2024 Annual Report
In the
global spotlight
Jamieson Wellness gratefully acknowledges that our workplace lies on the
unceded territories of the First Nation, Inuit and Métis Nations. Our facilities
and head office reside in Toronto and Windsor, Canada, which are traditionally
the home of the Anishinabewaki, Wendake-Nionwentsïo, Ho-de-no-sau-nee-
ga (Haudenosaunee), Mississauga and the Mississaugas of the Credit First
Nation. Through our dispersed team, Jamieson Wellness conducts its work
on the traditional territories of several Indigenous peoples across the world.
We respectfully honour all people, cultures and traditions. As part of our
acknowledgement, we are committed to amplifying Indigenous voices and
working in partnership with Indigenous organizations, community members
and ambassadors on our Purpose of Inspiring Better Lives Every Day.
LAND ACKNOWLEDGMENT
2024 ANNUAL REPORT | 2
FORWARD-LOOKING INFORMATION & NON-IFRS AND OTHER FINANCIAL MEASURES
This annual report contains “forward-looking information” within the meaning
of applicable securities laws, which forward-looking information represents
management’s expectations as at the date hereof and is subject to change
after such date. For a detailed discussion of forward-looking information, which
applies in all respects to the forward-looking information contained herein,
please refer to the section entitled “Forward-Looking Information” in Jamieson
Wellness’ annual information form dated March 31, 2025. This annual report
makes reference to certain financial measures, including non-IFRS/financial
measures that are historical.
These measures are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other companies. See “How we
Assess the Performance of our Business” of the Company’s management’s
discussion and analysis of the results of operations and financial condition
of the Company for the year ended December 31, 2024 (the “MD&A”) for an
explanation of the composition of each such measure and see “Selected
Consolidated Financial Information” of the MD&A for a quantitative reconciliation
of each non-IFRS financial measure to its most directly comparable financial
measure disclosed in our financial statements to which the measure relates,
which disclosures are incorporated by reference herein.
2024 ANNUAL REPORT | 4
Dear Shareholders,
I am pleased to report that this past year has been one of solid financial performance
for Jamieson Wellness. Our strategic initiatives and unwavering commitment to
excellence have resulted in strong revenue and profitability.
The success we are witnessing in our key markets of Canada, the U.S. and China is a
clear indication that our growth strategy is the right one for the future of Jamieson
Wellness. We are confident that the investments we continue to make in these
markets will drive our growth and strengthen our position as a global leader in the
health and wellness industry.
Our dedication to providing value for our shareholders remains at the forefront
of our efforts. We are committed to ensuring that our strategic decisions and
operational excellence translate into long-term value creation.
Thank you for your continued trust and support.
Sincerely,
Tim Penner
Chair of the Board
EXECUTIVE LETTERS
Dear Shareholders,
Jamieson Wellness arrived on the global stage in 2024. Unprecedented levels of
consumer demand and the successful execution of our growth strategy led to our
outstanding performance, including an impressive 14% branded revenue growth in the
year, record high cash generation, and EBITDA margins that exceeded our expectations.
In 2024, nearly half of our branded revenue came from markets outside of Canada,
marking the shift we have been focused on since we accelerated our global growth
strategy with the acquisitions of our U.S. and China businesses a few short years ago.
In China, our marketing investments led to nearly 80% revenue growth, validating
our commitment to this key market and setting us up for long-term growth. In the
U.S., our youtheory expansion continued to gain traction, as we saw strong growth in
our e-commerce and brick-and-mortar retailers and continued to demonstrate our
innovation excellence with the launch of our GLP-1 support products. Throughout the
year, we also strengthened our International presence with growth of nearly 15%, as
consumers increased their engagement with our Jamieson brand, specifically in the
Middle East and Europe.
Even with our focus on global growth, we never took our eyes off our home market.
In Canada, revenue growth outpaced the market in 2024, and our targeted marketing
programs highlighted our Canadian manufacturing reputation for quality and trust,
reinforcing our brand reputation and expanding our market leadership.
Our journey from a primarily Canadian company in 2017 to a global force today
demonstrates the power of our approach. Looking ahead to 2025 and beyond, we’re
executing from an even stronger foundation. Global category tailwinds remain robust
and our strategic marketing investments are driving revenue growth, improved
profitability, and sustained improvements in cash flow. We have a clear path to
continued growth, and our ability to navigate and deliver exceptional results in this
constantly changing global environment is a testament to the strength of our strategy
and solid execution by our team.
I want to thank everyone at Jamieson Wellness for their unwavering commitment to
delivering best-in-class products and best-in-class results, and our shareholders for
your continued trust.
Sincerely,
Mike Pilato
President and CEO
2024 ANNUAL REPORT | 6
A century of progress prepared
us for the global stage.
In 2024, we stepped up.
Millions of consumers worldwide now benefit from Jamieson Wellness
taking a leading role in the innovation and production of trusted, natural
health products.
As a result, in 2024 we delivered 14% branded revenue growth, with record
cash flows and EBITDA margins exceeding our expectations.
Our continued global growth is built on the unwavering strength of our
local position, with Jamieson Vitamins consistently maintaining the title
of #1 VMS brand in Canada. Though we saw exceptional growth across all
our branded business units in 2024, we gained the most traction in our U.S.
and China businesses—areas where we made significant investments in
on-the-ground resources and to enhance consumer awareness, channel
distribution and innovation.
Across every milestone, we took significant measures to uphold the
Purpose we instated last year, Inspiring Better Lives Every Day. That means
supporting consumers through all life stages and lifestyles in every part of
the world.
By remaining committed to our Purpose in the most
promising global markets, we are poised to outperform
ourselves again—and again.
INTRODUCTION
2024 ANNUAL REPORT | 8
A year of star
performance.
Through our relentless focus on opportunities in the world’s largest,
fastest growing markets, we have accelerated our emergence as a global
headliner with a unique market position.
In 2024, our track record of performance held strong, as we drove
revenue growth, expanded margins and improved ROI.
Branded revenue growth / $628.7M
+14.1%
+8.5%
+19.2%
+94.2%
$1.61
Consolidated revenue growth / $733.8M
Adjusted EBITDA margin1
Cash flow from operating activities
Adjusted diluted earnings per share1
FINANCIAL HIGHLIGHTS
1 “Adjusted EBITDA margins” and “Adjusted Diluted earnings per share” are non-IFRS financial ratios that do not have a standardized meaning
prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. “Adjusted EBITDA margin”
is defined as Adjusted EBITDA divided by revenue. “Adjusted diluted earnings per share” is defined as Adjusted net earnings divided by the total
weighted average number of outstanding diluted shares at the end of the most recently completed quarter for the relevant period. For more
information, see the non-IFRS and other financial measures disclaimer included on page 4 of this annual report.
2024 ANNUAL REPORT | 10
CANADA
Keeping the local
spotlight.
In 2024, we remained a clear leader in the Canadian VMS marketplace, anchored
by 102 years of industry excellence and our focus on delivering products that
live up to their promise.
Throughout the year, we pushed forward in our endless quest for quality,
met the growing demand of discerning consumers who want the best for
themselves and their families, and innovated across new categories, product
formats, ingredients and trends. We placed products that consumers trust
everywhere they wanted them to be.
These pursuits also helped fuel the success of the Jamieson brand’s multi-
platform advertising campaign, which we launched mid-year to promote our
reputation for quality and trust.
#1
VMS brand
6.1%
Revenue
growth outpaced
market growth
#1
VMS supplier
#1
VMS brand in
gummies
2024 Advantage Group survey
2024 ANNUAL REPORT | 12
YOUTHEORY
An encore in
excellence and
innovation.
In 2024, we continued to expand our growing presence in the U.S.,
hitting new revenue highs for our youtheory brand.
We strengthened our line-up of products across formats,
categories and channels through new, innovative formulations.
Our channel expansion extended to our e-commerce platform and
product range in food, drug and mass categories.
25%
International, new
distribution, and
e-commerce revenue
growth in Q4
1st
To market with
GLP-1 companion
products
17%
International, new
distribution, and
e-commerce revenue
increase in 2024
2024 ANNUAL REPORT | 14
CHINA
A more commanding
presence in the fastest-
growing market.
By the year-end, we successfully reached our highest revenue in China to
date—the pay-off of our investments in brand building, market penetration,
locally relevant innovation, and cross-border e-commerce programs. Our
presence has become more dynamic, with improved distribution mixes across
different channels.
We have remained focused on engaging Chinese consumers with promotional
content and making products accessible in high-margin geographies, earning
ourselves a bigger fan base by the day.
Our growth is further boosted by favorable category growth in China, as more
consumers take an interest in proactive health and wellness and choose to
invest in our products to help support it.
$30B+
Size of market
We deliver what consumers want.
Brand
Reputation
Product
Potency
High Quality
Ingredients
Product Label
Transparency
Imported & Domestic
Availability
78%
Revenue growth
in 2024
50%
Revenue
increase in 11/11
promotional
campaign
2024 ANNUAL REPORT | 16
INTERNATIONAL
Rising to the call for
better health solutions.
We have continued to thrive in a world where increasingly health- and
quality-conscious consumers crave brands they can trust. More than ever,
younger and older demographics are making health and quality of life a
top priority.
Thanks to the advancement of these global trends, together with our
collaboration with key distributors and investments in brand growth, we
experienced significant growth in international markets, Eastern Europe,
Middle East, and Southeast Asia.
We are always monitoring for further expansion opportunities in new areas.
Revenue
growth
15%
Growth in Slovenia’s
Sleep, Stress, Energy
campaign in H2
15%
2024 ANNUAL REPORT | 18
COMMITMENTS
Our guiding light.
In everything we do, we strive to live up to our Purpose
of Inspiring Better Lives Every Day. We consider our
progress towards our sustainability commitments in
2024 a major success.
Throughout the year, we continued to raise standards
and expectations, pushing our business in more
positive directions.
Good Governance
To help inform our sustainability strategy, we conducted a double materiality
assessment, engaging our key stakeholders on what they see as material
risks and opportunities.
This assessment will inform our sustainability strategy and help us pinpoint
the areas where we can make the greatest impact on the wellbeing of people
and the planet.
Inclusion & Belonging
We believe diversity, equity, inclusion, and belonging leads to greater innovation,
better decision-making, and a stronger, more connected team. By ensuring
everyone has an equal opportunity to contribute, succeed, and feel supported, we
foster a sense of belonging that reflects the world we live in.
Last year, we made significant progress towards our 2025 Inclusion & Belonging
targets, increasing our workplace training, the number of executive positions held
by women, and ensuring fair and diverse candidate and interview slates for all
external career opportunities for manager and above roles.
Decarbonization & Restoration
We successfully implemented environmental projects that we
anticipate will contribute 22% of our 2030 Scope 1 and 2 carbon
emissions reduction goal. In 2025, we will conduct a Scope 3
emissions inventory to help us address our environmental impact
across our entire value chain.
We expanded our impact portfolio with the environmental company
veritree from one to four restoration projects. These projects will
sequester carbon, restore biodiversity, and will bring socioeconomic
benefits to the communities involved in their stewardship.
50%
Reduction of Scope
1 & 2 emissions
expected
by 2030
We are proud to have
published our second annual
Sustainability Impact Report,
detailing our commitments
to our people and the planet
as well as our progress in
upholding them.
View our Sustainability Impact Report
2024 ANNUAL REPORT | 20
2024 ANNUAL REPORT | 20
LEADERSHIP
Casting strong leaders.
In 2024, we made sure the right management was in place to drive our
strategy forward, from operations to finance departments and across all
areas of the business including Canada, the U.S., China, and International.
We further strengthened our Board of Directors by welcoming Diane Nyisztor.
As a former executive with more than 30 years of global human resources and
corporate governance experience, she will undoubtedly be instrumental as we
continue to deepen our global presence.
“I look forward to contributing my expertise to the
Board to help enable Jamieson’s global growth
strategy and benefit all stakeholders.”
Diane Nyisztor
Board of Directors
Mike Pilato
Director, President & CEO
Regan Stewart
Chief Operations & People Officer
Don Bird
Executive Vice President &
Managing Director, Strategic
Partners & Global Business
Development
Paul Galbraith
Executive Vice President &
Managing Director, USA
Tara Martin
Sr. Vice President, General Counsel
John Doherty
Chief Science & Innovation Officer
Joel Scales
Executive Vice President, Jamieson
International, Global Strategy &
E-commerce
Eric Bentz
Executive Vice President, Global
Marketing & Managing Director, Canada
Christopher Snowden
Chief Financial Officer & Corporate
Secretary
2024 ANNUAL REPORT | 22
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Our star continues
to rise.
OUTLOOK
Our first act as a primarily Canadian company prepared us to be the global
player we are today—with a clear path to continued growth.
We are so proud of the headlining performance of our brands throughout
2024. History has shown that, even in times of economic uncertainty,
consumers continue to prioritize health and wellness. The global
megatrends driving our category continue to accelerate, and we remain
uniquely positioned to capture this opportunity.
Our ability to navigate and deliver exceptional results in this constantly
changing global environment is a testament to the strength of our strategy
and the solid execution by our team.
We look forward to carrying this momentum into the next
act, and the future of Jamieson Wellness.
47%
Of Branded revenue
in 2024 from markets
outside of Canada
2024 ANNUAL REPORT | 24
26
25
Table of contents
Independent auditor’s report
28
32
Consolidated statements of financial position
33
Consolidated statements of operations and comprehensive income
34
Consolidated statements of changes in shareholders’ equity
35
Consolidated statements of cash flows
36
Notes to the consolidated financial statements
74
Management Discussion and Analysis of Financial Condition
and Results of Operations
27
Consolidated Financial Statements
28
27
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Jamieson Wellness Inc.
Opinion
We have audited the consolidated financial statements of Jamieson Wellness Inc. and its subsidiaries (the Group),
which comprise the consolidated statements of financial position as at December 31, 2024 and 2023, the consolidated
statements of operations and comprehensive income, consolidated statements of changes in shareholders’ equity and
consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at December 31, 2024 and 2023, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with International Financial
Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report. We are independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the
consolidated financial statements of the current period. These matters were addressed in the context of the audit of the
consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a
separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report, including in relation to this matter. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
consolidated financial statements. The results of our audit procedures, including the procedures performed to address
the matter below, provide the basis for our audit opinion on the accompanying consolidated financial statements.
Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
30
29
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation
of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
INDEPENDENT AUDITOR’S REPORT (continued)
Sales promotional incentives
Key audit matter
How our audit addressed the key audit matter
As described in the Summary of Material Accounting
Policies in Note 2 to the consolidated financial
statements, the Group provides certain customers with
discounts and sales promotional incentives, which
results in variable consideration and the Group having
to estimate expected levels of promotions that are
typically settled in a period after the sale being
recorded. The estimated costs of these discounts and
customer-specific sales promotional incentives are
recorded as a reduction to revenue at the time a product
is sold to the customer.
The Group’s sales promotional incentives are complex,
and there are a significant amount of revenues and
products affected. The measurement of sales
promotional incentives involves the use of judgement
related to estimating future promotional spending
based on historical performance of promotions and
adjustments for current trends, among other inputs.
The timing difference between sales of goods by the
Group and the settlement of customer-specific sales
promotional incentives further increases the risk
associated with the measurement of revenues. Changes
in these estimates can have a significant impact on the
amount of revenue recognized.
•
We considered the appropriateness of the Group’s
revenue recognition accounting policies,
specifically the recognition and classification
criteria for discounts and sales promotional
incentives, by reviewing the Group’s contractual
and non-contractual arrangements with its
customers.
•
Among other audit procedures, we tested the sales
promotional incentives accrued at the end of the
year by comparing program details with
agreements or other correspondence between the
Group and its customers, where applicable, taking
customary trade practices into consideration.
•
We examined correspondence between the Group
and its customers, and historical end-consumer
spending patterns on similar promotions, to
evaluate the reasonableness of the estimated end-
consumer purchases forecasted by management
during the promotional period.
•
We also analyzed retrospective reviews prepared by
management on its ability to estimate customer-
specific sales promotional incentives, which
compared actual spending to amounts accrued at
period end and analyzed trending of customer-
specific sales promotional incentives as a
percentage of revenue, to evaluate the accuracy and
completeness of amounts accrued by management
at year end.
•
Additionally, we performed inquiry procedures
directly with sales representatives to evaluate the
completeness of incentive programs.
Other information
Management is responsible for the other information. The other information comprises:
•
Management’s Discussion and Analysis
•
The information, other than the consolidated financial statements and our auditor’s report thereon, in the
Annual Report
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information, and in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If based on the work we
will perform on this other information, we conclude there is a material misstatement of other information, we are
required to report that fact to those charged with governance.
32
31
Jamieson Wellness Inc.
Consolidated Statements of Financial Position
In thousands of Canadian dollars as at December 31,
Notes
2024
2023
Assets
Current assets
Cash
44,787
36,863
Accounts receivable
6
228,031
164,499
Inventories
7
154,658
182,456
Derivatives
23
2,661
3,707
Prepaid expenses and other current assets
6,803
5,335
436,940
392,860
Non-current assets
Property, plant and equipment
8, 16
103,591
106,903
Goodwill
9
287,503
274,411
Intangible assets
10
377,214
366,521
Deferred income tax
15
3,545
2,879
Total assets
1,208,793
1,143,574
Liabilities
Current liabilities
Accounts payable and accrued liabilities
11
137,653
135,520
Income taxes payable
15
4,373
2,263
Derivatives
23
2,982
-
Current portion of other long-term liabilities
4, 16
27,673
7,546
172,681
145,329
Long-term liabilities
Long-term debt
13
308,285
325,000
Post-retirement benefits
14
1,209
1,078
Deferred income tax
15
64,467
60,532
Redeemable preferred shares
17
98,138
89,409
Other long-term liabilities
4, 16
15,633
41,031
Total liabilities
660,413
662,379
Equity
Share capital
18
326,219
312,593
Warrants
19
14,705
14,705
Contributed surplus
23,835
19,089
Retained earnings
99,109
80,654
Accumulated other comprehensive income
41,313
11,892
Total shareholders' equity
505,181
438,933
Non-controlling interests
43,199
42,262
Total equity
548,380
481,195
Total liabilities and equity
1,208,793
1,143,574
(see the accompanying notes to the consolidated financial statements)
Approved on behalf of the Board:
Tania Clarke
Tim Penner
Director
Director
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Paula J. Smith.
Toronto, Canada
February 26, 2025
34
33
Jamieson Wellness Inc.
Consolidated Statements of Changes in Shareholders’ Equity
In thousands of Canadian dollars
Notes
Share capital
Warrants
Contributed
surplus
Retained
earnings
Accumulated other
comprehensive
income (loss)
Total
Shareholders'
equity
Non-
controlling
interests
Total equity
As at January 1, 2023
307,200
-
17,115
85,483
21,793
431,591
-
431,591
Net earnings for the year
-
-
-
47,882
-
47,882
(1,842)
46,040
Issuance of treasury shares
18
12,892
-
(3,749)
-
-
9,143
-
9,143
Issuance of warrants
5
-
14,705
-
-
-
14,705
-
14,705
Minority interest in subsidiary
-
-
-
-
-
-
44,414
44,414
Dividends to common shareholders ($0.72 per
share)
-
-
72
(30,257)
-
(30,185)
-
(30,185)
Repurchase of common shares
(7,499)
-
-
(22,454)
-
(29,953)
-
(29,953)
Other comprehensive loss
-
-
-
-
(2,174)
(2,174)
-
(2,174)
Unrealized foreign currency loss on translation
of foreign operations
-
-
-
-
(7,727)
(7,727)
(310)
(8,037)
Share-based compensation
20
-
-
5,651
-
-
5,651
-
5,651
As at December 31, 2023
312,593
14,705
19,089
80,654
11,892
438,933
42,262
481,195
Net earnings for the year
-
-
-
51,914
-
51,914
(781)
51,133
Issuance of treasury shares
18
13,626
-
(2,379)
-
-
11,247
-
11,247
Dividends to common shareholders ($0.80 per
share)
-
-
-
(33,459)
-
(33,459)
-
(33,459)
Other comprehensive loss
-
-
-
-
(3,016)
(3,016)
-
(3,016)
Unrealized foreign currency gain on translation
of foreign operations
-
-
-
-
32,437
32,437
1,718
34,155
Share-based compensation
20
-
-
7,125
-
-
7,125
-
7,125
As at December 31, 2024
326,219
14,705
23,835
99,109
41,313
505,181
43,199
548,380
(see the accompanying notes to the consolidated financial statements)
Jamieson Wellness Inc.
Consolidated Statements of Operations and Comprehensive Income
In thousands of Canadian dollars, except share and per share amounts, for the years ended December 31,
Notes
2024
2023
Revenue
25, 26
733,780
676,172
Cost of sales
7
458,170
442,613
Gross Profit
275,610
233,559
Selling, general and administrative expenses
174,489
140,304
Acquisition related adjustments
4
(12,425)
(7,863)
Share-based compensation
20
7,268
5,868
Earnings from operations
106,278
95,250
Foreign exchange loss
1,479
1,962
Accretion on preferred shares
17
8,729
4,833
Interest expense and other financing costs
22
20,272
22,784
Earnings before income taxes
75,798
65,671
Provision for income taxes
15
24,665
19,631
Net earnings
51,133
46,040
Other comprehensive income
Actuarial loss not to be reclassified subsequently to net earnings
14
(12)
(38)
Income tax recovery
15
5
8
Net of tax
(7)
(30)
Unrealized loss on amounts that may be reclassified to net earnings
on cash flow hedges
23
(4,029)
(2,873)
Income tax recovery
15
1,020
729
Net of tax
(3,009)
(2,144)
Unrealized gain (loss) on amounts that may be reclassified to net
earnings on translation of foreign operations
34,155
(8,037)
Total other comprehensive income (loss)
31,139
(10,211)
Comprehensive income
82,272
35,829
Net earnings attributable to:
Shareholders
51,914
47,882
Non-controlling interests
(781)
(1,842)
51,133
46,040
Comprehensive income attributable to:
Shareholders
81,335
37,981
Non-controlling interests
937
(2,152)
82,272
35,829
Earnings per share attributable to common shareholders:
28
Basic, earnings per share
1.23
1.10
Diluted, earnings per share
1.19
1.08
Weighted average number of shares:
28
Basic
41,580,983
41,960,516
Diluted
42,843,210
42,650,501
(see the accompanying notes to the consolidated financial statements)
36
35
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
1.
Company overview
1.1 Description of the business and consolidated financial statements
Jamieson Wellness Inc. (“Jamieson” or the “Company”) is a Canadian public company with common shares
(“Common Shares”) listed on the Toronto Stock Exchange under the stock symbol “JWEL”.
The consolidated financial statements of Jamieson and its subsidiaries for the year ended December 31, 2024
were authorized for issue by the Board of Directors of the Company on February 26, 2025. Jamieson is a
company continued under the Business Corporations Act (Ontario) and resident in Canada. Jamieson’s
registered office is located at 66 Wellington Street West, Suite 5300, TD Bank Tower, Toronto, ON, M5K 1E6.
The Company has manufacturing facilities located in Windsor, Ontario, Toronto, Ontario, and Irvine, California
and is principally engaged in the manufacturing, development, distribution, sales and marketing of branded and
customer branded health products for humans including vitamins, herbal and mineral nutritional supplements.
1.2 Subsidiaries
The table below provides a summary of the Company's subsidiaries. Unless otherwise stated, the subsidiaries as
listed below have share capital consisting solely of common shares, which are held directly or indirectly by the
Company.
2.
Summary of material accounting policies
2.1 Basis of preparation and statement of compliance
The consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The consolidated financial statements have been prepared on a historical cost basis, except for certain derivative
financial instruments and contingent consideration that have been measured at fair value. The consolidated
financial statements are presented in Canadian dollars and all values are rounded to the nearest thousand
($000), except share and per share amounts and when otherwise indicated. Certain supplementary information
in U.S. dollars is rounded to the nearest thousand where applicable.
2.2 Basis of consolidation
Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Company controls an investee if, and only if, the Company has:
As at December 31,
2024
2023
Entity
%
%
Jamieson Laboratories Ltd.
100.0
100.0
Canada
Canadian dollar
International Nutrient Technologies Limited
100.0
100.0
Canada
Canadian dollar
Body Plus Nutritional Products Inc.
100.0
100.0
Canada
Canadian dollar
Jamieson Health Products Australia Pty Ltd.
100.0
100.0
Australia
Australian dollar
Nutrawise UK Ltd.
100.0
100.0
United Kingdom
British pound sterling
Jamieson Health Products UK Ltd.
100.0
100.0
United Kingdom
United States dollar
Jamieson Health Products USA Ltd.
100.0
100.0
United States of America
United States dollar
Nutrawise Health & Beauty LLC
100.0
100.0
United States of America
United States dollar
Jamieson Health Products Netherlands B.V.
100.0
100.0
Netherlands
United States dollar
Nutrawise Japan GK
100.0
100.0
Japan
Japanese yen
Jamieson Health Products (Cayman Islands) Limited
66.7
66.7
Cayman Islands
United States dollar
Jamieson Health Products (Hong Kong) Limited
66.7
66.7
China
United States dollar
Jamieson Health Products (Shanghai) Co., Ltd.
66.7
66.7
China
Chinese yuan
Jamieson Health Products (Hong Kong) Trading Limited
66.7
66.7
China
United States dollar
Jamieson Health Products (Hong Kong) Operating Limited
66.7
-
China
United States dollar
Principal Place of Operations
Functional Currency
Jamieson Wellness Inc.
Consolidated Statements of Cash Flows
In thousands of Canadian dollars, for the years ended December 31,
Cash provided by (used in)
Notes
2024
2023
Operating activities
Net earnings
51,133
46,040
Items not affecting cash
Depreciation of property, plant and
equipment and right-of-use assets
8
12,588
14,410
Amortization of intangible assets
10
5,944
5,913
Deferred income taxes
4,289
1,763
Accretion on redeemable preferred shares
17
8,729
4,833
Share-based compensation
20
7,125
5,651
Revaluation of contingent consideration
4
(1,620)
(13,759)
Others
4,559
(1,012)
Net change in non-cash working capital
27
(31,169)
(32,126)
61,578
31,713
Investing activities
Acquisition of business
4
-
(25,823)
Additions to property, plant and equipment, net
8
(9,181)
(8,835)
Acquisition of intangible assets
10
(983)
(473)
(10,164)
(35,131)
Financing activities
Proceeds from credit facilities
13
102,397
206,019
Repayment to credit facilities
13
(119,112)
(281,019)
Payment of lease liabilities
16
(5,558)
(4,536)
Issuance of redeemable preferred shares, net
5, 17
-
84,576
Issuance of warrants, net
5, 19
-
14,705
Proceeds from minority interest in subsidiary
5
-
44,414
Exercise of stock options and ESPP
18
11,247
9,143
Dividends to common shareholders
(33,459)
(30,257)
Repurchase of common shares
18
(949)
(29,004)
(45,434)
14,041
Effect of foreign currency translation on cash
1,944
-
Increase in cash
7,924
10,623
Cash - Beginning of the year
36,863
26,240
Cash - End of the year
44,787
36,863
Supplemental disclosure
Amount of income taxes paid
18,418
22,910
Amount of interest paid
20,070
23,353
(see the accompanying notes to the consolidated financial statements)
38
37
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
consideration that is classified as equity is not re-measured, and subsequent settlement is accounted for within
equity.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the
amount recognized for non-controlling interests) and any previous interest held, over the net identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired
and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at
the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognized in net income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each
of the Company’s cash-generating units (“CGUs”) (or group of CGUs) that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU (or group of CGUs) and part of the operation within that unit is
disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the
operation when determining the gain or loss on disposal of the operation. Goodwill disposed in these
circumstances is measured based on the relative fair values of the disposed operation and the portion of the CGU
retained.
