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)
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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