- Record billed revenue of $3.86M in Q1 2022 ($4.88M CAD), compared to $3.04M ($3.84M CAD) in Q1 2021, representing an increase of 27%.
- Net revenue for Q1 2022 of $3.70M ($4.68M CAD), compared to $2.86M ($3.62M CAD) in Q1 2021, representing an increase of 29%.
CAROL STREAM, IL / ACCESSWIRE / May 30, 2022 – The Fresh Factory B.C. Ltd. (CSE: FRSH) (FRA: Q4Z) (“The Fresh Factory” or the “Company”), a mission-driven company for fresh and better-for-you food and beverage brands, reports financial results for the first quarter ending March 31, 2022.
“We are excited by the record-breaking billed revenue for the quarter and better-than-anticipated rate of growth as we head into the summer season,” said Bill Besenhofer, Chief Executive Officer and co-founder of The Fresh Factory. “Our growth has truly been customer-driven as we continue to see increased demand from current customers, the addition of new customers, and the return of quick-service restaurant customers. We also launched the Fresh Start program this quarter to help companies launch, accelerate, and scale through our vertically integrated platform, significantly reducing the time to market and lowering costs. This opens up a new set of customers that can leverage our capabilities early on in their life cycle. While we continue to support our growth, we also remain operationally prudent. We recognize inflationary pressures have had some impact on our overall costs, but we believe our disciplined operational approach and platform economies can help manage these uncertain times. With our unique offering and a growing and diverse set of capabilities, The Fresh Factory remains well-positioned to support the next generation of fresh and better-for-you products.”
Financial and Operational Highlights
(All figures in this press release are in US dollars unless otherwise stated.)
- Record billed revenue of $3.86M ($4.88M CAD) for Q1 2022 vs. $3.04M ($3.84M CAD) for Q1 2021, an increase of 27%.
- Adjusted EBITDA decreased to ($0.45M) (($0.57M) CAD) in Q1 2022 from $06M ($0.07M CAD) in Q1 2021, primarily driven by additional public-company expenses and investments in staff and infrastructure for growth.
- Adjusted gross margins were $1.0M ($1.27M CAD) in Q1 2022 vs. $1.1M ($1.40M CAD) in Q1 2021 due to the impacts of continued inflation on input costs and labor.
- The Company announced that it had commenced trading on the Frankfurt Stock Exchange under the ticker symbol “Q4Z.”
- The Company appointed John Mikulich as Chief Financial Officer, effective June 1, 2022.
Strategic Areas of Focus
The Fresh Factory is building a platform to service emerging food and beverage brands in the fresh-food sector with an emphasis on better-for-you brands. The Company has established four key areas of focus on which it will report on a quarterly basis moving forward:
Execution: Focus on safety, high-quality operations, and strong margins
- The company notified customers of an additional price increase at the end of March that will go into effect in Q2 2022 to address decreased margins in the quarter.
- Adjusted gross margins, on a percentage basis, fell to 27% in Q1 2022 from 34.9% in Q1 2021 due to the impacts of continued inflation on input costs and labor.
- Operating profit decreased to $0.56M ($0.71M CAD) in Q1 2022 from $0.71M ($0.90M CAD) in Q1 2021. Operating profit, on a percentage basis, fell from 23.3% to 14.6% due to the impacts of inflation on labor, cost of goods, real estate (for additional space needed to grow the operations), and utility costs.
Growth: Invest in and grow with the right brands across diversified channels
- Revenue in Q1 2022 continues to remain broadly diversified across direct-to-consumer, quick-service restaurants, retail customers, and food-service customers.
- The Company installed new pouching equipment with the addition of two anchor customers. The pouching equipment will allow the Company to expand into new sales channels and further cement its position as a leader in the clean-label manufacturing space.
- The Company produced 2.0M units in Q1 2022, a 31% increase from Q1 2021.
- The Company launched the Fresh Start program in February, a platform to help companies prepare for launch and craft their go-to-market strategy for fresh, clean-label, better-for-you products.
Brand Portfolio: Build meaningful equity participation in the sector
- The Company continues to invest in its two wholly owned brands, Field + Farmer and Element Pressed.
