The Very Good Food Company Reports First Quarter 2021 Financial Results
First Quarter 2021 Revenue Increased 680% Year-over-Year to $2.6 Million
Production Units Sold Increased 77% over Q4 2020
eCommerce Revenue Increased by $0.7m, or 52% over Q4 2020
Fulfilled 23,181 eCommerce orders in Q1 2021, compared to a total of 40,322 in fiscal 2020
New brokerage and distribution partnerships to accelerate U.S. retail reach
Vancouver, British Columbia--(Newsfile Corp. - May 26, 2021) - The Very Good Food Company Inc. (TSXV: VERY) (OTCQB: VRYYF) (FSE: 0SI) ("VERY GOOD" or the "Company"), a leading plant-based food technology company, is pleased to announce its financial results for its first quarter ended March 31, 2021.
"We have once again reported record quarterly results as a result of growing interest in our brand," said Mr. Scott. "This strong growth trajectory that we have achieved quarter over quarter is driven by our ability to strategically enhance our operational capabilities, optimize our logistics network to meet the increasing demand from our eCommerce channel, and secure new wholesale distribution partnerships to expand our geographical footprint across North America. Overall, sales increased 44% from Q4 2020 supported by production from our Victoria Facility as the Rupert Facility was being commissioned. Our products are expected to be on the shelves of major U.S. retailers starting in October 2021 and in smaller natural chains in August 2021; lockstep with the ramp up of production at our Rupert Facility. We look forward to building upon this success and reaching our 2021 goals, including the capability to fulfill upwards of 5,000 eCommerce orders a week and establishing approximately 15,000 points of distribution in Canada and the U.S. while continuing to build on our position as a leader in the plant-based food industry."
Q1 2021 Financial Highlights
- Revenue increased 680% to $2,643,083 in Q1 2021 compared to $338,552 in Q1 2020, and increased 44% from $1,836,682 in Q4 2020 through enhanced operation of the Victoria Facility as the Rupert Facility has just started to produce saleable product as of mid-May 2021.
- Product units sold increased 77% to 265,702 in Q1 2021 compared to 150,154 in Q4 2020.
- eCommerce sales increased 1,744% to $2,185,095 in Q1 2021 compared to $118,508 in Q1 2020, and increased 52% from $1,438,931 in Q4 2020.
- eCommerce sales as a percentage of revenue remained at ~80% in Q1 2021.
- eCommerce orders fulfilled were 23,181 in Q1 2021 compared to 13,580 orders fulfilled in the prior period; representing 57% of the total orders fulfilled in fiscal 2020.
- Wholesale revenue increased 230% to $345,905 in Q1 2021 compared to $104,912 in Q1 2020, and increased 36% from Q4 2020.
- Wholesale distribution points increased 239% to 1,356 at the end of Q1 2021 compared to 400 in Q1 2020; and increased 4.3% from Q4 2020.
- Adjusted Gross Profit(1) was 36% of revenue in Q1 2021, compared to 37% of revenue in Q4 2020.
- Adjusted General and Administrative Expense(1) remained relatively flat at $2,422,252 in Q1 2021 compared to $2,154,364 in Q4 2020.
- Adjusted EBITDA(1) was a loss of $(5,391,936) in Q1 2021 compared to $(3,279,266) in Q4 2020.
- Ended the quarter with a strong cash position of ~$17.2 million.
- Voted one of the "Best Vegan Butcher Shops" by VegNews in April 2021; noting VERY GOOD's meaty products made with natural ingredients and our wide product range.
| || Three months|
| Three months|
|Revenue by channel|
|Butcher Shop, Restaurant and Other||112,083||142,475||115,132|
|Adjusted Gross Profit(1)||$||953,372||$||676,709||$||(14,986||)|
|Adjusted Gross Margin(1)||36%||37%||(4%)|
|Adjusted general and administrative expense(1)||$||2,422,255||$||2,154,364||$||365,535|
|Adjusted EBITDA net loss(1)||$||(5,391,936||)||$||(3,279,266||)||$||(728,443||)|
|Loss per share - basic and diluted||$||(0.15||)||$||(0.06||)||$||(0.02||)|
|Weighted average number of shares outstanding - basic and diluted||97,156,969||89,689,807||45,549,039|
(1) See "Non-GAAP Measures" below and in our Management's Discussion and Analysis for the three months ended March 31, 2021 and 2020 for further details concerning Gross Profit, Gross Margin, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted general and administrative expense and Adjusted EBITDA including definitions and reconciliations to the relevant reported IFRS measures, which is available under our SEDAR profile at www.sedar.com.
