GFI ANNOUNCES FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS WITH ANNUAL REVENUE EXCEEDING $120 MILLION

Total Revenues grew +100% to reach $124 million
with third consecutive year of positive Adjusted EBITDA

TORONTO, July 26, 2022 /CNW/ - Global Food and Ingredients Ltd. (TSXV: PEAS) ("GFI" or the "Company"), is pleased to announce the year-end audited results for its wholly-owned subsidiary, Global Food and Ingredients Inc. for the three and twelve-month periods ended March 31, 2022.

"GFI is pleased to report its year end results showing continued strong growth", commented David Hanna, GFI's CEO. "I want to thank all of our customers, farmer suppliers, shareholders and our incredibly dedicated employees for their continued support and hard work. We navigated through a number of challenges over the course of fiscal 2022 including supply chain disruptions and rapid cost increases from the pandemic and floods in British Columbia, as well as a historically poor Canadian grain harvest. Despite these challenges, GFI was able to deliver revenue growth of over 100%, complete 2 business acquisitions, purchase a plant-based pet food processing facility, raise equity financing and become a publicly traded entity.  We also diversified our business by vertically integrating into new value-added product categories, including pet food ingredients, branded consumer packaged goods and subsequent to year end, the production of split peas and pea fibre. We are excited about the future of the business and believe that GFI is ideally situated to respond to current global challenges with its strengthened balance sheet, its locally sourced network of over 500+ farmers in Western Canada and four wholly-owned processing facilities that together create a zero-waste system and allows GFI to maximize value creation from each input that goes into our process".

Key Financial Highlights – Fiscal Year 2022

• Total revenues of $124.4 million, a 102% increase over the prior year, driven by increased volume throughput at GFI's processing facilities in Western Canada and the launch of the Plant-Based Pet Food Ingredients division in Q4 2022.
• Gross profit of $4.0 million, an increase of 39% compared to 2021.
• Loss for the period of $6.2 million, a decline of 644% attributable to $3.7 million of non-cash and/or one-time expenses (net of non-recurring income) recorded during 2022 versus non-recurring income in the comparable period (net of non-cash and/or one-time expenses) of $3.4 million.
• Adjusted gross profit¹ of $9.9 million, an increase of 20% from 2021.
• Adjusted gross profit less toll processing related services¹ of $7.4 million, an increase of 145% from 2021.
• Positive adjusted EBITDA¹ of $1.7 million, the Company's third consecutive year of positive adjusted EBITDA and a decline of 24% from 2021 due to industry challenges, rising commodity prices, poor harvest and delayed timing and increased cost of shipments.

Key Financial Highlights – Fourth Quarter 2022

• Total revenues of $34.8 million, an increase of 31% from 2021.
• Gross profit of $0.7 million, a decrease of 48% compared to 2021.
• Adjusted gross profit¹ of $1.5 million, a decrease of 50% from 2021.
• Adjusted gross profit less toll processing related services¹ of $1.5 million, a decrease of 19% from 2021.
• Negative adjusted EBITDA¹ of $0.5 million compared to positive adjusted EBITDA of $1.6 million in 2021.

^1	Adjusted gross profit, adjusted gross profit less toll processing related services and adjusted EBITDA are non-IFRS performance measures. Refer to "Cautionary Statements - Non-IFRS Measures" in this release for further details.

Other Milestones in Fiscal Year 2022

• Completed two business acquisitions and an asset acquisition in higher margin product categories to achieve vertical integration, namely Plant-Based Branded Consumer Packaged Goods (YoFiit and Bentilia) and Plant-Based Pet Food Ingredients (pet food processing facility in Bowden, Alberta).
• Raised over $11 million in long term debt and equity financing to fund the Company's growth plans.
• Increased working capital financing and reduced borrowing costs by entering into a 3-year committed facility with a limit of $25 million, up significantly from the prior demand facility limit of $6 million.
• Strengthened the management team with important additions of executives including Marie Amazan - President YoFiit, Prashant Jairaj - VP Plant-Based Consumer Products and Michael Moussa - VP Ingredients.

