Beyond Meat, Inc. (NASDAQ: BYND) (“Beyond Meat” or “the Company”),
a leader in plant-based meat, today reported financial results for
its third quarter ended September 26, 2020.
Third Quarter 2020 Financial Highlights1
- Net revenues were $94.4 million, an increase of 2.7%
year-over-year.
- Gross profit was $25.5 million, or gross margin of
27.0% of net revenues; Adjusted gross profit was $27.3 million, or
Adjusted gross margin of 28.9% of net revenues, reflecting
exclusion of expenses attributable to COVID-19.
- Net loss was $19.3 million, or $0.31 per common share;
Adjusted net loss was $17.5 million, or $0.28 per common share,
reflecting exclusion of expenses attributable to
COVID-19.
- Adjusted EBITDA was a loss of $4.3 million, or -4.5% of
net revenues.
Beyond Meat President and CEO Ethan Brown commented, "Our
financial results reflect a quarter where for the first time since
the pandemic began, we experienced the full brunt and
unpredictability of COVID-19 on our net revenues and accordingly,
throughout our P&L. Unlike the second quarter where record
retail buying and freezer loading by consumers offset the
deterioration of our foodservice business as COVID-19 stay-at-home
and related measures set in, the long tail of retail stockpiling by
consumers, coupled with continued challenges across the majority of
our foodservice customers, led to Q3 results that were lower than
we expected."
__________________________
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 added, "We have not, however, blinked in our focus on the
expanding long-term opportunity before us and continue to operate
our business locked in on this exciting long-term growth
trajectory. Rather than curtail activities in reaction to
transitory macroeconomic conditions, we continue to invest in the
pillars of our future growth, and in capabilities, infrastructure,
and markets that support our global vision and provide the highest
long-term return to our investors. Even as the pandemic has
created significant disruption, we continue to see strong growth in
critically important metrics of household penetration, buyer rates,
purchase frequency and repeat rates; our brand’s sales growth
continues to outpace the category; and during the quarter we saw
our year-over-year velocities rise even as we grew
distribution. Over the course of the quarter, we further
invested in personnel and plants in the E.U. and China; worked
towards the completion of our acquisition of our new plant in
Pennsylvania that will support integrated production; brought new
innovation to market; readied our next iteration of the Beyond
Burger; and continued to develop products for our strategic Quick
Serve Restaurant partners. These initiatives brought expense
during a period of disruption to our top-line, but we are confident
in our belief that they will deliver strong long-term gains in
enterprise value. While we expect the near-term outlook to continue
to be shaped by COVID-19, we continue to build the team, assets,
market presence, and technology to realize the full potential of
Beyond Meat as a significant and lasting global protein
company."
Third Quarter 2020
Net revenues increased 2.7% to $94.4 million in the third
quarter of 2020, compared to $92.0 million in the year-ago period.
Growth in net revenues was primarily due to increased retail
channel sales, largely offset by a decline in foodservice channel
sales due to the continued impact of COVID-19 on foodservice demand
levels. In addition, during the third quarter of 2020, retail
channel net revenues were negatively impacted by a surge in retail
consumer demand in the second quarter of 2020 due to the onset of
the COVID-19 pandemic, which resulted in consumer freezer loading
and, in turn, contributed to sequentially weaker demand in the
third quarter of 2020. Growth in volume sold during the third
quarter of 2020 was partially offset by lower net price per pound
driven by the Company’s strategic investments in promotional
activity intended to encourage greater consumer trial and adoption,
and, to a lesser extent, product mix shifts as larger-pack items
carrying a lower net price per unit volume accounted for a greater
proportion of the Company's retail net revenues compared to the
year-ago period.
