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Laird Superfood Reports First Quarter 2021 Financial Results

05/13/2021

Net Sales Increase 35% Year Over Year to $7.4 Million

Online Sales Contribute 59% of Net Sales, with Direct To Consumer Sales from Lairdsuperfood.com Up 135% Year Over Year

SISTERS, Ore.--(BUSINESS WIRE)-- Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood”), today reported financial results for its first quarter ended March 31, 2021.

First Quarter 2021 Highlights

  • Net Sales increased to $7.4 million, an increase of 35% year over year.
  • Online sales contributed 59% of net sales, increasing 65% year over year, with lairdsuperfood.com sales growing 135% year over year, and subscribers growing 153%.
  • Wholesale sales contributed 39% of net sales, increasing 7% year over year, and included retail door expansion, beginning in March, into Target, Harris Teeter and Wakefern.
  • Gross profit was $1.9 million and gross margin was 25.1% compared to gross profit of $2.1 million and gross margin of 38.6% in the prior year quarter.
  • Net loss attributable to common stockholders was $5.3 million, or $0.60 per diluted share, compared to net loss attributable to common stockholders of $2.0 million, or $0.47 per diluted share, in the prior year period.

“Our first quarter 2021 results illustrate the power of our omnichannel platform as we continued aggressively scaling our business,” said Paul Hodge Jr., Co-founder, President and Chief Executive Officer of Laird Superfood. “Gross margins improved 480 basis points from the fourth quarter, and net sales increased 35% year over year, including a 65% increase in our dominant online channel. Subsequent to the end of the quarter, we completed the acquisition of Picky Bars, a fellow Central-Oregon based company that is aligned with our core values, our mission and our strategic goals. We are very excited to integrate their healthy snacks and breakfast products across the entire omnichannel platform,” concluded Hodge Jr.

For the Three Months Ended March 31, 2021

Three Months Ended March 31,

2021

2020

$ % of Total $ % of Total
Coffee Creamers

$

5,021,908

 

68

%

$

4,019,362

 

73

%

Hydration and Beverage Enhancing Supplements

 

1,064,576

 

14

%

 

858,707

 

16

%

Coffee, Tea, and Hot Chocolate Products

 

1,900,832

 

26

%

 

740,572

 

14

%

Other

 

359,321

 

5

%

 

59,590

 

1

%

Gross Sales

 

8,346,637

 

113

%

 

5,678,231

 

104

%

Shipping income

 

25,659

 

0

%

 

151,551

 

3

%

Returns and discounts

 

(946,042

)

(13

%)

 

(346,556

)

(7

%)

Sales, net

$

7,426,254

 

100

%

$

5,483,226

 

100

%

 
Three Months Ended March 31,

2021

2020

$ % of Total $ % of Total
Online

$

4,362,407

 

59

%

$

2,650,741

 

48

%

Wholesale

 

2,923,056

 

39

%

 

2,727,812

 

50

%

Food Service

 

140,791

 

2

%

 

104,673

 

2

%

Sales, net

$

7,426,254

 

100

%

$

5,483,226

 

100

%

 

Net sales increased 35% to $7.4 million in the first quarter of 2021 compared to $5.5 million in the first quarter of 2020.Growth in net sales in the first quarter of 2021 was primarily driven by a significant expansion of our customer base in online channels.

Gross profit was $1.9 million, slightly lower compared to the prior year period of $2.1 million. Gross margin was 25.1% of net sales in the first quarter of 2021, compared to 38.6% of net sales in the prior year period. The year over year decrease in gross margin was primarily due to elevated outbound shipping costs combined with the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com, increased personnel costs, disposal costs related to the initial production and distribution of our liquid creamer product line, and increased co-packing costs primarily associated with our liquid creamer product line.

Operating expenses were $7.2 million compared to $4.1 million in the year ago period and reflect General and Administrative expense increases of $2.0 million, primarily due to stock-based compensation, personnel costs, insurance expense, and professional fees, as well as Sales and Marketing expense increases of $0.9 million, primarily due to advertising expense.

