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 June 30, 2021.
“The growth we have experienced in the first
half of 2021 is a testament to the strength of the Tattooed Chef
brand and the ability of our team to execute,” said Sam Galletti,
President and CEO of Tattooed Chef. “We are firing on all
cylinders, winning distribution in leading national retailers like
Kroger, Publix, and Albertsons, and our velocities are
outperforming the competition. By the end of the third quarter, we
expect our branded Tattooed Chef products will be in over 12,000
retail stores, exceeding our previous goal of 10,000 stores.
Furthermore, with the acquisition of Foods of New Mexico in May, we
have ample production capacity to achieve over $500 million in
revenue, and a strong innovation pipeline to stay ahead of the
curve. I have never been more excited about the future of Tattooed
Chef.”
Sarah Galletti, Chief Creative Officer and “The
Tattooed Chef”, added, “We are still in the early innings of growth
as we prepare to expand Tattooed Chef beyond the frozen aisle and
into refrigerated and ambient products later this year or early
next year. With our new manufacturing capabilities for Mexican food
products, meat alternatives and alternative tortillas, I am
confident our innovation ideas will really resonate with consumers
and I am excited about all the future opportunities for
growth.”
Financial Highlights for the Second
Quarter of 2021 Compared to the Second Quarter of 2020
- Revenue was $50.7 million, a 45.9%
increase compared to $34.8 million in the prior year period;
Tattooed Chef branded product revenue was $33.1 million, an
increase of 62.3% compared to $20.4 million in the prior year
period.
- Gross profit was $8.0 million, or
15.7% gross margin, compared to $3.7 million, or 10.8% gross
margin, in the prior year period.
- Net loss was $53.2 million compared
to net income of $1.3 million in the prior year period. This loss
includes a one-time, non-cash expense of $46.0 million resulting
from a valuation allowance on a deferred tax asset due to
additional investments.
- Adjusted EBITDA was negative $5.9
million compared to Adjusted EBITDA of positive $2.0 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.
Second Quarter 2021 Results
Revenue increased by $16.0 million, or 45.9%, to
$50.7 million in the three months ended June 30, 2021 compared
to $34.8 million in the three months ended June 30, 2020. The
revenue increase was primarily driven by a $12.7 million increase
in “Tattooed Chef” branded products, partially offset by a $1.3
million decrease in private label products and legacy products for
select private label retailers. The recent acquisition of Foods of
New Mexico, which closed on May 14, 2021, contributed $4.3 million
in revenue in the second quarter. 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.
Gross profit was $8.0 million in the three
months ended June 30, 2021 compared to $3.7 million in the three
months ended June 30, 2020. Gross margin in the three months ended
June 30, 2021 was 15.7% compared to 10.8% in the three months ended
June 30, 2020. The increase in gross margin was primarily due to
increased Tattooed Chef sales volume, improved production capacity,
and the ability to take advantage of economies of scale.
Operating expenses increased $13.8 million to
$15.9 million in the three months ended June 30, 2021 compared to
$2.1 million in the three months ended June 30, 2020. The increase
in operating expenses was primarily due to promotional expenses of
$3.2 million, marketing expenses of $2.9 million, and professional
services including legal and accounting of $2.6 million. The
Company expects operating expenses to decrease as a percentage of
revenue over time as many relatively fixed operating expenses will
be spread over increased revenue. The Company is also heavily
investing in the Tattooed Chef brand in order to increase
distribution, raise brand awareness, and drive sales in the new
stores that are launching the products. The costs that the Company
is investing today should produce realized benefits in the
future.
Net loss was $53.2 million in the three months
ended June 30, 2021 compared to net income of $1.3 million in the
prior year period. There was a one-time, non-cash expense of $46.0
million included in the second quarter of 2021 resulting from a
valuation allowance on a deferred tax asset due to the Company’s
additional investments.
Adjusted EBITDA was negative $5.9 million in the
three months ended June 30, 2021, compared to Adjusted EBITDA of
positive $2.0 million in the three months ended June 30, 2020. The
decrease in Adjusted EBITDA was primarily due to public accounting
costs that were not present in the second quarter of 2020 and the
operating expenses that were previously mentioned.
Cash Position
As of June 30, 2021, the Company had cash and
cash equivalents of $140.2 million.
Outlook
For full year 2021, the Company now 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. The Company does not expect the second
facility, Karsten, to have a material impact on 2021 revenue
because of the timing of equipment being installed during the
fourth quarter.
- Gross margin in the range of 16% to
22%
- Adjusted EBITDA of negative $14
million to $17 million. The Company is committed to an aggressive
plan of growing its brand through extensive marketing and
promotional spending that has already produced significant revenue
growth in both grocery and mass retail. To augment the revenue
growth, the Company has invested in its staff and infrastructure,
equipment, brand visibility, and customer acquisition costs to meet
the marketplace demands and the Company’s current and future goals.
