A conference call will be held on Monday, August 14 at 10:00 AM ET
VANCOUVER, British Columbia, August 14, 2023 (Globe Newswire) — Elze Nutrition Holdings Co., Ltd. (baby) (baby beef) (0YL.F) (“other than that” or “company”) Plant-Based Baby, Toddler and Child Nutrition companytoday reported its second quarter 2023 financial results for the period ended June 30, 2023. Financial statements and MD&A are available from SEDAR’s company profile.
Total revenue in Q2 2023 was $2.4 million, up 3% compared to $2.3 million in Q2 2022. Revenue in the first half of 2023 increased by 35% year-over-year compared to the first half of 2022.
Sales to brick-and-mortar retailers in the US and Canada in Q2 2023 increased 157% year-over-year compared to Q2 2022. As of Q2 2023, Else products are listed in nearly 13,000 of his stores in North America, compared to 3,000 in Q2 2022. Management expects to reach over 15,000 listing stores and over 40,000 distribution locations by the end of 2023.
Total e-commerce sales in Q2 2023 decreased 42% year over year compared to Q2 2022. The decline in sales was a result of our decision in the last three quarters to prioritize brick-and-mortar retailers and divert merchandise from e-commerce channels. The company is rebuilding sales velocities on Amazon and its e-commerce store, and expects those channels to return to growth in the second half of 2023. E-commerce sales increased by 26% in Q2 2023 compared to Q1 2023.
As of June 30, 2023, the cash balance was C$4.6 million, including restricted cash and short-term bank deposits. On July 10, Else received her CAD $3 million (US$2.5 million) follow-on investment from her Lind Partners. The total potential investment from Lind Partners is up to C$19 million (US$13 million), of which we have withdrawn her US$8.1 million.
Recent business highlights
Over 7,000 CVS stores, over 1,100 Walmart stores, over 900 Shoppers Drug Marts across 11 states and territories, over 440 Rob Rose stores, over 600 Sovais stores, 161 Giant Food stores, and 110 Shochu stores. Expanded distribution to Nax supermarkets.
Else Kids Vanilla, Else Kids Cocoa, Else Toddler Organic & Else Toddler Omega have been approved for U.S. Federal Insurance claims under the Centers for Medicare and Medicaid Services, opening new avenues for distribution and Else plant-based nutritional products. improved availability.
Other infant and child nutrition products are approved by the Oklahoma Women, Infants and Children (WIC) Program. This approval follows the company’s recent achievement of product approvals under Arizona and U.S. federal claims and is a continuation of its strategic vision to increase the availability of plant-based nutritional products throughout the United States. It reflects good execution.
Expanded production capacity with the addition of a second manufacturing facility in the United States and the launch of the first manufacturing facility in Europe. The additional equipment will nearly triple our production capacity and greatly reduce the risk of future stock-outs. The company expects the new, larger manufacturing capacity to reduce manufacturing costs from the second half of 2023.
In the United States and Canada, we plan to launch a ready-to-drink product for children in the second half of 2023 and a ready-to-drink product for adults in 2024.
The company plans to enter Western Europe in the second half of 2023. The first launch will be in the UK through Amazon and natural food distributors, with other European countries to follow.
The company plans to enter Australia in the second half of 2023. The initial launch will be via Amazon, followed by drug and grocery chains.
Received significant Institutional Review Board (IRB) approval of the Infant Growth Study Protocol for the study of Else Infant Formula.
Else Nutrition CEO Hamtar Yitzhak commented: We continue to expand our sales footprint across various regions and channels. Else is now a national brand in North America and is sold at prominent retailers such as Walmart, CVS and Shopper’s Drugs His Mart. By the end of 2023, he expects to reach over 15,000 retail outlets.
Two new manufacturing facilities, located in the United States and Europe, are now operational and have more than tripled capacity to better meet growing customer demand and reduce the risk of future stock-outs. became. In addition, the company’s new facility will make its production more efficient and cost-effective, and the company expects to realize lower production costs in the coming quarters, leading to improved margins.
We are now adjusting our production and inventory levels appropriately, but we still have work to do to ameliorate the impact caused by production issues. After about nine months of diverting inventory from e-commerce channels in favor of brick-and-mortar customers, we are now rebuilding our sales velocities on e-commerce channels, which will drive him further growth in the second half of 2023. It should connect.
