VANCOUVER, BC, May 2, 2022 /CNW/ - good natured Products
Inc. (the "Company" or "good natured®")
(TSX-V: GDNP), a North American leader in plant-based products,
today announced its audited financial results for the three months
("Q4 2021") and twelve months ended December
31, 2021 ("FY2021"). The Company also announced that it will
host a webcast investor presentation on May
12, 2022 at 2:00 PM Eastern /
11:00 AM Pacific time.
FY2021 was another transformational year for the Company, with
266% revenue growth driven by contribution from strategic
acquisitions and strong organic growth. Organic revenue growth was
approximately 45%, up from 22% in the prior year, driven by a 300%
increase in active B2B customer accounts. The Company also achieved
its goal to improve adjusted EBITDA, and delivered positive
adjusted EBITDA1 for the fourth quarter.
In addition to revenue growth through acquisitions, FY2021
results were achieved through the addition of a commercial
agreement with a national U.S. food producer announced October 13, 2021, increases in average selling
price per unit, along with the noted increase in B2B customers to
over 1,200 active accounts at December 31,
2021 compared to 400 at December 31,
2020.
"Despite challenging macro economic conditions that required
consistent and disciplined management of a changing business
environment and global supply chain disruptions, good
natured® again delivered record revenue performance
in Q4 2021 and improved gross margins when compared to the third
quarter," stated Paul Antoniadis, CEO of good
natured®. "We're off to a strong start in 2022, with
our first quarter preliminary results indicating over 200%
year-over-year revenue growth and gross margins near the high end
of the targeted range. With robust end market demand driven in part
by significant reshoring activity, combined with our investments in
high-speed robotic machinery, I have never been more excited about
what the future holds for good natured® and our
owners!"
Key Highlights:·
- Revenues for Q4 2021 increased 329% to a record $22.9 million compared to $5.3 million for the three months ended
December 31, 2020 ("Q4 2020").
Revenue for FY2021 increased 266% to $61.1
million compared to $16.7
million for FY2020.
- Variable gross profit1 for Q4 2021 increased 262% to
$7.0 million and 30.5% of sales,
compared to $1.9 million and 36.2% of
sales for Q4 2020. Variable gross profit1 for FY2021
increased 207% to $19.7 million and
32.2% of sales, compared to $6.4
million and 38.4% of sales for FY2020.
- Gross profit increased 205% to $5.3
million for Q4 2021 and 151% to $15.6
million for FY2021. Gross margin for Q4 2021 and FY2021 was
23.3% and 25.6% respectively.
- Selling, general and administrative ("SG&A")
expenses, excluding acquisition activity and one-time
charges1, for Q4 2021 and FY2021 were $3.2 million and $10.2
million compared to $1.5
million and $4.3 million in Q4
2020 and FY2020. While these represented increases year-over-year,
strong growth in revenue and gross profit more than offset SG&A
expenses, producing positive operating leverage that resulted in
the improvement in adjusted EBITDA1 noted above.
- SG&A expenses for Q4 2021 and FY2021, including acquisition
activity and one-time charges, were $4.1
million and $12.8 million
compared to $2.2 million and
$5.7 million in Q4 2020 and FY2020,
representing an increase of 88% and 127% respectively.
- The Company's Adjusted EBITDA1 for Q4 2021 and
FY2021 showed a gain of $0.5 million
and a loss of $0.1 million, compared
to a loss of $0.8 million and
$1.5 million for Q4 2020 and FY2020
respectively.
- In Q4 2021, the Company incurred a net loss of $4.2 million compared to a net loss of
$3.2 million in Q4 2020. Net loss for
FY2021 was $12.7 million compared to
a net loss of $7.2 million for
FY2020.
- Net working capital increased to $20.6
million as at December 31,
2021, compared to $5.6 million
at December 31, 2020, an increase of
271%.
The Company's FY2021 audited 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.
Investor Webcast on May 12,
2022
The Company also announced that it will host an
investor webcast on Thursday, May 12,
2022 at 2:00 PM Eastern /
11:00 AM Pacific time.
During the webcast, Paul Antoniadis, Chief Executive Officer of
good natured®, will provide a presentation
covering key areas of the business. After the formal presentation,
attendees will have an opportunity to ask questions through an
interactive Q&A portal.
