Beyond Meat, Inc. (NASDAQ: BYND) (“Beyond Meat” or “the Company”),
a leader in plant-based meat, today reported financial results for
its first quarter ended April 1, 2023.
First Quarter 2023 Financial
Highlights1
- Net revenues were $92.2 million, a
decrease of 15.7% year-over-year.
- Gross profit was $6.2 million, or
gross margin of 6.7% of net revenues, compared to gross profit of
$0.2 million, or gross margin of 0.2% of net revenues, in the
year-ago period.
- Gross profit and gross margin were
positively impacted by reduced manufacturing costs excluding
depreciation, decreased logistics costs and, to a lesser extent,
lower materials costs per pound, partially offset by lower net
revenues per pound and higher inventory reserves, which increased
costs per pound.
- Gross profit and gross margin
included the impact from a change in the Company's accounting
estimate associated with the estimated useful lives of its large
manufacturing equipment, which reduced COGS depreciation expense in
the quarter by approximately $5.1 million, or 5.5 percentage points
of gross margin, relative to depreciation expense utilizing the
Company's previous estimated useful lives.
- Net loss was $59.0 million, or $0.92
per common share, compared to net loss of $100.5 million, or $1.58
per common share, in the year-ago period.
- Adjusted EBITDA was a loss of $45.8
million, or -49.6% of net revenues, compared to an Adjusted EBITDA
loss of $78.9 million, or -72.1% of net revenues, in the year-ago
period.
Beyond Meat President and CEO Ethan Brown commented, "Late last
year, we articulated a strategy to drive Beyond Meat to cash-flow
positive operations and sustainable long-term growth. We are
pleased to report strong progress for the second full quarter of
this strategy; cash use and net loss are substantially improved on
a sequential and year-over-year basis: gross margin is up on a
sequential and year-over-year basis; and we delivered net revenues
consistent with guidance. We remain focused on our strategy and
committed to pursuing our vision of transforming the $1.4 trillion
global meat industry.”
(1) This release includes references to non-GAAP financial
measures. Refer to “Non-GAAP Financial Measures” later in this
release for the definitions of the non-GAAP financial measures
presented and a reconciliation of these measures to their closest
comparable GAAP measures.
First Quarter 2023
Net revenues decreased 15.7% to $92.2 million in the first
quarter of 2023, compared to $109.5 million in the year-ago period.
The decrease in net revenues was driven by a 9.0% decrease in net
revenue per pound and a 7.3% decrease in volume of products sold.
Most markets and channels were negatively impacted by continued
softness in demand in the plant-based meat category. The decrease
in net revenue per pound was primarily attributable to changes in
product sales mix, increased trade discounts and unfavorable
changes in foreign exchange rates, partially offset by pricing
changes. U.S. retail channel net revenues decreased 35.3% compared
to the year-ago period primarily driven by a 33.2% decrease in
volume of products sold and a 3.1% decrease in net revenue per
pound due to higher trade discounts and changes in product sales
mix, partially offset by increased pricing for certain items. U.S.
foodservice channel net revenues decreased 5.3% compared to the
year-ago period primarily driven by a 7.3% decrease in volume of
products sold, partially offset by a 2.2% increase in net revenue
per pound due to changes in product sales mix, partially offset by
higher trade discounts. International retail channel net revenues
decreased 11.5% compared to the year-ago period driven by a 6.3%
decrease in net revenue per pound, largely attributable to
unfavorable changes in foreign exchange rates, increased trade
discounts and changes in product sales mix, and a 5.5% decrease in
volume of products sold. International foodservice channel net
revenues increased 99.8% compared to the year-ago period due to a
115.0% increase in volume of products sold, partially offset by a
7.1% decrease in net revenue per pound primarily due to changes in
product sales mix and unfavorable changes in foreign exchange
rates, partially offset by lower trade discounts.
