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 March 28, 2020.
First Quarter 2020 Financial Highlights Compared to
Prior Year Period
- Net revenues were $97.1 million, an increase of 141%, compared
to net revenues of $40.2 million in the year-ago period;
- Gross profit was $37.7 million, or 38.8% of net revenues,
compared to gross profit of $10.8 million, or 26.8% of net
revenues, in the year-ago period;
- Net income was $1.8 million, or $0.03 per common diluted share,
compared to net loss of $6.6 million, or $0.95 per common share, in
the year-ago period; and
- Adjusted EBITDA, which is a non-GAAP financial measure, was
$12.7 million compared to an Adjusted EBITDA loss of $2.1 million
in the year-ago period.
See “Non-GAAP Financial Measures” below for how Beyond Meat
defines Adjusted EBITDA and the financial table that accompanies
this release for a reconciliation of this measure to the closest
comparable GAAP measure.
“I am proud of our first quarter financial results which
exceeded our expectations despite an increasingly challenging
operating environment due to the COVID-19 health crisis," said
Ethan Brown, Beyond Meat's President and Chief Executive Officer.
"The health and safety of our employees and their families is our
top priority and we have implemented a series of measures to
minimize risks while supporting business continuity. Among other
things, these include the creation of an internal task force to
actively monitor new developments and maintain a constant dialog
with health officials; implementation of various physical
distancing and preventative hygienic protocols within our
facilities; and increased frequency of our inventory reviews to
ensure sufficient floor stocks of key inputs to mitigate against
business disruption. During this unprecedented time, we remain
steadfast in our resolve to continue to provide great-tasting
plant-based meats to consumers, to solidify our support to our
retail and foodservice customers, and to continue to lead the
global plant-based meat movement.”
First Quarter 2020
Net revenues increased 141% to $97.1 million in the first
quarter of 2020, compared to $40.2 million in the first
quarter of 2019. Growth in net revenues in the first quarter of
2020 was primarily due to an increase in volume sold, partially
offset by lower net price per pound. Growth in volume sold was
driven mainly by expansion in the number of distribution points
both domestically and abroad, higher sales velocities at existing
retail customers, and contribution from new products introduced
subsequent to the first quarter of 2019. During the quarter,
specifically in the latter half of March, the Company experienced a
reduction in sales to foodservice customers as a result of the
ongoing COVID-19 health crisis.
Net revenues by channel (unaudited):
|
|
Three Months Ended |
|
Change |
(in
thousands) |
|
March 28, 2020 |
|
March 30, 2019 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
49,923 |
|
|
$ |
19,461 |
|
|
$ |
30,462 |
|
|
157 |
% |
Foodservice |
|
22,631 |
|
|
8,834 |
|
|
13,797 |
|
|
156 |
% |
U.S. net revenues |
|
72,554 |
|
|
28,295 |
|
|
44,259 |
|
|
156 |
% |
International: |
|
|
|
|
|
|
|
|
Retail |
|
5,952 |
|
|
118 |
|
|
5,834 |
|
|
4,944 |
% |
Foodservice |
|
18,568 |
|
|
11,793 |
|
|
6,775 |
|
|
57 |
% |
International net revenues |
|
24,520 |
|
|
11,911 |
|
|
12,609 |
|
|
106 |
% |
Net revenues |
|
$ |
97,074 |
|
|
$ |
40,206 |
|
|
$ |
56,868 |
|
|
141 |
% |
Effective January 1, 2020, the Company began presenting net
revenues by geography and distribution channel. Prior period
amounts have been recast to conform to the current period
presentation. Please see the “Presentation of Net Revenues by
Channel” at the end of this release for additional information and
a recast of the Company’s 2019 quarterly net revenues by
channel.
Gross profit was $37.7 million, or 38.8% of net revenues,
in the first quarter of 2020, compared to $10.8 million, or
26.8% of net revenues, in the year-ago period. The increase in
gross profit and gross margin was primarily due to an increase in
the volume of products sold, production efficiency improvements,
direct materials and packaging input cost savings, and direct labor
efficiencies in the first quarter of 2020 compared to the year-ago
period.
