Diamond Estates Wines & Spirits Reports Q2 2026 Financial Results

Niagara-on-the-Lake, Ontario–(Newsfile Corp. – November 20, 2025) – Diamond Estates Wines & Spirits Inc. (TSXV: DWS) (“Diamond Estates” or the “Company”) today announced its financial results of position for the six months ended September 30^th, 2025 (“Q2 2026”).

Q2 2026 Summary:

• Revenue for Q2 2026 was $8.5 million, an increase of $0.8 million from $7.7 million in Q2 2025. The Winery division experienced an increase in sales of $0.9 million driven by grocery and big-box stores as well as changes to the VQA support program. The organic growth of the winery division is lapping a very strong Q2 a year ago due to the LCBO strike and the expansion of the retail channel. The Agency division experienced a decrease of $0.1 million primarily driven by the sale of Western Canada agency operations to Renaissance which has been partly offset by the acquisition of Perigon Beverage Group.
• Gross margin¹ for Q2 2026 was $5.9 million, an increase of $1.7 million, from $4.2 million in Q2 2025. Gross margin as a percentage of revenue grew to 69.8% for Q2 2026 compared to 53.8% in Q2 2025. The change in gross margin came from the Winery division experiencing an increase of $1.7 million while the Agency division remained flat. The gross margin improvement in the Winery division was driven by the increase in sales volumes in the grocery and convenience channels as well as enhancements in the VQA and Wine Sector Support programs.
• Adjusted EBITDA¹ increased by $1.3 million to $1.8 million in Q2 2026 from $0.5 million in Q2 2025. The Adjusted EBITDA¹ increase is attributed to improving gross margins in the Winery division offset by an overall increase in SG&A expenses of $0.4 million compared to the prior year.
• EBITDA¹ decreased by $0.1 million to $0.9 million in Q2 2026 from $1.0 million in Q2 2025. The year-over-year variance between EBITDA and Adjusted EBITDA primarily reflects non-operational items in the prior year related to the gain on sale of the Western Canada agency to Renaissance and lower share-based compensation, as well as one-time costs in the current year associated with regulatory compliance initiatives and severance expenses.
• Net income decreased from $0.2 million in Q2 2025 to $Nil in Q2 2026, primarily due to the same non-operational and one-time items that impacted EBITDA

During Q2 2026, on July 22, 2025, the Company also issued an aggregate of 764,917 common shares at a price of $0.21 per share as part of the contingent consideration payable associated with the acquisition of Perigon Beverage Group (“Perigon”) based upon the achievement of gross margin targets.

Deferred share units

As previously announced, the Company issued an aggregate of 248,683 DSUS in October 2025, in settlement of $47,250 of previously accrued deferred directors compensation.

Stock option grant

As previously announced, the Company granted a total of 1,250,000 options in October 2025, at a strike price of $0.19 per stock option to an officer of the Company. Each stock option is exercisable for the purchase of one common share of the Company for up to five years from the date of issuance, at which time they expire. The stock options are being issued under the Company’s Stock Option Plan and vest at the rate of 25% on each anniversary of the issuance date.

Security-based compensation plan amendments

At the Annual General and Special Meeting of shareholders held on October 30, 2025, the shareholders approved certain amendments to the Company’s Stock Option Plan and DSU Plan, including the following notable changes:

• Converting both plans into “fixed up to 20%” plans as defined under Policy 4.4 of the TSXV. As a result, the maximum number of shares which may be issued under all of the Company’s security- based compensation arrangements shall now be a maximum of 13,376,703 common shares, or such additional amount as may be approved from time to time by the shareholders of the Company; and
• The DSU plan was amended to allow deferred share units reflecting each director’s quarterly retainer to be automatically credited on the last day of each fiscal quarter.

BMO SARCA amendments

On November 7, 2025, the Company agreed to the seventh amendment to its Second Amended and Restated Credit Agreement with Bank of Montreal that featured the following notable changes:

• maturity date extended to March 27, 2026;
• a temporary bulge in the revolving line of credit in the amount of $3,600,000 due no later than the maturity date; and
• an increase of the interest rate during the period of the temporary bulge to prime plus 2.65% from prime plus 2.40%.

Debentures payable

The Company has obtained a 60 day forbearance on most of the convertible debentures and related accrued coupon interest, otherwise due on November 9, 2025. Management expects the majority of the debenture holders to agree to a rollover under similar but updated terms, with the obligations to the remaining debenture holders in the range of $100,000 being settled in cash and/or shares.

President’s Message:

“Q2 marks another very strong quarter. The company’s performance reflects the success of our turnaround initiatives and investment decisions, with rapidly improving financial results that demonstrate real progress and momentum. The results are particularly encouraging given we are lapping a very strong Q2 a year ago where the LCBO strike and retail expansion contributed to 50% revenue growth. We see continued opportunity through our strengthened portfolio, our strategic investment in the retail sales team, broad growth in our Agency brands and our continued focus to deliver significant growth of our VQA products — which receive the highest levels of government support and deliver meaningful benefits to the local economy. Our industry is also benefitting from a strong ‘buy local’ movement, a trend we expect to persist over the long term,” said Andrew Howard, President and CEO.

Other Matters

The Company also announces that, pursuant to the engagement letter it entered into with 2RL Capital Inc. (“2RL Capital”) dated September 12, 2024 (the “Engagement Letter”), in connection with the Perigon acquisition and the ongoing services to be provided by 2RL Capital to the Company, the Company issued 270,270 common shares to the principals of 2RL Capital on June 20, 2025, at a deemed issuance price of $0.185 per common share. This disclosure should have been included in the Q1 press release or issued as a separate release.

About Diamond Estates Wines and Spirits Inc.

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

Through its commercial division, Trajectory Beverage Partners, the Company serves as the sales agent for a wide range of leading international beverage brands.
Wine Portfolio:
Trajectory represents several renowned wine brands, including Fat Bastard and Gabriel Meffre from France; Kaiken from Argentina; Kings of Prohibition from Australia; Yealands, Kono, Tohu, and Joiy Sparkling Wine from New Zealand; Talamonti and Cielo from Italy; Porta 6, Julia Florista, Boas Quintas, Catedral, and Cabeca de Toiro from Portugal; as well as C.K Mondavi & Family, Charles Krug, Line 39, Harken, FitVine, and Rabble from California.
Spirits Portfolio:
The Company also represents distinguished spirit brands such as Tag Vodka, Ginslinger Gin, and Barnburner Whisky from Ontario; Cofradia Tequila and Hussong’s Tequila from Mexico; Islay Mist and Waterproof blended Scotch whiskies from Scotland; Glen Breton Canadian whiskies from Nova Scotia; Five Farms Irish Cream Liqueur and Broker’s Gin from the UK; Tequila Rose Strawberry Cream, 360 Vodka, and Holladay Bourbon from the USA; Giffard Liqueurs from France; and Becherovka from the Czech Republic.
Beer, Cider, and RTD Portfolio:
In the beer, cider, and ready-to-drink (RTD) categories, Trajectory represents Bench Beer, Henderson Beer, Niagara Craft Cider, TAG and Ginslinger RTDs, and Darling Mimosas from Ontario; Rodenbach beer from Belgium; La Trappe beer from the Netherlands; and Warsteiner beer from Germany.

Forward-Looking Statements

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

Non IFRS Financial Measure

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

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

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

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

¹ See definition of selected terms under the heading “Non-IFRS Financial Measures”

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