Goodfood lifts cash balance via $30 million convertibles sale in Q2

By Devika Patel

Knoxville, Tenn., April 8 – Goodfood Market Corp. settled a $30 million sale of convertible debentures in February, which boosted the company’s cash balance, giving Goodfood greater financial flexibility in uncertain times.

As of Feb. 29, the company had total debt of $15.8 million, excluding leases and convertible debentures, and $69.5 million in cash, cash equivalents and restricted cash.

“We ended the quarter in a very healthy financial position, with close to $70 million in cash, cash equivalents and restricted cash, supported by our recently completed $30 million financing,” chairman, president and chief executive officer Jonathan Ferrari said on the company’s second quarter ended Feb. 29 earnings conference call on Wednesday.

“We completed a $30 million financing through the issuance of convertible debentures.

“This well-timed transaction will help us execute our growth strategy in the coming months,” Ferrari said.

If needed, the extra cash on the balance sheet will help the company weather the current market conditions, although the company expects to see a boost in subscribers due to the pandemic.

“With our new financing, we ended the quarter in a very strong financial position,” chief financial officer Philippe Adam said on the call.

“We thus have ample flexibility to grow from current levels and withstand any potential negative impact from the current crisis if required,” Adam said.

The Covid-19 pandemic has resulted in more subscribers, increased order rates and average order values, but has also brought labor shortages and increased food costs.

“As Covid-19 continues to take hold across Canada and globally, we are all facing challenges in our daily lives of a magnitude never seen before,” Ferrari said.

“The current circumstances have accelerated the use and adoption of grocery delivery, a trend beneficial to Goodfood so far.

“While the pandemic may be positive for subscriber growth, increased order rates and average order values, we are also experiencing pressure on food costs and labor shortages, which are challenging our operations and supply chain,” Ferrari said.

Goodfood is a Montreal-based online grocery retailer.

© 2015 Prospect News.
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