Goodfood Market Corp. (“Goodfood” or “the
Company”) (TSX: FOOD), a leading Canadian online grocery company,
delivering fresh meal solutions and grocery items, today announced
financial results for the second quarter of Fiscal 2022, ended
March 5, 2022.
“I am pleased with the quarterly progress we are
making across our three key value-creating drivers. Beginning with
our focus to improve profitability and cash flow, we have made
continued improvements in our cost structure and working capital
management, leading to cash flow used in operating activities of
$13.7 million, a significant improvement over the $18.9 million and
$23.7 million used in the first quarter of Fiscal 2022 and last
quarter of Fiscal 2021, respectively. From an operational
perspective, we successfully implemented a series of efficiency
initiatives that offset inflationary pressures and other
macroeconomic headwinds to come inline from a gross margin
perspective when compared to the first quarter of 2022. During the
quarter, we also continued to sequentially reduce our fixed cost
structure, having now fully realized the previously announced $12
million in annualized savings from headcount reduction,” said
Jonathan Ferrari, Chief Executive Officer of Goodfood.
“Growing our on-demand customer base is our
second value creating driver as it will be the driving force of our
planned return to top-line net sales growth. Only Goodfood, through
our vertically integrated on-demand grocery and meal solutions
network, allows Canadians to fulfill their meal planning needs in
minutes with no mark-up to in-store prices. We are thrilled to have
grown our on-demand Active Customer (1) base to over 27,000
households in Toronto and Montreal, clearly demonstrating
Canadians’ appetite for a fast delivery of our unique selection of
products, and we are excited by the opportunity the recent opening
of our digital store to non-subscriber creates. The exciting
adoption rates we are seeing led, in a seasonally impacted quarter,
to second quarter Net Sales essentially inline with those of the
first quarter 2022 adjusted for its additional four days.”
“Turning to our other value creating driver, on
the back of the rapid growth of our on-demand customer base, we
have launched 3 new micro fulfillment centres to serve new and
existing customers better. Our total of now 6 on-demand facilities
enable us to serve population-dense areas of Toronto, Montreal and
now Ottawa, where our first automated facility opened in March,”
added Mr. Ferrari.
“As we continue to execute on our three key
value-creating drivers, we are giving particular focus to improving
our profitability, and began implementing during the third quarter
a further $10 to $12 million in headcount reductions as well as
other measures to streamline operations. With the improved cost
structure, we believe the $106 million of cash on hand and revolver
availability provide the Company with the financial flexibility
required to return to top-line growth and positive Adjusted EBITDA
(1).”
"Lastly, we are also excited to welcome John
Khabbaz to our Board of Directors, replacing Hamnett Hill who will
continue to be an important shareholder of the Company. I would
first like to thank Hamnett for his incredible support in helping
build Goodfood over the years. I would also like to welcome John to
our Board. His continued support in recent months and strong
business acumen will help guide Goodfood in the exciting
initiatives it is building,” concluded Mr. Ferrari.
“I am grateful to have served as a Director and
advisor to Goodfood over the past seven years. Our plan has always
been to build a national grocery brand and delivery infrastructure
by initially winning the subscription meal-kit market, once
Canadians began to order groceries online. The acceleration of that
shift in buying behavior brought about by COVID, combined with the
incredible response to and demand for our on-demand grocery
offering gives me confidence we will continue to capture share of
that $140-billion-plus opportunity. My decision to step down is the
result of a personal decision that my family and I have made to
take an extended sabbatical leave. As a result of this decision, I
have stepped down from all of the professional and non-profit
boards I have been serving on,” said Hamnett Hill. “I am also
excited by the experience, skills, background, and financial
commitment that my replacement, John Khabbaz will bring to the
company and the Board. His detailed understanding of the business,
the industry and public markets will surely strengthen the company
and the Board. While I may cease to be a Director moving forward, I
will remain amongst your largest, most engaged and vocal
shareholders and champions,” concluded Mr. Hill in his open letter
to the Board, management and shareholders
(http://edo.ink/letter).
