Beyond Meat, Inc. (NASDAQ: BYND) (“Beyond Meat” or “the Company”),
a leader in plant-based meat, today reported financial results for
its second quarter ended July 2, 2022.
Second Quarter 2022 Financial
Highlights1
- Net revenues were $147.0 million, a decrease of 1.6%
year-over-year.
- Gross profit was a loss of $6.2 million, or gross margin of
-4.2% of net revenues. Gross profit was negatively impacted by
approximately $14.5 million, or -10.0 percentage points of gross
margin, associated with sales to the liquidation channel and
increased inventory reserves, and a further $7.7 million, or -6.7
percentage points of gross margin, related to Beyond Meat®
Jerky.
- Net loss was $97.1 million, or $1.53 per common share. Net loss
as a percentage of net revenues was -66.1%.
- Adjusted EBITDA was a loss of $68.8 million, or -46.8% of net
revenues.
Beyond Meat President and CEO Ethan Brown commented, “In Q2
2022, we recorded our second largest quarter ever in terms of net
revenues even as consumers traded down among proteins in the
context of inflationary pressures, and we made solid sequential
progress on reducing operating and manufacturing conversion costs.
Across the balance of the year, we are tightly focused on
intensifying OpEx and manufacturing cost reductions, executing
against a series of planned market activities for our global
strategic partners, and strengthening our retail business through
core support and the introduction of one of our best innovations to
date. Through these and other measures, we are confident we will
emerge from the current economic climate leaner and stronger, and
well positioned for our next chapter of growth.”
_______________________
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.
Brown continued, “We recognize progress is taking longer than we
expected, notwithstanding the increasing urgency and importance of
our opportunity. Our transition to mass market consumption will
occur as we actualize our vision: providing consumers with
plant-based meats that are indistinguishable from, understood as
healthier than, and at price parity with their animal protein
equivalents. With the recent, dramatic, decline in consumer buying
power, the importance of delivering on our price parity targets is
magnified. We take note of this powerful reminder, and continue to
advance as well as broaden cost reduction activities in service to
realizing price parity.”
Second Quarter 2022
Net revenues decreased 1.6% to $147.0 million in the second
quarter of 2022, compared to $149.4 million in the year-ago period.
The decrease in net revenues was driven by a decrease in net
revenue per pound of approximately 14.2%, partially offset by a
14.6% increase in total pounds sold. The decrease in net revenue
per pound was primarily attributable to changes in price, including
the impact of sales to liquidation channels and list price
reductions in the EU implemented in the first quarter of 2022,
changes in foreign exchange rates, and increased trade discounts.
U.S. retail channel net revenues increased 2.2% compared to the
year-ago period primarily driven by sales of Beyond Meat Jerky,
which was introduced in the first quarter of 2022, to the Planet
Partnership, LLC, our joint venture with PepsiCo, Inc., partially
offset by decreases of other products. U.S. foodservice channel net
revenues decreased 2.4% primarily due to discontinued distribution
at a certain customer, which was included in the year-ago period,
partially offset by increased sales of other products.
International retail channel net revenues decreased 17.0% mainly
due to list price reductions in the EU, unfavorable foreign
exchange rate impact, and increased trade discounts partially
offset by increased pounds sold. International foodservice channel
net revenues increased 7.0% primarily due to an increase in pounds
sold, partially offset by changes in sales mix, unfavorable foreign
exchange rate impact, and increased trade discounts.
