Goodfood Market Corp. (“
Goodfood”, “the
Company”, “
us” or
“
we”) (TSX: FOOD), a leading Canadian online meal
solutions company, today announced financial results for the fourth
quarter and Fiscal 2024, ended September 7, 2024.
“Our full-year results demonstrate the strength
of our financial performance in Fiscal 2024, with record adjusted
free cash flow1 of $8 million and a gross margin2 surpassing 41%,”
said Jonathan Ferrari, Chief Executive Officer of Goodfood.
“Focused execution on operational efficiency, disciplined cost
management and unit economics improvement have driven record
adjusted EBITDA1 of $9 million for the year. With improved cash
flow and profitability, we have in turn significantly reduced our
net debt and net leverage1, enhancing our financial position. The
margin improvement and resulting higher cash flows cement our focus
on continuing to strengthen our financial performance to deliver
improved profitability and value to our shareholders.”
“These results are also a testament to the
dedication and commitment of the entire Goodfood team throughout
the year,” Ferrari continued. “Every employee has worked with
determination to help further solidify our balance sheet and
position us well to expand our market reach, innovate our product
offering, and maintain our focus on delivering value to customers
across Canada. With the recent launch of our Value Plan containing
delicious classic recipes under $10 per serving, and with new
collaborations with renowned chefs, our teams are creating
delightful new meals for every Canadian, every day. The recently
announced acquisition of Genuine Tea also marks the beginning of
our new phase of growth, consisting of building a portfolio of
next-generation businesses and brands by providing
direct-to-consumer entrepreneurs with a platform to scale. We are
pleased to have added a high-potential brand that aligns with our
growth strategy and deepens customer engagement and look forward to
building on this first acquisition.”
RESULTS OF OPERATIONS – FISCAL 2024 AND
2023
The following table sets forth the components of
the Company’s consolidated statement of loss and comprehensive
loss:
(In thousands of Canadian dollars, except per
share and percentage information)
For the 53 and 52 week periods ended |
|
September 7, 2024 |
|
|
September 2, 2023 |
|
|
($) |
|
|
(%) |
|
Net sales |
$ |
152,838 |
|
$ |
168,558 |
|
$ |
(15,720 |
) |
|
(9 |
)% |
Cost of
goods sold |
|
89,860 |
|
|
103,178 |
|
|
(13,318 |
) |
|
(13 |
)% |
Gross profit |
$ |
62,978 |
|
$ |
65,380 |
|
$ |
(2,402 |
) |
|
(4 |
)% |
Gross margin |
|
41.2 |
% |
|
38.8 |
% |
|
N/A |
|
2.4 p.p. |
Selling, general and
administrative expenses |
|
54,843 |
|
|
65,867 |
|
|
(11,024 |
) |
|
(17 |
)% |
Depreciation and
amortization |
|
7,381 |
|
|
10,837 |
|
|
(3,456 |
) |
|
(32 |
)% |
Reorganization and other
related net gains |
|
(1,327 |
) |
|
(468 |
) |
|
(859 |
) |
|
184 |
% |
Net
finance costs |
|
5,514 |
|
|
5,668 |
|
|
(154 |
) |
|
(3 |
)% |
Loss before income taxes |
$ |
(3,433 |
) |
$ |
(16,524 |
) |
$ |
13,091 |
|
|
(79 |
)% |
Deferred income tax recovery |
|
– |
|
|
(61 |
) |
|
61 |
|
|
(100 |
)% |
Net loss, being comprehensive loss |
$ |
(3,433 |
) |
$ |
(16,463 |
) |
$ |
13,030 |
|
|
(79 |
)% |
Basic and diluted loss per share |
$ |
(0.05 |
) |
$ |
(0.22 |
) |
$ |
0.17 |
|
|
(77 |
)% |
VARIANCE ANALYSIS FOR FISCAL 2024
COMPARED TO FISCAL 2023
- The decrease in net sales is
primarily driven by a decrease in the number of active customers1,
as we continue to focus on attracting and retaining customers that
provide higher gross margins and by changing customer behaviours.
