Mr. David Hanna reports

GFI ANNOUNCES FOURTH QUARTER AND FULL YEAR FISCAL 2023 RESULTS WITH RECORD GROSS PROFIT

Global Food and Ingredients Ltd. has released the fourth quarter results for the three months and fiscal year ended March 31, 2023.

Highlights of fiscal 2023

• Generated strong volume in the last six months of the year to reach sales of $123.3-million, comparable with the previous fiscal year.
• Positioned the company's product mix to higher product margin categories, with the share of such product categories growing to 25.8 per cent and 24.6 per cent of revenue, respectively, during the three and 12 months ended March 31, 2023.
• Gross profit increased by 71.4 per cent to $6.8-million and adjusted gross profit increased by 19.9 per cent to $9.2-million for fiscal 2023 compared with the fiscal year ended March 31, 2022. Adjusted gross profit as a percentage of revenue increased from 6.1 per cent to 7.4 per cent in the period.
• Cash generated from operating activities of $5.0-million in fiscal 2023, an improvement of $17.5-million from $12.5-million of cash used by operating activities in fiscal 2022.
• Commissioned 60,000 MT, state-of-the-art, environmentally-friendly pea splitting facility in Zealandia, Sask., and retail bagging lines in Clayton, N.C., providing further platforms for growth in higher-margin categories.

"GFI is pleased to report its year end results, showing our continued improvement in gross profit margin driven by our shift in focus to higher margin products and services," commented David Hanna, GFI's chief executive officer. "We continue to navigate our business through a tough economic environment to strategically position our focus and extensive capabilities to further value-added, downstream categories, which will drive our growth, long-term success and ultimately shareholder value."

Mr. Hanna continued: "Over the past 12 months, GFI completed our reverse takeover transaction, commissioned our state-of-the-art pea splitting facility, solidified our position as a premium supplier to the pet food industry and opened our first U.S. distribution centre. The hard work and market positioning in these new categories over the last 12 months positions the company to capitalize on significant growth opportunities in the global plant-based food and ingredients markets with new crop in the coming year.

"Our plant-based ingredients segment grew EBITDA over 125 per cent, year over year, backed by our strategic positioning in higher-margin product categories, despite the pea splitter going through its ramp-up phase," added Mr. Hanna. "We have made the strategic decision to focus on growing this division in the upcoming fiscal year, while reducing costs and overhead associated with our consumer-packaged goods division (including the divestiture of Yofiit), and our corporate and public company related costs."

Mr. Hanna concluded, "We are ideally positioned to realize on the tailwinds of our investments over the past two years and focus on expanding our core plant-based ingredients business to unlock value for our shareholders."

Fourth quarter results

Financial highlights -- three months ended March 31, 2023

• The company recorded revenue of $29.9-million in the three months ended March 31, 2023, a 14.2-per-cent decrease in comparison with the prior comparable period, predominantly attributable to one large sale in the previous period and the company's shift to more premium, value-added ingredients.
• Despite the decline in sales, gross profit was $700,000 in the three months ended March 31, 2023, consistent with the prior comparable period, resulting in an increase in gross profit margin to 2.2 per cent in the three months ended March 31, 2023, in comparison with 2.0 per cent in the three months ended March 31, 2022.
• Adjusted gross profit was $1.4-million or 4.9 per cent of revenue in the three months ended March 31, 2023, compared with $1.5-million or 4.4 per cent of revenue in the prior comparable period, predominantly attributable to the company's successful shift to higher-margin, value-added products.

Financial highlights -- fiscal year ended March 31, 2023

• Revenues were $123.3-million, a slight decrease of 0.9 per cent or $1.2-million compared with $124.4-million in the fiscal year ended March 31, 2022. During the period, the company focused its sales efforts on driving higher-margin categories rather than volume.
• Gross profit increased by 71.4 per cent or $2.8-million to $6.8-million in the fiscal year ended March 31, 2023, compared with $4.0 -million in the fiscal year ended March 31, 2022. The company's increased focus on higher-margin product categories drove a 2.3-per-cent increase in gross profit margin to 5.5 per cent of revenue, compared with 3.2 per cent in the prior comparable period.
• Adjusted gross profit was $9.1-million or 7.4 per cent of revenue in the fiscal year ended March 31, 2023, compared with $7.6-million or 6.1 per cent of revenue in the prior comparable period. The $1.5-million increase is attributable the company's shift to higher-margin product categories, including a year of the pet food operations (2023 -- 19.3 per cent of plant-based ingredient sales, 2022 -- 6.3 per cent) and commissioning of the pea splitting line (2023 -- 5.4 per cent of plant-based ingredient sales, 2022 -- 1.8 per cent), despite the increased overhead costs, one-time branding and market development expenses from the consumer products segment, and $2.3-million negative realized foreign exchange gains/losses.

Highlights -- subsequent to the fiscal year ended March 31, 2023

• Completed the installation of the retail packaging capabilities at the company's United States distribution centre in Clayton, N.C. The retail packaging lines are capable of packaging products in pouches and pillow bags, including one-pound, two lb and four lb formats. The capabilities were built within the company's existing distribution centre, providing highly efficient operation with retail packaging and order fulfilment in the same location. The initial focus for the facility will be packaging GFI's branded North Lily and North Lily Organics ingredients into pillow bags and then distributing throughout North America. GFI will also be providing private label bagging services to third party customers at gross margins higher than fiscal 2023 consolidated gross margins.
• Completed the divestiture of the Yofiit business to the founders, resulting in GFI receiving a vendor-takeback note of $2.7-million and cancellation of one million outstanding shares of GFI. Yofiit recorded a loss for the fiscal year ended March 31, 2023, of $2.0-million and incurred a decrease in cash from discontinued operations of $2.6-million. As part of the transaction, the company retained ownership of the working capital associated with the business and entered into an inventory purchase sales agreement with the purchasers to be executed over a six-month period following the closing of the transaction.
• Refocused the company's consumer packaged good (CPG) segment resulting in a significant decrease in overhead and marketing expenses associated with the division. The CPG segment recorded a loss during the fiscal year ended March 31, 2023, of $900,000 and used cash from operations of $2.7-million. The company shifted and increased focus back to its core ingredients and value-added business segment for the immediate future. Management believes that CPG segment still aligns with our long-term farm-to-fork strategy and will focus primarily on consumer products that connect directly to the company's core ingredients procurement and value-added processing capabilities and can be distributed effectively with low marketing costs.

The audited financial statements for the fiscal year ended March 31, 2023, and related management's discussion and analysis (MD&A) for the three and 12 months ended March 31, 2023, are available under the company's profile at SEDAR+.

About Global Food and Ingredients Ltd.

Global Food is a fast-growing Canadian plant-based food and ingredients company, connecting the local farm to the global supply chain for peas, beans, lentils, chickpeas and other high-protein specialty crops. Global Food's vision is to become a vertically integrated farm-to-fork plant-based company providing traceable, locally sourced, healthy and sustainable food and ingredients. Global Food is organized into four primary business lines: core ingredients, value-added ingredients, plant-based pet food ingredients and downstream products. Headquartered in Toronto, Global Food buys directly from its extensive network of farmers, processes its products locally at its four wholly owned processing facilities in Western Canada and ships to 37 countries across the world.

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