Income from operations in the first quarter of 2020 was
$1.8 million compared to loss from operations of
$5.3 million in the first quarter of the prior year. The
improvement in income from operations in the first quarter of 2020
was driven by the year-over-year increase in gross profit,
partially offset by higher operating expenses primarily to support
increased personnel levels and higher administrative costs
associated with being a public company, higher share-based
compensation expense, increases in the Company’s marketing
initiatives, higher restructuring expenses, and continued
investment in innovation.
Net income was $1.8 million in the first quarter of 2020
compared to net loss of $6.6 million in the year-ago period.
Improvement in net income was primarily the result of the increase
in net revenues and gross profit, as well as operating expense
leverage, compared to the first quarter of 2019.
Adjusted EBITDA was $12.7 million, or 13.1% of net revenues, in
the first quarter of 2020 compared to an Adjusted EBITDA loss of
$2.1 million, or (5.3)% of net revenues, in the first quarter of
2019. Adjusted EBITDA is a non-GAAP financial measure defined under
“Non-GAAP Financial Measures,” and is reconciled to net income
(loss), the closest comparable GAAP measure, at the end of this
release.
Chief Financial Officer and Treasurer, Mark Nelson commented,
“We are pleased with the Company’s first quarter results even as we
began to navigate headwinds stemming from the COVID-19 pandemic
late in the quarter. We maintained our solid top-line momentum
while driving our best-ever performance in production unit cost per
pound. Despite near-term challenges ahead stemming from the ongoing
global health crisis, our improving operating results and continued
strength of our balance sheet give us added confidence about the
Company’s long-term financial position.”
Balance Sheet and Cash Flow Highlights
The Company’s cash and cash equivalents balance was
$246.4 million as of March 28, 2020 and total outstanding debt
was $30.6 million. Net cash used in operating activities was
$17.2 million for the quarter ended March 28, 2020, compared
to $13.3 million for the prior year period. Capital
expenditures totaled $12.4 million for the quarter ended March
28, 2020 compared to $3.8 million for the prior year period.
The increase in capital expenditures was primarily driven by
growth, as the Company continued to invest in capital production
equipment related to capacity expansion initiatives.
On April 22, 2020, the Company announced that it has entered
into a new $150 million five-year revolving credit facility,
replacing its previous secured credit arrangements. The new credit
facility, which includes an accordion feature for up to an
additional $200 million, increases the Company’s borrowing
capacity, lowers its cost of capital, and enables greater strategic
flexibility for future global growth initiatives.
2020 Outlook
The Company continues to expect to benefit from food-at-home
consumer demand in its retail channel, however, given the ongoing
uncertainty related to the COVID-19 pandemic, including the
magnitude and duration of the impact to the foodservice channel, in
particular, the Company is suspending its 2020 outlook previously
provided on February 27, 2020 until further notice.
Conference Call and Webcast
The Company will host a conference call and webcast to discuss
these results with additional comments and details today at 4:30
p.m. Eastern, 1:30 p.m. Pacific. The conference call webcast will
be available live over the Internet through the “Investors” section
of the Company’s website at www.beyondmeat.com. Investors
interested in participating in the live call can dial 866-221-1171
from the U.S. or 270-215-9602 from international locations. A
telephone replay will be available approximately two hours after
the call concludes through Wednesday, May 20, 2020, by
dialing 855-859-2056 from the U.S., or 404-537-3406 from
international locations, and entering confirmation code
5337749.
About Beyond Meat
Beyond Meat, Inc. (NASDAQ: BYND) is one of the fastest growing
food companies in the United States, offering a portfolio of
revolutionary plant-based meats. Founded in 2009, Beyond Meat has a
mission of building meat directly from plants, an innovation that
enables consumers to experience the taste, texture and other
sensory attributes of popular animal-based meat products while
enjoying the nutritional and environmental benefits of eating its
plant-based meat products. Beyond Meat’s brand commitment, Eat What
You Love™, represents a strong belief that by eating its portfolio
of plant-based meats, consumers can enjoy more, not less, of their
favorite meals, and by doing so, help address concerns related to
human health, climate change, resource conservation and animal
welfare. Beyond Meat’s portfolio of plant-based proteins are sold
at approximately 94,000 retail and foodservice outlets in 75
countries worldwide as of March 28, 2020. Visit www.BeyondMeat.com
and follow @BeyondMeat, #BeyondBurger and #GoBeyond on Facebook,
Instagram and Twitter.
