EMERGE Reports Strong Preliminary Q4 2021 Results

• Q4 2021 Revenue expected to be between $14.2M and $14.8M, year-over-year increase of over 491%
• Q4 2021 Adjusted EBITDA(1) expected to be between $1.1M and $1.4M, year-over-year increase of over 1,000%

TORONTO, February 9, 2022 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE" or the "Company"), a diversified acquirer and operator of niche e-commerce brands, today announced preliminary unaudited financial results for the fourth quarter ended December 31, 2021.

Preliminary Q4 Financial Highlights:

• Gross Merchandise Sales ("GMS")(1) is expected to be approximately $26 million in Q4 2021, an increase of over 213%, compared to $8.3 million in Q4 2020
• Revenue is expected to be between $14.2 million and $14.8 million in Q4 2021, an increase of over 491%, compared to $2.4 million Q4 2020
• Gross profit is expected to be between $5.9 million and $6.3 million for the fourth quarter of 2021, an increase of over 200%, compared to $1.9 million in Q4 2020
• Adjusted EBITDA(1) is expected to be between $1.1 million and $1.4 million for Q4 2021, a significant increase of over 1,000%, compared to $0.1 million in Q4 2020

Q4 2021 includes results from the acquisition of the BattlBox Group as of October 6, 2021, and WholesalePet.com as of November 15, 2021.

"Our preliminary Q4 results illustrate the power of our diversified portfolio, albeit a partial view, as both BattlBox Group and WholesalePet.com were acquired during the quarter. Ultimately, we are most proud about the quarterly Adjusted EBITDA(1) figure, which is expected to significantly exceed 2020 results," commented Ghassan Halazon, Founder and CEO, EMERGE.

Key Business Highlights for the Quarter

• During Q4 2021, EMERGE closed two acquisitions, BattlBox Group and WholesalePet.com, adding two profitable niche e-commerce businesses, along with three additional brands
• The Company refinanced and upsized its credit facility to $25 million in November 2021
• EMERGE eclipsed $100 million in GMS(1) on a pro-forma basis, post-acquisition of BattlBox Group and WholesalePet.com
• Cyber Monday (November 29, 2021) marked the first time EMERGE achieved $1 million in GMS(1) on a single day
• November 2021 was the first month that EMERGE processed in excess of $10 million of GMS(1)

"The success we achieved in Q4 was the culmination of the team's hard work all year round. One of our priorities in 2022 is to elevate EMERGE from a marginally profitable business to a meaningfully profitable business, with positive operating cash flow," continued Halazon.

Preliminary Unaudited Financial Information

The financial and operating results included in this news release are based on preliminary unaudited estimated results which have not yet been finalized or, in the case of annual results, audited. These estimated results are subject to change upon completion of the financial statements for the year ended December 31, 2021, and the audit of such financial statements and such changes could be material due to, among other things, the completion of EMERGE's financial closing procedures, final adjustments, review by EMERGE's auditors and other developments that may arise between now and the time the financial results are finalized. Accordingly, such estimated results are forward-looking statements (as defined below) within the meaning of applicable securities legislation and are subject to the limitations and risks described under "Forward-Looking Statements" below.

EMERGE anticipates filing its audited annual financial statements for the year ended December 31, 2021, and related management's discussion and analysis on SEDAR in late April 2022.

Unless otherwise noted, all amounts are in Canadian dollars.

About EMERGE

EMERGE Commerce Ltd. (TSXV: ECOM) is a diversified acquirer and operator of profitable niche e-commerce brands. EMERGE's subscription and marketplace e-commerce properties provide their members with access to pet products, premium meat & groceries, outdoor gear, golf, and other curated experiences.

EMERGE's portfolio houses some of North America's most coveted online destinations including WholesalePet.com, truLOCAL.ca, BattlBox.com, UnderPar.com, JustGolfStuff.ca, CarnivoreClub.co, WagJag.com, 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.

Our model entails acquiring category defining e-commerce brands along with exceptional management teams, after which we apply our shared services platform and playbook with the goal of integrating and accelerating these brands to new heights, leveraging the combined benefits of scale and wide-ranging expertise at EMERGE.

To learn more about EMERGE, visit https://www.emerge-brands.com/

Follow EMERGE:
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Cautionary notice

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 Financial 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"), and Adjusted EBITDA should not be construed as alternatives to revenue or gross profit or net income/loss determined in accordance with IFRS. GMS, 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 management 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 table reconciles preliminary GMS to revenue

Adjusted EBITDA as defined by management 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.

The following table reconciles preliminary gross profit to Adjusted EBITDA

*Amounts for Q4 2021 in the table are preliminary and represent the mid-point of our expected range.

A description and reconciliation of the adjusted measures will be included in the Company's management discussion & analysis for the three and twelve months ended December 31, 2021.

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 annual information form, which 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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