ELSE NUTRITION HOLDINGS INC
(BABY)
(BABYF)
(0YL.F)
("Else" or the
"Company") the
Plant-Based baby, toddler and children nutrition company, today
reported third quarter 2022 financial results for the period ending
September 30, 2022. The financial statements and MD&A are
available on SEDAR under the Company’s profile.
Third Quarter 2022 Financial Highlights
- Revenues were $2.2M, an 83%
increase versus 1.2M in 3Q21, and 4% decline versus $2.31M in 2Q22.
The growth pause in revenues was due to a temporary product
shortage driven by a mechanical malfunction at the Company’s US
facility, which delayed production by about six weeks. The demand
for the products stayed very high. Management estimates the revenue
loss from the malfunction was roughly $0.3M-$0.5M in 3Q22.
- Sales in 3Q22 on Amazon.com
increased 7% versus 2Q22. Demand exceeded supply during the quarter
as the Company made the decision to pull back on supplying
Amazon.com and its own e-store, to be able to fulfill all orders
from brick-and-mortar retailers.
- Else products are listed in over 4,500 stores in North America,
selling in over 3,400 stores already, compared with 1,200 stores in
1Q22. New 3Q22 retail chains include Walmart (400+ doors), CVS
(1,000+ doors), Win Dixie (500+ doors), BuyBuyBaby (133 doors),
Giant Food (161 doors), London Drugs (79 doors in BC and Alberta),
Metro Ontario stores (139 stores in Ontario), and more. Management
expects to surpass 5,000 listed stores and 10,000 Points of
distribution by the end of 2022.
- Cash balance as of September 31,
2022, was $17.4M CAD (including restricted cash and short-term bank
deposit).
- The Company had no loans liability
as of September 30, 2022.
Recent Business
Highlights
-
Expanded US retail presence to more than 4,500 stores in the United
Stated and Canada, including the recent launches in CVS, London
Drugs, Winne-Dixie, and Metro Ontario stores. continuing to
increase retail sales velocity and product range in existing
stores, and adding key mass and grocery chains to our customer
list
-
Entered the Canadian market with the launch on Amazon.ca, and in
brick-and-mortar stores, experiencing an unexpectedly fast market
acceptance, interest, and demand. Expecting to be listed in more
than 1,100 Canadian stores by the end of 2022.
-
Entered the Chinese market with the launch of its flagship Chinese
store on Tmall Global. The company will be selling its Toddler
Formula, Kids nutritional drinks and Baby Cereal products directly
to Chinese consumers through the store.
-
The Company plans to enter Western Europe in 1H2023. The initial
launch will be in the UK via Amazon, with other countries to
follow.
-
Else Nutrition Kids Shakes are sold in 400 Walmart stores in 35
states including California, Florida, and Texas, with other
products to follow soon.
-
Else Super Cereal, the first US cereal brand certified safe from
heavy metals, reached the best-seller status in its category on
Amazon.com, within months of its launch.
-
Successfully completed the second and last preclinical study on its
infant formula, setting the path to FDA approval.
-
In final preparations for the commencement of the FDA clinical
study, awaiting control formula availability.
Management Commentary
Hamutal Yitzhak, CEO of Else Nutrition,
commented, “We are pleased to see the demand for our products
continue to grow in 3Q22 and the very successful launch in Canada.
We are also very excited to see first sales in China (Cross-Border
online) as this is by far the largest market in the world with the
highest growth potential for Else.
In the third quarter we incurred unforeseen
manufacturing challenges which resulted in product shortages that
prohibited us from adequately supplying the strong and growing
demand for our products. The shortfall of products was further
caused by the strong demand in May and June, which depleted our
inventory levels heading into 3Q. We are working closely with our
manufacturing partner to increase production and resolve the
inventory shortage issues as soon as possible. From a long-term
standpoint, we are working diligently on securing additional
manufacturing facilities in North America and Europe by the
beginning of 2023, in order to better diversify our production
capacity.”
We are very enthusiastic about our international
expansion. Our entry into Canada in August is off to a spectacular
start, as initial demand is multiple times our initial
expectations. Our marketing efforts over the past years in the US
have created pent-up demand for our unique products in Canada, and
we are excited to see this market grow rapidly. In June, we
announced our entry into the Chinese market via an agreement with
Baozun, a leading E-commerce distributor in China, and in September
we launched our flagship Chinese store on Tmall Global.
Furthermore, we expect to enter the UK and Australia in the first
half of 2023.
Our brick-and-mortar expansion is exceeding our
expectations. We are currently listed in over 4,500 retail doors in
the US and Canada, exceeding our stated goal of listing 4,000 doors
by the end of 2022. Given the extraordinary enthusiasm from
retailers for our products, we now expect to reach about 5,000
stores by the end of 2022. Importantly, we are now selling on some
of the most well-known online platforms and distributors such as
Walmart.com, Kroger.com, UNFI, and KeHE.”
