Net Sales grew 30%. Gross Margin at 41.8%, the
third consecutive quarter at or above 40.0%. Cash increased $0.5
million.
Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,”
the “Company,” “we,” and “our”) today reported financial results
for the second quarter ended June 30, 2024.
Jason Vieth, Chief Executive Officer, commented, “I am
pleased to report that our second quarter results once again
demonstrate tremendous progress in the two most important financial
measures for our business – namely, strong sales growth and
sustained margin improvement. After reporting 22% Net Sales growth
in Q1 of this year, our Net Sales growth accelerated to 30% in Q2,
with both sales channels growing and led by 80% growth on Amazon
and 32% growth on DTC. At the same time, Net Sales in our Wholesale
business grew by 9%, and our retail scanner sales by an even more
impressive 30%, demonstrating a healthy business across all sales
channels. In addition, our Gross Margin was 41.8% during Q2 marking
the third consecutive quarter that it has been in excess of 40%,
which gives us confidence in our ability to sustain Gross Margin
above 40% going forward.”
Vieth continued: “Based on our strong performance through the
first half of the year, we are increasing our 2024 outlook. For the
full year, we are now projecting Net Sales to be $40 to $44
million, which represents 17% - 29% growth versus prior year, and
Gross Margin to be 40% - 41%, which would be a 10- to 11-point
improvement versus 2023. This increase in our full-year guidance
reflects the confidence that we have in our near-term financial
results as well as the long-term strategy and financial future of
Laird Superfood.”
Second Quarter 2024 Highlights
- Net Sales of $10.0 million compared to $9.9 million in the
prior quarter, and $7.7 million in the corresponding prior year
period.
- Wholesale sales increased by 9% year-over-year and contributed
39% of total Net Sales, driven by growth in Grocery due to velocity
improvement and distribution expansion, as well as more efficient
promotional spend.
- E-commerce sales increased by 47% year-over-year and
contributed 61% of total Net Sales, despite a significant,
continued, planned reduction in media spend in this channel. Sales
on Amazon.com increased by 80% year-over-year, building on the
strong performance over the last two quarters as compared to the
reduced prior year sales volume stemming from out-of-stock products
caused by the quality event last year. Direct-to-Consumer (DTC)
grew 32% year-over-year, driven by strong performance in both
subscription and repeat customers, higher average order value, and
improved discount rates due to strategic shifts in our promotional
strategies.
- Gross Margin was 41.8% compared to 40.0% in the first quarter
of 2024 and 24.3% in the corresponding prior year period. This
margin expansion was driven by the full realization of the cost
savings resulting from our transition to a variable cost
third-party co-manufacturing model, as well as planned reductions
in trade spend.
- Net Loss was $0.2 million, or $0.02 per diluted share, compared
to Net Loss of $3.5 million, or $0.38 per diluted share, in the
corresponding prior year period. The improvement was driven by
Gross Margin expansion, as well as lower marketing, and general and
administrative (G&A) spend.
- Adjusted Net Loss, which is a non-GAAP financial measure, was
$0.3 million, or $0.03 per diluted share, compared to $3.3 million,
or $0.36 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.
Year-to-Date 2024
Highlights
- Net Sales of $19.9 million compared to $15.8 million in the
corresponding prior year period, representing 26% growth.
- Wholesale sales increased by 9% year-over-year and contributed
40% of total Net Sales, driven by velocity improvement and
distribution expansion in Retail, as well as more efficient
promotional spend.
- E-commerce sales increased by 40% year-over-year and
contributed 60% of total Net Sales, despite a significant, planned
reduction in media spend in this channel. Amazon.com and DTC
platform sales increased by 63% and 29%, respectively,
year-over-year, driven by growth in revenue from subscribers and
repeat customers as well as higher average order value.
- Gross Margin was 40.9% compared to 23.7% in the corresponding
prior year period. This margin expansion was driven by the full
realization of the cost savings resulting from our transition to a
variable cost third-party co-manufacturing business model, as well
as planned reductions in trade spend.
- Net Loss was $1.3 million, or $0.13 per diluted share, compared
to Net Loss of $7.7 million, or $0.83 per diluted share, in the
corresponding prior year period. The improvement was driven by
Gross Margin expansion, and lower marketing, and G&A
spend.
