July 19, 2022 — (Vancouver, BC) good natured Products Inc. (the “Company” or “good natured®”) (TSX-V: GDNP) (OTCQX: GDNPF), a North American leader in plant-based products, today announced preliminary revenue and gross margin estimates for the quarter ending June 30, 2022 (“Q2 2022”).
Preliminary revenue for Q2 2022 is anticipated at $24.0 million to $26.0 million, an increase of approximately 95% to 110%, compared to $12.4 million for the three months ended June 30, 2021 (“Q2 2021”). Variable gross margin, a non-GAAP measure1, for Q2 2022 is anticipated to be between 31% and 33% compared to 34.7% for Q2 2021. Gross margin is estimated between 24% and 26% for Q2 2022 compared to 28.3% for Q2 2021.
The growth in revenue in Q2 2022 was driven by strong organic growth with new customer additions, including a National U.S. food producer announced in October 2021, increases in average selling price per unit and contribution from the Ex-Tech Plastics acquisition completed in May 2021.
Gross margin performance has improved over the past several quarters as price increases have been implemented and with the integration of the Ex-Tech acquisition. The decrease in gross margin in Q2 2022, compared to Q2 2021, was driven by a higher mix of revenue from the Company’s industrial business group associated with the completion of the Ex-Tech acquisition, a higher mix of revenue from the national market segment and external supply chain and inflationary cost increases.
The Company plans to release full Q2 2022 results in August 2022.
“I’m very pleased with the strong results that our good natured® team delivered in the second quarter, with revenue expected to double year over year through both strong organic growth and contributions from acquisitions,” stated Paul Antoniadis, CEO of good natured®. “Our gross margins remain within our targeted range, even in the face of sustained inflationary conditions. Overall, customer demand for our sustainable, earth-friendly products continues to be robust, and we remain highly focused on servicing our customers with strong operational execution.”
The preliminary results set forth above are based on an initial review of the Company’s operating and financial results for Q2 2022 and are subject to change. Final reported results could differ from these preliminary results following the completion of quarter-end accounting procedures, final adjustments and other developments arising between now and the time that the Company’s financial results are finalized, and such changes could be material. The Company’s independent auditor, Deloitte LLP, has not audited, reviewed, or performed any procedures with respect to the accompanying preliminary financial results and other data, and accordingly does not express an opinion or any other form of assurance with respect thereto. The preliminary results have been prepared by, and are the responsibility of, the Company’s management, and were approved by management on July 18, 2022. In addition, these preliminary results are not a comprehensive statement of the Company’s financial results for Q2 2022. They should not be viewed as a substitute for audited financial statements prepared in accordance with International Financial Reporting Standards and are not necessarily indicative of the Company’s results for any future period.
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
1-877-286-0617 ext. 113
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 margin, a non-GAAP measure, for Q2 2022, and Q2 2021, to provide, what management believes, is a meaningful comparison of the Company’s performance in Q2 2022. In this news release, variable gross margin is gross margin excluding fixed production costs such as depreciation, repairs and maintenance, utilities, and similar overhead items. The use of variable gross margin by management allows for evaluation of the core aspects of the Company’s profit margin as certain fixed production costs that are outside the Company’s control are excluded. Variable gross margin does not have a standardized meaning, and therefore may not be comparable to similar measures presented by other issuers.
The following table provides a reconciliation of preliminary and historic gross margin to preliminary and historic variable gross margin (expressed in thousands of dollars)
Cautionary Statement Regarding Forward-Looking Information
Information regarding the release of Q2 2022 preliminary revenue and gross margin results contained in this press release may constitute forward-looking information within the meaning of securities laws. 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.
The financial outlook provided in this press release is provided to provide early guidance on the first quarter financial performance of the Company and readers are cautioned that this information may not be appropriate for any other purpose. In preparing the financial outlook, the Company completed an initial review of operations for the three months ended June 30, 2022, however actual results may differ materially from the financial outlook provided in this press release as the financial outlook has not been audited or reviewed. 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.
Forward-looking information contained in this news release is based on our current estimates, expectations, and projections, 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. All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.
1 For more information regarding non-GAAP measures included in this news release, please refer to “Non-GAAP financial measures”.