 Financial and Operational Highlights: Sales decreased 27.3 to 32.2 million 120.7 or 9.3 million increase in e-commerce and wholesale sales Adjusted operating loss1 of 4.4 million compared to loss of 1.7 million Net cash position of 39.3 million as at May 2, 2020 DAVIDsTEAs online business at and sales in grocery stores and pharmacies across Canada continues solid growth 18 stores across Canada expected to re-open before the end of August 2020MONTREAL, July 31, 2020 GLOBE NEWSWIRE -- DAVIDsTEA Inc. Nasdaq:DTEA DAVIDsTEA or the Company, a leading tea merchant in North America, announces its first quarter results for the period ended May 2, 2020. All dollar amounts are expressed in Canadian dollars.Our first quarter results reflect the closure of all our stores for about half of the quarter and the exceptional performance of our e-commerce and wholesale channels as our customers shifted their buying habits. Yesterday, we announced that our Canadian network will be comprised of 18 stores going forward for which we are finalizing terms and conditions with respective landlords. These stores will complement our focus on e-commerce and wholesale channels and position DAVIDsTEA as a leaner and more resilient company. We look forward to continuing to offer an unrivalled selection of health and wellness teas, and virtual access to our tea experts, as we transition our business to focus primarily on being an online retailer and wholesaler of high-quality tea, adapting to evolving consumer expectations, stated Herschel Segal, Founder, Chairman and Interim CEO of DAVIDsTEA.With first quarter sales growth of over 120 year-over-year, we are extremely pleased that our loyal tea-loving customers have shifted to buying our teas online, and in supermarkets and drugstores. The strong performance of these sales channels provided us with the confidence that we are on the right path for the future. We are moving forward with our business plan at an accelerated pace and our sales channels are now well balanced to fully leverage the DAVIDsTEA beloved brand across North America and return to profitability, said Frank Zitella, COO and CFO.Mr. Segal added: I sincerely regret the impact of closing stores and restructuring of our business will have on some of our exceptional and passionate employees. This has been an incredibly difficult decision to take, but a necessary one to ensure the long-term viability of DAVIDsTEA. I would like to sincerely thank our impacted employees for their contributions and for their passion for our brand through the years.Operating Results for the First Quarter of Fiscal 2020 Compared to the First Quarter of Fiscal 2019Sales. Sales for the three months ended May 2, 2020 decreased 27.3, or 12.1 million, to 32.2 million from 44.3 million in the prior year quarter. On March 17, 2020, we shuttered all of our stores resulting in a decline in retail sales and a migration to our online and wholesale channels. Sales from our e-commerce and wholesale channels increased 9.3 million or 120.7 to 17.0 million, resulting primarily from the closure of our stores along with naturally occurring organic growth in these channels. The decline in retail sales of 21.5 million resulted from the temporary closure of all of our stores during the period March 17, 2020 to May 2, 2020. In the quarter ended May 2, 2020, e-commerce and wholesale sales represented 52.9 of total sales as opposed to 17.5 in the prior year quarter. Gross Profit. Gross profit of 14.7 million for the three months ended May 2, 2020 decreased by 11.7 million or 44.3 from the prior year quarter due primarily to a decline in sales during the period. Gross profit as a percentage of sales declined to 45.6 for the three-month period ended May 2, 2020 from 59.5 in the prior year quarter. Gross profit was also impacted by the significant increase in e-commerce sales during the period ended May 2, 2020 and resulted in an increase of 2.1 million in delivery and distribution costs and the shift from loose-leaf tea sold in our retail stores to pre-packed tea assortment sold in our e-commerce and wholesale channels. Further impacting our margins in the quarter was an increase in inventory obsolescence of 0.6 million reflecting spring merchandise stranded in our closed retail stores.Selling, General and Administration Expenses. Selling, general and administration expenses SGA increased by 31.0 million or 110.6, to 59.0 million in the three months ended May 2, 2020 from the prior year quarter. Excluding the impact of the impairment of property, equipment and right-of-use assets for the three-month period ended May 2, 2020 which amounted to 40.0 million, Adjusted SGA decreased by 8.1 million for the three months ended May 2, 2020. This is