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 June 27, 2020.
Second Quarter 2020 Financial Highlights1
- Net revenues were $113.3 million, an increase of 69%
year over year.
- Gross profit was $33.7 million, or gross margin of
29.7% of net revenues; Adjusted gross profit was $39.6 million, or
Adjusted gross margin of 34.9% of net revenues, reflecting
exclusion of expenses attributable to COVID-19.
- Net loss was $10.2 million, or $0.16 per common share;
Adjusted net loss was $1.2 million, or $0.02 per diluted common
share, reflecting exclusion of expenses attributable to COVID-19
and early debt extinguishment.
- Adjusted EBITDA was $11.7 million, or
10.3% of net revenues.
Beyond Meat President and CEO Ethan Brown commented, "I am proud
of our record net revenues and growth during a very challenging
period. As the toll of the COVID-19 pandemic took hold across the
foodservice industry, we repurposed assets and repacked and
rerouted products to meet increased consumer activity in the retail
aisles. Throughout the quarter, our brand experienced an enviable
combination of consumer trends – increasing household penetration;
increasing buying levels per household; and strong repeat purchase
rates of nearly 50%2, well above the success threshold for consumer
packaged goods. Further, we forged ahead with our long-term growth
strategy. We invested in expanded operations and sales in the EU
and Asia, in innovation, and in targeted pricing measures during
this period of high beef prices. Most notable in this regard was
the retail introduction of our Cookout Classic™ value pack, which
significantly reduced the price of our burgers from nearly 2 times
that of conventional beef patties to an approximate 20% premium, on
a per pound basis. Though the Cookout Classic™ only reached stores
in the last 2 weeks of the second quarter, it accounted for 16
points of the year-over-year volume growth in our U.S. retail
business. We look forward to continuing to serve our consumers and
customers alike as we all hope for a resolution to the COVID-19
pandemic.”
____________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.2 According to SPINS/IRI panel data for
the 52-week period ended June 28, 2020.
Second Quarter 2020
Net revenues increased 69% to $113.3 million in the second
quarter of 2020, compared to $67.3 million in the year-ago period.
Growth in net revenues was primarily due to an increase in volume
sold, partially offset by lower net price per pound driven by the
Company’s strategic investments in promotional activity intended to
encourage greater consumer trial. Growth in volume sold was driven
mainly by increased retail channel sales, resulting from
distribution gains both domestically and abroad, higher sales
velocities at existing retail customers, and contribution from new
product introductions. During the quarter, increased retail channel
sales were partially offset by a reduction in foodservice channel
sales as a result of the ongoing COVID-19 pandemic.
Net revenues by channel (unaudited):
|
|
Three Months Ended |
|
Change |
(in
thousands) |
|
June 27, 2020 |
|
June 29, 2019 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
90,040 |
|
|
$ |
30,531 |
|
|
$ |
59,509 |
|
|
194.9 |
|
% |
Foodservice |
|
6,486 |
|
|
16,504 |
|
|
(10,018 |
) |
|
(60.7 |
) |
% |
U.S. net revenues |
|
96,526 |
|
|
47,035 |
|
|
49,491 |
|
|
105.2 |
|
% |
International: |
|
|
|
|
|
|
|
|
Retail |
|
9,572 |
|
|
3,589 |
|
|
5,983 |
|
|
166.7 |
|
% |
Foodservice |
|
7,240 |
|
|
16,627 |
|
|
(9,387 |
) |
|
(56.5 |
) |
% |
International net revenues |
|
16,812 |
|
|
20,216 |
|
|
(3,404 |
) |
|
(16.8 |
) |
% |
Net revenues |
|
$ |
113,338 |
|
|
$ |
67,251 |
|
|
$ |
46,087 |
|
|
68.5 |
|
% |
|
|
Six Months Ended |
|
Change |
(in
thousands) |
|
June 27, 2020 |
|
June 29, 2019 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
139,963 |
|
|
$ |
49,992 |
|
|
$ |
89,971 |
|
|
180.0 |
|
% |
Foodservice |
|
29,117 |
|
|
25,338 |
|
|
3,779 |
|
|
14.9 |
|
% |
U.S. net revenues |
|
169,080 |
|
|
75,330 |
|
|
93,750 |
|
|
124.5 |
|
% |
International: |
|
|
|
|
|
|
|
|
Retail |
|
15,524 |
|
|
3,707 |
|
|
11,817 |
|
|
318.8 |
|
% |
Foodservice |
|
25,808 |
|
|
28,420 |
|
|
(2,612 |
) |
|
(9.2 |
) |
% |
International net revenues |
|
41,332 |
|
|
32,127 |
|
|
9,205 |
|
|
28.7 |
|
% |
Net revenues |
|
$ |
210,412 |
|
|
$ |
107,457 |
|
|
$ |
102,955 |
|
|
95.8 |
|
% |
Gross profit was $33.7 million, or gross margin of 29.7% of net
revenues, in the second quarter of 2020, compared to $22.7 million,
or gross margin of 33.8% of net revenues, in the year-ago period.