This decrease is partially offset by an increase in average basket
size as a result of more portions being added per order and pricing
optimizations, increased variety in the meal-kit offering as well
as the additional week of operations. This net sales decrease is
also explained by the Company’s decision to discontinue its
on-demand offering in Fiscal 2023.
- The decrease in gross profit
primarily resulted from a decrease in net sales as well as higher
credit and incentives as a percentage of net sales partially offset
by lower food, production and fulfilment costs driven by improved
inventory management reducing waste, lower production labour cost
and lower packaging and shipping costs. Gross margin increased
mainly due to operational efficiencies driving lower food,
production and fulfilment costs, as well as pricing optimization,
partially offset by an increase in credits and incentives as a
percentage of net sales.
- The decrease in selling, general
and administrative expenses is primarily due to lower wages and
salaries, marketing spend, software expenses, audit fees,
utilities, maintenance and insurance expenses driven primarily by
the Company’s costs saving initiatives. The decrease was partially
offset by the additional week of operations. Selling, general and
administrative expenses as a percentage of net sales decreased from
39.1% to 35.9% even with lower net sales.
- The decrease in depreciation and
amortization expense is mainly due to the reduction in right-of-use
assets following exiting facilities as part of the Company’s costs
reduction initiatives as well as the derecognition of a
right-of-use asset and fixed assets pursuant to a sublease
agreement and depreciation.
- The increase in reorganization and
other related net gains is primarily explained by the net gain on
reversal of impairment resulting from a sublease agreement
concluded in Fiscal 2024.
- The decrease in net finance costs
is mainly due to lower interest expense on lease obligations in
relation to the Company’s costs saving, lower interest on debt as a
result of a lower debt balance as well as lower debt renewal fees
in Fiscal 2024 partially offset by higher interest expense on
debentures in relation to the Company’s $30 million
convertible debentures issued in February 2023.
- The decrease in net loss is mainly
due to lower wages and salaries in cost of goods sold and in
selling, general and administrative expenses as well as lower
depreciation and amortization, lower food costs, marketing spend
and audit fees, utilities, maintenance and insurance expenses
partially offset by a lower sales base.
RESULTS OF
OPERATIONS –
FOURTH QUARTER
OF FISCAL 2024
AND 2023
The following table sets forth the components of
the Company’s consolidated statement of loss and comprehensive
loss:
(In thousands of Canadian dollars, except per
share and percentage information)
For the 14 and 13 weeks periods ended |
|
September 7, 2024 |
|
|
September 2, 2023 |
|
|
($) |
|
|
(%) |
|
Net sales |
$ |
34,063 |
|
$ |
37,228 |
|
$ |
(3,165 |
) |
|
(9 |
)% |
Cost of
goods sold |
|
21,072 |
|
|
23,007 |
|
|
(1,935 |
) |
|
(8 |
)% |
Gross profit |
$ |
12,991 |
|
$ |
14,221 |
|
$ |
(1,230 |
) |
|
(9 |
)% |
Gross margin |
|
38.1 |
% |
|
38.2 |
% |
|
N/A |
|
(0.1) p.p. |
Selling, general and
administrative expenses |
|
12,762 |
|
|
13,793 |
|
|
(1,031 |
) |
|
(7 |
)% |
Depreciation and
amortization |
|
1,879 |
|
|
2,006 |
|
|
(127 |
) |
|
(6 |
)% |
Reorganization and other
related costs |
|
34 |
|
|
812 |
|
|
(778 |
) |
|
(96 |
)% |
Net
finance costs |
|
1,476 |
|
|
1,299 |
|
|
177 |
|
|
14 |
% |
Net loss, being comprehensive loss |
$ |
(3,160 |
) |
$ |
(3,689 |
) |
$ |
529 |
|
|
(14 |
)% |
Basic and diluted loss per share |
$ |
(0.05 |
) |
$ |
(0.05 |
) |
$ |
– |
|
|
N/A |
VARIANCE ANALYSIS FOR THE FOURTH QUARTER
OF 2024 COMPARED TO FOURTH QUARTER OF 2023
- The decrease in net sales is
primarily driven by the decrease in the number of active customers,
as we continue to focus on customers providing stronger unit
economics, as well as an increase in credits and incentives. This
decrease was partially offset by an increase in average basket size
as a result of more portions being added per order, pricing
optimizations and increased variety in the meal-kit offering as
well as the additional week of operations.
