The Very Good Food Company Inc. (NASDAQ: VGFC) (TSXV: VERY.V) (FSE: 0SI) ("VERY GOOD" or the "Company"), a leading plant-based food technology company, today reported its financial results for the third quarter ended September 30, 2021.
"VERY GOOD delivered another strong quarter, achieving solid year-over-year growth across our eCommerce and wholesale channels, driven by strategic execution and demand for plant-based food products," said Mitchell Scott, co-founder and CEO of VERY GOOD. “We launched successfully into the US retail market, strategically shifting our focus towards growing retail orders over eCommerce, securing long-term in store listings, driving higher units sold, and ultimately delivering 86% wholesale revenue growth since last quarter. Since quarter end the success of this strategy has been further demonstrated as increased retail listings across US and Canada and demand for vegan meat alternatives for the holidays drove record revenue this October of $1.5 million, a 202% increase over last year.”
“Scaling our production capabilities to meet strong demand for our products remains a key priority,” added Mr. Scott. “Line 1 at the Rupert Facility is currently operating five days a week with three shifts per day, producing seven SKUs of the popular The Very Good Butchers lineup and five SKUs of our new Butcher’s Select suite of products. With our ramped-up production, our products are now available in more than 1,400 outlets across North America, including 600 stores in the US. We already have over 2,000 retail locations confirmed for the first quarter of 2022.”
“As we head into the final quarter of 2021, like many others, our industry is facing near-term pressures including supply chain disruption and labour shortages, which could impact our results. To continue to drive growth, we remain flexible and agile in our approach, adjusting quickly in line with evolving trends. Looking forward to the medium-term, we believe that the strategic investments we’re making in our expansion plans, premium products, and production capacity along with our great partners, positions VERY GOOD for the future."
Q3 2021 Financial Highlights
Q3 2021 Operational Highlights
Developing the Chops to Meet the Demand - Building Operational Scalability and Enhanced Production Capabilities
Product Updates
Capital Markets Update
Related Party Transaction Update
VERY Good’s Board of Directors has reviewed and approved the financial information for the three and nine months ended September 30, 2021 contained in this document and its release. The financial information contained in this document has not been audited by VERY Good’s auditor. The management's discussion and analysis for the period and the accompanying financial statements and notes will be available under the Company's profile on SEDAR at www.sedar.com and will be furnished on a Report on Form 6-K on EDGAR at www.sec.gov upon the completion of the Company's financial closing procedures.
Third Quarter 2021 Conference Call Details
VERY GOOD will host a conference call today, Wednesday, November 24, 2021 at 11:00 am Eastern Time/ 8:00 am Pacific Time to discuss the financial results and business outlook.
Participant Dial-In Numbers:
Toll-Free: 1-877-425-9470
Toll / International: 1-201-389-0878
* Participants should request The Very Good Food Company Third Quarter Earnings Call.
The call will be available via webcast on Very Good's investor page of the Company website at www.verygoodfood.com/investors or at this link until December 22, 2021.
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.
Financial Highlights
| Three months ended September 30, | Three months ended June 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | |||||
| 2021 | 2021 | 2020 | 2021 | 2020 | |||||
Revenue by channel |
|
|
|
|
| |||||
eCommerce | $ | 1,546,146 | $ | 2,206,403 | $ | 978,883 | $ | 5,937,643 | $ | 1,943,526 |
Wholesale |
| 846,749 |
| 455,055 |
| 310,444 |
| 1,647,709 |
| 585,215 |
Butcher Shop, Restaurant and Other |
| 143,202 |
| 119,223 |
| 84,487 |
| 374,509 |
| 271,416 |
| $ | 2,536,097 | $ | 2,780,681 | $ | 1,373,814 | $ | 7,959,861 | $ | 2,800,157 |
Gross Profit(1) | $ | 476,893 | $ | 677,859 | $ | 295,672 | $ | 1,745,589 | $ | 574,168 |
Adjusted Gross Profit(1) | $ | 783,375 | $ | 1,079,490 | $ | 387,131 | $ | 2,841,873 | $ | 840,716 |
Gross Margin(1) |
| 19% |
| 24% |
| 22% |
| 22% |
| 21% |
Adjusted Gross Margin(1) |
| 31% |
| 39% |
| 28% |
| 36% |
| 30% |
Net Loss | $ | (13,699,706) | $ | (12,500,733) | $ | (4,497,027) | $ | (41,229,015) | $ | (8,045,668) |
Adjusted EBITDA net loss(1) | $ | (8,174,024) | $ | (5,673,109) | $ | (3,138,595) | $ | (19,239,069) | $ | (5,064,851) |
Loss per share – basic and diluted | $ | (0.13) | $ | (0.13) | $ | (0.06) | $ | (0.42) | $ | (0.14) |
Weighted average number of shares outstanding – basic and diluted |
| 103,330,623 |
| 97,603,729 |
| 80,642,478 |
| 99,233,603 |
| 58,564,669 |
(1) See "Non-GAAP Financial Measures" below for further details concerning Adjusted Gross Profit, Adjusted Gross Margin, Adjusted General and Administrative Expense and Adjusted EBITDA.
