- Gross Sales of $6.1 million in
Q2 2021, +50.4% compared to Q2 2020; Gross Sales of $12.6 million in the first six months of 2021,
+77.3% compared to Q2 2020. Strong sales growth continues to
outperform North American category growth.1
- Gross Margin2 of 15.6% in Q2 2021, +880bps vs. Q2
2020; Gross Margin of 15.2% in the first six months of 2021,
+1,850bps vs. Q2 2020.
- Continued progress against key strategic pillars, including
expanded distribution in existing channels and launches in new
channels with partners including: Loblaws, Sobeys, Metro, Whole
Foods, Weis and Costco.
- Began trading on the TSX Venture Exchange on May 26, 2021, under the ticker VEG after
completing its qualifying transaction and raising $15 million in two private
placements3, to accelerate its near-term growth
pipeline.
MISSISSAUGA, ON, May 31, 2021 /CNW/ - Sol Cuisine Ltd. ("Sol
Cuisine" or the "Company") (TSXV: VEG) a growth-oriented North
American leader in plant-based protein products, today reported the
financial results for its wholly-owned subsidiary, Sol Cuisine Inc.
for the three and six months ended March 31,
2021 prior to completion of the Company's qualifying
transaction. All figures are in Canadian dollars ($) unless
otherwise specified.
Summary Financial Results
|
Three months
ending
|
Six months
ending
|
|
March 31,
2021
|
March 31,
2020
|
March 31,
2021
|
March 31,
2020
|
Gross
Sales
|
$6,127,467
|
$4,075,437
|
$12,632,225
|
$7,125,454
|
Revenue4
|
$5,635,537
|
$3,615,412
|
$11,663,640
|
$6,260,992
|
Gross
Profit
|
$877,313
|
$246,984
|
$1,773,545
|
($204,196)
|
Gross
Margin
|
15.6%
|
6.8%
|
15.2%
|
(3.3%)
|
Adjusted
EBITDA5
|
($819,820)
|
($771,966)
|
($1,003,436)
|
($1,801,586)
|
Net Loss and
Comprehensive Loss
|
($2,005,923)
|
($1,223,806)
|
($3,122,169)
|
($3,015,800)
|
Management Commentary
"During the first six months of the year, our team continued to
execute on a clearly identified strategic roadmap focused on
generating sustained sales growth, product innovation, and a steady
expansion of the Company's distribution and channel footprint,"
said John Flanagan, CEO of Sol
Cuisine. "We are focused on delivering long term sustainable
results and I am very pleased to see the efforts of our North
American team translating into steady financial progress."
Mr. Flanagan continued, "The North American
plant-based protein sector is growing rapidly and as an early
leader, Sol Cuisine is well-positioned to become one of the top
players in the space over the next several years. At 20+ years
young, Sol Cuisine is just at the beginning of its growth story and
as such, we are focused on making the right investments and taking
the right steps to ensure we are positioned to generate sustained
growth and shareholder value over a multi-year period. With a
unique combination of best-in-class, highly differentiated
products, a broad and growing North American distribution network,
and the fully funded and built operational foundation to support
significant volume and revenue expansion, we look forward to
continuing to delight consumers while delivering value for
shareholders."
Q2 Operating Highlights
Sol Cuisine is focused on executing a clear and actionable
strategy designed to deliver continued growth. This strategy is
focused on four primary pillars: introducing breakthrough product
innovation; generating brand velocity; aggressively expanding
retail distribution; and launching and growing into important new
channels. The Company continued to make progress during the
quarter, with successes including:
- Breakthrough product innovation: The recent launch of
appetizers and entrees in a bagged format have been favorably
received by consumers. Distribution continues to grow and during
Q2, the sales velocity of Sol Cuisine Wings, Meatballs, Turk'y
Roasts and Chik'n Tenders already exceeded that exhibited by the
Company's leading burger products in Canada. In the U.S., Sol Cuisine Falafel,
Chik'n Bites, Chik'n Tenders, Meatballs and Wings are also selling
ahead of expectations in the first quarter post-launch.
- Brand Velocity: In Q2, driven by new product launches,
Sol Cuisine continued to significantly outperform the market in
terms of sales growth. The Company grew +44% in Canada, more than four-times faster than the
overall category and +40% in the US in a category that declined in
the low single digits.1
- Distribution footprint: Sol Cuisine continued to
introduce products beyond its core burger set into key retail
channels in Canada and the U.S.
During Q2, the Company added products through Canadian retail
banners including: Loblaws, Sobeys, Costco, Farm Boy and Whole
Foods. In the U.S., the Company added products through retail
banners including: Weis, Tops and Cub Foods.
- Launch and growth in important new channels: The Company
continued to grow its presence in the key U.S. Club and Food
Service segments during Q2, with launches and/or expansions in
Costco (Midwest region), Publix, Little Spoon and Target Deli.
Summary of Recent Corporate Developments
- On May 19, 2021, Sol Cuisine
completed its qualifying transaction (the "Transaction"). In
conjunction with the Transaction, the Company raised $15 million in two private placements[6], to
accelerate its near-term growth pipeline.
- On May 19, 2021, concurrent with
the Transaction, Ms. Mary Dalimonte,
Ms. Beena Goldenberg and Ms.
Lisa Swartzman joined the Company's
board of directors. All three are highly experienced professionals
with proven track records of success in CPG and consumer retail.
The new additions join Chairman Mike
Fata, who has a 20+ year history in natural products,
including as the founder and CEO of Manitoba Harvest, and
Dror Balshine, founder and President
of Sol Cuisine.