Our sales to retailers continue to be strong as our products sell well at retailers and we continue to open more stores. Importantly, the major retailer is expanding the number of his SKUs. As an example, Walmart recently announced the addition of both Toddler Organic and Toddler Omega to its shelves, in addition to the Super Cereal and Kids Shake products already on sale.
Our international expansion is progressing smoothly. Canadian market launches in Q3 2022 exceeded expectations and consumer enthusiasm continues. Additionally, we are excited to be entering Western Europe and Australia in the second half of 2023.
Our growth targets for 2023 and beyond remain unchanged. However, given the challenging capital market environment, we are now placing greater emphasis on expense management, capital efficiency and being a good manager of capital. Over the past few months, we have reduced costs and achieved significant efficiencies in all areas of our business. Total operating expenses decreased by 17% in the first half of 2023 compared to the same period last year, despite a 35% increase in revenue. We believe that our revised cost structure, combined with expected revenue growth and margin expansion, will allow us to reach break-even cash flow in the second half of 2024. “
As part of the pathway to bring infant formulas to market under FDA and other agency approval, Els has developed a range of products to demonstrate the safety and nutrient bioavailability of infant formula and its ingredients. In addition, we successfully completed two preclinical safety studies of plant-based infant formulas. The results confirmed adequate growth in a neonatal preclinical model similar to dairy-based infant formulas, and demonstrated the protein efficiency and quality of infant formulas. These are the two critical steps of the three steps to obtaining FDA and other regulatory clearance for your product to market.
In February 2023, the company announced that its Institutional Review Board (Ethics Committee) had approved an infant growth study protocol for testing Els Infant Formula. As a final step before the study begins, the company is currently submitting preclinical study results and infant development study protocols to the FDA for review, and is in discussions with the FDA on optimizing infant formula prior to initiation of clinical studies. be. In parallel, we continue to look for comparison formulas, but due to the continued shortage of infant formulas in the US and subsequent several recent product recalls, they are not currently available.
CEO and Co-Founder Hamtar Yitzhak will host a conference call on August 14, 2023 at 10:00 a.m. ET to discuss financial results for the quarter.
Interested parties can watch the live webcast by following the link in the Investors section of our website or by following the link below. https://app.webinar.net/nlg7JVlWQPG
After the conference call, a replay will be available on the Investors section of our website. https://app.webinar.net/nlg7JVlWQPG
About Els Nutrition Holdings Co., Ltd.
Else Nutrition Holdings Inc. is an international stage food and nutrition company focused on developing innovative, clean, plant-based food and nutrition products for infants, toddlers, children and adults. Its innovative plant-based, non-soy formula is a clean alternative to dairy-based formulas. Else Nutrition (formerly INDI) won the ‘2017 Best Health and Diet Solutions’ award at the Global Food Innovation Summit in Milan. The holding company, Else Nutrition Holdings Inc., is a public company and is listed on the TSX Venture Exchange under the trading symbol BABY, on the US OTC market QX board under the trading symbol BABYF and on the Frankfurt Exchange under the symbol 0YL. Masu. . Since launching plant-based complete nutrition for toddlers made with whole foods, almonds, buckwheat and tapioca, the brand has received thousands of strong testimonials and reviews from parents and is now available from Sprouts Farmers Market to retailers nationwide. achieved rapid sales growth with the support of . Else was the #1 bestseller in the New Baby and Toddler Milk category on Amazon in Fall 2020. Most recently, he won the ‘Best Dairy Alternative’ award at the World Plant-Based Expo 2021 and was also named a Nexty Award finalist in the Plant-Based Lifestyle category at Expo West 2022.
Investor Information Contact:
Lytham Partners LLC
New York | Phoenix
RBMG – RB Milestone Group LLC
Trevor Brucato, Managing Director
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Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that may constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements are generally identified by words such as “will” or similar expressions. Forward-looking statements in this press release include statements regarding the expected filing date of our financial disclosure documents. Such forward-looking statements are based on current estimates, beliefs and assumptions based on management’s perception of current conditions and expected future developments and other factors that management believes are appropriate under the circumstances. reflects the There is no guarantee that the foregoing will prove correct. The forward-looking statements made in this press release are based on the assumption that, among other things, there will be no interruptions or disruptions to our supply chain due to the effects of COVID-19 and that our manufacturing, brokerage and supply logistics agreements will not be terminated. Expectations are assumed. Actual results may differ from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect only management’s expectations as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.