Tattooed Chef, Inc. (Nasdaq: TTCF) (“Tattooed Chef” or the
“Company”), a leader in plant-based foods, today announced
financial results for the three months ended March 31, 2021.
“Our record start to the year demonstrates the
strength of our business and the Tattooed Chef brand,” said Sam
Galletti, President and CEO of Tattooed Chef. “Branded revenue
increased 105% in the first quarter across the mass, club, and
grocery channels driven by successful product launches, increased
distribution, and a promotion at a large club chain. We are
executing on our growth strategy to increase distribution, build
brand awareness, expand manufacturing capabilities, and diversify
our product portfolio through innovation. We are investing in the
business today in order to support strong long-term growth, and we
believe the recently announced strategic acquisition of Foods of
New Mexico will help create meaningful shareholder value going
forward.”
Sarah Galletti, Chief Creative Officer and “The
Tattooed Chef”, added, “We are revolutionizing plant-based eating
with the Tattooed Chef brand by tapping into consumer preferences
and constantly bringing new ideas to the market. Our recent product
launches in retail have been very successful and with the addition
of our new manufacturing capabilities with the Foods of New Mexico
acquisition, we have a pipeline of over 250 plant-based innovation
ideas including ambient products and snacks.”
Financial Highlights for the First
Quarter of 2021 Compared to the First Quarter of 2020
- Revenue was $52.7 million, a 59%
increase compared to $33.2 million in the prior year period;
Tattooed Chef branded product revenue was a record $36.0 million,
an increase of 105% compared to $17.6 million in the prior year
period.
- Gross profit was $13.7 million, or
26% gross margin, compared to $9.2 million, or 28% gross margin, in
the prior year period.
- Net loss was $7.9 million compared
to net income of $5.9 million in the prior year period.
- Adjusted EBITDA loss was $3.0
million compared to Adjusted EBITDA of $7.0 million in the prior
year period. Adjusted EBITDA is a non-GAAP financial measure
defined under “Non-GAAP Measures.” Please see “Adjusted EBITDA
Reconciliation” at the end of this press release.
First Quarter 2021 Results
Revenue increased by $19.5 million, or 59%, to
$52.7 million in the three months ended March 31, 2021
compared to $33.2 million in the three months ended March 31, 2020.
The revenue increase was primarily driven by an $18.4 million
increase in “Tattooed Chef” branded products, and a $1.3 million
increase in private label products and legacy products for select
private label retailers. The increase in Tattooed Chef branded
products resulted from expansion in the number of U.S. distribution
points, as well as increased volume at existing retail customers
with our current portfolio of products and new product
introductions including smoothie bowls, vegetable blends, buffalo
cauliflower, and other value-added riced cauliflower meals.
Gross profit was $13.7 million in the three
months ended March 31, 2021 compared to $9.2 million in the three
months ended March 31, 2020. Gross margin in the three months ended
March 31, 2021 was 26.0% compared to 27.9% in the three months
ended March 31, 2020. Gross margin in the three months ended March
31, 2021 decreased compared to the prior year period, however, on a
sequential basis, first quarter gross margin increased 860 basis
points compared to 17.4% in the fourth quarter of 2020 due to
increased operational efficiencies.
Operating expenses increased $18.3 million to
$20.7 million in the three months ended March 31, 2021 compared to
$2.4 million in the three months ended March 31, 2020. The increase
in operating expenses was primarily due to $3.2 million of
stock-based compensation, $2.6 million in marketing, $2.6 million
in public company and new employee costs, and $1.9 million in
promotional expenses to invest in customers through promotional
offers. The Company expects operating expenses to decrease as a
percentage of revenue over time.
Net loss was $7.9 million in the three months
ended March 31, 2021 compared to net income of $5.9 million in the
prior year period, primarily driven by increased operating
expenses.
Adjusted EBITDA loss was $3.0 million in the
three months ended March 31, 2021, compared to Adjusted EBITDA of
$7.4 million in the three months ended March 31, 2020. The decrease
in Adjusted EBITDA was primarily due to the operating expenses that
were previously mentioned.
Balance Sheet and Cash Flow
As of March 31, 2021, the Company had cash and
cash equivalents of $185 million.
Outlook
For full year 2021, the Company expects:
- Revenue in the range of $235
million to $242 million, an increase of 58% to 63% compared to
2020. This guidance implies 49% year-over-year growth on the base
business to $222 million, and a $13 million to $20 million
contribution from one of the two facilities included in the Foods
of New Mexico acquisition, which is expected to close near-term.
This revenue guidance excludes any revenue contribution from the
second facility (Karsten) because it is currently not in operation.
The Company expects to update guidance again once production begins
at that facility in the coming months.