- Adjusted Net Loss, which is a non-GAAP financial measure, was
$1.3 million, or $0.13 per diluted share, compared to $7.2 million,
or $0.77 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 June
30,
2024
2023
$
% of Total
$
% of Total
Coffee creamers
$
4,696,979
47
%
$
4,647,553
60
%
Coffee, tea, and hot chocolate
products
2,503,529
25
%
1,957,760
25
%
Hydration and beverage enhancing
supplements
2,309,600
23
%
998,309
13
%
Harvest snacks and other food items
1,683,776
17
%
1,849,947
24
%
Other
91,909
1
%
124,953
2
%
Gross sales
11,285,793
113
%
9,578,522
124
%
Shipping income
120,402
1
%
259,843
3
%
Returns and discounts
(1,402,541
)
(14
)%
(2,114,274
)
(27
)%
Sales, net
$
10,003,654
100
%
$
7,724,091
100
%
Three Months Ended June
30,
2024
2023
$
% of Total
$
% of Total
E-commerce
$
6,098,327
61
%
$
4,139,373
54
%
Wholesale
3,905,327
39
%
3,584,718
46
%
Sales, net
$
10,003,654
100
%
$
7,724,091
100
%
Six Months Ended June
30,
2024
2023
$
% of Total
$
% of Total
Coffee creamers
$
10,267,299
52
%
$
9,779,696
62
%
Coffee, tea, and hot chocolate
products
4,678,794
23
%
3,912,901
25
%
Hydration and beverage enhancing
supplements
4,334,872
22
%
1,669,159
11
%
Harvest snacks and other food items
2,987,837
15
%
3,602,344
23
%
Other
213,921
1
%
154,683
1
%
Gross sales
22,482,723
113
%
19,118,783
122
%
Shipping income
231,830
1
%
563,069
4
%
Returns and discounts
(2,801,961
)
(14
)%
(3,844,823
)
(26
)%
Sales, net
$
19,912,592
100
%
$
15,837,029
100
%
Six Months Ended June
30,
2024
2023
$
% of Total
$
% of Total
E-commerce
$
11,966,664
60
%
$
8,567,054
54
%
Wholesale
7,945,928
40
%
7,269,975
46
%
Sales, net
$
19,912,592
100
%
$
15,837,029
100
%
Balance Sheet and Cash Flow
Highlights
The Company had $7.8 million of cash, cash equivalents, and
restricted cash as of June 30, 2024, and no outstanding debt.
Cash provided by operating activities was $0.2 million for the
first half of 2024, compared to cash used in operating activities
of $7.5 million in the first half of 2024. The improvement in cash
used relative to the corresponding prior year period was driven by
Gross Margin expansion and significant reductions in marketing and
G&A costs. Cash increased by $0.5 million in the second quarter
of 2024 as compared to cash reduction of $0.4 million in the first
quarter of 2024. The improved cash flow in the second quarter of
2024 relative to the first quarter of 2024 was due to working
capital timing, specifically the timing of accounts receivables
collections, and the distribution of 2023 employee bonuses in the
first quarter of 2024.
2024 Outlook
Based on the first half 2024 results and management's best
assessment of the environment today, the Company is raising the
guidance for the full year 2024:
- Net Sales are expected to be in the range of approximately $40
to $44 million, representing growth of 17% to 29% compared to
2023.
- Gross Margin is expected to expand to approximately 40% to 41%,
representing a 10- 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
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Sales, net
$
10,003,654
$
7,724,091
$
19,912,592
$
15,837,029
Cost of goods sold
(5,826,373
)
(5,848,023
)
(11,771,210
)
(12,087,085
)
Gross profit
4,177,281
1,876,068
8,141,382
3,749,944
General and administrative
Salaries, wages, and benefits
975,809
1,090,266
1,898,216
2,405,715
Other general and administrative
1,172,363
1,608,235
2,407,704
3,375,096
Total general and administrative
expenses
2,148,172
2,698,501
4,305,920
5,780,811
Sales and marketing
Marketing and advertising
1,383,425
2,036,766
3,436,683
4,187,822
Selling
920,739
721,630
1,699,895
1,574,834
Related party marketing agreements
63,566
74,776
126,067
164,564
Total sales and marketing expenses
2,367,730
2,833,172
5,262,645
5,927,220
Total operating expenses
4,515,902
5,531,673
9,568,565
11,708,031
Operating loss
(338,621
)
(3,655,605
)
(1,427,183
)
(7,958,087
)
Other income
103,069
149,109
214,066
320,103
Loss before income taxes
(235,552
)
(3,506,496
)
(1,213,117
)
(7,637,984
)
Income tax expense
(3,524
)
(750
)
(42,481
)
(13,172
)
Net loss
$
(239,076
)
$
(3,507,246
)
$
(1,255,598
)
$
(7,651,156
)
Net loss per share:
Basic and diluted
$
(0.02
)
$
(0.38
)
$
(0.13
)
$
(0.83
)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock,
basic and diluted
9,833,001
9,284,585
9,617,800
9,249,738
LAIRD SUPERFOOD, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities
Net loss
$
(1,255,598
)
$
(7,651,156
)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and amortization
138,579
163,532
Stock-based compensation
533,273
453,711
Provision for inventory obsolescence
187,901
378,859
Allowance for credit losses
(28,425
)
51,363
Noncash lease costs
76,169
76,168
Other operating activities, net
—
38,984
Changes in operating assets and
liabilities:
Accounts receivable
(117,929
)
(371,355
)
Inventory
(263,719
)
(539,579
)
Prepaid expenses and other current
assets
149,152
1,328,709
Operating lease liability
(64,812
)
(62,923
)
Accounts payable
310,019
1,202,716
Accrued expenses
555,804
(2,529,105
)
Net cash from operating activities
220,414
(7,460,076
)
Cash flows from investing
activities
(13,462
)
245,706
Cash flows from financing
activities
(86,066
)
(19,137
)
Net change in cash and cash
equivalents
120,886
(7,233,507
)
Cash, cash equivalents, and restricted
cash, beginning of period
7,706,806
17,809,802
Cash, cash equivalents, and restricted
cash, end of period
$
7,827,692
$
10,576,295
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
Receivable from sale of assets
held-for-sale included in other current assets at the end of the
period
$
—
$
450,351
LAIRD SUPERFOOD, INC.