Milestones subsequent to Fiscal Year 2022 Year End

• Completed an equity financing of subscription receipts for gross proceeds $3.6 million.
• Closed Qualifying Transaction (as defined in the policies of the TSX Venture Exchange) with Pivotal Financial Corp. to become a publicly traded company, with trading of GFI's shares on the TSX Venture Exchange beginning on June 20, 2022.
• Completed commissioning of a state-of-the-art pea splitting facility at GFI's existing plant-based ingredient processing complex in Zealandia, Saskatchewan capable of processing over 60,000 metric tonnes of yellow and green peas into split peas and pea fibre annually.
• Began sales of a YoFiit plant-based milk product in 15 Costco stores in Ontario and Quebec.

Financial Summary

Income Statement Summary

	Three months ended				Twelve months ended
	Q4 2022		Q4 2021		FY 2022		FY 2021
Revenue	$     34,834,013		$   26,503,930		$    124,436,679		$   61,566,535
Cost of sales	34,128,286		25,149,569		120,457,673		58,698,431
Gross profit	705,727		1,354,361		3,979,006		2,868,104
Expenses:
General and administration	1,332,538		1,106,948		5,806,685		3,878,466
Depreciation and amortization	170,209		178,351		335,847		713,477
Profit (loss) before the undernoted	(797,020)		69,062		(2,163,526)		(1,723,839)
Other expenses (income)	1,690,389		(5,162,834)		4,253,892		(3,725,945)
Profit (loss) before income taxes	(2,487,409)		5,231,896		(6,417,418)		2,002,106
Income tax expense (recovery)	(162,320)		1,213,135		(126,781)		846,545
Profit (loss) for the period	$      (2,325,089)		$    4,018,761		$      (6,290,637)		$       1155,561

Non-IFRS Measures Summary¹

	Three months ended				Twelve months ended
	Q4 2022		Q4 2021		FY 2022		FY 2021
Gross profit margin	2.0 %		5.1 %		3.2 %		4.7 %
Adjusted gross profit	1,538,020		3,061,787		9,921,440		8,295,923
Adjusted gross profit margin	4.4 %		11.6 %		8.0 %		13.5 %
Adjusted gross profit less toll processing related services	1,501,658		1,846,225		7,436,642		3,039,717
Adjusted gross profit margin less toll processing related services	4.3 %		7.1 %		6.0 %		5.3 %
EBITDA	(1,295,289)		5,756,448		(3,201,076)		4,394,238
EBITDA margin	(3.7 %)		21.7 %		(2.6 %)		7.1 %
Adjusted EBITDA	(475,050)		1,598,255		1,735,497		2,287,473
Adjusted EBITDA margin	(1.4 %)		6.0 %		1.4 %		3.7 %

^1

Gross profit margin, adjusted gross profit, adjusted gross profit margin, adjusted gross profit less toll processing related services, adjusted gross profit margin less toll processing related services, EBITDA, EBITDA margin and adjusted EBITDA and adjusted EBITDA margin are non-IFRS performance measures. Refer to "Cautionary Statements - Non-IFRS Measures" in this release for further details.

The audited financial statements for Global Food and Ingredients Inc. for the year ended March 31, 2022 ("Financial Statements") and related Management's Discussion & Analysis ("MD&A") for the three and twelve months ended March 31, 2022, are available under the Company's profile at www.sedar.com.

About GFI

GFI is a fast-growing Canadian plant-based food and ingredients company, connecting the local farm to the global supply chain for peas, beans, lentils, chickpeas and other high protein specialty crops. GFI is organized into four primary business lines: Pea Protein Inputs, Plant-Based Ingredients, Plant-Based Pet Food Ingredients and Plant-Based Consumer Packaged Goods. Headquartered in Toronto, GFI buys directly from its extensive network of farmers, processes its products locally at its four wholly-owned processing facilities in Western Canada and ships to 37 countries across the world.

GFI's vision to become a vertically integrated farm-to-fork plant-based company providing traceable, locally sourced, healthy and sustainable food and ingredients. Through recent acquisition and development activities, GFI now offers a full suite of Plant-Based Consumer Packaged goods with over 20 SKUs under the YoFiit, Bentilia and Five Peas in Love brands.

