Earnings release
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Colabor Group Reports Results for the Third Quarter 2025 and Provides a Corporate Update SAINT-BRUNO-DE-MONTARVILLE, Quebec, Oct. 16, 2025 -- Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports its results for the third quarter ended September 6, 2025. Third Quarter 2025 Financial Highlights (12 weeks): • Sales increased by 31.1% to $212.5 million, compared to $162.0 million for the corresponding period of 2024; • Adjusted EBITDA(1) decreased to $5.8 million from $9.5 million for the corresponding period of 2024, with an adjusted EBITDA(1) margin to 2.7% of sales, compared to 5.9% of sales during the corresponding period of 2024; • Net loss from continuing operations was $74.4 million, compared to net earnings of $1.2 million for the corresponding period of 2024; • Cash flow from operating activities decreased to $(7.7) million compared to $9.9 million for the third quarter of 2024; • Net debt(2) increased to $112.1 million, compared to $47.8 million as at December 28, 2024; • On July 21, 2025, the Company announced that it identified a cybersecurity incident on July 20, 2025 that has impacted its internal IT systems. Refer to section 2.1 in MD&A for more information; • On September 5, 2025, the Company entered into forbearance agreements with its lenders. The Company obtained an extension of these agreements on October 15, 2025. The lenders have agreed to temporarily forbear, until January 30, 2026, from exercising their rights and remedies with respect to anticipated defaults under the amended credit facility, the subordinated debt and highly subordinated debt. The forbearance agreement with its banking syndicate also requires new equity contributions and significant amendments to the credit facility; and • As at September 6, 2025, as a result of unfavorable economic factors in certain industry sectors resulting in a decrease in volume of sales, profit margins and the growth prospects, the Company recognized an impairment charge of $75.0 million, which was allocated to goodwill. Events since the end of the quarter: Kelly Shipway Appointed President and Chief Executive Officer of Colabor Colabor announced today the departure, effective immediately, of Mr. Louis Frenette, President and Chief Executive Officer since 2019. In accordance with the company's succession plan, Kelly Shipway, currently Chief Operating Officer, is appointed President and Chief Executive Officer. The Board of Directors thanks Mr. Frenette for his contributions over the past few years. The Board wishes him the best of success in the pursuit of his projects. Succession plan This transition is part of a structured and responsible approach aimed at enhancing the customer experience, increasing profitability, and ensuring organizational continuity. A key member of the management team, Ms. Shipway has more than 25 years of experience in strategic business execution, operations, acquisitions and integrations primarily in the agri-food sector. She joined Colabor in 2023 as Vice President, Centralized Negotiations, Marketing and Procurement, took on the role of Vice President of Business Strategy in January 2024, before being promoted to Chief Operating Officer a few weeks ago. Since joining the company, Ms. Shipway has laid the foundation for best practices in revenue management by aligning business strategy and strengthening long-term partnerships with suppliers and customers. "I am honored by the trust that the Board of Directors has in me by entrusting me with the reins of Colabor," said Ms. Shipway. "I am committed to taking the next steps and seizing the growth opportunities that lie ahead." Transformation and priorities "The Board of Directors is confident that Kelly Shipway is the right leader to take Colabor's next steps, thanks to her performance-driven and collaborative leadership, as well as her strong understanding of business strategy and operations," said Denis Mathieu, Interim Chairman of the Board. "Her expertise in acquisition integration and her pragmatic approach will maximize synergies, improve profitability and strengthen purchasing power. We are confident that Ms. Shipway will ensure continuity and successfully guide the company through this new phase of growth." Financial turnaround remains a top priority for the Company, supported by its commitment to profitable growth and maintaining the highest levels of service and quality offered to its customers.