explained by the temporary closure of our stores effective March 17, 2020 and the corresponding impact on wages, salaries and employee benefits amounting to 6.8 million and a 1.0 million reduction in amortization expense due to a lower right-of-use asset value at the beginning of the period. As a percentage of sales, Adjusted SGA decreased to 59.2 from 63.3 due to lower selling expenses resulting from the temporary closure of our stores effective March 17, 2020.Results from Operating Activities. Loss from operating activities was 44.4 million as compared to a loss of 1.7 million in the prior year quarter. Excluding the impact of the impairment of property and equipment and right-of-use assets for the three month period ended May 2, 2020 amounting to 40.0 million, Adjusted results from operating activities was a loss of 4.4 million compared to a loss of 1.7 million in the prior year quarter, a difference of 2.7 million. The decrease is explained by the reduction of gross profit of 11.7 million partially offset by a reduction in wages, salaries and employee benefits amounting to 6.8 million and 1.0 million reduction in amortization expense due to a lower right-of-use asset value at the beginning of the period, as previously noted.Finance Costs. Finance costs amounted to 1.7 million in the three months ended May 2, 2020, an increase of 0.1 million from the prior year quarter. The interest expense relates to lease liabilities and has increased slightly from prior year quarter.Finance Income. Finance income of 0.2 million is derived mainly from interest on cash on hand and has increased slightly from prior year quarter.EBITDA. EBITDA, which excludes non-cash and other items in the current and prior periods, was negative 40.4 million in the quarter ended May 2, 2020 compared to 3.1 million in the prior year quarter, representing a decrease of 43.5 million over the prior year quarter. Adjusted EBITDA for the quarter ended May 2, 2020, which excludes the impact of stock-based compensation expense and the impairment of property and equipment and right-of-use assets, amounted to negative 0.1 million compared to 3.3 million in the prior year quarter. The decline in Adjusted EBITDA is an outcome of the decline in sales and gross profit that was partially offset by a reduction in SGA.Net Loss. Net loss was 45.8 million in the quarter ended May 2, 2020 compared to a net loss of 3.3 million in the prior year quarter. Adjusted net loss, which excludes the impact from the impairment of property and equipment and right-of-use assets was 5.8 million compared to 3.3 million in the prior year quarter.Fully diluted loss per common share. Fully diluted loss per common share was negative 1.76 compared to negative 0.13 in the first quarter of Fiscal 2019. Adjusted fully diluted loss per common share, which is adjusted net loss on a fully diluted weighted average shares outstanding basis, was negative 0.22 per share compared to negative 0.13 per share.Liquidity and Capital ResourcesAs at May 2, 2020 we had 39.3 million of cash primarily held by major Canadian financial institutions. Total current assets less the sum of Trade and other payables and Deferred revenue was 48.3 million and 52.9 million, for the periods ended May 2, 2020 and February 1, 2020, respectively.Our primary source of liquidity is cash on hand. Our primary cash needs are to finance working capital and capital expenditures in connection with enhancing the functions and features of our online store. Our working capital requirements are for the purchase of inventory and payment of payroll, rent and other operating costs. Furthermore, in light of implementing the Restructuring Plan, the Company expects to use cash on hand to pay for professional fees and dividend resulting from the plan of arrangement that will be presented to creditors.Our working capital requirements fluctuate during the year, rising in the second and third fiscal quarters as we take title to increasing quantities of inventory in anticipation of our peak selling season in the fourth fiscal quarter. We funded our capital expenditures and working capital requirements from cash on hand and net cash provided by our operating activities.Condensed Consolidated Financial Data Canadian dollars, in thousands, except per share information For the three months ended May 2, May 4, 2020 2019 Sales 32,242 44,265 Cost of sales 17,569 17,929 Gross profit 14,673 26,336 SGA expenses 59,034 28,020 Operating loss 44,361 1,684 Finance costs 1,667 1,827 Finance income 240 191 Net loss 45,788 3,320 EBITDA1 40,367 3,142 Adjusted SGA1 19,074 28,020 Adjusted operating loss 1 4,401 1,684 Adjusted EBITDA1 94 3,269 Adjusted net loss 1 5,828 3,320 Basic and fully diluted loss per common share 1.76 0. 