Net revenues by channel (unaudited):
|
|
Three Months Ended |
|
Change |
(in
thousands) |
|
September 26, 2020 |
|
September 28, 2019 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
62,057 |
|
|
$ |
44,170 |
|
|
$ |
17,887 |
|
|
|
40.5 |
|
% |
Foodservice |
|
16,325 |
|
|
18,359 |
|
|
(2,034 |
) |
|
|
(11.1 |
) |
% |
U.S. net revenues |
|
78,382 |
|
|
62,529 |
|
|
15,853 |
|
|
|
25.4 |
|
% |
International: |
|
|
|
|
|
|
|
|
Retail |
|
7,975 |
|
|
6,295 |
|
|
1,680 |
|
|
|
26.7 |
|
% |
Foodservice |
|
8,079 |
|
|
23,137 |
|
|
(15,058 |
) |
|
|
(65.1 |
) |
% |
International net revenues |
|
16,054 |
|
|
29,432 |
|
|
(13,378 |
) |
|
|
(45.5 |
) |
% |
Net revenues |
|
$ |
94,436 |
|
|
$ |
91,961 |
|
|
$ |
2,475 |
|
|
|
2.7 |
|
% |
|
|
Nine Months Ended |
|
Change |
(in
thousands) |
|
September 26, 2020 |
|
September 28, 2019 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
Retail |
|
$ |
202,019 |
|
|
$ |
94,162 |
|
|
$ |
107,857 |
|
|
|
114.5 |
|
% |
Foodservice |
|
45,442 |
|
|
43,697 |
|
|
1,745 |
|
|
|
4.0 |
|
% |
U.S. net revenues |
|
247,461 |
|
|
137,859 |
|
|
109,602 |
|
|
|
79.5 |
|
% |
International: |
|
|
|
|
|
|
|
|
Retail |
|
23,499 |
|
|
10,002 |
|
|
13,497 |
|
|
|
134.9 |
|
% |
Foodservice |
|
33,888 |
|
|
51,557 |
|
|
(17,669 |
) |
|
|
(34.3 |
) |
% |
International net revenues |
|
57,387 |
|
|
61,559 |
|
|
(4,172 |
) |
|
|
(6.8 |
) |
% |
Net revenues |
|
$ |
304,848 |
|
|
$ |
199,418 |
|
|
$ |
105,430 |
|
|
|
52.9 |
|
% |
Gross profit was $25.5 million, or gross margin of 27.0% of net
revenues, in the third quarter of 2020, compared to $32.8 million,
or gross margin of 35.6% of net revenues, in the year-ago period.
Adjusted gross profit, which excludes $1.8 million of expenses
attributable to COVID-19, was $27.3 million, or Adjusted gross
margin of 28.9% of net revenues, in the third quarter of 2020,
compared to Adjusted gross profit of $32.8 million, or Adjusted
gross margin of 35.6% of net revenues, in the year-ago period. The
decrease in Adjusted gross profit and Adjusted gross margin was
primarily due to lower net price realization as a result of higher
trade discounts and lower absorption of fixed overhead production
costs as the Company scaled back production during the quarter to
draw down inventory levels. The $1.8 million in expenses
attributable to COVID-19 in the third quarter of 2020 were driven
by $1.1 million in inventory write-offs and reserves associated
with foodservice products determined to be unsalable and $0.7
million in costs associated with product repacking activities
driven by the Company’s efforts to repurpose certain foodservice
inventory into retail products.
Loss from operations in the third quarter of
2020 was $18.5 million compared to income from operations of $3.6
million in the year-ago period. The decrease in income from
operations was primarily driven by the decline in gross profit,
combined with higher operating expenses primarily due to the
Company’s increased headcount to support long-term growth,
increases in the Company’s marketing initiatives, higher
share-based compensation expense, investments in international
expansion initiatives, and continued investments in innovation.
Net loss was $19.3 million in the third quarter of 2020 compared
to net income of $4.1 million in the year-ago period. Net loss per
common share was $0.31 in the third quarter of 2020 compared to net
income per common diluted share of $0.06 in the year-ago period.
During the third quarter of 2020, net loss included $1.8 million in
expenses attributable to COVID-19, specifically related to
inventory write-offs and reserves and product repacking costs.
Excluding these costs, Adjusted net loss was $17.5 million in the
third quarter of 2020, or $0.28 per common share, compared to
Adjusted net income of $4.1 million, or $0.06 per diluted common
share, in the year-ago period.
Adjusted EBITDA was a loss of $4.3 million, or -4.5% of net
revenues, in the third quarter of 2020 compared to Adjusted EBITDA
of $11.0 million, or 12.0% of net revenues, in the year-ago
period.
Chief Financial Officer and Treasurer, Mark Nelson commented,
“Our third quarter financial performance is demonstrative of the
ongoing challenges associated with operating in this
pandemic-affected environment. Although we are not satisfied with
our latest results, we strongly believe that the fundamentals of
our business remain robust and we will continue balancing diligent
risk management with a requisite level of investment to advance our
long-term strategic initiatives.”