Adjusted gross profit, which excludes $5.9 million of costs
associated with product repacking activities due to COVID-19, was
$39.6 million, or Adjusted gross margin of 34.9% of net revenues,
in the second quarter of 2020, compared to Adjusted gross profit of
$22.7 million, or Adjusted gross margin of 33.8% of net revenues,
in the year-ago period. The increase in Adjusted gross profit and
Adjusted gross margin was primarily due to direct materials and
packaging input cost savings, direct labor efficiencies, and an
increase in the volume of products sold in the second quarter of
2020 compared to the year-ago period. The $5.9 million in costs
associated with product repacking activities in the second quarter
of 2020 were driven by the Company’s efforts to repurpose certain
foodservice inventory into retail products as a result of the
sudden shift in consumer demand related to COVID-19. Following
these repacking activities, the Company has rebalanced its mix of
finished goods inventory between retail and foodservice products
and does not anticipate a need for further repacking activity.
Loss from operations in the second quarter of
2020 was $8.2 million compared to income from operations of $2.2
million in the year-ago period. The decrease in income from
operations was primarily driven by increased headcount to support
the Company’s long-term growth, higher share-based compensation
expense, increases in the Company’s marketing initiatives,
continued investments in innovation, product donation costs related
to the Company’s COVID-19 relief campaign, investments in
international expansion initiatives, and higher restructuring
expenses, partially offset by the increase in gross profit during
the quarter.
Net loss was $10.2 million in the second quarter of 2020
compared to net loss of $9.4 million in the year-ago period. Net
loss per diluted common share was $0.16 in the second quarter of
2020 compared to net loss per diluted common share of $0.24
in the year-ago-period. During the second quarter of 2020, net loss
included $5.9 million of costs associated with the product
repacking activities attributable to COVID-19, $1.6 million in
product donation costs related to the Company’s COVID-19 relief
campaign, and $1.5 million of early debt extinguishment costs
associated with the Company’s refinanced credit arrangements.
Excluding these costs, Adjusted net loss was $1.2 million in the
second quarter of 2020, or $0.02 per diluted common share, compared
to Adjusted net income of $2.3 million, or $0.05 per diluted common
share, in the year-ago period.
Adjusted EBITDA was $11.7 million, or 10.3% of net revenues, in
the second quarter of 2020 compared to Adjusted EBITDA of $6.9
million, or 10.2% of net revenues, in the year-ago period.
Chief Financial Officer and Treasurer, Mark Nelson commented,
“With our robust sales momentum and strong, underlying operating
results during the second quarter, we feel confident about Beyond
Meat’s potential to seize upon the growth opportunities ahead of
us. Although COVID-19 has added complexity to managing our
business, we are proud of the way our team has adapted and
continues to execute against our long-term strategic plan, closely
managing near-term risk while continuing to invest in Beyond Meat’s
longer-term future.”
Balance Sheet and Cash Flow Highlights
The Company’s cash and cash equivalents balance was $222.3
million as of June 27, 2020 and total outstanding debt was $50.0
million. Net cash used in operating activities was $44.3 million
for the six months ended June 27, 2020, compared to $22.4 million
for the prior year period. Capital expenditures totaled $26.0
million for the six months ended June 27, 2020 compared to $7.5
million for the prior year period. The increase in capital
expenditures was primarily driven by the Company’s continued
investments in production equipment and facilities related to
capacity expansion initiatives. On April 22, 2020, the Company
announced that it had entered into a new $150 million five-year
secured revolving credit facility, which also includes an accordion
feature for up to an additional $200 million, replacing its prior
credit facilities. Long-term borrowings on the Company’s new
revolving credit facility were $50.0 million as of June 27, 2020,
as compared to short and long-term borrowings under the Company’s
prior credit facilities of $30.6 million as of December 31,
2019.
