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 third quarter of Fiscal 2022, ended June
4, 2022.
“In our third quarter, we have demonstrated
continued progress across our three key value-creating drivers.
First, our focus to improve profitability is yielding substantial
results as our gross margin surpassed 26% for the first time in a
year, on its way to returning to our 30% historical average. This
improvement, despite extraordinary inflationary pressures across
all our input costs, along with strong cost discipline in our
SG&A cost structure, have improved our Adjusted EBITDA (1) by
$3 million this quarter compared to the second quarter, reaching an
Adjusted EBITDA (1) loss of $10.6m, a significant improvement from
our first post-COVID Adjusted EBITDA (1) loss of $17.7m in the
fourth quarter of Fiscal 2021,” said Jonathan Ferrari, Chief
Executive Officer of Goodfood.
“We also showed important growth in our other
two key value-creating drivers, with on-demand active customers (1)
reaching 38,000 and our micro-fulfilment centre footprint standing
at 9 facilities in operation. As we outlined in our second quarter
disclosure, our path to profitability is expected to be driven by a
return to back-to-school volumes in our weekly subscription
offering and by reaching a certain level of scale in on-demand
active customers (1) and micro-fulfilment centres. The progress
made this quarter on our on-demand strategy positions us very well
on our path to profitability. In addition to scale, additional
efficiencies in costs of goods sold and selling, general and
administrative expenses are expected to provide the required
leverage to achieve positive Adjusted EBITDA (1). Last quarter, we
launched Project Blue Ocean, a series of identified initiatives
which we have begun to put in place that are designed to yield cost
efficiencies to return the company to a positive Adjusted EBITDA
(1) position in the first half of Fiscal 2023,” added Mr.
Ferrari
“As of today, through pricing, operational
simplification and SG&A reductions, Project Blue Ocean, which
we launched during the third quarter, has contributed to gross
margin and SG&A improvements and we expect further savings
opportunities in the near-term. With the objective of simplifying
our operations, we are undertaking a review of our asset base,
seeking opportunities to optimize our facilities infrastructure
beginning with the consolidation in late June of our breakfast
facility in Montreal into our main production facility. In
addition, in recent months, we have begun to significantly simplify
our operations through key actions such as ingredient reduction in
our ready-to-eat meals and curtailing grocery availability in
weekly subscription to streamline our processes. Finally, earlier
this month, we passed through a high single-digit percentage price
increase, placing us at or slightly below our largest competitor’s
pricing.”
“As we continue to execute on our three key
value-creating drivers and Project Blue Ocean, we are building an
optimized cost structure that, combined with a return to growth,
will provide the Company with the financial flexibility required to
return to positive Adjusted EBITDA (1) and continue to execute on
our on-demand strategy,” concluded Mr. Ferrari.
FINANCIAL HIGHLIGHTS
RESULTS OF OPERATIONS – THIRD QUARTER OF FISCAL 2022 AND
2021
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 13-weeks periods ended |
June 4,2022 |
|
May 31,2021 |
|
($) |
|
(%) |
|
|
Net sales |
$ |
67,031 |
|
$ |
107,795 |
|
$ |
(40,764 |
) |
(38 |
)% |
| Cost of
goods sold |
|
49,475 |
|
|
70,063 |
|
|
(20,588 |
) |
(29 |
)% |
|
Gross profit |
$ |
17,556 |
|
$ |
37,732 |
|
$ |
(20,176 |
) |
(53 |
)% |
| Gross margin |
|
26.2 |
% |
|
35.0 |
% |
|
N/A |
|
(8.8)p.p. |
|
| Selling, general and
administrative expenses |
|
29,369 |
|
|
37,255 |
|
|
(7,886 |
) |
(21 |
)% |
| Reorganization and other
related costs |
|
2,477 |
|
|
- |
|
|
2,477 |
|
N/A |
|
| Depreciation and
amortization |
|
5,220 |
|
|
2,318 |
|
|
2,902 |
|
125 |
% |
| Net
finance costs |
|
1,596 |
|
|
431 |
|
|
1,165 |
|
270 |
% |
|
Net loss before income taxes |
$ |
(21,106 |
) |
$ |
(2,272 |
) |
$ |
(18,834 |
) |
N/A |
|
| Deferred income tax (recovery)
expense |
|
(2 |
) |
|
61 |
|
|
(63 |
) |
N/A |
|
|
Net loss, being comprehensive loss |
$ |
(21,104 |
) |
$ |
(2,333 |
) |
$ |
(18,771 |
) |
N/A |
|
|
Basic and diluted loss per share |
$ |
(0.28 |
) |
$ |
(0.03 |
) |
$ |
(0.25 |
) |
N/A |
|
VARIANCE ANALYSIS FOR THE THIRD QUARTER
OF 2022 COMPARED TO THIRD QUARTER OF 2021
- Net sales
decreased compared to the same period last year mainly due to the
change in customer behaviors driven by removal of lock-down
restrictions and the increased vaccine coverage as well as the
current economic conditions partially offset by the growth of our
on-demand active customer base. In addition, due to the
non-recurrence of the prior year’s COVID-19 restrictions coupled
with a lower sales base, there was a slight 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 as well as the current
extraordinary inflationary pressures, both impacting our input
costs mainly on food, labour, production, and shipping costs. The
increase in food costs was also 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 operating de-leverage.