Operational Metrics
| Three months ended September 30, | Three months ended June 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, |
| 2021 | 2021 | 2020 | 2021 | 2020 |
For the period ended: |
|
|
|
|
|
Production volume sold by channel (units) |
|
|
|
|
|
eCommerce | 145,167 | 216,121 | 99,869 | 559,458 | 213,808 |
Wholesale | 143,478 | 91,624 | 63,602 | 302,634 | 125,431 |
| 288,645 | 307,745 | 163,471 | 862,092 | 339,239 |
Number of eCommerce orders | 17,546 | 24,057 | 13,107 | 64,784 | 26,742 |
As at period end: |
|
|
|
|
|
Number of product SKUs manufactured | 25 | 20 | 14 | 25 | 14 |
Number of wholesale distribution points(2) | 4,551 | 1,869 | 1,055 | 4,551 | 1,055 |
(2) Wholesale distribution points are defined as the number of retail stores multiplied by the number of SKUs.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian dollars, unaudited)
As at |
| September 30, 2021 | December 31, 2020 | |||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents |
| $ | 10,548,513 | $ | 25,084,083 | |
Accounts receivable |
|
| 1,664,003 |
| 449,583 | |
Inventory |
|
| 5,469,544 |
| 1,195,535 | |
Prepaids and deposits |
|
| 4,092,063 |
| 1,887,035 | |
Total current assets |
|
| 21,774,123 |
| 28,616,236 | |
Right-of-use assets |
|
| 17,307,862 |
| 5,046,597 | |
Property and equipment |
|
| 12,402,045 |
| 740,728 | |
Prepaids and deposits |
|
| 753,741 |
| 779,036 | |
Goodwill |
|
| 3,479,535 |
| – | |
Deferred financing costs |
|
| 4,431,240 |
| – | |
Total assets |
| $ | 60,148,546 | $ | 35,182,597 | |
Liabilities and shareholders’ equity |
| |||||
Current liabilities |
|
|
| |||
Accounts payable and accrued liabilities |
| $ | 7,058,979 | $ | 1,871,728 | |
Deferred revenue |
|
| 79,249 |
| 102,239 | |
Current portion of lease liabilities |
|
| 874,283 |
| 146,935 | |
Current portion of loans payable and other liabilities |
|
| 1,668,291 |
| – | |
Contingent considerations |
|
| 1,048,000 |
| – | |
Total current liabilities |
|
| 10,728,802 |
| 2,120,902 | |
Lease liabilities |
|
| 17,227,201 |
| 5,389,352 | |
Loans payable and other liabilities |
|
| 4,373,315 |
| 30,000 | |
Total liabilities |
|
| 32,329,318 |
| 7,540,254 | |
| ||||||
Share capital |
|
| 62,907,824 |
| 39,335,150 | |
Equity reserves |
|
| 22,867,321 |
| 5,009,980 | |
Subscriptions received and receivable |
|
| - |
| 8,250 | |
Accumulated other comprehensive income |
|
| (9,205) |
| 6,660 | |
Deficit |
|
| (57,946,712) |
| (16,717,697) | |
Total shareholders’ equity |
|
| 27,819,228 |
| 27,642,343 | |
Total liabilities and shareholders’ equity |
| $ | 60,148,546 | $ | 35,182,597 |
Condensed Interim Consolidated Statements of Net Loss and Comprehensive Loss
(Expressed in Canadian dollars, unaudited)
|
| Three months ended | Nine months ended | |||||||||
|
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||
|
|
|
|
|
| |||||||
Revenue |
| $ | 2,536,097 | $ | 1,373,814 | $ | 7,959,861 | $ | 2,800,157 | |||
Procurement expense |
|
| (2,059,204) |
| (1,078,142) |
| (6,214,272) |
| (2,225,989) | |||
Fulfilment expense |
|
| (1,804,459) |
| (637,905) |
| (5,833,068) |
| (1,129,499) | |||
General and administrative expense |
|
| (7,089,277) |
| (1,890,707) |
| (23,498,714) |
| (3,226,522) | |||
Marketing and investor relations expense |
|
| (2,178,765) |
| (1,365,552) |
| (6,904,766) |
| (2,269,357) | |||
Research and development expense |
|
| (566,672) |
| (104,908) |
| (1,448,657) |
| (267,732) | |||
Pre-production expense |
|
| (1,327,009) |
| - |
| (2,868,832) |
| - | |||
Operating loss |
|
| (12,489,289) |
| (3,703,400) |
| (38,808,448) |
| (6,318,942) | |||
