TORONTO , Feb. 2, 2021 /CNW/ - EMERGE Commerce Ltd . (TSXV: ECOM) ("EMERGE" or the "Company"), a leading acquirer and operator of niche e-commerce brands, is pleased to provide the following corporate update based on preliminary results:
- truLOCAL, EMERGE's largest and most recent acquisition, achieved over 117% revenue growth in January 2021 compared to January 2020 , with continued profitability, exceeding management expectations in both revenue and EBITDA (1)
- Shopify-powered brand, JustGolfStuff.ca, achieved gross merchandise sales ("GMS") (1) growth of over 515% in January 2021 compared to January 2020 , surpassing 2020 holiday shopping season levels
- Management expects the overall business to achieve triple digit revenue growth in Q1 2021 compared to Q1 2020
- Management expects the majority of revenues to be subscription-based in 2021
- Additional acquisition targets are being advanced in the grocery and golf verticals, among other additional niche e-commerce verticals, with e-commerce pipeline of target opportunities exceeding $35 million in combined EBITDA (1)
(1) Non-GAAP Measure. See the Non-GAAP Measures section of this news release.
"The power of our diversified e-commerce portfolio is in full display. As consumer dollars continue to shift online at an accelerated rate, we are pleased to report that a number of EMERGE e-commerce verticals achieved stellar growth in January 2021 ," commented Ghassan Halazon , the Company's Founder and CEO.
truLOCAL,the market leader in direct-to-consumer, premium meat subscriptions, achieved revenue growth of over 117% in January 2021 , its first full month under EMERGE ownership. EMERGE sees additional opportunities for additional monthly recurring membership revenue, both organically and inorganically, and expects subscriptions to comprise the majority of its revenue in 2021.
Halazon added, "truLOCAL is paving the way for more subscription-based revenue with a focus on health-conscious, digitally savvy customers with high disposable income and a strong preference to support local."
Another EMERGE brand, JustGolfStuff.ca, a golf equipment and apparel e-commerce business, powered by Shopify (TSX: SHOP), achieved over 515% growth in GMS in January 2021 compared to January 2020 .
"Combining Shopify-powered platforms like JustGolfStuff with our industry-leading niche expertise and vendor relationships is proving to be a powerful way to scale e-commerce brands. Shopify has enabled thousands of bootstrapped niche e-commerce brands, and we plan to continue to acquire and scale such consumer sites," continued Halazon.
EMERGE's current acquisition pipeline of companies, ranging from early due diligence to signed letters of intent, exceeds $35 million in combined EBITDA. EMERGE is preparing to aggressively execute on its acquisition strategy in 2021 and beyond.
"In truLOCAL and UnderPar/JustGolfStuff, we have established our initial niche e-commerce verticals in premium meat subscription and golf respectively. We plan to grow both verticals with complementary acquisitions and new market launches, as well as expand into additional verticals over the next 12-18 months," said Halazon.
"It's becoming evident that this new world of online shopping for groceries, golf and everything in-between is here to stay, and likely to accelerate further as consumer spending continues to shift online in record numbers," said EMERGE Chairman, Drew Green .
About EMERGE:
EMERGE is a disciplined, diversified, rapidly growing acquirer and operator of niche e-commerce brands across North America. Our network of e-commerce sites provides our members with access to groceries, golf, nearby escapes, and family offers. Our portfolio houses some of Canada's most coveted online destinations including trulocal.ca , UnderPar.com , WagJag.com , JustGolfStuff.ca , and BeRightBack.ca . EMERGE was named one of the fastest growing companies in Canada by the Startup 50, and the Globe and Mail's 2020 Canada's Top Growing Companies.
To learn more, visit www.emerge-commerce.com .
Cautionary notice
Investors are cautioned that any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Non-GAAP Measures
This press release makes reference to certain non-GAAP measures. These non-GAAP measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of the Company reported under IFRS. Gross Merchandise Sales ("GMS"), Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. GMS, EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.
GMS as defined by EMERGE is the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of discounts and refunds. Management believes GMS provides a useful measure for the dollar volume of e-commerce transactions made through our platforms and an indicator for our business performance.
The following provides a comparison of JustGolfStuff.ca's GMS growth to revenue growth and gross profit growth during the same period: GMS – over 515%; Revenue – over 45%; Gross profit – over 600%.
Adjusted EBITDA as defined by EMERGE means earnings before interest and financing costs, income taxes, depreciation and amortization, transaction costs, foreign exchange gains/losses, discontinued operations, unrealized gains/losses on contingent consideration and share-based compensation. Management believes that Adjusted EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.
Notice regarding forward-looking statements
This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the risk factors discussed in the Company's filing statement which are incorporated herein by reference and are available through SEDAR at www.sedar.com . The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
SOURCE EMERGE Commerce Ltd.
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