Update on COVID-19 and 2020 Outlook
Due to the COVID-19 pandemic, as previously communicated, the
Company experienced a meaningful slowdown in its foodservice
business as various regions around the world implemented
stay-at-home orders, resulting in the closure or limited operations
of many of its foodservice customers. At the same time, the
Company experienced an increase in demand by its retail customers
as consumers shifted towards more at-home consumption, which more
than offset the decline in sales to foodservice customers. While
many of the Company’s foodservice customers have reopened, most are
operating under various local restrictions and continue to navigate
a highly uncertain environment. Given the uncertainty regarding the
ultimate duration, magnitude and effects of the COVID-19 pandemic,
management remains unable to predict the continuing impact of
COVID-19 on its business for the balance of the year with
reasonable certainty. As such, the Company’s 2020 outlook,
previously provided on February 27, 2020, remains suspended 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, August 19, 2020, by dialing
855-859-2056 from the U.S., or 404-537-3406 from international
locations, and entering confirmation code 4658234.
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
resource conservation and animal welfare. Beyond Meat’s portfolio
of plant-based proteins were available at approximately 112,000
retail and foodservice outlets in 85 countries worldwide as of June
27, 2020. Visit www.BeyondMeat.com and follow @BeyondMeat,
#BeyondBurger and #GoBeyond on Facebook, Instagram and Twitter.
Forward-Looking StatementsCertain 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
duration, magnitude and effects 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
pandemic, 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 or naming 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 June 27, 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.
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 gross profit,
Adjusted gross margin, Adjusted net (loss) income, Adjusted net
(loss) income 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). 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.
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 |
|
Six Months Ended |
|
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Net revenues |
|
$ |
113,338 |
|
|
|
$ |
67,251 |
|
|
|
$ |
210,412 |
|
|
|
$ |
107,457 |
|
|
Cost of goods sold |
|
79,687 |
|
|
|
44,510 |
|
|
|
139,070 |
|
|
|
73,945 |
|
|
Gross profit |
|
33,651 |
|
|
|
22,741 |
|
|
|
71,342 |
|
|
|
33,512 |
|
|
Research and development
expenses |
|
6,016 |
|
|
|
4,212 |
|
|
|
12,210 |
|
|
|
8,710 |
|
|
Selling, general and
administrative expenses |
|
34,292 |
|
|
|
15,515 |
|
|
|
61,607 |
|
|
|
26,692 |
|
|
Restructuring expenses |
|
1,509 |
|
|
|
847 |
|
|
|
3,882 |
|
|
|
1,241 |
|
|
Total operating expenses |
|
41,817 |
|
|
|
20,574 |
|
|
|
77,699 |
|
|
|
36,643 |
|
|
(Loss) income from
operations |
|
(8,166 |
) |
|
|
2,167 |
|
|
|
(6,357 |
) |
|
|
(3,131 |
) |
|
Other expense, net: |
|
|
|
|
|
|
|
|
Interest expense |
|
(569 |
) |
|
|
(741 |
) |
|
|
(1,274 |
) |
|
|
(1,474 |
) |
|
Remeasurement of warrant
liability |
|
— |
|
|
|
(11,744 |
) |
|
|
— |
|
|
|
(12,503 |
) |
|
Other, net |
|
(1,454 |
) |
|
|
898 |
|
|
|
(744 |
) |
|
|
1,039 |
|
|
Total other expense, net |
|
(2,023 |
) |
|
|
(11,587 |
) |
|
|
(2,018 |
) |
|
|
(12,938 |
) |
|
Loss before taxes |
|
(10,189 |
) |
|
|
(9,420 |
) |
|
|
(8,375 |
) |
|
|
(16,069 |
) |
|
Income tax expense |
|
16 |
|
|
|
21 |
|
|
|
15 |
|
|
|
21 |
|
|
Net loss |
|
$ |
(10,205 |
) |
|
|
$ |
(9,441 |
) |
|
|
$ |
(8,390 |
) |
|
|
$ |
(16,090 |
) |
|
Net loss per share available
to common stockholders—basic and diluted |
