Mr. Paul Antoniadis reports

GOOD NATURED PRODUCTS INC. ANNOUNCES FIRST QUARTER 2023 RESULTS

Good Natured Products Inc. has released its financial results for the three months ended March 31, 2023.

Q1 2023 Highlights

Revenue of $20.3 million compared to $25.9 million in Q1 2022 and $23.3 million in Q4 2022.

Adjusted EBITDA1 of $0.7 million compared to $1.2 million in Q1 2022 and $0 in Q4 2022.

Variable gross margin1 of 38% compared to 32% in Q1 2022 and 33% in Q4 2022.

SG&A expenses of $3.8 million compared to $3.8 million in Q1 2022 and $4.9 million in Q4 2022.

Cash flow from operations of $0.8 million compared to $3.1 million in Q1 2022 and $4.0 million in Q4 2022.

Ending cash balance of $11.6 million compared to $11.9 million at December 31, 2022.

The Company's Packaging business group was robust in Q1 2023 and delivered 46% year-over-year revenue growth. A year-over-year decrease in Industrial business group revenue was driven by continued customer de-stocking from high inventory levels in prior quarters due in part to unpredictable demand cycles from their end users, as well as an overall industry shift to just-in-time ordering. This was concentrated amongst the Company's commodity petroleum-based industrial products inherited through its acquisitions, where a combination of increased competitive pressure and declines in average selling prices were particularly pronounced.

"We're keenly focused executing our long-term strategy to make plant-based packaging the largest and most profitable portion of our business. The recent White House announcement committing the United States to making 90% of plastics from bio-based materials has heightened the market relevance of our mission," stated Paul Antoniadis, CEO of good natured(TM). "Our industrial capability has been assembled for supply chain efficiencies that will fuel our ability to scale packaging revenues. We expect a continued increase in usage of our industrial production capacity to support our own thermoforming facilities. Our team has been carefully navigating this transitional time, improving our margins in comparison to Q1 2022, reducing costs from Q4 2022, and delivering an ending cash balance that is essentially unchanged from 2022 year-end."

Q1 2023 Financial Overview

Revenue for Q1 2023 decreased 22% to $20.3 million as compared to $25.9 million for the three months ended March 31, 2022 ("Q1 2022"). The year-over-year change in revenue in Q1 2023 was driven by the reduction in revenue from third-party Industrial thermoforming customers due to factors outlined above. This was partly offset by organic growth in the Company's Packaging business group, as well as contribution from the FormTex acquisition completed in July 2022.

Variable gross margin for Q1 2023 increased to 38% compared to 32% for Q1 2022. The increase in variable gross margin reflects the higher mix of revenue from the Packaging business group, improved supply chain management, and productivity enhancements. Gross margin for Q1 2023 was 28% compared to 26% for Q1 2022.

Selling, general and administrative expenses ("SG&A") in Q1 2023 increased by 1% compared to Q1 2022 and represented 19% of total revenue compared to 15% for Q1 2022. The small increase in SG&A expenses was driven by a 13% increase in wages reflecting the July 2022 FormTex acquisition, as well as overall growth in average wage rates. The increase in wages was not fully offset by a 18% decline in other SG&A costs, which reflects the Company's efforts to reduce costs in areas such as accounting and audit fees, investor relations expenses, as well as general legal fees (see table below for more details).

The Company's adjusted EBITDA1 for Q1 2023 was $0.7 million compared to $1.2 million for Q1 2022. The decline in adjusted EBITDA1 reflects the decline in revenue and gross profit, not fully offset by the decline in fulfilment and logistics costs.

In Q1 2023, the Company incurred a net loss of $2.5 million compared to a net loss of $1.6 million in Q1 2022.

Cash Flow and Net Working Capital

Cash generated by operating activities for Q1 2023 was $0.8 million compared to $3.1 million for Q1 2022. As at March 31, 2023, the Company had cash of $11.6 million and net working capital of $8.8 million, compared to $11.9 million and $10.0 million as at December 31, 2022.

The Company's Q1 2023 financial statements and Management's Discussion and Analysis are available on SEDAR at sedar.com and on the Company's investor website at investor.goodnaturedproducts.com.

Q1 2023 Results Conference Call

The Company will hold a conference call to discuss its financial results for Q1 2023, hosted by Paul Antoniadis, Executive Chair & CEO, and Kerry Biggs, Chief Financial Officer, on May 24, 2023 at 11:00 AM Eastern / 8:00 AM Pacific time.

Date: May 24, 2023Time: 11:00 AM ET / 8:00 AM PTToll-Free: 1-888-396-8049 International: +1-416-764-8646Conference ID: 07288870Participants are asked to dial in 10 minutes prior to the start of the call.

A replay of the call will be available approximately two hours after its completion through to June 7, 2022. The replay will be available by dialing 1-877-674-7070 or +1-416-764-8692 and by using the passcode 288870.

The good natured(TM) corporate profile can be found at: investor.goodnaturedproducts.com

About good natured Products Inc.good natured(TM) is passionately pursuing its goal of becoming North America's leading earth-friendly product company by offering the broadest assortment of plant-based products made from rapidly renewable resources instead of fossil fuels. The Company is focused on making it easy and affordable for business owners and consumers to shift away from petroleum to better everyday products(TM) that use more renewable materials, less fossil fuel, and no chemicals of concern.

good natured(TM) offers over 400 products and services through wholesale, direct to business, and retail channels. From plant-based home organization products to certified compostable food containers, bio-based industrial supplies and medical packaging, the Company is focused on making plant-based products more readily accessible to people as a means to create meaningful environmental and social impact.

We seek Safe Harbor.