- Gross margin in the range of 20% to
25%
- Adjusted EBITDA in the range of $2
million to $4 million
- Capital expenditures in the range
of $15 million to $20 million
The Company is in a high growth phase and does
not provide guidance for the most directly comparable GAAP measure,
net income, and similarly cannot provide a reconciliation between
its forecasted Adjusted EBITDA and net income metrics without
unreasonable effort due to upcoming one-time transactional costs,
starting of a new facility, and stock compensation that are
unknowable at this time and affect the reliability of estimates for
certain items. These items are difficult to estimate and may vary
greatly between periods and could significantly impact future
financial results.
Conference Call and WebcastThe
Company will host a conference call and webcast to discuss the
results today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
Investors interested in participating in the live call can dial
855-327-6837 from the U.S. and 631-891-4304 internationally. A
telephone replay will be available approximately two hours after
the call concludes through Wednesday, May 26, 2021, and can be
accessed by dialing 844-512-2921 from the U.S., or 412-317-6671
internationally, and entering the confirmation ID 10014706. The
webcast will be available on the Investors section of the Company’s
website at www.tattooedchef.com and archived for 30 days.
About Tattooed ChefTattooed
Chef is a leading plant-based food company offering a broad
portfolio of innovative and sustainably sourced plant-based foods.
Tattooed Chef’s signature products include ready-to-cook bowls,
zucchini spirals, riced cauliflower, acai and smoothie bowls, and
cauliflower pizza crusts, which are available in the frozen food
sections of leading national retail food stores across the United
States as well as on Tattooed Chef’s e-commerce site. Understanding
consumer lifestyle and food trends, a commitment to innovation, and
self-manufacturing allows Tattooed Chef to continuously introduce
new products. Tattooed Chef provides approachable, great tasting
and chef-created products to the growing group of plant-based
consumers as well as the mainstream marketplace. For more
information, please visit www.tattooedchef.com.
Forward Looking
StatementsCertain statements made in this release are
“forward looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. When used in this release, the words
“estimates,” “projected,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,”
“future,” “propose,” “trend,” “accelerate,” “continues,”
“opportunities,” “next,” “increase,” “runway,” “guidance” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
Tattooed Chef's control, that could cause actual results or
outcomes to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include: uncertainty
surrounding the ultimate success of Tattooed Chef’s e-commerce
platform; the need to prove Tattooed Chef’s ability to build brand
awareness and continue to launch innovative products; continued
acceptance of Tattooed Chef branded products by new retail
customers; Tattooed Chef’s ability to increase in-store count and
points of distribution; the outcome of any legal proceedings that
may be instituted against Tattooed Chef; competition and the
ability of the business to grow and manage growth profitably; the
ability to meet Nasdaq’s listing requirements; costs related to our
recent business combination; anticipated but unpredictable
increased costs associated with our transition to a public company;
and other risks and uncertainties indicated from time to time in
the definitive proxy statement filed with the Securities and
Exchange Commission (the “SEC”) in connection with our recent
business combination, including those under “Risk Factors” therein,
and other factors identified in past and future filings with the
SEC, available at www.sec.gov. Some of these risks and
uncertainties may be amplified by the COVID-19 outbreak. Tattooed
Chef undertakes any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Non-GAAP Measures
The Company seeks to achieve profitable, long
term growth by monitoring and analyzing key operating metrics,
including Adjusted EBITDA. The Company’s management uses this
non-GAAP financial metric and related computations to evaluate and
manage the business and to plan and make near and long-term
operating and strategic decisions. The management team believes
this non-GAAP financial metric is useful to investors to provide
supplemental information in addition to the GAAP financial results.
Management reviews the use of its primary key operating metrics
from time-to-time. Adjusted EBITDA is not intended to be a
substitute for any GAAP financial measure and as calculated, may
not be comparable to similarly titled measures of performance of
other companies in other industries or within the same industry.
The Company’s management team believes it is useful to provide
investors with the same financial information that it uses
internally to make comparisons of historical operating results,
identify trends in underlying operating results, and evaluate its
business.