Finance expense |
|
| (1,089,004) |
| (782,506) |
| (1,851,981) |
| (1,694,839) | |||
Other expense |
|
| (121,413) |
| (11,121) |
| (568,586) |
| (31,887) | |||
Net loss |
|
| (13,699,706) |
| (4,497,027) |
| (41,229,015) |
| (8,045,668) | |||
Other comprehensive income |
|
|
|
|
| |||||||
Foreign currency translation loss |
|
| (24,800) |
| (80) |
| (15,865) |
| (80) | |||
Comprehensive loss |
| $ | (13,724,506) | $ | (4,497,107) | $ | (41,244,880) | $ | (8,045,748) | |||
Loss per share – basic and diluted |
| $ | (0.13) | $ | (0.06) | $ | (0.42) | $ | (0.14) | |||
Weighted average number of shares outstanding – basic and diluted |
|
| 103,330,623 |
| 80,642,478 |
| 99,233,603 |
| 58,564,669 |
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian dollars, unaudited)
Nine months ended | September 30, 2021 | September 30, 2020
| ||||
| ||||||
Net loss for the period | $ | (41,229,015) | $ | (8,045,668) | ||
Adjustments for non-cash items: |
|
| ||||
Finance expense |
| 1,867,040 |
| 337,577 | ||
Depreciation |
| 1,457,763 |
| 271,982 | ||
(Gain)/Loss on termination of lease |
| (1,600) |
| 7,533 | ||
Loss on disposal of equipment |
| 32,816 |
| - | ||
Loss on settlement of debt |
| - |
| 1,357,262 | ||
Share-based compensation |
| 18,406,456 |
| 829,337 | ||
Shares and units issued for services |
| 227,471 |
| 58,086 | ||
Warrants issued for services |
| - |
| 119,040 | ||
Lease concessions |
| - |
| (11,374) | ||
Changes in non-cash working capital items: |
|
| ||||
Accounts receivable |
| (1,180,266) |
| (284,600) | ||
Inventory |
| (4,161,142) |
| (250,134) | ||
Prepaids and deposits |
| (880,744) |
| (709,512) | ||
Accounts payable and accrued liabilities |
| 3,028,788 |
| 963,604 | ||
Deferred revenue |
| (22,990) |
| 310,855 | ||
Due from related parties |
| - |
| 22,866 | ||
Net cash and cash equivalents used in operating activities |
| (22,455,423) |
| (5,023,146) | ||
Cash acquired from acquisitions |
| 9,306 |
| - | ||
Cash paid for acquisitions |
| (1,250,000) |
| - | ||
Purchase of property and equipment |
| (9,518,458) |
| (242,286) | ||
Security deposits paid for property and equipment |
| (1,813,506) |
| - | ||
Acquisition of right-of-use assets |
| (67,332) |
| - | ||
Net cash and cash equivalents used in investing activities |
| (12,639,990) |
| (242,286) | ||
Proceeds from the issuance of units for cash (net of share issue costs) |
| 18,378,261 |
| 11,476,080 | ||
Proceeds from the exercise of warrants |
| 2,384,483 |
| 2,330,206 | ||
Proceeds from the exercise of stock options |
| 116,099 |
| 139,125 | ||
Proceeds from loans payable |
| 3,475,875 |
| 499,129 | ||
Repayment of loans payable |
| (555,000) |
| (490,310) | ||
Deferred financing costs paid |
| (2,129,801) |
| - | ||
Proceeds from loan payable to related parties |
| - |
| 400,000 | ||
Repayment of loan payable and accrued interest to related parties |
| - |
| (400,000) | ||
Payments of lease liabilities |
| (1,040,221) |
| (133,567) | ||
Payments of non-current lease deposits |
| - |
| (747,791) | ||
Interest paid |
| (55,928) |
| (73,286) | ||
Net cash and cash equivalents provided by financing activities |
| 20,573,768 |
| 12,999,586 | ||
Effect of foreign exchange rate changes on cash and cash equivalents |
| (13,925) |
| (80) | ||
(Decrease) increase in cash and cash equivalents |
| (14,535,570) |
| 7,734,074 | ||
Cash and cash equivalents, beginning of period |
| 25,084,083 |
| 405,610 | ||
Cash and cash equivalents, end of period | $ | 10,548,513 | $ | 8,139,684 | ||
Cash | $ | 10,448,513 | $ | 7,074,684 | ||
Redeemable guaranteed investment certificate (“GIC”) |