Loss from operations was $5.3 million in the first quarter of 2021, compared to a loss of $2.0 million in the prior year period.

Net loss attributable to common stockholders was $5.3 million, or $0.60 per diluted share, in the first quarter of 2021, compared to net loss attributable to common stockholders of $2.0 million, or $0.47 per diluted share.

Valerie Ells, Chief Financial Officer, commented, “The first quarter of 2021 illustrated the power of our online platform, a meaningful step forward in gross margin, and yet another quarter of year over year sales growth. As we progress into the year, our priorities will remain focused on market share, expanding our customer growth, optimizing our margins and integrating our recently announced acquisition. We demonstrated again this quarter that consumers who seek healthy, plant-based, sustainable products repeatedly purchase our authentic offerings across our dynamic, omnichannel platform.”

Balance Sheet and Cash Flow Highlights

The Company’s current assets include cash, cash equivalents, and restricted cash of $51.7 million as of March 31, 2021. Total outstanding debt was $51,000 as of March 31, 2021. Net cash used in operating activities was $5.1 million in the three months ended March 31, 2021, compared to $2.3 million in the comparative prior year period.

Capital expenditures totaled $0.2 million for the three months ended March 31, 2021, compared to $0.1 million in the comparative prior year period.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally. The conference I.D. code is 1495851. Alternatively, participants may access the live webcast on the Laird Superfood Investor Relations website at https://investors.lairdsuperfood.com under “Events.”

About Laird Superfood

Laird Superfood, Inc. creates award-winning, plant-based superfood products that are both delicious and functional. The Company's products are designed to enhance your daily ritual and keep consumers fueled naturally throughout the day. The Company was co-founded in 2015 by the world's most prolific big-wave surfer, Laird Hamilton. Laird Superfood's offerings are environmentally conscientious, responsibly tested, and made with real ingredients. Shop all products online at lairdsuperfood.com and join the Laird Superfood community on social media for the latest news and daily doses of inspiration.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Laird Superfood’s future financial performance, including our outlook for fiscal year 2021. These forward-looking statements are based on Laird Superfood’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Laird Superfood’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. We expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The risks and uncertainties referred to above include, but are not limited to: (1) the effects of the current COVID-19 pandemic, or of other global outbreaks of pandemics or contagious diseases or fear of such outbreaks, including on our supply chain, the demand for our products, and on overall economic conditions and consumer confidence and spending levels; (2) our expectations regarding our revenue, expenses, including shipping expenses, and other operating results; (3) our ability to acquire new direct and wholesale customers and successfully retain existing customers; (4) our ability to attract and retain our suppliers, distributors and co-manufacturers, and effectively manage their costs and performance; (5) our expectations regarding real or perceived quality with our products or other issues that adversely affect our brand and reputation; (6) our ability to innovate on a timely and cost-effective basis, predict changes in consumer preferences and develop successful new products, or updates to existing products, and develop innovative marketing strategies; (7) expectations regarding prices and availability of raw materials and other inputs, a substantial amount of which come from a limited number of suppliers outside the United States, including in areas which may be adversely affected by climate change; (8) effects of changes in the tastes and preferences of our consumers and consumer preferences for natural and organic food products; (9) the financial condition of, and our relationships with, our suppliers, co-manufacturers, distributors, retailers and foodservice customers, as well as the health of the foodservice industry generally; (10) effects of real or perceived quality or health issues with our products or other issues that adversely affect our brand and reputation; (11) the ability of ourselves, our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations; (12) our plans for future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (13) the costs and success of our marketing efforts, and our ability to promote our brand; (14) our reliance on our executive team and other key personnel and our ability to identify, recruit and retain skilled and general working personnel; (15) our ability to effectively manage our growth; (16) our ability to compete effectively with existing competitors and new market entrants; (17) the impact of adverse economic conditions; and (18) the growth rates of the markets in which we compete.