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 magnitude and duration of the
pandemic and, in particular, the impact to the foodservice channel,
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,” “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, 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 outbreak, such as the recent COVID-19
outbreak, including on our ability to expand in new geographic
markets or the timing of such expansion efforts; estimates of our
expenses, future revenues, capital requirements and our needs for
additional financing; our ability to effectively manage our growth;
our estimates of the size of market opportunities; our ability to
effectively expand our manufacturing and production capacity; our
ability to accurately forecast demand for our products and manage
our inventory; our ability to successfully enter new geographic
markets, manage our international expansion and comply with any
applicable laws and regulations; the effects of increased
competition from our market competitors and new market entrants;
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 to
manufacture our products; the availability of pea protein that
meets our standards; our ability to diversify the protein sources
used for our products; the volatility associated with ingredient
and packaging costs; real or perceived quality or health issues
with our products or other issues that adversely affect our brand
and reputation; changes in the tastes and preferences of our
consumers; our ability to accurately predict taste preferences and
purchasing habits of consumers in new geographic markets; our
ability to accurately predict consumer trends and demand and
successfully introduce and commercialize new products and improve
existing products; significant disruption in, or breach in security
of our information technology systems and resultant interruptions
in service and any related impact on our reputation; the attraction
and retention of qualified employees and key personnel; the effects
of natural or man-made catastrophic 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
plant‑based industry category; the effectiveness of our internal
controls; changes in laws and government regulation affecting our
business, including Food and Drug Administration governmental
regulation and state regulation; changes in laws, regulations or
policies of governmental agencies or regulators relating to the
labeling of our products; the impact of adverse economic
conditions; 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; the ability of our suppliers and
co‑manufacturers to comply with food safety, environmental or other
laws and regulations; seasonality; the sufficiency of our cash and
cash equivalents to meet our liquidity needs and service our
indebtedness; outcomes of legal or administrative proceedings;
foreign exchange fluctuations; our, our suppliers’ and our
co-manufacturers’ ability to protect our proprietary technology and
intellectual property adequately; 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, 2019 and the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 28, 2020
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 as otherwise
required by law. 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.
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). 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 our webpage
at https://investors.beyondmeat.com/investor-relations and
to sign up for and regularly follow our 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.
Contacts
Media:
Shira Zackai917-715-8522szackai@beyondmeat.com
Investors:
Katie Turner646-277-1228Katie.turner@icrinc.com
BEYOND MEAT,
INC.Condensed Consolidated Statements of
Operations(In thousands, except share and per
share data)(unaudited)
|
|
Three Months Ended |
|
|
March 28, 2020 |
|
March 30, 2019 |
Net revenues |
|
$ |
97,074 |
|
|
$ |
40,206 |
|
Cost of goods sold |
|
59,383 |
|
|
29,435 |
|
Gross profit |
|
