good natured Products Inc. Announces Financial Results for the Three and Nine Months Ended September 30, 2022

VANCOUVER, BC, Nov. 22, 2022 /CNW/ - good natured Products Inc. (the "Company" or "good natured^®") (TSXV: GDNP) (OTCQX: GDNPF), a North American leader in plant-based products, today announced its financial results for the three months ("Q3 2022") and nine months ("YTD 2022") ended September 30, 2022.

The Company grew quarterly revenue on a year-over-year basis by 45% to $26.2 million while achieving gross margin of 27%, which was at the high end of the Company's targeted range. Q3 2022 represents the Company's fourth consecutive quarter of positive adjusted EBITDA¹.

"Q3 2022 illustrates the significant progress we're making toward leveraging our investments in internal production capabilities, productivity initiatives and revenue and margin mix that drove a greater percentage of revenue contribution from higher margin product categories in Q3," stated Paul Antoniadis, CEO of good natured^®. "While broader macroeconomic conditions have remained challenging, we believe demand for sustainable, earth-friendly products, especially within staple goods categories like food packaging, will remain resilient."

Key Highlights

• Revenues for Q3 2022 increased 45% to $26.2 million compared to $18.0 million for the three months ended September 30, 2021 ("Q3 2021"). YTD 2022 revenues increased 103% to $77.7 million compared to $38.3 million for the nine-month period ended September 30, 2021 ("YTD 2021").
• Variable gross profit¹ for Q3 2022 increased 75% to $9.1 million, representing a variable gross margin¹ of 34%, compared to $5.2 million and 29% for Q3 2021. Variable gross profit for YTD 2022 increased 101% to $25.6 million, 33% of sales, compared to $12.7 million, 33% of sales, in YTD 2021.
• Gross profit for Q3 2022 increased 78% to $7.1 million representing a gross margin of 27%, compared to $4.0 million and 22% respectively for Q3 2021. Gross profit for YTD 2022 increased 99% to $20.5 million, 26% of sales, compared to $10.3 million, 27% of sales, in YTD 2021.
• Selling, general and administrative expenses ("SG&A"), excluding acquisition activity and one-time charges,¹ for Q3 2022 and YTD 2022 were $4.2 million and $11.7 million compared to $3.2 million and $7.0 million for Q3 2021 and YTD 2021. As a percent of sales, SG&A expenses, excluding acquisition activity and one-time charges,¹ declined to 16% for Q3 2022 and 15% for YTD 2022 compared to 18% in Q3 2021 and YTD 2021.
• SG&A expenses for Q3 2022 and YTD 2022, were $4.6 million and $13.0 million compared to $3.8 million and $8.7 million for Q3 2021 and YTD 2021. As a percent of sales, SG&A expenses declined to 18% for Q3 2022 and 17% for YTD 2022 compared to 21% in Q3 2021 and 23% in YTD 2021.
• Cash generated by operating activities for YTD 2022 was $0.5 million compared to $12.1 million used by operating activities for YTD 2021.
• Net working capital improved to $19.6 million as at September 30, 2022, compared to $12.4 million as at September 30, 2021.
• The Company's adjusted EBITDA¹ for Q3 2022 and YTD 2022 was $0.8 million and $3.0 million respectively, compared to a loss of $0.6 million for Q3 2021 and YTD 2021.
• In Q3 2022, the Company incurred a net loss of $2.1 million compared to a net loss of $2.9 million in Q3 2021. Net loss for YTD 2022 was $6.7 million compared to a net loss of $8.5 million in YTD 2021.

The Company's Q3 2022 financial statements and Management's Discussion and Analysis are available on SEDAR at sedar.com and on the Company's investor website at investor.goodnaturedproducts.com.

Q3 2022 Results Conference Call

The Company will hold a conference call to discuss its financial results for Q3 2022, hosted by Paul Antoniadis, Executive Chair & CEO, and Kevin Leong, Chief Financial Officer, on November 22, 2022 at 11:00 AM Eastern / 8:00 AM Pacific time.

Date: November 22, 2022
Time: 11:00 AM ET / 8:00 AM PT
Toll-Free: 1-888-396-8049 International: [phone]
Conference ID: 97854983
Participants are asked to dial in 10 minutes prior to the start of the call.

A replay of the call will be available approximately two hours after its completion through to December 7, 2022. The replay will be available by dialing 1-877-674-7070 in North America or [phone] and using the passcode 854983.

The good natured^® corporate profile can be found at: investor.goodnaturedproducts.com

About good natured Products Inc.

good natured^® is passionately pursuing its goal of becoming North America's leading earth-friendly product company by offering the broadest assortment of plant-based products made from rapidly renewable resources instead of fossil fuels. The Company is focused on making it easy and affordable for business owners and consumers to shift away from petroleum to better everyday products^® that use more renewable materials, less fossil fuel, and no chemicals of concern.

good natured^® offers over 400 products and services through wholesale, direct to business, and retail channels. From plant-based home organization products to certified compostable food containers, bio-based industrial supplies and medical packaging, the Company is focused on making plant-based products more readily accessible to people as a means to create meaningful environmental and social impact.