To attend the webcast, please pre-register at the following
link:
https://event.webcasts.com/starthere.jsp?ei=1540486&tp_key=2aeab4aeae
An archived version of the webcast and presentation will be
available on the Company's website at
investor.goodnaturedproducts.com
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 margin, SG&A excluding acquisition
activity and one-time charges, and adjusted EBITDA, all non-GAAP
measures, for Q4 2021, FY2021, Q4 2020 and FY2020 to provide, what
management believes, is a meaningful comparison of the Company's
performance in Q4 2021 and FY2021. 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, 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 margin,
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 margin by management allows for
evaluation of the core aspects of the Company's profit margin as
certain fixed items, such as depreciation, repairs and maintenance,
and utilities are excluded. 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:
|
|
|
|
|
|
Three months
ended
|
Year ended
|
|
|
Dec. 2021
|
|
Dec. 2020
|
|
Dec. 2021
|
|
Dec. 2020
|
Income (loss) for the
period
|
$
|
(4,175)
|
$
|
(3,153)
|
$
|
(12,695)
|
$
|
(7,187)
|
Share-based
compensation
|
|
498
|
|
98
|
|
2,254
|
|
262
|
Depreciation
|
|
253
|
|
192
|
|
1,071
|
|
484
|
Depreciation in COGS
and SG&A
|
|
284
|
|
32
|
|
926
|
|
32
|
Financing
costs
|
|
1,618
|
|
764
|
|
4,552
|
|
3,440
|
Foreign exchange loss
(gain)
|
|
262
|
|
295
|
|
315
|
|
(118)
|
|
|
|
|
|
|
|
|
|
Loss on debt repayment
and conversion
|
|
936
|
|
250
|
|
1,148
|
|
413
|
Gain on interest-free
loan
|
|
(42)
|
|
(17)
|
|
(85)
|
|
(83)
|
|
|
|
|
|
|
|
|
|
Acquisition
related activity and One-time
charges
|
|
886
|
|
700
|
|
2,572
|
|
1,315
|
Deferred income
taxes
|
|
20
|
|
-
|
|
(126)
|
|
(80)
|
Adjusted
EBITDA1
|
$
|
540
|
$
|
(839)
|
$
|
(68)
|
$
|
(1,522)
|
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of gross margin
to variable gross margin for the periods ended:
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
Dec. 2021
|
|
Dec. 2020
|
|
Dec. 2021
|
|
Dec. 2020
|
Revenue
|
$
|
22,860
|
$
|
5,326
|
$
|
61,132
|
$
|
16,713
|
Variable cost of
product
|
|
(15,880)
|
|
(3,397)
|
|
(41,462)
|
|
(10,298)
|
Variable Gross
Profit1
|
|
6,980
|
|
1,929
|
|
19,670
|
|
6,415
|
Variable Gross
Margin
%
|
|
30.5%
|
|
36.2%
|
|
32.2%
|
|
38.4%
|
Fixed factory
overhead
|
|
(1,385)
|
|
(147)
|
|
(3,182)
|
|
(147)
|
Depreciation
|
|
(265)
|
|
(32)
|
|
(851)
|
|
(32)
|
Gross profit
|
$
|
5,330
|
$
|
1,750
|
$
|
15,637
|
$
|
6,236
|
Gross margin
%
|
|
23.3%
|
|
32.9%
|
|
25.6%
|
|
37.3%
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of selling,
general and administrative expense excluding acquisition activity
and one-time charges:
|
|
|
Three months ended
December 31
|
|
|
Year Ended December
31
|
|
|
|
2021
|
|
2020
|
+/-
|
|
|
2021
|
|
2020
|
+/-
|
SG&A
Wages
|
|
|
1,517
|
|
739
|
105%
|
|
|
5,700
|
|
2,291
|
149%
|
SG&A
Other
|
|
1,514
|
|
632
|
40%
|
|
|
4,030
|
|
1,611
|
150%
|
Product
Development
|
|
194
|
|
116
|
67%
|
|
|
519
|
|
434
|
20%
|
Acquisition related
activity &
One-Time Charges
|
|
|
886
|
|
700
|
27%
|
|
|
2,572
|
|
1,315
|
96%
|
SG&A
|
|
$
|
4,111
|
$
|
2,187
|
88%
|
|
$
|
12,821
|
$
|
5,651
|
127%
|
SG&A % of
Revenue
|
|
|
18%
|
|
41%
|
|
|
|
21%
|
|
34%
|
|
SG&A excluding
acquisition
activity & One-Time Charges
|
|
$
|
3,225
|
$
|
1,487
|
117%
|
|
$
|
10,249
|
$
|
4,336
|
136%
|
Preliminary Results
The preliminary results set forth above are made as of the
date of this news release and are based on an initial review of the
Company's operating and financial results for the quarter ended
March 31, 2022 and are subject to
change. These preliminary results are provided for the purpose of
providing the readers with further context to the Company's FY2021
results. 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 April 18, 2022. In addition, these preliminary
results are not a comprehensive statement of the Company's
financial results for the quarter ended March 31, 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.