John Khabbaz is the Founder and Chief Investment
Officer of Phoenician Capital, an investment management firm
headquartered in New York City. Phoenician’s mission is to invest
in high-quality businesses built on foundations of strong unit
economics and often led by pioneering founders. Mr. Khabbaz earned
his undergraduate degree from McGill University and then attended
Columbia University, where he received his MBA. Prior to founding
Phoenician Capital in 2007, Khabbaz held leadership roles at a
multi-asset class financial firm. Before that, he was the founder
and CEO of a manufacturing business based in New York, with global
operations spanning three continents.
“I am thrilled to be joining Goodfood’s Board of
Directors as I am a staunch supporter of the Company’s vision and
management team. The company is at the forefront of the structural
evolution of the Canadian grocery landscape, as Canadian consumers
shift their buying habits to on-demand delivery of grocery and meal
solutions,” said Khabbaz. “As an entrepreneur and founder myself, I
understand the challenges and opportunities faced by young, growing
businesses. Working with my fellow Board members, I will seek to
guide this dynamic team to cement its leadership in the Canadian
online grocery market. Goodfood is currently selling at an
attractive valuation, and, in the long run, the market will
recognize its unique competitive advantages,” concluded Mr.
Khabbaz.
FINANCIAL HIGHLIGHTS
RESULTS OF OPERATIONS – SECOND QUARTER OF FISCAL 2022 AND
2021 |
(In thousands of Canadian dollars, except per share and percentage
information) |
For the 13-weeks periods ended |
March 5,2022 |
|
February 28,2021 |
|
($) |
|
(%) |
|
Net sales |
$ |
73,377 |
|
$ |
100,654 |
|
$ |
(27,277 |
) |
(27 |
)% |
Cost of goods sold |
55,782 |
|
70,018 |
|
(14,236 |
) |
(20 |
)% |
Gross profit |
$ |
17,595 |
|
$ |
30,636 |
|
$ |
(13,041 |
) |
(43 |
)% |
Gross margin |
24.0 |
% |
30.4 |
% |
N/A |
|
(6.4)p.p. |
|
Selling, general and administrative expenses |
|
33,163 |
|
|
31,788 |
|
|
1,375 |
|
4 |
% |
Reorganization costs |
|
1,293 |
|
139 |
|
1,154 |
|
830 |
% |
Depreciation and amortization |
|
4,282 |
|
2,292 |
|
1,990 |
|
87 |
% |
Net finance costs |
1,056 |
|
540 |
|
516 |
|
96 |
% |
Net loss before income taxes |
$ |
(22,199 |
) |
$ |
(4,123 |
) |
$ |
(18,076 |
) |
N/A |
|
Deferred income tax (recovery) expense |
|
(1,559 |
) |
|
129 |
|
|
(1,688 |
) |
N/A |
|
Net loss, being comprehensive loss |
$ |
(20,640 |
) |
$ |
(4,252 |
) |
$ |
(16,388 |
) |
N/A |
|
Basic and diluted loss per share |
$ |
(0.28 |
) |
$ |
(0.06 |
) |
$ |
(0.22 |
) |
N/A |
|
VARIANCE ANALYSIS FOR THE SECOND QUARTER
OF 2022 COMPARED TO SECOND QUARTER OF 2021
- Net sales
decreased compared to the same period last year mainly due to the
reduced consumer demand following the removal of lock-down
restrictions and the increased vaccine coverage partially offset by
the growth of our on-demand Active Customer (1) base. In addition,
due to the non-recurrence of the prior year’s COVID-19 restrictions
coupled with a lower sales base, there was an increase in
incentives and credits used as a percentage of sales.
- The decrease in
gross profit and gross margin primarily resulted from a decrease in
net sales leading to operating de-leverage, including food,
production costs and shipping costs. The increase in food costs was
primarily driven by the expansion of our private label grocery
offering. Higher production costs primarily resulted from an
increase in production and fulfillment labour due to inflationary
increases in wages and increases in supervisory and other
non-direct labour. Lastly, higher shipping costs resulted mainly
from reduced density due to operating de-leverage.