Net revenues by channel (unaudited):
The following table presents our net revenues by channel for the
periods presented:
|
|
Three Months Ended |
|
Change |
(in
thousands) |
|
April 1,2023 |
|
April 2,2022 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
|
Retail |
|
$ |
44,159 |
|
|
$ |
68,260 |
|
|
$ |
(24,101 |
) |
|
(35.3 |
)% |
Foodservice |
|
|
14,675 |
|
|
|
15,493 |
|
|
|
(818 |
) |
|
(5.3 |
)% |
U.S. net revenues |
|
|
58,834 |
|
|
|
83,753 |
|
|
|
(24,919 |
) |
|
(29.8 |
)% |
International: |
|
|
|
|
|
|
|
|
|
Retail |
|
|
14,289 |
|
|
|
16,137 |
|
|
|
(1,848 |
) |
|
(11.5 |
)% |
Foodservice |
|
|
19,113 |
|
|
|
9,565 |
|
|
|
9,548 |
|
|
99.8 |
% |
International net revenues |
|
|
33,402 |
|
|
|
25,702 |
|
|
|
7,700 |
|
|
30.0 |
% |
Net revenues |
|
$ |
92,236 |
|
|
$ |
109,455 |
|
|
$ |
(17,219 |
) |
|
(15.7 |
)% |
Volume of products sold by channel
(unaudited):
The following table presents consolidated volume of our products
sold in pounds for the periods presented:
|
|
Three Months Ended |
|
Change |
(in
thousands) |
|
|
April 1,2023 |
|
|
|
April 2,2022 |
|
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
|
8,315 |
|
|
|
12,453 |
|
|
|
(4,138 |
) |
|
(33.2 |
)% |
Foodservice |
|
|
2,551 |
|
|
|
2,752 |
|
|
|
(201 |
) |
|
(7.3 |
)% |
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
|
3,337 |
|
|
|
3,530 |
|
|
|
(193 |
) |
|
(5.5 |
)% |
Foodservice |
|
|
5,549 |
|
|
|
2,581 |
|
|
|
2,968 |
|
|
115.0 |
% |
Volume of products sold |
|
|
19,752 |
|
|
|
21,316 |
|
|
|
(1,564 |
) |
|
(7.3 |
)% |
Gross profit was $6.2 million, or gross margin of 6.7% of net
revenues, in the first quarter of 2023, compared to gross profit of
$0.2 million, or gross margin of 0.2% of net revenues, in the
year-ago period. Gross profit and gross margin in the first quarter
of 2023 were positively impacted by reduced manufacturing costs
excluding depreciation, decreased logistics costs and, to a lesser
extent, lower materials costs per pound, partially offset by lower
net revenues per pound and higher inventory reserves, which
increased costs per pound. During the first quarter of 2023, the
Company completed a reassessment of the useful lives of its large
manufacturing and research and development equipment, and
determined that it should increase the estimated useful lives for
certain equipment from a range of 5 to 10 years to a uniform 10
years. The Company estimates that this change in accounting
estimate reduced COGS depreciation expense in the first quarter of
2023 by approximately $5.1 million, or 5.5 percentage points of
gross margin, relative to depreciation expense utilizing the
Company's previous estimated useful lives.
Loss from operations in the first quarter of 2023 was $57.7
million compared to $97.6 million in the year-ago period. The
reduced loss from operations was primarily driven by higher gross
profit, lower marketing-related expenses including advertising and
product donation costs, reduced non-production headcount expenses,
lower production trial expenses, and reduced outbound freight costs
included in the Company’s selling expenses.
Net loss was $59.0 million in the first quarter of 2023 compared
to $100.5 million in the year-ago period. Net loss per common share
was $0.92 in the first quarter of 2023 compared to $1.58 in the
year-ago period. The reduction in net loss in the first quarter of
2023 was primarily driven by the reduction in loss from operations
and by a $4.1 million increase in net interest income and foreign
currency transaction gains, partially offset by a $2.6 million
increase in losses related to the Company’s joint venture with
PepsiCo, Inc., the Planet Partnership, LLC (“TPP”).
Adjusted EBITDA was a loss of $45.8 million, or -49.6% of net
revenues in the first quarter of 2023 compared to an Adjusted
EBITDA loss of $78.9 million, or -72.1% of net revenues, in the
year-ago period.
Balance Sheet and Cash Flow Highlights
The Company’s cash and cash equivalents balance, including
restricted cash, was $273.6 million and total outstanding debt was
$1.1 billion as of April 1, 2023. Net cash used in operating
activities was $42.2 million for the quarter ended April 1, 2023,
compared to $165.2 million for the year-ago period. Capital
expenditures totaled $5.3 million for the quarter ended April 1,
2023, compared to $21.5 million for the year-ago period. Net cash
used in investing activities also included $3.3 million in
investment in TPP that was previously committed for the quarter
ended April 1, 2023, partially offset by $2.3 million in proceeds
from sales of fixed assets.
2023 Outlook
The Company's operating environment continues to be affected by
near-term uncertainty related to macroeconomic issues, including
inflation and rising interest rates, demand in the plant-based meat
category, increasing concerns about the likelihood of a recession,
increased competition, supply chain disruptions, challenges related
to labor availability and, to a lesser extent, COVID-19 and its
potential impact on consumer behavior and demand levels, among
other things, all of which could have unforeseen impacts on the
Company’s actual realized results. Based on management's best
assessment of the environment today, the Company is providing the
following outlook for the full year 2023:
- Net revenues are expected to be in the range of approximately
$375 million to $415 million, representing a decrease of
approximately 10% to 1% compared to 2022.
- As a result of the change in accounting estimate associated
with the Company’s estimated useful lives for its large fixed
assets, gross margin is now expected to be 1 to 2 percentage points
above prior guidance of the low double-digit range for the full
year, increasing sequentially through the remainder of the
year.
- Operating expenses are expected to be approximately $250
million, weighted slightly more towards the first half of the
year.
- Capital expenditures are expected to be in the range of $30
million to $35 million.