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Colabor is well positioned and ready to accelerate its growth and consolidate its role as a leader in foodservice distribution in Quebec and Canada. Integration of Alimplus' activities The Company has initiated the integration plan for Alimplus' activities in order to achieve the expected cost savings with the closure of the Drummondville site by the end of November 2025 and the Anjou site by the end of January 2026, respectively. The Company expects that integration synergies, including those associated with the aforementioned site closures, will take several quarters to materialize, meaning that the full benefits of the acquisition will not be realized until the end of 2026. Table of Third Quarter 2025 Financial Highlights: Financial highlights 12 weeks 36 weeks (in thousands of dollars, except percentages, per share data and financial leverage ratio) 2025 2024 2025 2024 $ $ $ $ Sales from continuing operations 212,470 162,034 513,654 454,512 Adjusted EBITDA(1) 5,780 9,484 13,416 24,084 Adjusted EBITDA(1) margin (%) 2.7 5.9 2.6 5.3 Net (loss) earnings from continuing operations (74,420) 1,164 (80,719) 1,067 Net (loss) earnings (74,420) 1,113 (80,719) 996 Per share - basic and diluted ($) (0.73) 0.01 (0.79) 0.01 Cash flow from operating activities (7,746) 9,904 2,953 26,627 Financial position As at As at September 6, December 28, 2025 2024 Net debt(2) 112,122 47,802 Financial leverage ratio(3) 7.8x 2.4x (1) Non-IFRS measure. Refer to the table Reconciliation of Net (Loss) Earnings to adjusted EBITDA in MD&A section 6 "Non- IFRS Performance Measures". Adjusted EBITDA corresponds to net operating (loss) earnings before (income) costs not related to current operations, depreciation and amortization and expenses for stock-based compensation plan. (2) Non-IFRS measure. Refer to MD&A section 6 "Non-IFRS Performance Measures". Net debt corresponds to bank indebtedness, current portion of long-term debt and long-term debt, net of cash. (3) Financial leverage ratio is an indicator of the Company's ability to service its long-term debt. It is defined as net debt / adjusted EBITDA and pro forma adjustments related to the recent Acquisition, less lease liability payments and interests on lease obligations for the last four quarters. Refer to MD&A section 6 "Non-IFRS Performance Measures". "Several factors weighed on the Company's results for the quarter. Among other things, there was a temporarily increased cost structure due to the time required to ensure the successful integration of Alimplus' activities and the consequent deferral of the realization of the anticipated synergies resulting from the acquisition of Alimplus, the loss of sales associated with the cybersecurity incident, pressure on margins due to the impact of the renewal of the major institutional contract in December 2024 as well as challenging market conditions for the foodservice sector. These factors have had a significant impact on our working capital and liquidity needs during the quarter," said Yanick Blanchard, Interim Senior Vice President and Chief Financial Officer of Colabor. "To remedy the situation, since the end of the quarter, we have initiated the first phases of our program to integrate Alimplus' activities into our Saint-Bruno and Lévis operations. Our priority remains to maintain the highest service rates in the industry during this transition period, and our teams are ready to gradually take over. From the end of November 2025 and the end of January 2026, Alimplus customers will be gradually served from our sites located in Saint-Bruno and Lévis, which will generate operational efficiencies. We expect a return to stronger profitability next year, mainly driven by the realization of cost-based synergies with Alimplus," added Mr. Blanchard. Results for the Third Quarter of 2025 Consolidated sales for the third quarter were $212.5 million, an increase of 31.1% compared to $162.0 million during the corresponding quarter of 2024. Sales from the distribution activities increased by 39.0% as a result of the recent Acquisition which contributed $53.3 million, the organic sales volume growth with major account clients and the effect of inflation. This growth was compensated by the impact of the cybersecurity incident occurred in July, the renewal of a supply agreement with an institutional customer under less favorable economic conditions than those in effect in 2024, as well as the current economic weaknesses affecting the restaurant industry. Sales from the wholesale activities have increased by 6.6% mainly as a result of the inflation and an increase in sales volume. Adjusted EBITDA(1) from continuing operations was $5.8 million or 2.7% of sales from continuing operations compared to $9.5 million or 5.9% during 2024. These variations result from the supply agreement renewed in December 2024, as previously explained, combined to a decrease in gross margin related to the restaurant industry.
