good natured Products Inc. Announces Results for the Three and Six Months Ended June 30, 2021

August 26, 2021 — (Vancouver, BC) good natured Products Inc. (the “Company” or “good natured®”) (TSX-V: GDNP), a North American leader in earth-friendly plant-based products, today announced its financial results for the three months (“Q2 2021”) and six months (“H1 2021”) ended June 30, 2021.

Key Highlights:

• Revenues for Q2 2021 increased 237% to $12.4 million compared to $3.7 million for the three month period ended June 30, 2020 (“Q2 2020”). H1 2021 revenues increased 201% to $20.3 million compared to $6.7 million for the six month period ended June 30, 2020 (“H1 2020”).

• Variable gross profit, a non-GAAP measure, for Q2 2021 increased 163% to $4.3 million, 34.7% of sales, compared to $1.6 million, 44.3% of sales in Q2 2020. Variable gross profit for H1 2021 increased 174% to $7.5 million, 37.1% of sales, compared to $2.7 million, 40.7% of sales in H1 2020.

• Gross profit for Q2 2021 and H1 2021 was $3.5 million and $6.3 million respectively. As a percentage of sales, gross profit for Q2 2021 and H1 2021 was 28.3% and 31.1%.

• Selling, general and administrative expenses (“SG&A”), excluding acquisition activity, a non-GAAP measure, for Q2 2021 and H1 2021 were $3.8 million and $6.4 million compared to $1.6 million and $2.9 million for Q2 2020 and H1 2020, representing an increase of 140% and 125% respectively.

• The Company’s adjusted EBITDA, a non-GAAP measure, for Q2 2021 and H1 2021 was a loss of $175,000 and a loss of $20,000 compared to a loss of $40,000 and a loss of $348,000 for Q2 2020 and H1 2020 respectively.

• In Q2 2021, the Company incurred a net loss of $3.7 million compared to a net loss of $1.5 million in Q2 2020. Net loss for H1 2021 was $5.6 million compared to a net loss of $2.3 million in H1 2020.

“It was another outstanding quarter of revenue growth for the Company, increasing 237% year over year. Our revenue for the quarter was bolstered by contribution from our strategic acquisitions and strong execution by the team and our partners. Together, we increased our B2B customer base to 800 customers from 600 in Q1 of 2021,” stated Paul Antoniadis, CEO of good natured®. “In anticipation of growing demand from the lifting of COVID-19 restrictions across U.S. and Canada, we made the strategic decision to build inventory levels. This positioned us to service demand from our existing customer base and increase our market share while the industry continues to face external supply chain challenges that has limited or delayed product availability in the market”. 

Paul Antoniadis continued, “Our variable gross profit and gross profit rates for the quarter were at the high end of our range announced on July 20, 2021.  We saw year over year rate changes from a higher product mix from our industrial business group, higher mix of national customers, higher mix of sales from our insource manufacturing, lower mix of COVID-19 medical face shields and packaging, and supply chain cost increases due to inflationary pressure which is anticipated to continue into 2022. We also added several new team members to support our expanding customer base which positions the company for further growth and ensures a smooth integration of our recently announced acquisitions. End customer demand remains robust and we continue to focus on driving growth organically and through acquisitions, while leveraging intensifying long term positive macro trends.”

The Company’s Q2 2021 audited financial statements and Management’s Discussion and Analysis (MD&A) are available on SEDAR at sedar.com.

Q2 2021 Results Conference Call

The Company is pleased to host a conference call to discuss its financial results for Q2 2021, hosted by Paul Antoniadis, Executive Chair & CEO, and Kevin Leong, Chief Financial Officer, on August 26, 2021 at 11:00 AM Eastern / 9:00 AM Pacific time.

Date: August 26, 2021

Time: 11:00 AM EST / 8:00 AM PST

Toll-Free: 1-833-900-2239 International: +1 (236) 712-2470

Conference ID: 6174798

Participants are asked to dial in 10 minutes prior to the start of the call. 

A replay of the call will be available approximately two hours after its completion through to September 22, 2021. The replay will be available by dialing 1-800-585-8367 or +1 (416) 621-4642.

The good natured® corporate profile can be found at: investor.goodnaturedproducts.com

About good natured Products Inc.

good natured® is passionately pursuing its goal of becoming North America’s leading earth-friendly product company by offering the broadest assortment of eco-friendly options made from plants instead of petroleum. We’re all about making it easy and affordable for business owners and consumers to switch to better everyday products® made from renewable materials and free from chemicals of concern.

Part of the sustainable consumer goods market, good natured® offers over 400 products and services through wholesale and retail channels, including our own e-commerce stores. From plant-based home organization products to compostable food containers, bioplastic industrial supplies and medical packaging, we’re focused on delivering a great customer experience to make more plant-based products readily accessible to more people as the path to deliver meaningful environmental and social impact.

For more information: goodnaturedproducts.com

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
invest@goodnaturedproducts.com

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, SG&A excluding acquisition costs, and adjusted EBITDA, all non-GAAP measures, for Q2 2021, H1 2021, Q2 2020 and H1 2020 to provide, what management believes, is a meaningful comparison of the Company’s performance in Q2 2021 and H1 2021. In this news release, variable gross profit is gross profit excluding fixed production costs such as depreciation, repairs and maintenance, utilities and similar overhead items, SG&A excluding acquisition costs and adjusted EBITDA is earnings before interest and finance costs, taxes, depreciation and amortization, other non‐cash items and one‐time gains and losses. Variable gross profit, SG&A excluding acquisition costs and Adjusted EBITDA do not have standardized meanings, and therefore may not be comparable to similar measures presented by other issuers. The use of variable gross profit by management allows for evaluation of the core aspects of the Company’s profit margin as certain fixed items, such as depreciation, repairs and maintenance, and utilities are excluded. The use of SG&A excluding acquisition costs allows for an evaluation of Company’s expenses disregarding the expenses associated with the Company’s voluntary execution of Its growth through acquisition strategy. The use of the adjusted EBITDA by management allows for evaluation of the Company’s principal business activities as certain non‐core items such as interest and finance costs, taxes, depreciation and amortization, and other non‐cash items and one‐time gains and losses are removed.

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

The following table provides a reconciliation of gross profit to variable gross profit for the periods ended:

The following table provides a reconciliation of selling, general and administrative expense:

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 and focuses for 2021, the upcoming results conference call and managements outlook for 2021. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors 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.

When 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 in the previous paragraph 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.

Forward-looking information contained in this news release is based on our current estimates, expectations and projections regarding, among other things, sales volume and pricing which we believe are reasonable as of the current date. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.