2.3.2 Current versus non-current classification
The Company presents assets and liabilities in the consolidated statements of financial position based on
current/non-current classification.
An asset is current when it is:
• Expected to be realized or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realized within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period; or
• It does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current.
Deferred income tax assets and liabilities are classified as non-current assets and liabilities.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption
and when the Company has less than a majority of the voting or similar rights of an investee, the Company
considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement(s) with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Company’s voting rights and potential voting rights.
The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the Company gains control until the date the Company ceases to
control the subsidiary.
Transactions and balances between the Company and its consolidated entities have been eliminated on profit or
loss, and each component of OCI are attributed to the equity holders of the Company and to the non-controlling
interest, even if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with
the Company’s accounting policies.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction.
If the Company loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit
or loss.
2.3 Summary of accounting policies
The following are the accounting policies applied by the Company in preparing its consolidated financial
statements:
2.3.1 Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as
the aggregate of the consideration transferred, which is measured at the acquisition date fair value and the
amount of any non-controlling interest in the acquiree. Acquisition-related costs are expensed as incurred and
included in the consolidated statements of operations and comprehensive income.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition
date. All contingent consideration (except that which is classified as equity) is subsequently re-measured to fair
value at each reporting period end, with the changes in fair value recognized in profit or loss. Contingent
40
39
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
2.3.4 Revenue recognition
The majority of the Company’s revenue is derived from the sale of Jamieson branded products to distributors,
retail and wholesale customers, referred to as the Company’s “Jamieson Brands” segment, as well as providing
contract manufacturing services and the sale of products to strategic partners, referred to as the Company’s
“Strategic Partners” segment.
Revenue is recognized for the sale of Jamieson branded products and the manufacturing of products to its
strategic partners at the point in time when control of the asset is transferred to the customer based on shipping
terms. The Company generally has a right to payment at the time of delivery (which is the same time that the
Company has satisfied its performance obligations under the arrangement), as such a receivable is recognized as
the consideration is unconditional and only the passage of time is required before payment is due.
A portion of the Company’s revenues derived from contract manufacturing services provided to customers in its
Strategic Partners segment is under a tolling arrangement where the customer supplies the Company with a raw
material or ingredient. Revenue is recognized net of the cost of the raw material or ingredient supplied by the
customer.
Rights of return give rise to variable consideration. The variable consideration is estimated at contract inception
using the expected value method as this best predicts the amount of variable consideration to which the
Company is entitled. The variable consideration is constrained to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognized will not occur when any uncertainty is
subsequently resolved. For products that are expected to be returned, a refund liability is recognized as a
reduction of revenue at the time the control of the products purchased is transferred to the customers.
Jamieson may provide discounts and sales promotional incentives to its customers, which give rise to variable
consideration. The variable consideration is constrained to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when any uncertainty is subsequently
resolved. The application of the constraint on variable consideration increases the amount of revenue that will be
deferred. Jamieson applies the most likely amount method estimating discounts provided to customers using
contracted rates and estimating sales promotional incentives provided to customers based on historical spending
patterns. Jamieson may also provide other consideration to customers for customer-specific programs to
promote the Company’s products. Consequently, revenues are recognized net of these estimated program costs.
All other estimated non-customer-specific promotional costs and consideration are expensed as selling, general
and administrative expenses.
In subsequent periods, the Company monitors the performance of customers against agreed-upon obligations
related to sales incentive programs and makes any adjustments to both revenue and sales incentive accruals as
required.
2.3.5 Foreign currencies
The Company’s consolidated financial statements are presented in Canadian dollars. For each entity, the
Company determines the functional currency, and items included in the financial statements of each entity are
measured using that functional currency (refer to Note 1.2).
Transactions and balances
Transactions in foreign currencies are initially recorded by the entities at their respective functional currency
spot rate at the date the transaction first qualifies for recognition.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
2.3.3 Fair value measurement
The Company measures financial instruments, such as derivatives, at fair value at each consolidated statements
of financial position date. Fair value related disclosures for financial instruments and non-financial assets that
are measured at fair value or where fair values are disclosed are summarized in the following notes:
• Accounting policy disclosures (Note 2.3.3)
• Disclosures for valuation methods, significant estimates and assumptions (Notes 3 and 4)
• Quantitative disclosures of fair value measurement hierarchy (Note 23)
• Financial instruments (including those carried at amortized cost) (Notes 13 and 23)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability; or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of instruments that are quoted in active markets is determined using the quoted prices. The
Company uses valuation techniques to establish the fair value of instruments where prices quoted in active
markets are not available. Therefore, where possible, parameter inputs to the valuation techniques are based on
observable data derived from prices of relevant instruments traded in an active market. These valuation
techniques involve some level of management estimation and judgment, the degree of which will depend on the
price transparency for the instrument or market and the instrument’s complexity.
The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy
prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value
measurement based on the lowest level input significant to the fair value measurement in its entirety.
The three levels of the fair value hierarchy are defined as follows:
Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets
and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 - Significant unobservable inputs which are supported by little or no market activity.
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value.
For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by reassessing
categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
42
41
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at
that date, are recognized subsequently if new information about facts and circumstances arise. The adjustment is
either treated as an adjustment to goodwill (as long as it does not exceed goodwill) if it is incurred during the
measurement period or recognized in net income.
Sales tax
Revenues, expenses and assets are recognized net of the amount of sales tax, except:
• Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority,
in which case, the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense
item, as applicable; and
• Receivables and payables are stated with the amount of sales tax included. The net amount of sales tax
recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
consolidated statements of financial position.
2.3.7 Property, plant and equipment
Property, plant and equipment, with the exception of land, is recorded at cost less accumulated depreciation and
any net accumulated impairment losses. Land is carried at cost and not depreciated. Construction-in-process
assets are capitalized during construction and depreciation commences when the asset is available for use.
Repair and maintenance costs are recognized in profit or loss as incurred unless the recognition criteria are
satisfied and it substantially changes the useful life of an asset.
Depreciation is calculated on a straight-line basis, after taking into account residual values, over the following
expected useful lives of the assets:
Land
Not depreciated
Buildings
20-30 years
Machinery and equipment
3-20 years
Furniture and fixtures
4-5 years
Computer equipment and software
3-10 years
Tools and dies
1 year
When parts of an item of property and equipment have different useful lives, those components are accounted
for as components of property and equipment. Any gain or loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
consolidated statements of operations and comprehensive income when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
periodically.
2.3.8 Intangible assets
Intangible assets are primarily established as a result of business combinations and measured on initial
recognition at fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less accumulated amortization and any accumulated impairment losses.
Upon recognition of an intangible asset, the Company determines if the asset has a definite or indefinite life. In
making this determination, the Company considers the expected use, expiry of agreements, the nature of the
asset, and whether the value of the asset decreases over time.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
• Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency
spot rate of exchange in effect at the reporting date.
• Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions.
• Revenue and expense items are translated using the average exchange rate during the year.
Differences arising on settlement or translation of monetary items are recognized in profit or loss.
On consolidation, the assets and liabilities of foreign operations are translated into the reporting currency at the
reporting currency spot rate of exchange in effect at the reporting date and their statement of operations are
translated using the average exchange rate during the year. Exchange differences arising on translation for
consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the
component of OCI relating to that particular foreign operation is reclassified to profit or loss.
2.3.6 Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted at the reporting date in the countries where the Company
operates and generates taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the
consolidated statements of operations and comprehensive income. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation, and it establishes provisions where appropriate.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred income taxes are not recognized where:
• The deferred income tax liability arises from the initial recognition of goodwill;
• The deferred income tax asset or liability arises on the initial recognition of an asset or liability in an acquisition
that is not a business combination and, at the time of the acquisition, affects neither the accounting profit nor
taxable profit or loss; and
• For temporary differences relating to investments in subsidiaries to the extent that the Company can control
the timing of the temporary difference and it is probable that they will not reverse in the foreseeable future.
Deferred income tax assets are recognized for unused loss carry forwards and deductible temporary differences
to the extent that it is probable that taxable profit will be available against which they can be utilized. At each
reporting period, previously unrecognized deferred income tax assets are reassessed to determine whether it has
become probable that future taxable profit will allow the deferred income tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Current and deferred income taxes relating to items recognized directly in OCI or equity are also recognized
directly in OCI or equity, respectively.
44
43
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The Company has made the following financial instrument classifications:
Impairment
IFRS 9 requires a forward-looking Expected Credit Loss (“ECL”) model. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash flows that the Company
expects to receive.
For accounts receivable, Jamieson applies the simplified approach and has determined the allowance based on
lifetime ECLs at each reporting date. The Company has established a provision that is based on the Company’s
historical credit loss experience, adjusted for forward-looking factors specific to the customers and the economic
environment.
Derecognition
A financial asset is derecognized when the rights to receive cash flows from the asset have expired, or the
Company has transferred its rights to receive cash flows from the asset and either (a) the Company has
transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognized in the consolidated statements of operations and comprehensive income.
2.3.10 Derivative financial instruments and hedge accounting
The Company uses derivative financial instruments (primarily forward contracts and swaps) to manage exposure
to fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are initially
recognized at fair value on the date the derivative contract is executed and are subsequently remeasured at fair
value each reporting period end.
At the inception of a hedging relationship, the Company designates and formally documents the relationship
between the hedging instrument and the hedged item, the risk management objective, and its strategy for
undertaking the hedge. The documentation identifies the specific asset, liability, or anticipated cash flows being
hedged, the risk that is being hedged, the type of hedging instrument used, and how effectiveness will be
assessed.
The Company also formally assesses, both at inception and at each reporting date thereafter, whether or not the
derivatives that are used in hedging transactions are highly effective in offsetting the changes attributable to the
hedged risks in the fair values or cash flows of the hedged items. If a hedge relationship becomes ineffective, it no
Financial Instrument
IFRS 9 Measurement
Cash
Amortized cost
Accounts receivable
Amortized cost
Accounts payable and accrued liabilities
Amortized cost
Long-term debt
Amortized cost
Derivatives not designated as hedging instruments
FVTPL
Derivatives designated as hedging instruments
Lease liabilities
Contingent consideration
Fair value (hedge accounting)
Amortized cost
FVTPL
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by changing the amortization period, as appropriate, and are
treated as changes in accounting estimates. The amortization expense on intangible assets is recognized in the
consolidated statements of operations and comprehensive income on a straight-line basis over their estimated
useful lives as follows:
Customer relationships
15-30 years
Registrations, licenses, and other
3-10 years
The Company expects its trade names to generate economic benefit in perpetuity, and accordingly, has assigned
the trade names as indefinite-life intangible assets.
Indefinite-life intangibles including trade names are tested for impairment annually at December 31 and
otherwise as required if events occur that indicate that the net carrying value may not be recoverable.
2.3.9 Financial instruments — initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Classification and measurement
All financial assets and liabilities are recognized initially at fair value plus, in the case of financial instruments
not at fair value through profit or loss (“FVTPL”), transaction costs.
Debt financial instruments are subsequently measured at FVTPL, fair value through other comprehensive
income (“FVOCI”), or amortized cost using the effective interest rate method. The Company determines the
classification of its financial assets based on the Company’s business model for managing the financial assets and
whether the instruments’ contractual cash flows represent solely payments of principal and interest on the
principal amount outstanding. The Company’s derivatives not designated as a hedging instrument in a qualifying
hedge relationship are subsequently measured at FVTPL. Equity instruments within the scope of IFRS 9,
“Financial Instruments” (“IFRS 9”), if any, are subsequently measured at FVTPL or elected irrevocably to be
classified at FVOCI at initial recognition.
Financial liabilities are subsequently measured at amortized cost using the effective interest method or at
FVTPL. Financial liabilities are subsequently measured as FVTPL when the financial liability is: (i) contingent
consideration of an acquirer in a business combination; (ii) held for trading; or (iii) it is designated as FVTPL if
eligible. Other financial liabilities are subsequently measured at amortized cost using the effective interest
method.
For financial liabilities that are designated as FVTPL, the amount of change in the fair value of the financial
liability that is attributable to changes in the Company’s own credit risk of that liability is recognized in OCI
unless the recognition of the effects of changes in the liability’s credit risk in OCI would create or enlarge an
accounting mismatch in the consolidated statements of operations and comprehensive income. The remaining
amount of change in the fair value of liability is recognized in the consolidated statements of operations and
comprehensive income. Changes in fair value of a financial liability attributable to the Company’s own credit
risk that are recognized in OCI are not subsequently reclassified to the consolidated statements of operations
and comprehensive income; instead, they are transferred to retained earnings, upon derecognition of the
financial liability.
46
45
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Where the carrying amount of an asset or CGU (or group of CGUs) exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. Impairment losses, if any, of continuing
operations are recognized in the consolidated statements of operations and comprehensive income in those
expense categories consistent with the function of the impaired asset.
A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to
determine the asset’s or CGU’s recoverable amount since the last impairment loss was recognized. The reversal is
limited so that the carrying amount of the asset or group of assets does not exceed their recoverable amount, nor
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the assets in prior years. Such reversal is recognized in the consolidated statements of operations
and comprehensive income. Impairment losses relating to goodwill cannot be reversed in future periods.
2.3.13 Cash
Cash in the consolidated statements of financial position is comprised of cash balances that are subject to an
insignificant risk of changes in value.
2.3.14 Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the subsequent increase in
the provision due to the passage of time is recognized as a finance cost.
2.3.15 Post-retirement benefits
The Company’s post-retirement benefit plan (refer to Note 14) is unfunded and available to all Canadian hourly
union personnel. The plan provides prescription and vision benefits to eligible employees upon attainment of
age 65 with at least 15 years of service.
Post-retirement benefit costs for the plan are actuarially determined using the projected unit credit method pro-
rated on service and management’s best estimate of the appropriate discount rate, health care costs, inflation,
mortality and other decrements. The accrued benefit obligation is based on the present value of future benefits
based on the last actuarial valuation completed as of December 31, 2024.
Current and past years’ service costs, interest income or expenses and gains and losses on curtailments are
recognized in the consolidated statements of operations and comprehensive income as they occur and at the date
of a plan amendment or curtailment.
Re-measurements, comprising actuarial gains and losses, are recognized immediately in the consolidated
statements of financial position with a corresponding debit or credit to OCI in the period in which they occur.
Re-measurements are not reclassified to net income in subsequent periods.
As of January 30, 2022, the Company transitioned its current employer-sponsored group RRSP plan for certain
production hourly employees to participation in The Colleges of Applied Arts and Technology Pension Plan (the
“CAAT Plan”). The CAAT Plan is a multi-employer, jointly sponsored defined benefit pension plan which is
financed by contributions from participating members and participating employers, and by investment earnings.
The Company’s participation in the CAAT Plan is accounted for as a defined contribution pension plan, where
the Company’s contributions are expensed as incurred. The Company does not bear any performance risk on
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
longer qualifies for hedge accounting and any subsequent change in the fair value of the hedging instrument is
recognized in net income.
The Company uses hedge accounting for highly probable forecasted transactions (cash flow hedges). When hedge
accounting is appropriate, the hedging relationship is designated as a cash flow hedge. In a cash flow hedge, the
change in fair value of the hedging instrument is recorded, to the extent it is effective, in other comprehensive
income. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset, the
Company removes that amount from the cash flow hedge reserve and includes it directly in the initial cost of the
inventory.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
other comprehensive income is immediately recognized in the consolidated statements of operations and
comprehensive income.
2.3.11 Inventories
Inventories are valued at the lower of cost and net realizable value. Raw material costs are accounted for using
purchase cost on a first-in, first-out basis. Finished goods and work in progress costs are accounted for using cost
of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs to sell. A provision for obsolescence is calculated based on historical
experience and expiration.
2.3.12 Impairment of non-financial assets
Disclosures relating to impairment of non-financial assets are summarized in the following notes:
• Accounting policy disclosures (Note 2.3.12)
• Disclosures for significant assumptions (Note 3)
• Property, plant and equipment (Note 8)
• Goodwill and intangible assets (Notes 9 and 10)
The Company performs impairment testing annually for goodwill and indefinite-life intangible assets and, when
circumstances indicate that there may be impairment, for other long-lived assets. Management judgment is
involved in determining if there are circumstances indicating that testing for impairment is required, and in
identifying CGUs for the purpose of impairment testing.
The Company assesses impairment by comparing the recoverable amount of a long-lived asset, CGU or CGU
group to its carrying value. The recoverable amount is defined as the higher of: (i) value in use; or (ii) fair value
less cost to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs to sell, a market multiple approach is used. These calculations are
corroborated by other available fair value indicators.
The determination of the recoverable amount involves significant estimates and assumptions, including those
with respect to valuation multiples, future cash inflows and outflows, discount rates, and asset lives. These
estimates and assumptions could affect the Company’s future results if the current estimates of future
performance and fair values were to change. These determinations will affect the amount of amortization
expense on definite-life intangible assets recognized in future periods.
48
47
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
DSUs fully vest on the one-year anniversary from the grant date and are exercised upon termination of
employment. The fair value of DSUs is measured at grant date based on the market value of a Common Share at
grant date.
A maximum of 8.7% of the issued Common Shares outstanding are reserved for issuance under the LTIP and the
Company’s legacy option plan combined.
Employee share purchase plan
The Company maintains an employee share purchase plan (“ESPP”) for all eligible employees. Employees can
contribute any amount of their eligible earnings subject to an annual cap of 10% of aggregate base salary and
commissions to the ESPP. Share purchases occur 14 days following the end of the Company’s fiscal quarter (the
“Purchase Date”), or the first business day thereafter if any Purchase Date is not a business day. Eligible
employees are able to purchase Common Shares at 90 percent of the volume weighted average closing price on
the TSX on the five trading days immediately preceding the Purchase Date.
Employees pay for their share purchases through payroll deductions at a rate equal to any whole percentage
from 1 percent to 10 percent.
Contributions to the ESPP are recorded as share capital at each Purchase Date.
2.3.17 Leases
The Company assesses at contract inception whether the contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
The Company has applied judgment to determine the lease term for some lease contracts that include renewal
options. The assessment of whether the Company is reasonably certain to exercise such options impacts the
lease term, which affects the amount of lease liabilities and right-of-use assets recognized.
The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to
use the underlying assets during the lease term for all leases.
Right-of-use assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. The recognized right-of-use assets are
depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use
assets are subject to impairment.
The Company’s right-of-use assets are included in property, plant, and equipment.
Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value
of lease payments to be made over the lease term. The lease payments include fixed payments (including in-
substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index
or a rate, and amounts expected to be paid under residual value guarantees.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
plan investments and is not required to fund the plan beyond the required annual contributions. Any pension
surplus or deficit is a joint responsibility of the members and employers and may affect future contribution rates;
the deficit or surplus is determined by the Plan’s actuarial valuation.
2.3.16 Share-based compensation
The Company has an equity-based compensation plan providing for the issuance of securities under which the
grants will be made by the Company. Under the long-term incentive plan (the “LTIP”), the Board of Directors of
the Company, at its discretion may grant share options, restricted shares, restricted share units in the form of
time-based restricted share units ("RSUs") or performance-based share units (“PSUs”), deferred share units
(“DSUs”), and stock appreciation rights. The awards are settled in Common Shares with a cash settlement
alternative available to the Company.
Share-based compensation costs are accounted for on a fair value basis, as measured at the grant date, which is
generally the date at which both the Company and employee have a mutual understanding of the terms of the
award.
The compensation expense is based on the estimated number of awards that will eventually vest and adjustments
for forfeitures are made as they occur.
Upon exercise of options and settlement of RSUs, PSUs, and DSUs, the amount recognized in contributed
surplus for the award plus the cash received upon exercise is recognized as an increase in share capital.
Options are granted with an exercise price equal to or greater than their fair value, as determined by the closing
price on the TSX immediately preceding the grant date of the shares into which they may be converted. Options
granted to directors of the Company fully vest on the one-year anniversary from the grant date. Options granted
to persons other than directors of the Company vest at a rate of 25% or 33% per year on each anniversary date
from the beginning of the vesting period. Options expire no later than the 10th anniversary of the beginning of
the vesting period or upon termination of employment.
The fair value of the share options is estimated using the Black-Scholes option-pricing model. Several
assumptions are used in the underlying calculation of fair values of the Company’s share options using the Black-
Scholes option-pricing model, including the market value at grant date, expected life of the option, stock-price
volatility, forfeiture rates, and risk-free interest rates.
PSUs, RSUs, and DSUs granted represent the right to receive one Common Share for each PSU, RSU, or DSU.
PSUs vest on the third anniversary of the grant date based on the Company’s total shareholder return (“TSR”)
compared to a principal peer group.
The Company has determined that the above specified performance condition represents a market condition.
Accordingly, the Company recognizes the compensation cost over the vesting period, irrespective of whether the
market condition is satisfied, provided that service conditions are satisfied.
The fair value of PSUs is estimated at grant date using the Monte Carlo simulation. For PSUs, the model
simulates the TSR and compares it against the principal peer group. It takes into account the share price
volatility of the Company relative to that of its peer group so as to predict the share performance.
RSUs granted to directors of the Company fully vest on the one-year anniversary from the grant date. RSUs
granted to persons other than directors of the Company vest on the one-year or three-year anniversary from the
grant date. The fair value of RSUs is measured at grant date based on the market value of a Common Share at
grant date.
50
49
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
3. Significant accounting judgments, estimates and assumptions
The preparation of the Company’s consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Judgments
The Company has identified the following judgments, apart from estimates, that management made in the
process of applying the Company’s accounting policies, and that have the most significant effect on the amounts
recognized in the consolidated financial statements.
Control of China Operations
On May 16, 2023, the Company completed its strategic partnership with DCP Capital (“DCP”) in respect of the
Company’s operations in China. The transaction involved DCP’s contribution of $47,096 (USD $35,000) in
capital in exchange for a 33% minority interest in Jamieson Health Products (Cayman Islands) Limited
(“Jamieson-DCP Partnership”), which in turn holds Jamieson Health Products (Shanghai) Co., Ltd. (“Jamieson
Shanghai”), Jamieson Health Products (Hong Kong) Trading Limited, and Jamieson Health Products (Hong
Kong) Limited (together with Jamieson-DCP Partnership, “China Operations”), less transaction costs of $2,682.
The Jamieson-DCP Partnership is governed by a board consisting of six members, including four from the
Company and two from DCP, with certain reserved matters requiring a vote of two-thirds of the directors present
at the board meeting, including at least one DCP director. Management’s judgment is involved when determining
whether these reserved matters affect the Company’s current ability to direct the relevant activities and whether
the Company has the ability to use its power over this strategic partnership to affect the amount of the
Company’s returns. The Company has determined that it controls the China Operations based on all facts and
circumstances assessed during the period. Therefore, the Jamieson-DCP Partnership is consolidated into the
Company’s Financial Statements. DCP’s 33% minority interest in the Jamieson-DCP Partnership is recorded as
non-controlling interest.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are described below. The Company based its assumptions and estimates on
parameters available when the consolidated financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances arising
beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Estimating variable consideration for returns, trade merchandise allowances and sales promotional incentives
The Company uses historical customer return data to determine the expected return percentages. These
percentages are applied to determine the expected value of the variable consideration. Any significant changes in
experience as compared to historical return pattern will impact the expected return percentages estimated by the
Company.
The Company provides for estimated payments to customers based on various trade programs and sales
promotional incentives. The Company estimates the most likely amount payable to each customer for each trade
and incentive program separately using (i) the projected level of sales volume for the relevant period; (ii)
customer rates for allowances, discounts, and rebates; (iii) historical spending patterns; and (iv) sales lead time.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the
assessment to purchase the underlying asset.
The Company’s lease liabilities are included in other long-term liabilities.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases
of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-
value assets are expensed on a straight-line basis over the lease term.
2.3.18 Adoption of Amended IFRS Pronouncements
Amendments to IAS 1, Presentation of Financial Statements - Classification of Liabilities as Current or Non-
Current and Non-Current Liabilities with Covenants
Effective January 1, 2023, the Company adopted the amendments to IAS 1, issued in January 2020, which clarify
the requirements for classifying liabilities as current or non-current. The amendments clarify the classification of
liabilities as current or non-current based on rights that are in existence at the end of the reporting period and
unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability. The
amendments also clarify the definition of "settlement" of a liability. On October 31, 2022, the IASB issued Non-
Current Liabilities with Covenants (further amendments to IAS 1). These amendments specify that covenants to
be complied with after the reporting date do not affect the classification of debt as current or non-current as of
the reporting date. These amendments are effective in the same period the entity adopts the January 2020
amendments which for the Company is January 1, 2023. The amendments had no material impact on the
consolidated financial statements.
2.3.19 Future changes to accounting standards
The IASB issued IFRS 18 “Presentation and Disclosure in the Financial Statements” ("IFRS 18"), which sets out
requirements and guidance on presentation and disclosure in financial statements, including:
•
presentation in income statement of income and expenses within five defined categories: operating,
investing, financing, income taxes, and discontinued operations
•
presentation in the income statements of new defined subtotals for operating profit and profit before
financing and income taxes
•
enhanced guidance on aggregation and disaggregation of information and whether to provide
information in the financial statements or in the notes
•
disclosure of specified expenses by nature
•
disclosure of explanations of management-defined performance measures
IFRS 18 will replace IAS 1 “Presentation of Financial Statements” but carries forward many requirements from
IAS 1 without any change. The standard is effective for the annual reporting periods beginning on or after
January 1, 2027, with early application permitted. The Company is currently assessing the impact of this new
standard on its consolidated financial statements.
52
51
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Useful lives of property, plant and equipment and intangible assets with finite useful lives
The Company employs significant estimates to determine the estimated useful lives of property, plant and
equipment and intangible assets with finite useful lives, including assets arising from business combinations,
considering industry trends such as technological advancements, past experience, expected use and review of
asset lives.
Components of an item of property, plant and equipment may have different useful lives. The Company makes
estimates when determining depreciation methods, depreciation rates and asset useful lives, which requires
taking into account industry trends and company-specific factors. The Company reviews these decisions at least
once each year or when circumstances change. The Company will change depreciation methods, depreciation
rates or asset useful lives if they are different from previous estimates.
4.
Business Combinations
4.1 Acquisition related adjustments
On July 19, 2022, Jamieson Health Products USA Ltd. (“Jamieson USA”) acquired Nutrawise Health & Beauty
Corporation (“Nutrawise” or “youtheory”), and Nutrawise became a wholly owned subsidiary of Jamieson USA.
