• Better Choice Reports Impressive Second Quarter 2022 Financial Results with Gross Sales of $19.8 Million and Net Sales of $16.5 Million, Highlighting a Transformative 50% Quarter-Over-Quarter Growth in Net Sales, Fueled by 133% Surge in Brick & Mortar Sales and 75% Increase in International Sales.
• Better Choice Announces Record First Half 2022 Gross Sales of $39.5 Million and Net Sales of $33.5 Million, Reflecting a Significant Year-Over-Year Increase of 54% in Net Sales.
• Better Choice Achieves Robust Second Quarter Gross Margin of 29% and Adjusted Gross Margin of 31%, Marking a Notable Improvement from the 28% Gross Margin of the First Quarter 2022.
• Better Choice Confidently States that its Second Quarter 2022 Cash Balance of $17.8 Million is Adequate to Support Strategic Plans for Profitability and Anticipates Positive Developments in its Net Working Capital Position in the Second Half of 2022.

NEW YORK, Aug. 11, 2022 (GLOBE NEWSWIRE) — Better Choice Company Inc. (NYSE American: BTTR) (the “Company” or “Better Choice”), a leading pet health and wellness company, has released its financial results for the second quarter ending June 30, 2022, showcasing remarkable growth and strategic advancements.

“Despite facing unprecedented supply chain challenges across the consumer-packaged goods sector, we successfully delivered an impressive sequential adjusted gross margin improvement of around 300 basis points. Additionally, we achieved a remarkable 50% growth in net sales compared to the second quarter of 2021, bolstered by a 75% increase in international sales and a staggering 133% growth in brick-and-mortar sales. The quarter’s gross sales of $19.8 million represent a historic peak for Better Choice, exceeding the previous record of $19.7 million achieved in the first quarter of 2022. Our international business is expanding rapidly, and we are making significant strides in the pet specialty sector. We’ve already introduced Halo Elevate® in over 1,500 pet specialty stores, including major retailers like Petco and Pet Supplies Plus, and we are witnessing consistent week-over-week growth in point-of-sale sales alongside robust repeat customer purchase rates at strategic accounts,” stated Scott Lerner, CEO of Better Choice.

“Along with achieving record gross sales, we also realized significant sequential gross margin improvement, attaining a gross margin of 29% in Q2 2022 compared to 28% in Q1 2022. After accounting for one-time expenses associated with the pet specialty launch, we achieved an adjusted gross margin of 31% in Q2 2022. This enhancement in Q2 2022 was driven by critical factors, including the transition of domestic kibble production to a new co-manufacturer, the consolidation of production runs across our product portfolio, and the implementation of price increases both domestically and internationally. As we move into the second half of 2022, we expect to see continued improvement in gross margins primarily due to the transition of our international dry kibble diets to a new co-manufacturer, which was completed in mid-June and yielded an immediate 1,500 to 2,000 basis point enhancement to gross margins. These diets generated approximately $10 million in net sales during the first half of 2022, constituting around 70% of our total international net sales. We are also thrilled about several exciting developments on the horizon, including the nationwide distribution of Halo Elevate® and the rebranding of Halo Holistic™ and TruDog. We believe our cash position at the end of the second quarter is more than sufficient to support our profitability goals, especially as we anticipate positive changes in our net working capital in the latter half of 2022. While we are excited about our sales growth in the first half of this year, we remain highly focused on continuing to drive margin improvements across our entire portfolio,” concluded Mr. Lerner.

Operational Highlights and Updates from Second Quarter 2022

• Successfully launched Halo Elevate® in over 1,000 Petco retail locations, expanding our market reach.
• Expanded Halo Elevate® to more than 600 Pet Supplies Plus retail locations, enhancing product availability.
• Initiated a comprehensive global marketing campaign coinciding with the pet specialty launch, achieving over 42 million impressions and 22 million video views within the first six weeks post-launch.
• Completed the transition of co-manufacturing for key international diets in mid-June, resulting in an immediate gross margin enhancement of 1,500 to 2,000 basis points for these diets, which previously accounted for approximately $10 million in net sales during the first half of 2022 (about 70% of total international net sales).
• Successfully integrated the TruDog brand and launched Halo® branded freeze-dried raw meals, treats, and toppers.
• Implemented domestic and international price increases effective April 2022 to mitigate inflationary pressures.

Corporate Developments in Second Quarter 2022

• Promoted Robert Sauermann to Chief Operating Officer and Donald Young to Chief Sales Officer, enhancing leadership capabilities.
• Certain board members and management team members purchased 566,269 common shares, led by Donald Young, representing approximately 2% of the basic common shares outstanding.
• Joined the Russell Microcap® Index effective June 27, 2022, marking a significant milestone for the company.

Join Us for Our Upcoming Conference Call and Webcast

The Company will host a conference call and audio webcast on Thursday, August 11, 2022, at 8:30 am (Eastern Time) to discuss the operational and financial highlights of the second quarter of 2022.

For those interested individuals unable to participate in the conference call, a dial-in replay will be available until August 25, 2022. This can be accessed by dialing +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 10169599.

Better Choice Company Inc.
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)

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Sienna Blake

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Sienna Blake is a licensed aesthetic consultant and beauty writer specializing in cosmetic surgery advancements and non-invasive treatments. With a background in dermatology and over eight years of industry experience, Sienna is passionate about helping people achieve confidence through informed beauty decisions. She holds a Bachelor's degree in Health Sciences and regularly collaborates with top plastic surgeons to stay at the forefront of aesthetic innovations. Outside of her work, Sienna enjoys traveling, skincare research, and practicing Pilates.

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