Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,”
“we” and “our”), today reported financial results for its fourth
quarter and fiscal year ended December 31, 2022.
Jason Vieth, Chief Executive Officer, commented, "Fiscal
year 2022 was a year of transition, beginning with the onboarding
of a new leadership team and culminating in the successful
transition of our in-house manufacturing and fulfillment center to
3rd party co-manufacturing and logistics partners at the end of the
year. We expect this move to expedite our margin improvement agenda
by moving our business to a variable cost model and dramatically
reducing our overhead costs. Additionally, we recently unveiled a
complete brand refresh across all products in our portfolio, which
is already having a positive effect on retail performance. We
believe that these momentous steps will position the business for
growth and continued improvement in our gross margin throughout
2023."
Anya Hamill, Chief Financial Officer, commented, "We have
completed cost cutting and cash optimization initiatives across
multiple functions, even beyond manufacturing and supply chain, in
order to aggressively curtail selling, general, and administrative
expenses in the coming year and to eliminate inefficient marketing
spend. We expect that the transformation of our supply chain to a
variable cost model will drive gross margin improvement to over 30%
in 2023, excluding any one time charges. In shutting down our
Sisters facility and making this move to a third-party supply
chain, we incurred $9.1 million of one-time charges in the fourth
quarter of 2022, most of which were non-cash, as detailed in our
Non-GAAP Financial Statement. Additionally, I am pleased to report
that our operating cash burn was reduced by $7.8 million in 2022,
and we are implementing a number of initiatives to further improve
our cash burn rate in 2023."
Fourth Quarter 2022
Highlights
- Net Sales of $9.0 million compared to $8.8 million in the third
quarter of 2022 and $9.4 million in the prior year period.
- E-commerce contributed 66% of total Net Sales and decreased
4.7% year-over-year reflecting lower direct-to-consumer (“DTC”)
revenues due to a 52% reduction in marketing media spend partially
offset by double-digit growth in sales via Amazon.com.
- Wholesale contributed 34% of total Net Sales and revenue
decreased 3.3% year-over-year, primarily due to lower sales in the
Club channel.
- Gross Margin was (4.6)%, compared to 23.4% in the third quarter
of 2022 and 23.6% in the prior year period. This reduction is
primarily due to exit and disposal costs relating to the transition
to a co-manufacturing model and the product quality issue
discovered in the first quarter of 2023.
- Adjusted Gross Margin, which is a non-GAAP financial measure,
was 19.0% compared to 23.4% in the third quarter of 2022 and 23.6%
in the fourth quarter of 2021. This margin compression reflects
fixed cost deleverage on lower production volume due to inventory
drawdown, increased costs associated with inventory reserves and
disposals, and inflationary freight costs. For more details on
non-GAAP financial measures, refer to the information in the
Non-GAAP financial measures section of this press release.
- Net Loss was $15.6 million, or $1.69 per diluted share compared
to a Net Loss of $5.7 million, or $0.63 per diluted share, in the
third quarter of 2022 and a Net Loss of $6.9 million, or $0.76 per
diluted share, in the prior year period.
- Adjusted Net Loss, which is a non-GAAP financial measure, of
$4.3 million, or $0.47 per diluted share, improved sequentially
versus Adjusted Net Loss of $5.6 million, or $0.61 per diluted
share, in the third quarter of 2022. In the prior year period
Adjusted Net Loss was $6.9 million, or $0.76 per diluted share. For
more details on non-GAAP financial measures, refer to the
information in the Non-GAAP financial measures section of this
press release.
Three Months Ended December
31,
2022
2021
$
% of Total
$
% of Total
Coffee creamers
$
4,934,397
55
%
$
5,177,126
55
%
Hydration and beverage enhancing
supplements
1,061,721
12
%
1,290,336
14
%
Harvest snacks and other food items
1,855,273
21
%
1,821,220
19
%
Coffee, tea, and hot chocolate
products
1,808,361
20
%
1,874,473
20
%
Other
710,989
8
%
439,695
5
%
Gross sales
10,370,741
116
%
10,602,850
113
%
Shipping income
270,251
3
%
196,384
2
%
Returns and discounts
(1,671,464
)
(19
)%
(1,431,675
)
(15
)%
Sales, net
$
8,969,528
100
%
$
9,367,559
100
%
E-commerce
5,902,285
66
%
6,195,224
66
%
Wholesale
3,067,243
34
%
3,172,335
34
%
Sales, net
$
8,969,528
100
%
$
9,367,559
100
%
Fiscal Year 2022
Highlights
- Net Sales of $35.8 million compared to $36.8 million in the
fiscal year 2021.
