VANCOUVER, BC, Aug. 30, 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 its
financial results for the three months ("Q2 2022") and six
months ("H1 2022") ended June 30,
2022.
For Q2 2022, the Company delivered another quarter of positive
adjusted EBITDA1 coupled with strong growth in revenues.
Gross margins remained in the targeted range despite continued
inflationary pressure, while growth in revenue and gross profit
outpaced increases in operating expenses.
Revenue in Q2 2022 grew on a year-over-year basis by
106% to $25.5 million, driven by
strong organic growth, increases in average selling price per unit
and contribution from strategic acquisitions. The Company's active
business-to-business ("B2B") customer accounts grew to over
1,400 as at June 30, 2022.
"I remain incredibly proud of our team's unwavering commitment
to serving our customers while navigating challenging market
conditions and inflationary pressures over the last few quarters.
We've delivered another solid quarter of growth by focusing on
strong execution and leveraging our investments in production
capability, like with our recent acquisition of FormTex Plastics in
Houston," stated Paul Antoniadis,
CEO of good natured®. "In future quarters, you'll
continue to see our commitment to strong execution and productivity
improvements that are laying the foundation to profitably scale our
business and the associated positive environmental impact that
comes with our growth."
Key Highlights
- Revenues for Q2 2022 increased 106% to $25.5 million compared to $12.4 million for the three months ended
June 30, 2021 ("Q2 2021"). H1
2022 revenues increased 154% to $51.5
million compared to $20.3
million for the six-month period ended June 30, 2021 ("H1 2021").
- Variable gross profit1 for Q2 2022 increased 97% to
$8.5 million, representing a variable
gross margin1 of 33.1%, compared to $4.3 million and 34.7% for Q2 2021. Variable
gross profit for H1 2022 increased 122% to $16.7 million, 32.4% of sales, compared to
$7.5 million, 37.1% of sales, in H1
2021.
- Gross profit for Q2 2022 increased 92% to $6.7 million representing a gross margin of
26.4%, compared to $3.5 million and
28.3% respectively for Q2 2021. Gross profit for H1 2022 increased
113% to $13.4 million, 26.0% of
sales, compared to $6.3 million,
31.1% of sales, in H1 2021.
- Selling, general and administrative ("SG&A")
expenses, excluding acquisition activity and one-time
charges,1 for Q2 2022 and H1 2022 were $4.0 million and $7.5
million compared to $2.2
million and $3.8 million for
Q2 2021 and H1 2021. As a percent of sales, SG&A expenses,
excluding acquisition activity and one-time charges,1
declined to 16% for Q2 2022 and 15% for H1 2022 compared to 18% in
Q2 2021 and 19% in H1 2021.
- SG&A expenses for Q2 2022 and H1 2022, including
acquisition activity and one-time charges, were $4.6 million and $8.4
million compared to $3.2
million and $4.9 million for
Q2 2021 and H1 2021. As a percent of sales, SG&A expenses
declined to 18% for Q2 2022 and 16% for H1 2022 compared to 26% in
Q2 2021 and 24% in H1 2021.
- The Company's adjusted EBITDA1 for Q2 2022 and H1
2022 was $1.0 million and
$2.2 million respectively, compared
to a loss of $0.2 million for Q2 2021
and break-even for H1 2021.
- In Q2 2022, the Company incurred a net loss of $3.0 million compared to a net loss of
$3.7 million in Q2 2021. Net loss for
H1 2022 was $4.6 million compared to
a net loss of $5.6 million in H1
2021.
Subsequent to quarter end, on August 26,
2022, the Company announced that it had completed a senior
secured revolving credit facility with Wells Fargo Bank, N.A.,
through its wholly owned subsidiary Well Fargo Capital Finance
Corporation Canada, of up to USD $55
million and closed a $6.6
million mortgage financing with Business Development Bank of
Canada. Further details regarding
these announcements can be found in the Company's press release
dated August 26, 2022.
The Company's Q2 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.
Q2 2022 Results Conference Call
The Company will hold
a conference call to discuss its financial results for Q2 2022,
hosted by Paul Antoniadis, Executive Chair & CEO, and
Kevin Leong, Chief Financial
Officer, on August 30, 2022 at
11:00 AM Eastern / 8:00 AM Pacific time.
Date: August 30, 2022
Time: 11:00 AM ET / 8:00 AM PT
Toll-Free: 1-888-396-8049 International: +1 (416) 764-8646
Conference ID: 08064469
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 September
13, 2022. The replay will be available by dialing
1-877-674-7070 or +1 (416) 764-8692 and by using the passcode
064469.