- The decrease in gross profit is
driven mainly by a decrease in net sales as well as higher credit
and incentives as a percentage of net sales mostly offset by lower
production costs as a result of lower labour and food costs. Gross
margin remained flat compared to the same quarter last year.
- The decrease in selling, general
and administrative expenses is primarily due to lower wages and
salaries, software expenses and marketing spend driven primarily by
the Company’s costs saving initiatives. In addition, this decrease
was partially offset by an additional week of operations. Selling,
general and administrative expenses as a percentage of net sales
increased from 37.1% to 37.5%.
- The decrease in reorganization and
other related costs is explained by the finalization of the
Company’s cost saving initiatives during Fiscal 2023.
- The slight improvement in net loss
is mainly the result of lower wages and salaries in cost of goods
sold and selling, general and administrative expenses as well as
operational efficiencies reducing production and fulfilment costs.
This improvement can also be explained by lower reorganization and
other related costs mostly offset by a lower net sales base.
METRICS AND NON-IFRS FINANCIAL
MEASURES–RECONCILIATION
ADJUSTED GROSS PROFIT1
AND ADJUSTED GROSS MARGIN1
The reconciliation of gross profit to adjusted
gross profit and adjusted gross margin is as follows:
(In thousands of Canadian dollars, except
percentage information)
|
|
For the 14 and 13
weeks ended |
|
|
For the 53 and 52 weeks ended |
|
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
Gross profit |
$ |
12,991 |
|
$ |
14,221 |
|
$ |
62,978 |
|
$ |
65,380 |
|
Discontinuance of products related to on-demand offering |
|
– |
|
|
– |
|
|
– |
|
|
1,273 |
|
Adjusted gross profit |
$ |
12,991 |
|
$ |
14,221 |
|
$ |
62,978 |
|
$ |
66,653 |
|
Net
sales |
$ |
34,063 |
|
$ |
37,228 |
|
$ |
152,838 |
|
$ |
168,558 |
|
Gross margin |
|
38.1 |
% |
|
38.2 |
% |
|
41.2 |
% |
|
38.8 |
% |
Adjusted gross margin (%) |
|
38.1 |
% |
|
38.2 |
% |
|
41.2 |
% |
|
39.5 |
% |
For the 14 weeks ended September 7, 2024,
adjusted gross profit decreased by $1.2 million while adjusted
gross margin remained flat with a narrow decrease of 0.1 percentage
points compared to the same quarter last year. The slight change in
adjusted gross margin is explained by an increase in credits and
incentives as a percentage of net sales mostly offset by
operational efficiencies driving lower production costs resulting
from lower production labour and packaging costs as well as pricing
optimization.
For the 53 weeks ended September 7, 2024, the
adjusted gross profit decreased by $3.7 million primarily due
to a decrease in net sales partially offset by lower cost of goods
sold mainly in food costs, production and fulfillment costs. The
increase in adjusted gross margin of 1.7 percentage points can be
explained by lower production labour costs, food costs and shipping
costs driven mainly by production efficiencies, lower last-mile
shipping costs as well as pricing optimization. This improvement
was partially offset by an increase in credits and incentives as a
percentage of net sales.