- E-commerce contributed 62% of total Net Sales in fiscal years
2022 and 2021, decreasing 1.7% year-over-year reflecting lower
direct-to-consumer (“DTC”) revenues due to planned reductions in
marketing spend partially offset by double-digit growth in sales
via Amazon.com.
- Wholesale contributed 38% of total Net Sales in fiscal years
2022 and 2021, decreasing 4.3% year-over-year, primarily due to
lower sales in the Club and Food Service channels.
- Shelf stable and liquid creamer consumption in the Natural
channel increased by 24.5% compared to fiscal year 2021.
- Gross Margin was 14.5%, compared to 25.6% in fiscal year 2021.
This reduction is primarily driven by exit and disposal costs
relating to the transition to a co-manufacturing model and a
product quality issue discovered in the first quarter of 2023.
- Adjusted Gross Margin, which is a non-GAAP financial measure,
was 19.8% compared to 25.6% in fiscal year 2021. This reduction is
due to fixed cost deleverage on lower volume, increased costs
associated with inventory reserves and disposals, and inflationary
freight costs. For more details on non-GAAP financial measures,
refer to the information in the Non-GAAP financial measures section
of this press release.
- Net Loss was $40.3 million, or $4.41 per diluted share compared
to a Net Loss of $23.9 million, or $2.66 per diluted share, in
fiscal year 2021.
- Adjusted Net Loss, which is a non-GAAP financial measure, of
$22.8 million, or $2.49 per diluted share, compared to Adjusted Net
Loss was $23.4 million, or $2.56 per diluted share in fiscal year
2021. For more details on non-GAAP financial measures, refer to the
information in the Non-GAAP financial measures section of this
press release.
Year Ended December
31,
2022
2021
$
% of Total
$
% of Total
Coffee creamers
$
19,800,429
55
%
$
21,767,409
59
%
Hydration and beverage enhancing
supplements
4,877,067
14
%
5,814,629
16
%
Harvest snacks and other food items
7,191,316
20
%
7,108,361
19
%
Coffee, tea, and hot chocolate
products
6,648,576
19
%
5,228,888
14
%
Other
1,805,914
5
%
808,352
2
%
Gross sales
40,323,302
113
%
40,727,639
110
%
Shipping income
1,099,358
3
%
457,879
1
%
Returns and discounts
(5,594,268
)
(16
)%
(4,374,565
)
(11
)%
Sales, net
$
35,828,392
100
%
$
36,810,953
100
%
E-commerce
22,313,241
62
%
22,687,736
62
%
Wholesale
13,515,151
38
%
14,123,217
38
%
Sales, net
$
35,828,392
100
%
$
36,810,953
100
%
Balance Sheet and Cash Flow
Highlights
The Company had $17.8 million of cash and cash equivalents as of
December 31, 2022, and no outstanding debt.
Net cash used in operating activities was $14.3 million for the
year ended December 31, 2022, compared to $22.1 million in the
prior year period. During fiscal 2022, net cash used in operating
activities improved sequentially from the second to the third
quarter by 8.6% and sequentially from the third to the fourth
quarter by 11.7%.
2023 Outlook
We anticipate that uncertain economic environment with
historically high inflation rates impacting consumer spending will
continue into 2023. We believe that strategic actions we have taken
in 2022, and continue to take in 2023, have positioned the business
for net sales growth in the high single digits and gross margin in
excess of 30%, excluding extraordinary events. Gross margin
guidance excludes any one-time charges associated with the any
non-recurring actions.
Conference Call and Webcast Details
The Company will host a conference call and webcast at 5:00 p.m.
ET today to discuss results. Participants may access the live
webcast on the Laird Superfood Investor Relations website at
https://investors.lairdsuperfood.com under “Events”.
About Laird Superfood
Laird Superfood, Inc. creates award-winning, plant-based
superfood products that are both delicious and functional. The
Company's products are designed to enhance your daily ritual and
keep consumers fueled naturally throughout the day. The Company was
co-founded in 2015 by the world's most prolific big-wave surfer,
Laird Hamilton. Laird Superfood's offerings are environmentally
conscientious, responsibly tested and made with real ingredients.
Shop all products online at lairdsuperfood.com and join the Laird
Superfood community on social media for the latest news and daily
doses of inspiration.
Forward-Looking Statements
This press release and the conference call referencing this
press release contain “forward-looking” statements, as that term is
defined under the federal securities laws, including but not
limited to statements regarding Laird Superfood’s future financial
performance and growth. These forward-looking statements are based
on Laird Superfood’s current assumptions, expectations and beliefs
and are subject to substantial risks, uncertainties, assumptions
and changes in circumstances that may cause Laird Superfood’s
actual results, performance or achievements to differ materially
from those expressed or implied in any forward-looking statement.