Pursuant to the purchase agreement, the former owners are entitled to additional payments up to USD $190,000
subject to meeting specific earnings before interest expense, income taxes, depreciation and amortization
(EBITDA) targets up to 2025.
The following table shows the carrying amounts of the contingent consideration with respect to the Nutrawise
acquisition and the movements during the period.
During the year ended December 31, 2024, the $12,425 fair value adjustment recorded in acquisition related
adjustments in the consolidated statements of operations and comprehensive income includes a $7,594
settlement relating to the 2024 contingent consideration. During the year ended December 31, 2023, the fair
value adjustment in the amount of $13,759 was recorded in acquisition related adjustments in the consolidated
statements of operations and comprehensive income, net of post-acquisition working capital adjustments of
$5,896 to reflect acquired liabilities.
The fair value of contingent consideration is estimated using a Monte-Carlo simulation model. The simulation is
revaluated at the end of each reporting period and any changes in fair value are recognized in the consolidated
statements of operations and comprehensive income. The fair value for the contingent consideration is an
estimate requiring judgment and subject to fluctuations in key assumptions, including EBITDA forecasts until
2025, weighted average cost of capital of 11.8% (2023 - 12.5%), risk-free-rate of 4.1% (2023 - 4.1%), volatility of
40.0% (2023 - 40.0%), and earn-out payment discount rate of 7.2% (2023 - 7.2%).
2024
2023
$
$
Balance, beginning of the year
22,623
37,235
Fair value adjustment
(1,620)
(13,759)
Foreign currency translation
1,828
(853)
Balance, end of year
22,831
22,623
Current
22,831
2,778
Long-term
-
19,845
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
These arrangements are complex and there are a significant number of customers and products affected.
Management has systems and processes in place to estimate and value these obligations.
The Company updates its expected return, trade merchandise allowances and sales promotional incentives on a
quarterly basis and the refund liability and trade and promotional accruals are adjusted accordingly. To the
extent that payments differ from estimates of the related liability, accounts payable and accrued liabilities, net
income, and comprehensive income will be affected in future periods.
Valuation of inventory
Management makes estimates of the future customer demand for products when establishing appropriate
provisions for inventory. In making these estimates, management considers the product life of inventory and the
profitability of recent sales of inventory. In many cases, products sold by the Company turn quickly and
inventory on-hand values are low, thus reducing the risk of inventory obsolescence. However, code or “best
before” dates are very important in the determination of realizable value of inventory. Management ensures that
systems are in place to highlight and properly value inventory that may be approaching code dates. To the extent
that actual losses on inventory differ from those estimated, inventory, net income, and comprehensive income
will be affected in future periods.
Long-lived assets valuation
The Company performs impairment testing annually for goodwill and indefinite-life intangible assets and when
circumstances indicate long-lived assets may be impaired. Management judgment is involved in determining if
there are circumstances indicating that testing for impairment is required, and in identifying CGUs for the
purpose of impairment testing. The Company assesses impairment by comparing the recoverable amount of a
long-lived asset, CGU, or CGU group to its carrying value. The recoverable amount is defined as the higher of: (i)
value in use; or (ii) fair value less costs of disposal.
The determination of the recoverable amount involves significant estimates and assumptions. Fair value less
costs to sell is determined using market multiples. Value in use is determined using future cash inflows and
outflows, discount rates, growth rates and asset lives. These estimates and assumptions could affect the
Company’s future results if the current estimates of future performance and fair values change. These
determinations will affect the amount of amortization expense on definite-life intangible assets recognized in
future periods.
Measurement of fair values
A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities. When the measurement of fair values cannot be determined
based on quoted prices in active markets, fair value is measured using valuation techniques and models. The
inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree
of judgment is required in establishing fair values. Changes in assumptions about the inputs to these models
could affect the reported fair value of the Company’s financial and non-financial assets and liabilities.
Tangible and intangible assets acquired through business combinations are initially recorded at their fair values
based on assumptions of management. These assumptions include estimating the cost of tangible assets and
future expected cash flows arising from intangible assets identified. Financial instruments acquired are
determined based on the amortized costs at the acquisition date that approximate their carrying values.
To the extent that these estimates differ from those realized, the measured asset or liability, net income, and/or
comprehensive income will be affected in future periods. Information about the valuation techniques and inputs
used in determining the fair value of various assets and liabilities are disclosed in Notes 4, 5, 9, 10, 17, 19, 20 and
23.
54
53
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The Company has determined that the USD $10,000 potential charge for not executing its right to repurchase
the 33% minority interest is not a present obligation for the Company, and is therefore not recognized in the
Financial Statements.
In conjunction with DCP’s $47,096 investment in the Company’s China Operations on May 16, 2023, DCP also
completed its subscription for certain preferred shares and warrants of the Company. Please refer to Note 17 for
details of the preferred shares and Note 19 for details of the warrants.
6.
Accounts receivable
The Company maintains an allowance for expected credit losses that represents its estimate of uncollectible
amounts based on the Company’s historical credit loss experience, adjusted for forward-looking factors specific
to the customers and the economic environment.
The aging of receivables is as follows:
7.
Inventories
An inventory provision is estimated by management based on historical sales, inventory aging and expiry, and
expected future sales and is included in cost of sales. Subsequent changes to the provision are recorded in cost of
sales in the consolidated statements of operations and comprehensive income.
For the year ended December 31, 2024, inventory write-downs of $9,376 were expensed through cost of sales
(2023 - $5,243).
As at December 31,
2024
2023
$
$
Trade
227,260
163,917
Other miscellaneous receivables
934
701
Allowance for expected credit losses
(163)
(119)
228,031
164,499
As at December 31,
2024
2023
$
$
Current
197,300
135,607
Aged 1-30 days past due
16,558
20,969
Aged 31-60 days past due
6,360
3,075
Aged > 60 days past due
7,976
4,967
Allowance for expected credit losses
(163)
(119)
228,031
164,499
As at December 31,
2024
2023
$
$
Raw material and packaging
72,577
92,026
Bulk product and work in process
18,747
21,384
Packaged finished goods
70,081
73,781
Inventory provision
(6,747)
(4,735)
154,658
182,456
Inventories expensed during the year
417,175
398,204
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
4.2 Acquisition of former distribution partner in China
On April 28, 2023, the Company completed its acquisition of the operating assets from its former distribution
partner in China for a total cash consideration of $25,823, before post-closing cash adjustments. The acquisition
allows the Company to directly operate its sales, marketing and distribution activities in China, and marks a step
forward in the Company’s brand expansion plans in China.
The following table provides the purchase price allocation of the net assets acquired at their fair value amounts:
The intangible assets acquired include customer relationships, which are amortized over approximately 15 years
and expensed through the consolidated statements of operations and comprehensive income on a straight-line
basis over the estimated useful life.
The estimated goodwill represents the future economic benefit arising from other assets acquired in the
acquisition that are not individually identifiable and separately recognized. The estimated goodwill arising from
the acquisition of $4,867 is attributable to expected future income and cash-flow projections and synergies the
Company expects to achieve in leveraging its platform. Certain intangible assets and goodwill are not expected to
be deductible for tax purposes.
5.
China Operations Strategic Partnership
On May 16, 2023, the Company completed its strategic partnership with DCP in respect of the Company’s
operations in China. The transaction involved DCP’s contribution of $47,096 (USD $35,000) in capital in
exchange for a 33% minority interest in Jamieson Health Products (Cayman Islands) Limited, which in turn
holds Jamieson Health Products (Shanghai) Co., Ltd., Jamieson Health Products (Hong Kong) Trading Limited,
and Jamieson Health Products (Hong Kong) Limited, less transaction costs of $2,682.
The Jamieson-DCP Partnership is subject to an exit mechanism for DCP and various termination clauses. Exit
mechanisms may include a sale to Jamieson or third party, a public offering or a mutually agreed upon
termination of the agreement. Between the fourth and fifth anniversary of the Jamieson-DCP Partnership
agreement (which period is subject to delay in specified circumstances), the Company has the right, but not the
obligation, to repurchase DCP’s 33% minority interest at a pre-determined multiple of net revenues of the China
Operations (less net debt). If the Company does not execute its right to repurchase the 33% minority interest by
the fifth anniversary of the Jamieson-DCP Partnership agreement, a USD $10,000 charge is due to DCP. DCP
also has the right to negotiate and execute an exit event including the potential sale of the entire Jamieson-DCP
Partnership to a third party. The Company has a right of first refusal should DCP propose a sale of its shares in
the Jamieson-DCP Partnership.
The Company’s right to purchase DCP’s 33% minority interest in the Jamieson-DCP Partnership at a pre-
determined multiple of net revenues represents a call option whose value will be driven by the difference, if any,
between the fair value of DCP’s interest in the China Operations compared to the pre-determined net revenue
multiple calculation. The Company will assess the fair value of the call option at each reporting period and has
determined the fair values to be $nil at inception and as at December 31, 2024.
Final fair value as at
April 28, 2023
$
Inventories
13,697
Customer relationships
8,900
Goodwill
4,867
Deferred tax liability
(1,641)
Total net assets acquired
25,823
56
55
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
10.
Intangible assets
The carrying amount of indefinite-life intangible assets is comprised of trademarks, of which $68,000 is
allocated to the domestic and international sales CGU, $47,157 is allocated to the specialty brands sales CGU
(comprised of previous acquisitions of Body Plus Nutritional Products Inc., Sonoma Nutraceuticals Inc., and
Lorna Vanderhaeghe Health Solutions Inc.) and $155,596 is allocated to the youtheory sales CGU.
The estimated recoverable amount for the domestic and international sales, specialty brands, youtheory sales,
and China CGUs were determined by the Company as the fair value less costs of disposal of the CGU by using the
capitalized adjusted EBITDA approach, based on a multiple range of 13x - 15x (2023 - 13x - 15x), whereby the
Company referenced comparable companies in determining adjusted EBITDA multiples. Comparable companies
were determined by reference to size and operation in similar industries.
The impairment analyses are not sensitive to reasonable possible changes to the multiple.
Other intangible assets are comprised of patents, registrations, definite-life trademarks, system implementation,
and website development costs. No impairment losses were recognized against intangible assets during the years
ended December 31, 2024 and 2023.
11.
Accounts payable and accrued liabilities
Customer
relationships
Trademarks
Registrations,
licenses, and other
Total
$
$
$
$
Cost
At January 1, 2023
134,130
261,612
4,653
400,395
Assets acquired through business combinations
(Note 4)
8,900
-
-
8,900
Additions
-
-
473
473
Foreign currency translation
(877)
(3,307)
-
(4,184)
At December 31, 2023
142,153
258,305
5,126
405,584
Additions
-
-
983
983
Foreign currency translation
3,482
12,448
14
15,944
At December 31, 2024
145,635
270,753
6,123
422,511
Accumulated amortization
At January 1, 2023
30,601
-
2,589
33,190
Amortization charge for the year
4,912
-
1,001
5,913
Foreign currency translation
(40)
-
-
(40)
At December 31, 2023
35,473
-
3,590
39,063
Amortization charge for the year
5,366
-
578
5,944
Foreign currency translation
290
-
-
290
At December 31, 2024
41,129
-
4,168
45,297
Net book value
At December 31, 2024
104,506
270,753
1,955
377,214
At December 31, 2023
106,680
258,305
1,536
366,521
As at December 31,
2024
2023
$
$
Trade payables and accrued liabilities
80,421
76,460
Trade and promotional accruals
44,422
46,758
Refund liabilities
2,857
5,178
Salaries, commissions and bonuses
9,551
6,775
Accrued interest - current
402
349
137,653
135,520
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
8.
Property, plant and equipment
Other is comprised of furniture and fixtures, computer equipment, and leasehold improvements.
9.
Goodwill
Goodwill acquired through business combinations is allocated to the Jamieson Brands operating segment for the
purpose of impairment testing, which is expected to benefit from the synergies of the business combination in
which the goodwill arose.
The estimated recoverable amount was determined by the Company as the fair value less costs of disposal of the
Jamieson Brands operating segment by using the capitalized adjusted EBITDA approach, based on a multiple
range of 13x - 15x (2023 - 13x - 15x) whereby the Company referenced comparable companies in determining
adjusted EBITDA multiples. Comparable companies were determined by reference to size and operation in
similar industries.
The impairment analysis is not sensitive to reasonable possible changes to the multiple.
There have been no impairment losses recognized against goodwill for the years ended December 31, 2024 and
2023.
Land
Buildings
Machinery and
equipment
Right-of-
use assets
(Note 16)
Other
Total
$
$
$
$
$
$
Cost
At January 1, 2023
2,497
29,222
85,419
39,579
14,549
171,266
Additions
-
827
6,937
1,016
1,071
9,851
Disposals
-
-
(58)
(40)
-
(98)
Foreign currency translation
-
-
(281)
(124)
(135)
(540)
At December 31, 2023
2,497
30,049
92,017
40,431
15,485
180,479
Additions
-
707
7,179
320
1,295
9,501
Disposals
-
-
(598)
(1,816)
(702)
(3,116)
Foreign currency translation
-
-
1,428
447
480
2,355
At December 31, 2024
2,497
30,756
100,026
39,382
16,558
189,219
Accumulated Depreciation
At January 1, 2023
-
9,226
31,735
11,764
6,832
59,557
Depreciation for the year
-
1,054
7,236
4,875
1,245
14,410
Disposals
-
-
(52)
(40)
-
(92)
Foreign currency translation
-
-
(223)
(23)
(53)
(299)
At December 31, 2023
-
10,280
38,696
16,576
8,024
73,576
Depreciation for the year
-
1,090
5,494
4,840
1,164
12,588
Disposals
-
-
(572)
(620)
(702)
(1,894)
Foreign currency translation
-
-
814
249
295
1,358
At December 31, 2024
-
11,370
44,432
21,045
8,781
85,628
Net book value
At December 31, 2024
2,497
19,386
55,594
18,337
7,777
103,591
At December 31, 2023
2,497
19,769
53,321
23,855
7,461
106,903
2024
2023
$
$
Balance, beginning of the year
274,411
272,916
Assets acquired through business combinations (Note 4)
-
4,867
Foreign currency translation
13,092
(3,372)
Balance, end of year
287,503
274,411
58
57
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The table below illustrates the drawings and repayments applied against the Credit Facilities.
For the year ended December 31, 2024, the weighted average interest rate on the Credit Facilities was 5.7%
(2023 - 6.1%). A portion of the Credit Facilities outstanding is fixed through the interest rate swap (Refer to
Note 23). As at December 31, 2024, the interest rate on the Credit Facilities was 6.5% (2023 - 6.7%).
The Credit Facilities are collateralized by security agreements and first charges over the assets including
property, plant and equipment and intellectual property of the Borrowers and certain other subsidiaries of JLL,
subject to permitted liens.
Under the terms of the Credit Facilities, the Borrowers are subject to restrictive covenants and must maintain an
interest coverage ratio of not less than 3.00:1.00 and a leverage ratio not greater than 4.50:1.00.
The Borrowers are in compliance with all covenants as of December 31, 2024 and 2023.
14.
Post-retirement benefits
The Company maintains an unfunded post-retirement benefit plan that provides health and vision care coverage
to retirees at age 65 with 15 or more years of service. The Company uses actuarial reports prepared by
independent actuaries to measure its accrued obligation for funding and accounting purposes.
Changes in the present value of the post-retirement benefit plan are as follows:
The following significant economic assumptions were employed to determine the accrued benefit obligation:
For the years ended December 31,
2024
2023
$
$
Credit Facilities
Drawings
102,397
206,019
Repayments
(119,112)
(281,019)
(16,715)
(75,000)
As at December 31,
2024
2023
$
$
Balance, beginning of the year
1,078
929
Benefits paid
(28)
(23)
Actuarial gain
12
38
Interest costs
51
46
Current service costs
96
88
Balance, end of the year
1,209
1,078
As at December 31,
2024
2023
%
%
Benefit obligations
Discount rate - expense for the year
4.75
5.00
Discount rate - year-end obligation
4.75
4.75
Drug trend rate
4.50
4.50
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
12.
Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.
Transactions with former owners of acquired businesses
As at December 31, 2024, the Company has a contingent consideration fair valued at $22,831 (2023 - $22,623
million) payable to the former owners of youtheory.
Share-based compensation
The Company offers its employees a share-based compensation plan. Please refer to Note 20 for details of the
share-based compensation awards.
Compensation of key management personnel of the Company
Key management personnel are those persons having authority and responsibility for planning, directing, and
controlling the activities of the Company and/or its subsidiaries, directly or indirectly, including any non-executive
director of the Company.
Remuneration of key management personnel including C-suite executives of the Company is comprised of the
following expenses:
The amounts disclosed in the table are the amounts recognized as an expense during the reporting period related
to key management personnel.
Transactions with board members
On November 12, 2024, the Company entered into a three-year consulting agreement with Dr. Louis Aronne, a
member of the Company’s board of directors, for the development and formulation of natural health products to
support consumers while using GLP-1 drugs. For the year ended December 31, 2024, $nil was recognized in
consulting fees to Dr. Aronne.
13.
Long-term debt
On July 19, 2022, Jamieson Laboratories Ltd. (“JLL”) amended and restated its credit agreement to add
Nutrawise Health & Beauty LLC as a Borrower and to provide a secured revolving facility of $500,000, plus an
expanded accordion feature of up to $250,000 (collectively, the “Credit Facilities”), with an extended maturity to
July 19, 2027.
For the years ended December 31,
2024
2023
$
$
Short-term employee benefits
4,810
3,986
Share-based compensation
4,022
3,460
Total remuneration
8,832
7,446
60
59
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
15.
Income taxes
The major components of income tax expense for the years ended December 31 are as follows:
Reconciliation of effective tax rate
Income tax expense varies from the amount that would be computed by applying the combined federal and
provincial statutory income tax rates as a result of the following:
Income tax recognized in other comprehensive income (loss)
Deferred income tax assets and liabilities
Deferred income tax assets and liabilities arise on the timing differences between accounting and tax treatment
of goodwill and intangible assets, property plant and equipment, post-retirement employee benefit obligations,
deferred financing fees, and non-capital losses carried forward.
Years ended December 31,
2024
2023
$
$
Current income tax expense
20,438
17,755
Deferred income tax expense
4,227
1,876
Provision for income taxes
24,665
19,631
As at December 31,
2024
2023
$
$
Income tax expense at combined statutory rate of 26.2%
(2023 - 26.5%)
19,885
17,431
Non-deductible expenses
387
85
Preferred share accretion
1,877
1,281
Share-based compensation
1,757
376
Withholding Tax
234
-
Other
525
458
24,665
19,631
As at December 31,
2024
2023
$
$
Derivative instruments
1,020
729
Post-retirement benefit plan
5
8
1,025
737
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Impact of an increase/decrease in the health care trend of 1%:
The sensitivity analyses above have been determined based on a method that extrapolates the impact on the
post-retirement benefit obligation as a result of reasonable changes in key assumptions occurring at the end of
the reporting period. The sensitivity analyses are based on a change in a significant assumption, keeping all other
assumptions constant. The sensitivity analysis may not be representative of an actual change in the post-
retirement benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one
another. The same method has been applied for the sensitivity analysis as used to calculate the recognized post-
retirement liability.
The following payments are expected contributions to the post-retirement benefit plan over the next ten years:
As of January 30, 2022, the Company transitioned its current employer-sponsored group RRSP plan for certain
production hourly employees to participation in The CAAT Plan.
The Company’s contributions to the CAAT Plan during the year amounted to $1,374, in accordance with the
agreed upon contribution schedule:
The Company does not bear any performance risk on plan investments and is not required to fund the plan
beyond the required annual contributions. Any pension surplus or deficit is a joint responsibility of the members
and employers and may affect future contribution rates; the deficit or surplus is determined by the Plan’s
actuarial valuation. Based on the most recent actuarial valuation as at January 1, 2024, the CAAT Plan has a
surplus of $5,263.
As at December 31,
1% Increase
1% Decrease
1% Increase
1% Decrease
1% Increase
1% Decrease
2024
179
(148)
21
(17)
9
(7)
2023
181
(148)
22
(17)
10
(8)
Accrued benefit obligation
Service cost
Interest cost
As at December 31,
2024
2023
$
$
Within one year
37
29
Between 2 and 5 years
203
177
Between 5 and 10 years
377
342
Total
617
548
Contribution Schedule
Participating Member
Contributions based
on “Annual Earnings”
Employer
Contributions
based on “Annual
Earnings”
Additional Employer
Contributions based on
"Annual Earnings"
February 4, 2024 to February 1, 2025
2.5%
6.0%
0.5%
February 2, 2025 to January 31, 2026
3.0%
6.0%
1.0%
February 1, 2026 to January 30, 2027
3.5%
6.0%
1.5%
On and after January 31, 2027
5.0%
6.0%
0.0%
62
61
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The following table shows the maturity profile of the Company’s financial liabilities based on contractual
undiscounted payments as at December 31, 2024:
17.
Preferred shares
In conjunction with DCP’s $47,096 investment in the Company’s China Operations on May 16, 2023, DCP also
completed its subscription for 2,527,121 Series A Preference Shares of the Company (“Preferred Shares”) and
2,527,121 warrants (“Warrants”) (refer to Note 19) to purchase common shares of the Company for proceeds of
$101,565 (US$75,000). The Preferred Shares carry a nominal annual dividend of $0.01 per share and are
redeemable at $101,565 by DCP between May 15, 2025 and May 15, 2028, representing the second and fifth
anniversary from the completion of the agreement.
At closing, the Company estimated the fair value of the Preferred Shares by estimating the credit spread of the
Company at the inception date. The Preferred Shares accrete at approximately 9.6% for two years to its
redeemable value of $101,565 as at May 15, 2025. The Preferred Shares accretion expense is $8,729 for the year
ended December 31, 2024 (2023 - $4,833).
18.
Common shares
As at December 31,
2024
2023
$
$
Within one year
5,487
5,622
After one year but not more than five years
14,814
18,049
More than five years
1,899
5,260
22,200
28,931
2024
2023
$
$
Balance, beginning of the year
89,409
-
Issuance of preferred shares
-
86,603
Transaction costs
-
(2,027)
Accretion expense
8,729
4,833
Balance, end of the year
98,138
89,409
#
$
As at January 1, 2024
41,551,485
312,593
Exercise of stock options
530,011
13,091
Employee stock purchase plan
19,541
535
Repurchase of shares
(150,200)
-
As at December 31, 2024
41,950,837
326,219
#
$
As at January 1, 2023
41,694,203
307,200
Exercise of stock options
684,901
12,301
Employee stock purchase plan
22,181
591
Repurchase of shares
(849,800)
(7,499)
As at December 31, 2023
41,551,485
312,593
Common Shares
Common Shares
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
Deferred income tax assets and liabilities are comprised of the following:
The Company has Canadian and foreign based non-capital loss carry forwards as at December 31, 2024 of
$35,734 (2023 - $30,016) on a pre-tax basis. The Canadian non-capital loss expires in 2038-2044. The foreign
non-capital losses can be carried forward indefinitely.
16.
Leases
The Company has lease contracts for various items of property, plant, vehicles and other equipment used in its
operations. Leases of property and plant generally have lease terms between 3 and 10 years, while motor
vehicles and other equipment generally have lease terms between 2 and 5 years.
Set out below are the carrying amounts of right-of-use assets and lease liabilities recognized and the movements
during the period:
As at December 31,
2024
2023
$
$
Non-capital losses carried forward
10,008
7,934
Deferred financing fees
475
265
Post retirement
307
275
Property, plant and equipment
(15,345)
(15,364)
Goodwill and intangible assets
(64,788)
(55,261)
Reserves
2,153
1,420
Interest Limitation
4,889
2,692
Other
1,379
386
Total deferred income tax liabilities
(60,922)
(57,653)
Classified in the consolidated financial statements as:
Deferred income tax assets
3,545
2,879
Deferred income tax liabilities
(64,467)
(60,532)
Net deferred income tax liabilities
(60,922)
(57,653)
Property and
Plant
Vehicles
Other
Equipment
Total
Lease
liabilities
$
$
$
$
$
As at January 1, 2023
26,976
8
831
27,815
29,548
Additions
768
-
248
1,016
1,032
Assets acquired through business combinations
-
-
-
-
-
Depreciation expense
(4,702)
(8)
(165)
(4,875)
-
Interest expense
-
-
-
-
1,010
Foreign currency and other adjustments
(101)
-
-
(101)
(90)
Payments
-
-
-
-
(5,546)
As at December 31, 2023
22,941
-
914
23,855
25,954
Additions
22
-
298
320
320
Disposals
(1,196)
-
-
(1,196)
(1,291)
Depreciation expense
(4,621)
-
(219)
(4,840)
-
Interest expense
-
-
-
-
840
Foreign currency and other adjustments
184
-
14
198
210
Payments
-
-
-
-
(5,558)
As at December 31, 2024
17,330
-
1,007
18,337
20,475
Right-of-use assets
64
63
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
20.
Share-based compensation
Outstanding options held to purchase Common Shares have the following expiry dates and exercise prices:
The following is a summary of the Company’s share option plan activity for the years ended December 31:
The following is a summary of the Company’s PSU, RSU, and DSU activity for the years ended December 31:
2024 Outstanding Options
2024 Exercisable Options
Range of Exercise
Prices
Number of
Options
Outstanding
Weighted Average
Remaining
Contractual Life
(Years)
Weighted
Average
Exercise
Price/Share
Number of
Exercisable
Options
Weighted
Average
Exercise
Price/Share
$0.00-$20.00
391,748
2.63
14.55
391,748
14.55
$20.01-$30.00
781,343
3.36
25.31
514,558
24.86
>$30.01
1,000,299
3.04
33.49
720,323
33.78
2024
2023
Number of
Shares
Weighted Average
Exercise
Price/Share
Number of
Shares
Weighted Average
Exercise Price/Share
Outstanding, beginning of year
2,469,873
25.84
2,821,276
23.29
Granted
266,785
26.20
242,211
32.48
Exercised
(529,353)
15.11
(559,523)
15.41
Forfeited
(33,915)
33.41
(34,091)
33.24
Outstanding, end of year
2,173,390
27.14
2,469,873
25.84
Exercisable, end of year
1,626,629
26.33
1,758,290
22.86
PSUs (number of
shares)
RSUs (number of
shares)
DSUs (number of
shares)
Outstanding awards, beginning of year
198,915
57,964
42,346
Granted
116,583
133,934
32,824
Exercised
(39,343)
(780)
-
Forfeited
(3,566)
(9,055)
-
Outstanding awards, end of year
272,589
182,063
75,170
Awards exercisable, end of year
-
-
44,435
2024
PSUs (number of
shares)
RSUs (number of
shares)
DSUs (number of
shares)
Outstanding awards, beginning of year
158,857
838
23,865
Granted
109,105
59,713
23,549
Exercised
(67,937)
(843)
(3,879)
Forfeited
(1,110)
(1,744)
(1,189)
Outstanding awards, end of year
198,915
57,964
42,346
Awards exercisable, end of year
-
-
21,339
2023
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
As at December 31, 2024 and 2023, the authorized share capital consisted of:
a) Unlimited number of Common Shares. The holders of Common Shares are entitled to receive dividends as
declared from time to time, and are entitled to one vote per share at meetings of the Company.
b) Unlimited number of Preference Shares, issuable in series.