EBITDA1,
ADJUSTED EBITDA1
AND ADJUSTED
EBITDA
MARGIN1The reconciliation of net
loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin is as
follows: (In thousands of Canadian dollars, except percentage
information)
|
|
For the 14 and 13 weeks ended |
|
|
For the 53 and 52 weeks ended |
|
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
Net loss |
$ |
(3,160 |
) |
$ |
(3,689 |
) |
$ |
(3,433 |
) |
$ |
(16,463 |
) |
Net finance costs |
|
1,476 |
|
|
1,299 |
|
|
5,514 |
|
|
5,668 |
|
Depreciation and
amortization |
|
1,879 |
|
|
2,006 |
|
|
7,381 |
|
|
10,837 |
|
Deferred income tax recovery |
|
– |
|
|
– |
|
|
– |
|
|
(61 |
) |
EBITDA |
$ |
195 |
|
$ |
(384 |
) |
$ |
9,462 |
|
$ |
(19 |
) |
Share-based payments
expense |
|
231 |
|
|
278 |
|
|
879 |
|
|
3,909 |
|
Discontinuance of products
related to on-demand offering |
|
– |
|
|
– |
|
|
– |
|
|
1,273 |
|
Reorganization and other
related costs (gains) |
|
34 |
|
|
812 |
|
|
(1,327 |
) |
|
(468 |
) |
Other
costs |
|
49 |
|
|
– |
|
|
49 |
|
|
– |
|
Adjusted EBITDA |
$ |
509 |
|
$ |
706 |
|
$ |
9,063 |
|
$ |
4,695 |
|
Net
sales |
$ |
34,063 |
|
$ |
37,228 |
|
$ |
152,838 |
|
$ |
168,558 |
|
Adjusted EBITDA margin (%) |
|
1.5 |
% |
|
1.9 |
% |
|
5.9 |
% |
|
2.8 |
% |
For the 14 weeks ended September 7, 2024,
adjusted EBITDA margin decreased by 0.4 percentage points compared
to the same quarter last year mainly driven by lower net sales
mostly offset by lower general and administrative expenses as a
percentage of net sales. Overall, Adjusted EBITDA decreased by
$0.2 million this quarter compared to the same quarter last
year.
For the 53 weeks ended September 7, 2024,
adjusted EBITDA margin improved by 3.1 percentage points compared
to the corresponding period in 2023 mainly driven by stronger
adjusted gross margin as well as lower selling, general and
administrative expenses as a percentage of net sales as a result of
the Company’s cost savings measures which reduced wages and
salaries, utilities, maintenance and software expenses. This
improvement was partially offset by lower net sales. Overall,
Adjusted EBITDA increased by $4.4 million for the 53 weeks
ended September 7, 2024, compared to the same period last year.
FREE CASH
FLOW1 AND
ADJUSTED FREE
CASH FLOW1
The reconciliation of net cash flows from
operating activities to free cash flow and adjusted free cash flow
is as follows:
(In thousands of Canadian dollars)
|
|
For the 14 and 13 weeks ended |
|
|
For the 53 and 52 weeks ended |
|
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
|
September 7, 2024 |
|
|
September 2, 2023 |
|
Net cash (used in) provided by operating activities |
$ |
(932 |
) |
$ |
(1,958 |
) |
$ |
7,494 |
|
$ |
(9,350 |
) |
Additions to fixed assets |
|
(5 |
) |
|
(18 |
) |
|
(49 |
) |
|
(716 |
) |
Additions to intangible assets |
|
(165 |
) |
|
(197 |
) |
|
(578 |
) |
|
(1,019 |
) |
Free cash flow |
$ |
(1,102 |
) |
$ |
(2,173 |
) |
$ |
6,867 |
|
$ |
(11,085 |
) |
Payments related to
discontinuance of products related to on-demand offering |
|
– |
|
|
7 |
|
|
– |
|
|
319 |
|
Payments made to reorganization and other related costs |
|
– |
|
|
1,047 |
|
|
736 |
|
|
6,275 |
|
Adjusted free cash flow |
$ |
(1,102 |
) |
$ |
(1,119 |
) |
$ |
7,603 |
|
$ |
(4,491 |
) |
For the 14 weeks ended September 7, 2024,
adjusted free cash flow remained flat compared to the same period
last year mainly driven by lower net loss after non-cash items and
reorganization and other related costs.
For the 53 weeks ended September 7, 2024,
adjusted free cash flow was $7.6 million compared to negative
$4.5 million in the same period last year. This is an
improvement of $12.1 million compared to the corresponding
period in 2023 mainly driven by improved profitability through
lower net loss as a result of improved adjusted gross margin and
lower selling, general and administrative expenses. The improvement
can also be explained by a favorable change in non-cash working
capital due to a positive change in accounts and other receivables
due to timing of government refunds as well as in accounts payable
and accrued liabilities resulting from timing of supplier
payments.