37,691 |
|
|
10,771 |
|
Research and development
expenses |
|
6,194 |
|
|
4,498 |
|
Selling, general and
administrative expenses |
|
27,315 |
|
|
11,177 |
|
Restructuring
expenses |
|
2,373 |
|
|
394 |
|
Total operating
expenses |
|
35,882 |
|
|
16,069 |
|
Income (loss) from
operations |
|
1,809 |
|
|
(5,298 |
) |
Other income (expense),
net: |
|
|
|
|
Interest expense |
|
(705 |
) |
|
(733 |
) |
Remeasurement of warrant
liability |
|
— |
|
|
(759 |
) |
Other, net |
|
710 |
|
|
141 |
|
Total other income (expense),
net |
|
5 |
|
|
(1,351 |
) |
Income (loss) before
taxes |
|
1,814 |
|
|
(6,649 |
) |
Income tax benefit |
|
(1 |
) |
|
— |
|
Net income (loss) |
|
$ |
1,815 |
|
|
$ |
(6,649 |
) |
Net income (loss) per share
available to common stockholders—basic |
|
$ |
0.03 |
|
|
$ |
(0.95 |
) |
Weighted average common shares
outstanding—basic |
|
61,679,929 |
|
|
6,974,301 |
|
Net income (loss) per share
available to common stockholders—diluted |
|
$ |
0.03 |
|
|
$ |
(0.95 |
) |
Weighted average common shares
outstanding—diluted |
|
65,927,988 |
|
|
6,974,301 |
|
BEYOND MEAT,
INC.Condensed Consolidated Balance
Sheets(In thousands, except share and per share
data) (unaudited)
|
March 28, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
246,410 |
|
|
$ |
275,988 |
|
Accounts receivable |
36,333 |
|
|
40,080 |
|
Inventory |
120,702 |
|
|
81,596 |
|
Prepaid expenses and other current assets |
12,498 |
|
|
5,930 |
|
Total current assets |
415,943 |
|
|
403,594 |
|
Property, plant, and
equipment, net |
61,758 |
|
|
47,474 |
|
Operating lease right-of-use
assets |
12,431 |
|
|
— |
|
Other non-current assets,
net |
1,501 |
|
|
855 |
|
Total assets |
$ |
491,633 |
|
|
$ |
451,923 |
|
Liabilities and Stockholders’
Equity: |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
48,219 |
|
|
$ |
26,923 |
|
Wages payable |
1,949 |
|
|
1,768 |
|
Accrued bonus |
723 |
|
|
4,129 |
|
Current portion of operating lease liabilities |
1,628 |
|
|
— |
|
Accrued expenses and other current liabilities |
5,297 |
|
|
3,805 |
|
Short-term borrowings under revolving credit line and bank term
loan |
14,094 |
|
|
11,000 |
|
Current portion of finance lease liabilities |
73 |
|
|
72 |
|
Total current liabilities |
$ |
71,983 |
|
|
$ |
47,697 |
|
Long-term liabilities: |
|
|
|
Operating lease liabilities, net of current portion |
$ |
10,935 |
|
|
$ |
— |
|
Long-term portion of bank term loan, net |
12,185 |
|
|
14,637 |
|
Equipment loan, net |
4,347 |
|
|
4,932 |
|
Finance lease obligations and other long-term
liabilities |
202 |
|
|
567 |
|
Total long-term liabilities |
$ |
27,669 |
|
|
$ |
20,136 |
|
Commitments and
Contingencies |
|
|
|
Stockholders’ 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; 61,857,377 and
61,576,494 shares issued and outstanding at March 28, 2020 and
December 31, 2019, respectively |
6 |
|
|
6 |
|
Additional paid-in
capital |
532,275 |
|
|
526,199 |
|
Accumulated deficit |
(140,300 |
) |
|
(142,115 |
) |
Total stockholders’ equity |
$ |
391,981 |
|
|
$ |
384,090 |
|
Total liabilities and stockholders’ equity |
$ |
491,633 |
|
|
$ |
451,923 |
|
|
|
|
|
BEYOND MEAT, INC. |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(unaudited) |
|
|
Three Months Ended |
|
|
March 28, 2020 |
|
March 30, 2019 |
Cash flows from operating
activities: |
|
|
|
|
Net income (loss) |
|
$ |
1,815 |
|
|
$ |
(6,649 |
) |
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
|
|
|
|
Depreciation and amortization |
|
2,583 |
|
|
1,905 |
|
Non-cash lease expense |
|
445 |
|
|
— |
|
Share-based compensation expense |
|
5,949 |
|
|
855 |
|
Amortization of debt issuance costs |
|
57 |
|
|
58 |
|
Change in preferred and common stock warrant liabilities |
|
— |
|
|
759 |
|
Net change in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
3,746 |
|
|
(3,568 |
) |
Inventories |
|
(39,106 |
) |
|
(4,025 |
) |
Prepaid expenses and other assets |
|
(6,255 |
) |
|
122 |
|
Accounts payable |
|
16,651 |
|
|
(4,349 |
) |
Accrued expenses and other current liabilities |
