- Gross Sales of $6.1 million in
Q3 2021; Gross Sales of $18.7 million
in the first nine months of 2021, +42.4% compared to the same
period in 2020.
- Gross Margini of 8.5% in Q3 2021; Gross Margin of
13.0% in the first nine months of 2021, +699bps vs. the same period
in 2020.
- Continued to grow distribution footprint, including the
introduction of Sol Cuisine products in all Costco Mexico stores
during Q4, and the launch of four of the Company's SKUs nationally
in Walmart Canada stores and on Walmart.ca, which was announced
this morning.
- Continued progress against key strategic pillars, including
expanded distribution in existing channels and new channels; The
Company launched its initial e-commerce capabilities during
Q4.
MISSISSAUGA, ON, Aug. 30, 2021 /CNW/ - Sol Cuisine Ltd. ("Sol
Cuisine" or the "Company") (TSXV: VEG) a growth-oriented North
American plant-based protein leader, today reported the financial
results for its wholly-owned subsidiary, Sol Cuisine Inc. for the
three and nine months ended June 30,
2021. All figures are in Canadian dollars ($) unless
otherwise specified.
Summary Financial Results
|
Three months
ending
|
Nine months
ending
|
|
June 30,
2021
|
June 30,
2020
|
June 30,
2021
|
June 30,
2020
|
Gross
Sales
|
$6,085,189
|
$6,022,624
|
$18,717,414
|
$13,148,079
|
Revenueii
|
$5,570,180
|
$5,451,800
|
$17,233,820
|
$11,712,792
|
Gross
Profit
|
$471,804
|
$911,676
|
$2,245,349
|
$707,480
|
Gross
Margin
|
8.5%
|
16.7%
|
13.0%
|
6.0%
|
Adjusted
EBITDAiii
|
($940,066)
|
$729,602
|
($1,960,931)
|
($1,071,984)
|
Net Income (Loss) and
Comprehensive
Income (Loss)
|
$190,587
|
($404,519)
|
($2,931,582)
|
($3,420,319)
|
Basic and Diluted
Income (Loss) per
Share
|
$0.01
|
($0.04)
|
($0.17)
|
($0.34)
|
Management Commentary
John Flanagan, CEO of Sol
Cuisine commented, "During the first nine months of 2021,
our team made significant strides against all four pillars of our
strategy designed to generate sustainable growth. Despite more
muted growth in Q3 due to lower industry-wide sales in the retail
and club channels as consumer demand patterns adjusted to a
post-COVID world, Sol Cuisine generated more than 40% growth in
gross sales in the first nine months of the year, and a roughly 700
basis point improvement in gross margin."
Mr. Flanagan continued, "Since the time of our
public listing, we have deepened our distribution reach and
relationships with top retailers such as Metro, Sobeys, Loblaw
Companies and Costco, and launched in a new country with one of
those partners – Costco – which is now carrying Sol Cuisine
products in all of their stores in Mexico. This morning, we announced that
four Sol Cuisine products will be
launched across approximately 200 stores and through Walmart.ca in
Canada, this September. From an
operating perspective we are firing on all cylinders, and we expect
our efforts to get our delicious, nutritionally superior offerings
into the hands of more consumers will generate both volume growth
and steady margin expansion as we ramp up production at our fully
built-out production facilities."
Review of Execution of Growth Strategy
Sol Cuisine is focused on executing a clear and actionable
strategy designed to deliver continued growth. This strategy is
focused on four primary pillars: introducing breakthrough product
innovation; generating brand velocity; aggressively expanding
retail distribution; and launching and growing in important new
channels. The Company continued to make progress during the
quarter, with successes including:
- Breakthrough product innovation: In the quarter, the
Company launched appetizers and entrees in a bagged format which
has received favourable initial reception by consumers. The Company
continues to innovate and create exciting new SKUs that complement
existing protein formats.
- Brand velocity: In the quarter, the Company grew brand
velocity by focusing on promotional partnerships with key national
grocery retailers. The Company's Sol Cuisine wings, meatballs,
Turk'y Roasts and Chik'n tenders have performed well, already
exceeding the velocity exhibited by the Company's leading burger
products. The introduction of Falafel, Chik'n Bites, Chik'n
Tenders, Meatballs and Wings in the U.S. are also selling ahead of
expectations. The Company has multiple campaigns launching over the
next two quarters with retail partners to drive brand equity.