|
$ |
(0.16 |
) |
|
|
$ |
(0.24 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(0.69 |
) |
|
Weighted average common shares
outstanding—basic and diluted |
|
62,098,861 |
|
|
|
39,081,359 |
|
|
|
61,904,360 |
|
|
|
23,206,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEYOND MEAT, INC. |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
data) |
(unaudited) |
|
|
June 27, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
222,334 |
|
|
|
$ |
275,988 |
|
|
Accounts receivable |
|
45,986 |
|
|
|
40,080 |
|
|
Inventory |
|
143,033 |
|
|
|
81,596 |
|
|
Prepaid expenses and other current assets |
|
17,990 |
|
|
|
5,930 |
|
|
Total current assets |
|
429,343 |
|
|
|
403,594 |
|
|
Property, plant, and
equipment, net |
|
70,286 |
|
|
|
47,474 |
|
|
Operating lease right-of-use
assets |
|
23,637 |
|
|
|
— |
|
|
Other non-current assets,
net |
|
4,552 |
|
|
|
855 |
|
|
Total assets |
|
$ |
527,818 |
|
|
|
$ |
451,923 |
|
|
Liabilities and Stockholders’
Equity: |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
51,567 |
|
|
|
$ |
26,923 |
|
|
Wages payable |
|
2,024 |
|
|
|
1,768 |
|
|
Accrued bonus |
|
1,416 |
|
|
|
4,129 |
|
|
Current portion of operating lease liabilities |
|
1,944 |
|
|
|
— |
|
|
Accrued expenses and other current liabilities |
|
8,829 |
|
|
|
3,805 |
|
|
Short-term borrowings under revolving credit facility and bank term
loan |
|
— |
|
|
|
11,000 |
|
|
Current portion of finance lease liabilities |
|
72 |
|
|
|
72 |
|
|
Total current liabilities |
|
65,852 |
|
|
|
47,697 |
|
|
Long-term liabilities: |
|
|
|
|
Revolving credit facility |
|
$ |
50,000 |
|
|
|
$ |
— |
|
|
Operating lease liabilities, net of current portion |
|
21,871 |
|
|
|
— |
|
|
Long-term portion of bank term loan, net |
|
— |
|
|
|
14,637 |
|
|
Equipment loan, net |
|
— |
|
|
|
4,932 |
|
|
Finance lease obligations and other long-term liabilities |
|
185 |
|
|
|
567 |
|
|
Total long-term liabilities |
|
$ |
72,056 |
|
|
|
$ |
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; 62,425,640 and
61,576,494 shares issued and outstanding at June 27, 2020 and
December 31, 2019, respectively |
|
6 |
|
|
|
6 |
|
|
Additional paid-in
capital |
|
540,576 |
|
|
|
526,199 |
|
|
Accumulated deficit |
|
(150,505 |
) |
|
|
(142,115 |
) |
|
Accumulated other
comprehensive loss |
|
(167 |
) |
|
|
— |
|
|
Total stockholders’ equity |
|
$ |
389,910 |
|
|
|
$ |
384,090 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
527,818 |
|
|
|
$ |
451,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BEYOND MEAT, INC. |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(unaudited) |
|
|
Six Months Ended |
|
|
June 27, 2020 |
|
June 29, 2019 |
Cash flows from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(8,390 |
) |
|
|
$ |
(16,090 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
5,855 |
|
|
|
3,957 |
|
|
Non-cash lease expense |
|
1,186 |
|
|
|
— |
|
|
Share-based compensation expense |
|
13,535 |
|
|
|
2,678 |
|
|
Loss on sale of fixed assets |
|
183 |
|
|
|
— |
|
|
Amortization of debt issuance costs |
|
93 |
|
|
|
78 |
|
|
Loss on extinguishment of debt |
|
1,538 |
|
|
|
— |
|
|
Change in preferred and common stock warrant liabilities |
|
— |
|
|
|
12,503 |
|
|
Net change in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
(5,907 |
) |
|
|
(21,762 |
) |
|
Inventories |
|
(61,437 |
) |
|
|
(12,438 |
) |
|
Prepaid expenses and other assets |
|
(12,192 |
) |
|
|
(2,131 |
) |
|
Accounts payable |
|
21,564 |
|
|
|
9,799 |
|
|
Accrued expenses and other current liabilities |
|
818 |
|
|
|
1,028 |
|
|
Operating lease liabilities |
|
(1,181 |
) |
|
|
— |
|
|
Long-term liabilities |
|
— |
|
|
|
12 |
|
|
Net cash used in operating activities |
|
$ |
(44,335 |
) |
|
|
$ |
(22,366 |
) |
|
Cash flows from
investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
$ |
(26,031 |
) |
|
|
$ |
(7,502 |
) |
|
Proceeds from sale of fixed assets |
|
— |
|
|
|
232 |
|
|
Purchases of property, plant and equipment held for sale |
|
(2,288 |
) |
|
|
(3,121 |
) |
|
Payment of security deposits |
|
(9 |
) |
|
|
(487 |
) |
|
Net cash used in investing activities |
|
$ |
(28,328 |
) |
|
|
$ |
(10,878 |
) |
|
Cash flows from
financing activities: |
|
|
|
|
Proceeds from issuance of common stock pursuant to the initial
public offering, net of issuance costs |
|
$ |
— |
|
|
|
$ |
255,448 |
|
|
Proceeds from revolving credit facility |
|
50,000 |
|
|
|
— |
|
|
Debt issuance costs |
|
(1,183 |
) |
|
|
— |
|
|
Debt extinguishment costs |
|
(1,200 |
) |
|
|
— |
|
|
Repayment of revolving credit line |
|
(6,000 |
) |
|
|
— |
|
|
Repayment of term loan |
|
(20,000 |
) |
|
|
— |
|
|
Repayment of equipment loan |
|
(5,000 |
) |
|
|
— |
|
|
Principal payments under finance lease obligations |
|
(34 |
) |
|
|
(21 |
) |
|
Proceeds from exercise of stock options |
|
3,824 |
|
|
|
533 |
|
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
(1,231 |
) |
|
|
— |
|
|
Net cash provided by financing activities |
|
$ |
19,176 |
|
|
|
$ |
255,960 |
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in
cash and cash equivalents |
|
$ |
(53,487 |
) |
|
|
$ |
222,716 |
|
|
Effect of exchange rate
changes on cash |
|
(167 |
) |
|
|
— |
|
|
Cash and cash equivalents at
the beginning of the period |
|
275,988 |
|
|
|
54,271 |
|
|
Cash and cash equivalents at
the end of the period |
|
$ |
222,334 |
|
|
|
$ |
276,987 |
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
Cash paid during the period for: |
|
|
|
|
Interest |
|
$ |
1,265 |
|
|
|
$ |
1,445 |
|
|
Taxes |
|
$ |
15 |
|
|
|
$ |
21 |
|
|
Non-cash investing and financing activities: |
|
|
|
|
Non-cash additions to property, plant and equipment |
|
$ |
4,499 |
|
|
|
$ |
1,003 |
|
|
Offering costs, accrued not yet paid |
|
$ |
— |
|
|
|
$ |
578 |
|
|
Non-cash additions to property, plant and equipment held for
sale |
|
$ |
— |
|
|
|
$ |
646 |
|
|
Operating lease right-of-use assets obtained in exchange for lease
liabilities |
|
$ |
12,516 |
|
|
|
$ |
— |
|
|
Reclassification of warrant liability to additional paid-in
capital in connection with the initial public offering |
|
$ |
— |
|
|
|
$ |
14,421 |
|
|
Conversion of convertible preferred stock to common stock upon
initial public offering |
|
$ |
— |
|
|
|
$ |
199,540 |
|
|
Note receivable from sale of assets held for sale |
|
$ |
5,158 |
|
|
|
$ |
— |
|
|
|
|
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 measures. 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 gross profit and Adjusted gross
marginAdjusted gross profit is defined as net revenues
less cost of goods sold adjusted to exclude, when applicable, costs
attributable to COVID-19 activities which are not considered to be
part of the Company’s normal business activities. Adjusted gross
margin is defined as Adjusted gross profit divided by net
revenues.
Adjusted gross profit and Adjusted gross margin are presented to
provide additional perspective on underlying trends in the
Company’s gross profit and gross margin, which we believe is useful
supplemental information for investors to be able to gauge and
compare the Company’s current business performance from one period
to another.
Adjusted net (loss) income and Adjusted net (loss)
income per diluted common shareAdjusted net (loss) income
is defined as net (loss) income adjusted to exclude, when
applicable, costs attributable to COVID-19 activities, 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) income per diluted common share is defined as
Adjusted net (loss) income divided by the number of diluted common
shares outstanding.
