NUTRITIONAL GROWTH SOLUTIONS LTD. ASX Announcement
MARCH 2022 QUARTERLY ACTIVITIES REPORT
KEY GROWTH INITIATIVES IN USA AND ASIA PACIFIC ON TRACK; US SUPPLY
CHAIN IMPACTS IN Q1 RESTRICTED SALES GROWTH
KEY HIGHLIGHTS FOR Q1 FY22
● New Zealand manufactured product completed and shipped to distributers in Asia Pacific
o Setting NGS up for sales in Asia Pacific for Q2
● Commenced sales on Walmart.com and RangeMe.com
● Quarterly revenue from sales of Healthy Heights® products in the US (excluding Italy) of
US$614k1, up by 4% on pcp despite stock shortages, which have now been resolved
o Inventory shortages in Q1 held back growth of retail sales in the US and delayed China expansion;
o Overall revenue of US$631K was up by 10% compared with December 2021 quarter (US$570k);
o Overall revenue is down on prior corresponding period (US$814K) due to timing of Italy launch last year;
● Quarterly cash receipts from customers of US$609K, down 12% on pcp
● Appointed industry veteran David Fenlon as Non-executive Chairman
29 April 2022 - Nutritional Growth Solutions Ltd. (ASX: NGS), a global provider of scientifically formulated and clinically studied paediatric nutritional products, is pleased to provide a business update for the quarter ending 31 March 2022 (Q1 FY22), along with its Appendix 4C quarterly cash flow report.
Growth initiatives providing a strong footing for future growth in US and Asia Pacific
Nutritional Growth Solutions has delivered a solid March quarter for revenue and cash receipts, despite stock shortages, driven by continued demand for Healthy Heights® in the US and China markets.
Quarterly overall revenue was US$631k, down on the prior corresponding period (pcp), due to the Healthy Heights® launch in Italy 2021 which saw 12 months of orders processed in an initial order. Quarterly revenue in the US from sales of Healthy Heights products are up 4% on pcp, despite having to navigate stock shortages over the quarter.
Supply chain shortages in the USA have now been resolved with a once off, large order of high-quality whey protein from Fonterra Co-operative Group.
1 Unaudited
Commenting on the Company's progress during the quarter, Nutritional Growth Solutions CEO Liron
Fendell said, "This quarter has been focused on finalising the manufacturing of our Healthy Heights® products in New Zealand. I am pleased to report that the product is now being delivered to our distributors in the Asia Pacific with sales to commence during Q2.
"US operations have been focused on advancing our retail expansion strategy, with Healthy Heights® ranging now live on Walmart.com and Rangeme.com. In addition, our President of North America, Stephen Turner has had a full schedule, meeting with numerous quality retail partners across the country on ranging options for Healthy Heights®. NGS has also recently won the Buyers Choice Award at the ECRM retailers' event.
"Our doctors at Schneider's Medical Centre undertook review of the nutritional profile of our
KidzShake range, with updates made to the nutrient levels and post reporting period, have relaunched the KidzShake range under the new branding and Healthy Heights® umbrella as Healthy Heights® KidzProtein. There are 15 products in the new KidzProtein range including a vegan option to support the nutritional needs of the 2 in 10 children with intolerance to dairy-based products in the United States.
"We continuously work to grow the Healthy Heights® brand into a leading household name to support healthy growth development in children and truly believe in our growing product suite, that's backed by science and clinically proven to support growth development in children."
OPERATIONAL UPDATE
Sales commenced on Walmart.com and RangeMe.com as part of US retail expansion
Nutritional Growth Solutions' Healthy Heights® shake mixes started sales on Walmart's ecommerce platform which receives approximately 100 million unique visitors each month towards the end of the period. In addition, the complete Healthy Heights® product portfolio is now listed on leading product discovery and sourcing platform, RangeMe.com. The platform is used by over 10,000 retailers including Wholefoods, CVS Pharmacy, Target and 7-Eleven.
New Zealand manufactured product completed and received by distributers in Asia Pacific
Nutritional Growth Solutions has completed the manufacturing and packaging of Healthy Heights® Grow Daily 3+ with its manufacturing partner NIG Nutritionals in New Zealand. The product has been shipped to distributors in Asia Pacific who will commence selling the product through leading e-commerce platforms including Fortune 500 company and one of China's largest online retailers by transaction volume and revenue, JD.com (NASDAQ: JD), multinational e-commerce platforms Lazada Shopee, and TikTok, as well as the second largest cross-border e-commerce platform, Koala, and one of the world's largest community e-commerce platforms, Little Red Book.