|
(2,608 |
) |
|
1,608 |
|
Operating lease liabilities |
|
(479 |
) |
|
— |
|
Long-term liabilities |
|
— |
|
|
4 |
|
Net cash used in operating activities |
|
$ |
(17,202 |
) |
|
$ |
(13,280 |
) |
Cash flows from investing
activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
$ |
(12,398 |
) |
|
$ |
(3,795 |
) |
Proceeds from sale of fixed assets |
|
— |
|
|
132 |
|
Purchases of property, plant and equipment held for sale |
|
(964 |
) |
|
(829 |
) |
Payment of security deposits |
|
— |
|
|
(501 |
) |
Net cash used in investing activities |
|
$ |
(13,362 |
) |
|
$ |
(4,993 |
) |
Cash flows from financing
activities: |
|
|
|
|
Principal payments under finance lease obligations |
|
$ |
(16 |
) |
|
$ |
(9 |
) |
Proceeds from exercise of stock options |
|
1,014 |
|
|
366 |
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
(12 |
) |
|
— |
|
Payments of deferred offering costs |
|
— |
|
|
(946 |
) |
Net cash provided by (used in) financing activities |
|
$ |
986 |
|
|
$ |
(589 |
) |
Net decrease in cash and cash
equivalents |
|
$ |
(29,578 |
) |
|
$ |
(18,862 |
) |
Cash and cash equivalents at
the beginning of the period |
|
275,988 |
|
|
54,271 |
|
Cash and cash equivalents at
the end of the period |
|
$ |
246,410 |
|
|
$ |
35,409 |
|
|
Supplemental disclosures
of cash flow information: |
|
|
|
|
Cash paid during the period for: |
|
|
|
|
Interest |
|
$ |
682 |
|
|
$ |
715 |
|
Non-cash investing and financing activities: |
|
|
|
|
Non-cash additions to property, plant and equipment |
|
$ |
5,907 |
|
|
$ |
589 |
|
Offering costs, accrued not yet paid |
|
$ |
— |
|
|
$ |
69 |
|
Non-cash additions to property, plant and equipment held for
sale |
|
$ |
156 |
|
|
$ |
— |
|
Operating lease right-of-use assets obtained in exchange for lease
liabilities |
|
$ |
981 |
|
|
$ |
— |
|
Non-GAAP Financial Measures
Beyond Meat uses the following non-GAAP financial measures in
assessing its operating performance and in its financial
communications:
“Adjusted EBITDA” is defined as net income (loss) adjusted to
exclude, when applicable, income tax expense (benefit), interest
expense, depreciation and amortization expense, restructuring
expenses, share-based compensation expense, inventory losses from
termination of an exclusive supply agreement with a
co-manufacturer, costs of termination of an exclusive supply
agreement with the same co-manufacturer, expenses primarily
associated with the conversion of our convertible notes, and
remeasurement of our preferred stock warrant liability and common
stock warrant liability, and Other, net, including investment
income.
“Adjusted EBITDA as a % of net revenues” is defined as Adjusted
EBITDA divided by net revenues.
We use Adjusted EBITDA and Adjusted EBITDA as a % of net
revenues because they are important measures upon which our
management assesses our operating performance. We use Adjusted
EBITDA and Adjusted EBITDA as a % of net revenues as key
performance measures because we believe these measures facilitate
operating performance comparison from period‑to-period by excluding
potential differences primarily caused by the impact of
restructuring, asset depreciation and amortization, non-cash
share-based compensation and non-operational charges including the
impact to cost of goods sold and selling, general and
administrative expenses related to the termination of an exclusive
co-manufacturing agreement, early extinguishment of convertible
notes and remeasurement of warrant liability, and investment
income. Because Adjusted EBITDA and Adjusted EBITDA as a % of net
revenues facilitate internal comparisons of our historical
operating performance on a more consistent basis, we also use these
measures for our business planning purposes. In addition, we
believe Adjusted EBITDA and Adjusted EBITDA as a % of net revenues
are widely used by investors, securities analysts, ratings agencies
and other parties in evaluating companies in our industry as a
measure of our operational performance.