Balance Sheet and Cash Flow Highlights
The Company’s cash and cash equivalents balance was $214.6
million as of September 26, 2020 and total outstanding debt was
$50.0 million. Net cash used in operating activities was $42.7
million for the nine months ended September 26, 2020, compared to
$18.3 million for the prior year period. Capital expenditures
totaled $38.0 million for the nine months ended September 26, 2020
compared to $9.5 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.
Update on COVID-19 and 2020 Outlook
Due to the COVID-19 pandemic, the Company continues to
experience a meaningful slowdown in its foodservice business as
stay-at-home advisories and restrictions on foodservice locations’
operating capacity have resulted in closures or significantly
curtailed operations of many of its foodservice customers. At
the same time, the surge in demand from retail customers that
characterized the early stages of the pandemic as consumers shifted
towards more at-home consumption has moderated as panic-buying
generally has subsided. This ongoing evolution in consumer demand
patterns across retail and foodservice channels has added a higher
degree of uncertainty to the Company’s ability to forecast demand
beyond a limited timeframe. In light of these factors and 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 270-215-9602.
A telephone replay will be available approximately two hours after
the call concludes through Monday, November 23, 2020, by dialing
404-537-3406 and entering confirmation code 7543919.
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 made from simple ingredients
without GMOs, bioengineered ingredients, hormones, antibiotics, or
cholesterol. 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 meat, we can positively impact four growing
global issues: human health, climate change, constraints on natural
resources and animal welfare. As of September 26, 2020, Beyond Meat
had products available at approximately 122,000 retail and
foodservice outlets in over 80 countries worldwide. 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 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 COVID-19 pandemic, including on our ability to expand in new
geographic markets or the timing of such expansion efforts; 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; estimates of our expenses,
future revenues, capital requirements and our needs for additional
financing; our ability to effectively manage our growth; the
failure of acquisitions and other investments to be efficiently
integrated and produce the results we anticipate; 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 buying rates and
purchase frequency, and our ability to maintain and increase sales
velocity of our products; the 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; our ability to
effectively expand our manufacturing and production capacity; our
ability to accurately forecast demand for our products and manage
our inventory; 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; 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; 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 and packaging costs; real or perceived
quality or health issues with our products or other issues that
adversely affect our brand and reputation; our ability to
accurately predict 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; the attraction and retention of
qualified employees and key personnel and our ability to maintain
our company culture as we grow; 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 the
plant-based industry category; the effectiveness of our internal
controls; our indebtedness and ability to pay such indebtedness, as
well as our ability to comply with covenants under our credit
agreement; changes in laws and government regulation affecting our