|For the period ended:|
|Production volume sold by channel (units)|
|Number of eCommerce orders||23,181||13,580||2,441|
|As at period end:|
|Production capacity (lbs)||20,000||20,000||8,100|
|Number of product SKUs manufactured||19||14||13|
|Number of wholesale distribution points||1,356||1,300||400|
Corporate and Operational Highlights
Enhanced Production Capabilities & Scaled Distribution
- Completed the commissioning of the first production line at our newly leased 45,000 sq. ft. Vancouver-based production facility, the Rupert Facility, which is expected to produce up to 37 million lbs. to be phased in over 2021 (approximate increase of 2,690% of annualized production capacity over fiscal 2020). During the first quarter of 2021, the Rupert Facility and our first production line were commissioned with product testing commencing in April 2021. In May 2021, we announced Line 1 is now producing saleable product consisting of 7+ SKUs from our existing product line already in the market. The second line is planned to start food production in Q4 2021 and is expected to produce at least another 6+ SKUs not yet launched in the market under our new gluten-free product line "Butcher's Select".
New Wholesale Retail Distribution Points & Growth Opportunities
- Partnership with Quality Foods, a premier Vancouver Island grocer, to distribute The Very Good Butchers brand to 14 retail locations.
- Expanded product placement with Sobeys Inc., Canada's second largest retailer, into its top ten Safeway locations.
- Retail Distribution Points increased to 1,356 from 1,300 in Q4 2020; retail outlets increased from 275 stores at the end of 2020 to 300 stores at the end of March 2021.
- New brokerage and distribution partnerships to accelerate U.S. retail reach. We announced a new partnership with the Boulder, Colorado-based sustainable natural food and beverage brokerage, Green Spoon Sales, in April 2021. In May 2021, we signed a U.S. distribution agreement with United Natural Foods (UNFI). UNFI distributes over 250,000 natural, organic and conventional products to supermarkets and foodservice customers across Canada and the U.S.
- First U.S. sales order from the California-based online vegan grocery store, GTFO It's Vegan, was fulfilled; marking the first PO in a long list of U.S. retailers interested in carrying VERY GOOD's product lines. We advanced conversations with several large and mid-sized chains representing 800+ retail stores to carry our products, and are well positioned for scalable growth in the U.S.
- Acquisition of The Cultured Nut, ("Cultured Nut"), a highly popular artisan vegan cheese producer on the West Coast of Canada, driving our entry into the cheese alternatives space under the brand "The Very Good Cheese Co.", with five new SKUs targeted to launch through the Company's eCommerce channel in June 2021 and in retail stores in Q3 2021. These new dairy-free, plant-based cheese products have already been tested in the market, bringing VERY GOOD's growing portfolio of plant-based food options to 19+ SKUs.
- Acquisition of the Lloyd-James Marketing Group Inc., a boutique wholesale and food service broker specializing in the plant-based food industry with a history of placement in large, natural, specialty and conventional grocery retailers, such as, Whole Foods Market, The Pattison Food Group, Sobeys, Metro, Loblaws and Walmart. Since 2019, Lloyd-James has played an integral role in the development of VERY GOOD's Canadian distribution network. This acquisition directly results in cost savings of 5% of future gross revenue due to the elimination of broker fees.
Strengthened Leadership Team & Advisory Board
- Appointed Ana Silva as President to focus on the current priorities related to sales, marketing, operations, and supply chain.
- Formed a committee of strategic advisors with extensive experience in brand development, purpose-driven marketing programs and international sales to help guide the Company to the next stage of expansion.
- Established an experienced Sales and Marketing team with the addition of Kevin Callaghan as Director of Sales (US), Jordan Rogers as Director of Sales (Canada) and Kyle Marancos as the Director of Marketing and eCommerce; all with extensive experience in the food and beverage plant-based space. This team's near-term focus is to build our wholesale network and points of distribution, eCommerce sales and identify food service opportunities across North America.
Strengthened Brand Awareness & Consumer Engagement
- Rebranded corporate presence from "The Very Good Butchers" to "The Very Good Food Company" brought to life in a revamped "The Very Good Food Co." logo and newly unveiled website, www.VeryGoodFood.com as a centralized platform for our growing portfolio of great-tasting and nutritious plant-based products.