CONTACTS
INVESTORSRachel
Perkins-Ulshrachel@ulshir.com
MEDIANatania
Reedtattooedchef@praytellagency.com
TATTOOED CHEF,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (in thousands, except
per share information)
|
Three Months Ended |
|
March 31, |
|
|
2021 |
|
|
|
2020 |
|
REVENUE |
$ |
52,682 |
|
|
$ |
33,170 |
|
|
|
|
|
COST OF GOODS SOLD |
|
39,008 |
|
|
|
23,927 |
|
|
|
|
|
GROSS PROFIT |
|
13,674 |
|
|
|
9,243 |
|
|
|
|
|
OPERATING EXPENSES |
|
20,693 |
|
|
|
2,390 |
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS |
|
(7,019 |
) |
|
|
6,853 |
|
|
|
|
|
Interest expense |
|
(20 |
) |
|
|
(224 |
) |
Other income (expense) |
|
(2,589 |
) |
|
|
- |
|
|
|
|
|
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES |
|
(9,628 |
) |
|
|
6,629 |
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE) |
|
1,755 |
|
|
|
(730 |
) |
|
|
|
|
NET INCOME (LOSS) |
|
(7,873 |
) |
|
|
5,899 |
|
|
|
|
|
LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS |
|
- |
|
|
|
1,022 |
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO TATTOOED CHEF,
INC. |
$ |
(7,873 |
) |
|
$ |
4,877 |
|
|
|
|
|
NET INCOME (LOSS) PER SHARE |
|
|
|
Basic |
$ |
(0.10 |
) |
|
$ |
0.17 |
|
Diluted |
$ |
(0.10 |
) |
|
$ |
0.17 |
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES |
|
|
|
Basic |
|
79,415,105 |
|
|
|
28,324,038 |
|
Diluted |
|
79,719,129 |
|
|
|
28,324,038 |
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX |
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
109 |
|
|
|
(352 |
) |
|
|
|
|
Total other comprehensive income (loss), net of tax |
|
109 |
|
|
|
(352 |
) |
|
|
|
|
|
|
|
|
Comprehensive income |
|
(7,764 |
) |
|
|
5,547 |
|
Less: comprehensive income attributable to the noncontrolling
interest |
|
- |
|
|
|
1,011 |
|
|
|
|
|
Comprehensive income attributable to Tattooed Chef, Inc.
stockholders |
$ |
(7,764 |
) |
|
$ |
4,536 |
|
TATTOOED CHEF,
INC.CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
information)
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash |
|
|
|
|
$ |
185,161 |
|
$ |
131,579 |
|
|
Accounts receivable |
|
|
31,796 |
|
|
17,991 |
|
|
Inventory |
|
|
|
|
38,701 |
|
|
38,660 |
|
|
Prepaid expenses and other current assets |
|
|
11,699 |
|
|
18,240 |
|
TOTAL CURRENT ASSETS |
|
|
267,357 |
|
|
206,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
19,312 |
|
|
16,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred taxes |
|
|
45,005 |
|
|
43,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
923 |
|
|
605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
332,597 |
|
$ |
266,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING
INTEREST |
|
|
|
|
|
|
AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
$ |
30,971 |
|
$ |
25,391 |
|
|
Accrued expenses |
|
|
6,135 |
|
|
2,961 |
|
|
Line of credit |
|
|
26 |
|
|
22 |
|
|
Notes payable to related parties, current portion |
|
|
42 |
|
|
66 |
|
|
Notes payable, current portion |
|
|
111 |
|
|
111 |
|
|
Deferred revenue |
|
|
974 |
|
|
1,711 |
|
|
Forward contract derivative liability |
|
|
2,042 |
|
|
- |
|
|
Other current liabilities |
|
|
881 |
|
|
87 |
|
TOTAL CURRENT LIABILITIES |
|
|
41,182 |
|
|
30,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
|
1,875 |
|
|
5,184 |
|
Notes payable, net of current portion |
|
|
1,903 |
|
|
1,990 |
|
TOTAL LIABILITIES |
|
$ |
44,960 |
|
$ |
37,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (See Note 19) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Preferred stock- $0.0001 par value; 10,000,000 shares authorized,
none issued and outstanding at March 31,2021 and December 31,
2020 |
|
$ |
- |
|
$ |
- |
|
|
Common shares- $0.0001 par value; 1,000,000,000 shares authorized;
81,400,199 shares issued and outstandingat March 31, 2021,
71,551,067 shares issued and outstanding at December 31, 2020 |
|
|
8 |
|
|
7 |
|
|
Additional paid in capital |
|
|
230,970 |
|
|
164,423 |
|
|
Accumulated other comprehensive income |
|
|
110 |
|
|
1 |
|
|
Retained earnings |
|
|
56,549 |
|
|
64,729 |
|
|
|
Total equity attributable to Tattooed Chef, Inc. |
|
|
287,637 |
|
|
229,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
332,597 |
|
$ |
266,683 |
|
TATTOOED CHEF,
INC.Adjusted EBITDA
Reconciliation(in
thousands)
|
|
Three Months Ended |
|
|
|
|
|
|
(in thousands) |
|
March 31, |
|
|
March 31, |
2021 |
2020 |
Net income (loss) |
|
$ |
(7,873 |
) |
|
|
$ |
5,899 |
Interest |
|
$ |
20 |
|
|
|
$ |
224 |
Income tax (benefit) expense |
|
$ |
(1,755 |
) |
|
|
$ |
730 |
Depreciation |
|
$ |
552 |
|
|
|
$ |
193 |
EBITDA |
|
$ |
(9,056 |
) |
|
|
$ |
7,046 |
Adjustments |
|
|
|
|
|
|
|
Stock compensation expense |
|
$ |
3,184 |
|
|
|
$ |
- |
Loss on foreign currency forward contracts |
|
$ |
2,909 |
|
|
|
$ |
- |
Total Adjustments |
|
$ |
6,092 |
|
|
|
$ |
|
Adjusted EBITDA |
|
$ |
(2,964 |
) |
|
|
$ |
7,046 |
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