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. 3^rd 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.

All amounts in this press release are in Canadian dollars, unless otherwise specified.

More Information: Investors and Media
Jonathan Reuters CFO (855) 515-5191 [email protected]	Rosslane Auermule Vice President of Corporate Development (855) 515-5191 [email protected]

Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Such forward-looking information includes information about our objectives and strategies for achieving those objectives, and information about our beliefs, plans, expectations, projections, assumptions, estimates and intentions. but not limited to: , statements in the Financial Outlook section of MD&A relating to the impact of building and launching on-demand fulfillment centers or infrastructure and providing on-demand grocery and meal solutions supported by optimized digital platforms; but not limited to these. Realization and impact of the above. In particular, statements in this document that relate to Adjusted EBITDA: ⁽¹⁾ Losses or net sales are based on preliminary information available to us and our assessment of current conditions. Actual results may vary. This forward-looking information is , “anticipate,” “plan,” and other terms and phrases. , “foresee,” “believe,” “continue,” and similar terms, including references to the negative or hypothetical of these terms, except that all forward-looking information includes these terms and phrases. It is not included. Forward-looking information is intended to inform the reader about past trends, current conditions and possible future developments, and thus the reader should be aware that such information may not be suitable for other purposes. .

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties. Many of which are beyond our control and actual results may differ materially from those disclosed or implied therein. forward-looking information. These risks and uncertainties include, but are not limited to, the following risk factors: These risk factors are further described under “Risk Factors” in the Company’s Annual Information Form for the year ended August 31, 2021. : Limited operating history, negative operating cash flow and net loss, food industry including current industry inflation levels, impact of COVID-19 pandemic and emergence of COVID variants, quality control and health concerns, regulatory compliance , industry regulations, public safety issues, product recalls, Goodfood’s reputational damage, transportation disruptions, perishable food storage and delivery, product liability, union activity, consolidation trends, intellectual property ownership and protection, our evolving industry, our reliance on management and our inability to attract or retain key employees may affect our ability to operate effectively and achieve our financial goals. obstacles to achieving growth goals, changing consumer trends, competition, raw material availability and quality, environmental and employee health and safety regulations, the inability of the company’s IT infrastructure to support the company’s business requirements; Inability to effectively respond to changes in online security breaches, disruptions, denial of service attacks, reliance on data centers, compliance with open source licenses, future capital requirements, operational risk and insurance coverage, managing growth, limited number of products, conflicts of interest, lawsuits, catastrophic events, associated risks payments from customers or third parties, being accused of infringing the intellectual property rights of others, and climate change and environmental risks . This is not an exhaustive list of risks that may affect our forward-looking statements. Other risks not currently known to us or that we believe to be immaterial could cause actual results to differ materially from those expressed in the forward-looking statements. The forward-looking information contained herein is based on what we believe to be reasonable assumptions, but actual results could differ from the forward-looking information and readers should not rely on this information. Be careful not to over-rely on Certain assumptions have been made in preparing forward-looking information regarding the availability of capital resources, performance, market conditions and customer demand. Furthermore, the information and expectations set forth herein are subject to developments regarding the duration and severity of the COVID-19 pandemic, the emergence of COVID variants, and their impact on product demand, workforce mobility, and supply chain continuity. may change significantly depending on and other factors beyond our control. Accordingly, all forward-looking information contained herein is qualified by the foregoing caution and is subject to the assumption that the results or developments we anticipate will be realized or materially realized. There is no guarantee that it will result in or the effect on our business, financial condition or results of operations; Unless otherwise stated or the context dictates otherwise, the forward-looking information contained herein speaks only as of the date hereof and is not subject to new information, future events or otherwise. As a result, we make no commitment to update or revise such forward-looking information. except as required by applicable law.

⁽¹⁾ See non-IFRS financial measures in our latest MD&A.

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