TOTAL NET DEBT TO ADJUSTED
EBITDA1
(In thousands of Canadian dollars, except ratio
information)
|
September 7, 2024 |
September 2, 2023 |
Debt |
$ |
1,138 |
$ |
4,036 |
Convertible debentures, liability component, including current
portion |
|
45,405 |
|
41,752 |
Total debt |
$ |
46,543 |
$ |
45,788 |
Cash
and cash equivalents |
|
24,010 |
|
24,925 |
Total net debt |
$ |
22,533 |
$ |
20,863 |
Adjusted EBITDA (last four quarters) |
$ |
9,063 |
$ |
4,695 |
Total net debt to adjusted EBITDA |
2.49 |
|
4.44 |
Goodfood’s total net debt increased by
$1.7 million and its total net debt to adjusted EBITDA ratio
was of 2.49, compared to 4.44 last year. This improvement is mainly
explained by the Company’s stronger 12 months results.
FINANCIAL
OUTLOOKGoodfood’s core purpose is to create
experiences that spark joy and help our community live longer on a
healthier planet. As a food brand with a strong following from
Canadians coast to coast, we are focused on growing the Goodfood
brand through our meal solutions including meal kits and prepared
meals, with a range of exciting Goodfood branded add-ons to
complete a unique food experience for customers.
We believe there is runway for additional
penetration of meal kits into Canadian households, as evidenced by
2024 industry research estimating Canadian meal kit household
penetration to reach 4.2% by 2029 (up from current 3.5%), implying
a compound annual gross rate (CAGR) in the high single digit
percentage points through 2029 (see Goodfood’s 2024 Annual
Information Form for additional information and details).
Before scaling our efforts to endeavour to
capture an outsized share of the Canadian meal solutions market,
our focus has been and continues to be on further improving and
growing cash flows. We are pleased to have now reported seven
consecutive quarters of positive adjusted EBITDA1, which on a last
four quarters basis amounts to $9.1 million. The substantial
rise in adjusted EBITDA1 has led to significant adjusted free
cash flow1 improvement which has now been positive in four of
our last six quarters. These results help position Goodfood to fund
its growth with internally generated cash flows.
To grow our customer base, we first aimed to
build customer acquisition cost efficiencies. We have also made and
continue to make investments in our digital product to elevate the
customer experience by reducing friction and enhancing ease of use.
Combined with reactivations of previous Goodfood members, these
initiatives have driven a double-digit percentage reduction of our
customer acquisition costs year-over-year and improved the
profitability and unit economics of customers.
To capture more of Canadian’s food wallet, we
have increasingly enhanced product variety as a driver of order
frequency. In addition to launching our VIP program, which rewards
high-frequency customers, we have increased the diversity of our
recipe and ingredient offering to provide additional choices to
enhance order rate. With a focus on Better-for-You products like
organic chicken breasts, organic lean ground beef, bison,
sustainably raised steelhead trout, ground turkey and paleo and
keto meals, combined with exciting partnerships with first-rate
restaurants and chefs, we plan on offering a growing and
mouth-watering selection to customers to drive consistently
increasing order frequency. Also, to capture customers increasingly
looking for value, we have launched a new set of Value Meals
starting at $9.99 a portion and we are testing various plan
adjustments to attract a broader set of customers to our delicious
meals.
Still, the dollar-value of the baskets our
customers are building is also increasing and we are building a
differentiated set of meal kits, ready-to-eat meals and grocery
add-ons to provide Canadians with an exciting online meal solutions
option and increasingly capture a larger share of their food
wallet. In addition, we have provided and continue to provide more
choice of proteins to our customers, with the launch of upsells and
customization within our meal-kit recipes allowing customers to
swap or double the proteins included in their chosen recipes. With
these initiatives, we aim to provide customers with an array of
options to easily make their meals better and their baskets
bigger.
We are also continuously looking to enhance our
sustainability initiatives by prioritizing planet-friendly options.
