Good morning. My name is Miranda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Andrew Peller Limited first quarter fiscal 2023 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question- and- answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number two. Thank you. I would now like to turn the call over to Mr. David Mills. Please go ahead.
Good morning, and thank you, Miranda. Before we begin, we remind you that during this conference call, we may make statements containing forward-looking information. This forward-looking information is based on a number of assumptions and is subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those disclosed or implied. We direct you to our earnings release, MD&A and other securities filings for additional information about these assumptions, risks and uncertainties. I'll now turn things over to John Peller, Chief Executive Officer.
Thanks, David, and good morning, everyone. It's nice to be with you. We had our board meeting on Monday and released our results yesterday, and we're looking forward to communicating with you today. I'd like to first welcome Paul Dubkowski. He's joining us on the call as our CFO today. Paul has been with us for about a month, and we're very excited to have him join our company, and we know he'll help build long-term value for our shareholders. Paul, welcome to your first investor call. I'd also like to thank Steve Attridge for his leadership over the past four years and his support of Paul through the transition period.
We're grateful that Steve is continuing on to lead our digital business and process transformation, and he remains involved in many other strategic initiatives. You would have seen in our notice that our sales were up 5.7% in our first quarter, and that makes two successive quarters in a row of business growth. I'd like to just recap, you know, because we're dealing with COVID impacted financial results. You know, as a company, I like to look at the COVID in the context of the three periods of a hockey game. You'll recall in the first period, which was 2020, we had an unexpected revenue boost. We ended up posting very strong financials that year, even though some of our trade channels were closed. Particularly our retail channel overproduced.
While our results were strong, it kind of hid the reality that our business was in considerable mayhem from the openings and closings and the new imposition of COVID health regulations. It was a very traumatic year for us. In our second period, which was 2021, you know, we start experiencing several openings and closings through waves three, four, and five. Again, it was a very difficult year to manage our supply chain and the change of our business mix through those transitions. In the second half of that year, we start to see the beginning of the supply chain disruption. On top of that, we had two very challenging harvests in 2021.
As if that wasn't bad enough, we ended up having the mudslides out in western Canada, which cut off all our transportation routes, both for incoming product to our winery and for our outgoing shipments of sales to western Canada. You know, 2021 was an unbelievably difficult year. Despite that, our sales declined only 5%. Though our earnings were down around 30%, mostly driven by that revenue decline. Here we are in the year of 2022, and everything is now back open. You know, we're expecting to see our revenue return to normal levels. In fact, that's what we're seeing in this first quarter.
You know, not only are our revenues returning to a normal level, but we're also seeing a more normalized distribution of revenue through our trade channels as we had previously known the business. Having said that, as our revenue recovers, we are experiencing two-year supply chain disruption and some very high cost inflation in the, you know, 25%-30%. We expect that to continue for the next 12 months to 18 months, though already a lot of these costs are coming down and we are being able to manage them. You know, even though our sales were up 5.7% in the first quarter, our sales would have been, I would say, significantly higher had we been able to source materials and packaging components to fill open orders.
Yes, we have had kind of open order issues, very, very small ones in the past. These were extraordinary, you know, our sales would have been up several percentage points higher than they were. We have been able to deal with a lot of these issues. These were issues in canceled glass deliveries, in canceled international bulk wine deliveries, and packaging materials. They were challenging, our team has responded very well to work around, expedite and help stabilize our supply chain for the balance of the year. We're pleased to see that our margins are stabilizing at this point. We have been able to put some price increases in place to help offset some of this cost inflation.
We feel that we're in a good position to manage the ongoing revenue growth and sufficiently control our costs going forward until we experience the recovery, which we hope will be, you know, likely starting early to middle the following year. I'd like some more comments, but I'm gonna turn it over to Paul at this point to comment on other financial issues. Paul?
Thanks, John. Let me start by saying how excited I am to have joined Andrew Peller Limited. I'm truly appreciative of the opportunity to help lead this organization. You know, since I've started, I'm really motivated by the passion and commitment I've seen of the entire Andrew Peller team. Turning to our results, we were very encouraged by our sales growth in the first quarter. Sales were CAD 97.7 million, up CAD 5.3 million or 5.7% from CAD 92.4 million in the same period last year, as consumers displayed an affinity for our brands, products and experiences. The increase was driven by a number of positive factors, including price increases implemented at the start of fiscal 2023 to help offset ongoing inflationary and supply chain pressures, as John mentioned.