LAIRD SUPERFOOD, INC.
STATEMENTS OF OPERATIONS
 
For the Quarters Ended
March 31,

 

2021

 

 

2020

 

Sales, net

$

7,426,254

 

$

5,483,226

 

Cost of goods sold

 

(5,559,499

)

 

(3,365,609

)

Gross profit

 

1,866,755

 

 

2,117,617

 

 
General and administrative
Salaries, wages and benefits

 

1,205,854

 

 

816,172

 

Stock-based compensation

 

899,235

 

 

183,203

 

Professional fees

 

343,622

 

 

182,048

 

Insurance expense

 

522,399

 

 

31,195

 

Office expense

 

186,831

 

 

113,365

 

Occupancy

 

56,521

 

 

53,431

 

Merchant service fees

 

106,375

 

 

56,035

 

Netsuite subscription expense

 

55,021

 

 

26,395

 

Other expense

 

267,536

 

 

137,728

 

Total general and administrative expenses

 

3,643,394

 

 

1,599,572

 

 
Research and product development
Salaries, wages and benefits

 

70,361

 

 

74,902

 

Product development expense

 

162,844

 

 

57,743

 

Stock-based compensation

 

3,567

 

 

2,192

 

Other expense

 

3,915

 

 

8,478

 

Total research and product development expenses

 

240,687

 

 

143,315

 

 
Sales and marketing
Salaries, wages and benefits

 

633,751

 

 

746,009

 

Stock-based compensation

 

41,389

 

 

74,495

 

Advertising

 

1,681,344

 

 

936,363

 

General marketing

 

710,523

 

 

309,222

 

Amazon selling fee

 

202,276

 

 

187,571

 

Travel expense

 

8,756

 

 

70,014

 

Other expense

 

49,040

 

 

69,141

 

Total sales and marketing expenses

 

3,327,079

 

 

2,392,815

 

Total expenses

 

7,211,160

 

 

4,135,702

 

Operating loss

 

(5,344,405

)

 

(2,018,085

)

 
Other income (expense)
Interest and dividend income

 

13,901

 

 

22,854

 

Total other income

 

13,901

 

 

22,854

 

Loss before income taxes

 

(5,330,504

)

 

(1,995,231

)

Benefit from income taxes

 

-

 

 

-

 

Net loss attributable to Laird Superfood, Inc. common stockholders

$

(5,330,504

)

$

(1,995,231

)

 
Net loss per share attributable to Laird Superfood, Inc common stockholders:
Basic

$

(0.60

)

$

(0.47

)

Diluted

$

(0.60

)

$

(0.47

)

Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted

 

8,894,495

 

 

4,281,346

 

 
The accompanying notes are an integral part of these financial statements.
LAIRD SUPERFOOD, INC.
STATEMENTS OF CASH FLOWS
For the Quarter Ended March 31,

 

2021

 

 

2020

 

Cash flows used in operating activities
Net loss

$

(5,330,504

)

$

(1,995,231

)

Adjustments to reconcile net loss to net cash from operating activities:
Depreciation

 

131,333

 

 

114,901

 

Amortization

 

5,270

 

 

2,524

 

Loss on disposal of equipment

 

2,325

 

 

-

 

Stock-based compensation

 

1,010,003

 

 

258,486

 

Provision for excess and obsolete inventory

 

102,604

 

 

-

 

Changes in operating assets and liabilities:
Accounts receivable

 

69,504

 

 

(1,259,099

)

Accrued investment income receivable

 

(3,969

)

 

4,847

 

Inventory

 

(1,500,686

)

 

271,028

 

Prepaid expenses and other current assets

 

(55,465

)

 

(357,734

)

Deferred rent

 

90,054

 

 

90,622

 

Deposits

 

(391,149

)

 

(17,191

)

Accounts payable

 

284,681

 

 

340,271

 

Payroll liabilities

 

289,308

 

 

142,208

 

Accrued expenses

 