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Net loss from continuing operations was $74.4 million, down from net earnings from continuing operations of $1.2 million for the corresponding quarter of the previous year, resulting essentially from the impairment loss on goodwill, a decrease of the adjusted EBITDA(1) and an increase in financial expenses and depreciation, compensated by higher income taxes recovery and income not related to current operations. Results for 36-week period of 2025 Consolidated sales for the 36-week period were $513.7 million, an increase of 13.0 % compared to $454.5 million for the corresponding period of 2024. Sales from the distribution activities grew by 17.2% and the wholesale sales increased by 0.5%. Adjusted EBITDA(1) from continuing operations was $13.4 million or 2.6% of sales from continuing operations compared to $24.1 million or 5.3% in 2024. These variations result from the supply agreement renewed in December 2024, as previously explained, combined to a decrease in gross margin related to the restaurant industry. Net loss from continuing operations was $80.7 million, down from net earnings from continuing operations of $1.1 million in the previous fiscal year. This variation is explained by the elements previously mentioned. Cash Flow and Financial Position Cash flows from operating activities were $(7.7) million and $3.0 million for the 12 and 36-week periods of 2025, respectively, compared to $9.9 million and $26.6 million for the corresponding period of 2024. This decrease is mainly due to the decrease in adjusted EBITDA(1) and a higher utilization of working capital(4). The higher utilization of working capital(4) is mainly explained by the recent Acquisition. As at September 6, 2025, the Company's working capital(4) was $60.4 million, up from $50.3 million at the end of the fiscal year 2024. This increase is mainly explained by the recent Acquisition. As at September 6, 2025, the Company's net debt(2) was increased to $112.1 million, compared to $47.8 million at the end of the fiscal year 2024, resulting from an increase in the amended and restated credit facility of $45.5 million and a new highly subordinated debt of $15.0 million to finance the Acquisition. (4) Working capital is a non-IFRS performance measure. Working capital is an indicator of the Company's ability to hedge its current liabilities with its current assets. Refer to MD&A section 3.2 "Financial Position" for detailed calculation. Outlook "Our immediate priority is to stabilize the Company’s capital, by continuing negotiations with our main lenders and Investissement Québec to reach long-term agreements as well as by examining other financial alternatives, while actively implementing our Alimplus integration plan. The integration of Alimplus’s activities in particular remains essential to our growth and profitability strategy. It allows us to continue our momentum in the coveted territories and markets and further distinguishes us from the competition with an enhanced offer and personalized service. Our short- and medium-term priority remains on the optimal management of our activities and working capital, debt reduction, and the successful integration of Alimplus’ activities," concluded Mr. Blanchard. The Company has agreed on the amendment to the forbearance agreements announced on September 5 with its principal lenders and Investissement Québec, extending the forbearance period until January 30, 2026. Under the amended forbearance agreements, the Company will be subject to liquidity requirements of $1.0 million and to a minimum trailing twelve-month EBITDA, tested monthly. The Company must also, no later than December 15, 2025, provide the lenders with a non-binding letter of intent for the refinancing of the credit facilities and the full repayment of all obligations under an asset-based credit facility, as well as a non-binding letter of intent evidencing an equity raise of at least $15.0 million. The Company is also conducting a comprehensive review of the strategic alternatives available to it in order to stabilize its capital structure and long- term debt levels. All possible alternatives are currently being evaluated in order to arrive at a solution that will place the Company in a position to ensure its long-term stability for the benefit of all its stakeholders. There can be no assurance, however, that such long-term arrangements with the principal lenders and Investissement Québec, or that such strategic alternatives, can be successfully implemented. In such circumstances, the Company’s ability to continue its operations could be affected, and the Company’s investors could see the value of their investment decrease significantly. Non-IFRS Performance Measures The information provided in this release includes non-IFRS performance measures, notably adjusted earnings before financial expenses, depreciation and amortization and income taxes ("Adjusted EBITDA")(1). As these concepts are not defined by IFRS, they may not be comparable to those of other companies. Refer to Section 6 "Non-IFRS Performance Measures" in the Management's Discussion and Analysis. Reconciliation of Net (Loss) Earnings to Adjusted EBITDA(1) 12 weeks 36 weeks (in thousands of dollars) 2025 2024 2025 2024 $ $ $ $ Net (loss) earnings from continuing operations (74,420) 1,164 (80,719) 1,067 Income taxes (recovery) (2,213) 591 (4,513) 530 Financial expenses 4,013 2,823 9,630 8,196