- The increase in
selling, general and administrative expenses is primarily due to
higher wages and salaries resulting from the expansion of the
management team, including mainly our technology, operations
management and marketing groups, and related administrative
functions needed to build out the physical and digital on-demand
fulfillment infrastructure, including the growing product offering
required to support the Company’s growth plan. Selling, general and
administrative expenses as a percentage of net sales increased from
31.6% to 45.2%.
- Reorganization
costs were incurred in the second quarter of Fiscal 2022 mainly
consisting of severance costs related to organizational
realignments being progressively implemented in light of the
completion and implementation of systems and improved processes
coupled with aligning our workforce towards our future catalyst for
growth on-demand groceries and meal solutions.
- The increase in
depreciation and amortization expense is mainly due to the
recognition of right-of-use assets from new facility lease
agreements and related additions of leasehold improvements as the
Company continues to grow and expand its product offering of
grocery products and the ramp-up of new facilities across
Canada.
- The increase in
net finance costs is mainly due to the Company’s on-demand strategy
leading to a ramp-up of new facilities across Canada from
continuous expansion of its footprint and its network of
centralized manufacturing with localized micro fulfillment
resulting in an increase interest expense on lease
obligations.
- In the second
quarter of Fiscal 2022, a deferred income tax recovery was
recognized due to the issuance of $30 million convertible
debentures in February 2022.
- The increase in
net loss in the second quarter of 2022 compared to the same quarter
last year is mainly due to lower net sales and gross profit as well
as higher wages and salaries.
RESULTS OF OPERATIONS – YEAR-TO-DATE FISCAL 2022 AND
2021 |
(In thousands of Canadian dollars, except per share and percentage
information) |
For the 26-weeks periods ended |
|
March 5,2022 |
|
February 28,2021 |
|
($) |
|
(%) |
|
Net sales |
$ |
151,198 |
|
$ |
192,081 |
|
$ |
(40,883 |
) |
(21 |
)% |
Cost of goods sold |
114,955 |
|
131,872 |
|
(16,917 |
) |
(13 |
)% |
Gross profit |
$ |
36,243 |
|
$ |
60,209 |
|
$ |
(23,996 |
) |
(40 |
)% |
Gross margin |
24.0 |
% |
31.4 |
% |
N/A |
|
(7.4) p.p. |
|
Selling, general and administrative expenses |
|
67,738 |
|
|
61,523 |
|
|
6,215 |
|
10 |
% |
Reorganization costs |
|
3,105 |
|
139 |
|
2,996 |
|
2,134 |
% |
Depreciation and amortization |
|
7,222 |
|
4,325 |
|
2,897 |
|
67 |
% |
Net finance costs |
1,960 |
|
1,215 |
|
745 |
|
61 |
% |
Net loss before income taxes |
$ |
(43,782 |
) |
$ |
(6,993 |
) |
$ |
(36,789 |
) |
N/A |
|
Deferred income tax (recovery) expense |
|
(1,532 |
) |
|
342 |
|
|
(1,874 |
) |
N/A |
|
Net loss, being comprehensive loss |
$ |
(42,250 |
) |
$ |
(7,335 |
) |
$ |
(34,915 |
) |
N/A |
|
Basic and diluted loss per share |
$ |
(0.56 |
) |
$ |
(0.11 |
) |
$ |
(0.45 |
) |
N/A |
|
VARIANCE ANALYSIS FOR THE YEAR-TO-DATE
2022 COMPARED TO SAME PERIOD OF 2021
- Net sales
decreased compared to the same period last year mainly due to the
reduced consumer demand following the removal of lock-down
restrictions and the increased vaccine coverage partially offset by
the growth of our on-demand Active Customer (1) base. In addition,
due to the non-recurrence of the prior year’s COVID-19 restrictions
coupled with a lower sales base, there was an increase in
incentives and credits used as a percentage of sales.
- The decrease in
gross profit and gross margin primarily resulted from a decrease in
net sales leading to operating de-leverage, including food,
production costs and shipping costs. The increase in food costs was
primarily driven by the expansion of our private label grocery
offering. Higher production costs primarily resulted from an
increase in production and fulfillment labour due to inflationary
increases in wages and increases in supervisory and other
non-direct labour. Lastly, higher shipping costs resulted mainly
from reduced density due to operating de-leverage.
