good natured Products Inc. Announces Quarterly Financial Results for the Three Months Ended March 31, 2022
good natured Products Inc. (the “Company” or “good natured®”) (TSX-V: GDNP, OTCQX: GDNPF), a North American leader in plant-based products, today announced its financial results for the three months ended March 31, 2022 (“Q1 2022”).
In Q1 2022, the Company reached a significant milestone by achieving its second consecutive quarter of positive adjusted EBITDA.1 Continued growth in revenue and gross profit in Q1 2022 outpaced the quarter-over-quarter increases in operating expenses, including fulfilment costs that were upwardly influenced by global macro inflationary pressures.
Revenue in Q1 2022 grew on a year-over-year basis by 228% to a record high of $25.9 million. These results were driven by recent strategic acquisitions and strong organic growth, along with increases in average selling price per unit. The Company continues to serve over 1,200 active business-to-business (“B2B”) customer accounts across its sales and e-commerce channels.
“Our Q1 2022 growth in revenue and adjusted EBITDA is the result of our collective team across North America working together to achieve an incredible outcome in very challenging macro economic operating conditions,” stated Paul Antoniadis, CEO of good natured®. “I want to sincerely thank our team members and partners for their passionate commitment to our customers. This commitment will serve us well to capitalize on the robust demand for environmentally friendly products and the growing trend of re-shoring supply chains to North America.”
Key Highlights:
- Revenues for Q1 2022 increased 228% to a record $25.9 million compared to $7.9 million for the three months ended March 31, 2021
(“Q1 2021”).
- Variable gross profit1 for Q1 2022 increased 155% to $8.2 million, representing a variable gross margin1 of 31.7%, compared to $3.2 million and 40.8% for Q1 2021. Gross profit for Q1 2022 increased 138% to $6.6 million representing a gross margin of 25.6%, compared to $2.8 million and 35.3% respectively for Q1 2021.
- Selling, general and administrative (“SG&A”) expenses, excluding acquisition activity and one-time charges,1 for Q1 2022 were $3.5 million compared to $1.6 million for Q1 2021. As a percent of sales, SG&A expenses, excluding acquisition activity and one-time charges,1 declined to 14% compared to 20% in Q1 2021.
- SG&A expenses for Q1 2022, including acquisition activity and one-time charges, were $3.8 million compared to $1.7 million for Q1 2021, representing an increase of 123%. As a percent of sales, SG&A expenses declined to 15% compared to 22% in Q1 2021.
- The Company’s adjusted EBITDA1 for Q1 2022 showed a gain of $1.2 million compared to a gain of $0.2 million for Q1 2021, representing an increase of 646%.
- In Q1 2022, the Company incurred a net loss of $1.6 million compared to a net loss of $1.9 million in Q1 2021.
The Company’s Q1 2022 financial statements and Management’s Discussion and Analysis are available on SEDAR at sedar.com and on the Company’s investor website at investor.goodnaturedproducts.com.
Q1 2022 Results Conference Call
The Company will hold a conference call to discuss its financial results for Q1 2022, hosted by Paul Antoniadis, Executive Chair & CEO, and Kevin Leong, Chief Financial Officer, on May 31, 2022 at 11:00 AM Eastern / 8:00 AM Pacific time.
Date: May 31, 2022
Time: 11:00 AM ET / 8:00 AM PT
Toll-Free: 1-888-396-8049 International: +1 (416) 764-8646
Conference ID: 90874847
Participants are asked to dial in 10 minutes prior to the start of the call.
A replay of the call will be available approximately two hours after its completion through to June 30, 2022. The replay will be available by dialing 1-877-674-7070 or 1-416-764-8692.
The good natured® corporate profile can be found at: investor.goodnaturedproducts.com
About good natured Products Inc.
good natured® is passionately pursuing its goal of becoming North America’s leading earth-friendly product company by offering the broadest assortment of plant-based products made from rapidly renewable resources instead of fossil fuels. The Company is focused on making it easy and affordable for business owners and consumers to shift away from petroleum to better everyday products® that use more renewable materials, less fossil fuel, and no chemicals of concern.
good natured® offers over 400 products and services through wholesale, direct to business, and retail channels. From plant-based home organization products to certified compostable food containers, bio-based industrial supplies and medical packaging, the Company is focused on making plant-based products more readily accessible to people as a means to create meaningful environmental and social impact.
For more information: goodnaturedproducts.com
On behalf of the Company:
Paul Antoniadis – Executive Chair & CEO
Contact: 1-604-566-8466
Investor Contact:
Spencer Churchill
Investor Relations
1-877-286-0617 ext. 113
invest@goodnaturedproducts.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibilities for the adequacy or accuracy of this release.
Non-GAAP Financial Measures
We have included in this press release a discussion of the Company’s variable gross profit, variable gross margin, SG&A excluding acquisition activity and one-time charges, and adjusted EBITDA, all non-GAAP measures, for Q1 2022 and Q1 2021 to provide, what management believes, is a meaningful comparison of the Company’s performance in Q1 2022. In this news release, variable gross profit is gross profit excluding fixed production costs such as depreciation, repairs and maintenance, utilities and similar overhead items, and variable gross margin is variable gross profit divided by revenue; SG&A excluding acquisition activity and one-time charges is SG&A expenses but excluding acquisition costs and certain one-time charges and adjusted EBITDA is earnings before interest and finance costs, taxes, depreciation and amortization, other non-cash items and one-time gains and losses. Variable gross profit, SG&A excluding acquisition activity and one-time charges and Adjusted EBITDA do not have standardized meanings, and therefore may not be comparable to similar measures presented by other issuers. The use of variable gross profit and variable gross margin provides deeper insight into normalized product margins related to variable material input costs, inbound freight and labour costs associated with producing the goods being sold. Variable gross margin also removes gross margin percentage fluctuations due to changes in revenue from factors such as mix of insourced versus outsourced manufacturing to respond to specific customer requirements for multiple-facility production, depreciation from facility capital investments and the addition of manufacturing facility acquisitions with factory overhead charges. The use of SG&A excluding acquisition activity and one-time charges allows for an evaluation of Company’s expenses disregarding the expenses associated with the Company’s voluntary execution of Its growth through acquisition strategy. The use of the adjusted EBITDA by management allows for evaluation of the Company’s principal business activities as certain non-core items such as interest and finance costs, taxes, depreciation and amortization, and other non-cash items and one-time gains and losses are removed.
The following table provides a reconciliation of net loss to adjusted EBITDA for the periods ended:
The following table provides a reconciliation of variable gross profit to gross profit and gross margin to variable gross margin for the periods ended:
The following table provides a reconciliation of selling, general and administrative expense excluding acquisition activity and one-time charges:
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking information within the meaning of securities laws including statements related to Company plans and focuses for 2022, the upcoming results conference call and management’s outlook for 2022. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
By their nature, forward-looking statements involve known and unknown risks, uncertainties, changes in circumstances and other factors that are difficult to predict and many of which are outside of the Company’s control which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking information contained in this news release is based on our current estimates, expectations and projections regarding, among other things, sales volume and pricing which we believe are reasonable as of the current date. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date.
When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed that the material factors referred to herein will not cause such forward-looking statements and information to differ materially from actual results or events. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
Other than as required under securities laws, we do not undertake to update this information at any particular time.
All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.
A non-GAAP financial measure. Please refer to “Non-GAAP financial measures” below for additional information.