Normal Course Issuer Bid
On November 3, 2023, the Toronto Stock Exchange (“TSX”) accepted the Company’s notice of intention to make
a normal course issuer bid (“NCIB”). The NCIB permitted Jamieson to repurchase for cancellation, at its
discretion, up to 4,165,201 common shares of the Company (“Common Shares”) in accordance with the NCIB
procedures of the TSX. Under the NCIB, Jamieson was entitled to repurchase up to 25,729 Common Shares
through the TSX during each trading day (excluding any purchases made pursuant to the block purchase
exception in accordance with TSX rules).
The NCIB commenced on November 7, 2023 and remained in effect until November 6, 2024. Purchases under
the NCIB were made by means of open market transactions through the facilities of the TSX and through
alternative trading systems in Canada. The price paid by the Company for any such repurchased Common Shares
was the market price at the time of acquisition or such other price as a securities regulatory authority may
permit. All Common Shares repurchased under the NCIB were cancelled.
In connection with the NCIB, the Company also entered into an automatic share purchase plan (“ASPP”) with a
designated broker, to allow for purchases of its Common Shares during certain pre-determined black-out
periods, subject to certain parameters. The ASPP constitutes an “automatic securities purchase plan” under
applicable Canadian securities laws, was approved by the TSX and implemented effective December 14, 2023.
As at December 31, 2023, Jamieson accrued for cancellation 150,200 Common Shares under its ASPP program.
These Common Shares were settled during the three months ended March 31, 2024.
On January 30, 2025, TSX accepted the Company’s notice of intention to renew the NCIB (the “Renewed
NCIB”). The Renewed NCIB permits Jamieson to repurchase for cancellation, at its discretion, up to 3,502,925
Common Shares in accordance with the NCIB procedures of the TSX. Under the Renewed NCIB, Jamieson is
entitled to repurchase up to 11,744 Common Shares through the TSX during each trading day (excluding any
purchases made pursuant to the block purchase exception in accordance with TSX rules).
The Renewed NCIB commenced on February 3, 2025 and remains in effect until the earlier of February 2, 2026
and the date on which the Company has either acquired the maximum number of Common Shares permitted
under the NCIB or otherwise decided not to make any further repurchases. In connection with the Renewed
NCIB, the Company entered into another ASPP with a designated broker to allow for purchases of its Common
Shares during certain pre-determined black-out periods, subject to certain parameters.
19.
Warrants
The 2,527,121 Warrants are exercisable by DCP beginning May 15, 2025 and expire on May 15, 2028. The
exercise price of the Warrants is $40.19 per share representing a 10% premium to the 20-day volume weighted
average common share price as of the signing of the subscription agreement on February 23, 2023.
At closing, the Warrants were fair valued at $14,962, less transaction costs of $257, and classified as equity in the
consolidated statements of financial position.
The fair value of the Warrants was estimated using a Binomial tree model at the inception date. Key assumptions
include the risk-free interest rate of 3.5%, volatility of 30.0%, and the expected dividend yield of 2.4%.
66
65
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
22.
Interest expense and other financing costs
23.
Financial instruments and risk management activities
Financial instruments
The Company’s financial assets and liabilities have been classified in Note 2.
Fair value measurement
Foreign exchange forward contracts measured at FVOCI are designated as hedging instruments in cash flow
hedges for forecast purchases and sales in U.S. dollars and have been classified as Level 2 in the fair value
hierarchy. Interest rate swaps measured at FVOCI are designated as hedging instruments in cash flow hedges
and have been classified as Level 2 in the fair value hierarchy. Derivatives not designated in a formal hedging
relationship are classified as FVTPL and classified as Level 2 in the fair value hierarchy. Net gains and losses on
financial instruments held for trading consist of realized and unrealized gains and losses on derivatives that
were de-designated or were otherwise not in a formal hedging relationship.
The fair values and notional amounts of derivative financial instruments shown below are as at December 31:
On January 19, 2024, the Company entered into an interest rate swap with an effective date of February 1, 2024
to December 30, 2025 with a notional principal of $150,000, which increased to $250,000 on October 1, 2024
and reduced to $225,000 on December 31, 2024. The notional principal of the interest rate swap is $225,000 as
at the end of this reporting period. The interest rate swap is a derivative measured at fair value and meets hedge
accounting requirements. The fair values of the derivative financial instruments and interest rate swaps have
been classified as Level 2 in the fair value hierarchy.
The terms of the foreign currency forward contracts and interest rate swaps match the terms of the expected
highly probable forecast transactions. As a result, there is no hedge ineffectiveness to be recognized in the
consolidated statements of operations and comprehensive income.
Potential sources of hedge ineffectiveness are:
• Differences in the timing of the cash flows of the hedged items and the hedging instruments;
• The counterparty’s credit risk differently impacting the fair value movements of the hedging instruments and
hedged items; and
• Changes to the forecasted amount of cash flows of hedged items and hedging instruments.
The carrying values of financial assets and liabilities measured at amortized cost (excluding Preferred Shares and
long-term debt) approximate their fair values due to their short-term nature.
As at December 31,
2024
2023
$
$
Interest on debt and borrowings
19,432
21,774
Interest on lease liabilities (Note 16)
840
1,010
20,272
22,784
As at December 31,
Notional
Notional
Notional
Notional
Notional
Notional
Amount
Amount
Amount
Asset
Liability
Amount
Amount
Amount
Asset
Liability
$CAD
$USD
RMB
$
$
$CAD
$USD
RMB
$
$
-
9,000
-
771
-
-
-
-
-
-
-
(6,000)
(165,600)
1,890
(257)
-
(7,000)
-
412
-
225,000
-
-
-
(2,725)
110,000
-
-
3,295
-
225,000
3,000
(165,600)
2,661
(2,982)
110,000
(7,000)
-
3,707
-
Interest rate swaps designated as hedging
instruments
Foreign currency forward contract designated as
hedging instruments (forecast sales)
2023
2024
Fair Value
Foreign currency forward contract designated as
hedging instruments (forecast purchases)
Fair Value
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The inputs used in measuring the fair value of equity-based compensation granted during the years ended
December 31 are shown in the tables below.
(i)
Estimated by considering comparable industry share price volatility. The expected volatility reflects the
assumption that the historical volatility over a period similar to the life of the options is indicative of
future trends, which may not necessarily be the actual outcome.
(ii)
Based on Government of Canada Bonds.
(iii)
Based on historical data and current expectations and is not necessarily indicative of exercise patterns
that may occur.
The Company’s share-based compensation expense for the year ended December 31, 2024 is $7,268 (2023 -
$5,868), of which $7,125 (2023 - $5,651) is classified as contributed surplus in the Company’s consolidated
financial statements and $143 (2023 - $217) is related to employment taxes paid on exercise of options.
21.
Employee benefits expense
The Company recognized employee benefit expenses included in cost of sales and selling, general and
administrative expenses on the consolidated statements of operations and other comprehensive income as
follows:
Additionally, the Company recognized termination benefits for the year ended December 31, 2024 of $537 (2023
- $741) related to reorganization. The costs related to both years are mainly comprised of severance costs and
salary continuances.
Type of compensation
Options
PSUs
DSUs
RSUs
Weighted average share price at the
measurement date
26.20
$
26.20
$
26.20
$
26.20
$
Weighted average fair value at the grant
date
5.54
$
37.82
$
26.20
$
26.20
$
Expected volatility (i)
29.0%
n/a
n/a
n/a
Risk-free interest rate (ii)
3.5%
4.3%
n/a
n/a
Expected life (in years) (iii)
4.0
3.0
n/a
n/a
Expected dividend yield
2.9%
n/a
n/a
n/a
Pricing Model
Black-Scholes
Monte Carlo
Market Value
Market Value
2024
Type of compensation
Options
PSUs
DSUS
RSUs
Weighted average share price at the
measurement date
32.48
$
33.75
$
32.48
$
32.60
$
Weighted average fair value at the grant
date
7.52
$
39.83
$
32.48
$
32.60
$
Expected volatility (i)
29.0%
n/a
n/a
n/a
Risk-free interest rate (ii)
3.5%
4.3%
n/a
n/a
Expected life (in years) (iii)
4-5.5
3.0
n/a
n/a
Expected dividend yield
2.1%-2.8%
n/a
n/a
n/a
Pricing Model
Black-Scholes
Monte Carlo
Market Value
Market Value
2023
For the year ended December 31,
2024
2023
$
$
Salaries, wages and bonus
97,583
93,065
Other employee benefits
21,254
21,224
Post-retirement benefits (Note 14)
147
134
118,984
114,423
68
67
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The following table demonstrates the sensitivity to a reasonably possible change in the U.S. dollar exchange rate,
with all other variables held constant, of the Company’s net income before income taxes (due to changes in the
fair value of monetary assets and liabilities including non-designated foreign currency derivatives) and the
Company’s pre-tax OCI (due to changes in the fair value of foreign exchange forward contracts designated as
cash flow hedges).
The Company’s exposure to foreign currency changes for all other currencies is not material.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s accounts receivable and accounts payable are non-
interest bearing. The Company’s exposure to the risk of changes in market interest rates arises from long-term
debt obligations issued at fixed rates that create fair value interest rate risk and variable rate borrowings that
create cash flow interest rate risk.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and
borrowings. To further reduce the long-term interest rate exposure and gain predictability over future cash
flows, the Company uses interest rate swaps, in which it agrees to exchange, at specified intervals, the difference
between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal
amount.
With all other variables held constant, the sensitivity to a reasonably possible change in interest rates on floating
rate borrowings of the Company would have the following impact to net earnings before taxes:
Changes in market interest rates cause the fair value of long-term debt with fixed interest rates to fluctuate but
do not affect net earnings, as the Company’s debt is carried at amortized cost and the carrying value does not
change as interest rates change.
Commodity price risk
The Company is exposed to price risk related to purchases of certain commodities used as raw materials. The
Company may use fixed price contracts with suppliers to mitigate commodity price risk. Concentration in any
one raw material is not significant to the Company.
The most recent actions between the U.S. and Canada with respect to potential import tariffs, the threat of
associated retaliatory measures, and the possibility of a prolonged trade war may affect consumer behaviour and
require price adjustments to respond to increasing input costs, all of which may adversely affect our business. A
trade war could cause severe disruption to the Canadian and U.S. economies, impacting markets, gross-
domestic product growth, foreign exchange rates, inflation and employment rates and could trigger a broader
economic slowdown affecting consumer discretionary spending and purchasing behaviour, ultimately affecting
demand. In addition, if tariffs or other trade restrictions are imposed, the Company may face higher input costs
Change in U.S.$ FX
rate
Effect on earnings
(loss) before tax
Effect on pre-tax OCI
As at December 31,
%
$
$
2024
5
6,633
(150)
2023
5
4,439
350
Increase/decrease
in basis points
Effect on earnings
(loss) before tax
As at December 31,
+/-
$
2024
100
1,187
2023
100
2,576
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The carrying value of the Preferred Shares and long-term debt as at December 31, 2024 and December 31, 2023
approximates their fair value. The fair value of the Company’s Preferred Shares and long-term debt was
estimated based on discounted future cash flows using current rates for similar financial instruments subject to
similar risks and maturities. The fair values of the Preferred Shares and long-term debt have been classified as
Level 3 in the fair value hierarchy.
The call option entered into as part of the China Operations (refer to Note 5) has been valued using the
discounted cash flow approach and a methodology that incorporates similar recent market transactions and
market multiples of comparable peer companies. The Company’s estimates include projected future sales and
earnings, capital investments consistent with strategic plans and discount rates consistent with external industry
information reflecting the risk associated with the specific cash flows.
The fair values of the contingent consideration related to the Nutrawise acquisition (refer to Note 4) and the call
option entered into as part of the China Operations (refer to Note 5) have been classified as Level 3 in the fair
value hierarchy.
There were no transfers between levels during 2024 and 2023.
Financial instrument risk management objectives and policies
The Company is exposed to credit risk, market risk, liquidity risk, and emerging markets risk. The Company’s
senior management oversees the management of these risks. The Company’s financial instruments and policies
for managing these risks are detailed below.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial
loss to the Company. The Company is exposed to credit risk from its customers (primarily related to trade
accounts receivable) in the normal course of business. The Company has adopted a policy of only dealing with
creditworthy counterparties.
To mitigate this risk, the Company carries out regular credit evaluations and purchases credit insurance for
international customers, where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company is also exposed to counterparty credit risk inherent in its financing activities, trade receivable
insurance, foreign currency derivatives and interest rate derivatives. The Company has assessed these risks as
minimal.
Market risk
Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primarily from transactions in U.S. dollars such as a portion of trade accounts payable,
trade accounts receivable and cash. Revenue from our China operations are primarily in Chinese Renminbi
(‘RMB”).
The Company uses foreign exchange forward contracts to manage foreign exchange transaction exposure in U.S.
dollars and RMB. As at December 31, 2024, $12,135 (December 31, 2023 - $nil) of anticipated foreign currency
denominated purchases have been hedged and $42,869 (December 31, 2023 - $9,655) of anticipated foreign
currency denominated sales have been hedged with underlying foreign exchange forward contracts.
70
69
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
uncertainties. This may result in the outcome of dispute resolutions not being consistent or predictable as
compared to more developed jurisdictions.
Impact of geopolitical tensions
The continued risk surrounding the Eastern Europe and Middle East conflicts may have an adverse impact
on the Company’s business, financial condition, and results of operations. The Company does not conduct
direct business operations in regions affected by these conflicts, however, the Company has a sales
presence within the broader Eastern Europe and Middle East regions. At current, the Company has not had
any measurable disruption to its supply of raw materials and ability to service its customers.
Over the past few years, international markets have experienced heightened inflation and fluctuations in
consumer sentiments. These challenges have notably affected the Company’s international business
operations, particularly in neighbouring Eastern European and Middle Eastern regions where the
Company conducts business. The Company continues to monitor the environment to respond rapidly to
the evolving economic landscape and to ensure the continued stability of its business.
Additionally, the most recent actions between the U.S. and Canada with respect to potential import tariffs
and the possibility of a prolonged trade war may affect consumer behaviour and require price adjustments
to respond to increasing input costs, all of which may adversely affect the Company’s business.
Capital
The Company’s objective is to maintain a cost-effective capital structure that supports its long-term growth
strategy, supports the business and maximizes shareholder value. The Company typically uses leverage in its
capital structure to reduce the cost of capital. The Company’s goal is to maintain its primary credit ratios and
leverage at levels that are designed to provide continued access to investment-grade credit pricing and terms.
The Company measures its credit profile using a number of metrics, some of which are non-IFRS measures,
primarily cash, less long-term debt and bank indebtedness (“net cash (debt)”) to earnings before interest,
income taxes, depreciation, amortization, restructuring and other related costs, and interest coverage.
Additionally, the Company maintains a cash flow reserve to service obligations as they come due.
In addition to Credit Facilities, Preferred Shares and equity, the Company uses leases as additional sources of
financing.
There have been no material changes to the Company’s risk management activities.
The Company is subject to capital requirements under its Credit Facilities, as described in Note 13.
24.
Commitments and contingencies
Lease commitments
The Company does not have any lease contracts that have not yet commenced as at December 31, 2024.
General contingencies
Various claims and potential claims arising in the normal course of operation are pending against JLL. It is the
opinion of management that these claims or potential claims are without merit and the amount of potential
liability, if any, is not determinable. Management believes the final determination of these claims or potential
claims will not materially affect the financial position or results of the Company.
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
which could reduce margins or require product price adjustments that may also affect consumer demand.
Management is actively assessing the potential financial and operational implications and is exploring strategies
to mitigate risks.
Liquidity risk
Liquidity risk is the risk the Company will not be able to meet its financial obligations associated with financial
liabilities. The Company is exposed to this risk mainly in respect of its accounts payable and accrued liabilities,
various long-term debt agreements, obligations under its post-retirement benefits plan and lease commitments.
The Company manages its liquidity risk through continuous monitoring of its forecast and actual cash flows and
through the management of its capital structure. The Company continually revises its available liquid resources
as compared to the timing of the payment of liabilities to manage its liquidity risk.
As at December 31, 2024, the Company had $236,502 in cash and available revolving and swingline facilities.
The contractual undiscounted principal cash flows payable in respect of financial liabilities as at the
consolidated statements of financial position date were as follows:
Emerging markets risk
Jamieson Shanghai is an operating subsidiary of the Company located in China. Although China is
considered to be a relatively stable jurisdiction for business, it is possible that operating in China may
expose the Company to a certain degree of political, economic and other risks and uncertainties.
The Company’s business, financial condition and financial performance may be influenced by the political,
economic and legal environments in China, and by the general state of the Chinese economy on an
increasing basis over the next several years. The Company’s business operations in China are subject to
oversight and regulation by various Chinese government authorities, including the State Administration for
Market Regulation, particularly with respect to advertising and promotional activities. The regulatory
landscape in China is dynamic, with new laws and regulations being adopted periodically. Substantial
uncertainties exist regarding the interpretation and enforcement of current and future Chinese laws and
regulations applicable to the Company’s operations. Changes in investment policies or shifts in political
attitude in China may also adversely affect the Company’s business, results of operations and financial
condition. Operations may be affected in varying degrees by government regulations with respect to, but
not limited to price controls, income taxes, restrictions on production, foreign investment, bank lending,
intellectual property, export controls, and usage and costs of state-controlled transportation services and
nationalization or expropriation of property or business. Any events resulting in an adverse impact on the
Chinese economy may have an adverse effect on the Company's profitability and prospects.
The Chinese legal system is a system based on written statutes and government regulations. They are
interpreted by the Supreme Peoples' Court and the state organ which has issued them. Since 1979, the
Chinese government has been developing a comprehensive system of laws dealing with economic matters
such as foreign investment, corporate organization and governance, commerce, taxation and trade.
Because these laws and regulations are relatively new and often lacking the details required to understand
their practical impact in particular situations, and because of the limited volume of published cases and
their non-binding nature, the interpretation and enforcement of these laws and regulations involve
As at December 31,
2024
2023
$
$
Amounts payable in more than 12 months
326,207
369,232
Amounts payable in less than 12 months
165,971
143,920
492,178
513,152
72
71
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
The following table provides the non-current assets by major geographic region.
Information about major customers
The following table provides the proportion of revenue attributed to each significant customer:
Revenue from significant customers primarily affect the Jamieson Brands segment. It is management’s opinion
that the loss of any customer, significant or otherwise, would not impact the Company’s viability. No other sales
were made to any one customer that represented more than 10% of total sales.
26.
Revenue from contracts with customers
The following table sets forth the disaggregation of the Company’s revenue from contracts with customers in the
Jamieson Brands operating segment:
Revenue from international operations and U.S. operations are primarily denominated in U.S. dollars. Revenue
from China operations are primarily denominated in RMB. Both are subject to fluctuations in foreign exchange
(see Note 23 - Financial instruments and risk management activities) on the conversion to Canadian dollars.
27.
Net change in non-cash working capital
As of December 31,
2024
2023
$
$
Canada
395,427
403,537
USA
358,319
329,913
China
14,560
14,381
Other
2
4
768,308
747,835
For the years ended December 31,
2024
2023
Customer 1
13.5%
14.6%
Customer 2
12.8%
13.1%
Customer 3
10.2%
9.1%
Customer 4
9.1%
10.7%
45.6%
47.5%
For the years ended December 31,
2024
2023
$
$
Domestic operations
333,126
314,121
China operations
91,243
51,296
International operations
38,359
33,499
U.S. operations
166,016
152,255
Total revenue from contracts with customers
628,744
551,171
For the years ended December 31,
2024
2023
$
$
Accounts receivable
(63,532)
(3,701)
Inventories
27,798
(14,271)
Prepaid expenses and other current assets
(1,468)
(1,035)
Accounts payable and accrued liabilities
3,923
(7,995)
Taxes
2,110
(5,124)
Net change in non-cash working capital
(31,169)
(32,126)
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
25.
Segment information
The Company has two reportable operating segments with all material operations carried out in Canada and the
United States:
• The Jamieson Brands segment’s principal activity is the manufacturing, distribution and marketing of branded
natural health products including vitamins, minerals and supplements; and
• The Strategic Partners segment’s principal activity is providing contract manufacturing services to consumer
health companies and retailers worldwide.
The Company’s chief operating decision maker evaluates segment performance on the basis of earnings from
operations, as reported to internal management, on a periodic basis.
Inter-segment revenues and expenses are eliminated upon consolidation and relate mainly to sales from the
Strategic Partners segment to the Jamieson Brands segment.
Share-based compensation is allocated to the Jamieson Brands operating segment.
Geographic information
The following table provides the proportion of revenue based on the location of the customer.
Jamieson Brands
Strategic Partners
Total
$
$
$
Revenue
628,744
105,036
733,780
Cost of sales
366,679
91,491
458,170
Selling, general and administrative expenses
168,459
6,030
174,489
Acquisition related adjustments
(12,425)
-
(12,425)
Share-based compensation
7,268
-
7,268
Earnings from operations
98,763
7,515
106,278
Foreign exchange loss
1,479
Accretion on preferred shares
8,729
Interest expense and other financing costs
20,272
Provision for income taxes
24,665
Net earnings
51,133
Jamieson Brands
Strategic Partners
Total
$
$
$
Revenue
551,171
125,001
676,172
Cost of sales
336,877
105,736
442,613
Selling, general and administrative expenses
133,952
6,352
140,304
Acquisition related adjustments
(7,863)
-
(7,863)
Share-based compensation
5,868
-
5,868
Earnings from operations
82,337
12,913
95,250
Foreign exchange loss
1,962
Accretion on preferred shares
4,833
Interest expense and other financing costs
22,784
Provision for income taxes
19,631
Net earnings
46,040
For the year ended December 31, 2024
For the year ended December 31, 2023
For the years ended December 31,
2024
2023
Canada
54.4%
55.1%
USA
24.9%
30.2%
China
12.6%
7.8%
Other
8.1%
6.9%
100.0%
100.0%
74
73
Jamieson Wellness Inc.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
28.
Earnings per share
Basic earnings per share amounts are calculated by dividing the net earnings attributable to common
shareholders of the Company by the weighted average number of shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net earnings attributable to common
shareholders of the Company by the weighted average number of shares outstanding during the year, adjusted
for the effects of potentially dilutive share options, PSUs, RSUs, DSUs and warrants.
The following table sets forth the calculation of basic and diluted earnings per share:
Year ended December 31,
Net earnings
available to common
shareholders
Weighted
average number of
shares
EPS $
Net earnings
available to common
shareholders
Weighted
average number of
shares
EPS $
Basic
Continuing operations
51,133
41,580,983
1.23
46,040
41,960,516
1.10
Diluted
Continuing operations
51,133
42,843,210
1.19
46,040
42,650,501
1.08
2024
2023
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the three and twelve months ended December 31, 2024
76
75
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For the three and twelve months ended December 31, 2024
The following management’s discussion and analysis of financial condition and results of operations
(“MD&A”) of Jamieson Wellness Inc. (together with its subsidiaries), referred to herein as “Jamieson”, the
“Company”, “we”, “us” or “our”, is dated as of February 26, 2025. It should be read in conjunction with our audited
consolidated annual financial statements and accompanying notes for the year ended December 31, 2024.
Our audited consolidated annual financial statements and accompanying notes for the year ended December
31, 2024 have been prepared in accordance with International Financial Reporting Standards (“IFRS”). These audited
consolidated annual financial statements include the accounts of our Company and other entities that we control and
are reported in Canadian dollars. All references in this MD&A to “Q4 2024” are to our fiscal quarter ended December
31, 2024 and all references to “Q4 2023” are to our fiscal quarter ended December 31, 2023. All references in this
MD&A to “YTD 2024” are to our year ended December 31, 2024 and to “YTD 2023” are to our year ended December
31, 2023.
See “Forward-Looking Information” and “Risk Factors” for a discussion of the uncertainties, risks and
assumptions associated with these statements. Actual results may differ materially from those indicated or underlying
forward-looking information as a result of various factors, including those referred to under the heading “Risk Factors”
and elsewhere in this MD&A.
Non-IFRS and Other Financial Measures
This MD&A makes reference to certain financial measures, including non-IFRS financial measures that are
historical, non-IFRS measures that are forward-looking, non-GAAP ratios and supplementary financial measures.
Management uses these financial measures for purposes of comparison to prior periods and development of future
projections and earnings growth prospects. This information is also used by management to measure the profitability
of ongoing operations and in analyzing our business performance and trends. These measures are not recognized
measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other companies. Rather, these measures are provided as additional
information to complement those IFRS measures by providing further understanding of our results of operations from
management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of
our financial information reported under IFRS. We use the following non-IFRS financial measures: “EBITDA”,
“Adjusted EBITDA”, “Adjusted net earnings”, “normalized gross profit”, “normalized SG&A”, “normalized earnings
from operations”, “cash from operating activities before working capital considerations” and “net debt”, the following
non-IFRS ratios: “Adjusted EBITDA margin”, “Adjusted diluted earnings per share”, “normalized gross profit
margin”, “normalized operating margin”, and the following supplementary financial measures: “gross profit margin”
and “operating margin”, to provide supplemental measures of our operating performance and thus highlight trends in
our core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management
also uses non-IFRS and supplementary financial measures in order to prepare annual operating budgets and to
determine components of management compensation. See “How we Assess the Performance of our Business” for an
explanation of the composition of each such measure, as applicable, and see “Selected Consolidated Financial
Information” for a quantitative reconciliation of each non-IFRS financial measure to its most directly comparable
financial measure disclosed in our financial statements to which the measure relates.
Forward-Looking Information
Certain statements contained in this MD&A including, in particular, in the sections below entitled “Summary
of Factors Affecting our Performance”, “Liquidity and Capital Resources”, “Outlook” and “Risk Factors”, contain
forward-looking information within the meaning of applicable securities laws. Forward-looking information may
relate to our future outlook and anticipated events or results and may include information regarding our financial
position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividend policy, plans,
intentions, beliefs, and objectives of our Company. Particularly, information regarding our expectations of future
results, performance, achievements, prospects or opportunities is forward-looking information. In some cases,
forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”,
“expects”, “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”,
“forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or
variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”,
“will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions,
projections or other characterizations of future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not historical facts but instead represent management’s
expectations, estimates and projections regarding future events or circumstances.
In addition, our assessments of, and targets for, annual revenue, Adjusted EBITDA, Adjusted diluted earnings
per share and certain other measures are considered forward-looking information. See “Outlook” for additional
information concerning our strategies, assumptions and market outlook in relation to these assessments.