Net revenues by channel (unaudited):
The following tables present our net revenues by channel for the
periods presented:
|
Three Months Ended |
|
Change |
(in
thousands) |
July 2, 2022 |
|
July 3, 2021 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
Retail |
$ |
78,861 |
|
$ |
77,195 |
|
$ |
1,666 |
|
|
2.2% |
Foodservice |
|
23,389 |
|
|
23,961 |
|
|
(572 |
) |
|
(2.4)% |
U.S. net revenues |
|
102,250 |
|
|
101,156 |
|
|
1,094 |
|
|
1.1% |
International: |
|
|
|
|
|
|
|
Retail |
|
23,692 |
|
|
28,544 |
|
|
(4,852 |
) |
|
(17.0)% |
Foodservice |
|
21,098 |
|
|
19,726 |
|
|
1,372 |
|
|
7.0% |
International net
revenues |
|
44,790 |
|
|
48,270 |
|
|
(3,480 |
) |
|
(7.2)% |
Net revenues |
$ |
147,040 |
|
$ |
149,426 |
|
$ |
(2,386 |
) |
|
(1.6)% |
|
Six Months Ended |
|
Change |
(in
thousands) |
July 2, 2022 |
|
July 3, 2021 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
Retail |
$ |
147,121 |
|
$ |
141,021 |
|
$ |
6,100 |
|
|
4.3% |
Foodservice |
|
38,882 |
|
|
40,703 |
|
|
(1,821 |
) |
|
(4.5)% |
U.S. net revenues |
|
186,003 |
|
|
181,724 |
|
|
4,279 |
|
|
2.4% |
International: |
|
|
|
|
|
|
|
Retail |
|
39,829 |
|
|
45,743 |
|
|
(5,914 |
) |
|
(12.9)% |
Foodservice |
|
30,663 |
|
|
30,123 |
|
|
540 |
|
|
1.8% |
International net
revenues |
|
70,492 |
|
|
75,866 |
|
|
(5,374 |
) |
|
(7.1)% |
Net revenues |
$ |
256,495 |
|
$ |
257,590 |
|
$ |
(1,095 |
) |
|
(0.4)% |
Pounds sold by channel (unaudited):
The following table presents consolidated pounds sold by channel
for the periods presented:
|
Three Months Ended |
|
Change |
|
Six Months Ended |
|
Change |
(in
thousands) |
July 2,2022 |
|
July 3,2021 |
|
Amount |
|
% |
|
July 2,2022 |
|
July 3,2021 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
16,057 |
|
13,834 |
|
2,223 |
|
|
16.1% |
|
28,510 |
|
24,962 |
|
3,548 |
|
|
14.2% |
Foodservice |
3,965 |
|
4,002 |
|
(37 |
) |
|
(0.9)% |
|
6,717 |
|
6,884 |
|
(167 |
) |
|
(2.4)% |
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
5,061 |
|
4,775 |
|
286 |
|
|
6.0% |
|
8,591 |
|
7,734 |
|
857 |
|
|
11.1% |
Foodservice |
5,042 |
|
3,666 |
|
1,376 |
|
|
37.5% |
|
7,623 |
|
5,669 |
|
1,954 |
|
|
34.5% |
Total pounds sold |
30,125 |
|
26,277 |
|
3,848 |
|
|
14.6% |
|
51,441 |
|
45,249 |
|
6,192 |
|
|
13.7% |
Gross profit was a loss of $6.2 million, or gross margin of
-4.2% of net revenues, in the second quarter of 2022, compared to
gross profit of $47.4 million, or gross margin of 31.7% of net
revenues, in the year-ago period. The Company’s second quarter
results included increased sales of certain inventory to the
liquidation channel, as well as higher inventory reserves, which,
combined, the Company estimates reduced gross profit and gross
margin by approximately $14.5 million and 10.0 percentage points,
respectively (excluding any impact from Beyond Meat Jerky). The
Company estimates that Beyond Meat Jerky, which was introduced in
the first quarter of 2022, further reduced gross profit and gross
margin by approximately $7.7 million and 6.7 percentage points,
respectively. In addition to the aforementioned factors, gross
margin in the second quarter of 2022 compared to the year-ago
period was negatively impacted by increased manufacturing costs per
pound including depreciation, higher materials costs, and increased
logistics costs.
Loss from operations in the second quarter of 2022 was $89.7
million compared to $18.6 million in the year-ago period. In
addition to the decrease in gross profit, the expanded loss from
operations was primarily attributable to growth in non-production
headcount expenses compared to the year-ago period, increased
general and administrative expenses driven by ongoing consulting
agreements, greater investment in marketing activities, higher
expenses associated with production trial activities, and increased
investments in innovation.