- On May 26, 2021, the Company
began trading on the TSX Venture Exchange under the ticker
"VEG".
For more details, visit Sol Cuisine's IR website at:
investors.solcuisine.com or contact the IR team at
investors@solcuisine.com.
Non-IFRS Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and adjusted EBITDA margin are both non-IFRS
financial measures. Adjusted EBITDA is defined as net income or
loss before income taxes, net finance costs, depreciation and
amortization, impairment losses, restructuring costs, one-time cost
related to going public and stock-based compensation, while
adjusted EBITDA margin is defined as the percentage of adjusted
EBITDA to revenues. We believe that adjusted EBITDA and adjusted
EBITDA margin are useful measures of financial performance because
they provide an indication of the Company's ability to seize growth
opportunities in a cost-effective manner, finance its ongoing
operations and service its long-term debt.
The following information provides reconciliations of the
supplemental non-IFRS financial measure presented herein to the
most directly comparable financial measure calculated and presented
in accordance with IFRS.
Reconciliation of Net Loss to Adjusted EBITDA:
|
Three months
ending
|
Six months
ending
|
|
March 31,
2021
|
March 31,
2020
|
March 31,
2021
|
March 31,
2020
|
Net
Loss
|
($2,005,923)
|
($1,223,806)
|
($3,122,169)
|
($3,015,800)
|
Finance charges and
interest
|
217,056
|
(3,773)
|
438,885
|
111,996
|
Depreciation and
amortization
|
540,637
|
371,362
|
1,017,191
|
898,969
|
Impairment of
long-term assets
|
-
|
60,672
|
-
|
150,241
|
One-time costs
related to RTO process
|
232,259
|
-
|
232,259
|
-
|
Stock-based
compensation
|
196,151
|
23,579
|
430,398
|
53,008
|
Adjusted
EBITDA
|
($819,820)
|
($771,966)
|
($1,003,436)
|
($1,801,586)
|
% of
Revenue
|
(14.55%)
|
(21.35%)
|
(8.6%)
|
(28.77%)
|
About Sol Cuisine Ltd.
Sol Cuisine is the publicly traded parent company of Sol Cuisine
Inc. following the completion of its "qualifying transaction" on
May 19, 2021. Sol Cuisine is a
fast-growing producer of branded, consumer-preferred plant-based
protein offerings across key center-of-plate and appetizer
categories. The Company's products are offered through an
established omni-channel distribution platform in Canada and the U.S. and are available in over
11,000 stores and more than 41,000 unique points of distribution.
Over a history of 20+ years, Sol Cuisine has consistently
demonstrated an ability to innovate and delight consumers in
Canada and the U.S., while
remaining true to its commitment to producing great tasting
products that are nutritionally superior both to meat-based
offerings and to competitive plant-based products. This commitment
has resulted in several Canadian product wins, including the #1
frozen plant-based burger in Canada, the #1 consumer-preferred chicken
alternative and the #1 quality roast product as determined by Whole
Foods Market. The Company's taste and nutritional superiority has
also resulted in private label contracts with some of the most
recognized natural brands in North
America. Sol Cuisine's products are all produced at the
Company's two state of the art facilities, totaling 35,000 square
feet in Mississauga, Ontario,
capable of supporting up to 10 million kilograms of volume per
annum.
For more details on Sol Cuisine's consumer brands:
Website: www.solcuisine.com
Instagram: @solcuisine
Facebook: @solcuisine
Twitter: @solcuisine
LinkedIn: @solcuisine
Forward Looking Statements
This press release includes forward-looking information within
the meaning of Canadian securities laws regarding the Company and
its business. Often but not always, forward-looking information can
be identified by the use of words such as "expect", "intends",
"anticipated", "believes" or variations (including negative
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would" or "will" be
taken, occur or be achieved. Such statements are based on the
current expectations and views of future events of the management
of each entity, and are based on assumptions and subject to risks
and uncertainties. Although the management believes that the
assumptions underlying these statements are reasonable, they may
prove to be incorrect. The forward-looking events and circumstances
discussed in this press release may not occur and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the company, including risks regarding the
size of the industry, the growth of the market for the Company's
products, the rate and quantity of production at the Company's
facilities, market conditions, economic factors, management's
ability to manage and to operate the business of the Company and
the equity markets generally. Although the Company has attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results to differ from those anticipated,
estimated or intended. Accordingly, readers should not place undue
reliance on any forward-looking statements or information. No
forward-looking statement can be guaranteed. Except as required by
applicable securities laws, forward-looking statements speak only
as of the date on which they are made and the Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
The TSX Venture Exchange has not reviewed, approved, or
disapproved the content of this news release.
John Flanagan
Chief
Executive Officer
905-502-8500
1 Q2-2021. Canadian data per A.C. Nielsen
Markettrack @ Mar 2021; US data per
SPINS TL MULO @ April 2021
2 Defined as Gross Profit divided by Revenue
3 $15 million in gross proceeds. Split:
$12.9 million in gross proceeds as
part of a brokered private placement; and $2.1 million in gross proceeds as part of a
non-brokered private placement.
4 Defined as Gross Sales less sales discounts
and other deductions
5 Adjusted EBITDA is a non-IFRS financial
measure. See the section of this news release entitled "Non-IFRS
Financial Measures: Adjusted EBITDA and Adjusted EBITDA Margin"
6 $15 million in gross proceeds. Split:
$12.9 million in gross proceeds as
part of a brokered private placement; and $2.1 million in gross proceeds as part of a
non-brokered private placement.
SOURCE Sol Cuisine Ltd.