Not only do we offer perfectly portioned ingredients to reduce food
waste, we also constantly look to simplify our supply chain by
removing middlemen from farm to kitchen table. This year, we are
also aiming to offset carbon emissions on deliveries and
introducing packaging innovations that have helped us to remove the
equivalent of 2.4 million plastic bags annually from our
deliveries. Our goal is clear, build a business that helps our
customers live healthier lives on a healthier planet. (See
Goodfood’s 2024 Annual Information Form for additional information
and details on Goodfood’s partnership with Carbonzero and its
Fiscal 2023 Greenhouse Gas Emissions Inventory).
In addition to focusing on these key pillars of
top-line growth, we are increasingly considering various other
growth avenues, including acquisitions.
Our strategic execution to drive profitability
and cash flows continues to position us for growth and
profitability, underpinned by consistent improvement in adjusted
EBITDA1 and cash flows. Coupled with our unrelenting focus on
nurturing our customer relationships, profitable growth remains our
top priority. The Goodfood team is fully focused on building and
growing Canada’s most loved millennial food brand.
TRENDS AND
SEASONALITYThe Company’s net sales and expenses
are impacted by seasonality. During the winter 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 number of active customers to be
lower during these periods. During periods with significantly
colder or warmer weather, the Company anticipates packaging costs
to be higher due to the additional packaging required to maintain
food freshness and quality.
CONFERENCE
CALL
Goodfood will hold a conference call to discuss
these results on November 27, 2024 at 8:00AM Eastern Time.
Interested parties can join the call by dialing 1 800 717 1738,
(Toronto or overseas) or 1 514 400 3792, elsewhere in North
America). To access the webcast and view the presentation, click on
this link:
https://www2.makegoodfood.ca/en/investisseurs/evenements
Parties unable to call in at this time may
access a recording by calling 1 888 660 6264 and entering the
playback passcode 12890#. This recording will be available until
December 4, 2024.
A full version of the Company’s Management’s
Discussion and Analysis (MD&A) and Consolidated Financial
Statements for the 14 weeks and 53 weeks ended September 7, 2024,
will be posted on the Company’s SEDAR+ profile, accessible at
http://www.sedarplus.ca later today.
METRICS AND NON-IFRS
FINANCIAL MEASURES
Certain metrics and non-IFRS financial measures
included in this news release do not have standardized definitions
prescribed by IFRS and, therefore, may not be comparable to similar
measures presented by other companies. They are provided as
additional information to complement IFRS measures and to provide a
further understanding of the Company’s results of operations from
our perspective. 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 14 weeks and 53 weeks ended September 7,
2024.
Goodfood's definition of the metrics and
non-IFRS financial measures are as follows:
- An active
customer is a customer that has placed an order within the last
three months. 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.
- Adjusted gross
profit is defined as gross profit excluding the impact of the
discontinuance of products related to Goodfood On-Demand offering
pursuant to the Company’s costs saving initiatives. Adjusted gross
margin is defined as the percentage of adjusted gross profit to net
sales. The Company uses adjusted gross profit and adjusted gross
margin to measure its performance from one period to the next
excluding the variation caused by the items described above.
Adjusted gross profit and adjusted gross margin are non-IFRS
financial measures. We believe that these metrics are useful
measures of financial performance to assess how efficiently the
Company uses its resources to service its customers as well as to
assess underlying trends in our ongoing operations without the
variations caused by the impacts of strategic initiatives such as
the items described above and facilitates the comparison across
reporting periods.
- EBITDA is defined
as net income or loss before net finance costs, depreciation and
amortization and income taxes. Adjusted EBITDA is defined as EBITDA
excluding share-based payments expense, the impact of the
inventories write-downs due to the discontinuance of products
related to Goodfood On-Demand offering, impairment and reversal of
impairment of non-financial assets and reorganization and other
related (gains) costs pursuant to the Company’s costs saving
initiatives as well as other costs incurred in pursuit of
acquisitions. Adjusted EBITDA margin is defined as the percentage
of adjusted EBITDA to net sales. EBITDA, adjusted EBITDA, and
adjusted EBITDA margin are non-IFRS financial measures. We believe
that EBITDA, adjusted EBITDA, and adjusted EBITDA margin are useful
measures of financial performance to assess the Company’s ability
to seize growth opportunities in a cost-effective manner, to
finance its ongoing operations and to service its debt. They also
allow comparisons between companies with different capital
structures. We also believe that these metrics are useful measures
of financial performance to assess underlying trends in our ongoing
operations without the variations caused by the impacts of the
items described above and facilitates the comparison across
reporting periods.
