Company Announcements

• Fourth consecutive quarter of organic revenue growth
• First positive Adjusted EBITDA⁽¹⁾ quarter achieved under the EMERGE 2.0 strategy
• Strong outlook for Q2 2025, including double-digit revenue growth and strong, positive Adjusted EBITDA

TORONTO , May 28, 2025 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE" or the "Company"), a premium, Canadian brand portfolio, today announced its financial results for the three months ended March 31, 2025. Copies of the interim Financial Statements and MD&A are available on the Company's profile on SEDAR at www.sedar.com.

Q1 2025 Financial Highlights

For the first quarter of 2025, compared to the first quarter of 2024:

• Gross Merchandise Sales ("GMS¹") increased to $8.0M vs. $7.4M, an increase of 7%
• Revenue increased to $5.0M vs. $4.7M, an increase of 8%
• Gross profit of $1.94M vs. $1.96M, a decrease of 1%
• Adjusted EBITDA¹ improved to positive $32K vs. loss of $191K
• Net loss from continuing operations improved to $20K vs. $82K
• Cash on hand at March 31, 2025 was $2.7M

EMERGE's recently announced acquisition of Tee 2 Green ("T2G") is not included in Q1 2025 results, as it was completed in April 2025 (Q2). T2G achieved $1M Adjusted EBITDA ⁽¹⁾ and $700K net income in 2024 (unaudited).

Ghassan Halazon, Founder and CEO, EMERGE commented, "Q1 2025 was our fourth consecutive quarter of organic revenue growth. Notably, we delivered positive Adjusted EBITDA⁽¹⁾ for the first time under our EMERGE 2.0 strategy, reflecting our improved topline and our streamlined overhead expenses in place, now that the previously announced cost reductions have taken full effect. Our business model is uniquely positioned to thrive in the current macro backdrop. truLOCAL is a benefactor of the "Support LOCAL" movement sweeping the country, while our discount golf business continues to strengthen in this weakening economy as customers seek out more deals. We are also pleased to share that Q2-to-date, our first quarter including Tee 2 Green results, is exceeding management's expectations on both revenue growth and profitability overall. Special thanks to our team, Board, and trusted partners on yet another quarter of disciplined execution and sustained operational excellence."

Sale of Carnivore Club

On January 15, 2025, EMERGE completed the asset sale of Carnivore Club for a total purchase price of $500,000. Carnivore Club was a legacy, non-core asset.

2024 results include Carnivore Club. Q1 2025 will be the first financial report to classify Carnivore Club as discontinued operations, with prior period results to reflect the reclassification, where noted.

Events Subsequent to March 31, 2025

Acquisition of Tee 2 Green

On April 4, 2025, EMERGE closed the acquisition of all the issued and outstanding shares of Tee 2 Green Ltd. ("T2G"). T2G is a profitable, discount golf apparel and equipment business with a 38-year track record of operations, focused on the Canadian market. T2G achieved revenue of $6.4M, Adjusted EBITDA⁽¹⁾ of $1M and net income of $700K in 2024 (unaudited).

EMERGE utilized the cash proceeds from the Carnivore Club transaction, as well as the previously announced sale of the premium, dormant SHOP domains to Shopify (TSX: SHOP) towards closing the T2G acquisition.

Debt Refinancing

Alongside the T2G transaction on April 4, 2025, the Company also entered into a first amendment (the "Amended Facility") to the second amended and restated credit agreement dated January 31, 2024 with its existing lender. The Amended Facility provides an 18-month extension, and an additional 6-month extension option provided that lender consent is obtained. Inclusive of the 6-month extension, the Amended Facility would mature in April 2027. The Company remains in good standing with existing lender, which it has worked with since November 2019. The recent interest rate cuts, and the anticipated upcoming rate reductions, are expected to result in meaningful cash savings.

Second Quarter 2025 Outlook 

For Q2 2025, EMERGE management expects to achieve double-digit revenue growth, and strong positive Adjusted EBITDA⁽¹⁾ positive.

truLOCAL, our Canadian meat and seafood subscription brand, continues to be a benefactor of the "Buy Canadian" sentiment.

Our discounted golf experiences and products vertical is continuing to gain from the weakening macro climate given the recession-friendly nature of the business model, with golf season now in full swing.

Q2 is the first time EMERGE will include T2G's results. The addition of T2G, starting Q2 2025, is expected to substantially enhance the Company's revenue, profitability and cash flow profile, and in the process, strengthen its balance sheet, and potentially improve its cost of capital over time.