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Operating (loss) earnings (72,620) 4,578 (75,602) 9,793 Expenses for stock-based compensation plan (3) 28 25 80 Impairment loss on goodwill 75,000 — 75,000 — (Income) costs not related to current operations (1,912) 154 (1,165) 276 Depreciation and amortization 5,315 4,724 15,158 13,935 Adjusted EBITDA(1) 5,780 9,484 13,416 24,084 Additional Information The Management's Discussion and Analysis and the consolidated financial statements of the Company are available on SEDAR+ (www.sedarplus.ca). Additional information, including the annual information form, about Colabor Group Inc. can also be found on SEDAR+ and on the Company’s website at www.colabor.com. Forward-Looking Statements This press release contains certain forward-looking statements as defined under applicable securities law. Forward-looking information may relate to Colabor's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. Particularly, statements regarding the Company’s financial guidelines, future operating results, the profitability of the acquisition of Alimplus and future economic performance, objectives and strategies are forward-looking statements. Statements regarding the potential impacts of the forbearance agreement and expectations regarding the continued support of the Company's lender are also forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Colabor believes are reasonable as of the current date. Assumptions such as the realization of synergies from the acquisition of Alimplus are based on a preliminary analysis of the organizational structure and the current level of spending across the Company. Our synergies objective assumes that we will be able to establish and maintain an effective process for sharing best practices, and is also based on our ability to integrate the acquired business. Any delay or important change in these facts and assumptions could significantly impact our synergies estimate as well as the timing of the implementation of our various initiatives. Refer in particular to section 2.2 "Development Strategies and Outlook" of the Company's MD&A. While Management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Colabor currently expects. For more exhaustive information on these risks and uncertainties, the reader should refer to section 7 "Risks and Uncertainties" of the Company's MD&A. These factors, which include risks related to the repercussions of any cyber security incident, any negotiations to obtain an extension of forbearance agreements or financial relief, and the expectation of synergies resulting from the acquisition of Alimplus, are not intended to represent a complete list of the factors that could affect Colabor and future events and results may vary significantly from what Management currently foresees. The reader should not place undue importance on forward-looking information contained in this press release, information representing Colabor's expectations as of the date of this press release (or as of the date they are otherwise stated to be made), which are subject to change after such date. While Management may elect to do so, the Company is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law. Conference Call Colabor will hold a conference call to discuss these results on Friday, October 17, 2025, beginning at 9:30 a.m. Eastern time. Interested parties can join the call by dialing 1-800-990-4777 (from anywhere in North America) or 1-289-819-1299 (Toronto) or 1-514-400-3794 (Montreal). If you are unable to participate, you can listen to a recording by dialing 1-888-660-6345 or 1-289- 819-1450 and entering the code 60051# on your telephone keypad. The recording will be available from 1:30 p.m. on Friday, October 17, 2025, until 11:59 p.m. on October 24, 2025. Note that the recording will be available offline on our website at the following address: https://colabor.com/en/investisseurs-en/evenements-et-presentations/ You can also use the QuickConnect link: https://emportal.ink/3VL1u3l. This new link allows any participant to access the conference call by clicking on the URL link and enter their name and phone number. About Colabor Colabor is a distributor and wholesaler of food and related products serving the hotel, restaurant and institutional markets or "HRI" in Quebec and in the Atlantic provinces, as well as the retail market. Within its two operating activities, Colabor offers specialty food products such as meat, fish and seafood, as well as food and related products through its Broadline activities. Further information: Yanick Blanchard Interim Senior Vice President and Chief Financial Officer Colabor Group Inc Tel.: 450-449-4911 extension 1782 investors@colabor.com Danielle Ste-Marie Ste-Marie Strategy and Communications Inc. Investor Relations Tel.: 450-449-0026 extension 1180