EMERGE Reports Record Q1 2022 Results

• EMERGE reported over $30M in quarterly Gross Merchandise Sales1 ("GMS") in Q1 for the first time
• Q1 Revenue grew to a record $15.8M compared to $7.1M in Q1 2021, an increase of 123% YoY
• Q1 Adjusted EBITDA1 of $1.1M compared to $0.3M in Q1 2021, an increase of 297% YoY
• The Company signed multiple Letters of Intent ("LOI"), and is advancing acquisition opportunities

TORONTO, May 30, 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 the first quarter ended March 31, 2022.

Ghassan Halazon, Founder and CEO, EMERGE commented, "Q1 2022 marks the Company's first full quarter with the BattlBox Group and WholesalePet under EMERGE ownership, and demonstrates the power and resilience of our diversified platform, even as Q1 is a seasonal quarter for some of our verticals. I am pleased to report that EMERGE eclipsed $30M in quarterly GMS1 for the first time in the company's history, along with record revenue during the quarter, while delivering 297% growth in Adjusted EBITDA1 compared to the first quarter of 2021."

• GMS grew to a record $30.2 million for the three months ended March 31, 2022, an increase of 166% from $11.4 million in Q1 2021, driven by the BattlBox Group and WholesalePet acquisitions
• Q1 2022 revenue increased to $15.8 million, up 123% from $7.1 million in Q1 2021
• Positive Adjusted EBITDA1 of $1.1 million for Q1 2022 compared to $0.27 million in Q1 2021, an increase of 297%
• Cash on hand at March 31, 2022 was $5.8 million

EMERGE's outlook for 2022 remains resilient despite continued macro headwinds facing businesses globally today. In Q1, the business generated record revenue and the second consecutive quarter of positive Adjusted EBITDA1 exceeding $1 million.

In the wake of the challenging macro environment, management's operational priority for the balance of the year is to optimize profitability and cash flow, through synergies and cost savings.

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

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

To date, the Company has been able to leverage its existing debt facility to finance acquisitions. In March 2022, EMERGE entered into an amendment with its existing lender, providing the Company with an option to extend its debt facility to June 2023. EMERGE is currently advancing its plans to re-finance its current debt facility to provide additional capital for upcoming acquisitions, working capital, and improved pricing.

"Our M&A pipeline is currently deeper than at any point in our history, driven by entrepreneurs looking for alternatives to scale in a cost-effective manner," continued Mr. Halazon. "With accretive acquisition opportunities at attractive valuations, along with our diversified portfolio of high-quality brands, we believe EMERGE is well positioned to thrive in these times, and unlock our next phase of profitable growth."

Management will host a conference call on Monday, May 30 at 8:30 am ET to discuss its first quarter results. To access the conference call, please dial (416) 764-8650 or (888) 664-6383 and provide conference ID 73438507.

Alternatively, the conference call can be accessed online at: https://produceredition.webcasts.com/starthere.jsp?ei=1548276&tp_key=aa54b7833a

The tables below set out selected financial information and should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements and MD&A for the three months ended March 31, 2022, 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, 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.

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 months ended March 31, 2022 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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