- The Company continues to target achievement of cash flow
positive operations within the second half of 2023.
In the first quarter of 2023 the Company continued the process
of restructuring certain contracts and operating activities related
to Beyond Meat Jerky. The Company intends to assume distribution
responsibilities for Beyond Meat Jerky starting in the fourth
quarter of 2023 and believes this move will support its objectives
for gross margin expansion. TPP will remain as a vehicle to
evaluate a range of plant-based food and beverage products for
potential future business development.
Total distribution points by channel
(unaudited):
The following table presents the approximate number of
distribution outlets by channel for the periods presented:
|
Q3 2021 |
|
Q4 2021 |
|
Q1 2022 |
|
Q2 2022 |
|
Q3 2022 |
|
Q4 2022 |
|
Q1 2023 |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail(1) |
34,000 |
|
34,000 |
|
35,000 |
|
78,000 |
|
78,000 |
|
78,000 |
|
78,000 |
Foodservice |
36,000 |
|
38,000 |
|
39,000 |
|
41,000 |
|
42,000 |
|
43,000 |
|
42,000 |
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
32,000 |
|
30,000 |
|
31,000 |
|
33,000 |
|
35,000 |
|
35,000 |
|
36,000 |
Foodservice |
26,000 |
|
28,000 |
|
30,000 |
|
31,000 |
|
33,000 |
|
34,000 |
|
35,000 |
Total distribution points |
128,000 |
|
130,000 |
|
135,000 |
|
183,000 |
|
188,000 |
|
190,000 |
|
191,000 |
___________(1) Q2 2022, Q3 2022, Q4 2022 and Q1 2023 includes
distribution points unique to Beyond Meat Jerky. Excluding Beyond
Meat Jerky, total U.S. retail distribution outlets were
approximately 33,000 in Q1 2023.
Conference Call and Webcast
The Company will host a conference call to discuss these results
today at 5:00 p.m. Eastern, 2:00 p.m. Pacific. Investors interested
in participating in the live call can dial 412-902-4255 which will
be answered by an operator or by clicking the Call me™ weblink and
entering the Call me™ Passcode = 0721233. There will also be a
simultaneous, live webcast available on the Investors section of
the Company’s website at www.beyondmeat.com. The webcast will also
be archived.
About Beyond Meat
Beyond Meat, Inc. (NASDAQ: BYND) is a leading plant-based meat
company offering a portfolio of revolutionary plant-based meats
made from simple ingredients without GMOs, no added hormones or
antibiotics, and 0 mg of cholesterol per serving. Founded in 2009,
Beyond Meat products are designed to have the same taste and
texture as animal-based meat while being better for people and the
planet. Beyond Meat’s brand promise, Eat What You Love®, represents
a strong belief that there is a better way to feed our future and
that the positive choices we all make, no matter how small, can
have a great impact on our personal health and the health of our
planet. By shifting from animal-based meat to plant-based protein,
we can positively impact four growing global issues: human health,
climate change, constraints on natural resources and animal
welfare. As of March 2023, Beyond Meat branded products were
available at approximately 191,000 retail and foodservice outlets
in over 80 countries worldwide. Visit www.BeyondMeat.com and follow
@BeyondMeat, #BeyondBurger and #GoBeyond on Facebook, Instagram,
Twitter and TikTok.
Forward-Looking Statements
Certain statements in this release constitute “forward-looking
statements" within the meaning of the federal securities laws,
including statements related to the Company’s expectations with
respect to its full year 2023 outlook, cost-reduction initiatives,
transition to a sustainable growth model and ability to execute on
its strategic plan, restructuring of certain operating activities,
and the timing and success of achieving its cash flow positive
targets. The Company may be unable to realize the contemplated
benefits in connection with the cost-reduction initiatives and
restructuring of certain operating activities, which may have an
adverse impact on the Company’s performance, results of operations
and financial condition. Additionally, the Company’s ability to
meet its cash flow positive targets is subject to a number of
assumptions and uncertainties, including, without limitation, the
Company’s ability to reduce costs and achieve positive gross
margins; the Company’s ability to meet certain revenue and
operating expense targets, which may be subject to factors beyond
the Company’s control; and the Company’s ability to monetize
inventory and manage working capital.
