VEG Sol Cuisine Ltd

• Gross Sales of $6.1 million in Q2 2021, +50.4% compared to Q2 2020; Gross Sales of $12.6 million in the first six months of 2021, +77.3% compared to Q2 2020. Strong sales growth continues to outperform North American category growth.¹
• Gross Margin² of 15.6% in Q2 2021, +880bps vs. Q2 2020; Gross Margin of 15.2% in the first six months of 2021, +1,850bps vs. Q2 2020.
• Continued progress against key strategic pillars, including expanded distribution in existing channels and launches in new channels with partners including: Loblaws, Sobeys, Metro, Whole Foods, Weis and Costco.
• Began trading on the TSX Venture Exchange on May 26, 2021, under the ticker VEG after completing its qualifying transaction and raising $15 million in two private placements³, to accelerate its near-term growth pipeline.

MISSISSAUGA, ON, May 31, 2021 /CNW/ - Sol Cuisine Ltd. ("Sol Cuisine" or the "Company") (TSXV: VEG) a growth-oriented North American leader in plant-based protein products, today reported the financial results for its wholly-owned subsidiary, Sol Cuisine Inc. for the three and six months ended March 31, 2021 prior to completion of the Company's qualifying transaction. All figures are in Canadian dollars ($) unless otherwise specified.

Summary Financial Results

Management Commentary

"During the first six months of the year, our team continued to execute on a clearly identified strategic roadmap focused on generating sustained sales growth, product innovation, and a steady expansion of the Company's distribution and channel footprint," said John Flanagan, CEO of Sol Cuisine. "We are focused on delivering long term sustainable results and I am very pleased to see the efforts of our North American team translating into steady financial progress."

Mr. Flanagan continued, "The North American plant-based protein sector is growing rapidly and as an early leader, Sol Cuisine is well-positioned to become one of the top players in the space over the next several years. At 20+ years young, Sol Cuisine is just at the beginning of its growth story and as such, we are focused on making the right investments and taking the right steps to ensure we are positioned to generate sustained growth and shareholder value over a multi-year period. With a unique combination of best-in-class, highly differentiated products, a broad and growing North American distribution network, and the fully funded and built operational foundation to support significant volume and revenue expansion, we look forward to continuing to delight consumers while delivering value for shareholders."

Q2 Operating Highlights

Sol Cuisine is focused on executing a clear and actionable strategy designed to deliver continued growth. This strategy is focused on four primary pillars: introducing breakthrough product innovation; generating brand velocity; aggressively expanding retail distribution; and launching and growing into important new channels. The Company continued to make progress during the quarter, with successes including:

• Breakthrough product innovation: The recent launch of appetizers and entrees in a bagged format have been favorably received by consumers. Distribution continues to grow and during Q2, the sales velocity of Sol Cuisine Wings, Meatballs, Turk'y Roasts and Chik'n Tenders already exceeded that exhibited by the Company's leading burger products in Canada. In the U.S., Sol Cuisine Falafel, Chik'n Bites, Chik'n Tenders, Meatballs and Wings are also selling ahead of expectations in the first quarter post-launch.
• Brand Velocity: In Q2, driven by new product launches, Sol Cuisine continued to significantly outperform the market in terms of sales growth. The Company grew +44% in Canada, more than four-times faster than the overall category and +40% in the US in a category that declined in the low single digits.¹
• Distribution footprint: Sol Cuisine continued to introduce products beyond its core burger set into key retail channels in Canada and the U.S. During Q2, the Company added products through Canadian retail banners including: Loblaws, Sobeys, Costco, Farm Boy and Whole Foods. In the U.S., the Company added products through retail banners including: Weis, Tops and Cub Foods.
• Launch and growth in important new channels: The Company continued to grow its presence in the key U.S. Club and Food Service segments during Q2, with launches and/or expansions in Costco (Midwest region), Publix, Little Spoon and Target Deli.

Summary of Recent Corporate Developments

• On May 19, 2021, Sol Cuisine completed its qualifying transaction (the "Transaction"). In conjunction with the Transaction, the Company raised $15 million in two private placements[6], to accelerate its near-term growth pipeline.
• On May 19, 2021, concurrent with the Transaction, Ms. Mary Dalimonte, Ms. Beena Goldenberg and Ms. Lisa Swartzman joined the Company's board of directors. All three are highly experienced professionals with proven track records of success in CPG and consumer retail. The new additions join Chairman Mike Fata, who has a 20+ year history in natural products, including as the founder and CEO of Manitoba Harvest, and Dror Balshine, founder and President of Sol Cuisine.
• On May 26, 2021, the Company began trading on the TSX Venture Exchange under the ticker "VEG".

