Goodfood shutting down on-demand delivery service and micro-fulfillment centers

Oct 14

Goodfood Delivers Strategic and Financial Update, The Canadian Business Journal

Driving return to positive Adjusted EBITDA as part of Project Blue Ocean (1) Goodfood’s strategy is to grow the brand through weekly meal plans and add-ons while transitioning away from Goodfood On-Demand to maximize Adjusted EBITDA to achieve long-term profitable growth concentrate on (1) and cash flow

Based on management’s preliminary assessment, Blue Ocean Initiative expects non-cash earnings in the range of $45 million to $50 million in the fourth quarter, primarily due to asset consolidation and the closure of the Montreal micro-fulfillment center (MFC). Impairment charges are expected.Toronto Drives Improved Gross Margins and Selling, Administrative Expenses
Fourth Quarter Sales to Sept. 3rd Projected adjusted EBITDA expected to be in the range of $50 million to $51 million (1) Losses ranging from ($2) to ($4) million dollars
We entered into a letter of forbearance with the lender to limit the availability of some of its credit facilities

MONTREAL, OCTOBER 14, 2022 (GLOBE NEWSWIRE) –

Good Food Market Corporation (“Good Food” or the “Company”) (TSX: FOOD) today provided an update on Project Blue Ocean, its strategy and selected fourth quarter preliminary financial results.

blue ocean update

As announced in the third quarter of fiscal year 2022, Goodfood is committed to expanding its operations and overall We have embarked on a review of our business. Key initiatives previously announced, including repricing meal kits and add-ons, reducing raw materials, and consolidating procurement and fulfillment operations, were completed in the fourth quarter. In addition, just as it recently consolidated its breakfast facility into its main production facility on the east coast of Montreal, it has simplified its western operations by consolidating its British Columbia production facility into its Calgary facility. With our combined facilities in Montreal and Calgary, we serve all of Canada. These and other actions improved gross margins. Combined with the completion of sales, general and administrative efficiencies such as customer service automation and workforce streamlining, the execution of Project Blue Ocean is expected to deliver adjusted EBITDA. (1) Losses currently expected to range from ($2) to ($4) million in recent quarters based on net sales of approximately $50 million to $51 million.

Strategy update

Our primary goal is to return to positive Adjusted EBITDA (1) Completed a strategic review of Goodfood’s on-demand delivery model, including MFC, to position itself for the first half of 2023 and achieve long-term profitable growth. Since launch, in Montreal, Toronto and Ottawa, he has shipped over 340,000 orders and introduced thousands of Canadians to Good Food’s brands and product portfolio. While we are pleased with the progress we have made so far, looking ahead, the operational investments required to bring 30-minute deliveries to an attractive level of profitability will require significant additional capital and operating expense investments. will become necessary. As a result, we have closed or are planning to close all MFCs and have announced the closure of on-demand services for 30 minutes. Going forward, our strategy is to build the Goodfood brand nationally through weekly meal plans and add-ons, offering not only a spectacular selection of Goodfood branded products, but also greater flexibility and access to products over time. As a result of these results and the initiatives previously mentioned, our projected fourth quarter non-cash impairment charges ranged from $45 million to $50 million, based on management’s preliminary assessment. , may incur additional costs and will see improved gross margin, adjusted EBITDA. (1) and cash flow.

Available Credit Updates

Due to a breach of contract under our credit facility in the fourth quarter, we entered into a letter of forbearance with the lender in the fourth quarter. Currently unpaid. At the end of the year, the company had $38 million in cash and cash equivalents of him, and none withdrawn from Revolver. Goodfood is in the process of negotiating a revised credit facility. We cannot guarantee that such arrangements will be timely and properly executed or the terms of such arrangements.

Conclusion

“Project Blue Ocean contributes to gross margins and adjusted EBITDA through pricing, operational efficiencies and SG&A integration. (1) improvement. As we continue to execute Project Blue Ocean, we will grow the brand through a large number of customers who are loyal to their weekly meal plans, creating experiences aimed at inspiring joy and helping our communities live longer on a healthier planet. We are focused on creating,” said Jonathan Ferrari, Chief Executive Officer of Good Food.

About Good Food

Goodfood (TSX: FOOD) is Canada’s leading digital native meal solutions brand, offering fresh meals and add-ons that make it easy for customers across Canada to enjoy delicious meals at home every day. The Goodfood team is building Canada’s most beloved millennial food brand on a mission to inspire joy and help our communities live longer on a healthier planet. Good Food customers have access to unrivaled fresh, delicious products and special prices, made possible by our world-class culinary team and consumer-facing infrastructure and technology. We are passionate about connecting partner farms and suppliers to your kitchen, reducing food waste and costly retail expenses. The company’s administrative office is located in Montreal, Quebec, with production facilities in Quebec and Alberta.