See "Forward-Looking Statements" below for important disclosure with respect to expectations and forward-looking information.

Top Priorities

The Company's top priorities in the near-term are to i) accelerate revenue growth, ii) extract further operational efficiencies and synergies to drive profitability, and iii) opportunistically explore avenues to enhance cash flow and reduce interest expense.

Conference Call

Management will host a conference call on Wednesday, May 28 at 9:00 am ET to discuss its Q1 2025 results. To access the conference call, please dial (416) 945-7677 or (888) 699-1199 and provide conference ID 83868

Alternatively, the conference call can be accessed online at: https://app.webinar.net/Py5QDRxw8EW 

Selected Financial Highlights

The tables below set out selected financial information and should be read in conjunction with the Company's consolidated financial statements and MD&A for the three months ended March 31, 2025, which are available on SEDAR.

The following financial information has been summarized from the Company's unaudited condensed consolidated interim financial statements (excluding GMS and Adjusted EBITDA):

Results from WholesalePet and Carnivore Club business have been reclassified to discontinued operations.

The following table presents Adjusted EBITDA for the three months ended March 31, 2025, and the Adjusted EBITDA loss for the three months ended March 31, 2024, along with a reconciliation of the Company's reported results to its adjusted measures.

The following table highlights GMS for the three months ended March 31, 2025 and 2024, and a reconciliation of the Company's reported results to its adjusted measures.

About EMERGE

EMERGE is a premium, Canadian e-commerce and retail brand portfolio. Our subscription, marketplace, and retail businesses provide our members with access to offerings across our grocery and golf verticals. truLOCAL is our flagship Canadian meat and seafood subscription service, connecting local farmers with a health-conscious audience. Our golf vertical includes our discounted tee-times/ experiences brand, UnderPar, and our discounted golf apparel and equipment brands, JustGolfStuff and Tee 2 Green.

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Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Non-GAAP Measures

This press release makes reference to certain non-GAAP measures. These non-GAAP measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of the Company reported under IFRS. Gross Merchandise Sales ("GMS"), EBITDA, and Adjusted EBITDA should not be construed as alternatives to revenue or net income/loss determined in accordance with IFRS. GMS, EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.

GMS as defined by management is the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of discounts and refunds. Management believes GMS provides a useful measure for the dollar volume of e-commerce transactions made through our platforms and an indicator for our business performance.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA as defined by management means earnings before interest and financing costs, income taxes, depreciation and amortization, transaction costs, foreign exchange gains/losses, discontinued operations, unrealized gains/losses on contingent consideration and share-based compensation. Management believes that Adjusted EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.

A reconciliation of the adjusted measures is included in the Company's management discussion & analysis for the three months ended March 31, 2025 in the section "Non-GAAP Financial Measures" available through SEDAR at  www.sedar.com .

Notice regarding forward-looking statements

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including, without limitation, statements related to the closing of the Transaction and the timing thereof, the satisfaction of all conditions precedent to the closing of the Transaction, including, without limitation, TSXV approval in respect of the Transaction, any benefit that may be derived by the Company from the Transaction, including, without limitation, any material benefit to the working capital or financial position of the Company as a result of the Transaction, expectations regarding cash flow both as a result of the Transaction and in general, as well as other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. There is no guarantee the Transaction will be completed as contemplated or at all, and the forward-looking information contained herein is based on the assumptions of management of the Company as of the date hereof including, without limitation, assumptions with respect to the financial position, cash flow, and working capital of the Company, the ability of the Company to obtain TSXV approval for the Transaction and the satisfaction of any other conditions thereto, and the conditions of the financial markets and the e-commerce markets generally, among others. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including risks related to the disposition of an operating business by the Company, risks that the benefits derived from the Transaction may not be as expected or that the Company may not see any benefit from the Transaction, risks that each party to the Agreement may not satisfy its obligations or covenants, risks that the Company may be subject to litigation as a result of the Transaction including allegations of misrepresentation or breach of conditions or covenants, risks that the TSXV may not approve the Transaction, as well as the risk factors discussed in the Company's MD&A, which is available through SEDAR+ at  www.sedarplus.ca . The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

On Behalf of the Board
Ghassan Halazon
Director, President, and CEO
EMERGE Commerce Ltd.

SOURCE Emerge Commerce Ltd.