The forward-looking information contained in this MD&A is based on management’s opinions, estimates
and assumptions in light of its experience and perception of historical trends, current conditions and expected future
developments, as well as other factors that we believe to be appropriate and reasonable in the circumstances. Despite
a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying
opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of the ability to pursue
further strategic acquisitions; our ability to source raw materials and other inputs from our suppliers; our ability to
continue to innovate product offerings that resonate with our target customer base; our ability to retain key
management and personnel; our ability to continue to expand our international presence and grow our brand
internationally; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and
interest rates; the impact of competition; changes to trends in our industry or global economic factors; and changes to
laws, rules, regulations and global standards are material factors made in preparing the forward-looking information
and management’s expectations contained in this MD&A.
The forward-looking information contained in this MD&A represents management’s expectations as of the
date of this MD&A and is subject to change after such date. However, we disclaim any intention or obligation or
undertaking to update or revise any forward-looking information whether as a result of new information, future events
or otherwise, except as required under applicable securities laws in Canada. The forward-looking information
contained in this MD&A is expressly qualified by this cautionary statement.
Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that
management considered appropriate and reasonable as of the date such statements are made, and is subject to known
and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those expressed or implied by such forward-looking
information, including but not limited to those described below and referred to under the heading “Risk Factors” and
those discussed under the “Risk Factors” section of our most recent annual information form.
We caution that the list of risk factors and uncertainties is not exhaustive and other factors could also
adversely affect our results. Readers are urged to consider the risks, uncertainties and assumptions carefully in
evaluating the forward-looking information and are cautioned not to place undue reliance on such information.
Company Overview
Jamieson Wellness is a growing global manufacturer, distributor, and marketer of high-quality natural health
products, with a leadership position in Canada. From our offices in Canada, the U.S. and China, and our production
facilities in Ontario and California, we combine deep consumer insights with extensive research, development and
manufacturing capabilities to deliver category-leading innovation and growth.
We are dedicated to Inspiring Better Lives Every Day with our portfolio of innovative natural health brands.
Established in 1922, our Jamieson brand is Canada’s #1 consumer health brand. Our youtheory brand, acquired in
2022, is an established and growing lifestyle brand in the U.S. Combined, these global brands are available in
approximately 50 countries worldwide. We also offer a variety of innovative vitamins, minerals and supplements
(“VMS”) as well as sports nutrition products to consumers in Canada with our Progressive, Smart Solutions, Iron
Vegan and Precision brands. All of our brands are collectively referred to as our “Jamieson Brands” segment.
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In addition to our Jamieson Brands segment, our trusted reputation and strong industry relationships, together
with our high-quality production capabilities and certifications attract opportunities for us to manufacture products for
select blue-chip consumer health companies and retailers worldwide. More than “white label” manufacturing, this
segment of the business is designed to support Jamieson Brands by allowing us to broaden customer relationships and
improve asset utilization while providing direct benefit to strategic branded initiatives. We refer to this part of the
business as our “Strategic Partners” segment.
VMS and sports nutrition are two large and growing segments of the global consumer health industry. Our
reputation for product quality and trust, leading market position and brands, focus on innovation and extensive
selection of products, make us the preferred partner for retailers.
Summary of Factors Affecting Our Performance
We believe our performance and future success depend on a number of factors that present significant
opportunities for us. These factors are also subject to a number of inherent risks and challenges, some of which are
discussed below and referred to under “Risk Factors”.
Impact of Geopolitical Tensions
The continued risk surrounding the Eastern Europe and Middle East conflicts may have an adverse impact
on our business, financial condition, and results of operations. We do not conduct direct business operations in regions
affected by these conflicts, however, we have a sales presence within the broader Eastern Europe and Middle East
regions. We currently do not have any measurable disruption to our supply of raw materials and ability to service our
customers in these regions.
Over the past year, international markets have experienced heightened inflation and fluctuations in consumer
sentiments. These challenges have notably affected our Jamieson International business operations (“Jamieson
International”), particularly in neighbouring Eastern European and Middle Eastern regions where we conduct
business. We continue to monitor the environment to respond rapidly to the evolving economic landscape and to
ensure the continued stability of our business.
Additionally, the most recent actions between the U.S. and Canada with respect to potential import tariffs
and the possibility of a prolonged trade war may affect consumer behaviour and require price adjustments to respond
to increasing input costs, all of which may adversely affect our business.
Our Brands
Our iconic brands have been built around consumer trust through focus on product quality, purity and
potency. Our well-established brands include Jamieson, youtheory, Progressive, Iron Vegan, Smart Solutions, and
Precision. Maintaining, enhancing and growing the reputation of our brands globally is critical to our continued
success. Failure to do so may materially and adversely affect the business, results of operations or financial condition.
Product Innovation and Planning
We believe that product innovation is integral to our success and we continue to focus on innovation as a key
pillar of our growth. Our business is subject to changing consumer trends and preferences which is dependent, in part,
on continued consumer interest in our new products, line extensions and reformulations. The success of new product
offerings, enhancements, or reformulations depends upon a number of factors, including our ability to: (I) accurately
anticipate customer needs; (ii) develop new products, line extensions or reformulations that meet these needs;
(iii) successfully commercialize new products, line extensions and reformulations in a timely manner; (iv) price
products competitively; (v) manufacture and deliver products in sufficient volumes and in a timely manner;
(vi) differentiate product offerings from those of competitors; and (vii) maintain relationships with scientist employees
and consultants and members of our panel of consumer health industry experts, which we call the Jamieson Scientific
Advisory Board, in order to benefit from their expertise and innovations. We believe our pace of innovation and speed
to market with the introduction of new products provide us with a competitive advantage within the space we compete.
Customer Relationships
In our primary markets, we have longstanding and deeply entrenched customer relationships with top retailers
across the food, drug, mass (“FDM”), club, health food store, specialty and online retail channels. We sell products
through our knowledgeable retail partners and we are dependent on retail partners across all channels to display and
present our products to customers, in their brick-and-mortar stores and on their online e-commerce sites. Our partners
service customers by stocking and displaying our products, and, in certain health food and other specialty stores,
explaining product attributes and health benefits. Our relationships with these retail customers are important for
consumer trust in the brand and the advertising and educational programs we continue to deploy. Failure to maintain
these relationships with retail partners or financial difficulties experienced by these retail partners could adversely
affect our business.
Sourcing and Production
We have developed a strong, global supply chain based on long-standing relationships and have had
relationships with the majority of our suppliers for over ten years. We purchase our ingredients from approximately
300 high quality raw material ingredient and packaging suppliers worldwide and potential suppliers are subject to a
rigorous evaluation process by our quality assurance department. We are dependent on a stable and consistent supply
of materials and inputs, including ingredients and packaging products. Although materials and inputs are generally
available from multiple sources, certain materials and inputs are sourced from a restricted number of suppliers. In
2024, our top ten suppliers accounted for approximately 50% of our purchases. As is customary in the consumer health
industry, we do not have long-term written contracts with most suppliers and often enter into short to medium-term
contracts for raw materials at fixed prices to provide time to address price increases and mitigate margin erosion.
Distribution
Our warehousing and distribution functions are mainly operated under a third-party logistics model through
various facilities globally. We enter into agreements with a third-party logistics partner to provide warehousing and
distribution services for Jamieson Brands and Strategic Partners finished goods inventories. Our ability to satisfy our
customers’ demands and achieve our cost objectives depends on our ability to maintain key logistic and transport
arrangements. Our distribution and supply chain could be negatively affected by unforeseen disruptions due to fire,
severe weather conditions, natural disasters, or other catastrophic events, public health events, labour disagreements,
or other shipping problems. The loss of or disruption to these types of arrangements could interrupt product supply,
which in turn could adversely affect the assortment and product availability at the store level of our customers. If not
effectively managed or remedied, these events could negatively impact customer experience and adversely affect our
operations or financial performance. By leveraging the expertise of the third-party logistics provider, we are able to
operate more efficiently and diversify risk from our manufacturing facilities.
Consumer Trends
The consumer health industry is subject to shifts in consumer trends, preferences and spending. Our revenue
and operating results depend, in part, on our ability to respond to such changes in a timely manner. As a result of our
broad product scope and our strong innovation capabilities, we believe that we are well-positioned to respond to these
shifts in consumer trends, preferences and spending.
Our revenue is also impacted by consumer spending habits, including spending on our products, which are
affected by many factors that are beyond our control, including, but not limited to, prevailing economic conditions,
levels of employment, fuel prices, inflation, salaries and wages, the availability of consumer credit, and consumer
perception of economic conditions.
Competition
The market for VMS and sports nutrition products is highly competitive. Our direct competition consists of
publicly and privately-owned companies, which tend to be highly fragmented in terms of both geographic market
coverage and product categories. In many of our product categories, we compete not only with widely advertised
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branded products, but also with private label products. Given our significant scale and broad product scope relative to
our competition, iconic brand status, strong innovation capabilities and high-quality manufacturing, we believe that
we are well-positioned to capitalize on favorable long-term trends in the VMS and sports nutrition segments. The
specialized knowledge, expertise, and certifications required for production of VMS and sports nutrition products, is
generally a significant barrier to entry for new competitors. Internationally, our competition varies by market and we
have a strategic approach to entering international markets, which includes evaluating certain factors in each market,
such as competitiveness, pricing dynamics, growth potential, regulatory environment and the propensity to be attracted
to foreign brands.
Foreign Exchange
We may benefit from a natural currency hedge by purchasing certain materials and inputs in U.S. dollars and
selling our products internationally in U.S. dollars. With respect to sales in Canada, we are exposed to fluctuating
U.S.-Canadian currency exchange rates where the products sold contain materials and inputs purchased with
U.S. dollars. We manage our net exposure to fluctuating U.S.-Canadian currency exchange rates with foreign
exchange hedging contracts. We may, from time to time, enter into additional foreign exchange hedging contracts in
respect of other foreign currencies. With respect to our Chinese operations, we are exposed to the Chinese Renminbi
(“RMB”) to Canadian currency exchange rates as certain sales in China are denominated in RMB.
Currency hedging entails a risk of illiquidity and, to the extent the applicable foreign currency depreciates or
appreciates against the Canadian dollar, the use of hedges could result in losses greater than if the hedging had not
been used. There can be no assurance that our hedging strategies, if any, will be effective in the future or that we will
be able to enter into foreign exchange hedging contracts on satisfactory terms.
Business Acquisitions
We leverage our relationships and network of industry participants and advisors to actively source and
identify acquisition opportunities. We continue to pursue strategic acquisitions that enable us to further broaden and
diversify product offerings and leverage current manufacturing and distribution facilities for new products. Any
acquisitions may involve large transactions or realignment of existing investments, integration within our existing
structure, and realization of synergies, all of which present financial, managerial, and operational challenges. Failure
to successfully overcome these challenges may reduce our profitability.
On April 28, 2023, we completed the acquisition of the operating assets of our former distribution partner
in China for a total cash consideration of $25.8 million, before post-closing cash adjustments. The following table
provides a reconciliation of the net assets acquired at their fair value amounts:
The intangible assets acquired include customer relationships, which are amortized over approximately 15
years and expensed through the consolidated statements of operations and comprehensive income on a straight-line
basis over the estimated useful life.
The estimated goodwill represents the future economic benefit arising from other assets acquired in the
acquisition that are not individually identifiable and separately recognized. The estimated goodwill arising from the
acquisition of $4.9 million is attributable to expected future income and cash-flow projections and synergies we expect
to achieve in leveraging our platform. Certain intangible assets and goodwill are not expected to be deductible for tax
purposes.
Final fair value as at
April 28, 2023
$
Inventories
13,697
Customer relationships
8,900
Goodwill
4,867
Deferred tax liability
(1,641)
Total net assets acquired
25,823
Chinese Operations Strategic Partnership
On May 16, 2023, we completed our transaction with DCP Capital (“DCP”) with respect to our operations
in China. The transaction involved DCP’s contribution of $47.1 million (USD $35.0 million) in capital in exchange
for a 33% minority interest in Jamieson Health Products (Cayman Islands) Limited (“Jamieson-DCP Partnership”),
which in turn holds Jamieson Health Products (Shanghai) Co., Ltd. (“Jamieson Shanghai”), Jamieson Health Products
(Hong Kong) Trading Limited, and Jamieson Health Products (Hong Kong) Limited (together with Jamieson-DCP
Partnership, “China Operations”), less transaction costs of $2.7 million.
The strategic partnership with DCP is another significant step forward as we accelerate our growth plans in
the Chinese market. In conjunction with DCP’s $47.1 million investment in our China Operations on May 16, 2023,
DCP also completed its subscription for 2,527,121 Series A Preference Shares of the Company (“Preferred Shares”)
and 2,527,121 warrants (“Warrants”) to purchase common shares of the Company for proceeds of $101.6 million
(USD $75 million). The Preferred Shares carry a nominal annual dividend of $0.01 per share and are redeemable at
$101.6 million by DCP between May 15, 2025 and May 15, 2028, representing the second and fifth anniversary from
the completion of the transaction, respectively. The Warrants are exercisable by DCP beginning May 15, 2025 and
expire on May 15, 2028. The exercise price of the Warrants is $40.19 per share representing a 10% premium to the
20-day volume weighted average common share price as of the signing of the subscription agreement on February 23,
2023.
Refer to Note 5, Note 17, and Note 19 of our audited consolidated annual financial statements for
additional information on the China Operations Strategic Partnership.
Guidance from Canadian securities regulators provides that issuers operating in markets deemed “emerging
markets” (including China) must include additional disclosure with respect to operations in such markets. Although
China is considered to be a relatively stable jurisdiction for business, it is possible that operating in China may expose
the us to a certain degree of political, economic and other risks and uncertainties. For these reasons, the following
disclosure is included in contemplation of the guidance in Staff Notice 51-720 – Issuer Guide for Companies Operating
in Emerging Markets of the Ontario Securities Commission.
Our business, financial condition and financial performance may be influenced by the political, economic
and legal environments in China, and by the general state of the Chinese economy on an increasing basis over the next
several years. While the board and our management team in Shanghai is comprised of a majority of experienced senior
management employees and local residents whose jobs is to maintain appropriate oversight over our operations in
China and who are supported by our experienced service providers, consultants, partners and legal advisors who ensure
compliance with China’s regulatory requirements, our business may be influenced by, among other things, changes in
laws, governmental policies and regulations, changing political conditions, anti-inflationary measures, tariffs and
retaliatory trade measures, restrictions on foreign exchange and currency controls, and changes in taxation policies.
Changes in investment policies or shifts in political attitude in China may adversely affect our business,
results of operations and financial condition. Operations may be affected in varying degrees by government regulations
with respect to, but not limited to price controls, income taxes, restrictions on production, foreign investment, bank
lending, intellectual property, export controls, and nationalization or expropriation of property or business. Any events
resulting in an adverse impact on the Chinese economy may have an adverse effect on our profitability in the region
(for more information, see “Risk Factors” below).
Implementation of Growth Strategies
We have a successful track record of growing revenues faster than the broader VMS segment and we believe
we have a strong domestic and international growth strategy in place aimed at continuing to exceed broader industry
growth rates. Our future success depends, in part, on management’s ability to implement our growth strategy,
including (i) continued growth within our three key markets of Canada, the U.S., and China led by product innovations
within existing and into adjacent categories, continued growth of existing products in existing categories, and new
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distribution opportunities; (ii) further penetration into international markets and new geographies; and (iii) in support
of our profitability targets, improvements in gross profit, earnings from operations and operating margins. The ability
to implement this growth strategy depends, among other things, on our ability to develop new products and product
line extensions that appeal to consumers, maintain and expand brand loyalty and brand recognition, maintain and
improve competitive position in the channels in which we compete and identify and successfully enter and market
products in new geographic markets, market segments and categories.
Regulation
We are subject to the laws and regulations applicable to any business engaged in formulation, production and
distribution of consumer health products in the jurisdictions in which we operate. This includes natural health product
regulations, laws governing advertising, consumer protection regulations, environmental laws, laws governing the
operation of warehouse facilities and labour and employment laws. We hold all required and applicable site licenses,
certifications and import licenses for all of our manufacturing and distribution centres. Our products sold
internationally are subject to tariffs, treaties and various trade agreements as well as laws affecting the importation of
consumer goods and we continuously monitor changes in these laws, regulations, treaties and agreements.
There is currently no uniform regulation applicable to natural health products worldwide and there has been
an increasing movement in certain foreign markets to increase the regulation of natural health products. The adoption
of new laws, regulations or other constraints or changes in the interpretations of such requirements may result in
compliance costs or lead us to discontinue product sales and may have an adverse effect on the marketing of our
products, resulting in loss of sales. We believe that Canadian regulations are amongst the most stringent worldwide
and, as we currently operate in compliance with these high standards, increased regulation in foreign jurisdictions
makes us uniquely positioned to grow sales in such jurisdictions.
How We Assess the Performance of our Business
The key performance indicators below are used by management in evaluating the performance of our
Company and assessing our business. We refer to certain key performance indicators used by management and
typically used by our competitors in the Canadian consumer health industry, some of which are not recognized under
IFRS as identified below. See “Non-IFRS and Other Financial Measures” for more information on each non-IFRS
financial measure, non-IFRS ratio and supplementary measure. See “Selected Consolidated Financial Information”
for a quantitative reconciliation of each non-IFRS financial measure to its most directly comparable financial measure
disclosed in our financial statements to which the measure relates.
Revenue
The majority of our revenue is derived from the sale of Jamieson branded products to distributors, retail and
wholesale customers, as well as providing contract manufacturing services and the sale of product through our
Strategic Partners segment.
Revenue is recognized for the sale of Jamieson branded products and the manufacturing of products to our
strategic partners at the point in time when control of the asset is transferred to the customer, based on applicable
shipping terms. We generally have a right to payment at the time of delivery (which is the same time that we have
satisfied our performance obligations under the arrangement), as such, a receivable is recognized as the consideration
is unconditional and only the passage of time is required before payment is due.
A portion of our revenue is derived from contract manufacturing services provided to customers in our
Strategic Partners segment under a tolling arrangement where the customer supplies us with a raw material or
ingredient. Revenue is recognized net of the cost of the raw material or ingredient supplied by the customer.
Rights of return give rise to variable consideration. The variable consideration is estimated at contract
inception using the expected value method as this best predicts the amount of variable consideration to which we are
entitled. The variable consideration is constrained to the extent that it is highly probable that a significant reversal in
the amount of cumulative revenue recognized will not occur when any uncertainty is subsequently resolved. For
products that are expected to be returned, a refund liability is recognized as a reduction of revenue at the time the
control of the products purchased is transferred to the customers.
We may provide discounts and sales promotional incentives to our customers, which give rise to variable
consideration. The variable consideration is constrained to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when any uncertainty is subsequently resolved.
The application of the constraint on variable consideration increases the amount of revenue that will be deferred. We
apply the most likely amount method estimating discounts provided to customers using contracted rates and estimating
sales promotional incentives provided to customers based on historical spending patterns. We may also provide other
consideration to customers for customer-specific programs to promote our products. Consequently, revenues are
recognized net of these estimated program costs. All other estimated non-customer-specific promotional costs and
consideration are expensed as selling, general and administrative (“SG&A”) expenses.
In subsequent periods, we monitor the performance of customers against agreed-upon obligations related to
sales incentive programs and make any adjustments to both revenue and sales incentive accruals as required.
As required for the audited consolidated annual financial statements, we have disaggregated revenue
recognized from contracts with customers. Please refer to Note 26 in our audited consolidated annual financial
statements for the disclosure on disaggregated revenue.
Gross Profit
“Gross profit” is defined as revenue less cost of sales. Cost of sales includes product-related costs, labour,
other operating costs such as rent, repair and maintenance, and amortization. Our cost of sales may include different
costs compared to other manufacturers and distributors in the consumer health industry. Management believes that
gross profit is a useful measure in assessing our underlying operating performance before SG&A expenses and
share-based compensation.
Gross Profit Margin
“Gross profit margin” is defined as gross profit divided by revenue. Gross profit margin is a supplementary
financial measure.
Normalized Gross Profit and Normalized Gross Profit Margin
“Normalized gross profit” is defined as gross profit adjusted for non-operating expenses. Normalized gross
profit is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed in our
financial statements is gross profit. We believe normalized gross profit is a useful measure in assessing our operating
results by excluding the effects of the amortization of fair value adjustments on acquired inventories and labour
relations costs that are not reflective of our operating performance. “Normalized gross profit margin” is defined as
normalized gross profit divided by revenue. Normalized gross profit margin is a non-IFRS ratio.
SG&A
Our SG&A expenses are predominantly comprised of wages, benefits, travel, marketing, consulting fees,
accounting fees, legal fees, non-customer-specific promotional costs and other expenses related to the corporate
infrastructure required to support our business. Our SG&A expenses also include regulatory, legal, accounting,
insurance, termination benefits and other expenses associated with being a public company.
Normalized SG&A
“Normalized SG&A” is defined as SG&A adjusted for non-operating expenses. Normalized SG&A is a non-
IFRS financial measure and its most directly comparable financial measure that is disclosed in our financial statements
is SG&A. We believe normalized SG&A is a useful measure as it excludes the effects of (i) acquisition and divestiture
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related costs; (ii) IT system implementation costs; (iii) labour relations costs; and (iv) legal and other non-operating
costs that are not reflective of our operating performance.
Earnings from Operations
“Earnings from operations” is defined as gross profit less SG&A expenses and share-based compensation.
Operating Margin
“Operating margin” is defined as earnings from operations divided by revenue. Operating margin is a
supplementary financial measure.
Normalized Earnings from Operations and Normalized Operating Margin
“Normalized earnings from operations” is defined as earnings from operations adjusted for non-operating
expenses. Normalized earnings from operations is a non-IFRS financial measure and its most directly comparable
financial measure that is disclosed in our financial statements is earnings from operations. We believe normalized
earnings from operations is a useful measure in assessing our operating results by excluding the effects of (i)
acquisition and divestiture related costs; (ii) IT system implementation costs; (iii) labour relations costs; (iv)
amortization of fair value adjustments; (v) acquisition related purchase consideration and post-closing adjustments
and (vi) legal and other non-operating costs that are not reflective of our operating performance. “Normalized
operating margin” is defined as normalized earnings from operations divided by revenue. Normalized operating
margin is a non-IFRS ratio.
EBITDA
“EBITDA” is defined as net earnings before: (i) provision for (recovery of) income taxes; (ii) interest expense
(iii) accretion on preferred shares; (iv) depreciation of property, plant, and equipment; and (v) amortization of
intangible assets. EBITDA is a non-IFRS financial measure and its most directly comparable financial measure that
is disclosed in our financial statements is net earnings. We believe that EBITDA is a useful measure to assess the
performance and cash flow of our Company.
Adjusted EBITDA
“Adjusted EBITDA” is defined as EBITDA before: (i) share-based compensation; (ii) foreign exchange loss;
(iii) acquisition and divestiture related costs; (iv) labour relations costs; (v) IT system implementation costs; (vi)
amortization of fair value adjustments; (vii) acquisition related purchase consideration and post-closing adjustments;
and (viii) legal and other non-operating costs. Adjusted EBITDA is a non-IFRS financial measure and its most directly
comparable financial measure that is disclosed in our financial statements is net earnings. We believe Adjusted
EBITDA is a useful measure to assess the performance and cash flow of our Company as it provides more meaningful
operating results by excluding the effects of interest, taxes, depreciation and amortization costs, expenses we believe
are not reflective of our underlying business performance.
Adjusted EBITDA Margin
“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA Margin
is a non-IFRS ratio. We believe Adjusted EBITDA margin is a useful measure to assess the performance and cash
flow of our Company.
Adjusted Net Earnings
“Adjusted net earnings” is defined as consolidated net earnings adjusted for the impact of: (i) share-based
compensation; (ii) foreign exchange loss; (iii) acquisition and divestiture related costs; (iv) IT system implementation
costs; (v) labour relations costs; (vi) accretion on preferred shares; (vii) amortization of fair value adjustments; (viii)
acquisition related purchase consideration and post-closing adjustments and (ix) legal and other non-operating costs.
Adjusted net earnings is a non-IFRS financial measure and its most directly comparable financial measure that is
disclosed in our financial statements is net earnings. We believe Adjusted net earnings is a useful measure to assess
the performance of our Company as it provides more meaningful operating results by excluding the effects of expenses
that are not reflective of our underlying business performance.
Adjusted Diluted Earnings per Share
“Adjusted diluted earnings per share” is defined as Adjusted net earnings divided by the total weighted
average number of outstanding diluted shares at the end of the most recently completed quarter for the relevant period.
Adjusted diluted earnings per share is a non-IFRS ratio. We believe Adjusted diluted earnings per share is a useful
measure to assess the performance of our Company.
Net Debt
“Net debt” is defined as long-term debt less cash. Net debt is a non-IFRS financial measure and its most
directly comparable financial measure that is disclosed in our financial statements is long-term debt. We believe net
debt is a useful measure in managing our capital structure and financing requirements.
Investments in Working Capital
“Investments in working capital” is defined as net change in non-cash working capital less receivables on
gain from acquisition related working capital. Investments in working capital is a non-IFRS financial measure and its
most directly comparable financial measure that is disclosed in our financial statements is net change in non-cash
working capital. We believe investments in working capital is a useful measure in assessing cash flow from operations.
Cash from Operating Activities Before Working Capital Considerations
“Cash from operating activities before working capital considerations” is defined as cash from operating
activities plus net change in non-cash working capital. Cash from operating activities before working capital
considerations is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed
in our financial statements is cash flows from operating activities. We believe cash from operating activities before
working capital considerations is a useful measure in assessing cash flow from operations and liquidity.
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Selected Consolidated Financial Information
The following table provides selected historical financial information and other data of ours which should be
read in conjunction with our audited consolidated annual financial statements and related notes. A quantitative
reconciliation of net earnings to EBITDA, Adjusted EBITDA, and Adjusted net earnings can be found below.
(1)
This is a supplementary financial measure and is used throughout this MD&A. See “Non-IFRS and Other
Financial Measures” for more information on each supplementary financial measure. See “How we Assess
the Performance of our Business” for an explanation of the composition of such measure.
(2)
This is a non-IFRS financial measure and is used throughout this MD&A. See “Non-IFRS and Other
Financial Measures” for more information on each non-IFRS financial measure. See “How we Assess the
Performance of our Business” for an explanation of the composition of such measure.
