GreenSpace Brands Inc. Reports Record Fourth Quarter Net Revenue Growth of 206% and its First Positive Adjusted EBITDA Quarter

TORONTO, June 22, 2016 /CNW/ - GreenSpace Brands Inc. ("GreenSpace" or "the Company") (TSXV: JTR) today reported its fourth quarter financial results for the three months and year ended March 31, 2016.

Consolidated Performance Summary

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1 – These are not measures of financial performance under IFRS.  These measures are not necessarily comparable
to similarly titled measures used by other companies and should not be construed as an alternative to net income or
cash flow from operating activities as determined in accordance with IFRS.  See the discussion included in the
Company's annual MD&A available on on non-IFRS disclosure for further details, including reasons
for presentation of these financial measures.


Key Highlights

  • Gross Revenue in Q4 2016 grew by 283% over Q4 2015, to $5.8 million
  • Adjusted gross margins, removing one-time, non-recurring listing fees, grew from 19.8% in Q4 2015 to 25.6% in Q4 2016
  • Adjusted EBITDA turned positive for the first time as a public company, with only a 5 week contribution from the Central Roast acquisition.

The Company continued to set record gross revenue results through the fourth quarter of fiscal 2016, showing a 283% increase over the fourth quarter of prior year and a 71% quarterly increase when compared to the most recent quarter-ended December 31, 2015. The quarterly revenue increase was due to the continued strong internal growth of GreenSpace legacy brands, a full quarter of Love Child revenue and the additional revenue from only five weeks of the Central Roast acquisition. As expected, the Central Roast acquisition effectively doubled the monthly revenue run rate of the consolidated Love Child and the legacy GreenSpace business. On a pro-forma basis, if the Central Roast acquisition were completed on January 1, 2016, the Company's pro-forma net revenue for the fourth quarter would have totaled $7.3 million, excluding the one-time deductions for listing fees, which would have represented a 410% increase over the fourth quarter of prior year. 

Adjusted gross profit margins, excluding the impact of one-time listing fees, in the fourth quarter and for the year ended March 31, 2016 improved considerably when compared to similar periods in the prior year. The profit margin improvements were primarily the result of the Central Roast and Love Child acquisitions, which traditionally earned higher margins compared to the legacy brands. As well, the Company gained the expected ordering consistency with its Rolling Meadow dairy product lines, which helped to significantly reduce the amount of inventory write-offs in the 4th Quarter.  Listing fees, incurred by the Company, were significantly higher than in previous periods as a result of significant distribution wins in the quarter for both the Love Child and Central Roast brands. These listing fee deductions were one-time costs associated with these new distribution wins and consequently have been normalized out of revenue to arrive at adjusted gross profit.

As expected, with the acquisitions of Love Child and Central Roast, the Company has achieved the required revenue scale to cover its consolidated SG&A expenses and become profitable. The Company has started to implement a number of cost saving initiatives whose benefits were only partially realized in this quarter, with additional benefits expected in upcoming quarters. During the 4th quarter, the Company incurred significant professional service costs as a result of completing the acquisition of Central Roast and the accompanying prospectus. The one-time retailer listing fees deducted from revenue in the quarter of $979,130, the incremental professional service costs associated with the Central Roast acquisition of $659,070, and restructuring expenses of $60,000, are all expected to be non-recurring under normal operations and consequently they have been added back by the Company in calculating a positive Adjusted EBITDA margin.


Management continues to believe that there are a number of fundamental trends occurring within both the global and North American food market, which will inevitably drive demand for the Company's brands and products in future periods. As reported by the 2014 NPN Journal Industry Report, organic food sales are growing at an annual rate of 14% as compared to conventional food sales growing at an annual rate less than 2%. Presently, organic food sales make up only 6% of consumer food purchases but with these varying growth rates, it is expected that organic and natural sales take a much larger portion of consumer food purchases over the next five years. Considering this the 2014 NPN Journal Industry Report expects that the Global organic food market will reach $210 billion by the year 2020 and over the next five years that market will have a cumulative average growth rate of 15.7%.

