Mr. Anthony Longo reports

AEGIS BRANDS REPORTS IMPROVED SECOND QUARTER RESULTS

Aegis Brands Inc. has released financial results for the second quarter ending June 28, 2026. The company continues to deliver earnings growth, driven by operational efficiencies.

Highlights for the quarter:

• System sales decreased 2.1 per cent to $34.6-million and same-store sales decreased 3.9 per cent compared with last year.
• Net income for the second quarter improved 19.2 per cent to $1.3-million, or two cents per share, compared with net income of $1.1-million, or one cent per share, in Q2 2025.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter increased to $2-million from $1.6-million in Q2 2025, representing year-over-year growth of 26.7 per cent.

Year to date:

• System sales increased 1.2 per cent to $66.2-million and same-store sales decreased 1.5 per cent compared with last year.
• Net income increased 44.7 per cent to $1.8-million, or two cents per share, compared with $1.2-million, or one cent per share, in the prior year.
• Adjusted EBITDA increased 21.4 per cent to $3.2-million from $2.7-million in the prior year.

St. Louis Bar & Grill system sales for the quarter were down 2.1 per cent to $34.6-million and same-store sales decreased 3.9 per cent compared with the prior year. The decline in sales was impacted by the timing of the company's annual Wingsanity promotion, which benefited sales in the second quarter of 2025 but will run in the third quarter of 2026. Excluding this timing difference, sales remained consistent.

Franchise revenue for the quarter increased 6.3 per cent and operating expenses declined 9.7 per cent, driven primarily by a more efficient overhead structure following the organizational restructuring. These improvements, together with reduced interest and financing costs, resulted in the 19.2-per-cent improvement in net income versus the prior year.

Balance sheet and liquidity

The company continued to strengthen its financial position. Cash provided by operating activities totalled $2.2-million during the first half of the year, an increase of $1-million or 76 per cent over the same period last year.

Corporate update

During the quarter, Aegis announced a leadership transition following the departure of president and chief executive officer Steven Pelton. The company subsequently appointed Sean Murphy as president and chief executive officer and a director of Aegis Brands, effective Aug. 17, 2026.

Outlook

"Our second quarter results demonstrate the resilience of the St. Louis business and the benefits of the operational initiatives undertaken over the past year," said Anthony Longo, chairman of Aegis Brands. "While the timing of our Wingsanity promotion affected year-over-year sales comparisons during the quarter, the underlying business remained healthy, reflected in improved profitability and increased cash generation."

Aegis enters the second half of 2026 with a simplified business, prioritizing strengthening the St. Louis Bar & Grill brand. Management remains focused on driving franchisee success, enhancing guest experience and maintaining disciplined cost management while continuing to evaluate strategic growth opportunities.

Reconciliations of net income, the most directly comparable IFRS (international financial reporting standards) financial measure, to operating income, EBITDA and adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share are provided below.

About Aegis Brands Inc.

Aegis Brands owns and operates the St. Louis Bar & Grill brand and holds the master franchise for the Sweet Jesus ice cream brand in Canada. Aegis is focused on growing its portfolio through strategic partnerships, disciplined expansion and operational excellence.

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