We consider Adjusted net (loss) income and Adjusted net (loss)
income per diluted common share to be indicators of operating
performance because excluding special items allows for
period-over-period comparisons of our ongoing operations. Adjusted
net (loss) income 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
revenuesAdjusted EBITDA is defined as net (loss) income
adjusted to exclude, when applicable, income tax expense (benefit),
interest expense, depreciation and amortization expense,
restructuring expenses, share-based compensation expense, expenses
attributable to COVID-19, remeasurement of our warrant liability,
and Other, net, including investment income and foreign currency
transaction gains and losses. 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
internal comparisons of our historical operating performance on a
more consistent basis, and 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.
Limitations related to the use of non-GAAP financial
measuresThere are a number of limitations related to the
use of Adjusted gross profit, Adjusted gross margin, Adjusted net
(loss) income, Adjusted net (loss) income per diluted common share,
and Adjusted EBITDA rather than their most directly comparable GAAP
measures. Some of these limitations are:
- Adjusted gross profit and Adjusted gross margin 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 net (loss) income and Adjusted net (loss) income 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
investment income and foreign currency transaction gains and
losses, that may increase or decrease cash available to us;
and
- other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
The following tables present the reconciliation of Adjusted
gross profit and Adjusted gross margin to their most comparable
GAAP measures, gross profit and gross margin, respectively, as
reported (unaudited):
|
|
Three Months Ended |
|
Six Months Ended |
(in
thousands) |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Gross profit, as reported |
|
$ |
33,651 |
|
|
$ |
22,741 |
|
|
$ |
71,342 |
|
|
$ |
33,512 |
|
Repacking costs attributable
to COVID-19 |
|
5,915 |
|
|
— |
|
|
5,915 |
|
|
— |
|
Adjusted gross profit |
|
$ |
39,566 |
|
|
$ |
22,741 |
|
|
$ |
77,257 |
|
|
$ |
33,512 |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Gross margin, as reported |
|
29.7 |
% |
|
33.8 |
% |
|
33.9 |
% |
|
31.2 |
% |
Repacking costs attributable
to COVID-19, as a percentage of net revenues |
|
5.2 |
% |
|
— |
% |
|
2.8 |
% |
|
— |
% |
Adjusted gross margin |
|
34.9 |
% |
|
33.8 |
% |
|
36.7 |
% |
|
31.2 |
% |
|
|
|
|
|
|
|
|
|
The following tables present the reconciliation of Adjusted net
(loss) income and Adjusted net (loss) income per diluted common
share to their most comparable GAAP measures, net (loss) income and
net (loss) income per common share available to common
stockholders—diluted, respectively, as reported (unaudited):
|
|
Three Months Ended |
|
Six Months Ended |
(in thousands) |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Net loss, as reported |
|
$ |
(10,205 |
) |
|
|
$ |
(9,441 |
) |
|
|
$ |
(8,390 |
) |
|
|
$ |
(16,090 |
) |
|
Repacking costs attributable
to COVID-19 |
|
5,915 |
|
|
|
— |
|
|
|
5,915 |
|
|
|
— |
|
|
Product donations attributable
to COVID-19 relief efforts |
|
1,567 |
|
|
|
— |
|
|
|
2,742 |
|
|
|
— |
|
|
Remeasurement of warrant
liability |
|
— |
|
|
|
11,744 |
|
|
|
— |
|
|
|
12,503 |
|
|
Loss on extinguishment of
debt |
|
1,538 |
|
|
|
— |
|
|
|
1,538 |
|
|
|
— |
|
|
Adjusted net (loss)
income |
|
$ |
(1,185 |
) |
|
|
$ |
2,303 |
|
|
|
$ |
1,805 |
|
|
|
$ |
(3,587 |
) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
(in thousands, except
share and per share amounts) |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Numerator: |
|
|
|
|
|
|
|
|
Net loss, as reported |
|
$ |
(10,205 |
) |
|
|
$ |
(9,441 |
) |
|
|
$ |
(8,390 |
) |
|
|
$ |
(16,090 |
) |
|
Aggregate non-GAAP adjustments