- Distribution footprint: In the quarter, the Company
added products through Canadian retail banners including: Loblaws,
Sobeys, Costco, Farm Boy and Whole Foods. In the U.S. the Company
added products through retail banners including: Weis, Tops and
Club Foods. The Company is engaged in discussions to add additional
retailers in both Canada and the
U.S.
- Launch and growth in important new channels: The Company
continued to grow its presence in the key U.S. Club and Food
Service segments with launches and/or expansions in Costco (Midwest
region), Publix, Little Spoon and Target Deli. In early Q4, Sol
Cuisine announced the launch of its initial e-commerce
capabilities, which will enable customers to locate and purchase
products directly through several leading grocery platforms.
Summary of Recent Corporate Developments
- On August 19, 2021, the Company
announced a new distribution agreement with National Co+op Grocers
(NCG) in the U.S. to sell a selection from the Company's line of
plant-based Bites appetizers. Sol Cuisine's Crispy Chik'n Bites and
Spinach Chickpea Bites are available across NCG's 200 stores in 39
states. This is the Company's first distribution agreement with NCG
which has combined annual sales over $2.3
billion and more than 1.3 million consumer-owners.
- On August 11, 2021, the Company
announced the launch of one of its most popular SKUs – Buffalo
Cauliflower Chik'n Wings – in all 39 Costco stores in Mexico. This is the first time that Sol
Cuisine products have been offered in the Mexican market. The
products were launched on-shelf beginning August 23rd.
- On August 5, 2021, Sol Cuisine
announced that it had appointed experienced financial leader
Adam Kozak, as Chief Financial
Officer of the Company. Mr. Kozak succeeds David McLaren and assumed the role on
August 9, 2021. Mr. McLaren continues
to provide support through a transitional period. Mr. Kozak has
over 20 years of experience in Finance, M&A Integration, and
Investor Relations in both established and emerging industries.
Most recently he held the role of CFO for a privately held group of
direct store delivery, warehousing, and logistics companies. While
holding the role of CFO at TerrAscend Corp. Adam led the Company
through several of its key milestones, including the successful
completion of TerrAscend's capital reorganization and structuring
and executing the Company's milestone M&A transactions that
laid the foundation for entering into the U.S. market becoming a
leading North American operator. Prior to joining TerrAscend Adam
spent over 10 years at Loblaw Companies Limited where he held
progressive roles in Finance, Investor Relations, M&A
Integration, Loyalty and Consumer Insights.
- On July 30, 2021, the Company
announced it was launching the first of multiple planned national
freezer bunker programs with Sobeys featuring 7 SKUs across its
grocery stores with a focus on Ontario, British
Columbia, Alberta and
Nova Scotia. The program featured
Sol Cuisine's Hot & Spicy Chik'n Wings, Crispy Chik'n Tenders,
Crispy Tempura Filets, Zesty Italian Style Meatballs, Crispy Chik'n
Bites, Spinach Chickpea Bites and Spicy Black Bean Bites.
- On July 14, 2021, Sol Cuisine
announced it had launched initial e-commerce capabilities in
partnership with Destini™ Global, LLC ("Destini"), a leading
provider of digital solutions to innovative CPG brands in
North America, underpinned by a
powerful store-level database and tool set. Available at
solcuisine.com, these initial capabilities include: a product
locator, to help customers locate Sol Cuisine products in nearby
stores; and an e-commerce link to eight established sites where
customers can purchase Sol Cuisine products directly. In
Canada, solcuisine.com will link
to: Voila, Loblaws, Instacart, Real Canadian Superstore, Safeway,
SaveonFoods, Maxi, Cornershop, and Vejii. In the U.S.,
solcuisine.com will link to: Instacart, Cornershop, and Vejii. In
addition to these consumer-facing capabilities, the Destini
platform includes a robust suite of consumer demand analytics,
which will enable Sol Cuisine to map consumer interest, track
search results and match the launch of new or additional SKUs in
areas that align with consumer demand based on hard data.
Non-IFRS Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted
EBITDA and adjusted EBITDA margin are both non-IFRS financial
measures. Adjusted EBITDA is defined as net income or loss before
income taxes, net finance costs, depreciation and amortization,
impairment losses, restructuring costs, one-time cost related to
going public and stock-based compensation, while adjusted EBITDA
margin is defined as the percentage of adjusted EBITDA to revenue.
We believe that adjusted EBITDA and adjusted EBITDA margin are
useful measures of financial performance because they provide an
indication of the Company's ability to seize growth opportunities
in a cost-effective manner, finance its ongoing operations and
service its long-term debt.
