Diamond Estates Wines & Spirits Reports Fiscal 2026 Financial Results

Niagara-on-the-Lake, Ontario--(Newsfile Corp. - July 28, 2026) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or "the Company") today announced its financial results for the three and twelve months ended March 31, 2026 ("Q4 2026" and "FY 2026" respectively).

FY 2026 Summary:

• Fiscal 2026 delivered another year of stronger results, driven by Winery growth in Ontario's expanded retail marketplace, ongoing VQA Wine Support, and consumers buying local amid North American trade tensions.
• Revenue for FY 2026 was $29.9 million, an increase of $5.4 million from $24.5 million in FY 2025. The Winery division experienced an increase in sales of $5.9 million (+22%) while the Agency division experienced a decrease of $0.5 million driven by a reduction in low margin sales in Western Canada.
• Gross margin¹ as a percentage of revenue was 60.1% for FY 2026 compared to 52.7% in FY 2025, and gross margin increased by $5.1 million from $12.9 million in FY 2025 to $18.0 million in FY 2026, driven primarily by the Winery division.
• Adjusted EBITDA¹ increased by $3.0 million to $3.8 million in FY 2026 from $0.8 million in FY 2025, largely attributable to higher sales and improving gross margins in the Winery division, less the overall increase in SG&A expenses compared to the prior year.
• EBITDA¹ increased by $1.3 million to $2.4 million in FY 2026 from $1.1 million in FY 2025. The improvement is attributable to the increase in gross margin, partially offset by higher SG&A expenses of $1.1 million and regulatory compliance costs of $0.4 million.
• Net loss decreased from $2.5 million in FY 2025 to $1.3 million in FY 2026.
• During FY 2026, the Company generated $1.8 million of cash from operating activities before changes in non-cash working capital, compared to an outflow of $1.1 million in FY 2025. After incorporating changes in working capital, cash generated from operating activities was $5.5 million in FY 2026 versus an outflow of $1.1 million in FY 2025. This strong cash generation allowed the Company to reduce its term loans by $4.6 million during the year, from $16.0 million to $11.4 million.

Q4 2026 Summary:

• Total revenue for Q4 2026 was $5.7 million, an increase of $1.6 million compared to Q4 2025, with $1.1 million of the increase attributable to the Winery division. Prior year Q4 revenue was reduced by approximately $1.0 million by accounting adjustments recorded in that quarter, principally an adjustment to the VQA rebate accrual and the change in presentation of the consignment channel; excluding these items, Q4 revenue increased by approximately $0.4 million year-over-year.
• Gross margin¹ as a percentage of revenue was 57.0% for Q4 2026 compared to 53.1% in Q4 2025, reflecting continued margin improvement. After adjusting for the prior-year items noted above and the release of prior years' production overhead adjustment recorded in Q4 2025, the Q4 2025 gross margin percentage was approximately 52.3% on a basis comparable with Q4 2026.
• Adjusted EBITDA¹ was approximately $0.1 million in Q4 2026 compared to break-even in Q4 2025. The prior year benefited from $0.4 million of net one-time items, principally the release of prior years' production overhead variances and credits to wages, advertising and promotion accruals, partially offset by the VQA rebate accrual adjustment. Excluding these items, Q4 Adjusted EBITDA improved by approximately $0.4 million year-over-year, reflecting higher sales at stronger margins with operating expenses essentially unchanged.
• EBITDA¹ was a loss of $0.6 million in Q4 2026 compared to a loss of $0.2 million in Q4 2025. The year-over-year decline of $0.4 million reflects higher non-recurring charges recorded in the quarter, including the $0.4 million impairment provision on winery-division assets held for sale; these charges are added back in calculating Adjusted EBITDA¹, which improved year-over-year as described above.
• Net loss for Q4 2026 was $1.5 million compared to $1.1 million in Q4 2025. The increase is primarily attributable to a further $0.4 million impairment provision on winery-division assets held for sale recorded in Q4 2026, together with the prior-year one-time items noted above; excluding these items, net loss improved by approximately $0.4 million year-over-year, consistent with the improvement in Adjusted EBITDA¹.

Investor Relations Update:

As of mid-July 2026, the Company is no longer working with ImpactDeck for investor relations services. The Company thanks ImpactDeck for its contributions.

Subsequent Events:

• In May 2026, Lassonde Industries Inc. ("Lassonde"), the Company's largest shareholder, agreed to provide the Company with an unsecured advance in the principal amount of $1.0 million, bearing interest at the Bank of Montreal prime rate plus 2.25% per annum. The advance was subordinated to the Company's secured indebtedness and was fully repaid in July 2026.
• In June 2026, the Company entered into a share purchase agreement to dispose of all of the issued and outstanding shares of De Sousa Wines Toronto Inc., whose principal asset is a non-operational pre-1993 winery licence, for total consideration of $250,000. The transaction is subject to customary closing conditions, including regulatory approvals.
• As previously press released on July 2, the Company issued an aggregate of 226,785 DSUs as of June 30, 2026 in settlement of $31,750 of previously accrued deferred directors' compensation.