Increased sales of our premium higher margin VQA products through our Ontario retail network at our estates and through our direct-to-consumer wine clubs. We've seen strong performance across our estate hospitality business as consumers exhibited a renewed desire to travel and spend on experiences while comping over Q1 last year when restaurants and hospitality channels were closed for a portion of the period, and both domestic and international travel was still very limited. As John mentioned, sales growth was hindered by supply chain issues related to the pandemic. We continue to closely manage timely delivery of wines from international producers and the sourcing of glass bottles and other imports from our suppliers. Fortunately, we believe these supply chain issues are relatively short-term in nature, and we are already seeing some improvements.
In terms of our margins, we're pleased to see margins stabilize in the quarter, landing at CAD 38.1 million, up CAD 0.8 million or 2.1% to the prior year. Margin as a percentage of sales decreased slightly to 39% in the quarter, compared to 40.3% in the prior year, due to the current inflationary cost pressures. 39% in the current quarter is up from both the recent third and fourth quarters as we continue to actively manage against these inflationary pressures. Consistent with the second half of fiscal 2022, we're still experiencing higher than normal costs of raw materials, particularly glass bottles and packaging, and international freight, shipping charges and fuel surcharges remained well above historical levels.
In response to these inflationary cost pressures, our price increases are helping, as is the increase in sales of our higher margin VQA products. In addition, we've been implementing a number of cost reduction programs during the quarter, including consolidating certain warehouses and distribution networks to enhance efficiency, rationalizing our SKUs, and looking at alternative sourcing for our glass bottles. We're also seeing real and continued benefit as we capitalize on the recently implemented company-wide ERP system to improve efficiency, utilization, production, scheduling, and logistics. Sales and admin expenses increased marginally in the quarter to CAD 26.1 million, up CAD 0.8 million or 2.9% compared to the prior year, as our estate winery and hospitality businesses were at full operations, in addition to the increase in Ontario's minimum wage.
As a percentage of sales, our sales and admin expenses improved to 26.7% in the quarter from 27.4% for the same period last year. EBITDA for the quarter was CAD 12 million, a slight increase from the prior year as increased sales and margin were partially offset by inflationary cost pressures, and net earnings were CAD 2.9 million or CAD 0.07 per Class A Share, decreased from CAD 3.3 million or CAD 0.08 per share last year. Turning to our balance sheet, total debt increased marginally to CAD 192.9 million at June 30th. At quarter end, we had capacity on our revolving credit facility of approximately CAD 157 million.
Shareholders' equity at June 30th was CAD 6.18 per Class A Share, and we generated a significant increase in cash from operations, rising to CAD 7.3 million in the quarter, up from CAD 2 million last year due to strong operational performance and the reduced impact of the pandemic on our operations. Thank you for your time, and I'll now pass it back to John.
Thank you, Paul. Just as a recap, I mean, I think for the remainder of the year, our goal is to deliver revenue in the range of 5% maybe to 6% growth for the year as our sales recover back to normal. Our EBIT looks like it will be slightly above last year, but it will take, you know, another 12 months for it to recover more completely. We do expect that to happen, you know, and it will likely be over, as I said, in 18-24 month time frame. You know, we're pleased with the new products and the market share performance of the company.
You know, our value priced wine portfolio has had a very strong year, both with the blended domestic wines and new imported wines that we have launched from Australia, Italy, and Chile, you know, and all packaged in our popular 4L box format where we're competitively very strong. Our VQA portfolio has performed very well. We've gained share against all competitors in the country in our premium VQA portfolio. We've launched four new Gretzky cream products. Our whole spirits portfolio has had a very, very strong year. In addition to some new cream liqueurs, we've launched the craft vodka under the Gretzky brand as well. We've kind of established a much stronger direct to consumer and e-commerce business platform in the last year, where we're leveraging people's visits to our estate wineries. We know that this is.