Three months ended
Twelve months ended
December 31
December 31
($ in 000's, except as otherwise noted)
2024
2023
2024
2023
Revenue
244,781
220,365
733,780
676,172
Cost of sales
144,555
141,338
458,170
442,613
Gross profit
100,226
79,027
275,610
233,559
Gross profit margin (1)
40.9%
35.9%
37.6%
34.5%
Selling, general and administrative expenses
49,082
42,300
174,489
140,304
Acquisition related adjustments
(12,425)
(7,863)
(12,425)
(7,863)
Share-based compensation
1,987
1,534
7,268
5,868
Earnings from operations
61,582
43,056
106,278
95,250
Operating margin (1)
25.2%
19.5%
14.5%
14.1%
Foreign exchange loss
1,852
1,676
1,479
1,962
Interest expense and other financing costs
5,684
4,885
20,272
22,784
Accretion on preferred shares
2,220
1,965
8,729
4,833
Earnings before income taxes
51,826
34,530
75,798
65,671
Provision for income taxes
15,705
10,530
24,665
19,631
Net earnings
36,121
24,000
51,133
46,040
Net earnings attributable to:
Shareholders
36,810
24,407
51,914
47,882
Non-controlling interests
(689)
(407)
(781)
(1,842)
36,121
24,000
51,133
46,040
Adjusted net earnings (2)
34,641
28,615
69,044
66,084
EBITDA (2)
63,890
46,516
123,331
113,611
Adjusted EBITDA (2)
59,437
50,628
141,003
138,063
Adjusted EBITDA margin (3)
24.3%
23.0%
19.2%
20.4%
Weighted average number of shares
Basic
41,818,220
42,062,117
41,580,983
41,960,516
Diluted
43,179,260
42,766,299
42,843,210
42,650,501
Earnings per share attributable to common shareholders:
Basic, earnings per share
0.86
0.57
1.23
1.10
Diluted, earnings per share
0.84
0.56
1.19
1.08
Adjusted diluted, earnings per share
(3)
0.80
0.67
1.61
1.55
(3)
This is a non-IFRS ratio and is used throughout this MD&A. See “Non-IFRS and Other Financial Measures”
for more information on each non-IFRS ratio. See “How we Assess the Performance of our Business” for an
explanation of the composition of such ratio.
The following table provides selected consolidated financial position data for the periods indicated.
Results of Operations – three months ended December 31, 2024 and 2023
The following table provides a summary of our results for the three months ended December 31, 2024 and
December 31, 2023.
($ in 000's)
As at December 31,
As at December 31,
2024
2023
Selected Consolidated Financial Position Data:
Total assets
1,208,793
1,143,574
Total non-current liabilities
487,732
517,050
Three months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Revenue
244,781
220,365
24,416
11.1%
Cost of sales
144,555
141,338
3,217
2.3%
Gross profit
100,226
79,027
21,199
26.8%
Gross profit margin (1)
40.9%
35.9%
-
5.0%
Selling, general and administrative expenses
49,082
42,300
6,782
16.0%
Acquisition related adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Share-based compensation
1,987
1,534
453
29.5%
Earnings from operations
61,582
43,056
18,526
43.0%
Operating margin (1)
25.2%
19.5%
-
5.7%
Foreign exchange loss
1,852
1,676
176
10.5%
Interest expense and other financing costs
5,684
4,885
799
16.4%
Accretion on preferred shares
2,220
1,965
255
13.0%
Earnings before income taxes
51,826
34,530
17,296
50.1%
Provision for income taxes
15,705
10,530
5,175
49.1%
Net earnings
36,121
24,000
12,121
50.5%
Net earnings attributable to:
Shareholders
36,810
24,407
12,403
50.8%
Non-controlling interests
(689)
(407)
(282)
(69.3%)
36,121
24,000
12,121
50.5%
Adjusted net earnings (2)
34,641
28,615
6,026
21.1%
EBITDA (2)
63,890
46,516
17,374
37.4%
Adjusted EBITDA (2)
59,437
50,628
8,809
17.4%
Adjusted EBITDA margin (3)
24.3%
23.0%
-
1.3%
88
87
The following tables provide a quantitative reconciliation of net earnings to EBITDA, Adjusted EBITDA,
and Adjusted net earnings, as well as gross profit to normalized gross profit, SG&A to normalized SG&A, earnings
from operations to normalized earnings from operations, each of which are non-IFRS financial measures (see “Non-
IFRS and Other Financial Measures” and “How we Assess the Performance of our Business” for further information
on each non-IFRS financial measure), for the three months ended December 31, 2024 and December 31, 2023.
Three months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Net earnings:
36,121
24,000
12,121
50.5%
Add:
Provision for income taxes
15,705
10,530
5,175
49.1%
Interest expense and other financing costs
5,684
4,885
799
16.4%
Accretion on preferred shares
2,220
1,965
255
13.0%
Depreciation of property, plant, and equipment
2,635
3,589
(954)
(26.6%)
Amortization of intangible assets
1,525
1,547
(22)
(1.4%)
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
63,890
46,516
17,374
37.4%
Share-based compensation
(1)
1,987
1,534
453
29.5%
Foreign exchange loss
1,852
1,676
176
10.5%
Acquisition and divestiture related costs
(2)
168
2,846
(2,678)
(94.1%)
Labour relations costs
(3)
777
-
777
100.0%
IT system implementation
(4)
2,141
3,274
(1,133)
(34.6%)
Amortization of fair value adjustments
(5)
-
2,621
(2,621)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(6)
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
(7)
1,047
24
1,023
4262.5%
Adjusted EBITDA
59,437
50,628
8,809
17.4%
Provision for income taxes
(15,705)
(10,530)
(5,175)
(49.1%)
Interest expense and other financing costs
(5,684)
(4,885)
(799)
(16.4%)
Depreciation of property, plant, and equipment
(2,635)
(3,589)
954
26.6%
Amortization of intangible assets
(1,525)
(1,547)
22
1.4%
Share-based compensation
(1)
(1,865)
(1,411)
(454)
(32.2%)
Tax effect of normalization adjustments
2,618
(51)
2,669
5233.3%
Adjusted net earnings
34,641
28,615
6,026
21.1%
(1)
Our share-based compensation expense pertains to our long-term incentive plan (the “LTIP”) (refer to
“Share-based compensation”), with stock options, performance-based share units (“PSUs”), time-based
restricted share units (“RSUs”), and deferred share units (“DSUs”) expenses, along with associated payroll
taxes.
(2)
Current period mainly pertains to integration costs relating to the acquisition of our former distributor partner
in China which closed on April 28, 2023, while prior year was mainly comprised of integration costs
associated with the acquisition of our former distributor partner in China and the acquisition of youtheory in
the U.S.
(3)
These expenses are comprised of expenditures related to the labour disruption and service recovery
experienced as a result of the labour disruption in Q1 2024, including fines and penalties incurred related to
customer shipments, and freight costs to expedite shipments to customers.
(4)
Mainly pertains to development costs associated with our IT system implementation to augment our system
infrastructure. Unlike other system improvement projects with costs capitalized, due to its cloud-based
nature, these system implementation costs are expensed accordingly.
(5)
Post-closing amortization of the fair value increase of acquired inventories related to the April 28, 2023
transaction with our former distribution partner in China.
(6)
To adjust for the fair value of purchase consideration accounted for as compensation in the 2022 youtheory
acquisition, net of post-acquisition working capital adjustments to reflect acquired liabilities.
(7)
Other costs comprise primarily of a reserve for an indirect tax credit relating to historical years.
(8)
Non-IFRS financial measure used throughout this MD&A. See “Non-IFRS and Other Financial Measures”
for more information on each non-IFRS financial measure. See “How we Assess the Performance of our
Business” for an explanation of the composition of such measure.
Three months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Gross profit
100,226
79,027
21,199
26.8%
Labour relations costs
(3)
315
-
315
100.0%
Amortization of fair value adjustments
(5)
-
2,621
(2,621)
(100.0%)
Normalized gross profit (8)
100,541
81,648
18,893
23.1%
Normalized gross profit margin (9)
41.1%
37.1%
-
4.0%
Selling, general and administrative expenses
49,082
42,300
6,782
16.0%
Acquisition and divestiture related costs
(2)
(168)
(2,846)
2,678
94.1%
IT system implementation
(4)
(2,141)
(3,274)
1,133
34.6%
Labour relations costs
(3)
(462)
-
(462)
(100.0%)
Legal and other
(7)
(1,047)
(24)
(1,023)
(4262.5%)
Normalized selling, general and administrative expenses (8)
45,264
36,156
9,108
25.2%
Earnings from operations
61,582
43,056
18,526
43.0%
Acquisition and divestiture related costs
(2)
168
2,846
(2,678)
(94.1%)
IT system implementation
(4)
2,141
3,274
(1,133)
(34.6%)
Labour relations costs
(3)
777
-
777
100.0%
Amortization of fair value adjustments
(5)
-
2,621
(2,621)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(6)
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
(7)
1,047
24
1,023
4262.5%
Normalized earnings from operations (8)
53,290
43,958
9,332
21.2%
Normalized operating margin (9)
21.8%
19.9%
-
1.9%
90
89
(9)
A non-IFRS ratio and is used throughout this MD&A. See “Non-IFRS and Other Financial Measures” for
more information on each non-IFRS ratio. See “How we Assess the Performance of our Business” for an
explanation of the composition of such ratio.
The following table provides selected financial information for the Jamieson Brands operating segment for
the three months ended December 31, 2024 and December 31, 2023.
Jamieson Brands
The following table provides a quantitative reconciliation for the Jamieson Brands operating segment from
earnings from operations to Adjusted EBITDA, which is a non-IFRS financial measure (see “Non-IFRS and Other
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Revenue
202,621
181,007
21,614
11.9%
Gross profit
94,395
73,082
21,313
29.2%
Gross profit margin
46.6%
40.4%
-
6.2%
Normalized gross profit
94,710
75,703
19,007
25.1%
Normalized gross profit margin
46.7%
41.8%
-
4.9%
Selling, general and administrative expenses
47,621
40,751
6,870
16.9%
Normalized selling, general and administrative expenses
43,803
34,631
9,172
26.5%
Acquisition related adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Share-based compensation
1,987
1,534
453
29.5%
Earnings from operations
57,212
38,660
18,552
48.0%
Operating margin
28.2%
21.4%
-
6.8%
Normalized earnings from operations
48,920
39,538
9,382
23.7%
Normalized operating margin
24.1%
21.8%
-
2.3%
Adjusted EBITDA
54,341
45,404
8,937
19.7%
Adjusted EBITDA margin
26.8%
25.1%
-
1.7%
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Gross profit
94,395
73,082
21,313
29.2%
Labour relations costs
315
-
315
100.0%
Amortization of fair value adjustments
-
2,621
(2,621)
(100.0%)
Normalized gross profit
94,710
75,703
19,007
25.1%
Normalized gross profit margin
46.7%
41.8%
-
4.9%
Selling, general and administrative expenses
47,621
40,751
6,870
16.9%
Acquisition and divestiture related costs
(168)
(2,846)
2,678
94.1%
IT system implementation
(2,141)
(3,274)
1,133
34.6%
Legal and other
(1,047)
-
(1,047)
(100.0%)
Labour relations costs
(462)
-
(462)
(100.0%)
Normalized selling, general and administrative expenses
43,803
34,631
9,172
26.5%
Earnings from operations
57,212
38,660
18,552
48.0%
Acquisition and divestiture related cost
168
2,846
(2,678)
(94.1%)
IT system implementation
2,141
3,274
(1,133)
(34.6%)
Labour relations costs
777
-
777
100.0%
Amortization of fair value adjustments
-
2,621
(2,621)
(100.0%)
Acquisition related purchase consideration adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
1,047
-
1,047
100.0%
Normalized earnings from operations
48,920
39,538
9,382
23.7%
Normalized operating margin
24.1%
21.8%
-
2.3%
Financial Measures” and “How we Assess the Performance of our Business” for further information on each non-
IFRS financial measure), for the three months ended December 31, 2024 and December 31, 2023.
The following table provides selected financial information for the Strategic Partners operating segment for
the three months ended December 31, 2024 and December 31, 2023.
Strategic Partners
The following table provides a quantitative reconciliation for the Strategic Partners operating segment from
earnings from operations to Adjusted EBITDA, which is a non-IFRS financial measure (see “Non-IFRS and Other
Financial Measures” and “How we Assess the Performance of our Business” for further information on each non-
IFRS financial measure), for the three months ended December 31, 2024 and December 31, 2023.
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Earnings from operations
57,212
38,660
18,552
48.0%
Depreciation of property, plant, and equipment
1,909
2,785
(876)
(31.5%)
Amortization of intangible assets
1,525
1,547
(22)
(1.4%)
Share-based compensation
1,987
1,534
453
29.5%
Acquisition and divestiture related cost
168
2,846
(2,678)
(94.1%)
Labour relations costs
777
-
777
100.0%
IT system implementation
2,141
3,274
(1,133)
(34.6%)
Amortization of fair value adjustments
-
2,621
(2,621)
(100.0%)
Acquisition related purchase consideration adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
1,047
-
1,047
100.0%
Adjusted EBITDA
54,341
45,404
8,937
19.7%
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Revenue
42,160
39,358
2,802
7.1%
Gross profit
5,831
5,945
(114)
(1.9%)
Gross profit margin
13.8%
15.1%
-
(1.3%)
Selling, general and administrative expenses
1,461
1,549
(88)
(5.7%)
Normalized selling, general and administrative expenses
1,461
1,525
(64)
(4.2%)
Earnings from operations
4,370
4,396
(26)
(0.6%)
Operating margin
10.4%
11.2%
-
(0.8%)
Normalized earnings from operations
4,370
4,420
(50)
(1.1%)
Normalized operating margin
10.4%
11.2%
-
(0.8%)
Adjusted EBITDA
5,096
5,224
(128)
(2.5%)
Adjusted EBITDA margin
12.1%
13.3%
-
(1.2%)
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Selling, general and administrative expenses
1,461
1,549
(88)
(5.7%)
Legal and other
-
(24)
24
(100.0%)
Normalized selling, general and administrative expenses
1,461
1,525
(64)
(4.2%)
Earnings from operations
4,370
4,396
(26)
(0.6%)
Legal and other
-
24
(24)
(100.0%)
Normalized earnings from operations
4,370
4,420
(50)
(1.1%)
Normalized operating margin
10.4%
11.2%
-
(0.8%)
($ in 000's, except as otherwise noted)
For the three months ended December 31,
2024
2023
$ Change
% Change
Earnings from operations
4,370
4,396
(26)
(0.6%)
Depreciation of property, plant, and equipment
726
804
(78)
(9.7%)
Legal and other
-
24
(24)
(100.0%)
Adjusted EBITDA
5,096
5,224
(128)
(2.5%)
92
91
Revenue
Revenue increased by 11.1%, or $24.4 million, to $244.8 million in Q4 2024. This was driven by 11.9%
growth in Jamieson Brands revenue and 7.1% growth in Strategic Partners revenue compared with Q4 2023.
Revenue in the Jamieson Brands segment increased by $21.6 million, or 11.9%, to $202.6 million in Q4
2024. Canada revenue increased by 11.4% in Q4 2024, driven by continued strong consumer consumption and in
market pricing while revenue in the prior year’s fourth quarter was negatively impacted by distributor inventory
reduction. Youtheory international, new distribution and e-commerce revenue increased by over 25% in the quarter
through innovation and expanded offerings as we integrated sales efforts with our existing Jamieson sales force and
our new e-commerce business partnership. Total youtheory shipment growth of 2.3% (9% YTD) was impacted by the
timing of promotional purchases within our traditional distribution base, partially offsetting double digit consumption
growth. China shipments grew 38.9% compared with Q4 2023 on a constant currency basis reflecting investment to
drive brand awareness, market penetration, new e-commerce programs, and another strong 11/11 promotional period.
Jamieson International revenue increased by 14.2% on a constant currency basis, driven by innovation and market
expansion in the Middle East and continued consumption growth in multiple regions.
Revenue in the Strategic Partners segment increased by $2.8 million, or 7.1%, to $42.2 million in Q4 2024,
driven by customer ordering patterns and initial shipment of new business.
Gross profit
Gross profit increased by $21.2 million to $100.2 million in Q4 2024, while normalized gross profit increased
by $18.9 million mainly driven by higher revenues and increased margins. Gross profit margin increased by 500 basis
points to 40.9% in Q4 2024 due to a higher proportion of growth in Jamieson Brands sales, while normalized gross
profit margin increased 400 basis points after normalizing for the amortization of fair value adjustment in the prior
year.
Gross profit in the Jamieson Brands segment increased by $21.3 million to $94.4 million in Q4 2024, while
normalized gross profit increased by $19.0 million mainly driven by revenue growth and higher margins. Gross profit
margin increased by 620 basis points to 46.6%, while normalized gross profit margin increased by 490 basis points to
46.7% mainly driven by volume growth and favourable channel mix in China.
Gross profit in the Strategic Partners segment decreased by $0.1 million to $5.8 million and gross profit
margin decreased by 130 basis points to 13.8% in Q4 2024, impacted by reduced manufacturing efficiencies, partially
offset by customer mix.
Selling, general and administrative expenses
SG&A expenses of $49.1 million in Q4 2024 increased by $6.8 million, or 16.0%, compared to Q4 2023.
Excluding the impact of specified costs, SG&A expenses increased by $9.1 million or 25.2% in Q4 2024, mainly
driven by timing of variable compensation and investments to grow our brand as we continue to prioritize our global
expansion initiatives with resources, marketing and infrastructure to support our growth in China, where we increased
spending on digital and traditional brand awareness as well as equity building programs.
Specified costs of $3.8 million in Q4 2024 are mainly comprised of $2.1 million in development costs
associated with our IT system implementation to augment our system infrastructure.
Share-based compensation
Share-based compensation increased by $0.5 million to $2.0 million in Q4 2024 reflecting wage inflation
and additional grants in the current year.
Earnings from operations and operating margin
Earnings from operations increased by $18.5 million driven by higher gross profit and acquisition related
adjustments, partially offset by investments in SG&A. Operating margin increased by 570 basis points to 25.2% in
Q4 2024 due to higher gross profit margin. Normalized earnings from operations increased by $9.3 million, or 21.2%
in Q4 2024, and normalized operating margin was 21.8% compared with 19.9% in Q4 2023 due to higher gross profit.
Earnings from operations in the Jamieson Brands segment increased by $18.6 million and operating margin
is 28.2%. Normalized earnings from operations increased by $9.4 million driven by higher gross profit, partially offset
by timing of variable compensation in SG&A. Normalized operating margin increased by 230 basis points to 24.1%
in Q4 2024 due to higher gross profit.
Earnings from operations in the Strategic Partners segment was consistent with Q4 2023, while operating
margin decreased 80 basis points to 10.4% due to reduced manufacturing efficiencies, partially offset by customer
mix.
Foreign exchange loss
Foreign exchange loss of $1.9 million in Q4 2024 resulted from changes in currency exchange rates on our
foreign denominated accounts receivable and accounts payable at the end of the quarter. We experience fluctuations
from USD/CAD and RMB/CAD exchange rates between the date of transaction and when cash is realized.
Interest expense and other financing costs
Interest expense and other financing costs increased by $0.8 million to $5.7 million in Q4 2024 primarily
resulting from higher average borrowings in the current period.
Accretion on preferred shares
Preferred shares issued on May 16, 2023 as part of the Jamieson-DCP Partnership accrete at approximately
9.6% to its redeemable value of $101.6 million at May 15, 2025. Accretion expense of $2.2 million was realized
during Q4 2024.
Income taxes
Provision for income taxes was $15.7 million in Q4 2024 compared with a provision of $10.5 million in Q4
2023. Our Q4 2024 effective tax rate of 30.3% is consistent with our Q4 2023 effective tax rate of 30.5%.
Net Earnings and adjusted net earnings
Net earnings for the quarter was $36.1 million, while adjusted net earnings was $34.6 million or $6.0 million
higher than Q4 2023, with higher normalized earnings from operations.
Net loss attributable to non-controlling interests
Net loss attributable to non-controlling interests was $0.7 million. This represents DCP’s minority interest
on our China operations, with higher revenue offset by investments in on-the-ground capabilities, brand awareness
and social marketing in the region.
Depreciation
Depreciation expense of $2.6 million was $1.0 million lower than Q4 2023 reflecting timing of depreciation
of assets.
Amortization
Amortization expense of $1.5 million was relatively consistent with Q4 2023.
94
93
EBITDA and Adjusted EBITDA
EBITDA increased by $17.4 million to $63.9 million in Q4 2024, mainly driven by higher revenue and gross
profit.
Adjusted EBITDA increased by $8.8 million to $59.4 million, reflecting the impact of higher sales volumes
and pricing, partially offset by higher investments in SG&A. Adjusted EBITDA margin increased by 130 basis points
to 24.3% for the quarter, driven by higher gross profits.
Adjusted EBITDA in the Jamieson Brands segment increased by $8.9 million to $54.3 million driven by
higher gross profit, partially offset by higher SG&A to drive brand awareness and growth in China and timing of
variable compensation. Adjusted EBITDA margin increased by 170 basis points to 26.8%, driven by higher gross
profits.
Adjusted EBITDA in the Strategic Partners segment decreased by $0.1 million, to $5.1 million while
Adjusted EBITDA margin decreased by 120 basis points to 12.1% largely due to lower gross profit margin noted
above.
Results of Operations – twelve months ended December 31, 2024 and 2023
The following table provides a summary of our results for the twelve months ended December 31, 2024 and
December 31, 2023.
Twelve months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Revenue
733,780
676,172
57,608
8.5%
Cost of sales
458,170
442,613
15,557
3.5%
Gross profit
275,610
233,559
42,051
18.0%
Gross profit margin
37.6%
34.5%
-
3.1%
Selling, general and administrative expenses
174,489
140,304
34,185
24.4%
Acquisition related adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Share-based compensation
7,268
5,868
1,400
23.9%
Earnings from operations
106,278
95,250
11,028
11.6%
Operating margin
14.5%
14.1%
-
0.4%
Foreign exchange loss
1,479
1,962
(483)
(24.6%)
Interest expense and other financing costs
20,272
22,784
(2,512)
(11.0%)
Accretion on preferred shares
8,729
4,833
3,896
80.6%
Earnings before income taxes
75,798
65,671
10,127
15.4%
Provision for income taxes
24,665
19,631
5,034
25.6%
Net earnings
51,133
46,040
5,093
11.1%
Net earnings attributable to:
Shareholders
51,914
47,882
4,032
8.4%
Non-controlling interests
(781)
(1,842)
1,061
57.6%
51,133
46,040
5,093
11.1%
Adjusted net earnings
69,044
66,084
2,960
4.5%
EBITDA
123,331
113,611
9,720
8.6%
Adjusted EBITDA
141,003
138,063
2,940
2.1%
Adjusted EBITDA margin
19.2%
20.4%
-
(1.2%)
96
95
The following tables provide a quantitative reconciliation of net earnings to EBITDA, Adjusted EBITDA,
and Adjusted net earnings, as well as gross profit to normalized gross profit, SG&A to normalized SG&A, earnings
from operations to normalized earnings from operations, each of which are non-IFRS financial measures (see “Non-
IFRS and Other Financial Measures” and “How we Assess the Performance of our Business” for further information
on each non-IFRS financial measure), for the twelve months ended December 31, 2024 and December 31, 2023.
Twelve months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Net earnings
51,133
46,040
5,093
11.1%
Add:
Provision for income taxes
24,665
19,631
5,034
25.6%
Interest expense and other financing costs
20,272
22,784
(2,512)
(11.0%)
Accretion on preferred shares
8,729
4,833
3,896
80.6%
Depreciation of property, plant, and equipment
12,588
14,410
(1,822)
(12.6%)
Amortization of intangible assets
5,944
5,913
31
0.5%
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
123,331
113,611
9,720
8.6%
Share-based compensation
(1)
7,268
5,868
1,400
23.9%
Foreign exchange loss
1,479
1,962
(483)
(24.6%)
Acquisition and divestiture related costs
(2)
1,198
8,385
(7,187)
(85.7%)
Labour relations costs
(3)
7,165
-
7,165
100.0%
IT system implementation
(4)
11,562
7,743
3,819
49.3%
Amortization of fair value adjustments
(5)
-
8,440
(8,440)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(6)
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
(7)
1,425
(83)
1,508
1816.9%
Adjusted EBITDA
141,003
138,063
2,940
2.1%
Provision for income taxes
(24,665)
(19,631)
(5,034)
(25.6%)
Interest expense and other financing costs
(20,272)
(22,784)
2,512
11.0%
Depreciation of property, plant, and equipment
(12,588)
(14,410)
1,822
12.6%
Amortization of intangible assets
(5,944)
(5,913)
(31)
(0.5%)
Share-based compensation
(1)
(6,780)
(5,458)
(1,322)
(24.2%)
Tax deduction from vesting of certain share-based awards
(8)
-
(1,022)
1,022
100.0%
Tax effect of normalization adjustments
(1,710)
(2,761)
1,051
38.1%
Adjusted net earnings
69,044
66,084
2,960
4.5%
(1)
Our share-based compensation expense pertains to our LTIP, with stock options, PSUs, RSUs, and DSUs
expenses, along with associated payroll taxes.
(2)
Current year mainly pertains to legal, tax, consulting and, LTIP set-up costs associated with the integration
of our former distributor partner in China, while prior year was mainly comprised of acquisition costs relating
to the acquisition of our former distributor partner in China which closed on April 28, 2023 and integration
costs relating to our acquisition of youtheory in the U.S. which closed on July 19, 2022.
(3)
These expenses are mainly comprised of third-party legal, security fees, unavoidable facility expenditures,
customer fines and penalties, salary of fulltime staff spent on CBA negotiations, along with freight charges
to expedite shipments to customers as it relates to a labour disruption in Q1 2024.
(4)
Mainly pertains to development costs associated with our IT system implementation to augment our system
infrastructure. Unlike other system improvement projects with costs capitalized, due to its cloud-based
nature, these system implementation costs are expensed accordingly.
(5)
Post-closing amortization of the fair value increase of acquired inventories related to the April 28, 2023
transaction with our former distribution partner in China.
(6)
To adjust for the fair value of purchase consideration accounted for as compensation in the 2022 youtheory
acquisition, net of post-acquisition working capital adjustments to reflect acquired liabilities.
(7)
Other costs comprise primarily of a reserve for an indirect tax credit relating to historical years.
(8)
The vesting of share-based compensation provides a tax benefit during the period in which the awards are
settled.
Twelve months ended
December 31
2024
2023
$ Change
% Change
Gross profit
275,610
233,559
42,051
18.0%
Labour relations costs
(3)
5,028
-
5,028
100.0%
Amortization of fair value adjustments
(5)
-
8,440
(8,440)
(100.0%)
Acquisition and divestiture related cost
(2)
165
-
165
100.0%
Normalized gross profit
280,803
241,999
38,804
16.0%
Normalized gross profit margin
38.3%
35.8%
-
2.5%
Selling, general and administrative expenses
174,489
140,304
34,185
24.4%
Acquisition and divestiture related cost
(2)
(1,033)
(8,385)
7,352
87.7%
IT system implementation
(4)
(11,562)
(7,743)
(3,819)
(49.3%)
Labour relations costs
(3)
(2,137)
-
(2,137)
(100.0%)
Legal and other
(7)
(1,425)
83
(1,508)
(1816.9%)
Normalized selling, general and administrative expenses
158,332
124,259
34,073
27.4%
Earnings from operations
106,278
95,250
11,028
11.6%
Acquisition and divestiture related costs
(2)
1,198
8,385
(7,187)
(85.7%)
IT system implementation
(4)
11,562
7,743
3,819
49.3%
Labour relations costs
(3)
7,165
-
7,165
100.0%
Amortization of fair value adjustments
(5)
-
8,440
(8,440)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(6)
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
(7)
1,425
(83)
1,508
1816.9%
Normalized earnings from operations (9)
115,203
111,872
3,331
3.0%
Normalized operating margin (10)
15.7%
16.5%
-
(0.8%)
98
97
(9)
Non-IFRS financial measure used throughout this MD&A. See “Non-IFRS and Other Financial Measures”
for more information on each non-IFRS financial measure. See “How we Assess the Performance of our
Business” for an explanation of the composition of such measure.