We expressly disclaim any obligation to update or alter any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
The risks and uncertainties referred to above include, but are
not limited to: (1) the effects of the current COVID-19 pandemic,
or of other global outbreaks of pandemics or contagious diseases or
fear of such outbreaks, including on our supply chain, the demand
for our products, and on overall economic conditions and consumer
confidence and spending levels; (2) volatility regarding our
revenue, expenses, including shipping expenses, and other operating
results; (3) our ability to acquire new direct and wholesale
customers and successfully retain existing customers; (4) our
ability to attract and retain our suppliers, distributors and
co-manufacturers, and effectively manage their costs and
performance; (5) effects of real or perceived quality or health
issues with our products or other issues that adversely affect our
brand and reputation; (6) our ability to innovate on a timely and
cost-effective basis, predict changes in consumer preferences and
develop successful new products, or updates to existing products,
and develop innovative marketing strategies; (7) adverse
developments regarding prices and availability of raw materials and
other inputs, a substantial amount of which come from a limited
number of suppliers outside the United States, including in areas
which may be adversely affected by climate change; (8) effects of
changes in the tastes and preferences of our consumers and consumer
preferences for natural and organic food products; (9) the
financial condition of, and our relationships with, our suppliers,
co-manufacturers, distributors, retailers and food service
customers, as well as the health of the food service industry
generally; (10) the ability of ourselves, our suppliers and
co-manufacturers to comply with food safety, environmental or other
laws or regulations; (11) our plans for future investments in our
business, our anticipated capital expenditures and our estimates
regarding our capital requirements; (12) the costs and success of
our marketing efforts, and our ability to promote our brand; (13)
our reliance on our executive team and other key personnel and our
ability to identify, recruit and retain skilled and general working
personnel; (14) our ability to effectively manage our growth; (15)
our ability to compete effectively with existing competitors and
new market entrants; (16) the impact of adverse economic
conditions; and (17) the growth rates of the markets in which we
compete.
LAIRD SUPERFOOD, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended December
31,
Years Ended December
31,
2022
2021
2022
2021
Sales, net
$
8,969,528
$
9,367,559
$
35,828,392
$
36,810,953
Cost of goods sold
(9,381,825
)
(7,153,814
)
(30,641,125
)
(27,379,082
)
Gross profit
(412,297
)
2,213,745
5,187,267
9,431,871
General and administrative
Salaries, wages and
benefits
1,902,935
2,093,064
6,414,481
8,392,326
Impairment of goodwill and
long-lived assets
4,688,015
—
12,814,441
8,317
Loss on lease termination
3,596,365
—
3,596,365
—
Other expense
1,559,811
2,305,766
7,769,876
8,058,619
Total general and
administrative expenses
11,747,126
4,398,830
30,595,163
16,459,262
Research and product
development
92,160
171,984
427,537
1,030,127
Sales and marketing
Advertising
1,723,332
2,256,998
6,914,706
7,570,879
General marketing
814,344
1,412,265
3,797,761
4,491,446
Other expense
875,529
991,872
3,816,237
3,832,573
Total sales and marketing
expenses
3,413,205
4,661,135
14,528,704
15,894,898
Total expenses
15,252,491
9,231,949
45,551,404
33,384,287
Operating loss
(15,664,788
)
(7,018,204
)
(40,364,137
)
(23,952,416
)
Other income
124,096
63,458
47,088
99,704
Loss before income taxes
(15,540,692
)
(6,954,746
)
(40,317,049
)
(23,852,712
)
Income tax expense
(14,495
)
68,661
(20,269
)
(17,834
)
Net loss
$
(15,555,187
)
$
(6,886,085
)
$
(40,337,318
)
$
(23,870,546
)
Net loss per share:
Basic
$
(1.69
)
$
(0.76
)
$
(4.41
)
$
(2.66
)
Diluted
$
(1.69
)
$
(0.76
)
$
(4.41
)
$
(2.66
)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock,
basic and diluted
9,199,597
9,067,235
9,146,008
8,983,294
LAIRD SUPERFOOD, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Years Ended December
31,
2022
2021
Cash flows from operating
activities
Net loss
$
(40,337,318
)
(23,870,546
)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and
amortization
1,118,071
981,598
Gain on sale of assets
held-for-sale
(577,058
)
—
Stock-based compensation
631,227
4,040,207
