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ANDREW PELLER -LIMITED- Andrew Peller Limited Reports Results for Second Quarter Fiscal 2022 GRIMSBY , Ontario , Nov. 10 , 2021 ( GLOBE NEWSWIRE ) -- Andrew Peller Limited ADW.A / ADW.B ( " APL " or the " Company " ) announced today its results for the three and six months ended September 30 , 2021 . FISCAL 2022 HIGHLIGHTS : • Second quarter sales decreased 5 % as retail consumers return to pre - pandemic purchasing patterns and hospitality trade channels remain heavily restricted ; • Previously closed trade channels including the estate winery , restaurant , and export businesses are slowly recovering to pre - pandemic levels ; • Quarterly gross margin improved due to changes in sales mix , partially offset by increased costs due to global supply chain issues ; • Year - to - date selling and administration expenses increase as key trade channels re - open ; • Sale of Port Coquitlam property generates realized gain of $ 7.5 million ( $ 0.21 per Class A Share ) ; • 10 % increase in common share dividends announced in June 2021 . " Our business this year continues to be affected by a number of unusual market and operational issues resulting from the COVID - 19 pandemic , we expect that these factors will gradually reduce as the pandemic eases . However , comparing our sales through the first six months of fiscal 2022 to the prior year , we generated reasonable growth after adjusting for pandemic- related trade channel closures , ” commented John Peller , President and Chief Executive Officer . “ Looking ahead , over the longer term we believe our sales will grow and margins will improve as our markets return to more normal conditions . " Sales for the six months ended September 30 , 2021 were $ 191.6 million , down 5.5 % from the prior year . When the pandemic was announced , the Company saw an increase in sales through the first six months of fiscal 2021 as a result of changes in consumer purchasing patterns and uncertainty around trade channels for alcoholic beverages remaining open . Additionally , provincial liquor stores in Ontario were closed on Mondays for the majority of fiscal 2021 , resulting in an increase in sales at our retail locations . As the pandemic eases , sales in these channels have normalized when compared to prior year . Government - mandated closures of restaurants and hospitality businesses were lifted in June 2021 with restrictions on capacity remaining in place throughout the six month period ended September 30 , 2021. As a result , the recovery in the restaurant and hospitality industries has lagged when compared to the retail industry . Sales in these channels has increased in the second quarter of fiscal 2022 when compared with the second quarter of fiscal 2021 and management expects this to continue in the quarters ahead as consumers return to pre - pandemic activities . Gross margin as a percentage of sales was 41.6 % for the six months ended September 30 , 2021 compared to 42.8 % in the prior year . Gross margin has declined in fiscal 2022 due to higher imported wine costs , increased global supply chain costs due to the COVID - 19 pandemic , and increased co - packing costs related to the Company's new and growing refreshment beverage categories . Gross margin has improved sequentially to 42.7 % in the second quarter of fiscal 2022 compared to 40.3 % in the first quarter of fiscal 2022 and 35.5 % in the fourth quarter of fiscal 2021 as higher costs are being offset by sales of higher margin products . Selling and administrative expenses have increased in the three and six months of fiscal 2022 compared to the three and six months of fiscal 2021 as the Company increases staffing and marketing expenses in preparation for more normal markets returning as the impact of the COVID - 19 pandemic eases . During the three and six months ended September 30 , 2020 , the Company laid off a significant part of its workforce due to government - mandated closures and reduced advertising and promotional spending to conserve cash in response to the pandemic . In addition certain start - up costs were incurred in fiscal 2022 related to the recently acquired Riverbend Inn and Vineyard which opened on June 19 , 2021. As a percentage of sales , selling and administrative expenses were 26.8 % and 27.1 % through the three and six month ended September 30 , 2021 , respectively , compared to 20.8 % and 20.6 % in the same prior year periods . As the pandemic eases and activity in the hospitality , licensee and export channels increases , the Company expects selling and administrative expenses will trend to pre - pandemic levels as a percentage of sales . Earnings before interest , amortization , gain on sale of land and property , net unrealized gains and losses on derivative financial instruments and deferred financing fees , other ( income ) expenses , and income taxes ( " EBITA " ) were $ 27.7 million for the six months ended September 30 , 2021 compared to $ 45.0 million in the prior year . The decline in EBITA in fiscal 2022 is due primarily to the lower sales , reduced gross margin and higher administrative and selling expenses compared to the prior year . On September 28 , 2021 the Company completed the previously - announced sale of its Port Coquitlam , British Columbia property and related assets for total proceeds of approximately $ 8.8 million , net of transaction costs , and generated a realized gain on the sale of $ 7.5 million or $ 0.21 per Class A share . Net earnings for the three and six months ended September 30 , 2021 were $ 13.1 million ( $ 0.31 per Class A Share ) and $ 16.4 million ( $ 0.39 per Class A Share ) , respectively , compared to $ 12.7 million ( $ 0.30 per Class A Share ) and $ 23.9 million ( $ 0.56 per Class A Share ) in the prior year . Adjusted earnings , defined as net earnings not including the realized gain on sale of land and property , net unrealized gains and losses on derivative financial instruments , other ( income ) expenses , and the related income tax effect were $ 9.1 million for the six months ended September 30 , 2021 compared to $ 25.0 million in the prior year .