(10)
A non-IFRS ratio and is used throughout this MD&A. See “Non-IFRS and Other Financial Measures” for
more information on each non-IFRS ratio. See “How we Assess the Performance of our Business” for an
explanation of the composition of such ratio.
The following table provides selected financial information for the Jamieson Brands operating segment for
the twelve months ended December 31, 2024 and December 31, 2023.
Jamieson Brands
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Revenue
628,744
551,171
77,573
14.1%
Gross profit
262,066
214,293
47,773
22.3%
Gross profit margin
41.7%
38.9%
-
2.8%
Normalized gross profit
267,259
222,733
44,526
20.0%
Normalized gross profit margin
42.5%
40.4%
-
2.1%
Selling, general and administrative expenses
168,460
133,951
34,509
25.8%
Normalized selling, general and administrative expenses
152,303
118,002
34,301
29.1%
Acquisition related adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Share-based compensation
7,268
5,868
1,400
23.9%
Earnings from operations
98,763
82,337
16,426
19.9%
Operating margin
15.7%
14.9%
-
0.8%
Normalized earnings from operations
107,688
98,863
8,825
8.9%
Normalized operating margin
17.1%
17.9%
-
(0.8%)
Adjusted EBITDA
130,496
121,836
8,660
7.1%
Adjusted EBITDA margin
20.8%
22.1%
-
(1.3%)
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Gross profit
262,066
214,293
47,773
22.3%
Labour relations costs
5,028
-
5,028
100.0%
Amortization of fair value adjustments
-
8,440
(8,440)
(100.0%)
Acquisition and divestiture related costs
165
-
165
100.0%
Normalized gross profit
267,259
222,733
44,526
20.0%
Normalized gross profit margin
42.5%
40.4%
-
2.1%
Selling, general and administrative expenses
168,460
133,951
34,509
25.8%
Acquisition and divestiture related costs
(1,033)
(8,385)
7,352
87.7%
IT system implementation
(11,562)
(7,743)
(3,819)
(49.3%)
Labour relations costs
(2,137)
-
(2,137)
(100.0%)
Legal and other
(1,425)
179
(1,604)
(896.1%)
Normalized selling, general and administrative expenses
152,303
118,002
34,301
29.1%
Earnings from operations
98,763
82,337
16,426
19.9%
Acquisition and divestiture related costs
1,198
8,385
(7,187)
(85.7%)
IT system implementation
11,562
7,743
3,819
49.3%
Labour relations costs
7,165
-
7,165
100.0%
Amortization of fair value adjustments
-
8,440
(8,440)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
1,425
(179)
1,604
896.1%
Normalized earnings from operations
107,688
98,863
8,825
8.9%
Normalized operating margin
17.1%
17.9%
-
(0.8%)
The following table provides a quantitative reconciliation for the Jamieson Brands operating segment from
earnings from operations to Adjusted EBITDA, which is a non-IFRS financial measure (see “Non-IFRS and Other
Financial Measures” and “How we Assess the Performance of our Business” for further information on each non-
IFRS financial measure), for the twelve months ended December 31, 2024 and December 31, 2023.
The following table provides selected financial information for the Strategic Partners operating segment for
the twelve months ended December 31, 2024 and December 31, 2023.
Strategic Partners
The following table provides a quantitative reconciliation for the Strategic Partners operating segment from
earnings from operations to Adjusted EBITDA, which is a non-IFRS financial measure (see “Non-IFRS and Other
Financial Measures” and “How we Assess the Performance of our Business” for further information on each non-
IFRS financial measure), for the twelve months ended December 31, 2024 and December 31, 2023.
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Earnings from operations
98,763
82,337
16,426
19.9%
Depreciation of property, plant, and equipment
9,596
11,192
(1,596)
(14.3%)
Amortization of intangible assets
5,944
5,913
31
0.5%
Share-based compensation
7,268
5,868
1,400
23.9%
Acquisition and divestiture related costs
1,198
8,385
(7,187)
(85.7%)
Labour relations costs
7,165
-
7,165
100.0%
IT system implementation
11,562
7,743
3,819
49.3%
Amortization of fair value adjustments
-
8,440
(8,440)
(100.0%)
Acquisition related purchase consideration and post-closing adjustments
(12,425)
(7,863)
(4,562)
(58.0%)
Legal and other
1,425
(179)
1,604
896.1%
Adjusted EBITDA
130,496
121,836
8,660
7.1%
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Revenue
105,036
125,001
(19,965)
(16.0%)
Gross profit
13,544
19,266
(5,722)
(29.7%)
Gross profit margin
12.9%
15.4%
-
(2.5%)
Selling, general and administrative expenses
6,029
6,353
(324)
(5.1%)
Normalized selling, general and administrative expenses
6,029
6,257
(228)
(3.6%)
Earnings from operations
7,515
12,913
(5,398)
(41.8%)
Operating margin
7.2%
10.3%
-
(3.1%)
Normalized earnings from operations
7,515
13,009
(5,494)
(42.2%)
Normalized operating margin
7.2%
10.4%
-
(3.2%)
Adjusted EBITDA
10,507
16,227
(5,720)
(35.2%)
Adjusted EBITDA margin
10.0%
13.0%
-
(3.0%)
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Selling, general and administrative expenses
6,029
6,353
(324)
(5.1%)
Legal and other
-
(96)
96
100.0%
Normalized selling, general and administrative expenses
6,029
6,257
(228)
(3.6%)
Earnings from operations
7,515
12,913
(5,398)
(41.8%)
Legal and other
-
96
(96)
(100.0%)
Normalized earnings from operations
7,515
13,009
(5,494)
(42.2%)
Normalized operating margin
7.2%
10.4%
-
(3.2%)
100
99
Revenue
Revenue increased by 8.5%, or $57.6 million, to $733.8 million in YTD 2024. This was driven by 14.1%
growth in Jamieson Brands revenue and 16.0% decrease in Strategic Partners revenue compared with YTD 2024.
Revenue in the Jamieson Brands segment increased by $77.6 million, or 14.1%, to $628.7 million in YTD
2024. Canada revenue increased by 6.1% in YTD 2024, driven by strong consumer consumption and in market pricing.
Youtheory international, new distribution and e-commerce revenue increased by 17.4% in YTD 2024 through
innovation and expanded offerings as we integrated sales efforts with our existing Jamieson sales force and formed
our new e-commerce business partnership. Total youtheory shipment growth of 9.0% resulted from strong double
digit consumption growth driven through our primary SKUs, innovation and distribution, partially offset by the timing
of promotional shipments within certain traditional accounts. China shipments grew 77.9% in YTD 2024 on a reported
basis, reflecting the impact of our transition to an owned-distribution model. On a proforma and constant currency
basis, revenue grew 69.8% on the success of our demand driving marketing initiatives in cross-border e-commerce
and continued increases in traditional retail channels. Jamieson International increased by 16.0% on a constant
currency basis driven by innovation, consumption growth, and market expansion in the Middle East and Europe.
Revenue in the Strategic Partners segment decreased by $20.0 million, or 16.0%, to $105.0 million in YTD
2024, as we completed the close-out of a previously noted customer contract, partially offset by initial shipment of
new business awarded in the fourth quarter of 2024.
Gross profit
Gross profit increased by $42.1 million to $275.6 million in YTD 2024, while normalized gross profit
increased by $38.8 million mainly driven by higher revenues noted above. Gross profit margin increased by 310 basis
points to 37.6% in YTD 2024 largely due to a higher proportion of growth in Jamieson Brands, while normalized
gross profit margin increased 250 basis points normalizing for the amortization of fair value adjustment in the prior
year and for the labour relations costs in the current year.
Gross profit in the Jamieson Brands segment increased by $47.8 million to $262.1 million in YTD 2024,
while normalized gross profit increased by $44.5 million mainly driven by revenue growth. Gross profit margin
increased by 280 basis points to 41.7% and normalized gross profit margin increased by 210 basis points to 42.5%
due to favourable geographic mix and pricing.
Gross profit in the Strategic Partners segment decreased by $5.7 million to $13.5 million and gross profit
margin decreased by 250 basis points to 12.9% in YTD 2024, impacted by customer mix and lower plant utilization.
Selling, general and administrative expenses
SG&A expenses of $174.5 million in YTD 2024 increased by $34.2 million, or 24.4%, compared to YTD
2023. Excluding the impact of specified costs, SG&A expenses increased by $34.1 million or 27.4% in YTD 2024
reflecting the impact of our transition to an owned distribution model in China as well as accelerated investments to
grow our brand awareness and equity in China and the U.S. We continue to prioritize our global expansion initiatives
with resources, marketing and infrastructure to support our growth in key markets abroad.
Specified costs of $16.2 million in YTD 2024 are mainly comprised of $11.6 million of IT system
implementation costs and $2.1 million of labour relations costs.
($ in 000's, except as otherwise noted)
For the twelve months ended December 31,
2024
2023
$ Change
% Change
Earnings from operations
7,515
12,913
(5,398)
(41.8%)
Depreciation of property, plant, and equipment
2,992
3,218
(226)
(7.0%)
Legal and other
-
96
(96)
(100.0%)
Adjusted EBITDA
10,507
16,227
(5,720)
(35.2%)
Share-based compensation
Share-based compensation increased by $1.4 million to $7.3 million in YTD 2024 reflecting wage inflation
and additional grants in the current year.
Earnings from operations and operating margin
Earnings from operations increased by $11.0 million due to higher gross profits and acquisition related
adjustments, partially offset by investments in SG&A. Operating margin increased by 40 basis points to 14.5% in
YTD 2024. Normalized earnings from operations increased by $3.3 million, or 3.0% in YTD 2024, and normalized
operating margin was 15.7% compared with 16.5% in YTD 2023.
Earnings from operations in the Jamieson Brands segment increased by $16.4 million and operating margin
is 15.7%. Normalized earnings from operations increased by $8.8 million driven by higher gross profits, partially
offset by higher investments in SG&A. Normalized operating margin decreased by 80 basis points to 17.1% in YTD
2024 as anticipated, given our investments in marketing to support our global expansion.
Earnings from operations in the Strategic Partners segment decreased by $5.4 million due to lower gross
profit, and operating margin decreased 310 basis points compared with the prior year to 7.2%, due to lower gross
profit margins as noted above.
Foreign exchange loss
Foreign exchange loss of $1.5 million in YTD 2024 resulted from changes in currency exchange rates on our
foreign denominated accounts receivable and accounts payable at the end of the year. We experience fluctuations from
USD/CAD and RMB/CAD exchange rates between the date of transaction and when cash is realized.
Interest expense and other financing costs
Interest expense and other financing costs decreased by $2.5 million to $20.3 million in YTD 2024 resulting
from lower prevailing interest rates and the effects of interest rate hedges on a portion of borrowings.
Accretion on preferred shares
Preferred shares issued on May 16, 2023 as part of the Jamieson-DCP Partnership accrete at approximately
9.6% to its redeemable value of $101.6 million at May 15, 2025. Accretion expense of $8.7 million was realized
during YTD 2024.
Income taxes
Provision for income taxes was $24.7 million in YTD 2024 compared with a provision of $19.6 million in
YTD 2023. Our YTD 2024 effective tax rate of 32.5% reflects the impact of higher non-deductible preferred share
accretion compared with a YTD 2023 effective tax rate of 29.9% which includes the impact of a $1.0 million tax
deduction from the vesting of certain share-based awards.
Net earnings and adjusted net earnings
Net earnings was $51.1 million in YTD 2024, while adjusted net earnings was $69.0 million or $3.0 million
higher than YTD 2023, driven by higher normalized earnings from operations.
Net loss attributable to non-controlling interests
Net loss attributable to non-controlling interests of $0.8 million represents DCP’s minority interest on our
net earnings related to our China operations, with higher revenue offset by investments in on-the-ground capabilities,
brand awareness and social marketing in the region.
102
101
Depreciation
Depreciation expense of $12.6 million was $1.8 million lower than Q4 2023 reflecting the timing of
depreciation and the useful lives of assets.
Amortization
Amortization expense of $5.9 million was relatively consistent with YTD 2023.
EBITDA and Adjusted EBITDA
EBITDA increased by $9.7 million to $123.3 million in YTD 2024, mainly due to higher gross profits,
partially offset by higher SG&A costs.
Adjusted EBITDA increased by $2.9 million to $141.0 million, driven by higher gross profit, partially offset
by higher SG&A costs. Adjusted EBITDA margin decreased by 120 basis points to 19.2% in YTD 2024, an anticipated
decline which reflects our investments to drive brand awareness and growth in China and the U.S.
Adjusted EBITDA in the Jamieson Brands segment increased by $8.7 million to $130.5 million driven by
higher gross profit, partially offset by higher SG&A. Adjusted EBITDA margin decreased by 130 basis points to
20.8% due to higher SG&A as a percentage of revenue as noted above.
Adjusted EBITDA in the Strategic Partners segment decreased by $5.7 million, to $10.5 million while
Adjusted EBITDA margin decreased by 300 basis points to 10.0% due to lower gross profit margin noted above.
Summary of Consolidated Quarterly Results
The following is a summary of selected consolidated financial information for each of the eight most recently
completed quarters prepared in accordance with IFRS.
Revenue
Jamieson Brands segment revenue for the last eight quarters were impacted by factors including the following:
•
periodic price increases to recapture cost escalation;
•
the impact of innovation within our core VMS portfolio;
•
shipment fluctuations in our international markets;
•
the volume and timing of promotion and media;
•
the volume of inventory and timing of shipments to distributors and retailers;
•
seasonality;
•
the impact of channel mix;
2024
2023
($ in 000's, except per share amounts)
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Revenue by segment
Jamieson Brands
202,621
154,988
155,787
115,348
181,007
129,138
132,916
108,110
Strategic Partners
42,160
21,167
29,019
12,690
39,358
22,367
34,661
28,615
Total revenue
244,781
176,155
184,806
128,038
220,365
151,505
167,577
136,725
Earnings from operations
61,582
23,801
19,417
1,478
43,056
18,957
18,609
14,628
Net earnings (loss)
36,121
10,418
8,313
(3,719)
24,000
7,771
7,204
7,065
Adjusted net earnings
34,641
15,834
14,654
3,915
28,615
14,991
13,670
8,808
EBITDA
63,890
27,934
24,358
7,149
46,516
25,512
22,277
19,306
Adjusted EBITDA
59,437
33,914
31,555
16,097
50,628
31,871
31,056
24,508
Basic, earnings (loss) per share
0.86
0.25
0.20
(0.09)
0.57
0.18
0.17
0.17
Diluted, earnings (loss) per share
0.84
0.24
0.20
(0.09)
0.56
0.18
0.17
0.17
Adjusted diluted, earnings per share
0.80
0.37
0.35
0.09
0.67
0.35
0.32
0.21
•
severity and timing of shipments of cold and flu season;
•
business combinations;
•
labour disruption impacting sales in the first quarter of 2024;
•
foreign currency fluctuations; and
•
impact of global conflicts in Eastern Europe and the Middle Eastern regions.
Strategic Partners segment revenue for the last eight quarters were impacted by factors including the following:
•
available capacity when considering demand for Jamieson Brands products;
•
launch of new programs with existing or new customers, which include initial pipeline shipments;
•
the strategic exiting of programs with customers to drive operating efficiencies;
•
availability of customer supplied materials;
•
innovation and geographic demand for high quality certified manufacturers;
•
labour disruption impacting sales;
•
periodic price increases to recapture cost escalation; and
•
foreign currency fluctuations.
Earnings from operations
Earnings from operations for the last eight quarters were also impacted by factors including the following:
•
revenue factors impacting price and volume noted above;
•
return on incremental promotion and marketing programs;
•
improvements in production efficiencies and higher economies of scale;
•
increases to supply chain costs due to global geopolitical factors;
•
raw material costs in native currency;
•
timing of marketing spend and variable compensation;
•
IT systems implementation costs;
•
costs incurred in business acquisitions, integration and divestitures;
•
labour disruption impacting plant utilization;
•
revaluation of contingent consideration from the acquisition of youtheory; and
•
foreign currency fluctuations.
104
103
Selected Annual Information
The following selected annual information is shown for the three most recently completed financial years:
Over the three-year period, revenue increased year-over-year driven by strong growth in the Jamieson Brands
segment through an expanded consumer base and international expansion in addition to revenues from acquired
operations in 2022 and 2023.
Total assets have increased over the three-year period reflecting acquired assets in 2022 and 2023, as well as
investments in working capital, property, plant, and equipment designed to improve efficiency and expand capacity.
Liquidity and Capital Resources
Overview
Our principal uses of funds are for operating expenses, capital expenditures, finance costs, and debt service.
Management believes that cash generated from operations, together with amounts available under our Credit Facilities
(refer to “Credit Facilities”), will be sufficient to meet our future operating expenses, capital expenditures, and future
debt service costs.
Our primary liquidity and capital requirements are for capital expenditures, working capital and general
corporate needs. We have cash and availability under our Credit Facilities that we expect to utilize, along with cash
flow from operations, to provide capital to support the growth of our business (primarily through working capital and
capital expenditures), repay short-term obligations and for general corporate purposes. We believe that cash from
operations, together with our cash balance and our Credit Facilities will be sufficient to meet ongoing capital
expenditures, working capital requirements and other cash needs.
For the year ended
December 31
($ in 000's, except share and per share amounts)
2024
2023
2022
Revenue by segment
Jamieson Brands
628,744
551,171
439,147
Strategic Partners
105,036
125,001
108,222
Total revenue
733,780
676,172
547,369
Earnings from operations
106,278
95,250
83,189
Net earnings
51,133
46,040
52,808
Adjusted net earnings
69,044
66,084
65,149
EBITDA
123,331
113,611
100,168
Adjusted EBITDA
141,003
138,063
123,761
Basic, earnings per share
1.23
1.10
1.29
Diluted, earnings per share
1.19
1.08
1.25
Adjusted diluted, earnings per share
1.61
1.55
1.55
Selected consolidated financial position data:
Total assets
1,208,793
1,143,574
1,107,263
Total non-current liabilities
487,732
517,050
520,867
Dividends declared for the year:
Cash dividends per common share
0.80
0.72
0.64
Our ability to fund future debt service costs, operating expenses, and capital expenditures will depend on our
future operating performance which will be affected by general economic, financial and other factors including factors
beyond our control (refer to “Risk Factors”). From time to time, management reviews acquisition opportunities and if
suitable opportunities arise, may make selected acquisitions to implement our business strategy. Historically, the
funding for any such acquisitions has come from cash flow from operating activities and additional debt.
Credit Facilities
As at December 31, 2024, we had $236.5 million in cash and available revolving and swingline facilities and
net debt of $263.5 million.
(1)
This is a non-IFRS financial measure. See “Non-IFRS and Other Financial Measures” for more information
on each non-IFRS financial measure. See “How we Assess the Performance of our Business” for an
explanation of the composition of such measure.
On July 19, 2022, Jamieson Laboratories Ltd. (“JLL”) amended and restated its credit agreement to add
Nutrawise Health & Beauty LLC as a Borrower and to provide a secured revolving facility of $500.0 million, plus an
expanded accordion feature of up to $250.0 million (collectively, the “Credit Facilities”), with an extended maturity
to July 19, 2027.
The Credit Facilities are collateralized by security agreements and first charges over the assets including
property, plant and equipment and intellectual property of the Borrowers and certain other subsidiaries of JLL, subject
to permitted liens. Under the terms of the Credit Facilities, the Borrowers are subject to restrictive covenants and must
maintain an interest coverage ratio of not less than 3.00:1.00 and a leverage ratio not greater than 4.50:1.00. We are
in compliance with all covenants as at the date of this MD&A.
For the three and twelve months ended December 31, 2024, JLL made drawings of $23.7 million and $102.4
million, and debt repayments of $50.4 million and $119.1 million, respectively, applied against the Credit Facilities.
For the twelve months ended December 31, 2024, the weighted average interest rate on the Credit Facilities was 5.7%
(2023 – 6.1%). A portion of the Credit Facilities outstanding is fixed through an interest rate swap.
($ in 000's)
As at December 31,
As at December 31,
2024
2023
Long-term debt
308,285
325,000
Cash
(44,787)
(36,863)
Net debt (1)
263,498
288,137
106
105
Analysis of Cash Flows — three months ended December 31, 2024 and 2023
(1)
This is a non-IFRS financial measure. See “Non-IFRS and Other Financial Measures” for more information
on each non-IFRS financial measure. See “How we Assess the Performance of our Business” for an
explanation of the composition of such measure.
Cash Flows Generated from Operating Activities
In Q4 2024, cash flows generated from operating activities totalled $37.8 million compared with $26.1
million in Q4 2023. Cash flows generated in operating activities before working capital considerations of $41.3 million
was $20.9 million higher, mainly driven by higher net earnings. Investments in working capital increased by $9.2
million due to higher accounts receivable due to the timing of customer collections.
Cash Flows Used in Investing Activities
Cash flows used in investing activities in Q4 2024 totalled $4.5 million compared with $2.5 million used in
Q4 2023. Purchases of property, plant and equipment were $1.0 million higher compared with Q4 2023 as we resumed
our focus on capital projects following the labour disruption earlier in 2024. Intangible assets were $1.0 million higher
in Q4 2024 compared with Q4 2023 due to timing of acquisitions in the current year.
Cash Flows Used in Financing Activities
Cash flows used in financing activities in Q4 2024 totalled $32.1 million compared with $9.9 million used
in Q4 2023. In Q4 2024, we distributed $9.0 million of dividends to common shareholders and paid lease liabilities of
$1.3 million, with net repayments of $26.7 million on our Credit Facilities, and had proceeds of $4.9 million from the
exercise of stock options and our ESPP. In Q4 2023, we repurchased shares under the normal course issuer bid
(“NCIB”) for $29.0 million, distributed $8.0 million of dividends to common shareholders, and we made payments of
$1.1 million on our lease liabilities, partially offset by net proceeds of $24.0 million on our Credit Facilities and
proceeds of $4.7 million from the exercise of stock options and our ESPP.
Three months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Cash, beginning of period
42,190
23,260
18,930
81.4%
Cash flows from (used in):
Operating activities
37,786
26,081
11,705
44.9%
Investing activities
(4,519)
(2,549)
(1,970)
(77.3%)
Financing activities
(32,119)
(9,929)
(22,190)
(223.5%)
Effect of foreign currency translation on cash
1,449
-
1,449
100.0%
Cash, end of period
44,787
36,863
7,924
21.5%
Net change in non-cash working capital
14,695
(5,713)
20,408
357.2%
Less: Receivables on gain from acquisition related working capital adjustment
(11,220)
-
(11,220)
(100.0%)
Investments in working capital
1
3,475
(5,713)
9,188
160.8%
Cash flows from operating activities
37,786
26,081
11,705
44.9%
Cash from operating activities before working capital
1
41,261
20,368
20,893
102.6%
Analysis of Cash Flows — twelve months ended December 31, 2024 and 2023
(1)
This is a non-IFRS financial measure. See “Non-IFRS and Other Financial Measures” for more information
on each non-IFRS financial measure. See “How we Assess the Performance of our Business” for an
explanation of the composition of such measure.
Cash Flows Generated from Operating Activities
In YTD 2024, cash flows generated by operating activities totalled $61.6 million compared with $31.7
million generated in YTD 2023. Cash flows generated from operating activities before working capital considerations
of $81.5 million was $17.7 million higher, mainly driven by higher earnings. Investments in working capital decreased
by $12.2 million mainly due to the timing of inventory purchases, partially offset by timing of accounts receivable.
Cash Flows Used in Investing Activities
Cash flows used in investing activities in YTD 2024 totalled $10.2 million compared with $35.1 million used
in YTD 2023, mainly driven by the acquisition of the operating assets from our former distribution partner in China
for $25.8 million in YTD 2023. Purchases of property, plant and equipment were $0.3 million higher and intangible
assets were $0.5 million higher compared with YTD 2023.
Cash Flows Used in/Generated from Financing Activities
Cash flows used in financing activities in YTD 2024 totalled $45.4 million compared with $14.0 million
generated in YTD 2023. In YTD 2024, we distributed $33.5 million of dividends to common shareholders,
repurchased $1.0 million of common shares and made payments of $5.6 million on our lease liabilities and net
repayments of $16.7 million on our Credit Facilities, partially offset by proceeds of $11.2 million from the exercise
of stock options and our employee share purchase plan. YTD 2023 was impacted by the issuance of redeemable
preferred shares and warrants of $84.6 million and $14.7 million, respectively, net proceeds from DCP for their
minority interest in the Jamieson-DCP Partnership of $44.4 million and proceeds of $9.1 million from the exercise of
stock options and our ESPP. These were partially offset by net repayments of $75.0 million on our Credit Facilities,
$30.3 million of dividends to common shareholders, $29.0 million repurchase of common shares, and payments of
lease liabilities of $4.5 million.
Twelve months ended
December 31
($ in 000's, except as otherwise noted)
2024
2023
$ Change
% Change
Cash, beginning of period
36,863
26,240
10,623
40.5%
Cash flows from (used in):
Operating activities
61,578
31,713
29,865
94.2%
Investing activities
(10,164)
(35,131)
24,967
71.1%
Financing activities
(45,434)
14,041
(59,475)
(423.6%)
Effect of foreign currency translation on cash
1,944
-
1,944
100.0%
Cash, end of period
44,787
36,863
7,924
21.5%
Net change in non-cash working capital
31,169
32,126
(957)
(3.0%)
Less: Receivables on gain from acquisition related working capital adjustment
(11,220)
-
(11,220)
(100.0%)
Investments in working capital
1
19,949
32,126
(12,177)
(37.9%)
Cash flows from operating activities
61,578
31,713
29,865
94.2%
Cash from operating activities before working capital
1
81,527
63,839
17,688
27.7%
108
107
Contractual Obligations
The following table summarizes our significant undiscounted maturities of our contractual obligations and
commitments as at December 31, 2024.
1)
We have entered into several operating leases for vehicles, production equipment, computer and
communications equipment, office equipment, and office and warehouse space.
(2)
The Credit Facilities provide for a secured revolving facility of $500.0 million, with the option to increase
the revolving facility by $250.0 million. The Credit Facilities mature on July 19, 2027 with the outstanding principal
repayable in full on this date.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future
material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures,
or capital resources.
Related Party Transactions
Balances and transactions between us and our subsidiaries, have been eliminated on consolidation.
As at December 31, 2024, we have a contingent consideration fair valued at $22.8 million (2023 - $22.6
million) payable to the former owners of youtheory.
On November 12, 2024, we entered into a three-year consulting agreement with Dr. Louis Aronne, a member
of our board of directors, for the development and formulation of natural health products to support consumers while
using GLP-1 drugs. The consulting agreement is not significant to our financial position or financial results and was
entered into in the normal course of business. For the year ended December 31, 2024, $nil was recognized in consulting
fees to Dr. Aronne. Refer to Note 12 of our audited consolidated annual financial statements for the year ended
December 31, 2024.