Forward-looking statements are based on management's current
opinions, expectations, beliefs, plans, objectives, assumptions and
projections regarding financial performance, prospects, future
events and future results, including ongoing uncertainty related to
macroeconomic issues, including inflation and rising interest
rates, demand in the plant-based meat category, increasing concerns
about the likelihood of a recession, increased competition, supply
chain disruptions, challenges related to labor availability, and
COVID-19 and its potential impact on consumer behavior and demand
levels, among other matters, and involve known and unknown risks
that are difficult to predict. In some cases, you can identify
forward-looking statements by the use of words such as “may,”
“could,” “expect,” “intend,” “plan,” “seek,” “anticipate,”
“believe,” “estimate,” “project,” “predict,” “outlook,”
“potential,” “continue,” “likely,” “will,” “would” and variations
of these terms and similar expressions, or the negative of these
terms or similar expressions. These forward-looking statements are
only predictions, not historical fact, and involve certain risks
and uncertainties, as well as assumptions. Forward-looking
statements should not be read as a guarantee of future performance
or results, and will not necessarily be accurate indications of the
times at, or by which or whether, such performance or results will
be achieved. Actual results, levels of activity, performance,
achievements and events could differ materially from those stated,
anticipated or implied by such forward-looking statements. While
Beyond Meat believes that its assumptions are reasonable, it is
very difficult to predict the impact of known factors and, in
particular, the COVID-19 pandemic, and, of course, it is impossible
to anticipate all factors that could affect actual results. There
are many risks and uncertainties that could cause actual results to
differ materially from forward-looking statements made herein
including, but not limited to, the impact of inflation and rising
interest rates across the economy, including higher food, grocery,
raw materials, transportation, energy, labor and fuel costs; the
impact of adverse and uncertain economic and political conditions
in the U.S. and international markets, including due to an economic
recession, downturn or periods of rising or high inflation; reduced
consumer confidence and changes in consumer spending, including
spending to purchase our products, and negative trends in consumer
purchasing patterns due to levels of consumers’ disposable income,
credit availability and debt levels, and economic conditions,
including due to recessionary and inflationary pressures; factors
negatively impacting demand in the plant-based meat category; our
ability to accurately predict consumer taste preferences, trends
and demand and successfully innovate, introduce and commercialize
new products and improve existing products, including in new
geographic markets; the effects of increased competition from our
market competitors and new market entrants; risks and uncertainties
related to certain cost-reduction initiatives, workforce
reductions, executive leadership changes, and the timing and
success of achieving certain financial goals or cash flow positive
targets; our ability to streamline operations and improve cost
efficiencies, which could result in the contraction of our business
and the implementation of significant cost cutting measures such as
downsizing and exiting certain operations, domestically and/or
abroad; the impact of uncertainty as a result of doing business in
China and Europe; the volatility of or inability to access the
capital markets, including due to macroeconomic factors,
geopolitical tensions or the outbreak of hostilities or war;
changes in the retail landscape, including the timing and level of
trade and promotion discounts, our ability to maintain and grow
market share and increase household penetration, repeat purchases,
buying rates (amount spent per buyer) and purchase frequency, and
our ability to maintain and increase sales velocity of our
products; changes in the foodservice landscape, including the
timing and level of marketing and other financial incentives to
assist in the promotion of our products, our ability to maintain
and grow market share and attract and retain new foodservice
customers or retain existing foodservice customers, and our ability
to introduce and sustain offering of our products on menus; the
timing and success of distribution expansion and new product
introductions in increasing revenues and market share; the timing
and success of strategic Quick Service Restaurant partnership
launches and limited time offerings resulting in permanent menu
items; foreign exchange rate fluctuations; our ability to identify
and execute cost-down initiatives intended to achieve price parity
with animal protein; the effectiveness of our business systems and
processes; our estimates of the size of our market opportunities
and ability to accurately forecast market growth; the impact of
uncertainty in our domestic and international supply chain,
including labor shortages and disruption, shipping delays and
disruption, and the impact of cyber incidents at suppliers and
vendors; our ability to effectively expand or optimize our
manufacturing and production capacity, including effectively
managing capacity for specific products with shifts in demand;
risks associated with underutilization of capacity which could give
rise to increased costs, underutilization fees and termination fees
to exit certain supply chain arrangements and/or the write- off of
certain equipment; our inability to sell our inventory in a timely
manner requiring us to sell our products through liquidation
channels at lower prices, write-down or write-off obsolete
inventory, or increase inventory reserves; our ability to
accurately forecast our future results of operations and financial
goals or targets, including fluctuations in demand for our products
and in the plant-based meat category generally and increased
competition; our ability to accurately forecast demand for our
products and manage our inventory, including the impact of customer
orders ahead of holidays and shelf reset activities, customer and
distributor changes and buying patterns, such as reductions in
targeted inventory levels, and supply chain and labor disruptions,
including due to the impact of cyber incidents at suppliers and
vendors; our operational effectiveness and ability to fulfill
orders in full and on time; variations in product selling prices
and costs, and the mix of products sold; our ability to
successfully enter new geographic markets, manage our international
expansion and comply with any applicable laws and regulations,
including risks associated with doing business in foreign
countries, substantial investments in our manufacturing operations
in China and the Netherlands, and our ability to comply with the
U.S. Foreign Corrupt Practices Act or other anti-corruption laws;
the effects of global outbreaks of pandemics (such as the COVID-19
pandemic), epidemics or other public health crises, or fear of such
crises; the success of our marketing initiatives and the ability to
maintain and grow brand awareness, maintain, protect and enhance
our brand, attract and retain new customers and maintain and grow
our market share; our ability to attract, maintain and effectively
expand our relationships with key strategic foodservice partners;
our ability to attract and retain our suppliers, distributors,
co-manufacturers and customers; our ability to procure sufficient