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, anticipated financial results
for the quarter ended March 31, 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.
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
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. All
forward-looking information contained in this news release is
expressly qualified in its entirety by this cautionary
statement.
GOOD NATURED
PRODUCTS INC.
|
|
|
Consolidated
Statements of Financial Position
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31-Dec
|
|
31-Dec
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
10,655
|
$
|
8,114
|
|
Trade and other
receivables (note 17 (e))
|
|
|
13,689
|
|
5,557
|
|
Inventory (Note
5)
|
|
|
16,036
|
|
6,294
|
|
Prepaid
expenses
|
|
|
987
|
|
671
|
|
|
|
|
41,367
|
|
20,636
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property and equipment
(note 6)
|
|
|
30,463
|
|
15,416
|
|
Right-of-use assets
(note 7)
|
|
|
2,165
|
|
644
|
|
Customer relationships
(note 8)
|
|
|
5,725
|
|
5,709
|
|
Intangible and other
assets (note 8)
|
|
|
3,125
|
|
2,745
|
|
Goodwill (note
8)
|
|
|
7,684
|
|
6,824
|
|
|
|
|
|
|
|
|
|
|
$
|
90,529
|
$
|
51,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
17,699
|
$
|
8,882
|
|
Credit line (note
9)
|
|
|
-
|
|
3,073
|
|
Current portion of
long-term debt (note 10)
|
|
|
3,050
|
|
3,129
|
|
|
|
|
20,749
|
|
15,084
|
|
|
|
|
|
|
|
Non-Current
liabilities:
|
|
|
|
|
|
|
Long-term debt (note
10)
|
|
|
43,305
|
|
29,702
|
|
Contingent
consideration liability (note 4)
|
|
|
1,890
|
|
1,756
|
|
Deferred income tax
liabilities (note 13)
|
|
|
3,493
|
|
3,620
|
|
|
|
|
48,688
|
|
35,078
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
Common share
capital
|
|
|
57,083
|
|
28,883
|
|
Contributed
surplus
|
|
|
5,883
|
|
2,736
|
|
Foreign currency
translation reserve
|
|
|
872
|
|
244
|
|
Deficit
|
|
|
(42,746)
|
|
(30,051)
|
|
|
|
|
21,092
|
|
1,812
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
90,529
|
|
51,974
|
GOOD NATURED
PRODUCTS INC.
|
|
Consolidated Statements
of Net Loss and Comprehensive Loss
|
|
(In thousands except
per share amounts)
|
|
|
|
|
|
|
Year ended
December 31
|
|
|
2021
|
|
2020
|
Product
revenue
|
$
|
61,132
|
$
|
16,713
|
Cost of product revenue
(note 14)
|
|
(45,495)
|
|
(10,477)
|
|
|
|
|
|
Gross
profit
|
|
15,637
|
|
6,236
|
|
|
|
|
|
Other (Expenses)
Income:
|
|
|
|
|
Selling, general, and administrative (note 15)
|
|
(12,821)
|
|
(5,651)
|
Fulfilment and logistics
|
|
(6,382)
|
|
(3,454)
|
Share-based compensation (note 11 (b))
|
|
(2,254)
|
|
(262)
|
Depreciation and amortization
|
|
(1,071)
|
|
(484)
|
Financing costs
|
|
(4,552)
|
|
(3,440)
|
Foreign exchange gain (loss)
|
|
(315)
|
|
118
|
Loss on debt repayment and conversion (note 11
(b))
|
|
(1,148)
|
|
(413)
|
Gain on interest free loan (note 10 (f))
|
|
85
|
|
83
|
|
|
|
|
|
Net loss before
taxes
|
|
(12,821)
|
|
(7,267)
|
|
|
|
|
|
Deferred income tax
recovery (note 13)
|
|
126
|
|
80
|
|
|
|
|
|
Net loss for the
year
|
$
|
(12,695)
|
$
|
(7,187)
|
|
|
|
|
|
Other comprehensive
gain (loss), net of tax
|
|
|
|
|
Items that may be
reclassified subsequently to profit or loss:
|
|
|
|
|
Unrealized
currency gain on translation of foreign operations
|
|
628
|
|
262
|
|
|
|
|
|
Other comprehensive
loss for the year
|
$
|
(12,067)
|
$
|
(6,925)
|
|
|
|
|
|
Basic and diluted loss
per share
|
$
|
(0.06)
|
$
|
(0.06)
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted
|
|
210,831
|
|
124,700
|
GOOD NATURED PRODUCTS INC.