With these trends in mind, Management continues to be optimistic that this anticipated growth in the organic and natural food market will continue to drive demand for the Company's developed products and provides a lot of opportunity for further expansion into new product offerings within acquired and existing brands. In particular, Management believes it is one of very few companies positioned to capitalize on the emerging grass-fed trend in Canada. Through its dairy brand, Rolling Meadow, and the Life Choices brand, the Company has carved out a niche in the Canadian grass-fed market, which it hopes to exploit with continued product and brand launches. 

The Company continues to intend to grow through a two pronged growth strategy. Firstly, the Company expects to have a strong and on-going internal brand and product development program. There are currently a number of new product offerings in various stages of development that the Company expects to release to the market by the middle of the up-coming fiscal year. Secondly, the Company expects to grow through acquisition by making strategic investments in strong, simple ingredient businesses. Both the Love Child and Central Roast acquisitions completed in the previous fiscal year are great examples of the type of businesses that the Company is looking to acquire. Based on normalized Q4 results, the Company has an annualized gross revenue run-rate of approximately $30 million and has turned the corner to become an EBITDA positive business, after adjusting for one-time, non-recurring costs. With this larger revenue base management expects to leverage its strong customer relationships, utilize its distribution networks and realize on a number of synergistic cost savings through its up-coming fiscal year to continue to generate positive EBITDA and positive operating cash-flows. Management continues to feel it is in a strong position to be one of the principle consolidators in the North American natural and organic food market, due to its industry position and accumulated reputational goodwill.

About GreenSpace Brands Inc.

GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across Canada. GreenSpace owns Rolling Meadow Dairy, Canada's first grass fed dairy product line that has built upon the founding values of Greenspace's original brand, Life Choices. Life Choices features premium convenience meat products made with grass fed and pasture raised meats without the use of added hormones and antibiotics. GreenSpace owns Holistic Choice, a premium natural pet food line and Nudge, a line of family favorite foods made better. GreenSpace also owns Love Child (Brands) Inc., a producer of 100% organic food for infants and toddlers made with the purest, natural and most nutritionally-rich ingredients and recently acquired Central Roast Inc., a clean snacking brand that has been one of the leading Natural food brands in Canada over the last several years. All brands, except Central Roast, are wholly owned and retail in a variety of natural and mass retail grocery locations across Canada.

For more information, visit GreenSpace's filings are also available at

Forward-Looking Statements

Certain statements in this press release constitute forward-looking statements within the meaning of applicable securities laws.  Forward-looking statements include, but are not limited to, statements made under the heading "Outlook" and other statements concerning the Company's 2016 objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events.  Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.  Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements and there can be no assurance that actual results will be consistent with these forward-looking statements.  Factors that could cause such differences include the cyclical nature of the construction and agriculture industries, changes in general economic conditions and interest rates, adverse weather, cost and availability of materials used to manufacture the Company's products, competitive developments, legislative and government policy changes, as well as other risk factors included in the Company's Annual Information Form dated November 9, 2015 under the heading "Risks and Uncertainties Related to the Business" and as described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions.  This list is not exhaustive of the factors that may impact the Company's forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements.  As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements or levels of dividends and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward looking statements.  The factors underlying current expectations are dynamic and subject to change.  Certain statements included in this press release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for all purposes.  All forward-looking statements in this press release are qualified by these cautionary statements.  The forward-looking statements contained herein are made as of the date of this press release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE GreenSpace Brands Inc.

Image with caption: "GreenSpace Brands Inc. (CNW Group/GreenSpace Brands Inc.)". Image available at:

For further information: Matthew von Teichman, President & Chief Executive Officer, GreenSpace Brands Inc., Tel: (416) 934-5034 Ext. 200; Mathew Walsh, Chief Financial Officer, GreenSpace Brands Inc., Tel: (416) 934-5034 Ext. 201


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