- The increase in
selling, general and administrative expenses is primarily due to
higher wages and salaries resulting from the expansion of the
management team, including mainly our technology, operations
management and marketing groups, and related administrative
functions needed to build out the physical and digital on-demand
fulfillment infrastructure, including the growing product offering
required to support the Company’s growth plan. The increase was
partially offset by lower professional fees mainly due to ERP
implementation in Fiscal 2021. Selling, general and administrative
expenses as a percentage of net sales increased from 32.0% to
44.8%.
- Reorganization
costs were incurred in the half of Fiscal 2022 mainly consisting of
severance costs related to organizational realignments being
progressively implemented in light of the completion and
implementation of systems and improved processes coupled with
aligning our workforce towards our future catalyst for growth
on-demand groceries and meal solutions.
- The increase in
depreciation and amortization expense is mainly due to the
recognition of right-of-use assets from new facility lease
agreements and related additions of leasehold improvements as the
Company continues to grow and expand its product offering of
grocery products and the ramp-up of new facilities across
Canada.
- The increase in
net finance costs is mainly due to the Company’s on-demand strategy
leading to a ramp-up of new facilities across Canada from
continuous expansion of its footprint and its network of
centralized manufacturing with localized micro fulfillment
resulting in an increase interest expense on lease
obligations.
- A deferred
income tax recovery was recognized due to the issuance of $30
million convertible debentures in February 2022.
- The increase in
net loss compared to the same period last year is mainly due to
lower net sales and gross profit as well as higher wages and
salaries.
EBITDA
(1), ADJUSTED EBITDA
(1) AND ADJUSTED EBITDA MARGIN
(1)
The reconciliation of net loss to EBITDA (1),
adjusted EBITDA (1) and adjusted EBITDA margin (1) is as
follows:
(In
thousands of Canadian dollars, except percentage information) |
|
For the 13-weeks ended |
|
For the 26-weeks ended |
|
|
March 5,2022 |
|
February 28,2021 |
|
March 5,2022 |
|
February 28,2021 |
|
Net loss |
$ |
(20,640 |
) |
$ |
(4,252 |
) |
$ |
(42,250 |
) |
$ |
(7,335 |
) |
Net finance costs |
|
1,056 |
|
|
540 |
|
|
1,960 |
|
|
1,215 |
|
Depreciation and
amortization |
|
4,282 |
|
|
2,292 |
|
|
7,222 |
|
|
4,325 |
|
Deferred income tax (recovery) expense |
|
(1,559 |
) |
|
129 |
|
|
(1,532 |
) |
|
342 |
|
EBITDA(1) |
$ |
(16,861 |
) |
$ |
(1,291 |
) |
$ |
(34,600 |
) |
$ |
(1,453 |
) |
Share-based payments
expense |
|
1,984 |
|
|
1,404 |
|
|
3,337 |
|
|
2,401 |
|
Reorganization costs |
|
1,293 |
|
|
139 |
|
|
3,105 |
|
|
139 |
|
Adjusted EBITDA(1) |
$ |
(13,584 |
) |
$ |
252 |
|
$ |
(28,158 |
) |
$ |
1,087 |
|
Net
sales |
$ |
73,377 |
|
$ |
100,654 |
|
$ |
151,198 |
|
$ |
192,081 |
|
Adjusted EBITDA margin(1)(%) |
|
(18.5 |
)% |
|
0.3 |
% |
|
(18.6 |
)% |
|
0.6 |
% |
For the second quarter of 2022, adjusted EBITDA
margin (1) decreased by 18.8 percentage points compared to the
corresponding period in 2021 mainly due to a lower sales base
resulting from the continued relaxation of lock-down restrictions
and the increased vaccine coverage in the second quarter of 2022.
In addition, lower adjusted EBITDA margin (1) can be explained
mainly by higher wages and salaries as well as marketing spend as a
percentage of net sales resulting from the expansion of the
management team, including mainly our technology, operations
management and marketing groups, and related administrative
functions needed to build out the physical and digital on-demand
fulfillment infrastructure, including the growing product offering
required to support the Company’s growth plan.
