the year, compared with a loss of $31.2 million or $1.20 per share in 2019.
Deeper losses came as the company's sales plunged 38% to $121.7 million from $196.5 million as it felt the effects of lockdowns and it exited its entire retail network except 18 Canadian stores.
In the three months ended Jan. 30, DavidsTea lost $27.2 million or $1 per share, compared with losses of $5.7 million or 21 cents per share in the prior year.
Revenues were $40.2 million, down 45% from $73.5 million in the first quarter of 2020. However, e-commerce and wholesale sales increased 96%.
Excluding one-time items such as restructuring costs,DavidsTea's adjusted profit increased about $500,000 to reach $4 million or 15 cents per share in the quarter.
Adjusted losses for the year were $1.54 million or six cents per share, compared with losses of $14.9 million or 57 cents per share in 2019.
"In a very short period, we have successfully pivoted to a digital first organization, as we continue to connect with our customers in new ways," stated CEO Sarah Segal.
"We remain focused on expanding our omnichannel fulfilment capabilities in our retail locations, our subscription community and our service capacity with virtual tea guides online."
She said online sales accounted for more than 80% of annual sales, up from 22% in 2019.
The formal restructuring process under the Companies' Creditors Arrangement Act was recently extended until the beginning of June. Chief financial officer Frank Zitella said an agreement with creditors was the critical next step for the company.