Net loss was $97.1 million in the second quarter of 2022
compared to $19.7 million in the year-ago period. Net loss per
common share was $1.53 in the second quarter of 2022 compared to
net loss per common share of $0.31 in the year-ago period. In
addition to the expanded loss from operations, net loss in the
second quarter of 2022 included $5.4 million in unrealized foreign
currency losses primarily due to unfavorable changes in foreign
exchange rates of the Euro and Chinese Yuan compared to the
year-ago period.
Adjusted EBITDA was a loss of $68.8 million, or -46.8% of net
revenues in the second quarter of 2022 compared to an Adjusted
EBITDA loss of $2.2 million, or -1.5% of net revenues, in the
year-ago period.
Balance Sheet and Cash Flow Highlights
The Company’s cash and cash equivalents balance was $454.7
million and total outstanding debt was $1.1 billion as of July 2,
2022. Net cash used in operating activities was $235.7 million for
the six months ended July 2, 2022, compared to $120.4 million for
the year-ago period. In the six months ended July 2, 2022, net cash
used in operating activities included $43.7 million in prepaid
lease costs related to the Company’s new innovation center and
headquarters facility currently under construction, compared to
$26.6 million in the year-ago period. Capital expenditures totaled
$42.0 million for the six months ended July 2, 2022, compared to
$51.4 million for the year-ago period. Capital expenditures
primarily reflect the Company’s continued investments in production
equipment and facilities related to capacity expansion and
commercialization initiatives domestically and abroad.
2022 Outlook
The Company's operating environment continues to be affected by
near-term uncertainty related to macroeconomic issues, including
inflation and rising interest rates, increasing concerns about the
likelihood of a recession, COVID-19 and its potential impact on
consumer behavior and demand levels, challenges related to labor
availability and supply chain disruptions, partially attributable
to recent geopolitical tensions. Management's outlook considers the
potential impact from these factors assuming present day
conditions, but the Company acknowledges its operating results may
differ materially from the expectations set forth below if its
assumptions related to the aforementioned variables, among others,
do not materialize. Relative to its previous expectations, the
Company believes many of these factors have shifted adversely, and
based on management's best assessment of the environment today, the
Company is providing the following outlook for the full year
2022:
- Net revenues are expected to be in the range of $470 million to
$520 million, an increase of 1% to 12% compared to 2021. This
compares to the Company’s previous expectation of net revenues in
the range of $560 million to $620 million, representing an increase
of 21% to 33% compared to 2021.
- The Company is announcing a reduction-in-force affecting
approximately 4% of its global workforce. The reduction-in-force is
expected to result in total annualized savings of approximately $8
million, excluding one-time separation costs of approximately $1
million, which the Company expects to incur in the third quarter of
2022.
Total distribution points by channel
(unaudited):
The following table presents the approximate number of
distribution outlets by channel for the periods presented:
|
Q1 2021 |
|
Q2 2021 |
|
Q3 2021 |
|
Q4 2021 |
|
Q1 2022 |
|
Q2 2022 |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
Retail(1) |
32,000 |
|
34,000 |
|
34,000 |
|
34,000 |
|
35,000 |
|
78,000 |
Foodservice |
39,000 |
|
34,000 |
|
36,000 |
|
38,000 |
|
39,000 |
|
41,000 |
International: |
|
|
|
|
|
|
|
|
|
|
|
Retail |
24,000 |
|
29,000 |
|
32,000 |
|
30,000 |
|
31,000 |
|
33,000 |
Foodservice |
23,000 |
|
22,000 |
|
26,000 |
|
28,000 |
|
30,000 |
|
31,000 |
Total distribution points |
118,000 |
|
119,000 |
|
128,000 |
|
130,000 |
|
135,000 |
|
183,000 |
___________(1) Q2 2022 includes distribution points associated
with Beyond Meat Jerky. Excluding Beyond Meat Jerky, total U.S.
retail distribution outlets was approximately 35,000.
