Annual Revenue of $23.8M compared to $27.6M in 2022, when excluding eliminated revenue from U.S. operations and trading (revenue in 2022 of $31.7M prior to exclusion of these items) Annual Gross Margin of 50% compared to 44% in 2022 Annual Adjusted EBITDA1 of $1.14M compared to $1.13M in 2022 Annual Cash Flow from Operations of $2.0M compared to $1.1M in 2022 Q4 Revenue of $6.2M compared to $7.8M in Q4 2022 when excluding eliminated revenue from U.S. operations and trading Q4 Adjusted EBITDA1 of $0.5M compared to $0.3M in Q4 2022 2023 results include WholesalePet which has subsequently been sold in Q1 2024 Senior credit facility was reduced to $5.85M from $15.85M in Q1 2024, and from $25M originally TORONTO, April 29, 2024 /CNW/ – EMERGE Commerce Ltd. (TSXV:ECOM) ("EMERGE" or the "Company"), a premium e-commerce brand portfolio, today announced results for its three and twelve months ended December 31, 2023. Copies of the Annual Financial Statements and MD&A are available on the Company's profile on SEDAR at www.sedar.com. "2023 was a foundational year for us to paydown debt and significantly reduce interest expense which has been a drag on our cash flow in the current interest rate environment. Over the last year or so, through a series of transactions, we have taken aggressive steps to reduce our senior credit facility to $5.85M down from $25M originally, and in the process, also eliminate the vast majority of deferred consideration owed to brands. While there is still more work to be done, we are pleased with our debt reduction efforts to date. This in turn, allows us to double down on truLOCAL, our strategic premium meat subscription business, as well as our golf vertical, where we are seeing good momentum lately. Operationally, we achieved strong growth in Adjusted EBITDA, particularly in Q4 2023, drove much improved gross margins, and nearly doubled positive cash flow from operations for the year. We believe the go forward business is in a good position to start driving organic growth in 2024 and beyond, with more streamlined operations and focused management efforts," commented Ghassan Halazon, Founder and CEO, EMERGE. 2023 Financial Highlights Revenue of $23.8M in 2023 compared to $27.6M in 2022, when excluding eliminated revenue from U.S. operations and trading (revenue of $31.7M prior to exclusion of these items) Gross Margin increased to 50% vs. 44% in 2022 Adjusted EBITDA1 of $1.14M compared to $1.13M in 2022 Cash Flow from Operations improved to $2.0M compared to $1.1M in 2022 Net loss of $21.3M in 2023 compared to a net loss of $17.4M. The increase in net loss is mainly attributable to a goodwill impairment charge of $16.7M, a non-cash charge, due to updated assumptions that reflect current macroeconomic conditions. Excluding the impairment charge, the net loss for the year would have been $4.6M Cash on hand at December 31, 2023 was $2.5M Q4 2023 Financial Highlights Q4 Revenue of $6.2M compared to $7.8M in Q4 2022 when excluding eliminated revenue from U.S. operations (Q4 2022 Revenue of $8.00M prior to exclusion of these items) Q4 Gross Margin improved to 50% compared to $46% in 2022, marking the Company's 4th consecutive quarter with gross margin of at least 50% Q4 Adjusted EBITDA1 improved to $0.5M for 2023 compared to $0.3M in 2022, marking the Company's 9th consecutive quarter of positive Adjusted EBITDA Events Subsequent to December 31, 2023 Sale of WholesalePet On January 31, 2024, EMERGE completed the sale of WholesalePet ("WSP") to Tiny Fund I, LP, a private partnership of Tiny Ltd., for aggregate gross cash consideration of US$9.25M subject to certain closing and post-closing adjustments, payments and obligations. Following the transaction, EMERGE no longer has any deferred payment obligations owed to WSP shareholders. 2023 results include WholesalePet. Q1 2024 will be the first financial report to classify WholesalePet as discontinued operations, with prior period results also reflect the reclassification where noted. Debt Paydown and Refinancing EMERGE utilized $10M from the WSP transaction proceeds to paydown its senior credit facility with its existing lender, the principal balance of which has been reduced to $5.85M, from $15.85M prior to the completion of the transaction, and $25M originally. The Company's interest expense savings following the aforementioned debt repayment is expected to be approximately $1.38M annually. On January 31, 2024, the Company entered into a second amended and restated credit agreement with its existing lender. The Amended Facility provides a term of up to 24 months, which is comprised of an initial term of 18-months, plus an additional 6-month extension option (the "Extension"), which may be exercised upon mutual agreement between the Company and the lender. Inclusive of the Extension, the Amended Facility is expected to mature on January 31, 2026. The Company remains in good standing with existing lender, which it has worked with since November 2019. Go Forward Business Following the sale of WholesalePet, EMERGE retains 4 brands across 2 main verticals, Grocery and Golf, namely truLOCAL, Carnivore Club, UnderPar and JustGolfStuff. EMERGE expects further HQ cost reductions, given the reduced overheads required to service the go-forward brand portfolio. truLOCAL, our premium meat subscription brand, is EMERGE's largest business by revenue. truLOCAL experienced our most significant increase in profitability in 2023, following our various cost savings initiatives and gross margin improvements. Carnivore Club, an artisanal meat subscription brand, is housed under truLOCAL, and currently being optimized for profitability. EMERGE also operates a golf vertical, across Canada and the U.S., which includes UnderPar, our discounted experiences business, and JustGolfStuff, our fast-growing golf products and apparel business. Top Priorities The Company's top priorities in the near-term are to i) drive organic growth, ii) continue to reduce debt and interest expense, iii) extract further operational ...