The management's discussion and analysis for the period and the accompanying financial statements and notes are available under the Company's profile on SEDAR at www.sedar.com.
First Quarter 2021 Conference Call Details
VERY GOOD will host a conference call today, Wednesday, May 26, 2021 at 11:00 am Eastern Time/ 8:00 am Pacific Time to discuss the financial results and business outlook.
Conference Call Dial-in Numbers and Webcast Details
- Toll-Free: 1-855-327-6837
- Toll / International: 1-631-891-4304
* Participants should request The Very Good Food Company Earnings Call.
Please visit the website at least 15 minutes before the call to register, download, and install any necessary audio software. A replay of the call will be available on VERY GOOD's investor page approximately two hours after the conference call has ended.
VERY GOOD today also announced that it has retained Onefluent Inc., a leader in social based advertising headquartered in Calgary, Alberta, to provide us with investor relations services focused on various social media channels. Onefluent will receive $6,950 per month for their services. The initial term of the engagement runs until July 15, 2021 with optional renewals thereafter. VERY GOOD has the right to terminate the relationship with Onefluent upon 15 days' notice.
About Onefluent Inc.
Onefluent utilizes its proprietary 2-Target Data System, which includes artificial intelligence algorithms and global engagement teams across leading social platforms, to help clients achieve goals from global brand awareness and e-commerce conversions to investor outreach.
About The Very Good Food Company Inc.
The Very Good Food Company Inc. is an emerging plant-based food technology company that produces plant-based meat and other food products that are delicious while maintaining a wholesome nutritional profile. To date we have developed a core product line under The Very Good Butchers brand.
OUR MISSION IS LOFTY, BADASS BUT BEAUTIFULLY SIMPLE: GET MILLIONS TO RETHINK THEIR FOOD CHOICES WHILE HELPING THEM DO THE WORLD A WORLD OF GOOD. BY OFFERING PLANT-BASED FOOD OPTIONS SO DELICIOUS AND NUTRITIOUS, WE'RE HELPING THIS KIND OF DIET BECOME THE NORM.
This news release contains forward-looking information for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as "proposed", "expects", "intends", "may", "will", and similar expressions. Forward looking information contained or referred to in this news release includes statements relating to: VERY GOOD's products becoming available on the shelves of major U.S. retailers and in smaller natural chains and the expected timing therefor; VERY GOOD's 2021 goals including the capability to fullfill upwards of 5,000 eCommerce orders a week and establishing 15,000 points of distribution in Canada and in the U.S.; the planned timing for the start of food production on the second line at the Rupert Facility and the numbers of SKUs expected to be produced thereon; the status of VERY GOOD's conversations with U.S. retailers; management's belief that VERY GOOD is well positioned for scalable growth in the U.S.; and the timing for the eCommerce and retail launch of The Very Good Cheese Co. products. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information, but which may prove to be incorrect including, but not limited to, material assumptions with respect to the continued strong demand for VERY GOOD's products, the successful placement of VERY GOOD's products in retail stores, the availability of sufficient financing on reasonable terms to fund the Company's capital requirements and the ability to obtain necessary equipment, production inputs and labour. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because VERY GOOD can give no assurance that such expectations will prove to be correct. Risks and uncertainties that could cause actual results, performance or achievements of VERY GOOD to differ materially from those expressed or implied in such forward-looking information include, among others, negative cash flow and future financing requirements to sustain and grow operations, limited history of operations and revenues and no history of earnings or dividends, expansion of facilities, competition, availability of raw materials, dependence on senior management and key personnel, general business risk and liability, regulation of the food industry, change in laws, regulations and guidelines, compliance with laws, unfavourable publicity or consumer perception, product liability and product recalls, risks related to intellectual property, difficulties with forecasts, management of growth and litigation, as well as the impact of, uncertainties and risks associated with the ongoing COVID-19 pandemic, many of which are beyond the control of VERY GOOD. For a more comprehensive discussion of the risks faced by VERY GOOD, please refer to VERY GOOD's Management's Discussion & Analysis for the fiscal years ended December 31, 2020 and 2019 filed with Canadian securities regulatory authorities at www.sedar.com. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of VERY GOOD based on information currently available. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, VERY GOOD disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. 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 news release.
The Very Good Food Company
Chief Executive Officer and Director
Corporate Communications and Investor Relations
Phone: +1 855-472-9841
Phil Carlson / Erika Kay
KCSA Strategic Communications
KCSA Strategic Communications
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/85303