Conference Call and Webcast
The Company will host a conference call and webcast to discuss
these results with additional comments and details 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. The
conference call webcast will be available live over the Internet
through the “Investors” section of the Company’s website at
www.beyondmeat.com and later 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 commitment, 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 June 2022, Beyond Meat branded
products were available at approximately 183,000 retail and
foodservice outlets in over 90 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.
These 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
the COVID-19 pandemic, including the ultimate duration, magnitude
and effects of the pandemic and, in particular, the impact to the
foodservice channel, operations and supply chains, growth trends,
our international expansion plans, market share, new and existing
customers and expense trends, 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 effects of global outbreaks of pandemics or contagious
diseases or fear of such outbreaks (such as COVID-19), including on
our business, financial condition, cash flows and results of
operations, including on our supply chain, the demand for our
products, our product and channel mix, labor needs at the Company
as well as in the supply chain and at customers, the timing and
level of retail purchasing, the timing and level of foodservice
purchasing, our manufacturing and co-manufacturing facilities and
operations, our inventory levels, our ability to expand and produce
in new geographic markets or the timing of such expansion efforts,
the pace and success of new product introductions, the timing of
new foodservice launches, and on overall economic conditions and
consumer confidence and spending levels; the impact of uncertainty
in our domestic and international supply chain, including labor
shortages and disruption and shipping delays and disruption; a
resurgence of COVID-19 and the impact of variants of the virus that
causes COVID-19 which could slow, halt or reverse the reopening
process, or result in the reinstatement of social distancing
measures, business closures, restrictions on operations,
quarantines, lockdowns and travel bans; the impact of uncertainty
as a result of doing business in China and Europe; government or
employer mandates requiring certain behaviors from employees due to
COVID-19, including COVID-19 vaccine mandates, which could result
in employee attrition at the Company, suppliers and customers as
well as difficulty securing future labor and supply needs; the
impact of adverse and uncertain economic and political conditions
in the U.S. and international markets; the volatility of capital
markets and other macroeconomic factors, including due to
geopolitical tensions or the outbreak of hostilities or war; our
ability to effectively manage our growth in the U.S. and abroad;
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; our ability to
identify and execute cost-down initiatives intended to achieve
price parity with animal protein; the success of operations
conducted by joint ventures, such as the Planet Partnership, LLC
with PepsiCo, Inc., 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 effects of increased competition from
our market competitors and new market entrants; changes in the
retail landscape, including the timing and level of trade and
promotion discounts, our ability to 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 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 partnership launches and limited
time offerings resulting in permanent menu items; our estimates of
the size of market opportunities and ability to accurately forecast
market growth; 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 termination fees to exit certain supply chain arrangements
and/or the write-off of certain equipment; our ability 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, including