For more information: goodnaturedproducts.com

On behalf of the Company:
Paul Antoniadis – Executive Chair & CEO
Contact: 1-604-566-8466

Investor Contact:        
Spencer Churchill
Investor Relations
1-877-286-0617 ext. 113
[email protected] 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibilities for the adequacy or accuracy of this release.

Non-GAAP Financial Measures

We have included in this press release a discussion of the Company's variable gross profit, variable gross margin, SG&A excluding acquisition activity and one-time charges, and adjusted EBITDA all non-GAAP measures, for Q3 2022, YTD 2022, Q3 2021 and YTD 2021 to provide, what management believes, is a meaningful comparison of the Company's performance in Q3 2022 and YTD 2022. These non-GAAP measures do not have standardized meanings, and therefore may not be comparable to similar measures presented by other issuers. Variable gross profit, variable gross margin, SG&A excluding acquisition activity and one-time charges, and adjusted EBITDA are more fully defined and discussed in the Company's Q3 2022 Management's Discussion and Analysis under the heading "non-IFRS financial measures", which is available on the Company's SEDAR profile at www.sedar.com and on the Company's investor website at investor.goodnaturedproducts.com.

The following table provides a reconciliation of net loss to adjusted EBITDA for the periods ended:

		3 mon. ended Sep 30			9 mon. ended Sep 30
		2022	2021	+/-	2022	2021	+/-
Net loss for the period		$ (2,066)	$  (2,919)	-29 %	$ (6,670)	$ (8,520)	-22 %
Share-based compensation		381	781	-51 %	1,556	1,756	-11 %
Depreciation		465	306	52 %	1,436	818	76 %
Depreciation in COGS & SG&A		461	290	59 %	1,220	642	90 %
Financing costs		1,394	974	43 %	3,687	2,934	26 %
Foreign exchange loss (gain)		(611)	(486)	26 %	152	53	187 %
Gain on interest free loan		-	(14)	-100 %	(15)	(43)	-65 %
Loss on debt repayment and and conversion		445	-	- %	449	212	112 %
Acquisition related expenses & one time charges		377	626	-40 %	1,301	1,686	-23 %
Deferred income taxes recovery		(54)	(146)	-63 %	(162)	(146)	11 %
Adjusted EBITDA^1		$       792	$    (588)	-235 %	$    2,954	$    (608)	-586 %

The following table provides a reconciliation of variable gross profit to gross profit and variable gross margin to gross margin for the periods ended:

		3 mon. ended Sep 30			9 mon. ended Sep 30
		2022	2021	+/-	2022	2021	+/-
Revenue		$   26,178	$   18,001	45 %	$  77,660	$  38,272	103 %
Variable cost of product		17,287	12,824	35 %	52,092	25,582	104 %
Variable gross profit^1		8,891	5,177	72 %	25,568	12,690	101 %
Variable gross margin^1		34 %	29 %		33 %	33 %
Fixed factory overhead		1,759	1,165	51 %	5,054	2,383	112 %
Gross profit		7,132	4,012	78 %	20,514	10,307	99 %
Gross margin		27 %	22 %		26 %	27 %

The following table provides a reconciliation of selling, general and administrative expense excluding acquisition activity and one-time charges:

		3 mon. ended Sep 30			9 mon. ended Sep 30
		2022	2021	+/-	2022	2021	+/-
SG&A Wages		$    2,630	$   2,029	30 %	$   7,020	$    4,183	68 %
SG&A Other		1,405	1,096	28 %	4,109	2,516	63 %
Product Development expense		171	94	82 %	559	325	72 %
Acquisition related expenses & one-time charges		377	626	-40 %	1,301	1,686	-23 %
SG&A		4,583	3,845	19 %	12,989	8,710	49 %
SG&A % of revenue		18 %	21 %		17 %	23 %
SG&A excluding acquisition activity & one-time charges		4,206	3,219	31 %	11,688	7,024	66 %
SG&A excluding acquisition related & one-time charges % of revenue		16 %	18 %		15 %	18 %
SG&A Wages % of revenues		10 %	11 %		9 %	11 %

Cautionary Statement Regarding Forward-Looking Information

This news release contains forward-looking information within the meaning of securities laws including statements related to Company plans and focuses for 2022, the upcoming results conference call and management's outlook for 2022.

By their nature, forward-looking statements involve known and unknown risks, uncertainties, changes in circumstances and other factors that are difficult to predict and many of which are outside of the Company's control which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking information contained in this news release is based on our current estimates, expectations and projections regarding, among other things, future plans and strategies, projections, anticipated events and trends, general market conditions, the economy, sales volume and pricing and other future conditions which we believe are reasonable as of the current date. Important factors that could cause actual results and financial conditions to differ materially from those indicated in the forward-looking statements include, among others risks relating to general economic, market and business conditions and unforeseen delays in the realization of the Company's plans. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date.

If relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed that the material factors referred to herein will not cause such forward-looking statements and information to differ materially from actual results or events. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

Other than as required under securities laws, we do not undertake to update this information at any particular time.

All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.

____________________________________

¹ A non-GAAP financing measure. Please refer to the "Non-GAAP Financial Measures" below for an explanation of these measures and reconciliation to the Company's financial results reported in accordance with GAAP

SOURCE Good Natured Products