"Fiscal 2026 was a year of significant growth for Diamond Estates and was the result of foundational improvements made over the past three years. Adjusted EBITDA grew $3.0 million to $3.8 million, climbing from 3% of revenue in the prior year to nearly 13%. Our sales team and agency division, Trajectory Beverage Partners, drove continued growth for both our own brands and those we represent, across every retail channel and on-premise at restaurants and bars. The company delivered $5.5 million of cash from operations, and term debt was reduced by an impressive $4.6 million. Ontario's retail expansion, enhanced government support and the buy-local movement continue to power our Winery division — and we enter fiscal 2027 with that momentum firmly at our back," said Andrew Howard, President and CEO.

About Diamond Estates Wines and Spirits Inc.:

Diamond Estates is a producer of high-quality wines and ciders as well as a sales agent for over 120 beverage alcohol brands across Canada. The Company operates four facilities, three in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, D'Ont Poke the Bear, EastDell, Lakeview Cellars, Mindful, Shiny Apple Cider, Fresh Wines, Red Tractor, Seasons, Serenity and Backyard Vineyards.

Through its commercial division, Trajectory Beverage Partners ("Trajectory"), the Company serves as the sales agent for a wide range of leading international beverage brands.

Wine Portfolio:

Trajectory represents renowned wine brands, including Fat Bastard and Gabriel Meffre from France; Kaiken from Argentina; Kings of Prohibition from Australia; Yealands, Kono, Tohu, and Joiy Sparkling Wine from New Zealand; Talamonti, Cielo and Valdo from Italy; Bodegas Muriel from Spain; Porta 6, Julia Florista, Boas Quintas, Catedral and Cabeca de Toiro from Portugal; Fowles Wines from Australia; Empress Wines from Croatia; as well as C.K. Mondavi & Family, Charles Krug, Line 39, Harken, FitVine and Rabble from California. Trajectory also represents a broad portfolio of wines sold exclusively to restaurants, bars and private consumers.

Spirits Portfolio:

The Company also represents distinguished spirit brands such as Cofradia Tequila, Siempre Tequila, Chisme Tequila, Hussong's Tequila, Solmano Mezcal and Chica Chida Agave Spirit from Mexico; Islay Mist and Waterproof blended Scotch whiskies from Scotland; Glen Breton Canadian whiskies from Nova Scotia; Five Farms Irish Cream Liqueur from the UK; Tequila Rose Strawberry Cream, 360 Vodka and Holladay Bourbon from the USA; Giffard Liqueurs from France; Zubrowka Vodka from Poland and Becherovka from the Czech Republic.

Beer, Cider, and RTD Portfolio:

In the beer, cider, and ready-to-drink (RTD) categories, Trajectory represents Darling Mimosa, Protini Beverages from Ontario; Mountain Joe Hard Coffee, ESA Cocktails, Solmano Craft Cocktails, Stickler Shrub Cocktails, Sunday Session RTDs and Jasper Brewing Company from Alberta, and Warsteiner and Konig Ludwig from Germany.

The Company's mission is to build lasting, mutually beneficial relationships with channel partners, growers, suppliers and employees. To meet this goal, the Company is undertaking significant investments in winemaking, brand marketing, sales programming, performance management and back-office infrastructure, including information systems which will support growth in an efficient, profitable manner. Based on its analysis of the market, the Company believes that the growth prospects for the domestic and import beverage alcohol markets in Canada are positive. The Company continues to be a participant in the export market and has expanded its focus beyond China in the effort to be less reliant on that one marketplace. Canadian wines and particularly Icewine enjoy a premium product positioning with international consumers.

Forward-Looking Statements:

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Diamond Estates Wines and Spirits Inc. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the economy generally; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the views of the Company as of any date subsequent to the date of this press release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Non IFRS Financial Measure

Management uses net income (loss) and comprehensive income (loss) as presented in the audited consolidated statements of net loss and comprehensive loss as well as "gross margin", "EBITDA" and "Adjusted EBITDA" as a measure to assess performance of the Company. The Company defines "gross margin" as gross profit excluding depreciation. EBITDA and "Adjusted EBITDA" are other financial measures and are reconciled to net income (loss) and comprehensive income (loss) below under "Results of Operations".

EBITDA and Adjusted EBITDA are supplemental financial measures to further assist readers in assessing the Company's ability to generate income from operations before considering the Company's financing decisions, depreciation of property, plant and equipment and amortization of intangible assets. EBITDA comprises gross margin less operating costs before financial expenses, depreciation and amortization, non-cash expenses such as share-based compensation, one-time and other unusual items, and income tax. Adjusted EBITDA comprises EBITDA before non-recurring expenses including cost of sales adjustments related to inventory acquired in business combinations, transaction costs expensed, cost of sales adjustment to fixed production overheads, and other non-recurring adjustments included in the calculation of EBITDA. Gross margin is defined as gross profit excluding depreciation on property, plant and equipment used in production. Operating expenses exclude interest, depreciation on property, plant and equipment used in selling and administration, and amortization of intangible assets.

EBITDA does not represent the actual cash provided by the operating activities nor is it a recognized measure of financial performance under IFRS. Readers are cautioned that this measure should not be considered as a replacement for those as per the consolidated financial statements prepared under IFRS. The Company's definitions of this non-IFRS financial measure may differ from those used by other companies.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

¹ See definition of selected terms under the heading "Non IFRS Financial Measure"

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/307036