Goodfood Market Corp.

Thank you for standing by. Welcome to the Good Food Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. As a courtesy to others, we ask that each participant limit themselves to one question. Instructions will be provided at that time for you to queue up for questions. Please note that questions will be taken from financial analysts only. If anyone has any difficulties hearing the conference, please press star followed by the zero for operator assistance at any time. I would like to remind everyone this conference call is being recorded today, July 7, 2021, at 8 a.m. Eastern Time. Furthermore, I would like to remind you that today's presentation may contain forward-looking statements about Good Foods' current and future plans, expectations, and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. As such, please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I would now like to turn the meeting over to your host today for today's call, Jonathan Ferrari, Goodfood's Chief Executive Officer. Mr. Ferrari, you may proceed.

Thank you. Bonjour à tous et bienvenue à l'appel conférence de marché Goodfood. Good morning, everyone, and welcome to this call for Good Food Market Corp.

to present our financial results for the third quarter of fiscal 2021, ended this May 31st. I'm pleased to be joined on the call today by Neil Kagi, Good Foods President and Chief Operating Officer, and Jonathan Reuter, Chief Financial Officer. Our press release reporting our third quarter results was published earlier this morning. It can be found on our website at makegoodfood.ca and on CDAR. Please be aware that we will refer to certain metrics and non-IFRS measures. Where possible, these measures are identified and reconciled to the most comparable IFRS measures in our MD&A. Finally, let me remind you that all figures expressed on today's call are in Canadian dollars unless otherwise stated. Turning to slide three, which outlines our key financial highlights for the third quarter. Our results this quarter demonstrate the continued strength of Goodfood's value proposition to our customers. The clear benefits, convenience, and differentiation of our ready-to-cook products, combined with our growing grocery selection and same-day delivery capabilities, drove strong basket sizes and order rates, translating in record revenues. Our gross profit also hit a new record as basket sizes and operational effectiveness led to fixed cost leverage and lower credits and incentives. Our last mile delivery optimization also contributed to the solid results. This strong operational performance positions us well to continue to invest in additional initiatives to attract and retain customers. Adjusted EBITDA, which was positive for the quarter, was and will continue to be impacted As we have previously communicated, by the significant strategic investments we are making in people, technology and new infrastructure to support our next stage of growth. It is important to note that our investments in footprint and new technologies impact both our capital and operating expenses. Finally, our positive cash flows from operating activities, coupled with a strong balance sheet, continues to provide us with significant financial flexibility. Overall, our financial performance this quarter has been strong, driven by our strategy, solid execution, and the accelerated penetration of online grocery and meal solutions shopping. Generating year-over-year growth of 24% and 51% in revenues and gross profit, respectively, in the context of a comparable quarter that was significantly positively impacted by the pandemic last year, is an achievement we are all very proud of. I will now turn to slide four to discuss Goodfood's evolution. Since going public in 2017, Goodfood has evolved significantly. We gained substantial scale with revenues growing from $20 million in 2017 to over $380 million today. Our product offering has and continues to evolve to better serve our customers. Goodfood has grown from a ready-to-cook meal kit company with a handful of recipes, to now building out Canada's leading on-demand grocery delivery network anchored by a 30-recipe deep ready-to-cook offering that changes weekly, a growing grocery product selection, and an expanding purpose-built footprint with currently approximately 800,000 square feet spread across nine facilities from coast to coast. This evolution has enabled us to capture a larger share of customers' food and grocery spend and penetrate larger addressable markets. Moving to slide five, as we continue our evolution, our strong execution has allowed us to make significant progress on three key pillars required to build Canada's leading on-demand online grocery network and ultimately drive our next phase of growth. First, our selection of grocery products has grown tremendously. We have added nearly 250 products in the past three months alone and are close to reaching the thousandth SKU milestone, well ahead of our initial goal to do so by the end of calendar 2021. As we continue to build the right selection for our customers, we plan on adding more produce and as well as complement our existing good food offering with select national brands for customers to complete even more grocery baskets with good food. Second, delivery speed is a key requirement of shoppers to adopt online grocery delivery. To increase delivery speed and optimize cost structure, we are in the process of building out our distributed network of centralized manufacturing and distribution infrastructure, which will feed our highly automated and tech enabled footprint of local fulfillment centers that will be close to customers. As such, In addition to expanding same-day delivery in Montreal and Toronto, during the quarter, we continued to make progress in building out this distributed network, which will provide speedier deliveries while further lowering our cost to serve. Specifically, during the quarter, in addition to our announced new automated local fulfillment center in Ottawa, we added a distribution center in Montreal that will ultimately only service Quebec and Eastern Ontario. We expect both facilities to be operational in the first half of fiscal 22. In addition, subsequent to the quarter end, we signed leases in Toronto and Montreal, the former a manufacturing site that will allow us to redistribute closer to our customer activities currently taking place at our main Hickmore facility and the latter further reducing our same day delivery window in the Montreal region. Our footprint developments will allow us to further enhance delivery speeds in the key markets of Montreal and Toronto, but also launch same-day delivery in Vancouver, Ottawa, and Quebec City in the near term. Third, we are investing significantly in our differentiated technology platform. Our internal technology team has grown from 15 people less than two years ago to 75 people today. This investment has enabled us to assemble and develop the technology infrastructure to begin automating our grocery fulfillment, develop a frictionless platform that will be open to non-subscribers in short order, develop an exciting and very well rated mobile application, and ultimately to orchestrate orders automatically. In sum, we believe that as we bring these three pillars together, Coupled with continuing to provide Canadians with their meal solutions, we are uniquely positioned to address the growing online segment of Canada's $130 billion grocery market. Before I turn the call over to Jonathan Reuter, I would like to welcome him to our executive team. Along with Greg Christopher, who joined as EVP of operations, we've added experience and depth to our executive teams and are thrilled with contributions made so far with much more to come. On that note, over to Jonathan Reuter to review our financial performance in detail.