Disclaimer

Neither the TSXV nor its Regulation Service Provider (as defined policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Cautionary Statements

Non-IFRS Measures

This news release contains the financial performance metric of gross profit margin, adjusted gross profit, adjusted gross profit margin, adjusted gross profit less toll processing related services, adjusted gross profit margin less toll processing related services, EBITDA, EBITDA margin and adjusted EBITDA and adjusted EBITDA margin, all of which are measures that are not recognized or defined under IFRS (collectively the "Non-IFRS Measures"). As a result, this data may not be comparable to data presented by other food and ingredients companies. For an explanation and reconciliation of the Non-IFRS Measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the MD&A for the three and twelve months ended March 31, 2022. The Company believes that the Non-IFRS Measures are useful indicators of operational performance and are specifically used by management to assess the financial and operational performance of the Company.

Gross profit margin is defined as gross profit divided by revenue.

Adjusted gross profit is calculated by adding or deducting, as applicable from gross profit, certain costs, charges or benefits incurred in such period which in management's view are either not indicative or are directly correlated to the Company's process to sell its products, including: (a) realized foreign exchange loss (gain), (b) overhead costs attributable to brining inventory to a saleable condition that have been recorded as cost of sales under IFRS and (c) net insurance proceeds attributable to the applicable period as the proceeds are compensation for the forgone revenue related to the cancellation of the toll processing agreement which generated 100% gross profit. Adjusted gross profit margin represents adjusted gross profit divided by revenue.

Adjusted gross profit less toll processing related services is a non-IFRS measure used in the current period by management to assess the operating performance of the ongoing business operation net of revenue and margin associated with toll processing services. As these services were a larger portion of the operation in Q4 2021 and have been significantly reduced in Q4 2022 and will no longer provided in FY 2023, management's view is that this metric is indicative of the ongoing operating performance of the Company. Adjusted gross profit from continuing operations is calculated by adding or deducting, as applicable from gross profit, certain costs, charges or benefits incurred in such period which in management's view are either not indicative or are directly correlated to the Company's process to sell its products, including: (a) toll processing revenue, (b) realized foreign exchange loss (gain), and (c) overhead costs attributable to brining inventory to a saleable condition that have been recorded as cost of sales under IFRS. Adjusted gross profit margin less toll processing related services represents adjusted gross profit from continuing operations divided by revenue less toll processing related services.

EBITDA calculates, for the applicable period, earnings before interest, taxes and depreciation and amortization. Interest includes all finance costs net of interest income and depreciation and amortization includes the depreciation of property, plant and equipment, amortization of right-of-use assets, amortization of intangible assets and amortization of deferred financing fees. Management does not use EBITDA as a financial performance metric. EBITDA margin represents EBITDA divided by revenue.

Adjusted EBITDA is calculated by adding and deducting, as applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance, impact the ability to assess the operating performance of our business or are deemed non-cash, non-recurring or one-time in nature. Adjusted EBITDA margin represents adjusted EBITDA divided by revenue.

The following tables provide a reconciliation of the Non-IFRS Measures to the most directly comparable financial measures disclosed in the Financial Statements.

The following table provides a reconciliation of consolidated gross profit (loss) for the period to adjusted gross profit for the periods presented:

		Three months ended			Twelve months ended
		Q4 2022	Q4 2021		FY 2022	FY 2021
Gross profit		$      705,727	$   1,354,361		$    3,979,006	$    2,868,104
Less:
Realized foreign exchange loss (gain) ^(1)		135,969	(556,963)		(406,597)	(1,254,044)
Plus:
Total costs attributable to bringing inventory to a saleable condition: ^(2)
Overhead		801,812	367,345		2,602,477	2,181,792
Amortization of property plant and equipment		166,450	23,550		654,657	472,847
Net insurance proceeds attributable to current period^(3)		-	759,568		2,278,703	1,519,136
Adjusted gross profit		$  1,538,020	$ 3,061,787		$    9,921,440	$    8,295,923

