Page 1

ANDREW PELLER LIMITED REPORTS RECORD SALES AND EARNINGS IN FIRST NINE MONTHS OF GRIMSBY , Ontario February 10 , 2021 FISCAL 2021 Andrew Peller Limited ADW.A / ADW.B ( " APL " or the " Company " ) announced strong growth in sales and net earnings for the nine months ended December 31 , 2020 . NINE MONTHS FISCAL 2021 HIGHLIGHTS : Sales up 9.3 % in third quarter and 4.6 % year to date on resiliency of diversified trade channel network ; • Launch of new e - commerce portal contributes to sales growth ; • Gross margin impacted by change in sales mix due to COVID - 19 pandemic ; • Selling and administration expenses decrease due to reduced spending as a result of pandemic ; EBITA increases 18.1 % year to date ; and Net earnings rise to $ 34.1 million or $ 0.80 per Class A share , including a one time non - cash gain on debt modification of $ 2.3 million ( $ 0.05 per Class A share ) . " We are pleased with our sales growth and increase in net earnings through the first nine months of the year , a testament to the experience of our people and the resiliency of our diversified and well - established network of trade channels , ” " commented John Peller , President and Chief Executive Officer . “ Looking ahead , we are confident we will see strong operating performance through the balance of our fiscal year , however we remain cautious as to the possible impacts the pandemic may have on our results . " Solid Operating Performance Sales for the three and nine months ended December 31 , 2020 were $ 111.0 million and $ 313.9 million , respectively , up from $ 101.6 million and $ 300.2 million in the same prior year periods . Due to the COVID - 19 pandemic , consumer purchasing patterns changed resulting in an increase in sales on the Company's new e - commerce platform , at provincial liquor stores and other retail channels . Partially offsetting the increase was the reduction in hospitality and licensee sales due to COVID - 19 closures and lower duty - free export sales due to restricted travel . Management believes the highly diversified nature of its well - established network of trade channels will continue to mitigate the impact on sales of the COVID - 19 pandemic . Gross margin as a percentage of sales was 37.4 % and 40.9 % for the three and nine months ended December 31 , 2020 , respectively , compared to 41.3 % and 43.5 % in the prior year . Gross margin in fiscal 2021 has declined as a result of higher imported wine costs , an increase in consumption of lower margin products , revenue decline in high margin trade channels and increased distribution costs resulting from the new e - commerce platform . The Company expects margin to improve in post COVID - 19 periods . Selling and administrative expenses were lower in fiscal 2021 due to a deliberate effort to conserve cash resources by temporarily reducing advertising and promotional spending and staffing levels due to restrictions related to the COVID- 19 pandemic . As a percentage of sales , selling and administrative expenses reduced to 22.8 % and 21.4 % for the three and nine months ended December 31 , 2020 , respectively , compared to 25.4 % and 26.3 % in the same prior year periods . Earnings before interest , amortization , net unrealized gains and losses on derivative financial instruments , other ( income ) expenses , and income taxes ( " EBITA ” ) in the third quarter of fiscal 2021 were $ 16.2 million compared to $ 16.1 million last year . For the nine months ended December 31 , 2020 , EBITA was $ 61.2 million , up from $ 51.8 million in the prior year . The increase in EBITA through the first nine months of fiscal 2021 is due primarily to the lower selling and administrative costs . Net earnings for the three and six months of fiscal 2021 were $ 10.2 million ( $ 0.24 per Class A Share ) and $ 34.1 million ( $ 0.80 per Class A Share ) , respectively , compared to $ 8.1 million ( $ 0.19 per Class A Share ) and $ 24.5 million ( $ 0.57 per Class A Share ) , respectively , in the prior year . Included in net earnings for the nine months ended December 31 , 2020 is a one time non - cash gain on the amendment and restatement of the Company's debt ( see below ) , in accordance with IFRS 9 , of $ 2.3 million . Adjusted earnings , defined as net earnings not including gain on debt modification and financing fees , net unrealized gains and losses on derivative financial instruments , other ( income ) expenses , nonrecurring , non - operating ( gains ) and losses , and the related income tax effect were $ 8.2 million and $ 33.1 million for the three and nine months ended December 31 , 2020 , respectively , compared to $ 7.8 million and $ 26.4 million , respectively , in the prior year . 1