high-quality raw materials at competitive prices to manufacture our
products; the availability of pea and other proteins that meet our
standards; our ability to diversify the protein sources used for
our products; our ability to differentiate and continuously create
innovative products, respond to competitive innovation and achieve
speed-to-market; our ability to successfully execute our strategic
initiatives; the volatility associated with ingredient, packaging,
transportation and other input costs; real or perceived quality or
health issues with our products or other issues that adversely
affect our brand and reputation; our ability to accurately predict
consumer taste preferences, trends and demand and successfully
innovate, introduce and commercialize new products and improve
existing products, including in new geographic markets; significant
disruption in, or breach in security of our or our suppliers’ or
vendors’ information technology systems, and resultant
interruptions in service and any related impact on our reputation,
including data privacy, and on our supply chain, including on
customer demand, order fulfillment and lost sales, and the
resulting timing and/or amount of net revenues recognized; the
ability of our transportation providers to ship and deliver our
products in a timely and cost effective manner; senior management
and key personnel changes, the attraction, training and retention
of qualified employees and key personnel and our ability to
maintain our company culture; the effects of organizational changes
including reductions-in-force and realignment of reporting
structures; the success of operations conducted by joint ventures
where we share ownership and management of a company with one or
more parties who may not have the same goals, strategies or
priorities as we do and where we do not receive all of the
financial benefit; the timing, impact and success of restructuring
certain contracts and operating activities related to Beyond Meat
Jerky and our assumption of distribution responsibilities for
Beyond Meat Jerky; risks related to use of a professional employer
organization to administer human resources, payroll and employee
benefits functions for certain of our international employees, and
use of certain third party service providers for the performance of
several business operations including payroll and human capital
management services; the impact of potential workplace hazards; the
effects of natural or man-made catastrophic or severe weather
events, including events brought on by climate change, particularly
involving our or any of our co-manufacturers’ manufacturing
facilities, our suppliers’ facilities, or any other vital aspects
of our supply chain; the impact of marketing campaigns aimed at
generating negative publicity regarding our products, brand and the
plant-based meat category; the effectiveness of our internal
controls; accounting estimates based on judgment and assumptions
that may differ from actual results; the requirements of being a
public company and effects of increased administrative costs
related to compliance and reporting obligations; the sufficiency of
our cash and cash equivalents to meet our liquidity needs,
including risks associated with adverse developments affecting the
financial services industry; our significant indebtedness and
ability to repay such indebtedness; risks related to our debt,
including limitations on our cash flow from operations and our
ability to satisfy our obligations under the convertible senior
notes; our ability to raise the funds necessary to repurchase the
convertible senior notes for cash, under certain circumstances, or
to pay any cash amounts due upon conversion; provisions in the
indenture governing the convertible senior notes delaying or
preventing an otherwise beneficial takeover of us; and any adverse
impact on our reported financial condition and results from the
accounting methods for the convertible senior notes; estimates of
our expenses, future revenues, capital expenditures, capital
requirements and our needs for additional financing; our ability to
meet our obligations under our El Segundo Campus and Innovation
Center lease, the timing of occupancy and completion of the
build-out of our space, cost overruns, delays, workforce reductions
or other cost-reduction initiatives on our space demands; our
ability to meet our obligations under leases for our corporate
offices, manufacturing facilities and warehouses, or risks related
to excess space capacity under our leases due to workforce
reductions or other cost-reduction initiatives; changes in laws and
government regulation affecting our business, including the U.S.
Food and Drug Administration and the U.S. Federal Trade Commission
governmental regulation, and state, local and foreign regulation;
new or pending legislation, or changes in laws, regulations or
policies of governmental agencies or regulators, both in the U.S.
and abroad, affecting plant-based meat, the labeling or naming of
our products, or our brand name or logo; the failure of
acquisitions and other investments to be efficiently integrated and
produce the results we anticipate; risks inherent in investment in
real estate; the financial condition of, and our relationships with
our suppliers, co-manufacturers, distributors, retailers, and
foodservice customers, and their future decisions regarding their
relationships with us; our ability and the ability of our suppliers
and co-manufacturers to comply with food safety, environmental or
other laws or regulations; seasonality, including increased levels
of purchasing by customers ahead of holidays, customer shelf reset
activity and the timing of product restocking by our retail
customers; economic conditions and the impact on consumer spending;
the impact of increased scrutiny from a variety of stakeholders,
institutional investors and governmental bodies on environmental,
social and governance (“ESG”) practices, including expanding
mandatory and voluntary reporting, diligence and disclosure on ESG
matters; the outcomes of legal or administrative proceedings, or
new legal or administrative proceedings filed against us; our, our
suppliers’ and our co-manufacturers’ ability to protect our
proprietary technology, intellectual property and trade secrets
adequately; the impact of tariffs and trade wars; the impact of
changes in tax laws; and the risks discussed under the heading
“Risk Factors” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2022 filed with the SEC on March 1, 2023
and the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended April 1, 2023 to be filed with the SEC, as well as
other factors described from time to time in the Company's filings
with the SEC. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements set forth above. Such
forward-looking statements are made only as of the date of this
release. Beyond Meat undertakes no obligation to publicly update or
revise any forward-looking statement because of new information,
future events, changes in assumptions or otherwise, except to the
extent required by applicable laws. If we do update one or more
forward-looking statements, no inference should be made that we
will make additional updates with respect to those or other
forward-looking statements.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not
recognized under U.S. generally accepted accounting principles
(GAAP) in this press release, including: Adjusted EBITDA and
Adjusted EBITDA as a % of net revenues. See “Non-GAAP Financial
Measures” below for additional information and reconciliations of
such non-GAAP financial measures.