business, including Food and Drug Administration and 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; 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; economic conditions and the impact on consumer
spending; 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 and intellectual property adequately; the
impact of tariffs and trade wars; 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, 2019 and the Company’s Quarterly Report on Form
10-Q for the quarter ended September 26, 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 MeasuresThe 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 ChannelsInvestors 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: Fitzhugh Taylor and Raphael
Grossbeyondmeat@icrinc.com
BEYOND MEAT,
INC.Condensed Consolidated Statements of
Operations(In thousands, except share and per
share data)(unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Net revenues |
|
$ |
94,436 |
|
|
|
$ |
91,961 |
|
|
|
$ |
304,848 |
|
|
|
$ |
199,418 |
|
|
Cost of goods sold |
|
68,908 |
|
|
|
59,178 |
|
|
|
207,978 |
|
|
|
133,123 |
|
|
Gross profit |
|
25,528 |
|
|
|
32,783 |
|
|
|
96,870 |
|
|
|
66,295 |
|
|
Research and development
expenses |
|
8,278 |
|
|
|
5,951 |
|
|
|
20,488 |
|
|
|
14,661 |
|
|
Selling, general and
administrative expenses |
|
33,560 |
|
|
|
20,944 |
|
|
|
95,167 |
|
|
|
47,636 |
|
|
Restructuring expenses |
|
2,146 |
|
|
|
2,319 |
|
|
|
6,028 |
|
|
|
3,560 |
|
|
Total operating expenses |
|
43,984 |
|
|
|
29,214 |
|
|
|
121,683 |
|
|
|
65,857 |
|
|
(Loss) income from
operations |
|
(18,456 |
) |
|
|
3,569 |
|
|
|
(24,813 |
) |
|
|
438 |
|
|
Other (expense) income,
net: |
|
|
|
|
|
|
|
|
Interest expense |
|
(689 |
) |
|
|
(855 |
) |
|
|
(1,963 |
) |
|
|
(2,329 |
) |
|
Remeasurement of warrant
liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,503 |
) |
|
Other, net |
|
(85 |
) |
|
|
1,385 |
|
|
|
(829 |
) |
|
|
2,424 |
|
|
Total other (expense) income,
net |
|
(774 |
) |
|
|
530 |
|
|
|
(2,792 |
) |
|
|
(12,408 |
) |
|
(Loss) income before
taxes |
|
(19,230 |
) |
|
|
4,099 |
|
|
|
(27,605 |
) |
|
|
(11,970 |
) |
|
Income tax expense |
|
55 |
|
|
|
— |
|
|
|
70 |
|
|
|
21 |
|
|
Net (loss) income |
|
$ |
(19,285 |
) |
|
|
$ |
4,099 |
|
|
|
$ |
(27,675 |
) |
|
|
$ |
(11,991 |
) |
|
Net (loss) income per share
available to common stockholders—basic |
|
$ |
(0.31 |
) |
|
|
$ |
0.07 |
|
|
|
$ |
(0.45 |
) |
|
|
$ |
(0.33 |
) |
|
Weighted average common shares
outstanding—basic |
|
62,487,152 |
|
|
|
60,415,866 |
|
|
|
62,114,399 |
|
|
|
35,806,520 |
|
|
Net (loss) income per share
available to common stockholders—diluted |
|
$ |
(0.31 |
) |
|
|
$ |
0.06 |
|
|
|
$ |
(0.45 |
) |
|
|
$ |
(0.33 |
) |
|
Weighted average common shares
outstanding—diluted |
|
62,487,152 |
|
|
|
66,026,490 |
|
|
|
62,114,399 |
|
|
|
35,806,520 |
|
|
BEYOND MEAT, INC. |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
data) |
(unaudited) |
|
September 26, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
214,615 |
|
|
|
$ |
275,988 |
|
|
Accounts receivable |
29,760 |
|
|
|
40,080 |
|
|
Inventory |
132,359 |
|
|
|
81,596 |
|
|
Prepaid expenses and other current assets |
14,195 |
|
|
|
5,930 |
|
|
Total current assets |
$ |
390,929 |
|
|
|
$ |
403,594 |
|
|
Property, plant, and equipment, net |
77,002 |
|
|
|
47,474 |
|
|
Operating lease right-of-use assets |
13,736 |
|
|
|
— |
|
|
Other non-current assets, net |
4,970 |
|
|
|
855 |
|
|
Total assets |
$ |
486,637 |
|
|
|
$ |
451,923 |
|
|
Liabilities and Stockholders’
Equity: |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
30,531 |
|
|
|
$ |
26,923 |
|
|
Wages payable |
2,289 |
|
|
|
1,768 |
|
|
Accrued bonus |
43 |
|
|
|
4,129 |
|
|
Current portion of operating lease liabilities |
2,481 |
|
|
|
— |
|
|
Accrued expenses and other current liabilities |
10,241 |
|
|
|
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 |
$ |
45,657 |
|
|
|
$ |
47,697 |
|
|