as listed above |
|
9,020 |
|
|
|
11,744 |
|
|
|
10,195 |
|
|
|
12,503 |
|
|
Adjusted net (loss) income
used in computing basic and diluted Adjusted net (loss) income per
diluted common share |
|
$ |
(1,185 |
) |
|
|
$ |
2,303 |
|
|
|
$ |
1,805 |
|
|
|
$ |
(3,587 |
) |
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted average shares used
in computing Adjusted net (loss) income per share, basic |
|
62,098,861 |
|
|
|
39,081,359 |
|
|
|
61,904,360 |
|
|
|
23,206,203 |
|
|
Dilutive effect of shares
issuable under options and RSUs |
|
— |
|
|
|
5,054,823 |
|
|
|
4,093,396 |
|
|
|
— |
|
|
Weighted average shares used
in computing adjusted net (loss) income per share, diluted |
|
62,098,861 |
|
|
|
44,136,182 |
|
|
|
65,997,756 |
|
|
|
23,206,203 |
|
|
Adjusted net (loss) income per
common share, diluted |
|
$ |
(0.02 |
) |
|
|
$ |
0.05 |
|
|
|
$ |
0.03 |
|
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
(in thousands) |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Diluted net loss per share, as reported |
|
$ |
(0.16 |
) |
|
|
$ |
(0.24 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(0.69 |
) |
|
Repack costs related to
COVID-19 |
|
0.09 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
— |
|
|
Product donations related to
COVID-19 relief efforts |
|
0.03 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
|
Remeasurement of warrant
liability |
|
— |
|
|
|
0.29 |
|
|
|
— |
|
|
|
0.54 |
|
|
Loss on extinguishment of
debt |
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Adjusted net (loss) income per
diluted share |
|
$ |
(0.02 |
) |
|
|
$ |
0.05 |
|
|
|
$ |
0.03 |
|
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Net loss, as reported |
|
$ |
(10,205 |
) |
|
|
$ |
(9,441 |
) |
|
|
$ |
(8,390 |
) |
|
|
$ |
(16,090 |
) |
|
Income tax expense |
|
16 |
|
|
|
21 |
|
|
|
15 |
|
|
|
21 |
|
|
Interest expense |
|
569 |
|
|
|
741 |
|
|
|
1,274 |
|
|
|
1,474 |
|
|
Depreciation and amortization
expense |
|
3,272 |
|
|
|
2,052 |
|
|
|
5,855 |
|
|
|
3,957 |
|
|
Restructuring expenses(1) |
|
1,509 |
|
|
|
847 |
|
|
|
3,882 |
|
|
|
1,241 |
|
|
Share-based compensation
expense |
|
7,586 |
|
|
|
1,823 |
|
|
|
13,535 |
|
|
|
2,678 |
|
|
Expenses attributable to
COVID-19(2) |
|
7,482 |
|
|
|
— |
|
|
|
8,657 |
|
|
|
— |
|
|
Remeasurement of warrant
liability |
|
— |
|
|
|
11,744 |
|
|
|
— |
|
|
|
12,503 |
|
|
Other, net |
|
1,454 |
|
|
|
(898 |
) |
|
|
744 |
|
|
|
(1,039 |
) |
|
Adjusted EBITDA |
|
$ |
11,683 |
|
|
|
$ |
6,889 |
|
|
|
$ |
25,572 |
|
|
|
$ |
4,745 |
|
|
Net loss as a % of net
revenues |
|
(9.0 |
) |
% |
|
(14.0 |
) |
% |
|
(4.0 |
) |
% |
|
(15.0 |
) |
% |
Adjusted EBITDA as a % of net
revenues |
|
10.3 |
|
% |
|
10.2 |
|
% |
|
12.2 |
|
% |
|
4.4 |
|
% |
____________
(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 |
) |
Comprised of $5.9 million in
repacking costs attributable to COVID-19 and $1.6 million in
product donation costs related to the Company’s COVID-19 relief
campaign in the three months ended June 27, 2020, and $5.9 million
in repacking costs attributable to COVID-19 and $2.8 million in
product donation costs related to the Company’s COVID-19 relief
campaign in the six months ended June 27, 2020. Expenses
attributable to COVID-19 in the six months ended June 27, 2020
include $1.2 million in product donation costs related to the
Company’s COVID-19 relief campaign in the first quarter of 2020,
which were not previously included in the Company’s Adjusted EBITDA
calculation as these were deemed immaterial to the Company’s first
quarter 2020 financial results. Given the significant increase in
COVID-19-related expenses in the second quarter of 2020, and to
facilitate better comparison from period to period, management
determined that it was appropriate to recast its previous first
quarter 2020 Adjusted EBITDA calculation to include these
costs. |
Beyond Meat (NASDAQ:BYND)
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