Good Natured Products Inc. Announces First Quarter 2023 Results
Vancouver, British Columbia--(Newsfile Corp. - May 24, 2023) - good natured Products Inc. (TSXV: GDNP) (OTCQX: GDNPF) (the "Company" or "good natured®"), a North American leader in plant-based products, today announced its financial results for the three months ended March 31, 2023 ("Q1 2023").
Q1 2023 Highlights
Revenue of
$20.3 million compared to$25.9 million in Q1 2022 and$23.3 million in Q4 2022.Adjusted EBITDA1 of
$0.7 million compared to$1.2 million in Q1 2022 and$0 in Q4 2022.Variable gross margin1 of
38% compared to32% in Q1 2022 and33% in Q4 2022.SG&A expenses of
$3.8 million compared to$3.8 million in Q1 2022 and$4.9 million in Q4 2022.Cash flow from operations of
$0.8 million compared to$3.1 million in Q1 2022 and$4.0 million in Q4 2022.Ending cash balance of
$11.6 million compared to$11.9 million at December 31, 2022.
The Company's Packaging business group was robust in Q1 2023 and delivered
"We're keenly focused executing our long-term strategy to make plant-based packaging the largest and most profitable portion of our business. The recent White House announcement committing the United States to making
Q1 2023 Financial Overview
Revenue for Q1 2023 decreased
Variable gross margin for Q1 2023 increased to
Selling, general and administrative expenses ("SG&A") in Q1 2023 increased by
The Company's adjusted EBITDA1 for Q1 2023 was
In Q1 2023, the Company incurred a net loss of
Cash Flow and Net Working Capital
Cash generated by operating activities for Q1 2023 was
The Company's Q1 2023 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 2023 Results Conference Call
The Company will hold a conference call to discuss its financial results for Q1 2023, hosted by Paul Antoniadis, Executive Chair & CEO, and Kerry Biggs, Chief Financial Officer, on May 24, 2023 at 11:00 AM Eastern / 8:00 AM Pacific time.
Date: May 24, 2023
Time: 11:00 AM ET / 8:00 AM PT
Toll-Free: 1-888-396-8049 International: +1-416-764-8646
Conference ID: 07288870
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 7, 2022. The replay will be available by dialing 1-877-674-7070 or +1-416-764-8692 and by using the passcode 288870.
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 2023, Q1 2022 and Q4 2022 to provide, what management believes, is a meaningful comparison of the Company's performance in Q1 2023. These non-GAAP measures do not have standardized meanings, and therefore may not be comparable to similar measures presented by other issuers. Variable gross profit, variable gross margin, SG&A excluding acquisition activity and one-time charges, and adjusted EBITDA are more fully defined and discussed in the Company's Q1 2023 Management's Discussion and Analysis under the heading "non-IFRS financial measures", which is available on the Company's SEDAR profile at www.sedar.com and on the Company's investor website at investor.goodnaturedproducts.com.