^(1)	Consists of realized gains and losses on foreign exchange rates for executed transactions. The does not participate in hedge accounting practices, but books forward contracts at the time the Company enters into a new contract with a foreign currency denominated vendor. The gain or loss realized at the time of sale is directly related to each of the executed contracts and as a result is indicative of the margin realized on said contract.
^(2)	This is an IFRS adjustment to allocate applicable overhead costs, including compensation and benefits and other general and administration costs, and amortization of property, plant and equipment specifically related to the Company's operating facilities to cost of sales. Management views these costs as fixed in nature and does not assess them as being indicative of the variable cost of selling its products.
^(3)	Relates to the net insurance proceeds received under the Company's contract frustration policy in connection with the TPA and the vendor entering receivership. The net insurance proceeds were awarded to compensate for the forgone revenue as a result of the cancellation of the TPA. The net insurance proceeds were attributable to the five-quarter operating period, Q3 2021 through and inclusive of Q3 2022. Revenue under the TPA was booked at 100% gross profit as it was deemed ancillary to the Company's core operation and utilized fixed overhead costs and available capacity.

The following table provides a reconciliation of revenue to revenue less toll processing related services and gross profit to adjusted gross profit less toll processing related services for the periods presented:

		Three months ended			Twelve months ended
		Q4 2022	Q4 2021		FY 2022	FY 2021
Revenue		$ 34,834,013	$26,503,930		$124,436,679	$61,566,535
Less: toll processing related services		36,362	455,994		206,095	3,737,070
Revenue less toll processing related services		$34,797,651	$26,047,936		$124,230,584	$57,829,465
Gross profit		$     705,727	$  1,354,361		$    3,979,006	$  2,868,104
Less: toll processing related services		36,362	455,994		206,095	3,737,070
Less: realized foreign exchange loss (gain) ^(3)		135,969	(556,963)		(406,597)	(1,254,044)
Plus: total costs attributable to bringing inventory to a saleable condition ^(4)		968,262	390,895		3,257,134	2,654,639
Adjusted gross profit less toll processing related services ^(1)		$   1,501,658	$  1,846,225		$    7,436,642	$  3,039,717
Adjusted gross profit margin less toll processing related services ^(2)		4.3 %	7.1 %		6.0 %	5.3 %

^(1)	Adjusted gross profit less toll processing related services is a non-IFRS measure used in the current period by management to assess the operating performance of the ongoing business operation net of revenue and margin associated with toll processing services. As these services were a larger portion of the operation in FY 2021 and have been significantly reduced in FY 2022 and will no longer provided in FY 2023, management view is that this metric is indicative of the ongoing operating performance of the Company. Adjusted gross profit less toll processing related services is calculated by adding or deducting, as applicable from gross profit, certain costs, charges or benefits incurred in such period which in management's view are either not indicative or are directly correlated to the Company's process to sell its products, including: (a) toll processing revenue, (b) realized foreign exchange loss (gain), and I overhead costs attributable to bringing inventory to a saleable condition that have been recorded as cost of sales under IFRS.
^(2)	Adjusted gross profit margin less toll processing related services represents adjusted gross profit less toll processing related services divided by revenue less toll processing related services. In the current period, management use adjusted gross profit margin less toll processing related services to facilitate a comparison of the operating performance of the Company on a consistent basis reflecting the ongoing operating business.
^(3)	Consists of realized gains and losses on foreign exchange rates for executed transactions. The Company does not employ hedge accounting practices, but books forward contracts at the time the Company enters into a new contract with a foreign currency denominated vendor. The gain or loss realized at the time of sale is directly related to each of the executed contracts and as a result is indicative of the margin realized on said contract.
^(4)	This is an IFRS adjustment to allocate applicable overhead costs, including compensation and benefits and other general and administration costs, and amortization of property, plant and equipment specifically related to the Company's operating facilities to cost of sales. Management views these costs as fixed in nature and does not assess them as being indicative of the variable cost of selling its products.

