Mr. Jeff MacDonald reports

ECOSYNTHETIX REPORTS 2023 FIRST QUARTER RESULTS

EcoSynthetix Inc. has released its financial and operational results for the three months ended March 31, 2023. Financial references are in U.S. dollars unless otherwise indicated.

Highlights (comparison periods in each case are with the three months ended March 31, 2022):

• Recorded net sales of $3.1-million in first quarter 2023, down 28 per cent, due to lower volumes of 37 per cent compared with the prior period, partially offset by a higher average selling price which impacted sales by 9 per cent;
• Gross profit of $600,000 in Q1 2023, down 43 per cent, due to lower volumes and higher manufacturing costs, including $200,000 higher depreciation, partially offset by a higher average selling price;
• Recorded an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $600,000 in Q1 2023, an increase in loss of $400,000 from the prior period;
• Purchased and cancelled 68,400 common shares in Q1 2023 under the normal course issuer bid for total consideration of $200,000;
• Maintained a strong balance sheet with cash and term deposits of $35.6-million as at March 31, 2023;
• A particleboard manufacturer, that is backward integrated into a leading international retailer, identified the use of bio-based glues as a key enabler to achieving its climate targets and committed to a meaningful step in its implementation of DuraBind resin;
• Announced improvements to the company's asset bases in North America and Europe, including internalizing 30 million pounds of annualized nameplate manufacturing capacity at its centre of innovation in Burlington, Ont.;
• Received the platinum designation for the second consecutive year from EcoVadis, a globally recognized agency for business sustainability ratings of supply chains, by scoring within the top 1 per cent of the 90,000 companies rated.

"Despite disappointing results and challenging market conditions to date this year, our pipeline of prospects continues to expand, particularly in wood composites and our wet end strength aids," said Jeff MacDonald, chief executive officer of EcoSynthetix. "These opportunities and the size of the markets they serve continue to give us confidence that we are working with the right accounts to achieve our midterm goal of $100-million in revenue. During the quarter, a key strategic account that manufactures wood composites and is backward integrated into a leading retailer committed to move to bio-based glues in their wood panel production as one of the key drivers to address their carbon footprint goals published in their [fiscal year] 2022 climate report. This initiative included a meaningful step in its implementation of our DuraBind resin. Expanding with this account and other wood composites manufacturers in their supply chain is a key growth driver. While macro challenges persist with a soft start to [second quarter], our revenue diversification strategy with a greater focus on wood composites, personal care and strength aids for tissue and paperboard is the right approach to achieving our growth plans."

Notice of conference call

EcoSynthetix will host a conference call Thursday, May 4, 2023, at 8:30 a.m. ET, to discuss its financial results. Mr. MacDonald, and Robert Haire, chief financial officer, will co-chair the call. All interested parties can instantly join the call by phone by registering and connecting into the conference call automatically or by the conventional method by dialling 416-764-8659 or 888-664-6392 with the conference identification of 18511532. Please dial in 15 minutes prior to the call to secure a line. A live audio webcast of the conference call will also be available at the company's website. The presentation will be accompanied by slides, which will be available by the webcast link and the company's website. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.

About EcoSynthetix Inc.

EcoSynthetix offers a range of sustainable engineered biopolymers that allow customers to reduce their use of harmful materials, such as formaldehyde and styrene-based chemicals. The company's flagship products, DuraBind, Surflock, Bioform and EcoSphere, are used to manufacture wood composites, personal care, paper, tissue and packaging products, and enable performance improvements, economic benefits and carbon footprint reduction. The company is publicly traded on the Toronto Stock Exchange (ECO).

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