Niagara-on-the-Lake, Ontario--(Newsfile Corp. - August 20, 2026) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or "the Company") today announced its financial results for the three months ended June 30, 2026 ("Q1 2027").

Q1 2027 Summary:

• Revenue for Q1 2027 was $7.0 million, a decrease of $1.2 million from $8.2 million in Q1 2026. The Winery division experienced a decrease in revenue of $1.0 million, driven by temporary industry wide ordering interruptions as a large Canadian provincial liquor board transitioned to new inventory and ordering systems, combined with the prior-year quarter benefiting from a one-time load-in of volume as retailers replaced U.S. wines removed from store shelves. The Agency division experienced a decrease of $0.2 million, primarily driven by the planned exit of a non-strategic supplier relationship.
• Gross margin¹ as a percentage of revenue grew to 61.1% for Q1 2027 compared to 55.6% in Q1 2026, while gross margin decreased by $0.2 million from $4.5 million in Q1 2026 to $4.3 million in Q1 2027, reflecting lower sales volumes. The gross margin percentage in the Winery division increased from 51.9% in Q1 2026 to 58.5% in Q1 2027.
• Adjusted EBITDA¹ decreased by $0.4 million to $0.9 million in Q1 2027 from $1.3 million in Q1 2026, reflecting lower gross margin of $0.2 million driven by lower sales and higher SG&A expenses of $0.1 million.
• EBITDA¹ increased by $0.2 million to $1.6 million in Q1 2027 from $1.4 million in Q1 2026. The increase is attributable to the year-over-year change in the fair value of the derivative asset/liability of $0.5 million, partially offset by the decrease in gross margin of $0.2 million and the increase in SG&A expenses of $0.1 million.
• Net income increased by $0.2 million to $0.6 million in Q1 2027 from $0.4 million in Q1 2026.

Q1 2027 Subsequent Events:

• The unsecured advance from Lassonde of $1,000,000, received in May, 2026, was repaid in July, 2026. In August, 2026, the Company received an additional advance of $750,000 from Lassonde. The loan is unsecured, bears interest at BMO prime plus 2.25%, and is due the earlier of October 31, 2026 or receipt of the next Wine Sector Support Program payment, which was received in September last year.
• In June 2026, the Company entered into a share purchase agreement to dispose of all of the issued and outstanding shares of De Sousa Wines Toronto Inc., whose principal asset is a non-operational pre-1993 winery licence, for total consideration of $250,000. The transaction is subject to customary closing conditions, including regulatory approvals.
• Effective July 31, 2026, the Company agreed to the ninth amendment to its Second Amended and Restated Credit Agreement with Bank of Montreal, the only change of which was to extend the maturity date to October 30, 2026.
• In August, 2026, the third and final of the three instalments relating to the purchase of Perigon Beverage Group was paid when the Company issued a further 935,767 common shares valued at $0.19 per share for a total of $180,886 (see note 9).
• In August, 2026, 200,000 options that had been exercisable at $1.80 for each common share and that were going to mature in October 2026, were cancelled.

"Our first-quarter results reflect a temporary pause rather than a change in trajectory. Winery shipments were held back as a major provincial liquor board transitioned to new inventory and ordering systems, and the prior-year quarter included a one-time load-in as retailers replaced U.S. wines on their shelves. The fundamentals underneath remain strong — gross margin climbed to 61.1% of revenue from 55.6%, and we again delivered positive net income and cash from operations. Ontario's retail expansion, enhanced government support and the buy-local movement continue to power our Winery division, and we remain confident in the momentum we carry through fiscal 2027," said Andrew Howard, President and CEO.

About Diamond Estates Wines and Spirits Inc.:

Diamond Estates 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 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 ("Trajectory"), the Company serves as the sales agent for a wide range of leading international beverage brands.

Wine Portfolio:

Trajectory represents 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, Cielo and Valdo from Italy; Bodegas Muriel from Spain; Porta 6, Julia Florista, Boas Quintas, Catedral and Cabeca de Toiro from Portugal; Fowles Wines from Australia; Empress Wines from Croatia; as well as C.K. Mondavi & Family, Charles Krug, Line 39, Harken, FitVine and Rabble from California. Trajectory also represents a broad portfolio of wines sold exclusively to restaurants, bars and private consumers.

Spirits Portfolio:

The Company also represents distinguished spirit brands such as Cofradia Tequila, Siempre Tequila, Chisme Tequila, Hussong's Tequila, Solmano Mezcal and Chica Chida Agave Spirit from Mexico, Islay Mist and Waterproof blended Scotch whiskies from Scotland, Glen Breton Canadian whiskies from Nova Scotia, Five Farms Irish Cream Liqueur from the UK, Tequila Rose Strawberry Cream, 360 Vodka and Holladay Bourbon from the USA, Giffard Liqueurs from France, Zubrowka Vodka from Poland and Becherovka from the Czech Republic.

Beer, Cider, and RTD Portfolio:

In the beer, cider, and ready-to-drink (RTD) categories, Trajectory represents Darling Mimosa, Protini Beverages from Ontario, ESA Cocktails, Solmano Craft Cocktails, Stickler Shrub Cocktails, Sunday Session RTDs and Jasper Brewing Company from Alberta, and Warsteiner and Konig Ludwig from Germany.

The Company's mission is to build lasting, mutually beneficial relationships with channel partners, growers, suppliers and employees. To meet this goal, the Company is undertaking significant investments in winemaking, brand marketing, sales programming, performance management and back-office infrastructure, including information systems which will support growth in an efficient, profitable manner. Based on its analysis of the market, the Company believes that the growth prospects for the domestic and import beverage alcohol markets in Canada are positive. The Company continues to be a participant in the export market and has expanded its focus beyond China in the effort to be less reliant on that one marketplace. Canadian wines and particularly Icewine enjoy a premium product positioning with international consumers.

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 audited consolidated statements of net loss and comprehensive 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, 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 Measure"

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