The following table provides a reconciliation of net loss to adjusted EBITDA for the periods ended:
| 3 mon. ended Mar 31 | | | ||||||
( | | 2023 | | | 2022 | | | +/- | |
Net loss for the period | (2,521 | ) | (1,592 | ) | |||||
Share-based compensation | 403 | 601 | - | ||||||
Depreciation | 627 | 671 | - | ||||||
Depreciation in COGS & SG&A | 532 | 304 | |||||||
Financing costs | 1,799 | 975 | |||||||
Foreign exchange loss (gain) | (291 | ) | (26 | ) | |||||
Gain on WINN Loan | (42 | ) | - | - % | |||||
Loss on financing | - | - | - % | ||||||
Acquisition related expenses & one time charges | 291 | 278 | |||||||
Deferred income taxes recovery | (125 | ) | (54 | ) | |||||
Adjusted EBITDA1 | 673 | 1,157 | - |
The following table provides a reconciliation of variable gross profit to gross profit and variable gross margin to gross margin for the periods ended:
3 months ended Mar 31 | |||||||||
2023 | | 2022 | +/- | ||||||
Revenue | 20,315 | 25,936 | - | ||||||
Variable cost of product | 12,702 | 17,715 | - | ||||||
Variable gross profit1 | 7,613 | 8,221 | - | ||||||
Variable gross margin % | |||||||||
Fixed factory overhead | 2,014 | 1,587 | |||||||
Gross profit | 5,599 | 6,634 | - | ||||||
Gross margin % |
The following table provides a reconciliation of selling, general and administrative expense excluding acquisition activity and one-time charges:
3 mon. ended Mar 31 | |||||||||
( | 2023 | 2022 | +/- | ||||||
SG&A Wages | 2,353 | 2,086 | |||||||
SG&A Other | 1,031 | 1,250 | - | ||||||
Product Development expense | 166 | 192 | - | ||||||
Acquisition related expenses & one-time charges | 291 | 278 | |||||||
SG&A | 3,841 | 3,806 | |||||||
SG&A % of Revenue | |||||||||
SG&A excluding acquisition activity & one-time charges1 | 3,550 | 3,528 | |||||||
SG&A % of Revenue excluding acquisition related & one-time charges | |||||||||
SG&A Wages % of Revenues | | | | | |
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 2023, the upcoming results conference call and management's outlook for 2023.
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, future market and operating conditions, supply conditions, end customer demand conditions, anticipated events and trends, general market conditions, the economy, financial conditions, sales volume and pricing, expenses and costs, 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, but are not limited to: future capital needs and uncertainty of additional financing, risks relating to general economic, market and business conditions and unforeseen delays in the realization of the Company's plans, risks related to the loss of key manufacturing equipment, capability or facilities, the performance of plant-based materials and the ability of the Company's products and packaging to meet significant technical requirements, changes in raw material supply and costs, labour availability and labour costs, fluctuations in operating results, and other related risks as more fully set out in the Annual Information Form of the Company and other documents disclosed under the Company's filings at www.sedar.com. 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.
GOOD NATURED PRODUCTS INC. | |||||||
Consolidated Statements of Financial Position | |||||||
(In thousands) (Unaudited) | | | |||||
31-Mar | 31-Dec | ||||||
| 2023 | | 2022 | ||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 11,610 | $ | 11,860 | |||
Trade and other receivables | 11,418 | 9,360 | |||||
Inventory (note 3) | 11,906 | 12,663 | |||||
Prepaid expenses | | 744 | | 929 | |||
35,678 | 34,812 | ||||||
Non-current assets: | |||||||
Property and equipment (note 5) | 44,771 | 44,692 | |||||
Right-of-use assets (note 6) | 4,745 | 5,001 | |||||
Customer relationships (note 7) | 6,316 | 6,447 | |||||
Intangible and other assets (note 7) | 4,499 | 4,523 | |||||
Goodwill (note 7) | | 8,966 | | 8,966 | |||
$ | 104,975 | $ | 104,441 | ||||
Liabilities and Shareholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 21,223 | $ | 18,265 | |||
