Good Natured Products Inc. Announces First Quarter 2024 Results

May 30, 2024 6:00 AM EDT | Source: good natured Products Inc.

Vancouver, British Columbia--(Newsfile Corp. - May 30, 2024) - good natured Products Inc. (TSXV: GDNP) (OTCQB: GDNPF) (the "Company" or "good natured®"), a North American leader in eco-friendly food packaging, bio-based plastic extrusion and plant-based products, today announced its financial results for the three months ended March 31, 2024 ("Q1 2024").

Q1 2024 Highlights

  • Revenue of $14.1 million compared to $20.3 million for the three months ended March 31, 2023 ("Q1 2023") and $18.6 million for the three months ended December 31, 2023 ("Q4 2023").
  • Adjusted EBITDA1 of $0.2 million compared to $0.7 in Q1 2023 and $0.1 million in Q4 2023.
  • Variable gross margin1 of 40% compared to 38% in Q1 2023 and 35% in Q4 2023.
  • SG&A expenses excluding one-time and acquisition related costs of $2.7 million compared to $3.6 million in Q1 2023 and $3.3 million in Q4 2022.
  • Cash used in operating activities of $1.7 million compared to $0.8 million generated in Q1 2023.
  • Ending cash balance of $4.3 million compared to $7.3 million at December 31, 2023.

Revenue in Q1 2024 declined by 24% compared to Q4 2023, which was offset by higher variable gross margin and lower SG&A expenses to deliver stronger Adjusted EBITDA compared to Q4 2023. The decline in revenue in Q1 2024 was primarily due the following factors: 1) an abnormally slow and soft month of January 2024, which has been reported widely in the industry and was especially apparent in the Company's Industrial business group that continues to face lower demand levels, increased market competitiveness and volatility; 2) a decision to fully exit a legacy petroleum-based Industrial business group product line; and 3) lower order volumes from the large US food producer highlighted in Q4 2023 (the "US Food Producer") that supplies major grocery retailers, who continue to reassess product assortments and renegotiate vendor agreements to safeguard margins amid food inflation and shifting consumer spending patterns. The Company experienced improved monthly revenues for the balance of Q1 2024 after the abnormally slow January 2024.

The Company has taken a number of steps, including proactively adjusting its product offering to deliver improved profitability, in part by exiting an Industrial business group product line as mentioned above. Year-over-year revenue loss in Q1 2024 from these activities in the Industrial business group was $1.8 million and is anticipated to be $5.5 to $6.5 million in total revenue loss for 2024. The Company also intends to discontinue its Commercial & Business Supplies business group by the end of 2024.

Building on the actions taken in Q4 2023 to reduce overall cost structure, the Company took substantial measures in Q1 2024 to lower its operating costs, including corporate cost reduction initiatives announced on February 14, 2024 that are expected to result in annualized savings of approximately $3 million. The Company continues to rigorously review operating capabilities and processes in order to identify optimization initiatives.

"Our focus is squarely on maximizing profitability by focusing on cost containment, growing a diversified customer base, and by adjusting our products and mix to focus on the highest value offerings," stated Paul Antoniadis, CEO of good natured®. "Although the first quarter was also challenged by weather-related disruptions and ongoing evidence of changes in consumer purchasing patterns due to higher food prices, our team's proactive actions delivered positive Adjusted EBITDA for the tenth straight quarter."

Q1 2024 Financial Overview
Revenue for Q1 2024 decreased 31% to $14,070 as compared to $20,315 for Q1 2023. The Packaging business group realized a year-over-year revenue decline of 31%, driven by organic growth that was more than offset by general order volatility, including lower order volumes from the US Food Producer, lower blended average selling prices amongst some other national packaging accounts, and to a lesser extent customer churn amongst small business customers who have been greatly impacted by current economic conditions.

Industrial business group revenue declined by 32% compared to Q1 2023, driven by a decision to fully exit a legacy petroleum-based Industrial business group product line as noted above, an industry-wide decline in average selling prices, continued soft demand and increased competitive pressure for commodity petroleum-based product, and weather-related disruptions in January 2024.

Variable gross margin1 for Q1 2024 increased to 39.9% compared to 37.5% for Q1 2023. The increase in variable gross margin reflects lower raw material input costs, a reduction in direct labor headcount and productivity enhancements in the variable cost of products. Gross margin was 28.0% for Q1 2024 compared to 27.6% for Q1 2023.

Selling, general and administrative expenses ("SG&A") in Q1 2024 decreased by 8% compared to Q1 2023. The decrease in SG&A expenses reflects the Company's ongoing efforts to reduce costs through headcount reductions and lower legal and professional fees, which was partially offset by an increase in one-time costs associated with the cost reduction efforts in Q1 2024. SG&A excluding acquisition activity and one-time charges declined 24% on a year-over-year basis.