David Fenlon appointed as Non-executive Chairman
During the quarter NGS appointed David Fenlon as Independent Non-Executive Chairman of the
Company. David has over 30 years' experience in retail and consumer goods across Europe, Australasia and North America. Until very recently he was the Managing Director & CEO of leading beauty and wellness business BWX Limited (ASX: BWX), and was previously Managing Director - Australia & NZ for Blackmores Limited (ASX: BKL). In addition, Mr Fenlon is currently a Non-executive Director of
Quest for Life Foundation, an Australian not-for-profit organisation dedicated to supporting people through personal traumas.
LOOKING AHEAD
"Growing a brand into a global household name is no easy feat. The last stages of our rebrand are falling into place, and we have doubled our SKU offering over the last few months. Under new leadership of industry veteran David Fenlon, we have never been in a better position to continue the execution of our three-pillar growth strategy of new territories, products and sales channels, and reach our goal of ensuring children around the world have access to healthy products that support their growth development."
WEBINAR DETAILS
An investor webcast will take place on Tuesday 3 May 2022 at 3:00pm AEST. Following the briefing, participants will have an opportunity to ask questions via an online facility. Please pre-register for webcast via:
https://us06web.zoom.us/webinar/register/WN_c2c_Gd69RTeML2aYgUNDpA
FINANCIAL OVERVIEW
The Company achieved quarterly customer collection of US$609K, down 12% on Q1 FY21.
Operating cash outflows of US$1.6 million for the quarter included:
● US$817k in advertising and marketing;
● US$79k in research and development; and
● US$397k in product manufacturing and operating costs
● US$338k in other, general and administrative expenses.
The Company's cash balance as at 31 March 2022 is US$3.1 million, providing flexibility for it to execute its growth plans.
Payments made to related parties and their associates shown in the Appendix 4C are as follows:
● Item 6.1 includes US$36k directors' fees and US$138k payroll expenses
ASX Additional Information
Pursuant to ASX Listing Rule 4.7C.2, the Company provides the following comparison of its actual expenditure since admission to ASX (being 30 October 2020) against the total "use of funds" statement in its Prospectus dated 14 September 2020.
Item | Prospectus Amount | Actual Expenditures on cash basis for the 3 months ending on 31/03/2022 | Total for the 18 months on cash basis ending on 31/03/2022 |
Sales & Marketing Expense | A$3,700,000 | A$868,479 | A$5,176,250 |
Intellectual property Protection | A$100,000 | A$7,422 | A$144,016 |
International Expansion and Global Business Development | A$700,000 | A$248,464 | A$916,118 |
Research ExpensesandDevelopment | A$500,000 | A$102,015 | A$556,137 |
Working Capital | A$1,000,000 | A$474,223 | A$2,954,352 |
Costs of the Offer | A$1,000,000 | A$0 | A$971,701 |
Total | A$7,000,000 | A$1,700,603 | A$10,718,574 |
Prospectus Amount | Actual Expenditures on cash basis for the 3 months ending on 31/03/2022 | Total for the 18 months on cash basis ending on 31/03/2022 | |
Salaries and Wages | A$1,900,000 | A$208,683 | A$1,579,663 |
Social Media campaigns, adverting and brand awareness | A$1,600,000 | A$388,407 | A$1,925,147 |
Other Sales expensesandMarketing | A$200,000 | A$271,388 | A$1,671,440 |
Total | A$3,700,000 | A$868,478 | A$5,176,250 |
-ENDS-
This announcement has been authorised for release by the Board of Directors of Nutritional Growth Solutions Ltd.
For more information:
Investors
Liron Fendell
CEO and Managing Directorliron@ngsolutions.co
Media
Tristan Everett Market Eye
P: +61 403 789 096
E:tristan.everett@marketeye.com.au
Eric Kuret Market EyeEric.kuret@marketeye.com.au +61 417 311 335
Rule 4.7B
Appendix 4C
Quarterly cash flow report for entities subject to Listing Rule 4.7B
Name of entity
Nutritional Growth Solutions Ltd.
ABN
642 861 774
Quarter ended ("current quarter")
On 31/03/2022
Consolidated statement of cash flows | Current quarter $US'000 | Year to date (3 months) $US'000 |
| 609 (79) (397) (817) - (338) - - - - - - | 609 (79) (397) (817) - (338) - - - - - - |
(1,022) | (1,022) |
2.
Cash flows from investing activities
2.1
Payments to acquire or for:
ASX Listing Rules Appendix 4C (17/07/20)
(a) | entities | - | - |
(b) | businesses | - | - |
(c) | property, plant and equipment | - | - |
(d) | investments | - | - |
(e) | intellectual property | - | - |
(f) | other non-current assets | - | - |
Page 1 |
+ See chapter 19 of the ASX Listing Rules for defined terms.
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Nutritional Growth Solutions Ltd. published this content on 28 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 01:21:11 UTC.