fluctuations in demand for our products and any 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, and supply
chain and labor disruptions; 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
or contagious diseases or fear of such outbreaks, such as COVID-19;
the success of our marketing initiatives and the ability to grow
brand awareness, maintain, protect and enhance our brand, attract
and retain new customers 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, especially those
impacted by the conflict in the Ukraine or problems in the global
supply chain exacerbated by COVID-19 lockdowns in China; the
availability of pea and other protein that meets 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; the impact of inflation and
rising interest rates across the economy, including higher food,
grocery, raw materials, transportation, energy, labor and fuel
costs; reduced consumer confidence and consumer spending, including
spending to purchase our products, and negative trends in consumer
purchasing patterns due to consumers’ disposable income, credit
availability, debt levels and inflation; 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 information technology
systems and resultant interruptions in service and any related
impact on our reputation, including related to data privacy; the
ability of our transportation providers to ship and deliver our
products in a timely and cost effective manner; management and key
personnel changes, the attraction and retention of qualified
employees and key personnel, and our ability to maintain our
company culture; the effects of organizational changes including a
reduction-in-force and realignment of reporting structures; risks
related to use of a professional employer organization to
administer human resources, payroll and employee benefits functions
for certain of our international employees or use of certain third
party service providers for the performance of several business
operations including payroll and human capital management services;
the effects of natural or man-made catastrophic or severe weather
events particularly involving our or any of our co-manufacturers’
manufacturing facilities or our suppliers’ facilities; the impact
of marketing campaigns aimed at generating negative publicity
regarding our products, brand and the plant-based industry
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 administration costs related to compliance and
reporting obligations; our significant indebtedness and ability to
pay 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; 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 campus innovation and headquarters
lease, the timing of occupancy and completion of the build-out of
our space, cost overruns, delays and the impact of COVID-19 on our
space demands; our ability to meet our obligations under leases for
our corporate offices, manufacturing facilities and warehouses;
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 and 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; the sufficiency of our
cash and cash equivalents to meet our liquidity needs and service
our indebtedness and our ability to access capital markets upon
favorable terms, including due to rising interest rates; economic
conditions and the impact on consumer spending; the impact of
increased scrutiny from 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; foreign
exchange rate fluctuations; 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, 2021 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 net loss,
Adjusted net loss per diluted common share, 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:Fitzhugh Taylor and Raphael
Grossbeyondmeat@icrinc.com
BEYOND MEAT, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations(In thousands, except share and per
share data)(unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Net revenues |
$ |
147,040 |
|
|
$ |
149,426 |
|
|
$ |
256,495 |
|
|
$ |
257,590 |
|
Cost of goods sold |
|
153,202 |
|
|
|
102,074 |
|
|
|
262,467 |
