Else Nutrition Reports 23% Sequential Revenue Growth in the First Quarter of 2023

Conference call will be held on Monday, May 15 at 10 AM ET

VANCOUVER, British Columbia, May 15, 2023 (GLOBE NEWSWIRE) -- ELSE NUTRITION HOLDINGS INC (BABY) (BABYF) (0YL.F) ("Else" or the "Company") the Plant-Based baby, toddler, and children nutrition company, today reported first quarter 2023 financial results for the period ending March 31, 2023. The financial statements and MD&A are available on SEDAR under the Company’s profile.

First Quarter 2023 Financial Highlights

• 1Q23 total revenues were $2.9M, an 82% increase versus $1.6M in 1Q22, and a 23% increase versus $2.3M in 4Q22. Revenue growth continued to be hampered by product shortages. While the company increased its production pace, the demand for its products also continued to grow, a combination that challenged available supply, especially in the first half of the quarter. Management estimates the revenue loss from inventory constraints was roughly $1M in 1Q23.
• Sales to brick-and-mortar retailers in the US and Canada during 1Q23 increased by 105% versus 4Q22. As of 1Q23, Else products were listed in nearly 12,000 stores in North America, compared with 1,200 stores in 1Q22. Management expects to reach 20,000 listed stores and 50,000 points of distribution by the end of 2023.
• Sales in Canada, via Amazon and brick-and-mortar retailers increased over 240% in 1Q23 versus 4Q22 and represented over 28% of the Company’s formula sales.
• Retail sales velocity is growing, and as additional products are added to existing accounts, annual revenue per store is improving as well.
• Cash balance as of March 30, 2023, was $10.1M CAD, including restricted cash and short-term bank deposit.
  

Recent Business Highlights

• Expanded distribution to more than 7,000 CVS stores, more than 750 Walmart stores, over 440 Loblaws stores, over 600 Sobey’s stores and to 161 Giant Food Stores.
• Else products were listed in nearly 12,000 stores in North America, compared with 1,200 stores in 1Q22 reflecting 10 times growth.
• Significantly increased in-store sales velocity. For example, according to Spins data, the sales velocity of our Toddler Organic product in natural food stores grew by more than 50% in the last year (measured in 12-week periods).
• Expanded production capacity by adding a second manufacturing facility in the US and launching its first production facility in Europe. The additional facilities will increase the Company’s production capacity by about three times, greatly reducing the risk of future out of stock situations. The Company anticipates the new scaled manufacturing capacity to significantly decrease its manufacturing costs, beginning in 2H23.
• Entered the Canadian market with the launch on Amazon.ca and in brick-and-mortar stores. The success of the launch exceeded expectations given a fast entry into major retailers across the country and the strong demand for Else’s products. The Company expects to be listed in more than 3,000 Canadian stores by the end of 2023.
• The Company plans to enter Western Europe in 2H2023. The initial launch will be in the UK via Amazon and natural food distributors, with other European countries to follow.
• The Company plans to enter Australia in 2H2023. The initial launch will be via Amazon to be followed by drug and grocery chains.
• Received critical approval by the Institutional Review Board (IRB) of the infant growth study protocol for the testing of the Else Infant Formula.

Management Commentary