| - |
| 1,000,000 | ||
Restricted redeemable GIC |
| 100,000 |
| 65,000 | ||
Total cash and cash equivalents | $ | 10,548,513 | $ | 8,139,684 |
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures are metrics used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
Adjusted EBITDA Net Loss
Management defines adjusted EBITDA net loss as net loss before finance expense, tax, depreciation and amortization, share-based compensation and other one-time and non-cash items. Management believes adjusted EBITDA net loss is a useful financial metric to assess its operating performance because it excludes the impact of these one-time and non-cash items that do not directly relate to our underlying business performance.
| Three months ended September 30, | Three months ended June 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | |||||
| 2021 |
| 2021 | 2020 | 2021 | 2020 | ||||
Net loss as reported | $ | (13,699,706) | $ | (12,500,733) | $ | (4,497,027) | $ | (41,229,015) | $ | (8,045,668) |
Adjustments: |
|
|
|
|
| |||||
Depreciation |
| 616,111 |
| 512,168 |
| 117,265 |
| 1,457,763 |
| 271,982 |
Loss on disposal of equipment |
| 10,255 |
| 2,679 |
| - |
| 32,816 |
| - |
Gain on termination of lease |
| - |
| (239) |
| 7,533 |
| (1,600) |
| 7,533 |
Finance expense |
| 1,102,858 |
| 402,432 |
| 190,244 |
| 1,867,040 |
| 337,577 |
Share-based compensation |
| 3,796,458 |
| 5,835,989 |
| 379,326 |
| 18,406,456 |
| 829,337 |
Shares, units and warrants issued for services |
| - |
| 74,595 |
| 71,802 |
| 227,471 |
| 177,126 |
Loss on settlement of debt |
| - |
| - |
| 592,262 |
| - |
| 1,357,262 |
Adjusted EBITDA net loss | $ | (8,174,024) | $ | (5,673,109) | $ | (3,138,595) | $ | (19,239,069) | $ | (5,064,851) |
Adjusted gross profit and adjusted gross margin
Management utilizes adjusted gross profit to provide a representation of performance in the period by excluding the non-cash impact of share-based compensation recognized in procurement expense during the period as well as The Butcher Shop & Restaurant related procurement costs. Management believes adjusted gross profit provides useful information as it represents gross profit for management purposes based on cost to procure and manufacture the Company’s finished goods. Adjusted gross margin is calculated by taking adjusted gross profit divided by revenue.
| Three months ended September 30, | Three months ended June 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | |||||
|
| 2021 |
| 2021 |
| 2020 |
| 2021 |
| 2020 |
Revenue | $ | 2,536,097 | $ | 2,780,681 | $ | 1,373,814 | $ | 7,959,861 | $ | 2,800,157 |
Procurement expense |
| (2,059,204) |
| (2,102,822) |
| (1,078,142) |
| (6,214,272) |
| (2,225,989) |
Gross profit | $ | 476,893 | $ | 677,859 | $ | 295,672 | $ | 1,745,589 | $ | 574,168 |
Adjustments: |
|
|
|
|
| |||||
The Butcher Shop & Restaurant procurement expense |
| 120,081 |
| 117,484 |
| 76,460 |
| 367,187 |
| 237,303 |
Share-based compensation |
| 186,401 |
| 284,147 |
| 14,999 |
| 729,097 |
| 29,245 |
Adjusted gross profit | $ | 783,375 | $ | 1,079,490 | $ | 387,131 | $ | 2,841,873 | $ | 840,716 |
Adjusted gross margin |
| 31% |
| 39% |
| 28% |
| 36% |
| 30% |
Adjusted general and administrative expense
Management defines adjusted general and administrative expense as general and administrative expense excluding non-cash items such as share-based compensation and depreciation expense. Management believes adjusted general and administrative expense provides useful information as it represents the corporate costs to operate the business excluding any non-cash items.
