05:26 PM EDT, 10/17/2024 (MT Newswires) -- Colabor Group ( COLFF ) after trade Thursday reported lower net earnings for its fiscal third quarter on lower revenues, particularly from wholesale sales, and higher expenses.

The food-distribution company said earnings from continuing operations were $1.2 million or $0.01 per share, in the quarter ended Sept.7, down from a profit $3.5 million or $0.03, in the year-prior period. It said the drop came on increased financial expenses combined with a decreased adjusted EBITDA, but mitigated by lower income taxes expenses. It added the increase in financial charges reflects increased rental obligations, particularly for its premises located in Saint-Bruno-de-Montarville.

Sales from continuing operations decreased by 1.6% to $162.0 million, compared to $164.7 million. It said sales for the distribution activities increased by 1.5%, primarily as a result of a volume increase, part of which is related to the development of new territories, as well as the recent acquisition and the impact of inflation. But this growth was mitigated by a more difficult macroeconomic environment during the quarter directly affecting the restaurant and retail industries.

Among other highlights, Adjusted EBITDA decreased by 14.0% to $9.5 million from $11.0 million for the corresponding period of 2023 with an adjusted EBITDA margin to 5.9% of sales compared to 6.7% of sales during the corresponding period of 2023. Cash flow from operating activities increased to $9.9 million compared to $8.0 million for the third quarter of 2023. Net debt decreased to $50.7 million, compared to $61.5 million as at December 30, 2023.

"While the restaurant and retail industries are currently going through a more challenging period, we will continue to act on several fronts to continue to improve our productivity and operational efficiency. With our new distribution center in Saint-Bruno-de-Montarville, we are well positioned to distinguish ourselves in a competitive market. We will pursue a strategy of prudent allocation of our cash flows by prioritizing debt repayment, while remaining on the lookout for investment opportunities that will maximize shareholder returns," chief executive Louis Frenette, said.

Colabor ( COLFF ) shares closed unchanged at $1.32 on the Toronto Stock Exchange.