There are a number of limitations related to the use of Adjusted
EBITDA rather than net income (loss), which is the most directly
comparable GAAP measure. 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
expenses and therefore does not include all of our compensation
costs;
- Adjusted EBITDA does not reflect other income (expense),
including investment income, 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.
These non-GAAP financial measures should not be considered in
isolation or as a substitute for financial information provided in
accordance with GAAP. These non-GAAP financial measures may not be
computed in the same manner as similarly titled measures used by
other companies.
The following table presents the reconciliation of Adjusted
EBITDA to its most comparable GAAP measure, net income (loss), as
reported (unaudited):
|
|
Three Months Ended |
(in
thousands) |
|
March 28, 2020 |
|
March 30, 2019 |
Net income (loss), as reported |
|
$ |
1,815 |
|
|
$ |
(6,649 |
) |
Income tax benefit |
|
(1 |
) |
|
— |
|
Interest expense |
|
705 |
|
|
733 |
|
Depreciation and amortization
expense |
|
2,583 |
|
|
1,905 |
|
Restructuring
expenses(1) |
|
2,373 |
|
|
394 |
|
Share-based compensation
expense |
|
5,949 |
|
|
855 |
|
Remeasurement of warrant
liability |
|
— |
|
|
759 |
|
Other, net |
|
(710 |
) |
|
(141 |
) |
Adjusted EBITDA |
|
$ |
12,714 |
|
|
$ |
(2,144 |
) |
|
|
|
|
|
Net income (loss) as a % of
net revenues |
|
1.9 |
% |
|
(16.5 |
)% |
Adjusted EBITDA as a % of net
revenues |
|
13.1 |
% |
|
(5.3 |
)% |
_____________
(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. |
Presentation of Net Revenues by
Channel
Effective January 1, 2020, the Company began presenting net
revenues by geography and distribution channel as follows:
Distribution Channel |
|
Description |
U.S. Retail |
|
Net revenues from retail sales to the U.S. market |
U.S. Foodservice |
|
Net revenues from restaurant and foodservice sales to the U.S.
market |
International Retail |
|
Net revenues from retail sales to international markets,
including Canada |
International Foodservice |
|
Net revenues from restaurant and foodservice sales to
international markets, including Canada |
Net revenues from sales to the Canadian market, previously
included with net revenues from sales to the U.S. market, have been
reclassified to International net revenues. Prior period amounts
have been recast to conform to the current period presentation. The
foregoing change in presentation had no impact on the Company's net
revenues, results of operations or cash flows.
Effective January 1, 2020, the Company also eliminated the
presentation of net revenues by platform as it is no longer
material to an understanding of the Company's financial results.
Previously, the Company presented net revenues by platform for its
“ready-to-cook” or fresh platform, and “ready-to-heat” or frozen
platform. The Company discontinued its frozen chicken strip product
in the first quarter of 2019. Gross revenues from sales of products
in the Company's frozen platform were 5.5% of gross revenues in the
year ended December 31, 2019, as compared to 16.3% of gross
revenues in the year ended December 31, 2018.
The following table presents the Company’s 2019 quarterly net
revenues by channel (unaudited):
|
|
Three Months Ended |
(in
thousands) |
|
March 30, 2019 |
|
June 29, 2019 |
|
September 28, 2019 |
|
December 31, 2019 |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
19,461 |
|
|
$ |
30,531 |
|
|
$ |
44,170 |
|
|
$ |
35,221 |
|
Foodservice |
|
8,834 |
|
|
16,504 |
|
|
18,359 |
|
|
26,675 |
|
U.S. net revenues |
|
28,295 |
|
|
47,035 |
|
|
62,529 |
|
|
61,896 |
|
International: |
|
|
|
|
|
|
|
|
Retail |
|
118 |
|
|
3,589 |
|
|
6,295 |
|
|
5,424 |
|
Foodservice |
|
11,793 |
|
|
16,627 |
|
|
23,137 |
|
|
31,159 |
|
International net revenues |
|
11,911 |
|
|
20,216 |
|
|
29,432 |
|
|
36,583 |
|
Net revenues |
|
$ |
40,206 |
|
|
$ |
67,251 |
|
|
$ |
91,961 |
|
|
$ |
98,479 |
|
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