For the 26-weeks ended March 5, 2022, adjusted
EBITDA margin (1) decreased by 19.2 percentage points compared to
the corresponding period in 2021 mainly due to a lower sales base
resulting from the continued relaxation of lock-down restrictions
and the increased vaccine coverage in the first half of 2022. In
addition, lower adjusted EBITDA margin (1) can be explained mainly
by higher wages and salaries as well as marketing spend as a
percentage of net sales resulting from the expansion of the
management team, including mainly our technology, operations
management and marketing groups, and related administrative
functions needed to build out the physical and digital on-demand
fulfillment infrastructure, including the growing product offering
required to support the Company’s growth plan.
FINANCIAL OUTLOOK
Online grocery is a fast-growing segment of the
overall $140-billion-plus Canadian grocery industry, with digital
grocery delivery penetration currently estimated to be in the
single digits. We expect on-demand quick commerce delivery to act
as a further catalyst of growth, potentially resulting in online
grocery penetration reaching similar levels to other consumer goods
product categories, which at 20% penetration, would result in a
directly addressable market for online, on-demand grocery shopping
of approximately $30 billion.
Over the past two and a half years, the Company
has increased its offering from approximately 50 products to over
1,000 products today, which have built a cult-like following among
customers. In addition, the Company has increased its delivery
speed moving from a four-day delivery cycle to a same-day/next-day
offering, and now to extremely fast on-demand delivery in as little
as 30 minutes in Toronto, Montreal and now Ottawa. The results of
this strategy have led to a more engaged Goodfood customer, with
improved retention and more frequent order rates. Building on this,
Goodfood intends to continue to create significant long-term
shareholder value by:
- Continuing to grow its weekly orders and Active Customer (1)
base supported by rapid on-demand delivery and an expanding grocery
and meal solutions product portfolio
- Expanding the geographic coverage and increasing the density of
its on-demand grocery and meal solutions fulfillment network
- Improving progressively its Net Loss and Adjusted EBITDA (1) as
a percentage of Net Sales, as well as reducing its overall cash
outflows through optimized capital spend, benefiting from the
operating leverage Net Sales growth provides as well as through
improved efficiencies and processes
Each quarter, Goodfood’s Active Customer (1)
base places nearly a million weekly-subscription and on-demand
orders, serviced through a hub and spoke national network of
distribution centres and manufacturing facilities feeding
micro-fulfillment centres (“MFC") that are strategically located
close to our customers’ homes. The Company intends to grow its
Active Customer (1) base and weekly orders by increasing the
coverage of its on-demand 30-minute delivery to go along with an
expanding product portfolio that now includes national brands,
hyper-local brands, alcohol and health and beauty products, and a
digital store with continuously improving user-interface and
capabilities.
Since Goodfood launched its ground-breaking
30-minute on-demand grocery and meal solution service in Toronto
and Montreal, the Company sustained rapidly growing new on-demand
customers and reached an annualized $34 million sales run-rate
before incentives and credits within 4 months of launch, a ~129%
increase since the end of the first quarter of 2022. Supported by
an attractive Net Promoter Score, an indication of customer
satisfaction that is approximately 2x higher than traditional brick
and mortar grocery, industry leading average order values and
monthly order frequency, strong monthly cohort on-demand order
retention rates, and the attractive at scale unit-economics these
MFCs can provide, the Company plans on opening additional
facilities to expand both the coverage and density within Toronto
and Montreal, as well as Canada’s other leading cities. As we look
towards 2023, we expect the approximately 20 MFCs we plan on adding
to our network during calendar 2022 to be the driver of the return
of year-over-year growth. With adequate organizational capabilities
and capital, we intend to launch approximately an additional
15-plus facilities per year beginning in Fiscal 2023. With these
expected launches, our asset-light growth strategy will aim to have
over $1 billion of on-demand grocery and meal solution capacity
added by the end of Fiscal 2025 or sooner for as little as $40
million of capex for the local MFCs. Estimated required capex is
based on capex investments for MFCs previously launched.
