VANCOUVER, BC, July 4, 2022
/CNW/ - good natured Products Inc. (the "Company" or
"good natured®") (TSXV:
GDNP) (OTCQX: GDNPF), a North American leader in plant-based
products, today announced that, through a wholly owned subsidiary,
it has closed the acquisition of all the business and operating
assets of Houston-based FormTex
Plastics Corporation ("FormTex") for cash consideration of
approximately USD $4.8 million (the
"Acquisition"). The Acquisition will be funded in cash from
the Company's treasury. The terms of the Acquisition were first
announced in the Company's news release dated May 4, 2022.
"We are very pleased to complete this Acquisition and welcome
everyone at FormTex to the good natured® family,"
said Paul Antoniadis, CEO of good natured®. "The
addition of FormTex expands the scope and reach of our packaging
business, in-line with the strategic direction we've communicated,
and we believe there is material upside potential for revenue and
profitability through capacity expansion, supply chain improvements
and cost synergies previously disclosed."
"We believe partnering with good natured® is a
win-win scenario for our valued employees and customers," said
Mark Anselmo, co-owner of FormTex.
"It is a very strong strategic fit, and we see the same path to
much larger and more profitable operations leveraging greater
access to capital and good natured®'s internally
produced extruded rollstock capacity. This in turn will enable us
to have a more significant positive environmental impact by
producing more sustainable packaging solutions that the market is
demanding."
Founded in 1989, FormTex produces custom plastic packaging for
the medical, food, electronic, industrial, and retail end markets.
FormTex is ISO 9001:2015 certified in the design and manufacture of
thermoplastic molded components and operates seven different
thermoforming machines in a leased 51,000 square foot facility on
1.9 acres of land in Houston,
Texas.
Key Highlights of the Acquisition:
- FormTex generated unaudited revenue of approximately USD
$4.9 million and adjusted
EBITDA1 of approximately USD $0.6
million in the calendar year ended December 2021 (or "FY2021").
- FormTex generated unaudited revenue of USD $5.1 million for the trailing twelve months ended
February 28, 2022.
- FormTex generated an unaudited gross margin rate of
approximately 42% in FY2021.
- The Acquisition includes a minimum of USD $650,000 of net working capital as part of the
purchase price.
- The Acquisition adds 30 business-to-business ("B2B")
accounts to the Company's active B2B customer base.
- The current management team operating FormTex will be joining
the good natured® team.
- Highly strategic and synergistic acquisition that is expected
to be immediately accretive to shareholders on an adjusted
EBITDA1 basis.
- Expected to provide cost synergies of approximately USD
$0.2 to $0.3
million in the twelve months following the close of the
Acquisition.
Key Strategic Highlights:
- Strategic access to Texas and
the Southern US. Texas is the
world's 9th largest and the
United States' 2nd largest economy by
GDP.2
- good natured® is expected to supply
FormTex's extruded rollstock sheet requirements from its Ex-Tech
facility, which is expected to result in material positive
financial synergies.
- Significant potential to increase FormTex's current capacity
utilization rate of 40% through higher production uptime and add
new capacity with additional thermoforming machines in the current
facility footprint, and utilization of additional warehousing
space.
- FormTex's proximity to one of the 10 largest outbound shipping
endpoints in North America will
significantly reduce shipping costs to the Company's customers in
the southern United States.
- FormTex's location provides direct access to the 6th
largest U.S. container port, creating a highly efficient port of
entry for raw materials coming from Europe and South
America.
- good natured® will be able to leverage
Houston-based manufacturing,
importing, warehousing, and logistics to service the southeastern
U.S. market, which includes Florida (the 4th largest state by
GDP), Georgia (the 9th
largest state by GDP), and North
Carolina (the 11th largest state by GDP).
- All FormTex customers are net new customers not currently being
serviced by the Company, creating cross-selling opportunities for
other good natured® products and services.
The Acquisition was an arm's length transaction and is subject
to customary post-closing adjustments.
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
FormTex's adjusted EBITDA, a non-GAAP measure, for FY2021, to
provide what management believes is a meaningful comparison of
FormTex's performance in FY2021. In this news release, adjusted
EBITDA is earnings before interest and finance costs, taxes,
depreciation and amortization, other non‐cash items
and one‐time gains and losses. Adjusted EBITDA does
not have a standardized meaning, and therefore may not be
comparable to similar measures presented by other issuers. The use
of the adjusted EBITDA by management allows for evaluation of
FormTex'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, expressed in USD, provides a
reconciliation of FormTex net income to adjusted EBITDA for the
period ended:
|
|
|
Year ended
December 30
2021
|
|
|
Income (loss) for
the period:
|
|
$
|
507,013
|
|
|
Depreciation
|
|
|
65,356
|
|
|
Interest
|
|
|
7,112
|
|
|
Professional
Fees
|
|
|
20,000
|
|
|
Miscellaneous
|
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
599,481
|
|
|
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking statements"
within the meaning of applicable securities laws. Forward-looking
statements can be identified by words such as: "anticipate,"
"intend," "plan," "budget," "believe," "project," "estimate,"
"expect," "scheduled," "forecast," "strategy," "future," "likely,"
"may," "to be," "could,", "would," "should," "will" and similar
references to future periods or the negative or comparable
terminology, as well as terms usually used in the future and the
conditional. Examples of forward-looking statements include, among
others, statements regarding the Acquisition, and the projected
impact of completion of the Acquisition on the Company's business,
financial conditions and results. All forward-looking statements
contained in this news release are expressly qualified in their
entirety by this cautionary statement.
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 statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
the Company's current beliefs, expectations and assumptions
regarding the future of its business, future plans and strategies,
projections, anticipated events and trends, general market
conditions, the economy and other future conditions. The Company's
actual results and financial condition may differ materially from
those indicated in the forward-looking statements. Therefore, you
should not rely on any of these forward-looking statements.
Important factors that could cause actual results and financial
conditions to differ materially from those indicated in the
forward-looking statements include, among others risks relating to
general economic, market and business conditions and unforeseen
delays in the realization of the benefits of the Acquisition
described in this press release.
The Company considers its assumptions to be reasonable based
on currently available information, but cautions the reader that
its assumptions regarding future events, many of which are beyond
the control of the Company, may ultimately prove to be incorrect
since they are subject to risks and uncertainties that affect the
Company and its businesses. 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 above 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, the Company
does not undertake to update this information at any particular
time.
____________________________________
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1
|
Adjusted EBITDA is a
non-GAAP measure. For more information regarding non-GAAP measures
included in this news release, please refer to "Non-GAAP financial
measures" below.
|
2
|
Texas Enters 2021 as
World's 9th Largest Economy by GDP, Texas Economic
Development Corporation, January 2021,
https://businessintexas.com/news/texas-enters-2021-as-worlds-9th-largest-economy-by-gdp/
|
SOURCE Good Natured Products