|
|
|
177,530 |
|
Gross (loss) profit |
|
(6,162 |
) |
|
|
47,352 |
|
|
|
(5,972 |
) |
|
|
80,060 |
|
Research and development
expenses |
|
16,202 |
|
|
|
13,823 |
|
|
|
35,880 |
|
|
|
29,748 |
|
Selling, general and
administrative expenses |
|
63,015 |
|
|
|
48,286 |
|
|
|
138,129 |
|
|
|
87,240 |
|
Restructuring expenses |
|
4,302 |
|
|
|
3,844 |
|
|
|
7,328 |
|
|
|
6,318 |
|
Total operating expenses |
|
83,519 |
|
|
|
65,953 |
|
|
|
181,337 |
|
|
|
123,306 |
|
Loss from operations |
|
(89,681 |
) |
|
|
(18,601 |
) |
|
|
(187,309 |
) |
|
|
(43,246 |
) |
Other (expense) income,
net |
|
|
|
|
|
|
|
Interest expense |
|
(1,108 |
) |
|
|
(1,022 |
) |
|
|
(2,133 |
) |
|
|
(1,651 |
) |
Other, net |
|
(4,902 |
) |
|
|
180 |
|
|
|
(6,026 |
) |
|
|
(1,390 |
) |
Total other expense, net |
|
(6,010 |
) |
|
|
(842 |
) |
|
|
(8,159 |
) |
|
|
(3,041 |
) |
Loss before taxes |
|
(95,691 |
) |
|
|
(19,443 |
) |
|
|
(195,468 |
) |
|
|
(46,287 |
) |
Income tax expense |
|
11 |
|
|
|
2 |
|
|
|
21 |
|
|
|
50 |
|
Equity in losses of unconsolidated joint venture |
|
1,432 |
|
|
|
207 |
|
|
|
2,103 |
|
|
|
581 |
|
Net loss |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(46,918 |
) |
Net loss per share available to common stockholders—basic and
diluted |
$ |
(1.53 |
) |
|
$ |
(0.31 |
) |
|
$ |
(3.11 |
) |
|
$ |
(0.74 |
) |
Weighted average common shares outstanding—basic and diluted |
|
63,573,658 |
|
|
|
63,121,400 |
|
|
|
63,519,444 |
|
|
|
63,029,597 |
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
data) |
(unaudited) |
|
July 2, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
454,674 |
|
|
$ |
733,294 |
|
Accounts receivable, net |
|
77,154 |
|
|
|
43,806 |
|
Inventory |
|
254,653 |
|
|
|
241,870 |
|
Prepaid expenses and other current assets |
|
33,029 |
|
|
|
33,078 |
|
Total current assets |
$ |
819,510 |
|
|
$ |
1,052,048 |
|
Property, plant, and
equipment, net |
|
258,075 |
|
|
|
226,489 |
|
Operating lease right-of-use
assets |
|
25,464 |
|
|
|
26,815 |
|
Prepaid lease costs,
non-current |
|
102,839 |
|
|
|
59,188 |
|
Other non-current assets,
net |
|
6,301 |
|
|
|
6,836 |
|
Investment in unconsolidated
joint venture |
|
5,920 |
|
|
|
8,023 |
|
Total assets |
$ |
1,218,109 |
|
|
$ |
1,379,399 |
|
Liabilities and Stockholders’
(Deficit) Equity: |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
74,430 |
|
|
$ |
69,040 |
|
Wages payable |
|
2,984 |
|
|
|
155 |
|
Accrued bonus |
|
4,333 |
|
|
|
128 |
|
Current portion of operating lease liabilities |
|
4,595 |
|
|
|
4,458 |
|
Accrued expenses and other current liabilities |
|
22,975 |
|
|
|
20,226 |
|
Short-term finance lease liabilities |
|
210 |
|
|
|
182 |
|
Total current liabilities |
$ |
109,527 |
|
|
$ |
94,189 |
|
Long-term liabilities: |
|
|
|
Convertible senior notes, net |
$ |
1,131,641 |
|
|
$ |
1,129,674 |
|
Operating lease liabilities, net of current portion |
|
21,143 |
|
|
|
22,599 |
|
Finance lease obligations and other long-term liabilities |
|
3,739 |
|
|
|
442 |
|
Total long-term liabilities |
$ |
1,156,523 |
|
|
$ |
1,152,715 |
|
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; 63,643,369 and 63,400,899 shares issued and outstanding
at July 2, 2022 and December 31, 2021, respectively |
|
6 |
|
|
|
6 |
|
Additional paid-in
capital |
|
530,152 |
|
|
|
510,014 |
|
Accumulated deficit |
|
(574,564 |
) |
|
|
(376,972 |
) |
Accumulated other
comprehensive loss |
|
(3,535 |
) |
|
|
(553 |
) |
Total stockholders’ (deficit) equity |
$ |
(47,941 |
) |
|
$ |
132,495 |
|
Total liabilities and stockholders’ (deficit) equity |
$ |
1,218,109 |
|
|
$ |
1,379,399 |
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(unaudited) |
|
Six Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(197,592 |
) |
|
$ |
(46,918 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
14,820 |
|
|
|
9,207 |
|
Non-cash lease expense |
|
2,091 |
|
|
|
1,580 |
|
Share-based compensation expense |
|
19,598 |
|
|
|
15,239 |
|
Loss on sale of fixed assets |
|
400 |
|
|
|
111 |
|
Amortization of debt issuance costs |
|
