GreenSpace Brands Inc. Reports a 47% YOY Revenue Increase, 17% Quarterly Sequential Revenue Increase with Annualized Run Rate Revenue approaching $80 million
GreenSpace Brands Inc. Reports a 47% YOY Revenue Increase, 17% Quarterly Sequential Revenue Increase with Annualized Run Rate Revenue approaching $80 million |
[21-June-2018] |
TORONTO, June 20, 2018 /CNW/ - GreenSpace Brands Inc. ("GreenSpace" or "the Company") (TSXV: JTR) today reported its fourth quarter and fiscal year financial results for the period ending March 31, 2018.
Key Highlights for the Fourth Quarter of Fiscal 2018:
Consolidated Performance Summary
Gross revenue, for the fourth quarter ended March 31, 2018, was the highest gross revenue amount earned by the Company in a single quarter to date. Gross revenue for the fourth quarter ended March 31, 2018 increased 47.8% and net revenue, which is gross revenue net of deductions for rebates, discounts and one-time listing fees, increased 48.3% over the same period in prior year. The year on year improvement was the result of growth across the majority of the brand portfolio, with Love Child and Kiju performing above expectations. Q4 also included approximately 2 months of contribution from the recent acquisition of Go Veggie. Adjusted gross margin for the fourth quarter, which excludes one-time, non-recurring listing fees, fell to 20.4% from 22.5% a year earlier due primarily to a significant increase in commodity-based butter costs related to the Kiwi Pure line, driving that brand to negative gross margin. Price increases for the brand have been processed subsequent to the end of the quarter, which are expected to bring the gross margins for the Kiwi Pure products back in-line with historical levels. Gross margin was also negatively impacted by the liquidation of excess holiday season inventory in Central Roast during the quarter. Excluding the impact of these two items, gross margin would have been approximately 23.2%. Gross margin is expected to improve in the future driven by higher gross margin contribution from new product launches and the recent acquisition of Go Veggie. Rebates and discounts as a percentage of revenue decreased in Q4 to 11.1% from 11.5% in the previous year. For the quarter ending March 31, 2018, SG&A expense, as a percentage of gross revenue, increased in comparison to the previous year, representing 25.8% of revenue versus 22.4% in Q4 2017. The increase was primarily due to one-time restructuring expense from the discontinuation of the Nudge Brand, costs associated with the launch of Meatbar and costs associated with the acquisition and integration of Galaxy Foods, partially offset by favourable salaries and benefits and storage and delivery expenses. As discussed last quarter, the Company expects several quarters of higher SG&A costs as a percentage of revenue as it launches new brands and integrates and rationalizes the cost structure of Go Veggie. Outlook GreenSpace continues to believe that there are a number of fundamental trends occurring within both the Global and North American food industries. These trends will continue to drive consumer demand for GSB brands and customers will continue to be attracted by the Company's innovation within the natural and organic marketplace. As a result of this the Company is optimistic that anticipated market growth will continue to drive demand for the Company's acquired and developed brands and provides a significant opportunity for further expansion into new product offerings. This has been evidenced by several distribution wins announced over the last three quarters. In particular GreenSpace expects that it will continue to execute on a two-pronged growth strategy. Firstly, the Company expects to have a strong and ongoing internal brand and product development program. There are currently a number of new product offerings in various stages of development that the Company expects to release strategically, to fill gaps in the Canadian natural and organic marketplace, over the next few quarters. Secondly, the tripling in size of the Canadian natural and organic food market over the last decade has been driven by a number of new entrants, creating a highly fragmented competitive landscape. The Company seeks to continue to take advantage of this and expects to eventually grow through strategic investments in strong, simple ingredient businesses which are accretive to revenue and profitability. With its increasing revenue base and numerous new distribution wins, management expects to see year on year organic revenue growth of 20% or more, incremental gross margin improvement and to continue to generate positive adjusted EBITDA margins, once the Go Veggie acquisition is integrated. The Company continues to believe it is in a strong position to be one of the innovation leaders, as well as a principle consolidator, in the North American natural and organic food market, due to its industry position and accumulated reputational goodwill. About GreenSpace Brands Inc. GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across North America. GreenSpace owns Rolling Meadow Dairy, Canada's first grass fed dairy business, Life Choices, convenience meat products made with grass fed and pasture raised meats without the use of added hormones and antibiotics, Nudge, a line of family favorite foods made better, Love Child, a producer of 100% organic food for infants and toddlers made with the purest, natural and most nutritionally-rich ingredients, Central Roast, a clean snacking brand featuring a wide assortment of nut and seed mixes, Kiju, the Canadian market leader in the shelf stable organic juice segment, Cedar, the leaders in the Canadian Cold Press Juice category and the most recently acquired brand, Go Veggie, one of the leaders in the US plant based dairy market All brands are wholly owned and retail in a variety of natural and mass retail grocery locations across Canada. For more information, visit www.greenspacebrands.ca. GreenSpace's filings are also available at www.SEDAR.com. Forward-Looking Statements 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 release. SOURCE GreenSpace Brands Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: TorontoVE:JTR |
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