| Three months ended September 30, | Three months ended June 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | |||||
|
| 2021 |
| 2021 |
| 2020 |
| 2021 |
| 2020 |
General and administrative expense | $ | (7,089,277) | $ | (6,834,880) | $ | (1,890,707) | $ | (23,498,714) | $ | (3,226,522) |
Adjustments: |
|
|
|
|
| |||||
Share-based compensation |
| 3,043,998 |
| 4,546,887 |
| 352,470 |
| 14,931,844 |
| 764,875 |
Depreciation |
| 81,755 |
| 79,438 |
| 72,116 |
| 193,955 |
| 132,294 |
Adjusted general and administrative expense | $ | (3,963,524) | $ | (2,208,555) | $ | (1,466,121) | $ | (8,372,915) | $ | (2,329,353) |
About The Very Good Food Company Inc.
The Very Good Food Company Inc. is an emerging plant-based food technology company that produces nutritious and delicious plant-based meat and cheese products under VERY GOOD's core brands: The Very Good Butchers and The Very Good Cheese Co. www.verygoodfood.com.
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.
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.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934, as amended, and applicable Canadian securities laws, 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 statements and information may be identified by words such as “plans”, “proposed”, “expects”, “anticipates”, “intends”, “estimates”, “may”, “will”, and similar expressions. Forward-looking statements contained or referred to in this news release includes statements relating, but not limited to: expectations as to increased store listings and, in particular, continued US retail expansion by the end of 2021 and throughout 2022; VERY GOOD’s ability to aggressively increase market share, build operational scalability and enhance production capabilities; the demand for plant-based food products and vegan meat alternatives; the attributes of the Company’s products including taste and nutritional content; the appeal and importance of non-GMO verification certification; the timing and repayment of the Loans; the filing of the Company’s management's discussion and analysis and the accompanying financial statements; the expected benefits to be derived from the Company’s Nasdaq listing; and the intended use of proceeds from the offering completed in October. These forward-looking statements are 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, continued growth of the popularity of meat alternatives and the plant-based food industry, the availability of sufficient financing on reasonable terms to fund VERY GOOD’s capital and operating requirements, the successful placement of VERY GOOD’s products in retail stores and continued wholesale expansion and eCommerce growth, VERY GOOD’s ability to successfully enter new markets and manage its international expansion, VERY GOOD’s ability to increase production capacity and obtain the necessary production equipment, the availability of labour as well as the accuracy of construction schedules and cost estimates for the commissioning of production lines at VERY GOOD’s Rupert and Patterson facilities and the timely receipt of required permits, VERY GOOD’s relationship with its suppliers, distributors and third-party logistics providers, and the Company’s ability to position VERY GOOD competitively. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements 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, the impact of, uncertainties and risks associated with the ongoing COVID-19 pandemic, 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. For a more comprehensive discussion of the risks faced by VERY GOOD, please refer to VERY GOOD's most recent Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com and as an exhibit to the registration statement on Form F-10 filed with the SEC and is available at www.sec.gov. The forward-looking statements in this news release reflect the current expectations, assumptions and/or beliefs of the Company based on information currently available. Each of these forward-looking statements is made only as of the date of this news release. VERY GOOD undertakes no obligation to publicly update or revise any forward-looking statement because of new information, future events or otherwise, except as otherwise required by law.
None of the Nasdaq, TSX Venture Exchange, the SEC or any other securities regulator has either approved or disapproved the contents of this news release. None of the Nasdaq, the TSX Venture Exchange or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange), the SEC or any other securities regulator accepts responsibility for the adequacy or accuracy of this news release.
November 21, 2022 November 14, 2022 September 22, 2022 September 20, 2022 September 08, 2022 |
Hillcrest Energy Technologies is a clean technology company developing high value, high performance power conversion technologies and digital control systems for next-generation powertrains and grid-connected renewable...
CLICK TO LEARN MOREGreenPower Motor designs, builds and distributes a full suite of high-floor and low-floor all-electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo van, and a cab and chassis...
CLICK TO LEARN MORECOPYRIGHT ©2022 GREEN STOCK NEWS