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FOR IMMEDIATE RELEASE:

Amazing Food Corp. Reports First Quarter Fiscal 2024

EDMONTON, ALBERTA February 5, 2024 –Amazing Food Corp. (TSX: AFC) (“Amazing Food” or the “Company”)  announced today its unaudited financial results for the first quarter ended December 2, 2023. 

 

During the first quarter, Amazing Good delivered strong operational results with significant margin expansion and improved profitability, even as net sales decreased year-over-year. The strategic decision to exit the on-demand grocery market contributed to a 3.9 per cent in gross margin. Cost optimization initiatives – including reductions in personnel, utility, and technology expenses – helped drive an 8.5 percentage-point increase in adjusted EBITDA margin. The Company generated substantially higher operating cash flow, benefiting from enhanced working capital management and disciplined capital spending. The active customer base of 124 thousand reflects Amazing Food’s targeted focus on high-value customer retention. The quarter also saw continued progress in sustainability initiatives, with new packaging solutions eliminating the equivalent of 2.4 million plastic bags annually from the Company’s operations.

 

"Our first quarter results demonstrate the success of our strategic focus on operational efficiency and profitability," said Julia Truong, CEO of Amazing Food Corp. "While we saw a planned reduction in net sales as we exited the on-demand grocery market to focus on our core meal kit business, we achieved significant improvements in gross margin and adjusted EBITDA margin. This marks our fourth consecutive quarter of positive adjusted EBITDA, highlighting the strength of our business model and the effectiveness of our cost optimization initiatives."

 

2024 First Quarter Highlights

 

  • Net sales were $40.5 million, compared to $47.2 million in Q1 2023

  • Gross margin expanded to 39.4 per cent, an increase of 3.9 percentage points year-over-year

  • Net loss improved by 83.2 per cent to $2.0 million, compared to $11.7 million in Q1 2023

  • Adjusted EBITDA margin increased to 3.6 per cent, an improvement of 8.5 percentage points

  • Cash flows from operating activities reached $3.8 million, improving by $9.9 million year-over-year

  • Active customer base of 124,000, compared to 148,000 in Q1 2023

 

Financial Performance

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The Company’s gross margin expansion to 39.4 per cent was driven by operational efficiencies in food and production costs, resulting from the strategic exit from the on-demand grocery market and increased focus on the meal kit segment. This operational improvement, combined with pricing optimization, contributed to the enhanced profitability despite lower net sales.

Adjusted EBITDA margin for Q1 2024 saw an 8.5 per cent increase versus Q1 2023. This improvement was primarily driven by stronger gross margin and lower selling, general and administrative (SG&A) expenses, reflecting the Company’s cost saving measures implemented during Fiscal 2023. These measures resulted in decreased expenditure across salaries, software, operating leases, utilities, maintenance, and other operational costs. However, the positive margin impact was partially offset by decreased net sales base.

Adjusted free cash flows in Q1 20224 showed a $9.3 million improvement compared to Q1 2023. This improvement was driven by three key factors: reduced net loss stemming from improved adjusted gross margin and lower SG&A expenses,reduced capital expenditures during the quarter, and favourable changes in non-cash operating working capital.

 

Business Outlook

 

The Canadian meal kit market represents an exciting growth opportunity, currently valued at US$1.4 billion within the C$123 billion grocery industry. With just 4.8 per cent household penetration and projected 16 per cent Compound Annual Growth Rate (CAGR) through 2027, the market is expected to reach US$2.5 billion as consumers increasingly seek convenient, joyful cooking experiences that reduce food waste.

 

The Company’s financial performance demonstrates strong execution, and they are pleased to announce that they have delivered four consecutive quarters of positive adjusted EBITDA totaling $8.5 million, with positive free cash flow in two of the last three quarters. This improved profitability stems from enhanced operational efficiency and disciplined cost management, enabling self-funded growth initiatives.

 

The Company's Fiscal Year 2024 strategy focuses on four key growth drivers:

  1. Optimizing customer acquisition through refined marketing channels and an enhanced digital platform that reduces friction and improves user experience.

  2. Increasing order frequency through the new VIP program and expanded menu offerings, featuring premium options like organic chicken breasts, bison, sustainably raised steelhead trout, and specialized paleo and keto meals.

  3. Growing basket size through Better-for-You products and strategic partnerships with first-rate restaurants, offering customers an ever-expanding selection of mouth-watering choices. 

  4. Advancing the Company's sustainability initiatives through a farm-to-table approach, appropriately portioned ingredients to minimize food waste, and innovative packaging solutions that have eliminated 2.4 million plastic bags annually.

 

The Company is also exploring multi-channel partnerships to expand their market reach while maintaining our core focus on profitability. By simplifying the  supply chain and removing middlemen, the Company is building a more efficient, sustainable operation that delivers exceptional value to the customers.

 

Through these strategic initiatives, Amazing Food Corp. continues to strengthen its position as Canada’s premier millennial food brand, helping customers live healthier lives while contributing to a healthier planet. The Company's commitment to profitable growth, combined with their unwavering focus on customer relationships, positions them ideally for sustained success in this rapidly growing market. 
 

Conference Call Information


Amazing Food Corp. will host a conference call on February 6, 2024, at 10:00 AM ET to discuss its first-quarter results. Please dial (416) 555-1234 or (888) 555-5678 to join. The call will also be webcast live at www.amazingfoodcorp.com/en/investors.

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Cautionary Note Regarding Forward-Looking Statements

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This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, assumptions, estimates and intentions, including, without limitation, statements in the “Business Outlook” section of the MD&A. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company and its business, operations, prospects and risks at a point in time in the context of historical trends, current condition and possible future developments, and therefore the reader is cautioned that such information may not be appropriate for other purposes.
                                                             
Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information. Although the forward-looking information contained herein is based upon what the Company believes are reasonable assumptions, readers are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information.

Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and the Company does not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

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About Amazing Food Corp.


Amazing Food Corp. (TSX: AFC) is Canada’s leading meal solutions company, delivering chef-crafted meal kits and premium add-ons nationwide. Through its innovative platform, Amazing Food connects customers with fresh ingredients from local farms while eliminating food waste and retail overhead. Amazing Food’s mission is to create experiences that spark joy and help communities live longer on a healthier planet. Visit www.amazingfood.com to learn more.

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For more information: 

Stella Nguyen, Amazing Food Corp.

IR and Corporate Communications Coordinator

424-440-5770

snguyen@afc.ca

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