153,306

 

 

60,604

 

Net cash from operating activities

$

(5,143,385

)

$

(2,343,764

)

 
Cash flows used in investing activities
Purchase of property and equipment

 

(122,588

)

 

(115,669

)

Purchase of software

 

(78,200

)

 

-

 

Proceeds from sale of property, equipment, and software

 

700

 

 

-

 

Net cash from investing activities

$

(200,088

)

$

(115,669

)

 
Cash flows from financing activities
Issuance of common stock

 

-

 

 

1,997,665

 

Common stock issuance costs

 

(82,043

)

 

-

 

Common stock repurchases

 

-

 

 

(20,532

)

Withholding tax payments for share based compensation

 

(188,793

)

 

-

 

Stock options exercised

 

151,646

 

 

6,030

 

Net cash from financing activities

$

(119,190

)

$

1,983,163

 

 
Net change in cash and cash equivalents

 

(5,462,663

)

 

(476,270

)

Cash and cash equivalents beginning of period

 

57,208,080

 

 

1,004,109

 

Cash and cash equivalents end of period

$

51,745,417

 

$

527,839

 

 
Supplemental disclosures of non-cash information
 
Unrealized gain (loss) on available-for-sale securities

$

(20,290

)

$

31,090

 

 
The accompanying notes are an integral part of these financial statements.
LAIRD SUPERFOOD, INC.
BALANCE SHEETS
As of
March 31, 2021 December 31, 2020
Assets
Current assets
Cash and cash equivalents

$

51,745,417

 

$

57,208,080

 

Accounts receivable, net

 

770,155

 

 

839,659

 

Investment securities available-for-sale

 

8,690,523

 

 

8,706,844

 

Inventory

 

7,693,980

 

 

6,295,898

 

Prepaid expenses and other current assets

 

2,902,784

 

 

2,847,319

 

Deposits

 

488,823

 

 

97,674

 

Total current assets

 

72,291,682

 

 

75,995,474

 

 
Noncurrent assets
Property and equipment, net

 

3,501,718

 

 

3,513,488

 

Licensing agreement - intangible

 

132,100

 

 

132,100

 

Deferred rent

 

2,606,592

 

 

2,696,646

 

Other assets

 

77,922

 

 

4,992

 

Total noncurrent assets

 

6,318,332

 

 

6,347,226

 

Total assets

$

78,610,014

 

$

82,342,700

 

 
Liabilities, Convertible Preferred Stock and Stockholders' Equity
Current liabilities
Accounts payable

$

1,600,645

 

$

1,315,964

 

Payroll liabilities

 

1,012,223

 

 

722,915

 

Accrued expenses

 

857,849

 

 

704,543

 

Total current liabilities

 

3,470,717

 

 

2,743,422

 

 
Long-term liabilities
Note payable

 

51,000

 

 

51,000

 

Total long-term liabilities

 

51,000

 

 

51,000

 

Total liabilities

 

3,521,717

 

 

2,794,422

 

 
Stockholders' equity
Common stock, $0.001 par value, 100,000,000 and 9,600,000 shares authorized
as of March 31, 2021 and December 31, 2020; 9,285,782 and 8,921,034
issued and outstanding at March 31, 2021, respectively; 9,247,758
and 8,892,886 issued and outstanding at December 31, 2020, respectively

 

8,921

 

 

8,893

 

Additional paid-in capital

 

112,343,131

 

 

111,452,346

 

Accumulated other comprehensive income (loss)

 

(6,083

)

 

14,207

 

Accumulated deficit

 

(37,257,672

)

 

(31,927,168

)

Total stockholders' equity

 

75,088,297

 

 

79,548,278

 

Total liabilities, convertible preferred stock and stockholders' equity

$

78,610,014

 

$

82,342,700

 

 
The accompanying notes are an integral part of these financial statements.

 

ICR
Ashley DeSimone & Reed Anderson
646-677-1827

Source: Laird Superfood, Inc.

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