CONSOLIDATED BALANCE
SHEETS
(unaudited)
As of
June 30, 2024
December 31, 2023
Assets
Current assets
Cash, cash equivalents, and restricted
cash
$
7,827,692
$
7,706,806
Accounts receivable, net
1,168,726
1,022,372
Inventory, net
6,398,377
6,322,559
Prepaid expenses and other current
assets
1,136,412
1,285,564
Total current assets
16,531,207
16,337,301
Noncurrent assets
Property and equipment, net
96,477
122,595
Intangible assets, net
986,232
1,085,231
Related party license agreements
132,100
132,100
Right-of-use assets
290,929
354,732
Total noncurrent assets
1,505,738
1,694,658
Total assets
$
18,036,945
$
18,031,959
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
1,942,263
$
1,647,673
Accrued expenses
3,131,097
2,586,343
Related party liabilities
29,167
2,688
Lease liabilities, current portion
147,720
138,800
Total current liabilities
5,250,247
4,375,504
Lease liabilities
182,470
243,836
Total liabilities
5,432,717
4,619,340
Stockholders’ equity
Common stock, $0.001 par value,
100,000,000 shares authorized at June 30, 2024 and December 31,
2023; 10,474,633 and 10,108,929 issued and outstanding at June 30,
2024, respectively; and 9,749,326 and 9,383,622 issued and
outstanding at December 31, 2023, respectively.
10,107
9,384
Additional paid-in capital
120,147,868
119,701,384
Accumulated deficit
(107,553,747
)
(106,298,149
)
Total stockholders’ equity
12,604,228
13,412,619
Total liabilities and stockholders’
equity
$
18,036,945
$
18,031,959
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 June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net loss
$
(239,076
)
$
(3,507,246
)
$
(1,255,598
)
$
(7,651,156
)
Adjusted for:
Product quality issue (a)
(24,051
)
—
(35,246
)
491,861
Strategic organizational shifts (b)
—
74,690
—
(60,690
)
Company-wide rebranding costs (c)
—
102,355
—
163,806
Adjusted net loss
$
(263,127
)
$
(3,330,201
)
$
(1,290,844
)
$
(7,056,179
)
Net loss per share, diluted:
$
(0.02
)
$
(0.38
)
$
(0.13
)
$
(0.83
)
Adjusted net loss per share,
diluted:
$
(0.03
)
$
(0.36
)
$
(0.13
)
$
(0.76
)
Weighted-average shares of common stock
outstanding used in computing adjusted net loss per share of common
stock, diluted
9,833,001
9,284,585
9,617,800
9,249,738
(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 have
recorded recoveries in the first and second quarters 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.
(c) Costs incurred as part of the
company-wide rebranding efforts that launched in Q1 2023.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Gross margin
41.8
%
24.3
%
40.9
%
23.7
%
Adjusted for:
Product quality issue (a)
-0.3
%
—
-0.2
%
2.6
%
Strategic organizational shifts (b)
—
—
—
-0.1
%
Adjusted gross margin
41.5
%
24.3
%
40.7
%
26.8
%
(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 half 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, and freight costs to move inventory to third-party
facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807738928/en/
Investor Relations Contact Trevor Rousseau
investors@lairdsuperfood.com
Laird Superfood (AMEX:LSF)
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