1,967 |
|
|
|
1,352 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
1,037 |
|
Equity in losses of unconsolidated joint venture |
|
2,103 |
|
|
|
581 |
|
Unrealized losses on foreign currency transactions |
|
7,076 |
|
|
|
— |
|
Net change in operating assets and
liabilities: |
|
|
|
Accounts receivable |
|
(30,158 |
) |
|
|
(27,713 |
) |
Inventories |
|
(17,036 |
) |
|
|
(44,741 |
) |
Prepaid expenses and other assets |
|
(992 |
) |
|
|
(9,943 |
) |
Accounts payable |
|
(206 |
) |
|
|
(2,197 |
) |
Accrued expenses and other current liabilities |
|
7,949 |
|
|
|
10,157 |
|
Prepaid lease costs, non-current |
|
(43,651 |
) |
|
|
(26,578 |
) |
Operating lease liabilities |
|
(2,059 |
) |
|
|
(1,619 |
) |
Net cash used in operating activities |
$ |
(235,690 |
) |
|
$ |
(120,445 |
) |
Cash flows from investing
activities: |
|
|
|
Purchases of property, plant and equipment |
$ |
(41,965 |
) |
|
$ |
(51,420 |
) |
Payment of security deposits |
|
(23 |
) |
|
|
(145 |
) |
Net cash used in investing activities |
$ |
(41,988 |
) |
|
$ |
(51,565 |
) |
Cash flows from financing
activities: |
|
|
|
Proceeds from issuance of convertible senior notes |
$ |
— |
|
|
$ |
1,150,000 |
|
Purchase of capped calls related to convertible senior notes |
|
— |
|
|
|
(83,950 |
) |
Debt issuance costs |
|
— |
|
|
|
(23,605 |
) |
Repayment of revolving credit facility |
|
— |
|
|
|
(25,000 |
) |
Principal payments under finance lease obligations |
|
(43 |
) |
|
|
(83 |
) |
Proceeds from exercise of stock options |
|
1,309 |
|
|
|
6,499 |
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
(769 |
) |
|
|
(1,787 |
) |
Net cash provided by financing activities |
$ |
497 |
|
|
$ |
1,022,074 |
|
Net (decrease) increase in cash and cash equivalents |
$ |
(277,181 |
) |
|
$ |
850,064 |
|
Effect of exchange rate changes on cash |
|
(1,439 |
) |
|
|
146 |
|
Cash and cash equivalents at the beginning of the period |
|
733,294 |
|
|
|
159,127 |
|
Cash and cash equivalents at the end of the period |
$ |
454,674 |
|
|
$ |
1,009,337 |
|
|
Supplemental disclosures
of cash flow information: |
|
|
|
Cash paid during the period for: |
|
|
|
Interest |
$ |
153 |
|
|
$ |
306 |
|
Taxes |
$ |
21 |
|
|
$ |
98 |
|
Non-cash investing and financing activities: |
|
|
|
Non-cash additions to property, plant and equipment |
$ |
12,430 |
|
|
$ |
10,251 |
|
Non-cash additions to financing leases |
$ |
115 |
|
|
$ |
580 |
|
Operating lease right-of-use assets obtained in exchange for lease
liabilities |
$ |
748 |
|
|
$ |
1,678 |
|
Reclassification of other current liability to additional paid-in
capital in connection with the share-settled obligation |
$ |
— |
|
|
$ |
1,614 |
|
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 net loss and Adjusted net loss per diluted
common share
Adjusted net loss is defined as net loss adjusted to exclude,
when applicable, costs attributable to COVID-19, as well as other
special items, which are those items deemed not to be reflective of
the Company’s ongoing normal business activities.
Adjusted net loss per diluted common share is defined as
Adjusted net loss divided by the number of diluted common shares
outstanding.
We consider Adjusted net loss and Adjusted net loss per diluted
common share to be useful indicators of operating performance
because excluding special items allows for period-over-period
comparisons of our ongoing operations. Adjusted net loss per
diluted common share is a performance measure and should not be
used as a measure of liquidity.
Adjusted EBITDA and Adjusted EBITDA as a % of net
revenues
Adjusted EBITDA is defined as net loss adjusted to exclude, when
applicable, income tax (benefit) expense, interest expense,
depreciation and amortization expense, restructuring expenses,
share-based compensation expense, expenses attributable to
COVID-19, and Other, net, including interest income, loss on
extinguishment of debt and foreign currency transaction gains and
losses. Adjusted EBITDA as a % of net revenues is defined as
Adjusted EBITDA divided by net revenues.
