- Second consecutive quarter of record billed revenue of $4.85M in Q2 2022 ($6.22M CAD), compared to $3.43M ($4.39M CAD) in Q2 2021, representing an increase of 41.4%.
- Year-to-date billed revenue of $8.72M ($11.2M CAD), an increase of 34.6% over H1 2021.
- Year-to-date net revenue of $8.42M ($10.79M CAD), compared to $6.09M ($7.81M CAD) in H1 2021, representing an increase of 38.3%.
CAROL STREAM, IL / ACCESSWIRE / August 29, 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 second quarter ending June 30, 2022.
“Our team delivered another strong quarter, reflecting The Fresh Factory’s continued focus on executing our strategy to create, invest in, and accelerate the clean-label food and beverage brands of tomorrow,” said Bill Besenhofer, Chief Executive Officer and co-founder of The Fresh Factory. “We continue to see a growing demand for fresh food and beverages made with recognizable, healthy ingredients. This, coupled with our innovative production capabilities and operational expertise, gives us confidence that we will continue to see momentum for the rest of 2022 and beyond. Despite challenging headwinds with the current supply chain and inflationary environment, our customers see us as a trusted partner to scale their businesses, taking them from product to shelf, and everywhere in between. Our ability to source ingredients and packaging and streamline production and distribution has been extremely well received by our current customers, as well as prospective customers who come to us to help bring their ideas to life.”
Financial Highlights: H1 2022 vs H1 2021
- Record billed revenue of $8.72M ($11.2M CAD) in H1 2022 vs. $6.48M ($8.31M CAD) for H1 2021, an increase of 34.6%.
- Adjusted EBITDA decreased to $(0.93)M ($(1.19)M) CAD) in H1 2022, materially driven by additional public-company expenses and investments in staff and infrastructure for growth.
- Adjusted gross margins were $2.41M ($3.09M CAD) in H1 2022 vs. $2.22M ($2.85M CAD) in H1 2021.
Financial and Operational Highlights: Q2 2022 vs Q1 2022
- Record billed revenue of $4.85M ($6.22M CAD) in Q2 2022 vs. $3.86M ($4.95M CAD) for Q1 2022, an increase of 25.6%.
- Adjusted EBITDA of $(0.47)M ($(0.60)M CAD) in Q2 2022 was materially flat to Q1 2022.
- Adjusted gross margins were $1.37M ($1.76M CAD) in Q2 2022 vs. $1.00M ($1.28M CAD) in Q1 2022.
- As of August 24th, utilized the normal course issuer bid (“NCIB”) to repurchase for cancellation 46,000 shares at a weighted-average price of $0.49 ($0.63 CAD).
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
- A price increase was implemented in April to partially offset inflationary pressures.
- Adjusted gross margins, on a percentage basis, grew 1% from 27% in Q1 2022 to 28% in Q2 2022.
- Operating profits increased to $0.76M ($0.93M CAD) in Q2 2022 from $0.56M ($0.71M CAD) in Q1 2022.
- Operating profit, on a percentage basis, grew from 14.6% in Q1 2022 to 15.8% in Q2 2022 on the back of volume growth and pricing action referenced above.
- The Company passed its Annual SQF Manufacturing and Quality, formerly known as SQF Level III, audit for the sixth straight year.
Growth: Invest in and grow with the right brands across diversified channels
- Revenue in Q2 2022 continues to remain broadly diversified across direct-to-consumer, quick-service restaurants, retail customers, and food-service customers.
- The Company continues to invest in technology and equipment to support growth across multiple customer segments.
- The Company produced 1.2M pounds in Q2 of 2022, a ~33% increase from Q1 2022.
- The Fresh Start program that was launched in February, continues to introduce the Company to leading edge products and partnership opportunities.
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 wholly owned brand FIELD + FARMER announced the launch of its fresh refrigerated snack bars in 102 Costco locations across 14 Midwestern states beginning in Q3.
- The Company’s wholly owned brand FIELD + FARMER’s Caramelized Onion Party Dip won the Good Housekeeping 2022 Healthy Snack Award for Best Creamy Dip selected for its flavor and healthfulness.
Sustainability: Become a market leader in sustainability
- The Company continues to research and measure what it would take to become carbon neutral and/or a zero-waste production facility.
- The Company continues to compost 100% of its food waste and donate 100% of produce extras.
- The Company’s wholly owned 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 and six months ending June 30, 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 $0.78 as the conversion rate from CAD to USD.
All figures in this press release are in US dollars unless otherwise stated.
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.