The following table provides a reconciliation of consolidated loss for the period to EBITDA and adjusted EBITDA for the periods presented:

		Three months ended			Twelve months ended
		Q4 2022	Q4 2021		FY 2022	FY 2021
(Loss) profit for the period		$ (2,325,089)	$   4,018,761		$ (6,290,637)	$    1,155,561
Plus:
Income tax expense (recovery)		(162,320)	1,213,135		(126,781)	846,545
Interest ^(1)		830,489	310,899		2,165,981	1,160,297
Depreciation and amortization ^(2)		361,632	213,653		1,050,361	1,231,835
EBITDA		(1,295,288)	5,756,448		(3,201,076)	4,394,238
Impairment of intangible asset		-	-		-	1,676,897
Other expense (income) ^(3)		(495,233)	(1,345,204)		(464,196)	(1,365,046)
Loss on derivative liability related to convertible debentures ^(4)		129,933	-		1,370,519	-
Loss on warrant revaluation ^(4)		33,587	-		131,764	-
Unrealized loss (gain) on derivative financial instruments ^(5)		(315,136)	308,651		(185,363)	(189,658)
Unrealized foreign exchange loss (gain) ^(5)		177,396	(83,369)		451,088	49,745
Acquisition / one-time transaction costs ^(6)		1,250,398	-		1,250,398	-
Net insurance proceeds attributable to current (future) period^(7)		-	(3,038,271)		2,278,703	(2,278,703)
Share based compensation ^(8)		39,293	-		103,660	-
Adjusted EBITDA		$    (475,050)	$  1,598,255		$   1,735,497	$   2,287,473

^(1)	Interest includes all finance costs net of interest income.
^(2)	Depreciation and amortization includes depreciation of property, plant and equipment, amortization of right-of-use assets, amortization of intangible assets and amortization of deferred financing fees.
^(3)	Consists of income and expense incurred outside of the normal course of operation. Q4 2022 and FY 2022 includes $0.5 million of income from a government grant received in connection with the pea splitting project. Q4 2021 and FY 2021 includes $1.3 million of income related to an extraordinary gain on the retirement of debt associated with the vendor-take-back note as it related to the vendor entering receivership.
^(4)	This is a non-cash item that consists of the fair value revaluation of the convertible debentures and warrants.
^(5)	Consists of (i) non-cash, unrealized gains and losses attributable to foreign exchange rate fluctuations and (ii) non-cash gains and losses on foreign exchange "mark-to-market" in connection with our derivative financial instruments.
^(6)	Consists of acquisition, integration and other costs such as legal, consulting and other fees and expenses incurred in respect of acquisitions, financing and Transaction-related activities completed during the applicable period. We expect to incur similar costs in connection with other acquisitions and completion of the Transaction in the future and, under IFRS, such costs relating to acquisitions are expensed as incurred and not capitalized.
^(7)	Relates to the net insurance proceeds received under the Company's contract frustration policy in connection with the TPA and the vendor entering receivership. The net insurance proceeds were awarded to compensate for the forgone revenue as a result of the cancellation of the TPA. The net insurance proceeds were attributable to the five-quarter operating period, Q3 2021 through and inclusive of Q3 2022. The net proceeds of $3.8 million were received and booked in Q4 2021. The adjustment reallocates the proceeds to align them with their operating quarter in which the revenue would have been received on a basis of $0.8 million in each of the five-quarter period. One quarter of proceeds is allocated to Q4 2021 and nil to Q4 2022. Two quarters (Q3 – Q4 2021) of proceeds are allocated to FY 2021 and three quarters (Q1 – Q3 2022) are allocated to FY 2022.
^(8)	This is a non-cash item and consists of the amortization of the estimated fair value of share-based options granted under the Company's share-based option plan.

Non-IFRS Measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the GFI's operating results, underlying performance and prospects in a manner similar to GFI's management.

Accordingly, these Non-IFRS Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Forward-Looking Statements

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Forward looking statements in this press release include without limitation statements relating to GFI continuing to add further downstream processing and the effects thereof and GFI's business objectives. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. GFI undertakes no obligation to comment analyses, expectations or statements made by third-parties in respect of GFI, its securities, or financial or operating results (as applicable). Although GFI believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond GFI's control, including the risk factors discussed in GFI's Filing Statement dated May 30, 2022, which are incorporated herein by reference and are available through SEDAR at www.sedar.com. The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. GFI disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE Global Food and Ingredients

GLOBAL FOOD AND INGREDIENTS LTD.: Bill Murray, CFO, Phone: [phone], Email: [email protected]