Limitations related to the use of non-GAAP financial
measures
There are a number of limitations related to the use of Adjusted
net loss, Adjusted net loss per diluted common share, Adjusted
EBITDA and Adjusted EBITDA as a % of net revenues rather than their
most directly comparable GAAP measures. Some of these limitations
are:
- Adjusted net loss and Adjusted net loss per diluted common
share exclude costs associated with activities deemed to be
non-recurring or not part of the Company’s normal business
activities, which are subjective determinations made by management
and may not actualize as expected;
- 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 expenses attributable to
COVID-19 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, loss on extinguishment of debt 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 tables present the reconciliation of Adjusted net
loss and Adjusted net loss per diluted common share to their most
comparable GAAP measures, net loss and net loss per share available
to common stockholders—basic and diluted, respectively, as reported
(unaudited):
|
Three Months Ended |
|
Six Months Ended |
(in
thousands) |
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Net loss, as reported |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(46,918 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,037 |
|
Adjusted net loss |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(45,881 |
) |
|
Three Months Ended |
|
Six Months Ended |
(in thousands, except
share and per share amounts) |
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Numerator: |
|
|
|
|
|
|
|
Net loss, as reported |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(46,918 |
) |
Aggregate non-GAAP adjustments as listed above |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,037 |
|
Adjusted net loss used in computing Adjusted net loss per diluted
common share |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(45,881 |
) |
Denominator: |
|
|
|
|
|
|
|
Weighted average shares used in computing Adjusted net loss per
diluted common share |
|
63,573,658 |
|
|
|
63,121,400 |
|
|
|
63,519,444 |
|
|
|
63,029,597 |
|
Adjusted net loss per diluted common share |
$ |
(1.53 |
) |
|
$ |
(0.31 |
) |
|
$ |
(3.11 |
) |
|
$ |
(0.73 |
) |
|
Three Months Ended |
|
Six Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Net loss per share available to common stockholders—basic and
diluted, as reported |
$ |
(1.53 |
) |
|
$ |
(0.31 |
) |
|
$ |
(3.11 |
) |
|
$ |
(0.74 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Adjusted net loss per diluted common share |
$ |
(1.53 |
) |
|
$ |
(0.31 |
) |
|
$ |
(3.11 |
) |
|
$ |
(0.73 |
) |
The following table presents the reconciliation of Adjusted
EBITDA to its most comparable GAAP measure, net loss, as reported
(unaudited):
|
Three Months Ended |
|
Six Months Ended |
(in
thousands) |
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Net loss, as reported |
$ |
(97,134 |
) |
|
$ |
(19,652 |
) |
|
$ |
(197,592 |
) |
|
$ |
(46,918 |
) |
Income tax expense |
|
11 |
|
|
|
2 |
|
|
|
21 |
|
|
|
50 |
|
Interest expense |
|
1,108 |
|
|
|
1,022 |
|
|
|
2,133 |
|
|
|
1,651 |
|
Depreciation and amortization
expense |
|
7,729 |
|
|
|
4,881 |
|
|
|
14,820 |
|
|
|
9,207 |
|
Restructuring expenses(1) |
|
4,302 |
|
|
|
3,844 |
|
|
|
7,328 |
|
|
|
6,318 |
|
Share-based compensation
expense |
|
10,306 |
|
|
|
7,863 |
|
|
|
19,598 |
|
|
|
15,239 |
|
Other, net(2) |
|
4,902 |
|
|
|
(180 |
) |
|
|
6,026 |
|
|
|
1,390 |
|
Adjusted EBITDA |
$ |
(68,776 |
) |
|
$ |
(2,220 |
) |
|
$ |
(147,666 |
) |
|
$ |
(13,063 |
) |
Net loss as a % of net
revenues |
|
(66.1 |
)% |
|
|
(13.2 |
)% |
|
|
(77.0 |
)% |
|
|
(18.2 |
)% |
Adjusted EBITDA as a % of net
revenues |
|
(46.8 |
)% |
|
|
(1.5 |
)% |
|
|
(57.6 |
)% |
|
|
(5.1 |
)% |
____________
(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. |
(2 |
) |
(a) Includes $5.5 million and
$6.6 million in foreign currency transaction losses in the three
and six months ended July 2, 2022, respectively, and $0.2 million
in foreign currency transaction gains and $0.1 million in foreign
currency transaction losses in the three and six months ended July
3, 2021, respectively. (b) Includes $1.0 million in loss on
extinguishment of debt associated with termination of the Company's
credit facility in the six months ended July 3, 2021. |
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