Investing in employees and communities throughout COVID-19 pandemic
Q1 branded revenue is expected to increase 23% to 25% over prior year
Jamieson Wellness Inc. ("Jamieson Wellness" or the "Company") (TSX:JWEL) today announced a business update in response to COVID-19, including preliminary revenue for its first quarter ended March 31, 2020. All amounts are expressed in Canadian dollars.
"Jamieson has been producing vitamins and supplements that have been trusted by consumers around the world for nearly 100 years," said Mark Hornick, President and Chief Executive Officer of Jamieson Wellness. "Now more than ever, we feel a great responsibility to demonstrate why we have earned that trust by supporting the health and wellness of our employees, consumers and communities throughout this global health emergency. Our teams have pulled together to assist our retailers from home and in the field. We have put every safeguard possible in place to ensure a healthy work environment for all our employees as we work towards the same goal of ensuring shelves continue to be stocked with the products consumers rely on for their health and wellness. During the first quarter, we adapted to the rapidly changing global environment and we continue to adjust as the environment continues to change. We have seen understandable challenges as well as increased demand for our products, leading to robust growth in our branded businesses both in Canada and international markets."
Preliminary first quarter financial results
Revenue for the first quarter of fiscal 2020 is expected to be approximately $83.0 - $84.5 million, compared to $72.6 million in the prior year period, driven by growth in the following categories:
- Domestic Branded revenue grew between 20% and 22% reflecting the continued success of the Company’s consumer and trade programs and the impact of higher demand for immunity and general health supplements.
- International Branded revenue increased approximately 50% as demand for the Company’s products increased significantly in China and Eastern Europe. The expected delay in Domestic Chinese distribution was offset by an increase in orders from cross-border e-commerce and across many existing international markets.
- Strategic Partner volumes will be near the top end of our guidance at approximately 10% lower than prior year based on the timing of new programs realized in the first half of the prior year.
The Company expects the increase in contribution from higher revenues to be partially offset by investments to maximize employee safety while maintaining production volumes and supporting the business, its employees and communities throughout the COVID-19 pandemic. In support of the Company’s employees in manufacturing, distribution, and other critical on-site functions, the Company has increased sanitation, maximized social distancing and where possible established shift gaps to avoid congestion during shift changeovers. Effective mid-March, the Company introduced a TEAMWORK bonus for all hourly frontline employees working in its manufacturing and distribution facilities. "We are thankful to our frontline employees for continuing to come to work every day," said Mr. Hornick. "With additional health and safety precautions in place since early February, they are keeping our operations running and making it possible for people around the world to continue to have access to the products they need for themselves and their families."
Since becoming aware of the coronavirus in early January, the Company has secured additional, alternate sources of raw materials to ensure consistent supply. As a proud member of the community in Windsor, Ontario, since starting its business there nearly 100 years ago, the Company has arranged a donation of 58,000 surgical masks for the region’s frontline healthcare workers. The Company has also arranged to donate an additional 27,000 surgical masks to the hospitals in the Scarborough health network. In support of the Company’s communities in Scarborough and Toronto, it is also supplying vitamins and nutritional supplements to help sustain frontline healthcare staff and their families.
At this time, the Company is maintaining its full year 2020 guidance, acknowledging that the timing of revenue may be accelerated as a result of our consumers’ need to ensure personal supply. As a result, the seasonality of our volumes in fiscal 2020 may be inconsistent with the pattern experienced in the prior year. Additionally, the Company is incurring incremental costs to maintain adequate supply and will temporarily reduce total output to ensure the health and safety of its employees. This will create gross margin pressure as a function of the depth and duration of recommended social distancing policies in the weeks and months to come.
The Company does not intend to regularly provide preliminary revenue or financial results in the future.
About Jamieson Wellness Inc.
Jamieson Wellness is dedicated to improving the world's health and wellness with its portfolio of innovative natural health brands. Established in 1922, Jamieson is the Company's heritage brand and Canada's #1 consumer health brand. Jamieson Wellness manufactures and markets sports nutrition products and specialty supplements under its Progressive, Precision and Iron Vegan brands. The Company also markets Smart Solutions by Lorna Vanderhaeghe, the #1 women's natural health focused brand in Canada. For more information please visit jamiesonwellness.com.
Source: Jamieson Wellness Inc.