Mr. Steve Bromley reports

ORGANTO PROVIDES PRELIMINARY 2023 FIRST QUARTER SALES AND GROSS PROFIT ESTIMATES

Organto Foods Inc. today provided preliminary unaudited sales and gross profit estimates for the quarter ended March 31, 2023, and reconfirmed fiscal 2023 financial and operational targets.

Organto had record preliminary first quarter 2023 sales and strong gross profit improvement versus 2022. These results have been driven by a combination of new business growth initiatives, the acquisition of the New Fruit Group (see Jan. 3, 2023, news release), and actions taken to address the challenging macroeconomic conditions which impacted operations in fiscal 2022.

Preliminary fiscal 2023 financial and operational outlook

Record first quarter sales in the range of $7.4-million to $7.5-million, an increase in the range of 5 per cent to 7 per cent versus the same quarter in the prior year. These first quarter sales represent the largest quarterly sales in the history of the company, and the 15th consecutive quarter of currency adjusted sales versus the same quarter in the prior year.

Adjusted gross profit as a percentage of sales for the first quarter of approximately 9.4 per cent to 9.6 per cent, a significant improvement versus fourth quarter fiscal 2022 adjusted gross profit of 6.0 per cent and fiscal 2022 adjusted gross profit of 7.1 per cent. The improvement in adjusted gross profit is the byproduct of actions taken by the company to address challenges experienced throughout fiscal 2022.

Fiscal 2023 financial estimates reconfirmed

• Expected Canadian-sales-dollar growth of approximately 135 per cent versus fiscal 2022;
• Expected Canadian-gross-profit-dollar growth of approximately 200 per cent versus fiscal 2022.
• Expected to be EBITDA (earnings before interest, taxes, depreciation and amortization) positive during the back half of 2023.

"We are pleased with our progress in the first quarter as we have realized the largest quarterly sales in our history, and, more importantly, started to realize the benefits of initiatives we continue to implement to improve our gross profit profile after the challenges we faced in 2022 caused by a number of factors including a rapid rise in inflation and the Russia-Ukraine war. While we still have a lot of work to do, we believe we have good momentum in the business as we exit the first quarter and are looking forward to continued growth through the balance of the year," commented Steve Bromley, chair and co-chief executive officer of Organto Foods and Rients van der Wal, co-CEO of Organto Foods and CEO of Organto Europe BV.

Organto also reported that the commercial and financial integration of the New Fruit Group, acquired in January, 2023, is continuing and the company expects to achieve targeted run rate revenues in the second half of 2023. The acquisition has significantly expanded the company's product portfolio, customer base and distribution channels, further enhancing its position as a leading provider of both organic and non-GMO (genetically modified organism) value-added fruits and vegetables.

"The integration of the New Fruit Group acquisition has been a key focus for us, and we are pleased with our progress so far. We remain confident that this acquisition will help us achieve our long-term growth objectives and enhance our business profile," commented Rients van der Wal, co-CEO of Organto Foods and CEO of Organto Europe BV. "We are also keenly focused on continuing to expand our branded products capabilities and distribution, further building out our digital platform technologies, on-boarding new customers and suppliers, and leveraging our platform and supply chains to improve our operating results."

Investor update

The company also announced that it will host an investor update on Thursday, May 11, at 1 p.m. ET. The event will provide an opportunity for investors and stakeholders to hear directly from Organto's management team about the company's recent developments, financial results and growth strategy. Dial- in details herein.

Topic:  Organto virtual town hall

Time:  May 11, 2023, 1 p.m. Eastern Time (United States and Canada)

About Organto Foods Inc.

Organto is an integrated provider of branded, private-label and distributed organic and non-GMO (genetically modified organism) fruit and vegetable products using a strategic asset-light business model to serve a growing socially responsible and health-conscious consumer around the globe. Organto's business model is rooted in its commitment to sustainable business practices focused on environmental responsibility and a commitment to the communities where it operates, its people and its shareholders.

We seek Safe Harbor.