The Company also continues to be impacted by increases in logistic
costs, storage fees, legal and accounting fees, and marketplace
shortages in packaging products.
- 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 starting of a new facility, inflation
within the economy, and COVID-19 related uncertainties 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
877-300-8521 from the U.S. and 412-317-6026 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 10159081. 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,”
“prepare,” “later,” “achieve,” 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; uncertainty of freight costs; raw
material increases and other inflationary considerations; 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
MEDIACatherine McNally
tattooedchef@praytellagency.com
TATTOOED CHEF,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (in thousands, except
per share information)
|
Six Months Ended |
|
|
Three Months Ended |
|
June 30, |
|
|
June 30, |
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
REVENUE |
$ |
103,398 |
|
|
$ |
67,934 |
|
|
$ |
50,716 |
|
|
$ |
34,764 |
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS
SOLD |
|
89,534 |
|
|
|
54,946 |
|
|
|
42,750 |
|
|
|
31,019 |
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
13,864 |
|
|
|
12,988 |
|
|
|
7,966 |
|
|
|
3,745 |
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
28,816 |
|
|
|
4,458 |
|
|
|
15,900 |
|
|
|
2,068 |
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM
OPERATIONS |
|
(14,952 |
) |
|
|
8,530 |
|
|
|
(7,934 |
) |
|
|
1,677 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(114 |
) |
|
|
(381 |
) |
|
|
(94 |
) |
|
|
(157 |
) |
Other (expense) income |
|
(1,772 |
) |
|
|
288 |
|
|
|
817 |
|
|
|
288 |
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME BEFORE
PROVISION FOR INCOME TAXES |
|
(16,838 |
) |
|
|
8,437 |
|
|
|
(7,211 |
) |
|
|
1,808 |
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX
EXPENSE |
|
(44,510 |
) |
|
|
(1,283 |
) |
|
|
(45,985 |
) |
|
|
(553 |
) |
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME |
|
(61,348 |
) |
|
|
7,154 |
|
|
|
(53,196 |
) |
|
|
1,255 |
|
|
|
|
|
|
|
|
|
|
|
LESS: INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
- |
|
|
|
1,361 |
|
|
|
- |
|
|
|
339 |
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO TATTOOED CHEF, INC. |
$ |
(61,348 |
) |
|
$ |
5,793 |
|
|
$ |
(53,196 |
) |
|
$ |
916 |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE |
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.76 |
) |
|
$ |
0.20 |
|
|
$ |
(0.65 |
) |
|
$ |
0.03 |
|
Diluted |
$ |
(0.76 |
) |
|
$ |
0.20 |
|
|
$ |
(0.65 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES |
|
|
|
|
|
|
|
|
|
Basic |
|
81,121,795 |
|
|
|
28,324,038 |
|
|
|
81,981,428 |
|
|
|
28,324,038 |
|
Diluted |
|
81,258,427 |
|
|
|
28,324,038 |
|
|
|
81,981,428 |
|
|
|
28,324,038 |
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
(LOSS) INCOME, NET OF TAX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(101 |
) |
|
|
383 |
|
|
|
(210 |
) |
|
|
735 |
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive
(loss) income, net of tax |
|
(101 |
) |
|
|
383 |
|
|
|
(210 |
) |
|
|
735 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss)
income |
|
(61,449 |
) |
|
|
7,537 |
|
|
|
(53,406 |
) |
|
|
1,990 |
|
Less: comprehensive income attributable to the noncontrolling
interest |
|
- |
|
|
|
1,395 |
|
|
|
- |
|
|
|
384 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income
attributable to Tattooed Chef, Inc. stockholders |
$ |
(61,449 |
) |
|
$ |
6,142 |
|
|
$ |
(53,406 |
) |
|
$ |
1,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TATTOOED CHEF,
INC.CONSOLIDATED BALANCE SHEETS
(in thousands, except per share information)
|
|
June 30, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
Cash |
|
$ |
140,182 |
|
|
$ |
131,579 |
|
Accounts receivable, net of allowances of $65 and $0 as of June 30,
