Smart for Life announces the first quarter of 2020
Company achieves 679% year-over-year revenue growth as part of a successful acquisition strategy
Gross profit margin increased to 34.1% compared to 3.7% for the same period last year
MIAMI, May 16, 2022 (GLOBE NEWSWIRE) — Smart for Life, Inc. (SMFL) (“Smart for Life” or the “Company”)a global leader in the development, marketing and manufacturing of nutritional and related products, today provided a business update and released financial results for the first quarter ended March 31, 2022.
“I am pleased to report that we achieved significant revenue growth through both organic growth and the successful execution of our acquisition strategy, to $4.5 million this quarter,” said Darren Minton, Managing Director of Smart for Life. “By acquiring three companies, including Doctors Scientific Organica (DSO), Nexus Offers (Nexus) and GSP Nutrition (GSP) since the same period last year, we have been able to significantly expand our product lines, production capabilities, distribution and marketing capabilities.”
During the first quarter ended March 31, 2022, Smart for Life delivered 679% year-over-year revenue growth to $4.5 million. Additionally, gross profit increased more than seventy-fold to $1.5 million for the first quarter ended March 31, 2022, compared to just $21,000 for the first quarter ended March 31, 2021. , the company’s gross margin increased to 34.1% from 3.7% for the same quarter last year. The increase in gross profit and gross margin reflects both improved product mix and lower cost of materials due to increased purchasing power.
“It is important to note that our operating expenses included one-time non-cash interest expense of $11.2 million related to shares issued at the time of the IPO, as well as other non-cash expenses of $1.2 million. dollars,” noted Mr. Minton. “We also incurred significant costs of $0.7 million this quarter related to the IPO and public company costs that we did not have last year. Therefore, we believe that the next quarters will better reflect the true operational synergies of our business model. We believe we will begin to see improvements in the coming quarters as we consolidate operations, eliminate duplicate costs and grow our various business units. Overall, we believe we have built a highly scalable business model and expect to experience improved operational efficiencies as we leverage our fixed costs, which should translate into significant profitability as we continue. to increase our income.
“Through accretive acquisitions, our goal is to achieve $100 million in revenue over the next 24 months,” commented AJ Cervantes, Jr., Executive Chairman of Smart for Life. “To that end, we have announced a definitive agreement to acquire Ceautamed Worldwide, a leading vitamin and supplement company that markets and distributes a wide variety of nutritional products, including antioxidant-rich supplements, plant-based proteins, alkalizing nutrients and products designed for weight management. . Their Greens First brand is widely recognized as one of the best true green powders on the market. Ceautamed fits perfectly into our growing portfolio of brands, and our strategy is to accelerate the growth of Ceautamed by leveraging our distribution relationships and digital marketing platform, in addition to migrating their manufacturing to our factory in state-of-the-art, proprietary manufacturing that results in immediate cost savings.
Mr. Minton continued, “We are also advancing projects related to GSP Nutrition’s Sports Illustrated Nutrition™ brand for certain dietary and nutritional supplements. Our product line already includes a growing list of high-quality products, such as whey protein powder, joint health, pre- and post-workout mixes, omega-3 supplements, and more. We believe the tremendous brand recognition associated with Sports Illustrated will allow us to expand rapidly into new retail and online marketing channels. To that end, we look forward to providing further updates as developments unfold.
“During the quarter, we announced that we have expanded our sales channels by launching the DSO brand on Amazon Singapore. Smart for Life has been selected by Amazon to introduce several of its key SKUs to Amazon’s storefront in Singapore. This launch represents an important new market for Smart for Life and enhances our existing international sales in Canada, Mexico and overseas. We made tremendous progress in the first quarter growing our business through acquisitions and are well positioned to achieve a number of key milestones that we believe will generate significant shareholder value,” concluded Mr Minton.
Revenue increased to $4.5 million in Q1 2022 from $0.6 million in Q1 2021, an increase of $3.9 million or 679%. The increase is mainly due to the acquisitions of DSO, Nexus and GSP which were completed in 2021. Gross profit increased to $1.5 million in the first quarter of 2022 from $0.02 million in the same period l last year, an increase of $1.5 million due to acquisitions completed in 2021. Net loss attributable to common shareholders was $16.7 million in Q1 2022, compared to $0.8 million in Q1 2021, primarily due to increased general and administrative expenses of $4.4 million and total other expenses of $13.3 million.
The Company reported Adjusted EBITDA of ($2.8 million) in the first quarter of 2022, compared to Adjusted EBITDA of ($0.6 million) in the first quarter of 2021. The Company defines EBITDA as earnings before interest, taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA before other expenses and day 1 loss and changes in fair value of derivative liabilities. EBITDA and Adjusted EBITDA are not performance measures calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and should not be considered in isolation or as a substitute for earnings as an indicator of the operating performance or cash flow from operating activities as a measure of liquidity. The Company believes that the presentation of EBITDA and Adjusted EBITDA is relevant and useful in enhancing readers’ ability to understand the Company’s operating performance. The Company’s management uses EBITDA and Adjusted EBITDA as a means of measuring performance. The Company’s EBITDA and Adjusted EBITDA measures may not be comparable to similarly titled measures presented by other companies. The table below reconciles EBITDA and Adjusted EBITDA, two non-GAAP measures, with GAAP net loss figures for the three months ended March 31, 2022 and 2021.
|Q1 2022||Q1 2021|
|Depreciation and amortization||423,010||54,008|
|Other expenses||506 133||7,797|
|Day 1 loss and changes in fair value of derivative liability||38,997||–|
About Smart for Life, Inc.
Smart for Life, Inc. (SMFL) is engaged in the development, marketing, manufacturing, acquisition, operation and sale of a wide range of nutritional and related products with an emphasis on health and The well-being. Structured as a global holding company, the company executes a buy-and-build strategy with serial accretive acquisitions creating a vertically integrated company with the goal of bringing together companies generating a minimum of $300 million in revenue over the next thirty-six months. To drive growth and profits, Smart for Life develops proprietary products and acquires other profitable companies, encompassing brands, manufacturing and distribution channels. The Company currently operates four subsidiaries, including Doctors Scientific Organica, Nexus Offers, Bonne Santé Natural Manufacturing and GSP Nutrition. For more information about Smart for Life, please visit: www.smartforlifecorp.com.
A video regarding the company’s manufacturing facility at Bonne Santé Natural Manufacturing is available at: www.bonnesantemanufacturing.com/video.
Investor materials and a fact sheet with additional information about Smart for Life are available at: www.smartforlifecorp.com/investor-center.
This press release may contain information about our views on future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on management’s beliefs, assumptions and expectations regarding the future economic performance of Smart for Life, taking into account information currently available to it. These statements are not statements of historical fact. Although Smart for Life believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, it cannot guarantee that its expectations will be achieved. Smart for Life assumes no obligation to update any statements contained herein (including forward-looking statements), except as required by law. There can be no assurance that Smart for Life will be successful in acquiring its acquisition targets. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, which could cause the actual results, performance or financial condition of Smart for Life to be materially different from expectations of future results, performance or financial condition. Actual results may differ materially from the expectations discussed in the forward-looking statements. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks set forth in the “Risk Factors” included in our documents. filed with the Securities and Exchange Commission.
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