Diamond Estates Wines & Spirits Reports Fiscal 2026 Financial Results

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

FY 2026 Summary: * Fiscal 2026 delivered another year of stronger results, driven by Winery growth in Ontario's expanded retail marketplace, ongoing VQA Wine Support, and consumers buying local amid North American trade tensions. * Revenue for FY 2026 was $29.9 million, an increase of $5.4 million from $24.5 million in FY 2025. The Winery division experienced an increase in sales of $5.9 million (+22%) while the Agency division experienced a decrease of $0.5 million driven by a reduction in low margin sales in Western Canada. * Gross margin(1) as a percentage of revenue was 60.1% for FY 2026 compared to 52.7% in FY 2025, and gross margin increased by $5.1 million from $12.9 million in FY 2025 to $18.0 million in FY 2026, driven primarily by the Winery division. * Adjusted EBITDA(1) increased by $3.0 million to $3.8 million in FY 2026 from $0.8 million in FY 2025, largely attributable to higher sales and improving gross margins in the Winery division, less the overall increase in SG&A expenses compared to the prior year. * EBITDA(1) increased by $1.3 million to $2.4 million in FY 2026 from $1.1 million in FY 2025. The improvement is attributable to the increase in gross margin, partially offset by higher SG&A expenses of $1.1 million and regulatory compliance costs of $0.4 million. * Net loss decreased from $2.5 million in FY 2025 to $1.3 million in FY 2026. * During FY 2026, the Company generated $1.8 million of cash from operating activities before changes in non-cash working capital, compared to an outflow of $1.1 million in FY 2025. After incorporating changes in working capital, cash generated from operating activities was $5.5 million in FY 2026 versus an outflow of $1.1 million in FY 2025. This strong cash generation allowed the Company to reduce its term loans by $4.6 million during the year, from $16.0 million to $11.4 million. Q4 2026 Summary: * Total revenue for Q4 2026 was $5.7 million, an increase of $1.6 million compared to Q4 2025, with $1.1 million of the increase attributable to the Winery division. Prior year Q4 revenue was reduced by approximately $1.0 million by accounting adjustments recorded in that quarter, principally an adjustment to the VQA rebate accrual and the change in presentation of the consignment channel; excluding these items, Q4 revenue increased by approximately $0.4 million year-over-year. * Gross margin(1) as a percentage of revenue was 57.0% for Q4 2026 compared to 53.1% in Q4 2025, reflecting continued margin improvement. After adjusting for the prior-year items noted above and the release of prior years' production overhead adjustment recorded in Q4 2025, the Q4 2025 gross margin percentage was approximately 52.3% on a basis comparable with Q4 2026. * Adjusted EBITDA(1) was approximately $0.1 million in Q4 2026 compared to break-even in Q4 2025. The prior year benefited from $0.4 million of net one-time items, principally the release of prior years' production overhead variances and credits to wages, advertising and promotion accruals, partially offset by the VQA rebate accrual adjustment. Excluding these items, Q4 Adjusted EBITDA improved by approximately $0.4 million year-over-year, reflecting higher sales at stronger margins with operating expenses essentially unchanged. * EBITDA(1) was a loss of $0.6 million in Q4 2026 compared to a loss of $0.2 million in Q4 2025. The year-over-year decline of $0.4 million reflects higher non-recurring charges recorded in the quarter, including the $0.4 million impairment provision on winery-division assets held for sale; these charges are added back in calculating Adjusted EBITDA(1), which improved year-over-year as described above. * Net loss for Q4 2026 was $1.5 million compared to $1.1 million in Q4 2025. The increase is primarily attributable to a further $0.4 million impairment provision on winery-division assets held for sale recorded in Q4 2026, together with the prior-year one-time items noted above; excluding these items, net loss improved by approximately $0.4 million year-over-year, consistent with the improvement in Adjusted EBITDA(1). Investor Relations Update: