BOULDER, Colo., May 8, 2024 (BUSINESS WIRE) --
Laird Superfood, Inc. (NYSE American: LSF) ("Laird Superfood," the "Company", "we", and "our"), today reported financial results for the first quarter ended March 31, 2024.
Jason Vieth, Chief Executive Officer, commented, "After more than 18 months of executing a turnaround on our business, I am pleased to announce first quarter results that demonstrate the achievement of our growth and margin goals. Our 22% Net Sales growth during Q1 is among the best results for public companies within the food industry, and we achieved this through double-digit growth in each of our measured channels. Combined with another quarter of at least 40% Gross Margin, it's becoming clear that our strategy is working as we continue to build Laird Superfood into a leading plant-based brand of natural, functional food products."
Anya Hamill, Chief Financial Officer, commented, "Laird Superfood's first quarter financial results showcase our team's work against our strategic initiatives. Net Sales grew 22% and we achieved 40% Gross Margin, representing 17-point improvement over the same period in 2023. At the same time, operating expenses were reduced by $1.1 million and Net Loss improved by $3.1 million. Our balance sheet remains strong with no debt and $7.3 million of cash as of March 31, 2024, and we continue to project that we have enough cash to fund our operations into 2026 and beyond. Given the strength of our Q1 results, we are raising the upper end of our 2024 outlook for Net Sales to $38-42 million and are now projecting Gross Margin will reach 37 to 41%. Our full year guidance reflects the confidence that we have in our near-term financial results as well as the long-term strategies and financial future of Laird."
First Quarter 2024 Highlights
Net Sales of $9.9 million compared to $9.2 million in the prior quarter, and $8.1 million in the corresponding prior year period.
Wholesale sales increased by 10% year-over-year and contributed 41% of total Net Sales, driven by sales growth in club, velocity improvement and distribution expansion in grocery, and more efficient promotional spend.
E-commerce sales increased by 33% year-over-year and contributed 59% of total Net Sales, despite a significant, planned reduction in media spend in this channel. Sales through Amazon increased by 48% year-over-year, building on the strong performance in the fourth quarter of 2023, and continued strong inventory levels and media efficiency, as compared to the reduced sales volume during the first quarter of 2023 stemming from out-of-stock products associated with the quality event last year. Direct-to-consumer (DTC) achieved double-digit growth of 25% year-over-year driven by strong performance in both subscription and repeat orders, higher average order value, and improved discount rates due to strategic shifts in our promotional strategies.
Gross Margin was 40.0%, compared to 40.4% in the fourth quarter of 2023 and 23.1% in the corresponding prior year period. This margin expansion was driven by the full realization of the cost savings due to our transition to a variable cost third-party co-manufacturing business model, as well as planned reductions in trade spend intended to improve promotional effectiveness.
Net Loss was $1.0 million, or $0.11 per diluted share, compared to Net Loss of $4.1 million, or $0.45 per diluted share, in the corresponding prior year period. The improvement was driven by Gross Margin expansion, and lower marketing, and general and administrative (G&A) spend.
Adjusted Net Loss, which is a non-GAAP financial measure, was $1.0 million, or $0.11 per diluted share, compared to $3.7 million, or $0.40 per diluted share in the corresponding prior year period. This improvement was driven by significantly expanded Gross Margins and lower marketing and G&A costs. For more details on non-GAAP financial measures, refer to the information in the non-GAAP financial measures section of this press release.
Revenue Disaggregation
Three Months Ended March 31,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------------------------------------------------ -------------------- -------------------- ------------------------------------------------------------------------------------------ -------------------- --------------------
$ % of Total $ % of Total
-------------------------------------------------- ------------------------------------------------------------ -------------------------------------------------- ------------------------------------------------------------
Coffee creamers $ 5,570,321 56 % $ 5,132,143 63 %
Coffee, tea, and hot chocolate products 2,175,265 22 % 1,955,140 24 %
Hydration and beverage enhancing supplements 2,025,272 20 % 670,851 8 %
Harvest snacks and other food items 1,304,060 13 % 1,752,397 22 %
Other 122,012 1 % 29,729 -- %
-------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- --------------------
Gross sales 11,196,930 112 % 9,540,260 117 %
Shipping income 111,428 1 % 303,226 4 %
Returns and discounts (1,399,420 ) (13 )% (1,730,548 ) (21 )%
-------------------- ---------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- --------------------
Three Months Ended March 31,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2023
---------------------------------------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------- --------------------
$ % of Total $ % of Total % of Total
----------------------------- -------------------- -------------------- ------------------------------------------- ----------------------------- -------------------- -------------------- -------------------------------------------
E-commerce $ 5,868,337 59 % $ 4,427,681 55 %
Wholesale 4,040,601 41 % 3,685,257 45 %
-------------------- --------- -------------------- -------------------- -------------------- --- -------------------- -------------------- --------- -------------------- -------------------- --- --------------------
Balance Sheet and Cash Flow Highlights
The Company had $7.3 million of cash, cash equivalents, and restricted cash as of March 31, 2024, and no outstanding debt.
Cash used in operating activities was $0.4 million for the first quarter of 2024, compared to cash provided by operating activities of $0.2 million in the fourth quarter of 2023 and cash used in operating activities of $6.1 million in the prior year period. The improvement in cash used relative to the corresponding prior year period was driven by Gross Margin expansion and significant reductions in G&A costs. The decrease in cash burn in the first quarter of 2024 relative to the fourth quarter of 2023 was due to an increase in marketing investment as well as working capital timing, specifically the timing of accounts receivables collections and the distribution of 2023 employee bonuses.
2024 Outlook
Based on management's best assessment of the environment today, the Company is providing the following outlook for the full year 2024:
Net Sales are expected to be in the range of approximately $38 to $42 million, representing growth of 11% to 23% compared to 2023.
Gross Margin is expected to expand to approximately 37% to 41%, excluding any one-time charges, representing a 7 to 11-point improvement compared to 2023.
Conference Call and Webcast Details
The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss our financial 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 clean, delicious, and functional. The Company's products are designed to enhance a consumer's daily ritual and keep them 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 www.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 anticipated cash runway, future financial performance, and growth. Such forward-looking statements may be identified by words such as "anticipates," "believes," "continues," "could," "estimates," "expects" "intends," "may," "outlook," "plans," "potential," predicts," "projects," "seeks," "should," "will," "would", or the antonyms of these terms or other comparable terminology. 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 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, including our ability to continue as a going concern; (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; (17) the growth rates of the markets in which we compete, and (18) the other risks described in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings we make with the Securities and Exchange Commission.
LAIRD SUPERFOOD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
------------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Sales, net $ 9,908,938 $ 8,112,938
Cost of goods sold (5,944,837 ) (6,239,062 )
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Gross profit 3,964,101 1,873,876
-------------------- ---------- -------------------- -------------------- ---------- --------------------
General and administrative
922,407 1,315,449
Salaries, wages, and benefits
1,235,341 1,766,861
Other general and administrative
-------------------- ---------- -------------------- -------------------- ---------- --------------------
2,157,748 3,082,310
Total general and administrative expenses
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Sales and marketing
2,053,258 2,203,035
Marketing and advertising
779,156 853,204
Selling expenses
62,501 37,809
Related party marketing agreements
-------------------- ---------- -------------------- -------------------- ---------- --------------------
2,894,915 3,094,048
Total sales and marketing expenses
-------------------- ---------- -------------------- -------------------- ---------- --------------------
5,052,663 6,176,358
Total operating expenses
-------------------- ---------- -------------------- -------------------- ---------- --------------------
(1,088,562 ) (4,302,482 )
Operating loss
Other income 110,997 170,994
-------------------- ---------- -------------------- -------------------- ---------- --------------------
(977,565 ) (4,131,488 )
Loss before income taxes
Income tax expense (38,957 ) (12,422 )
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Net loss $ (1,016,522 ) $ (4,143,910 )
==================== ========== ==================== ==================== ========== ====================
Net loss per share:
Basic and diluted $ (0.11 ) $ (0.45 )
LAIRD SUPERFOOD, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended March 31,
----------------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Cash flows from operating activities
Net loss $ (1,016,522 ) $ (4,143,910 )
Adjustments to reconcile net loss to net cash from operating activities:
71,435 87,953
Depreciation and amortization
279,565 147,635
Stock-based compensation
43,204 234,394
Provision for inventory obsolescence
26,865 23,668
Allowance for credit losses
38,083 38,546
Noncash lease costs
-- (32,007 )
Other operating activities, net
Changes in operating assets and liabilities:
(1,069,238 ) (1,438,063 )
Accounts receivable
646,231 72,007
Inventory
217,889 402,299
Prepaid expenses and other current assets
(32,254 ) (31,315 )
Operating lease liability
84,880 1,312,821
Accounts payable
287,551 (2,728,290 )
Accrued expenses
-------------------- -------------- -------------------- -------------------- ---------- --------------------
(422,311 ) (6,054,262 )
Net cash from operating activities
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Cash flows from investing activities -- 135,737
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Cash flows from financing activities 4,791 (4,410 )
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Net change in cash and cash equivalents (417,520 ) (5,922,935 )
Cash, cash equivalents, and restricted cash, beginning of period 7,706,806 17,809,802
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Cash, cash equivalents, and restricted cash, end of period $ 7,289,286 $ 11,886,867
==================== ============== ==================== ==================== ========== ====================
Supplemental disclosures of cash flow information
Right-of-use assets obtained in exchange for operating lease liabilities $ -- $ 344,382
==================== ============== ==================== ==================== ========== ====================
Supplemental disclosures of non-cash investing activities
LAIRD SUPERFOOD, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of
----------------------------------------------------------------------------------------------------------------------------
March 31, 2024 December 31, 2023
---------------------------------------------------- ----------------------------------------------------
Assets
Current assets
$ 7,289,286 $ 7,706,806
Cash, cash equivalents, and restricted cash
2,064,745 1,022,372
Accounts receivable, net
5,633,124 6,322,559
Inventory, net
1,067,675 1,285,564
Prepaid expenses and other current assets
-------------------- ------------ -------------------- -------------------- ------------ --------------------
16,054,830 16,337,301
Total current assets
-------------------- ------------ -------------------- -------------------- ------------ --------------------
Noncurrent assets
102,881 122,595
Property and equipment, net
1,033,510 1,085,231
Intangible assets, net
132,100 132,100
Related party license agreements
323,007 354,732
Right-of-use assets
-------------------- ------------ -------------------- -------------------- ------------ --------------------
1,591,498 1,694,658
Total noncurrent assets
-------------------- ------------ -------------------- -------------------- ------------ --------------------
Total assets $ 17,646,328 $ 18,031,959
==================== ============ ==================== ==================== ============ ====================
Liabilities and Stockholders' Equity
Current liabilities
$ 1,718,574 $ 1,647,673
Accounts payable
2,862,394 2,586,343
Accrued expenses
28,167 2,688
Related party liabilities
148,598 138,800
Lease liabilities, current portion
-------------------- ------------ -------------------- -------------------- ------------ --------------------
4,757,733 4,375,504
Total current liabilities
Lease liabilities 208,142 243,836
-------------------- ------------ -------------------- -------------------- ------------ --------------------
Total liabilities 4,965,875 4,619,340
-------------------- ------------ -------------------- -------------------- ------------ --------------------
Stockholders' equity
9,520 9,384
Common stock, $0.001 par value, 100,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 9,885,429 and 9,519,725 issued and outstanding at March 31, 2024, respectively; and 9,749,326 and 9,383,622 issued and outstanding at December 31, 2023, respectively.
119,985,604 119,701,384
Additional paid-in capital
(107,314,671 ) (106,298,149 )
Accumulated deficit
-------------------- ------------ -------------------- -------------------- ------------ --------------------
12,680,453 13,412,619
Total stockholders' equity
-------------------- ------------ -------------------- -------------------- ------------ --------------------
LAIRD SUPERFOOD, INC.
NON-GAAP FINANCIAL MEASURES
(unaudited)
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 these adjusted metrics to evaluate financial performance because they 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 non-recurring items defined in detail in the tables to follow. We define adjusted gross margin to exclude the net sales and cost of goods sold components of non-recurring items defined in the tables to follow. Please be aware that adjusted gross margin, adjusted net loss, and adjusted net loss per diluted share have limitations and should not be considered in isolation or as a substitute for gross margin, net loss, or net loss per diluted share. In addition, we may calculate and/or present adjusted gross margin, 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 tables that follow:
Three Months Ended
March 31, March 31,
2024 2023
------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------
Net loss $ (1,016,522 ) $ (4,143,910 )
Adjusted for:
Product quality issue (a) (11,195 ) 491,861
Strategic organizational shifts (b) -- (135,380 )
Company-wide rebranding costs (c) -- 61,451
-------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- --------------------------------------------
Adjusted net loss $ (1,027,717 ) $ (3,725,978 )
============================================ ============================================ ============================================ ============================================ ============================================ ============================================
Net loss per share, diluted: $ (0.11 ) $ (0.45 )
Adjusted net loss per share, diluted: $ (0.11 ) $ (0.40 )
Weighted-average shares of common stock outstanding used in computing adjusted net loss per share of common stock, diluted 9,401,605 9,213,723
(a) In January 2023, we identified a product quality issue with raw material from one vendor and we voluntarily withdrew any affected finished goods. We previously incurred costs associated with product testing, discounts for replacement orders, and inventory obsolescence costs. We reached settlement with a supplier in the third quarter of 2023 and recorded recoveries in the first quarter of 2024.
(b) Costs incurred as part of the strategic downsizing of the Company's operations, including severances, forfeitures of stock-based compensation, and other personnel costs, IT integration costs, and freight costs to move inventory to third-party facilities.
Three Months Ended
March 31, 2024 March 31, 2023
------------------------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------------------
Gross margin 40.0 % 23.1 %
Adjusted for:
Product quality issue (a) -0.1 % 4.1 %
Strategic organizational shifts (b) -- -0.2 %
-------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- ----------------------------------------
Adjusted gross margin 39.9 % 27.0 %
============================================ ============================================ ============================================ ============================================ ============================================ ========================================
(a) In January 2023, we identified a product quality issue with raw material from one vendor and we voluntarily withdrew any affected finished goods. We previously incurred costs associated with product testing, discounts for replacement orders, and inventory obsolescence costs. We reached settlement with a supplier in the third quarter of 2023 and recorded recoveries in the first quarter of 2024.
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SOURCE: Laird Superfood, Inc.
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Investor Relations
Trevor Rousseau
investors@lairdsuperfood.com
COMTEX_452079322/1006/2024-05-08T16:00:02
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