Freshlocal's Board Chair,
"Freshlocal has a healthy underlying core business in eGrocery and is transitioning to being a leading eGrocery Management System (eGMS) provider. I'm excited to be taking on this new role with Freshlocal at such a pivotal point in our development as a business," expressed
Full-Year and Q4 Fiscal 2021 Financial Highlights
- Revenues for Fiscal 2021 of
$132.8 million , a year-over-year increase of$25.2 million , or 23.4%. Q4 FY2021 revenues of$28.8 million decreased by$2.8 million , or (8.9)% compared to the quarter endedOctober 3, 2020 . - Gross profit1 for Fiscal 2021 of
$49.5 million , a year-over-year increase of$11.0 million , or 28.6%. Q4 FY2021 gross profit1 of$10.4 million decreased by$0.6 million , or (5.5)% compared to the quarter endedOctober 3, 2020 . - Consolidated gross profit1 margin of 37.3% for the year ended
October 2, 2021 , a year-over-year increase of 1.5%. Q4 gross profit margin1 increased by 1.3% compared to the quarter endedOctober 3, 2020 .
Key Financial Information
All amounts in CAD $ millions except Active | Three months ended | Year ended | ||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||
Consolidated | ||||||||||||
Revenues | 28.8 | 31.6 | (8.9) | % | 132.8 | 107.6 | 23.4 | % | ||||
Gross profit1 | 10.4 | 11.0 | (5.5) | % | 49.5 | 38.5 | 28.6 | % | ||||
Net loss | (15.9) | (13.8) | (39.2) | (30.7) | ||||||||
Per share | (0.36) | (0.39) | (0.99) | (0.86) | ||||||||
Adjusted operating loss1 | (7.6) | (3.3) | (17.4) | (10.7) | ||||||||
Cash flow (used in) provided by operations | (1.6) | 0.2 | (14.3) | (6.8) | ||||||||
eGrocery Business Segment | ||||||||||||
Revenues | 20.4 | 24.4 | (16.4) | % | 101.9 | 78.0 | 30.6 | % | ||||
Active customers1 | 26,534 | 27,122 | (2.2) | % | ||||||||
Average Order Size ("AOS")1 | 123 | 115 | 7.0 | % | 123 | 115 | 7.0 | % | ||||
Blush Lane Business Segment | ||||||||||||
Revenues | 8.8 | 10.1 | (12.9) | % | 37.3 | 37.5 | (0.5) | % | ||||
Same Store Sales1 | (13) | % | 32 | % | (1) | % | 19 | % |
1. | Please refer to "Metrics and Reconciliation of Non-IFRS Financial Measures" at the end of this press release for further details. |
The financial information above relating to the three months and years ended
Business and Financial Highlights
Q4 FY 2021 and the Period Subsequent to Quarter-End
- Private Placement – On
December 2, 2021 , the Company completed the first tranche of its$13.9 million brokered private placement of convertible debenture units (the "Convertible Debenture Units"), through which it issued 12,415 Convertible Debenture Units at a price of$1,000 per Convertible Debenture Unit for aggregate gross proceeds of$12.415 million to the Company. The second tranche of the private placement is expected to be completed on or beforeDecember 31, 2021 , for an additional$1.5 million . The private placement was led byDesjardins Securities Inc. , andCormark Securities Inc. as co-agent. Each Convertible Debenture Unit is comprised of (i) one 8% subordinated unsecured convertible debenture of the Company in a principal amount of$1,000 (collectively, the "Convertible Debentures"), which are convertible into common shares of the Company (each a "Common Share") at a conversion price of$1.90 per Common Share, subject to adjustment in certain events and maturing onDecember 31, 2024 (the "Maturity Date"); and (ii) 263 common share purchase warrants of the Company, each of which entitles the holder to purchase one Common Share at a price of$1.25 per share until the Maturity Date. Please see the Company's news release datedDecember 2, 2021 for more information. - Forbearance Agreement – In connection with the breach of certain financing covenants under the Company's debt facility with
Silicon Valley Bank ("SVB"), onDecember 2, 2021 , the Company entered into a forbearance agreement with SVB (the "Forbearance Agreement") under which SVB granted the Company certain relief provisions throughJanuary 15, 2022 . These relief provisions are subject to, among other things, the completion of certain financing milestones and repayment terms. Please see the "Subsequent Events - SVB Forbearance Agreement" section in the Company's MD&A for more information. - Continued Expansion of its Product Line-up – The Company continues to focus on expanding its product offering, utilizing the additional space available at its Trapp fulfillment facility. The Company has increased its selection of produce, grocery and liquor from 10,600 products at the end of the Q2 FY2021 to a current offering of over 12,000 unique products.
- Consolidation of our Greater Vancouver Fulfillment Centres – In
July 2021 , the Company completed the strategic merger of its twoGreater Vancouver fulfillment centres, which allows SPUD.ca's BC customers to access its full 12,000 SKU product assortment. This facility consolidation will also generate positive operational efficiencies by reducing facility overhead expenses, a reduction in on-hand inventory and routing optimization. - Service Region Expansion – Building on the Company's expansion of its eGrocery services into additional regions in Central and
Southern Alberta and the Thomson Okanagan area, the Company also announced plans for expansion into the Northern portion ofVancouver Island and offering its full SKU assortment to allVancouver Island customers within the first quarter of calendar 2022.
