Net sales were $40 million in the second quarter, a 5% reduction compared to the same quarter last year and flat compared to the first quarter of Fiscal 2024 Gross margin increased to record 43.0% for the quarter, an improvement of 2.3% quarter-over-quarter, with gross profit at $17 million Net income for the quarter was $1.4 million, a $1.3 million improvement compared to the same quarter last year Adjusted EBITDA margin1 of 8.9% for an adjusted EBITDA1 of $3.5 million this quarter, a $0.5 million improvement compared to the same quarter last year Cash flows provided by operations were $0.1 million for the quarter, an improvement of $4.5 million compared to the same quarter last year, reaching $3.9 million year-to-date Adjusted free cash flow1 was $0.3 million for the quarter, a $2.5 million improvement compared to the same quarter last year and surpassing $4 million year-to-date MONTREAL, April 16, 2024 (GLOBE NEWSWIRE) -- Goodfood Market Corp. ("Goodfood" or "the Company") (TSX:FOOD), a leading Canadian online meal solutions company, today announced financial results for the second quarter of Fiscal 2024, ended March 2, 2024. "The first half for Fiscal 2024 showcased the efficient operating foundations we have laid, enabling Adjusted EBITDA1 to grow and reach a total of $9 million over the last twelve months. These results have driven two key vectors of value creation: cash flow generation and de-leveraging. This quarter marks the second quarter in a row with positive adjusted free cash flow1 and our last twelve months have delivered adjusted free cash flow1 of more than $7 million. In the past nine months, we have also reduced our total net debt to adjusted EBITDA2 ratio nearly 70% from 8X nine months ago to a little over 2X now. Combined, the cash flow generation and improved leverage help better position Goodfood to manage its capital structure and consider various capital allocation options as we strive to generate growth and enhance shareholder value," said Jonathan Ferrari, Chief Executive Officer of Goodfood. "As we look forward to the second half of this fiscal year and beyond, we are encouraged by the results our growth strategy is beginning to yield. Sales were stable quarter-over-quarter and the 5% year-over-year decline is the most stable performance achieved since the fourth quarter of Fiscal 2021, despite a challenging macroeconomic backdrop and soft consumer spending. We continue to work to enhance our customer value proposition and our initiatives have begun bearing results. Our members' average basket size was the highest ever this quarter and we see improvements in our customers' feedback metrics. As we continue to augment our value proposition, we are focused on growing our top line, conscious that this represents a key element in continuing to grow cash flows and to deliver shareholder value," concluded Jonathan Ferrari. RESULTS OF OPERATIONS – SECOND QUARTER OF FISCAL 2024 AND 2023 The following table sets forth the components of the Company's interim condensed consolidated statement of income and comprehensive income: (In thousands of Canadian dollars, except per share and percentage information) For the 13 weeks periods ended   March 2, 2024     March 4, 2023     ($)   (%)   Net sales $ 39,755   $ 42,043   $ (2,288 ) (5 )% Cost of goods sold   22,646     24,929     (2,283 ) (9 )% Gross profit $ 17,109   $ 17,114   $ (5 ) 0 % Gross margin   43.0%     40.7%     N/A   2.3 p.p. Selling, general and administrative expenses   13,893     15,531     (1,638 ) (11 )% Depreciation and amortization   1,818     2,856     (1,038 ) (36 )% Reorganization and other related gains   (1,364 )   (2,769 )   1,405   51 % Net finance costs   1,369     1,470     (101 ) (7 )% Income before income taxes $ 1,393   $ 26   $ 1,367   5,258 % Deferred income tax recovery   –     (72 )   72   N/A   Net income, being comprehensive income $ 1,393   $ 98   $ 1,295   1,321 % Basic and diluted income per share $ 0.02   $ –   $ 0.02   N/A   VARIANCE ANALYSIS FOR THE SECOND QUARTER OF 2024 COMPARED TO SECOND QUARTER OF 2023 The decrease in net sales is primarily driven by the decrease in the number of active customers, as we focus on customers providing stronger unit economics, partially offset by an increase in average order value as a result of price optimizations, increased variety in the meal-kit offering and a focus on meal-kit offerings with ready meal solutions and grocery products as add-ons. The slight decrease in gross profit primarily resulted from a decrease in net sales as well as higher credit and incentives as a percentage of sales partially offset by lower food costs and production costs as a percentage of net sales driven by improved inventory management reducing waste, lower production labour cost and price optimizations. Gross margin increased mainly due to operational efficiencies driving lower food and production costs, as well as pricing optimization, partially offset by an increase in credits and incentives as a percentage of net sales. The decrease in selling, general and administrative expenses is primarily due to lower marketing spend as well as lower wages and salaries, utilities and maintenance and insurance expenses primarily resulting from the Company's costs saving initiatives. Selling, general and administrative expenses as a percentage of net sales decreased from 36.9% to 34.9%. The decrease in reorganization and other related gains is mainly due to higher net gains in Fiscal 2023 as a result of termination of leases following the Company's costs reduction initiatives compared to a net gain on reversal of impairment resulting from a sublease agreement concluded in the second quarter of Fiscal 2024. The decrease in depreciation and amortization expense is mainly due to the reduction in right-of-use assets following exiting facilities as part of the Company's costs reduction initiatives. The improvement in net income is mainly the result of operational efficiencies reducing food costs and product costs as well as lower wages and salaries in cost of goods sold, lower depreciation and amortization expense partially offset by a lower net sales base and lower reorganization and other related gains. RESULTS OF OPERATIONS – YEAR-TO-DATE FISCAL 2024 AND 2023 The following table sets forth the components of the Company's interim condensed consolidated statement of loss and comprehensive loss: (In thousands of Canadian dollars, except per share and percentage information) For the 26 weeks periods ended   March 2, 2024     March 4, 2023     ($)   (%)   Net sales $ 80,214   $ 89,191   $ (8,977 ) (10 )% Cost of goods sold   47,176     55,318     (8,142 ) (15 )% Gross profit $ 33,038   $ 33,873   $ (835 ) (2 )% Gross margin   41.2%     38.0%     N/A   3.2 p.p. Selling, general and administrative expenses   28,381     37,529     (9,148 ) (24 )% Depreciation and amortization   3,773     6,625     (2,852 ) (43 )% Reorganization and other related gains   (1,361 )