Provision for inventory
obsolescence
2,795,174
423,345
Impairment of goodwill and
other long-lived assets
12,814,441
—
Loss on lease termination
3,596,365
—
Noncash lease costs
1,065,591
—
Other
247,350
137,451
Changes in operating assets and
liabilities:
Accounts receivable
(303,187
)
(383,998
)
Inventory
1,729,604
(3,622,784
)
Prepaid expenses and other
current assets
1,604,880
(1,008,978
)
Operating lease liability
(742,111
)
368,894
Accounts payable
191,499
(474,519
)
Accrued expenses
1,853,033
1,312,495
Net cash from operating
activities
(14,312,439
)
(22,096,835
)
Cash flows from investing
activities
Purchase of property, plant,
and equipment
(1,154,219
)
(1,555,191
)
Deposits on equipment to be
acquired
—
(489,325
)
Proceeds on sale of property,
plant, and equipment
17,677
12,700
Purchase of software
(2,713
)
(156,855
)
Acquisition of a business, net
of cash acquired
—
(10,449,587
)
Proceeds from sale of assets
held-for-sale
1,596,212
—
Proceeds from sale of
investment securities available-for-sale
8,513,783
—
Net cash from investing
activities
8,970,740
(12,638,258
)
Cash flows from financing
activities
Common stock issuances, net of
taxes
9,464
(152,414
)
Common stock issuance costs
—
(82,043
)
Recovery of short-swing
profits
28,555
—
Stock options exercised, net of
taxes
64,248
810,704
Net cash from financing
activities
102,267
576,247
Net change in cash and cash
equivalents
(5,239,432
)
(34,158,846
)
Cash and cash equivalents
beginning of year
23,049,234
57,208,080
Cash and cash equivalents end
of year
$
17,809,802
$
23,049,234
LAIRD SUPERFOOD, INC.
CONSOLIDATED BALANCE
SHEETS
As of
December 31, 2022
December 31, 2021
Assets
Current assets
Cash, cash equivalents, and
restricted cash
$
17,809,802
$
23,049,234
Accounts receivable, net
1,494,469
1,268,718
Investment securities
available-for-sale
—
8,635,077
Inventory, net
5,696,565
10,221,343
Prepaid expenses and other
current assets, net
2,530,075
4,507,462
Total current assets
27,530,911
47,681,834
Noncurrent assets
Property and equipment, net
150,289
4,512,935
Fixed assets held-for-sale
800,000
—
Intangible assets, net
1,424,218
4,838,854
Goodwill
—
6,486,000
Right-of-use asset
133,922
2,327,752
Total noncurrent assets
2,508,429
18,165,541
Total assets
$
30,039,340
$
65,847,375
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
1,080,267
$
888,768
Accrued expenses
6,312,140
2,897,253
Lease liability, current
portion
59,845
—
Total current liabilities
7,452,252
3,786,021
Long-term liabilities
Deferred tax liability, net
—
7,534
Lease liability
76,076
—
Total long-term liabilities
76,076
7,534
Total liabilities
7,528,328
3,793,555
Stockholders’ equity
Common stock, $0.001 par value,
100,000,000 shares authorized as of December 31, 2022 and December
31, 2021; 9,576,117 and 9,210,414 issued and outstanding at
December 31, 2022, respectively; 9,460,243 and 9,094,539 issued and
outstanding at December 31, 2021, respectively
9,210
9,095
Additional paid-in capital
118,636,834
117,903,455
Accumulated other comprehensive
loss
—
(61,016
)
Accumulated deficit
(96,135,032
)
(55,797,714
)
Total stockholders’ equity
22,511,012
62,053,820
Total liabilities and stockholders’
equity
$
30,039,340
$
65,847,375
Non-GAAP Financial Measures
In this press release, we report adjusted net loss and adjusted
net loss per diluted share, which are financial measures not
required by, or presented in accordance with, accounting principles
generally accepted in the United States of America (“GAAP”).
Management uses adjusted net loss and adjusted net loss per diluted
share to evaluate financial performance because adjusted net loss
and adjusted net loss per diluted share allow for
period-over-period comparisons of the Company’s ongoing operations
before the impact of certain items described below. Management
believes this information may also be useful to investors to
compare the Company’s results period-over-period. We define
adjusted net loss and adjusted net loss per diluted share to
exclude certain one-time costs defined in detail in the table to
follow. Please be aware that adjusted net loss and adjusted net
loss per diluted share have limitations and should not be
considered in isolation or as a substitute for net loss or diluted
net loss per share. In addition, we may calculate and/or present
adjusted net loss and adjusted net loss per diluted share
differently than measures with the same or similar names that other
companies report, and as a result, the non-GAAP measures we report
may not be comparable to those reported by others.