Long-term liabilities: |
|
|
|
Revolving credit facility |
$ |
50,000 |
|
|
|
$ |
— |
|
|
Operating lease liabilities, net of current portion |
11,413 |
|
|
|
— |
|
|
Long-term portion of bank term loan, net |
— |
|
|
|
14,637 |
|
|
Equipment loan, net |
— |
|
|
|
4,932 |
|
|
Finance lease obligations and other long-term liabilities |
167 |
|
|
|
567 |
|
|
Total long-term liabilities |
$ |
61,580 |
|
|
|
$ |
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; 62,625,629 and
61,576,494 shares issued and outstanding at September 26, 2020 and
December 31, 2019, respectively |
6 |
|
|
|
6 |
|
|
Additional paid-in
capital |
548,706 |
|
|
|
526,199 |
|
|
Accumulated deficit |
(169,790 |
) |
|
|
(142,115 |
) |
|
Accumulated other
comprehensive income |
478 |
|
|
|
— |
|
|
Total stockholders’ equity |
$ |
379,400 |
|
|
|
$ |
384,090 |
|
|
Total liabilities and stockholders’ equity |
$ |
486,637 |
|
|
|
$ |
451,923 |
|
|
|
|
|
|
BEYOND MEAT, INC. |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(unaudited) |
|
|
Nine Months Ended |
|
|
September 26, 2020 |
|
September 28, 2019 |
Cash flows from operating
activities: |
|
|
|
|
Net loss |
|
$ |
(27,675 |
) |
|
|
$ |
(11,991 |
) |
|
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
9,276 |
|
|
|
5,980 |
|
|
Non-cash lease expense |
|
1,573 |
|
|
|
— |
|
|
Share-based compensation expense |
|
20,377 |
|
|
|
5,807 |
|
|
Loss on sale of fixed assets |
|
218 |
|
|
|
— |
|
|
Amortization of debt issuance costs |
|
195 |
|
|
|
124 |
|
|
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 |
|
10,365 |
|
|
|
(21,856 |
) |
|
Inventories |
|
(50,263 |
) |
|
|
(30,013 |
) |
|
Prepaid expenses and other assets |
|
(9,444 |
) |
|
|
(1,878 |
) |
|
Accounts payable |
|
2,442 |
|
|
|
20,206 |
|
|
Accrued expenses and other current liabilities |
|
245 |
|
|
|
2,768 |
|
|
Operating lease liabilities |
|
(1,584 |
) |
|
|
— |
|
|
Long-term liabilities |
|
— |
|
|
|
11 |
|
|
Net cash used in operating activities |
|
$ |
(42,737 |
) |
|
|
$ |
(18,339 |
) |
|
Cash flows from investing
activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
$ |
(38,048 |
) |
|
|
$ |
(9,515 |
) |
|
Proceeds from sale of fixed assets |
|
— |
|
|
|
307 |
|
|
Purchases of property, plant and equipment held for sale |
|
(2,288 |
) |
|
|
(7,403 |
) |
|
Proceeds from note receivable on assets previously held for
sale |
|
599 |
|
|
|
— |
|
|
Payment of security deposits |
|
(9 |
) |
|
|
(542 |
) |
|
Net cash used in investing activities |
|
$ |
(39,746 |
) |
|
|
$ |
(17,153 |
) |
|
Cash flows from financing
activities: |
|
|
|
|
Proceeds from issuance of common stock pursuant to the initial
public offering, net of issuance costs |
|
$ |
— |
|
|
|
$ |
254,868 |
|
|
Proceeds from issuance of common stock pursuant to the secondary
public offering, net of issuance costs |
|
— |
|
|
|
37,937 |
|
|
Proceeds from revolving credit facility |
|
50,000 |
|
|
|
— |
|
|
Debt issuance costs |
|
(1,224 |
) |
|
|
— |
|
|
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 |
|
(52 |
) |
|
|
(31 |
) |
|
Proceeds from exercise of stock options |
|
6,491 |
|
|
|
898 |
|
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
(1,736 |
) |
|
|
— |
|
|
Net cash provided by financing activities |
|
$ |
21,279 |
|
|
|
$ |
293,672 |
|
|
|
Net (decrease) increase in
cash and cash equivalents |
|
$ |
(61,204 |
) |
|
|
$ |
258,180 |
|
|
Effect of exchange rate
changes on cash |
|
(169 |
) |
|
|
— |
|
|
Cash and cash equivalents at the beginning of the period |
|
275,988 |
|
|
|
54,271 |
|
|
Cash and cash equivalents at the end of the period |
|
$ |
214,615 |
|
|
|
$ |
312,451 |
|
|
|
Supplemental disclosures of cash flow
information: |
|
|
|
|
Cash paid during the period for: |
|
|
|
|
Interest |
|
$ |
2,114 |
|
|
|
$ |
2,261 |
|
|
Taxes |
|
$ |
15 |
|
|
|
$ |
21 |
|
|
Non-cash investing and financing activities: |
|
|
|
|