We've had incredibly strong performance across our estate winery portfolio so far this year. We're even more excited about the potential to increase our sales of ultra-premium wines going forward. As well, we've had a very solid performance in the refreshment category with our No Boats on Sunday cider and the launch of our Weekender product, which has been launched in Western Canada and the LCBO and in Eastern Canada and is performing very well. As Paul said, we are intensely focused on our cost reduction and containment this year, and then also making significant improvements to our supply chain going forward with the ERP investment that we've made. We're recognizing that our future is based on our capability of digitally transforming all aspects of our business.
It's a significant change to our company culture, and people are excited at the potential we have to leverage this to grow and strengthen our business as we go forward. Then lastly, I would just highlight that we have a very unique business model that we've evolved over the last 50, 60 years that combines some incredible brands and physical estate winery assets and big vineyards, and an operational capability and supply chain that we can participate in all segments of the beverage alcohol business. We know the business has great potential for growth going forward, and we're very excited about our future. With that operator, I'll turn things over to you for questioning.
Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and questions will be pulled in the order they are received. Should you wish to decline from the pulling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. As a reminder, if you have a question, please press star then the number one. Your first question will be coming from Nick Corcoran with Acumen Capital. Please go ahead.
Yeah, it's Nick Corcoran from Acumen Capital. Good morning, guys. Just a couple questions from me. You gave revenue guidance for fiscal 2023. Can you give any guidance on what gross or EBITDA margins for the year what do you expect them to be?
You know, I think, you know, Nick, generally what we were signaling is we finished last year at around CAD 39 million in EBITDA. Our goal is to improve on that number this year, but, you know, if there is a growth in that number, it will be small. Most of the costs that we're dealing with now are pretty much baked in. You can calculate that amount of EBITDA, by the way. It's around CAD 22 million-CAD 23 million of increased costs. As we get our revenue back to, you know, the 388-390 level, you know, our EBITDA was in the low 60s, was it? I believe in 2019. For that CAD 23 million to come back, it'll come back slowly over, you know, the next year, as I said, in the 18-24 months.
The good news is that we are seeing transportation costs starting to come down. Packaging costs and the bulk wine costs are also starting to come down a bit. We feel like that we're through the worst part of the storm. You know, that's how we feel it will play out for the rest of this year, continuing into next year, but starting to improve. We expect a full recovery.
That's good color. How should we think about CapEx for fiscal 2023?
We definitely as part of our, you know, cost containment and trying to be prudent this period, we will reduce, you know, CapEx in the high teen level for this year. We're holding off on some of the CapEx we wanted to make. You know, fortunately, we've been able to complete our ERP investment, and we're spending a lot of time building that system as we go forward. We're gonna keep up with CapEx in that kind of mid to high teen level until there's a full recovery in the performance of the business.
Have you reevaluated the NCIB and the short- and long-term here with your stock price where it's at?
Yeah. I think as part of our notice, we have reissued our NCIB so that we will be able as a company to purchase shares after this initial period of I think it's a week or so.
Great. Just the last question from me. Do you have any update on the Port Moody asset?
Our situation in Port Moody is it's a very active file these days. You know, we have the filing of our development permit. You know, at the request of the city manager and the planning department of Port Moody, they have asked for an extension of one year to complete the development permit process. They're a little overwhelmed at their staff level, but you know, we were 90% complete with them, and we will likely be finished the development permit process in the next month or two, which then means we would go back for a fourth bylaw reading, and we would be completed. In the interim, we're engaged with the development community and you know, talking to prospective partners and investors, and things, I think, are going well.
I think everyone in the development community knows that, you know, with the increased interest rates and the impending recession that at least in the short term, things will be a little cautious. In the medium to long term, the market conditions couldn't be more positive. They're very bullish. The value of the property and the project looks very positive going forward.
Great. That's all from me. Thank you.
Thanks, Nick.
There are no further questions at this time. Mr. Peller, please proceed.
Okay. Thank you, everybody, and feel free to call us anytime if you have any questions or just wanna catch up with us. I know our AGM is next up for September fifteenth, and we'll look forward to connecting with everybody then. Thank you very much, and thank you, Miranda, for your assistance today.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.