Share-based compensation
The LTIP is an equity-based compensation plan providing for the issuance of securities under which grants
will be made. Under the LTIP, our board of directors, at its discretion, may grant share options, restricted shares,
RSUs, PSUs, DSUs, and stock appreciation rights. The awards are settled in common shares of the Company
(“Common Shares”) with a cash settlement alternative available to us. We also maintain the ESPP for all eligible
employees for the purchase of Common Shares.
($ in 000's)
2025
2026-2029
Thereafter
Total
Operating leases
(1)
5,487
$
14,814
$
1,899
$
22,200
$
Trade and other payable
137,653
-
-
137,653
Contingent consideration
22,831
-
-
22,831
Post retirement benefits
-
1,209
-
1,209
Revolving credit facility
(2)
-
308,285
-
308,285
Total contractual obligations
165,971
$
324,308
$
1,899
$
492,178
$
Our share-based compensation expense, for the three and twelve months ended December 31, 2024 is $2.0
million and $7.3 million, respectively (2023 - $1.5 million and $5.9 million).
Financial Instruments
We primarily use foreign currency forward contracts to manage our exposure to fluctuations with respect to
transactions in U.S. dollars and RMB pertaining to inventory purchases and our international sales. These agreements
mature at various dates and qualify for hedge accounting as cash flow hedges of future foreign currency transactions.
The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast
transactions. As a result, there is no hedge ineffectiveness to be recognized in the consolidated statements of operations
and comprehensive income. As at December 31, 2024, $12.1 million (December 31, 2023 - $nil) of anticipated foreign
currency denominated purchases have been hedged and $42.9 million (December 31, 2023 - $9.7 million) of
anticipated foreign currency denominated sales have been hedged with underlying foreign exchange forward contracts.
We also use interest rate swaps to manage our long-term interest rate exposure with respect to interest on our
Credit Facilities which is based on fluctuating Canadian Overnight Repo Rate Average (“CORRA”).
On January 19, 2024, we entered into an interest rate swap with an effective date of February 1, 2024 to
December 30, 2025 with a notional principal of $150.0 million which increased to $250.0 million on October 1, 2024
and reduced to $225.0 million on December 31, 2024. The notional principal of the interest rate swap is $225.0 million
as at the end of this reporting period. The interest rate swap is a derivative measured at fair value and meets hedge
accounting requirements.
In Q2 2024, we transitioned our credit agreement benchmark from the Canadian Dollar Offered Rate
(“CDOR”) to CORRA. This change reflects the market wide cessation of the publication of CDOR. CORRA now
serves as the reference rate for our financing arrangements. This adjustment ensures compliance with Canadian
regulatory requirements.
Outstanding Share Capital
As at December 31, 2024 and 2023, the authorized share capital of the Company consisted of:
a) Unlimited number of Common Shares. The holders of Common Shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share at meetings of the Company; and
b) Unlimited number of Preference Shares, issuable in series.
Normal Course Issuer Bid
On November 3, 2023, the Toronto Stock Exchange (“TSX”) accepted our notice of intention to make a
#
$
As at January 1, 2024
41,551,485
312,593
Exercise of stock options
530,011
13,091
Employee stock purchase plan
19,541
535
Repurchase of shares
(150,200)
-
As at December 31, 2024
41,950,837
326,219
#
$
As at January 1, 2023
41,694,203
307,200
Exercise of stock options
684,901
12,301
Employee stock purchase plan
22,181
591
Repurchase of shares
(849,800)
(7,499)
As at December 31, 2023
41,551,485
312,593
Common Shares
Common Shares
110
109
normal course issuer bid (“NCIB”). The NCIB permitted us to repurchase for cancellation, at our discretion, up to
4,165,201 common shares of the Company (“Common Shares”) in accordance with the NCIB procedures of the TSX.
Under the NCIB, we were entitled to repurchase up to 25,729 Common Shares through the TSX during each trading
day (excluding any purchases made pursuant to the block purchase exception in accordance with TSX rules).
The NCIB commenced on November 7, 2023 and remained in effect until November 6, 2024. Purchases
under the NCIB were made by means of open market transactions through the facilities of the TSX and through
alternative trading systems in Canada. The price paid by us for any such repurchased Common Shares was the market
price at the time of acquisition or such other price as a securities regulatory authority may permit. All Common Shares
repurchased under the NCIB were cancelled.
In connection with the NCIB, we also entered into an automatic share purchase plan (“ASPP”) with a
designated broker, to allow for purchases of our Common Shares during certain pre-determined black-out periods,
subject to certain parameters. The ASPP constitutes an “automatic securities purchase plan” under applicable
Canadian securities laws, was approved by the TSX and implemented effective December 14, 2023.
As at December 31, 2023, we accrued for cancellation 150,200 Common Shares under our ASPP program.
These Common Shares were settled during the three month ended March 31, 2024.
On January 30, 2025, TSX accepted our notice of intention to renew the NCIB (the “Renewed NCIB”). The
Renewed NCIB permits us to repurchase for cancellation, at its discretion, up to 3,502,925 Common Shares in
accordance with the NCIB procedures of the TSX. Under the Renewed NCIB, we are entitled to repurchase up to
11,744 Common Shares through the TSX during each trading day (excluding any purchases made pursuant to the
block purchase exception in accordance with TSX rules).
The Renewed NCIB commenced on February 3, 2025 and remains in effect until the earlier of February 2,
2026 and the date on which we have either acquired the maximum number of Common Shares permitted under the
NCIB or otherwise decided not to make any further repurchases. In connection with the Renewed NCIB, we entered
into another ASPP with a designated broker to allow for purchases of our Common Shares during certain pre-
determined black-out periods, subject to certain parameters.
We believe that, from time to time, the market price for the Common Shares may not reflect our strong
financial performance and growth prospects, and that in such circumstances, using the NCIB to repurchase Common
Shares is an attractive investment opportunity and a prudent way to return capital to our shareholders.
Preferred Shares
In conjunction with DCP’s $47.1 million investment in our China Operations on May 16, 2023, DCP also
completed its subscription for 2,527,121 Series A Preference Shares and 2,527,121 warrants to purchase common
shares for proceeds of $101.6 million (USD $75.0 million). The Preferred Shares carry a nominal annual dividend of
$0.01 per share and are redeemable at $101.6 million by DCP between May 15, 2025 and May 15, 2028, representing
the second and fifth anniversary from the completion of the agreement.
At closing, we estimated the fair value of the Preferred Shares by estimating the credit spread of our company
at the inception date. The Preferred Shares accrete at approximately 9.6% for two years to its redeemable value of
$101.6 million at May 15, 2025. The preferred shares accretion expense is $2.2 million and $8.7 million, respectively,
for the three and twelve months ended December 31, 2024 (2023 - $4,833).
2024
2023
$
$
Balance, beginning of the year
89,409
-
Issuance of preferred shares
-
86,603
Transaction costs
-
(2,027)
Accretion expense
8,729
4,833
Balance, end of the year
98,138
89,409
Warrants
The 2,527,121 Warrants are exercisable by DCP beginning May 15, 2025 and expire on May 15, 2028. The
exercise price of the Warrants is $40.19 per share representing a 10% premium to the 20-day volume weighted average
common share price as of the signing of the subscription agreement on February 23, 2023.
At closing, the Warrants were fair valued at $15.0 million, less transaction costs of $0.3 million. The Warrants
are classified as equity in the consolidated statements of financial position.
The fair value of the Warrants was estimated using a Binomial tree model at the inception date. Key
assumptions include the risk-free interest rate of 3.5%, volatility of 30.0%, and the expected dividend yield of 2.4%.
Significant Accounting Judgements, Estimates, and Assumptions
The preparation of consolidated financial statements in accordance with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, revenue and expenses. Estimates and assumptions are continuously evaluated and are based on
management’s best judgments and experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in
which the estimates are revised and in any future periods affected. Actual results may differ from these estimates.
Significant judgments made by management in applying our accounting policies and key sources of
estimation of uncertainty were the same as those applied and described in Note 3 in the accompanying notes of our
Company’s audited consolidated annual financial statements for the year ended December 31, 2024. Items subject to
significant estimate uncertainty and critical judgments which have the most impact on the amounts recognized in the
audited consolidated annual financial statements are included both below and in the annual audited financial statement
notes.
Control of China Operations
The Jamieson-DCP Partnership (refer to “Chinese Operations Strategic Partnership”) is governed by a board
consisting of six members, including four from us and two from DCP, with certain reserved matters requiring a vote
of two-thirds of the directors present at the board meeting, including at least one DCP director. Management’s
judgment is involved when determining whether these reserved matters affect our current ability to direct the relevant
activities and whether we have the ability to use our power over this strategic partnership to affect the amount of our
returns. We have determined that we control the China Operations based on all facts and circumstances assessed
during the period. Therefore, the Jamieson-DCP Partnership is consolidated into our audited consolidated annual
financial statements. DCP’s 33% minority interest in the Jamieson-DCP Partnership is recorded as a non-controlling
interest.
Estimating variable consideration for returns, trade merchandise allowances and sales promotional incentives
We use historical customer return data to determine the expected return percentages. These percentages are
applied to determine the expected value of the variable consideration. Any significant changes in experience as
compared to historical return pattern will impact the expected return percentages we estimated.
We provide for estimated payments to customers based on various trade programs and sales promotional
incentives. We estimate the most likely amount payable to each customer for each trade and incentive program
separately using: (i) the projected level of sales volume for the relevant period; (ii) customer rates for allowances,
discounts, and rebates; (iii) historical spending patterns; and (iv) sales lead time. These arrangements are complex and
there are a significant number of customers and products affected. Management has systems and processes in place to
estimate and value these obligations.
We update our expected return, trade merchandise allowances and sales promotional incentives on a quarterly
basis and the refund liability and trade and promotional accruals are adjusted accordingly. To the extent that payments
112
111
differ from estimates of the related liability, accounts payable and accrued liabilities, net earnings, and comprehensive
income will be affected in future periods.
Valuation of inventory
Management makes estimates of the future customer demand for products when establishing appropriate
provisions for inventory. In making these estimates, management considers the product life of inventory and the
profitability of recent sales of inventory. In many cases, products sold by us turn quickly and inventory on-hand values
are low, thus reducing the risk of inventory obsolescence. However, code or “best before” dates are very important in
the determination of realizable value of inventory. Management ensures that systems are in place to highlight and
properly value inventory that may be approaching code dates. To the extent that actual losses on inventory differ from
those estimated, inventory, net earnings, and comprehensive income will be affected in future periods.
Long-lived assets valuation
We perform impairment testing annually for goodwill and indefinite-life intangible assets and when
circumstances indicate long-lived assets may be impaired. Management judgment is involved in determining if there
are circumstances indicating that testing for impairment is required, and in identifying cash-generating units (“CGUs”)
for the purpose of impairment testing. We assess impairment by comparing the recoverable amount of a long-lived
asset, CGU, or CGU group to its carrying value. The recoverable amount is defined as the higher of: (i) value in use;
or (ii) fair value less costs of disposal.
The determination of the recoverable amount involves significant estimates and assumptions. Fair value less
costs to sell is determined using market multiples. Value in use is determined using future cash inflows and outflows,
discount rates, growth rates and asset lives. These estimates and assumptions could affect our future results if the
current estimates of future performance and fair values change. These determinations will affect the amount of
amortization expense on definite-life intangible assets recognized in future periods.
Measurement of fair values
A number of our accounting policies and disclosures require the measurement of fair values, for both financial
and non-financial assets and liabilities. When the measurement of fair values cannot be determined based on quoted
prices in active markets, fair value is measured using valuation techniques and models. The inputs to these models are
taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in
establishing fair values. Changes in assumptions about the inputs to these models could affect the reported fair value
of our financial and non-financial assets and liabilities.
Tangible and intangible assets acquired through business combinations are initially recorded at their fair
values based on assumptions of management. These assumptions include estimating the cost of tangible assets and
future expected cash flows arising from intangible assets identified. Financial instruments acquired are determined
based on the amortized costs at the acquisition date that approximate their carrying values.
To the extent that these estimates differ from those realized, the measured asset or liability, net earnings,
and/or comprehensive income will be affected in future periods. Information about the valuation techniques and inputs
used in determining the fair value of various assets and liabilities are disclosed in Notes 4, 5, 9, 10, 17, 19, 20 and 23
in the accompanying notes of our audited consolidated annual financial statements for the year ended December 31,
2024.
Useful lives of property, plant and equipment and intangible assets with finite useful lives
We employ significant estimates to determine the estimated useful lives of property, plant and equipment
and intangible assets with finite useful lives, including assets arising from business combinations, considering industry
trends such as technological advancements, past experience, expected use and review of asset lives.
Components of an item of property, plant and equipment may have different useful lives. We make estimates
when determining depreciation methods, depreciation rates and asset useful lives, which requires taking into account
industry trends and company-specific factors. We review these decisions at least once each year or when circumstances
change. We will change depreciation methods, depreciation rates or asset useful lives if they are different from
previous estimates.
Summary of Material Accounting Policies
Our audited consolidated annual financial statements were prepared using the same accounting policies as
described in Note 2 in the accompanying notes of our audited consolidated annual financial statements for the year
ended December 31, 2024.
Recently adopted accounting standards
Amendments to IAS 1, Presentation of Financial Statements - Classification of Liabilities as Current or Non-Current
and Non-Current Liabilities with Covenants
Effective January 1, 2023, we adopted the amendments to IAS 1, issued in January 2020, which clarify the
requirements for classifying liabilities as current or non-current. The amendments clarify the classification of liabilities
as current or non-current based on rights that are in existence at the end of the reporting period and unaffected by
expectations about whether an entity will exercise its right to defer settlement of a liability. The amendments also
clarify the definition of "settlement" of a liability. On October 31, 2022, the IASB issued Non-Current Liabilities with
Covenants (further amendments to IAS 1). These amendments specify that covenants to be complied with after the
reporting date do not affect the classification of debt as current or non-current as of the reporting date. These
amendments are effective in the same period the entity adopts the January 2020 amendments which for the Company
is January 1, 2023.
The amendments had no material impact on the consolidated financial statements.
Disclosure Controls and Procedures
The Chief Executive Officer and the Chief Financial Officer (the “Certifying Officers”), along with other
members of management, have designed, or caused to be designed under their supervision, disclosure controls and
procedures (“DC&P”) to provide reasonable assurance that (i) material information relating to the Company is made
known to them by others, particularly during the period in which the annual filings are being prepared; and (ii)
information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or
submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation. The Certifying Officers have evaluated, or caused to be evaluated under their
supervision, the effectiveness of the Company’s DC&P as at December 31, 2024 and have concluded that the
Company's DC&P was effective as at December 31, 2024.
Internal Control over Financial Reporting
The Certifying Officers, along with other members of management, have designed, or caused to be designed
under their supervision, internal control over financial reporting (“ICFR”) to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes prepared in
accordance with IFRS. The Certifying Officers have used the Internal Control – Integrated Framework (2013 COSO
Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission to design our ICFR.
The Certifying Officers have evaluated, or caused to be evaluated under their supervision, the effectiveness of our
ICFR as at December 31, 2024 and have concluded that our ICFR was effective as at December 31, 2024.
There have been no changes in our ICFR during the three-month period ended December 31, 2024 which
have materially affected, or are reasonably likely to materially affect, our ICFR, subject to the scope limitation
described below.
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Limitations of an Internal Control System
We believe that any DC&P or ICFR, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met and that all control issues, including instances
of fraud, if any, within our company have been prevented or detected. Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their
costs. The design of any system of control is also based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all future
conditions.
Outlook
Following our 2024 investments in digital and traditional marketing, we realized strong growth in China and
within our youtheory brand. In both Jamieson and youtheory brands, globally we gained share as consumption growth
outpaced record shipment growth. In 2025, we are focused on brand contribution while driving operating efficiency
at the gross margin level. We will continue to grow our investments in the Jamieson and youtheory brands across
each of our primary geographies driving long-term brand equity, awareness, consumer consumption, and ultimately
share growth.
In fiscal 2025, we expect revenue to range between $800.0 to $840.0 million (9.0% to 14.5% growth). We
anticipate Adjusted EBITDA to range from $157.0 to $163.0 million (11.0% to 15.5% growth), while adjusted diluted
earnings per share to range from $1.82 to $1.93 (13.0% to 20.0% growth).
Jamieson Brands Segment:
Revenue in the Jamieson Brands segment is expected to increase between 9.0% and 14.5% to approximately
$685.0 to $720.0 million.
•
Jamieson Canada revenue growth of between 5.0% and 8.0%, reflecting the impact of our new marketing
campaigns driving consumption growth, the full year impact of in-market pricing and strong innovation
focussing on stress, sleep, digestive health, essential minerals and Gummies.
•
youtheory revenue growth of 5.0% and 15.0%, building on the momentum gained driving innovation and
expanded distribution with new FDM and club customers. Growth in 2025 is propelled by our expanded
digital marketing activities focusing on further improving conversion rates and innovation including
expanded mental wellness offerings and our recently launched GLP1 companion products, while driving
consumer brand awareness across all channels. Expected revenue growth will be impacted by our new e-
commerce partnership, whereby revenue will be net of certain marketing and distribution costs previously
reported on a separate line within the statement. In fiscal 2025, we are focused on expanding youtheory
profitability, faster than revenue growth, through more efficient brand spend and improved operating
efficiency while our new e-commerce program remains consistent with our traditional program profitability.
•
Building on our significant investment in fiscal 2024, where we significantly scaled our Chinese revenue
base, we expect Jamieson China revenue to grow an additional 25.0% to 35.0%. Growth will be driven by
market growth, innovation and by further extending our effectiveness and efficiency within digital programs
driving trial and awareness.
•
Jamieson International revenue growth of 20.0% to 30.0%, driven by growth through innovation and
distribution gains to strengthening our market position in key markets (Middle East and Eastern Europe etc.).
In 2025, we will continue to expand our global footprint through our strategic global partnerships and digital
commerce initiatives.
•
We expect Gross profit margin growth of between 50 and 150 basis points, driven by branded volume and
return focused promotional and operating investments driving margin efficiency. Profit margin growth will
be reinvested in our demand spend and infrastructure in order to support our global revenue growth
objectives.
Strategic Partners Segment:
In fiscal 2024, we made strong progress developing new Strategic Partner programs resulting in several
new customers commissioning programs in the fourth quarter with more coming throughout fiscal 2025. We
expected Strategic Partner growth of between 10.0% and 15.0% driven by new programs and industry growth
propelling higher volumes within our existing program portfolio.
Strategic Partner Adjusted AEBITDA margins are expected to decline by up to 100 basis points year-over-
year based on lower gross profit margins driven by customer mix.
Consolidated:
We expect to incur approximately $15.0 million in certain non-capital costs related to the enhancement of
our IT systems and other non-operating costs. These costs will impact net earnings while our expected Adjusted net
earnings and Adjusted diluted earnings per share for fiscal 2025 will reflect the adding back of these expenses on a
tax-effected basis.
Guidance reflects factors impacting our earnings and strategic investment choices in our Jamieson Brands
growth pillars noted above. The outlook for earnings growth and diluted earnings growth per share include the
following assumptions:
•
Gross Profit margins growth of between +100 and +200 basis points
•
Normalized SG&A including marketing expenses is expected to increase 15.0% to 20.0%
•
Share-based compensation costs of approximately $7.5 million
•
Adjusted EBITDA to range from $157.0 to $163.0 million
•
Adjusted EBITDA margin to range from 19.0% to 19.5%
•
Interest expense of approximately $19.0 million
•
Effective income tax rate of 27.5%
•
Foreign exchange rates of $1.44 $CAD/$USD and $5.19 $CAD/¥RMB
•
Adjusted diluted earnings per share to range from $1.82 to $1.93 (13% to 20% growth)
•
A fully diluted share count of approximately 43.5 million shares
•
Preferred shares remain in place or are converted to equity
•
$10.0 to $15.0 million of capital expenditures to support the maintenance of our operations and drive
efficiency, including capital to meet our sustainability goals
•
$25.0 to $35.0 million of working capital reflecting higher exchange rates, organizational growth, and
investment to maintain best-in-class customer fill rates
•
We expect to generate between $100.0 and $110.0 million (3.0% to 13.0% growth) in cash from operations
before working capital, IT systems enhancements and other certain non-operating costs
First Quarter 2025
Our guidance reflects shipment growth in Canada based on strong consumer consumption and in-market
pricing and lapping a customer inventory reduction in the fourth quarter of the prior year. Youtheory growth reflects
consumer consumption, new distribution, partially offset by new e-commerce business partnership and the timing of
initial shipments of innovation in the prior year. China growth continues to reflect investment to drive brand
awareness, market penetration and new e-commerce programs in traditional, social and emerging platforms.
International growth reflects innovation, market expansion and distribution gains.
In the first quarter of 2025, we expect revenue to range between $137.0 to $146.0 million (+7.0% to +14.0%):
•
Revenue in the Jamieson Brands segment is expected to increase by 7.0% to 13.0% to approximately $123.0
to $130.0 million.
•
Revenue in the Strategic Partners segment is expected to increase by 10.0% to 25.0% to approximately $14.0
to $16.0 million due to customers ordering patterns and initial shipment of new business awarded in the
fourth quarter of fiscal 2024.
•
We anticipate Adjusted EBITDA to range from $17.0 to $19.0 million.
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Our 2025 guidance does not consider any potential impact of tariffs imposed on trade between Canada and
the United States. As such, actual results may differ from those expressed or implied in this guidance due to unforeseen
changes in trade policies and economic conditions.
Current Share and Option Information
As of the date hereof, an aggregate of 41,954,472 Common Shares and 2,527,121 preferred shares are issued
and outstanding. As of the date hereof, the Company had 2,527,121 warrants, 2,173,390 options, 272,589 PSUs,
176,783 RSUs, and 75,170 DSUs outstanding.
Additional Information
Additional information relating to our Company, including our most recent annual report and annual
information form are available on SEDAR+ at www.sedarplus.ca and on the Investor Relations section of our website
at https://investors.jamiesonwellness.com.
Risk Factors
We are exposed to a variety of financial risks in the normal course of operations including credit risk, market
risk, liquidity risk, and emerging markets risk, each of which is discussed below. Management oversees the
management of these risks. Our financial instruments and policies for managing these risks are detailed below.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial
loss to us. We are exposed to credit risk from our customers (primarily related to trade accounts receivable) in the
normal course of business. We have adopted a policy of only dealing with creditworthy counterparties. To mitigate
this risk, we carry out regular credit evaluations and purchase credit insurance for international customers, where
appropriate, as a means of mitigating the risk of financial loss from defaults.
We are also exposed to counterparty credit risk inherent in our financing activities, trade receivable insurance,
foreign currency derivatives and interest rate derivatives. We have assessed these risks as minimal.
Market Risk
Market risk is comprised of foreign exchange risk, interest rate risk and commodity price risk.
Foreign Exchange Risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates
primarily from transactions in U.S. dollars such as a portion of trade accounts payable, trade accounts receivable and
cash. Our purchases of certain materials and inputs in U.S. dollars are partially offset by international sales in U.S.
dollars. We use foreign exchange forward contracts to manage foreign exchange transaction exposure.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Our accounts receivable and accounts payable are non-interest bearing.
Our exposure to the risk of changes in market interest rates arises from long-term debt obligations issued at fixed rates
that create fair value interest rate risk and variable rate borrowings that create cash flow interest rate risk. We manage
our interest rate risk by entering into interest rate swaps, in which we agree to exchange, at specified intervals, the
difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional
principal amount.
Commodity Price Risk
We are exposed to price risk related to purchases of certain commodities used as raw materials. We may use
fixed price contracts with suppliers to mitigate commodity price risk. Concentration in any one raw material is not
significant to us.
The most recent actions between the U.S. and Canada with respect to potential import tariffs, the threat of
associated retaliatory measures, and the possibility of a prolonged trade war may affect consumer behaviour and
require price adjustments to respond to increasing input costs, all of which may adversely affect our business. A trade
war could cause severe disruption to the Canadian and U.S. economies, impacting markets, gross-domestic product
growth, foreign exchange rates, inflation and employment rates and could trigger a broader economic slowdown
affecting consumer discretionary spending and purchasing behaviour, ultimately affecting demand. In addition, if
tariffs or other trade restrictions are imposed, we may face higher input costs which could reduce margins or require
product price adjustments that may also affect consumer demand. Management is actively assessing the potential
financial and operational implications and is exploring strategies to mitigate risks.
Liquidity Risk
Liquidity risk is the risk we will not be able to meet our financial obligations associated with financial
liabilities. We are exposed to this risk mainly in respect of our accounts payable and accrued liabilities, various
long-term debt agreements, obligations under our post-retirement benefits plan and lease liabilities.
We manage our liquidity risk through continuous monitoring of our forecast and actual cash flows and
through the management of our capital structure. We continually revise our available liquid resources as compared to
the timing of the payment of liabilities to manage our liquidity risk.
Emerging Markets Risk
Jamieson Shanghai is an operating subsidiary of ours located in China. Although China is considered to be a
relatively stable jurisdiction for business, it is possible that operating in China may expose us to a certain degree of
political, economic and other risks and uncertainties.
Our business, financial condition and financial performance may be influenced by the political, economic
and legal environments in China, and by the general state of the Chinese economy on an increasing basis over the next
several years. Our business operations in China are subject to oversight and regulation by various Chinese government
authorities, including the State Administration for Market Regulation, particularly with respect to advertising and
promotional activities. The regulatory landscape in China is dynamic, with new laws and regulations being adopted
periodically. Substantial uncertainties exist regarding the interpretation and enforcement of current and future Chinese
laws and regulations applicable to our operations. Changes in investment policies or shifts in political attitude in China
may also adversely affect our business, results of operations and financial condition. Operations may be affected in
varying degrees by government regulations with respect to, but not limited to price controls, income taxes, restrictions
on production, foreign investment, bank lending, intellectual property, export controls, and usage and costs of state-
controlled transportation services and nationalization or expropriation of property or business. Any events resulting
in an adverse impact on the Chinese economy may have an adverse effect on our profitability and prospects.
The Chinese legal system is a system based on written statutes and government regulations. They are
interpreted by the Supreme Peoples' Court and the state organ which has issued them. Since 1979, the Chinese
government has been developing a comprehensive system of laws dealing with economic matters such as foreign
investment, corporate organization and governance, commerce, taxation and trade. Because these laws and regulations
are relatively new and often lacking the details required to understand their practical impact in particular situations,
and because of the limited volume of published cases and their non-binding nature, the interpretation and enforcement
of these laws and regulations involve uncertainties. This may result in the outcome of dispute resolutions not being
consistent or predictable as compared to more developed jurisdictions.
REPORT DATED AT MARCH 31, 2025
833-223-2666
info@jamiesonwellness.com
1 Adelaide Street East
Suite 2200
Toronto, Ontario M5C 2V9
jamiesonwellness.com
CONTACT INFORMATION