Current portion of long-term debt (note 8) | | 5,638 | | 6,593 | |||
26,861 | 24,858 | ||||||
Non-Current liabilities: | |||||||
Long-term debt (note 8) | 56,176 | 55,320 | |||||
Contingent consideration liability (note 8) | 2,072 | 2,035 | |||||
Deferred income tax liabilities | | 3,153 | | 3,278 | |||
61,401 | 60,633 | ||||||
Shareholders' Equity: | |||||||
Common share capital | 63,496 | 63,446 | |||||
Contributed surplus | 7,916 | 7,563 | |||||
Foreign currency translation reserve | 2,150 | 2,269 | |||||
Deficit | | (56,849 | ) | | (54,328 | ) | |
16,713 | 18,950 | ||||||
Total Liabilities and Shareholders' Equity | $ | 104,975 | $ | 104,441 |
GOOD NATURED PRODUCTS INC. | ||||||
Consolidated Statements of Net Loss and Comprehensive Loss | ||||||
(In thousands except per share amounts) (Unaudited) | ||||||
Three months ended March 31 | ||||||
2023 | | 2022 | ||||
Product revenue | $ | 20,315 | $ | 25,936 | ||
Cost of product revenue (note 11) | | (14,716 | ) | | (19,302 | ) |
Gross profit | 5,599 | 6,634 | ||||
Other (Expenses) Income: | ||||||
Selling, general, and administrative (note 12) | (3,841 | ) | (3,806 | ) | ||
Fulfilment and logistics | (1,908 | ) | (2,253 | ) | ||
Share-based compensation (note 9 (b)) | (403 | ) | (601 | ) | ||
Depreciation and amortization | (627 | ) | (671 | ) | ||
Financing costs | (1,799 | ) | (975 | ) | ||
Foreign exchange gain (loss) | 291 | 26 | ||||
Gain on interest free loan (note 8 (c)) | | 42 | | - | ||
Net loss before taxes | (2,646 | ) | (1,646 | ) | ||
Deferred income tax recovery | | 125 | | 54 | ||
Net loss for the period | $ | (2,521 | ) | $ | (1,592 | ) |
Other comprehensive Income (loss), net of tax | ||||||
Items that may be reclassified subsequently to profit or loss: | ||||||
Unrealized currency gain on translation of foreign operations | (119 | ) | (186 | ) | ||
Other comprehensive loss for the period | $ | (2,640 | ) | $ | (1,778 | ) |
Basic and diluted loss per share | $ | (0.01 | ) | $ | (0.01 | ) |
Weighted average shares outstanding - basic and diluted | | 241,762 | | 222,223 |
GOOD NATURED PRODUCTS INC. | ||||||
Consolidated Statements of Cash Flow | ||||||
(In thousands) | ||||||
Three months ended March 31 | ||||||
2023 | | | 2022 | |||
Cash provided by (used in): | ||||||
Operations: | ||||||
Net loss | $ | (2,521 | ) | $ | (1,592 | ) |
Items not involving cash: | ||||||
Depreciation and amortization | 842 | 813 | ||||
Unrealized foreign exchange (gain) loss | (127 | ) | 273 | |||
Amortization of right of use assets | 256 | 168 | ||||
Share based compensation (note 9(b, d)) | 403 | 601 | ||||
Gain on interest free loan | (42 | ) | - | |||
Financing costs | 1,799 | 975 | ||||
Deferred income tax | (125 | ) | | (54 | ) | |
485 | 1,184 | |||||
Changes in non-cash operating working capital: | ||||||
Trade and other receivables | (2,058 | ) | 4 | |||
Inventory | 757 | (2,071 | ) | |||
Prepaid expenses | 185 | (26 | ) | |||
Accounts payable and accrued liabilities | | 2,958 | 4,774 | |||
1,842 | 2,681 | |||||
Finance costs paid | | (1,535 | ) | (725 | ) | |
Cash provided by (used in) operating activities | | 792 | 3,140 | |||
Financing: | ||||||
Exercise of warrants for common shares | - | 254 | ||||
Exercise of options for common shares | - | 28 | ||||
Proceeds from long-term debt, net of issuance costs (note 8) | 1,404 | 700 | ||||
Repayment of long-term debt (note 8) | | (1,681 | ) | (568 | ) | |
Cash provided by financing activities | | (277 | ) | 414 | ||
Investments: | ||||||
Purchase of equipment | (697 | ) | (1,466 | ) | ||
Purchase of other assets | | (69 | ) | (227 | ) | |
Cash used in investing activities | (766 | ) | | (1,693 | ) | |
| | | | | ||
Effect of foreign exchange rate changes on cash | | 1 | (142 | ) | ||
Increase in cash | (250 | ) | 1,719 | |||
Cash and cash equivalents, beginning of period | | 11,860 | 10,655 | |||
Cash and cash equivalents, end of period | | 11,610 | 12,374 |
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.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/167192