These non-GAAP measures are reconciled to the most directly
comparable GAAP measures in the table that follows.
LAIRD SUPERFOOD, INC.
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Three Months Ended
Year Ended
March 31, 2022
June 30, 2022
September 30, 2022
December 31, 2022
December 31, 2022
Net loss
$
(14,139,402
)
$
(4,904,520
)
$
(5,738,209
)
$
(15,555,187
)
$
(40,337,318
)
Adjusted for:
Impairment of goodwill and
long-lived assets
(a)
8,026,000
100,426
—
1,479,006
9,605,432
Strategic organizational
shifts
(b)
(581,351
)
(803,405
)
67,974
8,683,331
7,366,549
Gain on sale of land
held-for-sale
(c)
—
(573,818
)
—
—
(573,818
)
Company-wide rebranding
costs
(d)
—
—
—
455,475
455,475
Product quality issue
(e)
—
—
—
559,042
559,042
Other
(f)
(22,296
)
—
96,400
95,000
169,104
Adjusted net loss
$
(6,717,049
)
$
(6,181,317
)
$
(5,573,835
)
(4,283,333
)
$
(22,755,534
)
Adjusted net loss per share,
diluted:
(0.74
)
(0.68
)
(0.61
)
(0.47
)
(2.49
)
Weighted-average shares of common stock
outstanding used in computing adjusted net loss per share of common
stock, diluted
9,095,441
9,132,632
9,178,533
9,199,597
9,136,071
(a) Impairment charges to goodwill and
long-lived intangible assets assumed in the acquisition of Picky
Bars which occurred Q2 2021, in the amounts of $6.5 million and
$1.5 million, respectively, as well as $0.1 million of impairment
charges related to production machinery held-for-sale in Q2
2022.
(b) Costs incurred as part of the
strategic downsizing of the Company's operations, including lease
termination costs, severances and other personnel costs,
forfeitures of stock-based compensation, impairment of property,
plant, equipment, and internal use production software, and other
exit and disposal costs including but not limited to inventory
writeoffs, moving and setup costs, and property tax abatement
repayment. Reversals of stock-based compensation arising from the
forfeitures of unvested awards following the resignation of certain
executive officers, compensation expense recognized for severances
related to the resignations of certain executive officers.
(c) Gains realized on the sale of excess
lots of land adjacent to the Company's warehouses in Sisters,
Oregon in Q2 2022.
(d) Costs incurred as part of the
company-wide rebranding efforts that occurred in Q4 2022, launching
in Q1 2023.
(e) Inventory reserves recorded to account
for the product quality issue that was discovered in the first
quarter of 2023, related to finished goods and raw material
inventories on hand as of December 31, 2022.
(f) Realized losses on the liquidation of
all of the Company's available-for-sale securities included in
other income in Q1 2022. Recovery of costs incurred in connection
with an insurance claim following loss of product during handling
by a third party included in costs of goods sold in Q1 2022. Losses
incurred on prepaid inventories which were not recoverable
following the bankruptcy of the supplier and costs incurred as a
result of the early termination of a long-term service contract as
part of a strategic initiative to relieve future cash obligations
included in general and administrative expenses in Q3 2022.
Estimated legal settlement costs related to an ongoing class action
lawsuit included in general and administrative expenses in Q4
2022.
LAIRD SUPERFOOD, INC.
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Three Months Ended
Year Ended
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
December 31, 2021
Net loss
$
(5,330,504
)
$
(6,302,259
)
$
(5,351,698
)
$
(6,886,085
)
$
(23,870,546
)
Adjusted for:
Write off of prepaid inventory
balances from bankrupt supplier
(a)
—
179,000
—
—
179,000
Acquisition costs
(b)
98,750
179,390
—
—
278,140
Adjusted net loss
$
(5,231,754
)
$
(5,943,869
)
$
(5,351,698
)
$
(6,886,085
)
$
(23,413,406
)
Adjusted net loss per share,
diluted:
(0.59
)
(0.66
)
(0.59
)
(0.76
)
(2.56
)
Weighted-average shares of
common stock outstanding used in computing adjusted net loss per
share of common stock, diluted
8,894,495
8,967,797
9,001,912
9,067,235
9,136,071
(a) Losses incurred on prepaid inventories
which were not recoverable following the bankruptcy of the
supplier.
(b) Costs associated with the acquisition
of Picky Bars LLC on May 3, 2021, including professional and legal
fees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230314005904/en/
Investor Relations Contact Steve Richie
srichie@lairdsuperfood.com
Grafico Azioni Laird Superfood (AMEX:LSF)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Laird Superfood (AMEX:LSF)
Storico
Da Giu 2023 a Giu 2024