Goodfood's growth strategy involves delaying
short-term profitability through the investment of capital in
operating expenses related to building out its on-demand
fulfillment capability, its grocery and meal-solutions offering as
well as the technology and marketing required to support these
growth initiatives. While Goodfood expects these investments to
continue, we expect, through the on-going implementation of cost
saving initiatives, a continued progressive improvement in our cost
structure on a sequential quarter-over-quarter basis, as we
generate efficiencies through the implementation of technology
systems and improved
processes, improved purchasing power,
fulfillment and delivery costs, and realized operating leverage
across our network.
Looking further out, as the Company grows its
market share and scale, it is confident that it will achieve
economies of scale and additional efficiencies which will lead to
attractive profitability levels and returns on invested
capital.
Our overall strategy as well as the metrics
discussed in this section of the Press Release can be found in our
latest investor presentation. The investor presentation can be
found under the “Investor Presentation” section of our investor
relations website here:
https://www.makegoodfood.ca/en/investisseurs/evenements.
Lastly, the COVID-19 pandemic has had an impact
on Goodfood’s overall business and operations. The Company
experienced an acceleration of growth in demand as well as on-going
pressure on its cost structure. During the summer of 2021 and in
the Winter and Spring of 2022, we observed significant relaxation
of COVID-19 restrictions versus the prior year and a change in
consumer behavior as it relates to the pandemic, which negatively
impacted weekly subscriber order volume. As we navigate the return
to normalcy, we expect to see inconsistent demand patterns, and
supply chain and operational conditions. Combined with recent
inflationary pressures, these challenges are expected to impact
Goodfood until stable consumer and behavioral patterns are
established.
The foregoing discussion is based on assumptions
that we are able to launch on-demand facilities in accordance with
our strategic plan, that such facilities would be open and
operational in accordance with planned timing and that they would
have the impact on our operations, Net Sales and financial results
expected by management based on current circumstances. Actual
results could differ materially, and risks related to the launch of
such facilities and their impact include availability of locations,
our ability to source locations for the facilities, the cost of
leasing space and costs of materials and labour to build out the
facilities as well as availability and ability to source capital to
fund the build-out and launch of planned facilities. The impact of
new facilities and their contribution to our operational and
financial results is also subject to the risk factors related to
our business in general identified or referred to in the
‘‘Forward-Looking Information’’ and ‘‘Business Risk” sections of
the MD&A.
TRENDS AND SEASONALITY
The Company’s net sales and expenses are
impacted by seasonality. During the holiday season and the summer
season, the Company anticipates net sales to be lower as a higher
proportion of customers elect to skip their delivery. The Company
generally anticipates the growth rate of the number of Active
Customers (1) to be lower during these periods. While this is
typically the case, the COVID-19 pandemic as well as the impact of
the vaccine rollout and changing government restrictions have had,
and may continue to have, an impact on this trend. Seasonality was
muted during the pandemic. In light of the COVID-19 vaccine rollout
as well as relaxation of lock-down restrictions in the summer,
seasonality trends returned in the fourth quarter of Fiscal 2021
and lasted well into the first quarter of 2022 due to the
unseasonably warm weather throughout most of the quarter. During
periods with warmer weather, the Company anticipates packaging
costs to be higher due to the additional packaging required to
maintain food freshness and quality. The Company also anticipates
food costs to be positively affected due to improved availability
during periods with warmer weather.
CONFERENCE CALL
Goodfood will hold a conference call to discuss
these results on April 14, 2022, at 8:00AM Eastern Time. Interested
parties can join the call by dialing 1 (438) 803-0547 (Montreal or
overseas) or 1 (888) 440-2169 (elsewhere in North America). To
access the webcast and view the presentation, click on this link:
https://www.makegoodfood.ca/en/investisseurs/evenements
Parties unable to call in at this time may
access a recording by calling 1 (800) 770-2030 and entering the
conference ID 1927890. This recording will be available on April
14, 2022 as of 11:00 AM Eastern Time until 11:59 PM Eastern Time on
April 21, 2022.
A full version of the Company’s Management’s
Discussion and Analysis (MD&A) and Consolidated Financial
Statements for the second quarters ended March 5, 2022 and February
28, 2021 will be posted on http://www.sedar.com later today.