Availability of Information on Beyond Meat’s Website and
Social Media Channels
Investors and others should note that Beyond Meat routinely
announces material information to investors and the marketplace
using SEC filings, press releases, public conference calls,
webcasts and the Beyond Meat Investor Relations website. We also
intend to use certain social media channels as a means of
disclosing information about us and our products to consumers, our
customers, investors and the public (e.g., @BeyondMeat,
#BeyondBurger and #GoBeyond on Facebook, Instagram and Twitter, and
@BeyondMeatOfficial on TikTok). The information posted on social
media channels is not incorporated by reference in this press
release or in any other report or document we file with the SEC.
While not all of the information that the Company posts to the
Beyond Meat Investor Relations website or to social media accounts
is of a material nature, some information could be deemed to be
material. Accordingly, the Company encourages investors, the media
and others interested in Beyond Meat to review the information that
it shares at the “Investors” link located at the bottom of the
Company’s webpage at
https://investors.beyondmeat.com/investor-relations and to sign up
for and regularly follow the Company’s social media accounts. Users
may automatically receive email alerts and other information about
the Company when enrolling an email address by visiting “Request
Email Alerts” in the “Investors” section of Beyond Meat’s website
at https://investors.beyondmeat.com/investor-relations.
ContactsMedia:Shira
Zackaishira.zackai@beyondmeat.com
Investors:Raphael
Grossbeyondmeat@icrinc.com
BEYOND MEAT, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of
Operations |
(In thousands, except share and per share
data) |
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
April 1,2023 |
|
April 2,2022 |
Net revenues |
|
$ |
92,236 |
|
|
$ |
109,455 |
|
Cost of goods sold |
|
|
86,051 |
|
|
|
109,265 |
|
Gross profit |
|
|
6,185 |
|
|
|
190 |
|
Research and development
expenses |
|
|
12,432 |
|
|
|
19,678 |
|
Selling, general and
administrative expenses |
|
|
51,900 |
|
|
|
75,114 |
|
Restructuring expenses |
|
|
(426 |
) |
|
|
3,026 |
|
Total operating expenses |
|
|
63,906 |
|
|
|
97,818 |
|
Loss from operations |
|
|
(57,721 |
) |
|
|
(97,628 |
) |
Other (expense) income,
net: |
|
|
|
|
Interest expense |
|
|
(989 |
) |
|
|
(1,025 |
) |
Other, net |
|
|
2,908 |
|
|
|
(1,124 |
) |
Total other income (expense),
net |
|
|
1,919 |
|
|
|
(2,149 |
) |
Loss before taxes |
|
|
(55,802 |
) |
|
|
(99,777 |
) |
Income tax expense |
|
|
— |
|
|
|
10 |
|
Equity in losses of
unconsolidated joint venture |
|
|
3,235 |
|
|
|
671 |
|
Net loss |
|
$ |
(59,037 |
) |
|
$ |
(100,458 |
) |
Net loss per share available
to common stockholders—basic and diluted |
|
$ |
(0.92 |
) |
|
$ |
(1.58 |
) |
Weighted average common shares
outstanding—basic and diluted |
|
|
64,004,894 |
|
|
|
63,465,205 |
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
data) |
(unaudited) |
|
|
April 1,2023 |
|
December 31,2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
258,566 |
|
|
$ |
309,922 |
|
Restricted cash, current |
|
|
2,426 |
|
|
|
— |
|
Accounts receivable, net |
|
|
42,395 |
|
|
|
34,198 |
|
Inventory |
|
|
222,370 |
|
|
|
235,696 |
|
Prepaid expenses and other current assets |
|
|
16,561 |
|
|
|
20,700 |
|
Assets held for sale |
|
|
4,737 |
|
|
|
5,943 |
|
Total current assets |
|
$ |
547,055 |
|
|
$ |
606,459 |
|
Restricted cash,
non-current |
|
|
12,600 |
|
|
|
12,627 |
|
Property, plant, and
equipment, net |
|
|
251,218 |
|
|
|
257,002 |
|
Operating lease right-of-use
assets |
|
|
75,056 |
|
|
|
87,595 |
|
Prepaid lease costs,
non-current |
|
|
88,035 |
|
|
|
85,472 |
|
Other non-current assets,
net |
|
|
10,273 |
|
|
|
10,744 |
|
Investment in unconsolidated
joint venture |
|
|
2,340 |
|
|
|
2,325 |
|
Total assets |
|
$ |
986,577 |
|
|
$ |
1,062,224 |
|
Liabilities and stockholders’
(deficit) equity: |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
41,131 |
|
|
$ |
55,300 |
|
Current portion of operating lease liabilities |