Full-Year 2021 Highlights
- Freshlocal Common Shares Commenced Trading on the TSX – On
April 16, 2021 , Freshlocal announced the completion of its qualifying transaction which consisted of a reverse take-over of the Company. Following completion of the transaction, Freshlocal's Common Shares commenced trading on theToronto Stock Exchange onApril 21, 2021 , under the symbol "LOCL". - Carrefour Equity Participation Right and Execution of New SaaS Agreement in
Europe – InApril 2021 , the Company and Freshlocal entered into an Amended Equity Participation Right Agreement (the "Equity Participation Agreement") with Carrefour S.A., pursuant to which Carrefour S.A. was granted the right to purchase up to 9.9% of the Company's Common Shares on an undiluted basis, calculated on a post-issuance basis, issued and outstanding at the time of exercise of such right (the "EPR"), upon payment of a price per share equal to a 15% discount from the market price at the time the EPR will be exercised. The EPR was subject to the completion of a Qualifying Transaction and the execution of a new SaaS agreement with Carrefour S.A. or one of its affiliates in the European territory as contemplated in the Equity Participation Agreement (the "Contemplated SaaS Agreement"). Following the completion of the Qualifying Transaction and the execution of the Contemplated SaaS Agreement, the conditions governing the EPR have been met and the rights as described in the Equity Participation Agreement may be exercised by Carrefour S.A., in whole or in part, at any time and from time to time prior toNovember 7, 2022 . - Successful Implementation of the FoodX Grocery E-commerce Solution in
Belgium – OnMay 4, 2021 , Freshlocal announced that its wholly-owned subsidiary,Food-X Technologies Inc. ("FoodX"), a leading end-to-end software solution for profitable online grocery fulfillment, reached an important milestone in its strategic partnership withCarrefour Group , a longstanding global leader in the grocery industry, with the commencement of operations ofCarrefour Group's new e-commerce fulfillment centre inBelgium . This new facility has at its core the FoodX software-as-a-service (SaaS)-based eGrocery Management Solution (eGMS) to improve the productivity and profitability of operations, and the customer experience.
Earnings Conference Call
The Company will hold a conference call with Company leadership today at 10:30 a.m. ET to discuss its results. Slides to accompany management's prepared remarks will be available to view via the webcast.
Details of the Earnings Conference Call:
When: | |
Registration: | Please use the following link: |
https://event.on24.com/wcc/r/3404419/64598E18977C51E97DA4A278952A0A37 | |
Webcast: | The webcast and presentation slides can be accessed at Freshlocal's website: |
https://ir.freshlocalsolutions.com/events-and-presentations | |
Replay: | A webcast replay will be available until |
https://ir.freshlocalsolutions.com/events-and-presentations |
About
Notice on Forward Looking Information
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to the strategic partnership between the Company and
With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions, including, among other things, assumptions about general business and economic conditions of the Company and the market in which it operates. The foregoing list of assumptions is not exhaustive.
Although management of the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks associated with the business of the Company; business and economic conditions in the eGrocery industry generally; the supply and demand for labour and other project inputs; changes in commodity prices; changes in interest and currency exchange rates; risks relating to unanticipated operational difficulties (including failure of technology or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); changes in general economic conditions or conditions in the financial markets; changes in laws; risks related to the direct and indirect impact of COVID-19 including, but not limited to, its impact on general economic conditions; the ability to obtain financing as required; and other risk factors as detailed from time to time. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Metrics and Reconciliation of Non-IFRS Financial Measures
Freshlocal uses metrics and non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented later in this section. These measures are meant to supplement financial performance measures reported in accordance with IFRS and to provide further understanding of the Company's operating results from management's perspective. They do not substitute, are not superior to IFRS metrics and do not have any standardized meaning prescribed under IFRS. Therefore, they may not be comparable to similar measures as presented by other issuers.
Non-IFRS Metrics | Definition |
eGrocery Average Order Size ("AOS") | The eGrocery Average Order Size ("AOS") is defined as total sales net of returns and credits, |
Active customers | Based on the number of individual customer accounts that have completed an order on our |
Same-store sales | Retail segment sales from the same location for stores in operation in that location in both periods. |
Non-IFRS Financial Measures | Definition |
Adjusted operating loss | Adjusted operating loss represents net income or loss before net finance expenses (income), expense and other expenses (income). We believe that this is a more representative measure to |
Gross profit | Gross profit represents revenue net of returns and credits less cost of sales. |
The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating gain (loss) and gross profit, for which a reconciliation is presented in the following table, do not have any standardized meaning under IFRS and could be calculated differently by other companies. Those measures may not be comparable to similar measures described by other companies, as IFRS does not have standard definitions for these measures. These measures should be considered a supplement to IFRS measures and further understanding Freshlocal's operating results. Users should use these non-IFRS measures in conjunction with the IFRS financial statements for each applicable period.
This section presents a reconciliation of financial information in the consolidated financial statements of
The following tables summarize non-IFRS measures used in this press release for the three months and years ended
Adjusted Operating Loss
(In thousands of Canadian dollars) | Three months ended | Year ended | |||||
2021 | 2020 | 2021 | 2020 | ||||
Net loss and comprehensive loss | (15,934) | (13,773) | (39,156) | (30,722) | |||
Net finance expense | 6,499 | 8,375 | 8,587 | 14,020 | |||
Depreciation and amortization expense | 1,571 | 1,367 | 5,481 | 4,561 | |||
Stock-based compensation | 262 | 713 | 1,057 | 1,457 | |||
Transaction expense | 23 | — | 6,643 | — | |||
Other income | (46) | — | (56) | — | |||
Adjusted operating loss | (7,625) | (3,318) | (17,444) | (10,684) |
Gross Profit
(In thousands of Canadian dollars) | Three months ended | Year ended | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue | 28,790 | 31,566 | 132,762 | 107,561 | ||||
Cost of sales | (18,439) | (20,532) | (83,298) | (69,043) | ||||
Gross profit | 10,351 | 11,034 | 49,464 | 38,518 | ||||
Gross margin | 36.0 | % | 35.0 | % | 37.3% | 35.8 | % |
SOURCE
© Canada Newswire, source