|
Consolidated
Statements of Cash Flow
|
(In thousands)
|
|
|
|
|
|
Year ended December 31
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Cash provided by (used
in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(12,695)
|
$
|
(7,187)
|
Items not involving
cash:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
1,545
|
|
516
|
Unrealized foreign exchange loss
|
|
|
|
690
|
|
(112)
|
Amortization of right of use assets
|
|
|
|
396
|
|
61
|
Share based compensation (note 11(b))
|
|
|
|
2,063
|
|
262
|
Loss on debt repayment and conversion (note 11
(b))
|
|
|
|
1,148
|
|
413
|
Gain on interest free loan (note 10 (f))
|
|
|
|
(85)
|
|
(83)
|
Financing costs
|
|
|
|
4,552
|
|
3,440
|
Deferred income tax
|
|
|
|
(126)
|
|
(80)
|
|
|
|
|
(2,512)
|
|
(2,770)
|
|
|
|
|
|
|
|
Changes in non-cash
operating working capital:
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
(3,304)
|
|
(1,213)
|
Inventory
|
|
|
|
(7,302)
|
|
(3,458)
|
Prepaid expenses
|
|
|
|
(231)
|
|
39
|
Accounts payable and accrued liabilities
|
|
|
|
3,678
|
|
3,433
|
|
|
|
|
(7,159)
|
|
(1,199)
|
|
|
|
|
|
|
|
Finance
costs paid
|
|
|
|
(3,990)
|
|
(2,707)
|
Cash used in operating
activities
|
|
|
|
(13,661)
|
|
(6,676)
|
|
|
|
|
|
|
|
Financing:
|
|
|
|
|
|
|
Issuance of common shares, net of
|
|
|
|
|
|
|
issuance costs (note 11)
|
|
|
|
20,767
|
|
6,623
|
Exercise of warrants for common shares
|
|
|
|
2,436
|
|
2,451
|
Exercise of options for common shares
|
|
|
|
167
|
|
218
|
Credit line advance, net of
|
|
|
|
|
|
|
repayments (note 9)
|
|
|
|
(3,073)
|
|
2,424
|
Proceeds from convertible debenture, net of
|
|
|
|
|
|
|
issuance costs (note 10(b))
|
|
|
|
16,228
|
|
-
|
Proceeds from long-term debt, net of issuance costs (note
10(b,c))
|
|
|
|
29,358
|
|
21,021
|
Repayment of other long-term debt (note 10(a))
|
|
|
|
(29,496)
|
|
(4,543)
|
Cash provided by
financing activities
|
|
|
|
36,387
|
|
28,194
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
Business acquisitions exclude cash acquired (note
4)
|
|
|
|
(15,470)
|
|
(21,076)
|
Purchase of equipment
|
|
|
|
(4,264)
|
|
(726)
|
Purchase of other assets
|
|
|
|
(517)
|
|
(204)
|
Cash used in investing
activities
|
|
|
|
(20,251)
|
|
(22,006)
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
|
|
|
66
|
|
147
|
|
|
|
|
|
|
|
Increase (decrease) in
cash
|
|
|
|
2,541
|
|
(341)
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of year
|
|
|
|
8,114
|
|
8,455
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of year
|
|
|
|
10,655
|
|
8,114
|
______________________________
|
1 A non-GAAP
financial measure. Please refer to "Non-GAAP financial measures"
below for additional information.
|
SOURCE Good Natured Products