Non-cash additions to property, plant and equipment |
|
$ |
2,545 |
|
|
|
$ |
1,280 |
|
|
Offering costs, accrued not yet paid |
|
$ |
— |
|
|
|
$ |
487 |
|
|
Non-cash additions to property, plant and equipment held for
sale |
|
$ |
— |
|
|
|
$ |
1,019 |
|
|
Operating lease right-of-use assets obtained in exchange for lease
liabilities |
|
$ |
3,151 |
|
|
|
$ |
— |
|
|
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 |
|
$ |
4,558 |
|
|
|
$ |
— |
|
|
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 gross profit and Adjusted gross
margin
Adjusted gross profit is defined as net revenues less cost of
goods sold adjusted to exclude, when applicable, costs attributable
to COVID-19 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 share
Adjusted net (loss) income is defined as net (loss) income
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) 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
revenues
Adjusted 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, 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
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, 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
gross profit and Adjusted gross margin to their most comparable
GAAP measures, gross profit and gross margin, respectively, as
reported (unaudited):
|
|
Three Months Ended |
|
Nine Months Ended |
(in
thousands) |
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Gross profit, as reported |
|
$ |
25,528 |
|
|
$ |
32,783 |
|
|
$ |
96,870 |
|
|
$ |
66,295 |
|
Repacking costs attributable
to COVID-19 |
|
657 |
|
|
— |
|
|
6,572 |
|
|
— |
|
Inventory write-offs and
reserves attributable to COVID-19 |
|
1,104 |
|
|
— |
|
|
1,104 |
|
|
— |
|
Adjusted gross profit |
|
$ |
27,289 |
|
|
$ |
32,783 |
|
|
$ |
104,546 |
|
|
$ |
66,295 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Gross margin, as reported |
|
27.0 |
% |
|
35.6 |
% |
|
31.8 |
% |
|
33.2 |
% |
Repacking costs attributable
to COVID-19, as a percentage of net revenues |
|
0.7 |
% |
|
— |
% |
|
2.2 |
% |
|
— |
% |
Inventory write-offs and
reserves attributable to COVID-19, as a percentage of net
revenues |
|
1.2 |
% |
|
— |
% |
|
0.4 |
% |
|
— |
% |
Adjusted gross margin |
|
28.9 |
% |
|
35.6 |
% |
|
34.4 |
% |
|
33.2 |
% |
|
|
|
|
|
|
|
|
|
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 share available to common
stockholders—diluted, respectively, as reported (unaudited):
|
Three Months Ended |
|
Nine Months Ended |
(in thousands) |
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Net (loss) income, as reported |
$ |
(19,285 |
) |
|
$ |
4,099 |
|
|
$ |
(27,675 |
) |
|
$ |
(11,991 |
) |
Repacking costs attributable
to COVID-19 |
|
657 |
|
|
|
— |
|
|
|
6,572 |
|
|
|
— |
|
Inventory write-offs and
reserves attributable to COVID-19 |
|
1,104 |
|
|
|
— |
|
|
|
1,104 |
|
|
|
— |
|
Product donations attributable
to COVID-19 relief efforts |
|
— |
|
|
|
— |
|
|
|
2,742 |
|
|
|
— |
|
Remeasurement of warrant
liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,503 |
|
Loss on extinguishment of
debt |
|
— |
|
|
|
— |
|
|
|
1,538 |
|
|
|
— |
|
Adjusted net (loss)
income |
$ |
(17,524 |
) |
|
$ |
4,099 |
|
|
$ |
(15,719 |
) |
|
$ |
512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
(in thousands, except
share and per share amounts) |
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Numerator: |
|
|
|
|
|
|
|
Net (loss) income, as
reported |
$ |
(19,285 |
) |
|
$ |
4,099 |
|
$ |
(27,675 |
) |
|
$ |
(11,991 |
) |
Aggregate non-GAAP adjustments
as listed above |
1,761 |
|
|
— |
|
11,956 |
|
|
12,503 |
|
Adjusted net (loss) income
used in computing basic and diluted Adjusted net (loss) income per
diluted common share |
$ |
(17,524 |
) |
|
$ |
4,099 |
|
$ |
(15,719 |
) |
|
$ |
512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used
in computing Adjusted net (loss) income per share, basic |
62,487,152 |