- The Company’s Field + Farmer brand announced the launch of its refrigerated snack bars, currently available in participating Whole Foods Markets in the United States.
- The Company’s Field + Farmer Ranch Dressing was recognized as a 2022 Expo West NEXTY AWARD Finalist for Best New Dairy Alternative by the New Hope Network.
- The Company launched the Fresh Start program, an early-stage accelerator for food and beverage brands. The Company will contribute services in exchange for equity in early-stage companies through the program.
Sustainability: Become a market leader in sustainability
- The Company continues to develop a multi-year plan toward increased sustainability and other green initiatives.
- The Company continues to compost 100% of its food waste and donate 100% of produce extras.
- The Company’s Field + Farmer brand donated 1% of sales each month.
The earnings news release should be read in conjunction with the Company’s interim financial statements for the three-month period ending March 31, 2022, which can be found on The Fresh Factory’s issuer profile on SEDAR at www.sedar.com.
For purposes of conversion, this release used $0.79 as the conversion rate from CAD to USD.
About The Fresh Factory B.C. Ltd.
The Fresh Factory is a vertically integrated company focused on accelerating the growth of the fresh, clean-label, plant-based food and beverage brands of tomorrow. The Fresh Factory owns or partners with emerging brands in the plant-based space to develop, manufacture, and sell products made from fresh produce and recognizable ingredients. It operates from its centrally located manufacturing facility near Chicago, serving customers across the US. As a public-benefits corporation, The Fresh Factory is ESG-focused, driven to make a lighter, greener impact on the environment and a stronger, positive impact on local communities and the food system as a whole. Learn more about The Fresh Factory at www.thefreshfactory.co and find The Fresh Factory on social media at Instagram, Twitter, and LinkedIn. To receive news and updates about The Fresh Factory, visit their website at www.thefreshfactory.co.
CEO and Co-founder
Media and Investor Relations
There are measures included in this news release that do not have a standardized meaning under international financial reporting standards (IFRS) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use them as a means of assessing financial performance. Billed revenue, adjusted gross margin, operating profit, EBITDA, and adjusted EBITDA are financial measures that do not have a standardized meaning under IFRS. EBITDA is defined as earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA refers to earnings before interest, taxes, depreciation, amortization, stock-based compensation, one-time transaction expenses, and change in fair value of derivative liabilities. Adjusted gross margin is defined as billed revenue minus food, packaging, and labor (i.e., COGs). Operating profit is adjusted gross margin less utilities, facilities, and maintenance costs. Billed revenue is a financial measure defined as the revenue billed to customers as opposed to total revenue, which represents billed revenue less trade and variable selling and any production credits and samples.
We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP (Generally Accepted Accounting Principles) financial information used to evaluate our performance in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures, such as billed revenue, adjusted gross margin, operating profit, EBITDA, and adjusted EBITDA in making investment decisions about the Company and measuring its operational results.
Management believes that investors and financial analysts measure our business on the same basis, and we are providing the billed revenue, adjusted gross margin, operating profit, EBITDA, and adjusted EBITDA as financial metrics to assist in this evaluation and to provide a higher level of transparency into how we measure our own business.
This news release contains “forward-looking statements” or “forward-looking information” (collectively referred to hereafter as “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements that address activities, events, or developments that the Company expects or anticipates will, or may, occur in the future, including statements about the Company’s new product offerings, its ability to execute on its goals, general macro and micro economic impacts of inflation on the business and operation of the Company, the timing pertaining to these goals and receipt of applicable consents and approvals, and Company’s business prospects, future trends, plans, and strategies. In some cases, forward-looking statements are preceded by, followed by, or include words such as “may”, “will,” “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “proposes”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, “anticipate” or the negative of those words or other similar or comparable words. Although the management of the Company believes that the assumptions made and the expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement herein will prove to be accurate. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Risks and uncertainties applicable to the Company, as well as trends identified by the Company affecting its industry, can be found in the final long-form prospectus of the Company dated November 10, 2021, and the Company’s continuous disclosure record available on SEDAR at www.sedar.com. Such cautionary statements qualify all forward-looking statements made in this news release. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.