|
|
2,960 |
|
|
|
3,812 |
|
Accrued expenses and other current liabilities |
|
|
15,826 |
|
|
|
16,729 |
|
Total current liabilities |
|
$ |
59,917 |
|
|
$ |
75,841 |
|
Long-term liabilities: |
|
|
|
|
Convertible senior notes, net |
|
$ |
1,134,591 |
|
|
$ |
1,133,608 |
|
Operating lease liabilities, net of current portion |
|
|
44,787 |
|
|
|
55,854 |
|
Finance lease obligations and other long-term liabilities |
|
|
416 |
|
|
|
469 |
|
Total long-term liabilities |
|
$ |
1,179,794 |
|
|
$ |
1,189,931 |
|
Commitments and
Contingencies |
|
|
|
|
Stockholders’ (deficit)
equity: |
|
|
|
|
Preferred stock, par value
$0.0001 per share—500,000 shares authorized, none issued and
outstanding |
|
$ |
— |
|
|
$ |
— |
|
Common stock, par value
$0.0001 per share—500,000,000 shares authorized; 64,150,754 and
63,773,982 shares issued and outstanding at April 1,2023 and
December 31, 2022, respectively |
|
|
6 |
|
|
|
6 |
|
Additional paid-in
capital |
|
|
553,805 |
|
|
|
544,357 |
|
Accumulated deficit |
|
|
(802,146 |
) |
|
|
(743,109 |
) |
Accumulated other
comprehensive loss |
|
|
(4,799 |
) |
|
|
(4,802 |
) |
Total stockholders’ deficit |
|
$ |
(253,134 |
) |
|
$ |
(203,548 |
) |
Total liabilities and stockholders’ (deficit) equity |
|
$ |
986,577 |
|
|
$ |
1,062,224 |
|
|
|
|
|
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(unaudited) |
|
|
Three Months Ended |
|
|
April 1,2023 |
|
April 2,2022 |
Cash flows from operating
activities: |
|
|
|
|
Net loss |
|
$ |
(59,037 |
) |
|
$ |
(100,458 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
6,049 |
|
|
|
7,091 |
|
Non-cash lease expense |
|
|
1,783 |
|
|
|
1,118 |
|
Share-based compensation expense |
|
|
9,565 |
|
|
|
9,292 |
|
Loss on sale of fixed assets |
|
|
3,907 |
|
|
|
315 |
|
Amortization of debt issuance costs |
|
|
984 |
|
|
|
984 |
|
Equity in losses of unconsolidated joint venture |
|
|
3,235 |
|
|
|
671 |
|
Unrealized gain on foreign currency transactions |
|
|
(731 |
) |
|
|
— |
|
Net change in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
|
(8,078 |
) |
|
|
(9,108 |
) |
Inventories |
|
|
13,779 |
|
|
|
(43,043 |
) |
Prepaid expenses and other assets |
|
|
3,926 |
|
|
|
(213 |
) |
Accounts payable |
|
|
(13,271 |
) |
|
|
(2,295 |
) |
Accrued expenses and other current liabilities |
|
|
(528 |
) |
|
|
8,527 |
|
Prepaid lease costs, non-current |
|
|
(3,082 |
) |
|
|
(36,978 |
) |
Operating lease liabilities |
|
|
(678 |
) |
|
|
(1,113 |
) |
Net cash used in operating activities |
|
$ |
(42,177 |
) |
|
$ |
(165,210 |
) |
Cash flows from investing
activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
$ |
(5,302 |
) |
|
$ |
(21,548 |
) |
Proceeds from sale of fixed assets |
|
|
2,250 |
|
|
|
— |
|
Payments for investment in joint venture |
|
|
(3,250 |
) |
|
|
— |
|
Return of security deposits |
|
|
— |
|
|
|
49 |
|
Net cash used in investing activities |
|
$ |
(6,302 |
) |
|
$ |
(21,499 |
) |
Cash flows from financing
activities: |
|
|
|
|
Principal payments under finance lease obligations |
|
$ |
(33 |
) |
|
$ |
(45 |
) |
Proceeds from exercise of stock options |
|
|
136 |
|
|
|
815 |
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
|
(252 |
) |
|
|
(439 |
) |
Net cash (used in) provided by financing activities |
|
$ |
(149 |
) |
|
$ |
331 |
|
Net decrease in cash, cash
equivalents and restricted cash |
|
$ |
(48,628 |
) |
|
$ |
(186,378 |
) |
Effect of exchange rate
changes on cash |
|
|
(328 |
) |
|
|
942 |
|
Cash, cash equivalents and
restricted cash at the beginning of the period |
|
|
322,548 |
|
|
|
733,294 |
|
Cash, cash equivalents and
restricted cash at the end of the period |
|
$ |
273,592 |
|
|
$ |
547,858 |
|
|
Supplemental disclosures
of cash flow information: |
|
|
|
|
Cash paid during the period for: |
|
|
|
|
Interest |
|
$ |
— |
|
|
$ |
17 |
|
Taxes |
|
$ |
— |
|
|
$ |
52 |
|
Non-cash investing and financing activities: |
|
|
|
|
Non-cash additions to property, plant and equipment |
|
$ |
2,474 |
|
|
$ |
6,874 |
|
Reclassification of pre-paid lease costs to operating lease
right-of-use assets |
|
$ |
519 |
|
|
$ |
— |
|
