- Else Nutrition (BABY) reported fourth quarter and fiscal year 2022 financial results for the period ending December 31, 2022
- Q422 revenues were $2.4M; 86 per cent increase versus $1.3M in Q421, and 5 per cent increase versus $2.2M in Q322
- Fiscal year 2022 revenues were $8.6M, an 82 per cent increase versus $4.7M in FY2021
- Else Nutrition is a food and nutrition company in the international expansion stage
- Else Nutrition Holdings Inc. Shares (TSX:BABY) is down 6.67 per cent, trading at C$0.84 per share at 2:43 pm ET
Else Nutrition (BABY) reported fourth quarter and fiscal year 2022 financial results for the period ending December 31, 2022.
Fourth Quarter and Fiscal Year 2022 Financial Highlights
- Q422 revenues were $2.4M; 86 per cent increase versus $1.3M in Q421, and 5 per cent increase versus $2.2M in Q322. Revenue growth continued to be hampered by product shortages caused by a mechanical malfunction at the company’s US facility. The demand for products remained very high, outstripping the available supply. Management estimates the revenue loss from the malfunction was roughly $1.1M in Q422.
- Sales to brick-and-mortar retailers in Q422 increased 69 per cent versus Q322. Sales on Amazon in Q422 decreased by 24 per cent versus Q322. Demand exceeded supply during the quarter as the company continued to pull back on supplying Amazon.com and its own e-store, to be able to fulfill all orders from brick-and-mortar retailers.
- Sales in Canada, via Amazon and brick-and-mortar retailers increased over 100 per cent in Q422 versus Q32022. It represented roughly 10 per cent of the company’s formula sales. Demand exceeded supply during the quarter and the company chose to pull back on supplying Amazon.ca and its own e-store, to be able to fulfill at least part of the orders from brick-and-mortar retailers. It still created a significant backlog that was fulfilled in Q12023.
- Fiscal year 2022 revenues were $8.6M, an 82 per cent increase versus $4.7M in FY2021.
- Cash balance as of December 31, 2022, was $16.6M CAD (including restricted cash and short-term bank deposit), after a successful capital investment of $4.1M from Lind Partners LLC.
Recent Business Highlights
- Else products are listed in over 11,000 stores in North America, compared with 1,200 stores in Q122. Management expects to reach 20,000 listed stores and 50,000 points of distribution by the end of 2023.
- Expanded US distribution to more than 6,000 CVS stores. More than 750 Walmart stores, over 400 Win Dixie stores and to 161 Giant Food Stores.
- Expanded production capacity by adding a second manufacturing facility in the US and launching its first production facility in Europe. The additional production facilities will increase the company’s production capacity by about three times. This greatly reduces the risk of future out of stock situations.
- Expanded its presence in the Chinese market with the launch on JD.com, China’s largest online retailer with 580 million annual active customers. This launch follows the company’s successful launch on Tmall in September. The company will be selling its Toddler Formula, Kids nutritional drinks and Baby Cereal products directly to Chinese consumers through the store.
- Entered the Canadian market with the launch on Amazon.ca and in brick-and-mortar stores. The success of the launch exceeded expectations given a fast entry to major retailers across the country and a high demand for Else’s products. The company expects to be listed in more than 3,000 Canadian stores by the end of 2023.
- The company plans to enter Western Europe in 2H2023. The initial launch will be in the UK via Amazon and natural food distributors, with other European countries to follow.
- Successfully completed the second and last preclinical study on its infant formula, setting the path to FDA approval.
FDA Update
Else concluded two successful preclinical safety studies during 2021 and 2022 on its plant-based infant formula. This was to demonstrate safety and nutrient bioavailability of the infant formula and its ingredients. The results demonstrated proper growth, similar to dairy-based infant formula, in a neonatal preclinical model, as well as the infant formula protein efficiency and quality. Those are the key two steps out of three, on the path to obtaining the FDA and other regulatory permits to bring the product to market.
In February 2023, the company announced that the Institutional Review Board approved the infant growth study protocol for the testing of the Else Infant Formula.
As a final step before initiating the study, the company has now submitted the infant growth study protocol to the FDA for review. It is awaiting the FDA response, as well as a comparator formula availability, currently unavailable due to the continuous infant formula shortage followed by several recent product recalls in the US.
In 2023, a second clinical growth study on the healthy toddler population has started as part of the company’s plans to continue research activity demonstrating the safety, tolerability, and efficacy of its product range.
About Else Nutrition Holdings
Else Nutrition is a food and nutrition company in the international expansion stage. It focuses on developing innovative, clean, and plant-based food and nutrition products for infants, toddlers, children, and adults.
Else Nutrition Holdings Inc. (BABY) is down 6.67 per cent, trading at C$0.84 per share at 2:43 pm ET.