For more details, visit Sol Cuisine's IR website at: investors.solcuisine.com or contact the IR team at investors@solcuisine.com.

Non-IFRS Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and adjusted EBITDA margin are both non-IFRS financial measures. Adjusted EBITDA is defined as net income or loss before income taxes, net finance costs, depreciation and amortization, impairment losses, restructuring costs, one-time cost related to going public and stock-based compensation, while adjusted EBITDA margin is defined as the percentage of adjusted EBITDA to revenues. We believe that adjusted EBITDA and adjusted EBITDA margin are useful measures of financial performance because they provide an indication of the Company's ability to seize growth opportunities in a cost-effective manner, finance its ongoing operations and service its long-term debt.

The following information provides reconciliations of the supplemental non-IFRS financial measure presented herein to the most directly comparable financial measure calculated and presented in accordance with IFRS.

Reconciliation of Net Loss to Adjusted EBITDA:

About Sol Cuisine Ltd.

Sol Cuisine is the publicly traded parent company of Sol Cuisine Inc. following the completion of its "qualifying transaction" on May 19, 2021. Sol Cuisine is a fast-growing producer of branded, consumer-preferred plant-based protein offerings across key center-of-plate and appetizer categories. The Company's products are offered through an established omni-channel distribution platform in Canada and the U.S. and are available in over 11,000 stores and more than 41,000 unique points of distribution. Over a history of 20+ years, Sol Cuisine has consistently demonstrated an ability to innovate and delight consumers in Canada and the U.S., while remaining true to its commitment to producing great tasting products that are nutritionally superior both to meat-based offerings and to competitive plant-based products. This commitment has resulted in several Canadian product wins, including the #1 frozen plant-based burger in Canada, the #1 consumer-preferred chicken alternative and the #1 quality roast product as determined by Whole Foods Market. The Company's taste and nutritional superiority has also resulted in private label contracts with some of the most recognized natural brands in North America. Sol Cuisine's products are all produced at the Company's two state of the art facilities, totaling 35,000 square feet in Mississauga, Ontario, capable of supporting up to 10 million kilograms of volume per annum.

For more details on Sol Cuisine's consumer brands:
Website: www.solcuisine.com
Instagram: @solcuisine
Facebook: @solcuisine
Twitter: @solcuisine
LinkedIn: @solcuisine

Forward Looking Statements

This press release includes forward-looking information within the meaning of Canadian securities laws regarding the Company and its business. Often but not always, forward-looking information can be identified by the use of words such as "expect", "intends", "anticipated", "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would" or "will" be taken, occur or be achieved. Such statements are based on the current expectations and views of future events of the management of each entity, and are based on assumptions and subject to risks and uncertainties. Although the management believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this press release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the size of the industry, the growth of the market for the Company's products, the rate and quantity of production at the Company's facilities, market conditions, economic factors, management's ability to manage and to operate the business of the Company and the equity markets generally. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

The TSX Venture Exchange has not reviewed, approved, or disapproved the content of this news release.

John Flanagan
Chief Executive Officer
905-502-8500

¹ Q2-2021. Canadian data per A.C. Nielsen Markettrack @ Mar 2021; US data per SPINS TL MULO @ April 2021

² Defined as Gross Profit divided by Revenue

³ $15 million in gross proceeds. Split: $12.9 million in gross proceeds as part of a brokered private placement; and $2.1 million in gross proceeds as part of a non-brokered private placement.

⁴ Defined as Gross Sales less sales discounts and other deductions

⁵ Adjusted EBITDA is a non-IFRS financial measure. See the section of this news release entitled "Non-IFRS Financial Measures: Adjusted EBITDA and Adjusted EBITDA Margin"

⁶ $15 million in gross proceeds. Split: $12.9 million in gross proceeds as part of a brokered private placement; and $2.1 million in gross proceeds as part of a non-brokered private placement.

SOURCE Sol Cuisine Ltd.