|
|
60,415,866 |
|
62,114,399 |
|
|
35,806,520 |
|
Dilutive effect of shares
issuable under options and RSUs |
— |
|
|
5,610,624 |
|
— |
|
|
5,379,411 |
|
Weighted average shares used
in computing Adjusted net (loss) income per share, diluted |
62,487,152 |
|
|
66,026,490 |
|
62,114,399 |
|
|
41,185,931 |
|
Adjusted net (loss) income per
diluted common share |
$ |
(0.28 |
) |
|
$ |
0.06 |
|
$ |
(0.25 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Net (loss) income per share available to common
stockholders—diluted, as reported |
$ |
(0.31 |
) |
|
$ |
0.06 |
|
|
$ |
(0.45 |
) |
|
$ |
(0.33 |
) |
Repacking costs attributable
to COVID-19 |
0.01 |
|
|
— |
|
|
0.12 |
|
|
— |
|
Inventory write-offs and
reserves attributable to COVID-19 |
0.02 |
|
|
— |
|
|
0.02 |
|
|
— |
|
Product donations attributable
to COVID-19 relief efforts |
— |
|
|
— |
|
|
0.04 |
|
|
— |
|
Remeasurement of warrant
liability |
— |
|
|
— |
|
|
— |
|
|
0.34 |
|
Loss on extinguishment of
debt |
— |
|
|
— |
|
|
0.02 |
|
|
— |
|
Adjusted net (loss) income per
diluted common share |
$ |
(0.28 |
) |
|
$ |
0.06 |
|
|
$ |
(0.25 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
The following table presents the reconciliation of Adjusted
EBITDA to its most comparable GAAP measure, net (loss) income, as
reported (unaudited):
|
|
Three Months Ended |
|
Nine Months Ended |
(in
thousands) |
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
Net (loss) income, as reported |
|
$ |
(19,285 |
) |
|
|
$ |
4,099 |
|
|
|
$ |
(27,675 |
) |
|
|
$ |
(11,991 |
) |
|
Income tax expense |
|
55 |
|
|
|
— |
|
|
|
70 |
|
|
|
21 |
|
|
Interest expense |
|
689 |
|
|
|
855 |
|
|
|
1,963 |
|
|
|
2,329 |
|
|
Depreciation and amortization
expense |
|
3,421 |
|
|
|
2,023 |
|
|
|
9,276 |
|
|
|
5,980 |
|
|
Restructuring expenses(1) |
|
2,146 |
|
|
|
2,319 |
|
|
|
6,028 |
|
|
|
3,560 |
|
|
Share-based compensation
expense |
|
6,842 |
|
|
|
3,129 |
|
|
|
20,377 |
|
|
|
5,807 |
|
|
Expenses attributable to
COVID-19(2) |
|
1,761 |
|
|
|
— |
|
|
|
10,418 |
|
|
|
— |
|
|
Remeasurement of warrant
liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,503 |
|
|
Other, net(3) |
|
85 |
|
|
|
(1,385 |
) |
|
|
829 |
|
|
|
(2,424 |
) |
|
Adjusted EBITDA |
|
$ |
(4,286 |
) |
|
|
$ |
11,040 |
|
|
|
$ |
21,286 |
|
|
|
$ |
15,785 |
|
|
Net (loss) income as a % of
net revenues |
|
(20.4 |
) |
% |
|
4.5 |
|
% |
|
(9.1 |
) |
% |
|
(6.0 |
) |
% |
Adjusted EBITDA as a % of net
revenues |
|
(4.5 |
) |
% |
|
12.0 |
|
% |
|
7.0 |
|
% |
|
7.9 |
|
% |
____________
(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 $1.8 million in
costs attributable to COVID-19, consisting of $1.1 million in
inventory write-offs and reserves associated with foodservice
products determined to be unsalable and $0.7 million in repacking
costs in the three months ended September 26, 2020, and $10.4
million in costs attributable to COVID-19 consisting of $1.1
million in inventory write-offs and reserves associated with
foodservice products determined to be unsalable, $6.6 million in
repacking costs, and $2.7 million in product donation costs related
to our COVID-19 relief efforts in the nine months ended September
26, 2020. Expenses attributable to COVID-19 in the nine months
ended September 26, 2020 include $1.2 million in product donation
costs related to our COVID-19 relief efforts in the first quarter
of 2020, which were not previously included in our Adjusted EBITDA
calculation for the three months ended March 28, 2020 as these were
deemed immaterial to our first quarter 2020 financial results.
Given the significant increase in COVID-19-related expenses in the
second and third quarters 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. |
(3 |
) |
Includes $1.5 million in loss on
extinguishment of debt in the nine months ended September 26,
2020. |
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