Non-cash additions to financing leases |
|
$ |
55 |
|
|
$ |
— |
|
|
Non-GAAP Financial Measures
Beyond Meat uses the non-GAAP financial measures
set forth below in assessing its operating performance and in its
financial communications. Management believes these non-GAAP
financial measures provide useful additional information to
investors about current trends in the Company's operations and are
useful for period-over-period comparisons of operations. In
addition, management uses these non-GAAP financial measures to
assess operating performance and for business planning purposes.
Management also believes these measures are widely used by
investors, securities analysts, rating agencies and other parties
in evaluating companies in our industry as a measure of our
operational performance. These non-GAAP financial measures should
not be considered in isolation or as a substitute for the
comparable GAAP measures. In addition, these non-GAAP financial
measures may not be computed in the same manner as similarly titled
measures used by other companies.
“Adjusted EBITDA” is defined as net loss
adjusted to exclude, when applicable, income tax expense, interest
expense, depreciation and amortization expense, restructuring
expenses, share-based compensation expense, and Other, net,
including interest income, and foreign currency transaction gains
and losses.
“Adjusted EBITDA as a % of net revenues” is
defined as Adjusted EBITDA divided by net revenues.
There are a number of limitations related to the
use of Adjusted EBITDA and Adjusted EBITDA as a % of net revenues
rather than their most directly comparable GAAP measures. Some of
these limitations are:
- Adjusted EBITDA excludes depreciation and amortization expense
and, although these are non-cash expenses, the assets being
depreciated may have to be replaced in the future increasing our
cash requirements;
- Adjusted EBITDA does not reflect interest expense, or the cash
required to service our debt, which reduces cash available to
us;
- Adjusted EBITDA does not reflect income tax payments that
reduce cash available to us;
- Adjusted EBITDA does not reflect restructuring expenses that
reduce cash available to us;
- Adjusted EBITDA does not reflect share-based compensation
expense and therefore does not include all of our compensation
costs;
- Adjusted EBITDA does not reflect Other, net, including interest
income and foreign currency transaction gains and losses, that may
increase or decrease cash available to us; and
- other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
The following table presents the reconciliation of Adjusted
EBITDA to its most comparable GAAP measure, net loss, as reported
(unaudited):
|
|
Three Months Ended |
(in
thousands) |
|
April 1,2023 |
|
April 2,2022 |
Net loss, as reported |
|
$ |
(59,037 |
) |
|
$ |
(100,458 |
) |
Income tax expense |
|
|
— |
|
|
|
10 |
|
Interest expense |
|
|
989 |
|
|
|
1,025 |
|
Depreciation and amortization
expense |
|
|
6,049 |
|
|
|
7,091 |
|
Restructuring expenses(1) |
|
|
(426 |
) |
|
|
3,026 |
|
Share-based compensation
expense |
|
|
9,565 |
|
|
|
9,292 |
|
Other, net(2) |
|
|
(2,908 |
) |
|
|
1,124 |
|
Adjusted EBITDA |
|
$ |
(45,768 |
) |
|
$ |
(78,890 |
) |
Net loss as a % of net
revenues |
|
|
(64.0 |
)% |
|
|
(91.8 |
)% |
Adjusted EBITDA as a % of net
revenues |
|
|
(49.6 |
)% |
|
|
(72.1 |
)% |
____________
(1 |
) |
Primarily comprised of legal and
other expenses associated with the dispute with a co-manufacturer
with whom an exclusive supply agreement was terminated in May 2017.
On October 18, 2022, the parties to this dispute entered into a
confidential written settlement agreement and mutual release,
related to this matter. In the three months ended April 1, 2023, we
recorded a credit of $(0.4) million in restructuring expenses,
primarily driven by a reversal of certain accruals. |
(2 |
) |
Includes $0.3 million in net
foreign currency transaction gains and $1.1 million in net foreign
currency transaction losses in the three months ended April 1, 2023
and April 2, 2022, respectively. |
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