EMERGE Reports Record Q4 and Fiscal 2021 Results, Provides Strong Preliminary Outlook for Q1 2022

• Q4 Revenue grew to a record $14.9M compared to $2.4M in Q4 2020, an increase of 531% YoY
• Q4 Adjusted EBITDA1 of $1.4M compared to $0.1M in Q4 2020, an increase of 1,229% YoY
• Q4 Cash Flow from Operations of $2M compared to $1M in Q4 2020, an increase of 100% YoY
• Annual Revenue grew to a record $34.8M compared to $9.2M in 2020, an increase of 278% YoY
• Annual Adjusted EBITDA1$1.2M compared to $0.8M, an increase of 53% YoY

TORONTO, May 2, 2022 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE" or the "Company"), a diversified acquirer and operator of niche e-commerce brands, today announced results for its three and twelve months ended December 31, 2021. Copies of the Annual Financial Statements and MD&A are available on the Company's profile on SEDAR at www.sedar.com.

"In our first year as a public company, our revenues more than tripled, and we delivered three quality acquisitions, significantly enhancing the portfolio's scale and profitability. Our Q4 results came in at the high end of the preliminary ranges we previously shared, and are the culmination of the team's hard work all year round. We are most proud of the record Adjusted EBITDA1, and strong positive operating cash flow during the quarter. We will continue to prioritize profitability in 2022 and beyond," said Ghassan Halazon, Founder and CEO, EMERGE.

• Q4 Gross Merchandise Sales1 ("GMS") of $26.2M compared to $8.3M in Q4 2020, an increase of 216%
• Q4 Revenue of $14.9M compared to $2.4M in Q4 2020, an increase of 531%
• Q4 Adjusted EBITDA1 of $1.4M compared to $0.1M in Q4 2020, an increase of 1,229%
• Q4 Cash Flow from Operations of $2M compared to $1M in Q4 2020, an increase of 100%

• Annual GMS1 of $58.3M compared to $29.4M in 2020, an increase of 98%
• Annual Revenue of $34.8M compared to $9.2M in 2020, an increase of 278%
• Annual Adjusted EBITDA1 of $1.2M compared to $0.8M in 2020, an increase of 53%
• EMERGE ended the year with $7.8M in cash

Since completing its public listing in December 2020, EMERGE has executed three acquisitions, truLOCAL, BattlBox Group and WholesalePet. The financials include the results of the BattlBox Group and WholesalePet from the date of acquisition (October 6, 2021 and November 15, 2021, respectively) through to December 31, 2021.

Despite unprecedented macro challenges facing businesses globally in 2022, EMERGE drove record GMS1 in Q1 2022, based on preliminary unaudited results, benefiting from a diversified e-commerce portfolio and a multi-faceted customer acquisition strategy in the wake of a volatile digital advertising landscape. Q1 is traditionally a seasonal month for a number of EMERGE's verticals, notwithstanding, the Company was also able to achieve excellent revenue growth and strong positive Adjusted EBITDA1 overall, exceeding management's expectations (based on preliminary unaudited results).

The current pipeline of M&A opportunities remains robust, with multiple signed Letter of Intents (LOIs), including "tuck-in" acquisitions that offer a deeper level of potential synergies, as well as some anchor businesses in new verticals.

The Company anticipates the recent market climate could result in more attractive acquisition opportunities and pricing.

A key area of focus in 2022 is integrating acquired brands by centralizing vendor software solutions, administrative and analytics functions, as well as cross-selling opportunities. As the Company has grown, it has continued to invest in the team as well as infrastructure.

"The merits of our diversified portfolio were evident in Q1 2022 where we drove record sales and positive Adjusted EBITDA1, during a time of unprecedented macro volatility and uncertainty. For the remainder of 2022, our key priority will be driving EBITDA1 growth by extracting operational synergies from the existing portfolio, and acquiring "tuck-in" acquisitions that offer us further scale and synergies. We continue to make visible progress in elevating EMERGE from a marginally profitable business to a meaningfully profitable business. With $1.4M in Adjusted EBITDA1, and $2M in operating cash flow, Q4 2021 was a big step in the right direction," continued Halazon.

Q1 2022 marks the Company's first full quarter with the BattlBox Group and WholesalePet under EMERGE ownership. Management is pleased with the performance of both businesses in their first full quarter, based on preliminary results.

Management will host a conference call on Monday, May 2 at 8:30 am ET to discuss its fourth quarter results. To access the conference call, please dial (416) 764-8650 or (888) 664-6383 and provide conference ID 95487141.

Alternatively, the conference call can be accessed online at: https://produceredition.webcasts.com/starthere.jsp?ei=1546041&tp_key=7e9b93c617

The tables below set out selected financial information and should be read in conjunction with the Company's consolidated financial statements and MD&A for the three and twelve-months ended December 31, 2021, which are available on SEDAR.

The following table highlights Adjusted EBITDA and a reconciliation of the Company's reported results to its adjusted measures:

The following table highlights GMS and a reconciliation of the Company's reported results to its adjusted measures:

EMERGE is a diversified acquirer and operator of profitable niche e-commerce brands. Our subscription and marketplace e-commerce properties provide our members with access to pet products, premium meat, outdoor gear, golf, and other curated experiences. Our portfolio houses some of North America's most coveted online destinations including WholesalePet.com, trulocal.ca, BattlBox.com, UnderPar.com, JustGolfStuff.ca, CarinvoreClub.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.

To learn more visit https://www.emerge-commerce.com/

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.

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"), EBITDA, and Adjusted EBITDA should not be construed as alternatives to revenue or 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 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.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") and 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.

A reconciliation of the adjusted measures is included in the Company's management discussion & analysis for the three and twelve months ended December 31, 2021 in the section "Non-GAAP Financial Measures" available through SEDAR at www.sedar.com.

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 MD&A and Annual Information Form 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.

On Behalf of the Board
Ghassan Halazon
Director and CEO

SOURCE EMERGE Commerce Ltd.

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