The Company's Adjusted EBITDA1 decreased to $0.2 million in Q1 2024 from $0.7 in Q1 2023, as the decline in gross profit contribution exceeded the decline in SG&A and fulfilment and logistics expenses.

The Company incurred a net loss of $5.0 million in Q1 2024 compared to a net loss of $2.5 million in Q1 2023. Excluding changes in non-cash expenses such as share-based compensation, depreciation and amortization, one-time charges and gains, and foreign exchange, an increase in financing costs was the primary reason for the year-over-year increase in net loss.

Cash Flow & Balance Sheet Overview
Cash used by operating activities for Q1 2024 was $1.7 million compared to $0.8 million generated by operating activities for Q1 2023. The Company generated positive cash flow from its operations for Q1 2024 excluding financing expenses, which increased 27% compared to Q1 2023. The Company used $0.9 million in net cash from financing activities for Q1 2024 and used $0.5 million in investing activities for Q1 2024.

Cash balance as at March 31, 2024 was $4.3 million, compared to $7.3 million as at December 31, 2023. As at March 31, 2024, net working capital (deficit) was ($4.6) million compared to ($1.4) million as at December 31, 2023.

The Company remains committed to exploring options that will enhance its ability to execute on strategic growth over the long term. This includes a focus on ways to restructure and renegotiate its debt obligations to reduce leverage and cash interest payments.

As at March 31, 2024, the Company's total asset to liability ratio was 1.07 compared to 1.10 as at December 31, 2023.

The Company's Q1 2024 financial statements and Management's Discussion and Analysis are available on SEDAR+ at and on the Company's website at

As part of its strict focus on cost containment, the Company has made the decision to not hold quarterly conference calls until further notice. Management is available to discuss these results or any general inquiry, with contact information listed below.

The good natured® corporate profile can be found at:

About good natured Products Inc.
good natured® is at the forefront of North America's shift toward sustainability, showcasing over 90 plant-based packaging designs and an extensive portfolio of more than 400 products and services. These offerings are purposefully designed to reduce environmental impact by using more renewable materials, less fossil fuel, and eliminating chemicals of concern.

Manufactured locally in the US and Canada, good natured® engineers and distributes a diverse range of bio-based products across various sectors, including grocery, restaurant, electronics, automotive, and pharmaceutical via both wholesale and direct channels.

The Company is dedicated to providing an industry-leading customer experience in order to encourage the transition to renewable alternatives. By making it easy and affordable for businesses to adopt bio-based products and packaging, good natured® aims to empower them to reach their sustainability objectives.

For more information:

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

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 Q1 2023, Q1 2024, and Q4 2023 to provide, what management believes, is a meaningful comparison of the Company's performance in Q1 2024. 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 Q1 2024 Management's Discussion and Analysis under the heading "non-IFRS financial measures", which is available on the Company's SEDAR profile at and on the Company's investor website at

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

3 Mon Ended Mar 31


Net loss for the period$(5,004)$
Share-based compensation640 40359%
Depreciation573 627-9%
Depreciation in COGS & SG&A546 5323%
Financing costs2,290 1,79927%
Foreign exchange loss (gain)473 (291)-263%
Gain on WINN Loan- (42)-100%
Loss on financing- --%
Loss on impairment- --%
Acquisition related expenses & one-time charges831 291186%
Deferred income taxes recovery(125) (125)-%
Adjusted EBITDA1



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 months ended Mar 31



Variable cost of product


Variable Gross Profit1


Variable Gross Margin %39.9%37.5% 
Fixed factory overhead


Gross profit


Gross margin %28.0%27.6% 


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

3 Mon Ended Mar 31



SG&A Wages $1,935$2,353-18%
SG&A Other7461,031-28%
Product Development expense28166-83%
Acquisition related expenses & one-time charges1




SG&A % of Revenue


SG&A Excluding Acquisition Activity & One-Time Charges1


SG&A % of Revenue Excluding Acquisition Activity & One-Time Charges1


SG&A Wages % of Revenues




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, focuses and outlook for 2024.

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, future market and operating conditions, supply conditions, end customer demand conditions, anticipated events and trends, general market conditions, the economy, financial conditions, sales volume and pricing, expenses and costs, 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, but are not limited to: future capital needs and uncertainty of additional financing, risks relating to general economic, market and business conditions and unforeseen delays in the realization of the Company's plans, risks related to the loss of key manufacturing equipment, capability or facilities, the performance of plant-based materials and the ability of the Company's products and packaging to meet significant technical requirements, changes in raw material supply and costs, labour availability and labour costs, fluctuations in operating results, and other related risks as more fully set out in the Annual Information Form of the Company and other documents disclosed under the Company's filings at 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.

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