The following information provides reconciliations of the
supplemental non-IFRS financial measure presented herein to the
most directly comparable financial measure calculated and presented
in accordance with IFRS.
Reconciliation of Net Income (Loss) to Adjusted
EBITDA:
|
Three months
ending
|
Nine months
ending
|
|
June 30,
2021
|
June 30,
2020
|
June 30,
2021
|
June 30,
2020
|
Net Income
(Loss)
|
$190,587
|
($404,519)
|
($2,931,582)
|
($3,420,319)
|
Finance charges and
interest
|
70,991
|
338,538
|
509,876
|
$450,534
|
Depreciation and
amortization
(including amount expensed through
COGS)
|
519,735
|
772,003
|
1,536,926
|
1,670,972
|
Impairment of
long-term assets
|
-
|
-
|
-
|
150,241
|
One-time costs
related to RTO process
|
1,655,832
|
-
|
1,870,662
|
-
|
Share-based
payments
|
254,601
|
23,580
|
684,999
|
76,588
|
Gain on conversion of
pref. shares
|
(3,631,812)
|
-
|
(3,631,812)
|
-
|
Adjusted
EBITDA
|
($940,066)
|
$729,602
|
($1,960,931)
|
($1,071,984)
|
% of
Revenue
|
(16.9%)
|
13.4%
|
(11.4%)
|
(9.2%)
|
About Sol Cuisine Ltd.
Sol Cuisine is the publicly traded parent company of Sol Cuisine
Inc. following the completion of its "qualifying transaction" on
May 19, 2021. Sol Cuisine is a
fast-growing producer of branded, consumer-preferred plant-based
protein offerings across key center-of-plate and appetizer
categories. The Company's products are offered through an
established omni-channel distribution platform in Canada and the U.S., and Mexico, and are available in over 11,000
stores and more than 41,000 unique points of distribution. The
Company offers sells its products to four primary channels: Canada
Retail Sales & Club; U.S. Retail Sales & Club; Food Service
& Industrial; and Private Label. Over a history of 20+ years,
Sol Cuisine has consistently demonstrated an ability to innovate
and delight consumers in Canada
and the U.S., while remaining true to its commitment to producing
great tasting products that are nutritionally superior both to
meat-based offerings and to competitive plant-based products. This
commitment has resulted in several Canadian product wins, including
the #1 frozen plant-based burger in Canada, the #1 consumer-preferred chicken
alternative and the #1 quality roast product as determined by Whole
Foods Market. The Company's taste and nutritional superiority has
also resulted in private label contracts with some of the most
recognized natural brands in North
America. These products are all produced at Sol Cuisine's
two state of the art facilities, totaling 35,000 square foot
facility in Mississauga, Ontario,
capable of supporting up to 10 million kilograms of volume per
annum.
For more details on Sol Cuisine's consumer brands:
Website: www.solcuisine.com
Instagram: @solcuisine
Facebook: @solcuisine
Twitter: @solcuisine
LinkedIn: @solcuisine
Forward Looking Statements
This press release includes forward-looking information within
the meaning of Canadian securities laws regarding the Company and
its business. Often but not always, forward-looking information can
be identified by the use of words such as "expect", "intends",
"anticipated", "believes" or variations (including negative
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would" or "will" be
taken, occur or be achieved. Such statements are based on the
current expectations and views of future events of the management
of each entity, and are based on assumptions and subject to risks
and uncertainties. Although the management believes that the
assumptions underlying these statements are reasonable, they may
prove to be incorrect. The forward-looking events and circumstances
discussed in this press release may not occur and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the company, including risks regarding the
size of the industry, the growth of the market for the Company's
products, the rate and quantity of production at the Company's
facilities, market conditions, economic factors, management's
ability to manage and to operate the business of the Company and
the equity markets generally. Although the Company has attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results to differ from those anticipated,
estimated or intended. Accordingly, readers should not place undue
reliance on any forward-looking statements or information. No
forward-looking statement can be guaranteed. Except as required by
applicable securities laws, forward-looking statements speak only
as of the date on which they are made and the Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
The TSX Venture Exchange has not reviewed, approved, or
disapproved the content of this news release.
_________________________
|
i Defined as
Gross Profit divided by Revenue
|
ii Defined as
Gross Sales less sales discounts and other deductions
|
iii Adjusted
EBITDA is a non-IFRS financial measure. See the section of this
news release entitled "Non-IFRS Financial Measures: Adjusted
EBITDA"
|
SOURCE Sol Cuisine Ltd.