- The decrease in
selling, general and administrative expenses is primarily due to
lower marketing spend and wages and salaries driven primarily by
lower net sales and the Company’s reorganization initiatives,
including the launch of Project Blue Ocean, to align its workforce
and marketing spend towards its current net sales base and its
future catalyst for growth, on-demand groceries and meal solutions.
Selling, general and administrative expenses as a percentage of net
sales increased from 34.6% to 43.8%.
- Reorganization
and other related costs were incurred in the third quarter of
Fiscal 2022 mainly consisting of external costs related to ongoing
execution of Project Blue Ocean.
- 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 $30 million
convertible debenture issued in February 2022 as well as its
on-demand strategy leading to a ramp-up of new facilities across
Canada from continuous expansion of its footprint and its network
of centralized manufacturing with localized micro fulfillment
resulting in an increase interest expense on lease
obligations.
- The increase in
net loss in the third quarter of 2022 compared to the same quarter
last year is mainly due to lower net sales and gross profit
partially offset by lower higher wages and salaries and marketing
spend.
RESULTS OF OPERATIONS – YEAR-TO-DATE FISCAL 2022 AND
2021
The following table sets forth the components of
the Company’s consolidated statement of loss and comprehensive
loss:
(In thousands of Canadian dollars, except per
share and percentage information)
|
For the 39-weeks periods ended |
June 4,2022 |
|
May 31,2021 |
|
($) |
|
(%) |
|
|
Net sales |
$ |
218,229 |
|
$ |
299,876 |
|
$ |
(81,647 |
) |
(27 |
)% |
| Cost of
goods sold |
|
164,430 |
|
|
201,935 |
|
|
(37,505 |
) |
(19 |
)% |
|
Gross profit |
$ |
53,799 |
|
$ |
97,941 |
|
$ |
(44,142 |
) |
(45 |
)% |
| Gross margin |
|
24.7 |
% |
|
32.7 |
% |
|
N/A |
|
(8.0) p.p. |
|
| Selling, general and
administrative expenses |
|
97,107 |
|
|
98,778 |
|
|
(1,671 |
) |
(2 |
)% |
| Reorganization and other
related costs |
|
5,582 |
|
|
139 |
|
|
5,443 |
|
3,916 |
% |
| Depreciation and
amortization |
|
12,442 |
|
|
6,643 |
|
|
5,799 |
|
87 |
% |
| Net
finance costs |
|
3,556 |
|
|
1,646 |
|
|
1,910 |
|
116 |
% |
|
Net loss before income taxes |
$ |
(64,888 |
) |
$ |
(9,265 |
) |
$ |
(55,623 |
) |
N/A |
|
| Deferred income tax (recovery)
expense |
|
(1,534 |
) |
|
403 |
|
|
(1,937 |
) |
N/A |
|
|
Net loss, being comprehensive loss |
$ |
(63,354 |
) |
$ |
(9,668 |
) |
$ |
(53,686 |
) |
N/A |
|
|
Basic and diluted loss per share |
$ |
(0.85 |
) |
$ |
(0.14 |
) |
$ |
(0.71 |
) |
N/A |
|
VARIANCE ANALYSIS FOR THE YEAR-TO-DATE
2022 COMPARED TO SAME PERIOD OF 2021
- Net sales
decreased year-over-year mainly due to the change in customer
behaviors driven by the removal of lock-down restrictions and the
increased vaccine coverage and the current economic conditions
partially offset by the growth of our on-demand active customer
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 as well as the current
extraordinary inflationary pressures, both impacting our input
costs mainly on food, labour, production, and shipping costs. The
increase in food costs was also 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 operating de-leverage.