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 Q2 2022, H1 2022, Q2 2021 and H1
2021 to provide, what management believes, is a meaningful
comparison of the Company's performance in Q2 2022 and H1 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:
|
3 mon. ended
Jun 30
|
|
6 mon. ended Jun
30
|
|
|
2022
|
2021
|
+/-
|
2022
|
2021
|
+/-
|
Net loss for the
period
|
$
(3,012)
|
$ (3,698)
|
-19 %
|
$(4,604)
|
$ (5,601)
|
-18 %
|
Share-based
compensation
|
574
|
705
|
-19 %
|
1,175
|
975
|
21 %
|
Depreciation
|
300
|
276
|
9 %
|
971
|
512
|
90 %
|
Depreciation in COGS
& SG&A
|
455
|
217
|
110 %
|
759
|
352
|
116 %
|
Financing
costs
|
1,318
|
926
|
42 %
|
2,293
|
1,960
|
17 %
|
Foreign exchange loss
(gain)
|
789
|
468
|
69 %
|
763
|
539
|
42 %
|
Gain on WINN
Loan
|
(15)
|
(29)
|
-48 %
|
(15)
|
(29)
|
-48 %
|
Loss on
financing
|
4
|
46
|
-91 %
|
4
|
212
|
-98 %
|
Acquisition related
expenses &
one-time charges
|
646
|
914
|
-29 %
|
924
|
1,060
|
-13 %
|
Deferred income taxes
recovery
|
(54)
|
-
|
- %
|
(108)
|
-
|
- %
|
Adjusted
EBITDA1
|
$
1,005
|
$ (175)
|
-674 %
|
$ 2,162
|
$ (20)
|
-10910 %
|
The following table provides a reconciliation of variable
gross profit to gross profit and gross margin to variable gross
margin for the periods ended:
|
3 mon. ended Jun
30
|
|
6 mon. ended Jun
30
|
|
|
2022
|
2021
|
+/-
|
2022
|
2021
|
+/-
|
Revenue
|
$
25,546
|
$
12,371
|
106 %
|
$
51,482
|
$
20,271
|
154 %
|
Variable cost of
product
|
17,090
|
8,080
|
112 %
|
34,805
|
12,758
|
173 %
|
Variable Gross
Profit1
|
8,456
|
4,291
|
97 %
|
16,677
|
7,513
|
122 %
|
Variable Gross Margin
%1
|
33.1 %
|
34.7 %
|
|
32.4 %
|
37.1 %
|
|
Fixed factory
overhead
|
1,708
|
785
|
118 %
|
3,295
|
1,218
|
171 %
|
Gross profit
|
6,748
|
3,506
|
92 %
|
13,382
|
6,295
|
112 %
|
Gross margin
%
|
26.4 %
|
28.3 %
|
|
26.0 %
|
31.1 %
|
|
The following table provides a reconciliation of selling,
general and administrative expense excluding acquisition activity
and one-time charges:
|
3 mon. ended
Jun 30
|
|
6 mon. ended Jun
30
|
|
|
2022
|
2021
|
+/-
|
2022
|
2021
|
+/-
|
SG&A
Wages
|
$
2,304
|
$ 1,265
|
82 %
|
$
4,390
|
$ 2,154
|
104 %
|
SG&A
Other
|
1,454
|
847
|
73 %
|
2,704
|
1,420
|
91 %
|
Product Development
expense
|
196
|
132
|
48 %
|
388
|
231
|
68 %
|
Acquisition related
expenses &
one-time charges
|
646
|
914
|
-29 %
|
924
|
1,060
|
-13 %
|
SG&A
|
4,600
|
3,158
|
46 %
|
8,406
|
4,865
|
73 %
|
SG&A % of
Revenue
|
18 %
|
26 %
|
|
16 %
|
24 %
|
|
SG&A Excluding
Acquisition
Activity & One-Time Charges1
|
3,964
|
2,244
|
77 %
|
7,492
|
3,805
|
97 %
|
SG&A % of Revenue
Excluding
Acquisition Related & One-Time
Charges1
|
16 %
|
18 %
|
|
15 %
|
19 %
|
|
SG&A Wages % of
Revenues
|
9 %
|
10 %
|
|
9 %
|
11 %
|
|
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, 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, future plans and strategies,
projections, anticipated events and trends, general market
conditions, the economy, sales volume and pricing and other future
conditions which we believe are reasonable as of the current date.
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 Company's plans. The reader should
not place undue importance on forward-looking information and
should not rely upon this information as of any other date.
If 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.
_____________________________
|
1 A
non-GAAP financing measure. Please refer to the "Non-GAAP Financial
Measures" below for an explanation of these measures and
reconciliation to the Company's financial results reported in
accordance with GAAP..
|
SOURCE Good Natured Products