- Free cash flow
is defined as net cash provided by or used in operating activities
less additions to fixed assets and additions to intangible assets.
This measure allows the Company to assess its financial strength
and liquidity as well as to assess how much cash is generated and
available to invest in growth opportunities, to finance its ongoing
operations and to service its debt. It also allows comparisons
between companies with different capital structures. Adjusted free
cash flow is defined as free cash flow excluding cash payments made
to costs related to reorganization activities as well as other
costs incurred in pursuit of acquisitions. We believe that adjusted
free cash flow is a useful measure when comparing between companies
with different capital structures by removing variations caused by
the impacts of the items described above. We also believe that this
metric is a useful measure of financial and liquidity performance
to assess underlying trends in our ongoing operations without the
variations caused by the impacts of the items described above and
facilitates the comparison across reporting periods.
-
Total net debt to adjusted EBITDA (also named net leverage) is
calculated as total net debt divided by the last four quarters
adjusted EBITDA. Total net debt consists of debt and the liability
component of the convertible debentures less cash and cash
equivalents. We believe that total net debt to adjusted EBITDA is a
useful metric to assess the Company’s ability to manage debt and
liquidity.
- Please refer to
the “Metrics and non-IFRS financial measures – reconciliation” and
the “Liquidity and capital resources” sections of the MD&A for
a reconciliation of these non-IFRS financial measures to the most
comparable IFRS financial measures.
ABOUT
GOODFOOD
Goodfood (TSX: FOOD) is a leading digitally
native meal solutions brand in Canada, delivering fresh meals and
add-ons that make it easy for customers from across Canada to enjoy
delicious meals at home every day. The Goodfood team is building
Canada’s most loved millennial food brand, with the mission to
create experiences that spark joy and help our community live
longer on a healthier planet. Goodfood customers have access to
uniquely fresh and delicious products, as well as exclusive
pricing, made possible by its world-class culinary team and
direct-to-consumer infrastructures and technology. Goodfood is
passionate about connecting its partner farms and suppliers to its
customers’ kitchens while eliminating food waste and costly retail
overhead. The Company’s administrative offices are based in
Montreal, Quebec, with production facilities located in the
provinces of Quebec and Alberta.
Except where otherwise indicated, all amounts in
this news release are expressed in Canadian dollars.
For
further information:
Investors and
Media |
Roslane Aouameur Chief Financial Officer IR@makegoodfood.ca |
Jennifer StahlkeExecutive Vice President, Marketing
media@makegoodfood.ca |
FORWARD-LOOKING
INFORMATION
This news 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. 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 53
weeks ended September 7, 2024 available on SEDAR+ at
www.sedarplus.ca and under the “Events and Presentations” section
of our website at www.makegoodfood.ca/en/investors: history of
negative operating cash flow, food industry including current
industry inflation levels, indebtedness and impact upon financial
condition, future capital requirements, quality control and health
concerns, regulatory compliance, regulation of the industry, public
safety issues, product recalls, damage to Goodfood’s reputation,
social media, 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, fulfillment
centres and logistics channels, factors which may prevent
realization of growth targets, general economic conditions and
disposable income levels, competition, availability and quality of
raw materials, environmental and employee health and safety
regulations online security breaches and disruptions, reliance on
data centers, open source license compliance, operating risk and
insurance coverage, management of growth, limited number and scope
of products, conflicts of interest, litigation, food costs and
availabilities, catastrophic events, risks associated with payments
from customers and third parties, being accused of infringing
intellectual property rights of others, climate change and
environmental risks, failing to obtain or lose our certified B Corp
status, as well as an inability to maintain high social
responsibility standards could lead to reputational damage and
adversely affect our business and Environment, Social and
Governance (“ESG”) matters. 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, as well as customer demand.
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 Please refer to the “Metrics and Non-IFRS Financial Measures”
section of this news release for corresponding definitions.2 Gross
margin is defined as gross profit divided by net sales.
Grafico Azioni Goodfood Market (TSX:FOOD)
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