FDA Update
In Q4 2021 Else concluded a successful
preclinical safety study of its plant-based infant formula, as part
of the pathway to bring its Infant formulation to market.
The study results demonstrated proper growth,
similar to dairy-based infant formula, in a neonatal preclinical
model, which is a key first step on the path with the US Food and
Drug Administration (FDA), as well as with other regulatory
authorities, to demonstrate safety and nutrient bioavailability of
the infant formula and its ingredients. In Q2, the results of the
study were accepted for presentation in two key international
pediatric nutrition scientific conferences and have been published
in a scientific medical peer-reviewed journal. Else is in close
communication with the FDA, sharing its plans and results to
receive their guidance throughout the process of Else’s infant
formula development.
In Q2 2022 Else conducted a second preclinical
study, demonstrating the quality of the infant formula protein as
part of the FDA requirements for new infant formula to be marketed
in the US. Else is working on final preparations for the infant
growth clinical study for the FDA and European permits planned to
start by early 2023 and conclude in early 2024.
Clinical Research Demonstrating Product
Claims
Else started the first clinical study to
demonstrate the tolerance claim of its products in a specific
intolerant children population.
A second clinical study to be conducted on a
healthy toddler population to demonstrate healthy growth has been
approved by the ethical committee and should begin very soon.
In 2023 the Company plans to continue research
activity demonstrating the safety and tolerability of the infant
formula as well as to provide scientific support for Else products
including preparation for additional clinical studies.
Conference Call
Hamutal Yitzhak, CEO and Co-Founder, will hold a
conference call to discuss the quarter's financial results
at 10:00 a.m. (Eastern Time) on November 14,
2022.
Interested parties can listen via a live webcast, from the link
available in the Investors section of the Company's website or at
https://app.webinar.net/AMgJ03EoQNW.
A replay will be available after the call, in the Investors
section of the Company's website at
https://app.webinar.net/AMgJ03EoQNW.
About Else Nutrition Holdings
Inc.
Else Nutrition Holdings Inc. is a food and
nutrition company in the international expansion stage focused on
developing innovative, clean, and plant-based food and nutrition
products for infants, toddlers, children, and adults. Its
revolutionary, plant-based, non-soy formula is a clean-ingredient
alternative to dairy-based formula. Else Nutrition (formerly INDI)
won the "2017 Best Health and Diet Solutions" award at Milan's
Global Food Innovation Summit. The holding company, Else Nutrition
Holdings Inc., is a publicly-traded company, listed on TSX Venture
Exchange under the trading symbol BABY and is quoted on the US OTC
Markets Q.X. board under the trading symbol BABYF and the Frankfurt
Exchange under the symbol 0YL. Since launching its Plant-Based
Complete Nutrition for Toddlers, made of whole foods, almonds,
buckwheat, and tapioca, the brand has received thousands of
powerful testimonials and reviews from parents and gained national
retailer support from Sprouts Farmers Market, and achieved rapid
sales growth. Else became the #1 Best Seller on Amazon in the Fall
of 2020 in the New Baby & Toddler Formula Category. It recently
won the 'Best Dairy Alternative' Award 2021 at World Plant-Based
Expo and was a Nexty Award Finalist at Expo West 2022 in the
Plant-Based lifestyle category.
Investor Relations Contact:
RBMG – RB Milestone Group LLCTrevor Brucato, Managing DirectorE:
Baby@rbmilestone.comwww.rbmilestone.com
Lytham Partners, LLC Mr. Ben Shamsian New York | PhoenixE:
shamsian@lythampartners.com P: 646-829-9701
Toronto Stock Exchange
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adequacy or accuracy of this release.
Caution Regarding Forward-Looking
Statements
This press release contains statements that may
constitute “forward-looking statements” within the meaning of
applicable securities legislation. Forward-looking statements are
typically identified by words such as “will” or similar
expressions. Forward-looking statements in this press release
include statements with respect to the anticipated dates for filing
the Company’s financial disclosure documents. Such forward-looking
statements reflect current estimates, beliefs and assumptions,
which are based on management’s perception of current conditions
and expected future developments, as well as other factors
management believes are appropriate in the circumstances. No
assurance can be given that the foregoing will prove to be correct.
Forward-looking statements made in this press release assume, among
others, the expectation that there will be no interruptions or
supply chain failures as a result of COVID 19 and that the
manufacturing, broker and supply logistic agreement with the
Company do not terminate. Actual results may differ from the
estimates, beliefs and assumptions expressed or implied in the
forward-looking statements. Readers are cautioned not to place
undue reliance on any forward-looking statements, which reflect
management’s expectations only as of the date of this press
release. The Company disclaims any obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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