TORONTO, July 21, 2021 /CNW/ - GreenSpace Brands Inc.
("GreenSpace" or the "Company") (TSXV: JTR), a leader within the
organic and plant-based food industry, announces that it has filed
its annual audited Consolidated Financial Statements for the year
ended March 31, 2021, its related
Management Discussion and Analysis and its Chief Executive Officer
and Chief Financial Officer certifications. The Company also
announces that it has achieved its expectation of Project FIT
annualized cost savings in excess of $2.0
million. Management is now targeting an additional
$1.0 million in savings, amounting to
$3.0 million in total, on an
annualized basis starting in the second half of its current fiscal
year.
SUMMARY RESULTS OF FISCAL 2021:
- Gross revenue from continuing operations of $29.4 million, representing a (40%) decrease over
the prior year due to: (i) working capital constraints, such that
the Company did not have the required levels of inventories to
service customer demand and participate, at historic levels, in
customer driven promotional activity of our continuing brands; (ii)
the decision by a limited number of customers to stop doing
business with the Company as a consequence of the working capital
constraints; (iii) the cessation of the Life Choices and Cedar
businesses part way through the prior year; and (iv) the suspension
or de-prioritization of certain private label businesses.
- Adjusted Gross Profit Margin of 13.2% compared to 19.1% for the
prior year, primarily due to: (i) higher rebates and discounts
largely attributable to retailers' Manufacturer Charge Backs
(MCB's) from prior years, (ii) multiple one-off charges which
included write-offs for slow moving and obsolete inventory,
cancellation charges and inventory disposition costs; and (iii)
supply chain constraints and shortages during the Covid lockdowns
that led to certain cost increases, including those of certain raw
materials and freight which were absorbed by the Company.
- Adjusted EBITDA was ($6.6)
million, compared to ($7.3)
million last year, with the impact of lower gross margin
partially offset by significant reductions in General &
Administrative expenses compared to prior year.
- Non-cash impairment charges on Fixed Assets, Right-Of-Use
Assets, Intangible Assets and Goodwill amounted to ($10.1) million, compared with ($23.0) million in the prior year.
- Net Loss of ($20.8) million,
compared with ($33.7) million in
prior year, primarily related to non-cash impairment charges.
"The fiscal year ended March 31,
2021 was a challenging one for the business, with working
capital constraints negatively impacting inventory and customer
service levels. However, with two private placements
completed late in the fiscal year, we are quickly normalizing key
supplier payment terms, restoring inventory levels, delivering
significantly improved customer service levels, and resuming
customer promotional activity across all three of our core
brands. Since April, we are making solid progress on our
transformation efforts, embedding our new Focused Growth Strategy
across all aspects of the business, and ensuring a heightened focus
on driving profitable growth," said Shawn
Warren, President and CEO of GreenSpace Brands Inc.
MANAGEMENT RAISES GUIDANCE ON PROJECT FIT SAVINGS:
In
May 2021, the Company announced the
launch of Project FIT, a multi-pronged initiative expected to
deliver cost savings in excess of $2.0
million annually starting in the second half of the year
ending March 31, 2022. As part
of Project FIT, the transition of CENTRAL ROAST to a contract
manufacturer model was completed in June
2021 and robust efforts to lower SG&A costs are
underway. The Company's multi-year program on Supply Chain
reinvention, announced in May 2021,
is progressing well. Given the progress the
Company has made on its Project FIT initiative, Management has
achieved its expectation of annualized cost savings in excess of
$2.0 million ahead of schedule.
Management is now targeting an additional $1.0 million of savings, amounting to
$3.0 million in total, on an
annualized basis starting in the second half of its current fiscal
year.
OUTLOOK:
Management believes that its new Vision,
Strategic Plan and implementation of its Focused Growth Strategy
will lead to significant improvements in adjusted EBITDA starting
in the second-half of the year ending March
31, 2022 and continuing into subsequent years.
Management is rebuilding required levels of inventory and
improving customer service levels across all three branded
businesses. Considerable progress has already been made, leading to
the resumption of promotional activities with retailers which is
expected to improve sales. In the current fiscal year, the
Company has been able to regain distribution with certain strategic
customers. In addition, the Company has been able to
accelerate its new channel growth across a number of important
e-commerce platforms. Aligned with its Focused Growth Strategy,
Management has prioritized improvements in gross margins through
better product mix, price increases and enhanced cost
management.
GreenSpace has been able to rebuild credibility with its
supplier base and renegotiate payment terms with a number of key
suppliers across its ingredient and manufacturing network, enabling
improvements in the Company's cash conversion cycle. While
rebuilding customer sales momentum may take time after the working
capital challenges of the year just ended, Management expects that
the foundational elements have been established to deliver
improvements in both topline performance and profitability
improvements, particularly moving into the second half of the
current fiscal year. Management believes that the rapid
implementation of its Focused Growth Strategy will drive
improvements in the operation over time, produce positive adjusted
EBITDA and free cash flow to help finance the future growth
opportunities available to the Company.
ABOUT GREENSPACE BRANDS INC.:
GreenSpace is a North
American organic and plant-based food business that develops,
markets and sells premium food products to consumers within the
fast-growing natural and organic food categories. GreenSpace owns
LOVE CHILD ORGANICS, a producer of 100% organic food for infants
and toddlers made with natural and nutritionally-rich ingredients,
CENTRAL ROAST, a clean snacking brand featuring a wide assortment
of organic nut and seed mixes and GO VEGGIE, one of the pioneers
and leaders in the US plant-based dairy market. All brands
are wholly-owned and are sold in a variety of online, natural and
retail grocery locations.
For more information, visit www.greenspacebrands.ca and
GreenSpace's filings are also available at
www.SEDAR.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION:
This news release includes certain information
that may constitute "forward-looking information" under applicable
Canadian securities legislation. Forward-looking information is
necessarily based upon a number of estimates and assumptions that,
while considered reasonable, are subject to known and unknown
risks, uncertainties, certain of which are beyond the control of
GreenSpace, including, but not limited to, the failure of third
parties to comply with their obligations to the Company or its
affiliates; the impact of new and changes to, or application of,
current laws and regulations; critical accounting estimates and
changes to accounting standards, policies, and methods used by the
Company; the occurrence of natural and unnatural catastrophic
events and claims resulting from such events; and risks related to
COVID-19 including various recommendations, orders and measures of
governmental authorities to try to limit the pandemic, including
travel restrictions, border closures, nonessential business
closures, quarantines, self-isolations, shelters-in-place and
social distancing; and other factors which may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking information, including the risks
identified in the Company's disclosure documents. There can be no
assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. All
forward-looking information contained in this press release is
given as of the date hereof and is based upon the opinions and
estimates of management and information available to management as
at the date hereof. The Company disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE GreenSpace Brands Inc.