- The decrease in
selling, general and administrative expenses is primarily due to
lower marketing spend driven by lower net sales and the Company’s
reorganization initiatives, including the launch of Project Blue
Ocean, to align its workforce and marketing spend towards its
current net sales base and its future catalyst for growth,
on-demand groceries and meal solutions partially offset by 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
32.9% to 44.5%.
- Reorganization
and other related costs were incurred in Fiscal 2022 mainly
consisting of severance and other 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 as
well as interest expense related to the Company’s $30 million
convertible debenture issued in February 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 year-over-year is mainly due to lower net sales and gross
profit as well as higher depreciation and amortization expense and
reorganization and other related costs.
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 39-weeks ended |
|
|
|
June 4,2022 |
|
May 31,2021 |
|
June 4,2022 |
|
May 31,2021 |
|
|
Net loss |
$ |
(21,104 |
) |
$ |
(2,333 |
) |
$ |
(63,354 |
) |
$ |
(9,668 |
) |
| Net finance costs |
|
1,596 |
|
|
431 |
|
|
3,556 |
|
|
1,646 |
|
| Depreciation and
amortization |
|
5,220 |
|
|
2,318 |
|
|
12,442 |
|
|
6,643 |
|
|
Deferred income tax (recovery) expense |
|
(2 |
) |
|
61 |
|
|
(1,534 |
) |
|
403 |
|
|
EBITDA(1) |
$ |
(14,290 |
) |
$ |
477 |
|
$ |
(48,890 |
) |
$ |
(976 |
) |
| Share-based payments
expense |
|
1,177 |
|
|
869 |
|
|
4,514 |
|
|
3,270 |
|
| Reorganization and other
related costs |
|
2,477 |
|
|
- |
|
|
5,582 |
|
|
139 |
|
|
Adjusted EBITDA(1) |
$ |
(10,636 |
) |
$ |
1,346 |
|
$ |
(38,794 |
) |
$ |
2,433 |
|
| Net
sales |
$ |
67,031 |
|
$ |
107,795 |
|
$ |
218,229 |
|
$ |
299,876 |
|
|
Adjusted EBITDA margin(1)(%) |
|
(15.9 |
)% |
|
1.2 |
% |
|
(17.8 |
)% |
|
0.8 |
% |
For the third quarter of 2022, adjusted EBITDA
margin (1) decreased by 17.1 percentage points compared to the
corresponding period in 2021 mainly due to a lower sales base
resulting from a shift in customer behaviors driven by post
COVID-19 effects and the current economic conditions partially
offset by the growth of our on-demand active customer (1) base. A
decrease in gross margin contributed to the lower adjusted EBITDA
margin (1) primarily due to a decrease in net sales leading to
operating de-leverage as well as the current extraordinary
inflationary pressures across all input costs. In addition, lower
adjusted EBITDA margin (1) can be explained mainly by higher wages
and salaries and marketing spend as a percentage of net sales
resulting from lower net sales.
For the 39-weeks ended June 4, 2022, adjusted
EBITDA margin (1) decreased by 18.6 percentage points compared to
the corresponding period in 2021 mainly due to a lower sales base
resulting from a shift in customer behaviors from post COVID-19
effects as well as the current economic conditions partially offset
by the growth of our on-demand active customer base. A decrease in
gross margin contributed to the lower adjusted EBITDA margin (1)
primarily due to a decrease in net sales leading to operating
de-leverage as well as the current extraordinary inflationary
pressures across all input costs. In addition, lower adjusted
EBITDA margin (1) can be explained mainly by higher wages and
salaries as a percentage of net sales resulting from the expansion
of the management team 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 as well as marketing spend as a
percentage of net sales.
FINANCIAL OUTLOOK
Online grocery is a 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. At 20% penetration, online grocery would result
in a market of approximately $30 billion.