NON-IFRS FINANCIAL MEASURES
Certain financial and non-financial measures
included in this news release do not have a standardized meaning
under IFRS and therefore may not be comparable to similar measures
presented by other companies. The Company includes these measures
because it believes they provide to certain investors a meaningful
way of assessing financial performance. For a more complete
description of these measures and a reconciliation of Goodfood's
non-IFRS financial measures to financial results, please see
Goodfood's Management's Discussion and Analysis for the second
quarter ended March 5, 2021.
Goodfood's definition of the non-IFRS measures
are as follows:
- EBITDA is defined as net income
(loss) before net finance costs, depreciation and amortization and
income taxes.
- Adjusted EBITDA is defined as
EBITDA excluding share-based payments and restructuring costs.
- Adjusted EBITDA margin is defined
as the percentage of adjusted EBITDA to revenues.
- Total cash, net of debt measures
how much total cash the Company has after taking into account its
total debt. Total cash include cash and cash equivalent. Total debt
includes the current and long-term portions of the debt as well as
the liability component of the convertible debentures.
- Total cash, net of debt to total
capitalization is calculated as total cash, net of debt over total
capitalization. Total capitalization is measured as total debt plus
shareholder’s equity.
ACTIVE SUBSCRIBERS
(1)
An active subscriber is an account that is
scheduled to receive a delivery, has elected to skip delivery in
the subsequent weekly delivery cycle or that is registered to
Goodfood WOW. Active subscribers exclude cancelled accounts. For
greater certainty, an active subscriber is only accounted for once,
although different products might have been ordered in a given
weekly delivery cycle. While the active subscribers metric is not
an IFRS or non-IFRS financial measure, and, therefore, does not
appear in, and cannot be reconciled to a specific line item in the
Company’s consolidated financial statements, we believe that the
active subscribers metric is a useful metric for investors because
it is indicative of potential future net sales. The Company reports
the number of active subscribers at the beginning and end of the
period, rounded to the nearest thousand.
ACTIVE CUSTOMERS
(1)
An active customer is a customer that has placed
an order within the last three months. Active customers include
customers who have placed an order (1) received as part of our
weekly meal subscription plan, a subscription active customer; and
(2) received on a next-day, same-day or less basis, an on-demand
active customer. For greater certainty, an active customer is only
accounted for once, although different products and multiple orders
might have been purchased within a quarter. While the active
customers metric is not an IFRS or non-IFRS financial measure, and,
therefore, does not appear in, and cannot be reconciled to a
specific line item in the Company’s consolidated financial
statements, we believe that the active customers metric is a useful
metric for investors because it is indicative of potential future
net sales. The Company reports the number of active customers at
the beginning and end of the period, rounded to the nearest
thousand.
(1) |
The active subscriber and active customer metrics should be
evaluated independently, as they are related metrics where a user
of the Company’s platform can be counted as both an active
subscriber and active customer. For example, this could occur if
the user has made an order in the three months prior to the
relevant measurement date and holds an account which has not been
cancelled on or before the relevant measurement date. The Company
has been transitioning towards the active customer metric as it
provides greater clarity and transparency on the number of
customers who placed an order during a quarter (active customers)
as opposed to only customers who have a subscription (active
subscribers). |
ABOUT GOODFOOD
Goodfood (TSX: FOOD) is a leading online grocery
company in Canada, delivering fresh meal solutions and grocery
items that make it easy for customers from across Canada to enjoy
delicious meals at home every day. Goodfood’s vision is to be in
every kitchen every day by enabling customers to complete their
grocery shopping and meal planning in minutes and to receive their
order in as little as 30 minutes. Goodfood customers have access to
a unique selection of online products as well as exclusive pricing
made possible by its direct-to-consumer infrastructures and
technology that eliminate food waste and costly retail overhead.
The Company’s main production facility and administrative offices
are based in Montreal, Québec, with additional production
facilities located in the provinces of Québec, Ontario, Alberta,
and British Columbia.
Except where otherwise indicated, all amounts in
this press release are expressed in Canadian dollars.