2021 and December 31, 2020, respectively |
|
|
23,018 |
|
|
|
17,991 |
|
Inventory |
|
|
50,818 |
|
|
|
38,660 |
|
Prepaid expenses and other current assets |
|
|
8,592 |
|
|
|
18,240 |
|
TOTAL CURRENT
ASSETS |
|
|
222,610 |
|
|
|
206,470 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
|
39,231 |
|
|
|
16,083 |
|
Intangible assets, net |
|
|
206 |
|
|
|
- |
|
Deferred
taxes |
|
|
- |
|
|
|
43,525 |
|
Goodwill |
|
|
19,351 |
|
|
|
- |
|
Other assets |
|
|
1,947 |
|
|
|
605 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
283,345 |
|
|
$ |
266,683 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
29,269 |
|
|
$ |
25,391 |
|
Accrued expenses |
|
|
5,610 |
|
|
|
2,961 |
|
Line of credit |
|
|
2,115 |
|
|
|
22 |
|
Notes payable to related parties |
|
|
25 |
|
|
|
66 |
|
Notes payable, current portion |
|
|
405 |
|
|
|
111 |
|
Deferred revenue |
|
|
950 |
|
|
|
1,711 |
|
Forward contract derivative liability |
|
|
935 |
|
|
|
- |
|
Finance lease |
|
|
2,917 |
|
|
|
- |
|
Other current liabilities |
|
|
1,840 |
|
|
|
87 |
|
TOTAL CURRENT
LIABILITIES |
|
|
44,066 |
|
|
|
30,349 |
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
|
2,215 |
|
|
|
5,184 |
|
Notes payable, net of current
portion |
|
|
2,724 |
|
|
|
1,990 |
|
TOTAL
LIABILITIES |
|
$ |
49,005 |
|
|
$ |
37,523 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES (See Note 20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Preferred stock- $0.0001 par value; 10,000,000 shares authorized,
none issued and outstanding at June 30, 2021 and December 31,
2020 |
|
$ |
- |
|
|
$ |
- |
|
Common shares- $0.0001 par value; 1,000,000,000 shares authorized;
81,938,668 shares issued and outstanding at June 30, 2021,
71,551,067 shares issued and outstanding at December 31, 2020 |
|
|
8 |
|
|
|
7 |
|
Treasury stock- 0 shares issued and outstanding at June 30, 2021,
81,087 shares issued and outstanding at December 31, 2020 |
|
|
- |
|
|
|
- |
|
Additional paid in capital |
|
|
231,359 |
|
|
|
164,423 |
|
Accumulated other comprehensive income (loss) |
|
|
(100 |
) |
|
|
1 |
|
Retained earnings |
|
|
3,073 |
|
|
|
64,729 |
|
Total equity |
|
|
234,340 |
|
|
|
229,160 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
283,345 |
|
|
$ |
266,683 |
|
|
|
|
|
|
|
|
|
|
TATTOOED CHEF,
INC.Adjusted EBITDA Reconciliation
(in thousands)
|
Three Months Ended June 30, |
(in thousands) |
2021 |
|
2020 |
Net (loss) income |
$ |
(53,196 |
) |
|
$ |
1,255 |
|
Interest |
|
94 |
|
|
|
157 |
|
Income tax (benefit)
expense |
|
45,985 |
|
|
|
553 |
|
Depreciation and amortization |
|
896 |
|
|
|
278 |
|
EBITDA |
|
(6,221 |
) |
|
|
2,243 |
|
Adjustments |
|
|
|
|
|
Stock compensation expense |
|
318 |
|
|
|
- |
|
Gain on foreign currency forward contracts |
|
(1,107 |
) |
|
|
(288 |
) |
Loss (Gain) on warrant remeasurement |
|
371 |
|
|
|
- |
|
NMFD acquisition |
|
714 |
|
|
|
- |
|
Esogel S.R.L. and Ferdifin S.p.A asset acquisition |
|
12 |
|
|
|
- |
|
UMB ATM
transaction |
|
22 |
|
|
|
- |
|
Total Adjustments |
|
330 |
|
|
|
(288 |
) |
Adjusted EBITDA |
$ |
(5,891 |
) |
|
$ |
1,955 |
|
|
Six Months Ended June 30, |
(in thousands) |
2021 |
|
2020 |
Net (loss) income |
$ |
(61,348 |
) |
|
$ |
7,154 |
|
Interest |
|
114 |
|
|
|
381 |
|
Income tax (benefit)
expense |
|
44,510 |
|
|
|
1,283 |
|
Depreciation and amortization |
|
1,448 |
|
|
|
471 |
|
EBITDA |
|
(15,276 |
) |
|
|
9,289 |
|
Adjustments |
|
|
|
|
|
Stock compensation
expense |
|
3,502 |
|
|
|
- |
|
Loss (Gain) on foreign
currency forward contracts |
|
1,802 |
|
|
|
(288 |
) |
Loss (Gain) on warrant
remeasurement |
|
51 |
|
|
|
- |
|
NMFD
acquisition |
714 |
|
|
|
|
Esogel S.R.L. and Ferdifin
S.p.A asset acquisition |
|
12 |
|
|
|
|
UMB ATM
transaction |
|
22 |
|
|
|
- |
|
Total Adjustments |
|
6,103 |
|
|
|
(288 |
) |
Adjusted EBITDA |
$ |
(9,173 |
) |
|
$ |
9,001 |
|
Tattooed Chef (NASDAQ:TTCFW)
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