DAVIDsTEA Inc.
Q1 2021 Earnings Call Transcript

Published: 15 Jun 2021

[Operator:]

Good afternoon, ladies and gentlemen. Welcome to DAVIDsTEA's First Quarter 2021 Earnings Webcast. Today's webcast is being recorded and is in listen-only mode. Before we get started, I would like to remind you of the company's Safe Harbor language. This presentation includes forward-looking statements about our expectations for the performance of our business in the coming quarter and year. Each forward-looking statement contained in this presentation is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Risk Factors in our Form 10-K for our fiscal year ended January 30, 2021 filed both with the United States Securities and Exchange Commission and is available at www.sec.gov and in our quarterly report on Form 10Q, filed today with both the United States Securities and Exchange Commission and with the and Autorité des marchés and on DAVIDsTEA's website. The forward-looking statements in this discussion speak only as of today's date and we undertake no obligation to update or revise any of these statements.

[Herschel Segal:]

Thank you, operator. Good afternoon, everyone and thank you all for joining us. Also joining me is Frank Zitella, DAVIDsTEAs President, Chief Operating and Financial Officer. I am pleased by our results for the first quarter with another fourth consecutive quarter of positive adjusted EBITDA. Our sustained results are a clear validation of our digital first strategy and demonstrate what has been accomplished in a very short period of time.

[CCAA:]

From a business perspective, the choice was clear as it provided an opportunity to overcome the challenges we faced and ensure the long-term viability of DAVIDsTEA. Unfortunately, the decision to significantly reduce our retail footprint and the subsequent restructuring of our business negatively impacted a large number of our exceptional and passionate employees. But as we look back, we know that we took the right and the only decision possible that enabled a fresh start for DAVIDsTEA. Last Friday, creditor approval of our plan of arrangement marked an important milestone in this process. On behalf of management and the board, I want to thank our employees, landlords and other creditors for their support. In the past year, we underwent a transformation that required changes to how we connect with our customers. We found new ways to engage with tea lovers and to replicate our in-store tea discovery experience across multiple digital platforms. While our operational efficiency and platforms have evolved, our vision is the same. We remain committed to being the best tea company in the world. Today, DAVIDsTEA is also a more agile organization that can rapidly aligned its business strategy with evolving consumer preferences. As a leading team merchant with a strong brand, we seek to share our passion and love for tea and our unique and innovative blends with existing and new audiences. As interest and knowledge of tea grown in North America; we are excited by the significant prospects to grow our presence, as we use our scale, reach and experience to connect with a wide range of tea consumers. We're attracted by the desire to make the discovery of tea find easy and approachable.

[Frank Zitella:]

Thanks Sarah and good afternoon, everyone. As we move to put the CCAA process behind us, we look forward to fully dedicating our time and effort toward unleashing the full value and potential of the DAVIDsTEA brand. Last Friday, we reached a significant milestone in the CCAA process and in the company's transformational journey towards a digital first organization. We are grateful that creditors accepted management's plan of arrangement. The next step we expect that the plan will be approved by the courts in both Canada and the US within the week.

[Q -:]