For further information: Investors and Media |
|
Jonathan RoiterChief Financial
Officer(855) 515-5191IR@makegoodfood.ca |
Roslane Aouameur Vice
President, Corporate Development(855)
515-5191IR@makegoodfood.ca |
FORWARD-LOOKING INFORMATION
This press release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation. Such forward-looking information includes, but is not
limited to, information with respect to our objectives and the
strategies to achieve these objectives, as well as information with
respect to our beliefs, plans, expectations, anticipations,
assumptions, estimates and intentions, including, without
limitation, statements in the “Financial Outlook” section of the
MD&A related to the build-out and launch of on demand
fulfillment centres or infrastructure and the impact of on-demand
grocery and meal solution offerings supported by an optimized
digital platform and the realization and impact of the foregoing.
This forward-looking information is identified by the use of terms
and phrases such as “may”, “would”, “should”, “could”, “expect”,
“intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”,
and “continue”, as well as the negative of these terms and similar
terminology, including references to assumptions, although not all
forward-looking information contains these terms and phrases.
Forward-looking information is provided for the purposes of
assisting the reader in understanding the Company and its business,
operations, prospects and risks at a point in time in the context
of historical trends, current condition and possible future
developments and therefore the reader is cautioned that such
information may not be appropriate for other purposes.
Forward-looking information is based upon a
number of assumptions and is subject to a number of risks and
uncertainties, many of which are beyond our control, which could
cause actual results to differ materially from those that are
disclosed in, or implied by, such forward-looking information.
These risks and uncertainties include, but are not limited to, the
following risk factors which are discussed in greater detail under
“Risk Factors” in the Company’s Annual Information Form for the
year ended August 31, 2021 available on SEDAR at www.sedar.com:
limited operating history, negative operating cash flow and net
losses, food industry including current industry inflation levels,
COVID-19 pandemic as well as the impact of the vaccine rollout and
easing of restrictions, quality control and health concerns,
regulatory compliance, regulation of the industry, public safety
issues, product recalls, damage to Goodfood’s reputation,
transportation disruptions, storage and delivery of perishable
foods, product liability, unionization activities, consolidation
trends, ownership and protection of intellectual property, evolving
industry, reliance on management, failure to attract or retain key
employees which may impact the Company’s ability to effectively
operate and meet its financial goals, factors which may prevent
realization of growth targets, inability to effectively react to
changing consumer trends, competition, availability and quality of
raw materials, environmental and employee health and safety
regulations, the inability of the Company’s IT infrastructure to
support the requirements of the Company’s business, online security
breaches, disruptions and denial of service attacks, reliance on
data centers, open source license compliance, future capital
requirements, operating risk and insurance coverage, management of
growth, limited number of products, conflicts of interest,
litigation, catastrophic events, risks associated with payments
from customers and third parties, being accused of infringing
intellectual property rights of others and, climate change and
environmental risks. This is not an exhaustive list of risks that
may affect the Company’s forward-looking statements. Other risks
not presently known to the Company or that the Company believes are
not significant could also cause actual results to differ
materially from those expressed in its forward-looking statements.
Although the forward-looking information contained herein is based
upon what we believe are reasonable assumptions, readers are
cautioned against placing undue reliance on this information since
actual results may vary from the forward-looking information.
Certain assumptions were made in preparing the forward-looking
information concerning the availability of capital resources,
business performance, market conditions, and customer demand. In
addition, information and expectations set forth herein are subject
to and could change materially in relation to developments
regarding the duration and severity of the COVID-19 pandemic as
well as the impact of the vaccine rollout and easing of the
restrictions and its impact on product demand, labour mobility,
supply chain continuity and other elements beyond our control.
Consequently, all of the forward-looking information contained
herein is qualified by the foregoing cautionary statements, and
there can be no guarantee that the results or developments that we
anticipate will be realized or, even if substantially realized,
that they will have the expected consequences or effects on our
business, financial condition or results of operation. Unless
otherwise noted or the context otherwise indicates, the
forward-looking information contained herein is provided as of the
date hereof, and we do not undertake to update or amend such
forward-looking information whether as a result of new information,
future events or otherwise, except as may be required by applicable
law.
(1) |
See the non-IFRS financial measures and Active Customer and
Subscriber sections at the end of this press release. |
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