Mr. David Hanna reports

GFI ANNOUNCES THIRD QUARTER FY2024 RESULTS

Global Food and Ingredients Ltd. has released third quarter financial results for the three and nine months ended Dec. 31, 2023.

"The third quarter saw break-even results, despite a higher interest rate environment and slower first half market conditions. The results in the quarter were backed by a return to a strong sales level, following the harvest in August, coupled with improvement in gross profit as a result of GFI's continued efforts in prioritizing higher-margin generating business lines, specifically split peas, and diligent efforts to manage the company's open sales order book," commented David Hanna, Global Food's chief executive officer. "Our efforts to continue to prioritize higher-margin categories for sales along with prudently managing our overhead and non-revenue-generating expenses proved successful in the quarter. GFI is committed to the continued growth of the business through both organic and inorganic market opportunities."

Third quarter results

Highlights -- three months ended Dec. 31, 2023:

• The company recorded revenue of $36.9-million in the three months ended Dec. 31, 2023, down 6.5 per cent from the prior-year quarter predominantly due to $8.3-million lower pea protein input sales which were offset with higher sales in the current period from split peas, pet food ingredients and other commodities.
• Gross profit increased 20.4 per cent to $2.8-million in the three months ended Dec. 31, 2023, representing 7.5 per cent of revenue in comparison with 5.8 per cent in the prior period.
• The period included a record quarter of adjusted gross profit, which increased 59.4 per cent over the previous period to $3.9-million, backed by the company's shift to higher-margin product lines, specifically plant-based pet food ingredients, split peas and downstream retail packaged products, which collectively represented 25.8 per cent of total revenue, an increase of 7.9 per cent over the prior-year comparable period.
• Profit before income tax was $103,000, a 155-per-cent improvement over the comparable period, as a result of the strong gross profit levels and lower general and administrative expense, offset by increases in other expenses (interest and foreign exchange).

Highlights -- nine months ended Dec. 31, 2023:

• The company recorded revenue of $76.1-million in the nine months ended Dec. 31, 2023, a decline of 18.5 per cent over the prior-year period, predominantly due to slower market conditions in the first half of the year.
• Sales backed by the company's shift to higher-margin product lines, specifically plant-based pet food ingredients, split peas and downstream retail packaged products, represented 33.4 per cent of total revenue during the nine months ended Dec. 31, 2023, an increase of 9.1 per cent over the prior-year period.
• Loss before income tax was $4.9-million, an improvement of 38.9 per cent over the prior comparable period, predominantly due to improved company expense management and a significant reduction in one-time expenses not incurred in the current period.

Other highlights and business updates after Dec. 31, 2023:

• In February. 2024, the company closed the previous announced minority investment into its pet food division and recapitalization of the pet food assets with a shareholder of the company. Collectively the transactions unlocked an equity injection of $3.45-million and a new term facility of up to $10-million. The proceeds from the transaction were used to repay an outstanding shareholder loan, refinance a portion of the existing bank indebtedness, and for continued business growth and working capital purposes.
• Concurrent with the closing of the pet food transaction, the company entered into a new asset-based lending facility of up to $20-million. The proceeds from the facility were used to refinance the remaining balance on the existing bank indebtedness. The new facility provides more flexibility to the company in accessing working capital to support future growth opportunities.
• The company also entered into a promissory note in the amount of $500,000 with a shareholder of the company. The proceeds will be used to support future growth opportunities.

The unaudited condensed consolidated interim financial statements for the three and nine months ended Dec. 31, 2023, and related management's discussion and analysis (MD&A) for the three and nine months ended Dec. 31, 2023, are available under the company's profile on SEDAR+.

About Global Food and Ingredients Ltd.

Global Food is a 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. The company'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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