[August 09, 2017]

Jamieson Wellness Inc. Reports Second Quarter 2017 Financial Results

Jamieson Wellness Inc. ("Jamieson Wellness" or the "Company") (TSX: JWEL) today reported financial results for its second quarter and six months ended June 30, 2017. All amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures. See "Non-IFRS Financial Measures" below.

Highlights and Summary of Second Quarter 2017 Results versus Second Quarter 2016 Results

• Revenue increased 6.3% to $71.3 million and 20.4% after taking into account a new tolling arrangement entered into with a Strategic Partners customer;
• Adjusted EBITDA increased 25.0% to $15.1 million;
• Net loss was $7.0 million in the second quarter and Adjusted Net Income was $7.9 million;
• The Company reaffirmed its outlook for 2017, expecting pro forma revenue⁽¹⁾ in the range of $303 to $310 million and pro forma Adjusted EBITDA⁽¹⁾ of $62 million in 2017.

"We have just completed an historic period in our 95 year history, marked by last month's initial public offering on the Toronto Stock Exchange," said Mark Hornick, President and Chief Executive Officer of Jamieson Wellness. "We believe we are well positioned to fulfill our mission of improving the world's health and wellness. Our strong positioning is evident in our second quarter results, where we generated 20% pro forma revenue growth and 25% Adjusted EBITDA growth compared to the second quarter of 2016. We believe the strength of our brands, our scalable global platform, commitment to quality and innovation and strong industry trends will support continued growth. We remain confident in our 2017 financial outlook."

Second Quarter 2017 Results

Revenue increased 6.3% to $71.3 million in the second quarter of 2017 from $67.0 million in the second quarter of 2016 and was driven by a 20.5% increase in Jamieson Brands revenue to $56.6 million, partially offset by a 26.9% decrease in Strategic Partners revenue to $14.6 million. The increase in the Jamieson Brands revenue was primarily driven by the acquisition of Body Plus. The decline in Strategic Partners revenue was in line with the Company's expectation and was driven by a switch to a tolling from a turnkey arrangement for certain high volume products with a major Strategic Partners customer during 2016. The switch to tolling reduces the Company's inventory risk and working capital requirements while allowing the Company to maintain consistent profitability. If this arrangement had been in place at the beginning of the second quarter of 2016, the Strategic Partners revenue increased 19.7% quarter to quarter while total Company revenue quarter to quarter increased 20.4%.

Gross profit increased 18.4% to $25.3 million in the second quarter of 2017 from $21.4 million in the second quarter of 2016 and gross profit margin increased 360 basis points to 35.5% from 31.9% in the same respective periods. The increase in the gross profit margin was primarily driven by growth in Jamieson Brands revenues and the above mentioned switch to tolling within the Company's Strategic Partners segment.

Selling, general and administrative expenses increased 10.7% to $13.2 million in the second quarter of 2017 from $11.9 million in the second quarter of 2016. The increase was primarily due to the acquisition of Body Plus and Sonoma, partially offset by a shift in the timing of certain marketing expenses based on the Company's innovation calendar in 2017.

Operating income increased 29.8% to $10.7 million in the second quarter 2017 from $8.2 million in the second quarter of 2016 and operating margin increased 270 basis points to 15.0% from 12.3% in the same respective periods.

Interest income and other financing costs were $8.1 million of income in the second quarter of 2017 compared to $5.7 million of expense in the second quarter of 2016. The change was primarily driven by interest forgiveness in relation to the Company's note payable to Jamieson Finco LP, which was discharged as part of the Company's recent pre-IPO reorganization and lower interest rates on the Company's new credit facility entered into in January 2017.

Net loss for the second quarter 2017 was $7.0 million and this compared to net income of $1.8 million in the second quarter of 2016. The net loss for the second quarter 2017 included $13.4 million of accretion on the Company's redeemable preferred shares and other expenses associated with the Company's initial public offering, Adjusted Net Income increased 167.3% to $7.9 million in the second quarter 2017 from $2.9 million in the second quarter of 2016.

Adjusted EBITDA increased 25.0% to $15.1 million in the second quarter of 2017 from $12.1 million in the second quarter of 2016 and Adjusted EBITDA as a percentage of revenue increased 320 basis points to 21.2% from 18.0% in the same respective periods.

Balance Sheet & Cash Flow

The Company generated $10.8 million of cash from operations during the first six months of fiscal year 2017 compared to $6.8 million in the same period last year. The Company's cash and cash equivalents at June 30, 2017 were $10.8 million compared to $2.3 million on June 30, 2016. On July 7, 2017, the Company completed an initial public offering. Subsequent to the end of the second quarter, the Company received $232.1 million of net IPO proceeds that were used to pay dividends and return capital to the Company's preferred shareholders and to repay certain indebtedness, including a portion of the Company's term debt. Following the payment of dividends and return of capital to the preferred shareholders, all but one of the Company's preferred share classes were converted to common shares and split approximately 20.8 to 1 while the remaining preferred share class was redeemed.