To gain share in this market, over the past two
and a half years, Goodfood 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 Toronto, Montreal and Ottawa.
As we build our selection and expand our coverage, we aim to gain
share in the online grocery market by focusing on complementing
Canadians’ weekly shop with our rapid delivery of our
differentiated grocery products and delicious meal solutions.
Building on this, Goodfood intends to continue
to create long-term shareholder value by focusing and executing on
three key value drivers:
- Growing its
orders and Active Customer (1) base supported by rapid on-demand
delivery and an expanding grocery and meal solutions product
portfolio
- Expanding the
reach and 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 through Project Blue Ocean: building an optimized cost
structure, benefiting from the operating leverage Net Sales growth
provides as well as through improved efficiencies and processes, to
set up Goodfood for its next phase of growth
Each quarter, Goodfood’s Active Customer (1)
base places 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 reach of its on-demand 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
on-demand grocery and meal solution service in Toronto, Montreal
and Ottawa, the Company sustained rapidly growing new on-demand
customers generating nearly $7 million sales before incentives in
the third quarter of Fiscal 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 retention rates, and the attractive at scale unit-economics
these MFCs can provide, Goodfood now has 9 operational MFCs. As the
Company focuses on scaling up existing facilities and bringing
their economics towards its target, it could open additional
facilities to expand both the coverage and density within Toronto
and Montreal, as well as Canada’s other leading cities, while
focusing on returning to profitability for the overall Company.
To return to profitability, the Company has
embarked on a review of its cost structure efficiency called
Project Blue Ocean. As part of Project Blue Ocean, Goodfood will
increase its focus on near-and-medium-term profitability. The
project has helped Goodfood identify a series of initiatives to
simplify the business’ operational complexity and asset base, and
set up the structure to facilitate a return to top line growth and
to improve gross margin, and review its organizational structure
and marketing processes to gain further efficiency. A significant
portion of the initiatives identified have been or are currently in
process of execution and this strategic focus on optimizing asset
use and returning to profitability may result in fewer than the
previously anticipated 20 MFCs by the end of calendar 2022. The
goal of Project Blue Ocean aims to return Goodfood to positive
Adjusted EBITDA (1) in the first half of Fiscal Year 2023. In
recent months and in the near future, Goodfood’s key focus is to
attract and retain high-value customers and continue to implement
cost discipline across its assets and operations.
Goodfood's strategy involves investing 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
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 relaxation of COVID-19
restrictions versus the prior year and a change in consumer
behaviors 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 and that we
are able to implement Project Blue Ocean and its components as
currently expected. 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, as
well as other administrative and operational matters, including
project Blue Ocean, 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 effects 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 July 13, 2022, at 8:00AM Eastern Time. Interested
parties can join the call by dialing 1-416-764-8646 (Toronto or
overseas) or 1-888-396-8049 (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 1-877-674-7070 and entering the
playback passcode 136007#. This recording will be available on July
13, 2022, as of 11:00 AM Eastern Time until 11:59 PM Eastern Time
on July 20, 2022.
A full version of the Company’s Management’s
Discussion and Analysis (MD&A) and Consolidated Financial
Statements for the third quarters ended June 4, 2022, and May 31,
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 third
quarter ended June 4, 2022.
Goodfood's definition of the non-IFRS measures
are as follows:
- 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 and reorganization and other related
costs. 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 long-term debt.
They also allow comparisons between companies with different
capital structures.
- Total cash, net of debt is a
non-IFRS measure that 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. We believe that total cash, net of debt
measure is a useful measure to assess the Company’s overall
financial position.
- Total cash, net of debt to total
capitalization is a non-IFRS measure that is calculated as total
cash, net of debt over total capitalization. Total capitalization
is measured as total debt plus shareholder’s equity. We believe
this non-IFRS financial ratio to be a useful measure to assess the
Company’s financial leverage.
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.
A subscription active customer and an on-demand
active customer should be evaluated independently, as a customer of
the Company’s platform can be counted as both a subscription active
customer and an on-demand active customer. For example, this could
occur if the customer has made an on-demand order in the three
months prior to the relevant measurement date and holds a
subscription account which has not been cancelled on or before the
relevant measurement date.
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 impacts and the appearance of COVID variants,
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 and
the appearance of COVID variants 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 sections at the end of this press release.
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