Outlook

The Company reaffirmed its outlook for 2017 revenue and Adjusted EBITDA that was included in its management's discussion and analysis of financial condition and results of operations in its final prospectus (the "Prospectus") dated June 29, 2017 in respect of its initial public offering, and continues to expect pro forma revenue⁽¹⁾ in the range of $303 to $310 million and pro forma Adjusted EBITDA⁽¹⁾ of $62 million in 2017. This outlook is based on a forecasted CAD/USD exchange rate of $1.35, as noted in the Prospectus. The increase in revenue is expected to be driven by an increase in Jamieson Brands revenue, partially offset by a decrease in Strategic Partners revenue due to the above mentioned tolling arrangement.

With the completion of the Company's initial public offering in early July, both the second and third quarters of 2017 will include a number of IPO related expenses or special charges. These IPO related and special expenses are expected to be approximately $11.5 million (excluding underwriting commission) for the full year and the Company's Adjusted EBITDA guidance excludes these expenses.

¹ Pro forma 2017 revenue and Adjusted EBITDA assumes the acquisition of Body Plus Nutritional Products Inc. ("Body Plus") and Sonoma Nutraceuticals Inc. ("Sonoma") occurred on January 1, 2017 and thus includes the estimated contribution of the acquired business for the full 12 months of fiscal 2017. On a statutory basis and excluding the pre-acquisition results for Body Plus and Sonoma, the Company expects 2017 revenue of $299 to $306 million and Adjusted EBITDA of $61.4 million.

Consolidated Financial Statements and Management's Discussion and Analysis

The Company's unaudited condensed consolidated interim financial statements and accompanying notes as at and for the three and six months ended June 30, 2017 and related management's discussion and analysis of financial condition and results of operation ("MD&A") are available under the Company's profile on SEDAR at www.sedar.com and on the Investor Relation's section of the Company's website at https://investors.jamiesonwellness.com.

Conference Call

Management will host a conference call to discuss the Company's second quarter 2017 results at 5:00 p.m. ET on August 9, 2017. The call can be accessed live over the telephone by dialing 1-877-407-9716 from Canada and the U.S. or 1-201-493-6779 from international locations. A replay will be available shortly after the call and can be accessed by dialing 1-844-512-2921 from Canada and the U.S. or 1-412-317-6671 from international locations. The passcode for the replay is 13667764 and it will be available until Wednesday, August 23, 2017.

Interested parties may listen to a simultaneous webcast of the conference call by logging on via the Investor Relations section of the Company's website at https://investors.jamiesonwellness.com or directly at http://public.viavid.com/index.php?id=125725. A replay of the webcast will be available for approximately 30 days following the call.

About Jamieson Wellness

Jamieson Wellness is dedicated to improving the world's health and wellness with its portfolio of innovative natural health brands. Established in 1922, Jamieson Vitamins is the Company's heritage brand and Canada's #1 consumer health brand. Jamieson Wellness manufactures and markets sports nutrition products and specialty supplements under its Progressive, Precision and Iron Vegan brands. The Company also markets products by Lorna Vanderhaeghe Health Solutions (LVHS), the #1 women's natural health focused brand in Canada. For more information please visit jamiesonwellness.com.

Jamieson Wellness' head office is located at 2 St. Clair Avenue West, Toronto, Ontario, Canada.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes, but is not limited to, statements related to the Company's anticipated growth opportunities and its outlook for its 2017 revenue and Adjusted EBITDA. Words such as "expect," "anticipate," "intend," "attempt," "may," "plan," "will," "can," "believe," "seek," "estimate," and variations of such words and similar expressions are intended to identify such forward-looking information. This information reflects the Company's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Prospectus. This information is based on the Company's reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this press release. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law or regulatory authority.

We caution that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect the Company's results. Readers are urged to consider the risks, uncertainties and assumptions associated with these statements carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See "Forward-looking Information", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Outlook" in the Prospectus for a discussion of the uncertainties, risks and assumptions associated with these statements.

Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS measures. Management uses these non-IFRS financial measures for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of ongoing operations and in analyzing the Company's business performance and trends. These 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 further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. We use non-IFRS measures including "EBITDA", "Adjusted EBITDA", "Adjusted Net Income" and "gross profit" to provide supplemental measures of the Company's operating performance and thus highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also uses non-IFRS measures in order to prepare annual operating budgets and to determine components of management compensation. Definitions of non-IFRS measures can be found in our MD&A.

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