View all news

Laird Superfood Reports Third Quarter 2021 Financial Results

11/10/2021

Net Sales Increase 45% Year Over Year to $10.9 Million

Direct-To-Consumer Sales Up 108% Year Over Year

SISTERS, Ore.--(BUSINESS WIRE)-- Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,” “we” and “our”), today reported financial results for its third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Net Sales increased 45% year over year to $10.9 million.
  • Online sales contributed 58% of net sales, increasing 70% year over year with direct-to-consumer up 108%.
  • Wholesale sales contributed 41% of net sales, increasing 21% year over year, with continued traction in coffee creamers.
  • Gross profit was $3.2 million and gross margin was 29.4% compared to gross profit of $1.8 million and gross margin of 23.4% in the prior year period.
  • Net loss attributable to common stockholders was $5.4 million, or $0.59 per diluted share, compared to a net loss of $4.0 million, or $0.86 per diluted share, in the prior year period.

“In the third quarter, we delivered solid growth across our portfolio,” said Paul Hodge Jr., Co-Founder, President and Chief Executive Officer of Laird Superfood. “The power of our digitally native brand continued to be reflected in our direct-to-consumer sales, which rose 108%, fueled by our expanding product offerings and the ongoing strength of customer metrics around conversion and retention, including leading performance from the newest cohorts. Our new products in hydration and beverage supplements continue to grow at a strong pace, and we remain highly encouraged by results from the recently acquired Picky portfolio,” continued Hodge. “Operationally, we are hyper focused on efficiency and have made solid progress on several initiatives to move towards profitability as we continue rapidly scaling our powerful omnichannel platform. We remain steadfast in our vision of delivering better for you, plant-based alternatives for every moment of consumers’ daily ritual.”

For the Three Months Ended September 30, 2021

Three months ended September 30,

2021

2020

$ % of Total $ % of Total
Coffee creamers

 $

              6,489,895

 

60

%

 $

              5,261,175

 

70

%

Hydration and beverage enhancing supplements

 

  1,330,906

 

12

%

 

  1,037,517

 

14

%

Coffee, tea, and hot chocolate products

 

  1,724,919

 

16

%

 

  2,153,702

 

29

%

Harvest snacks and other food items

 

  1,866,709

 

17

%

 

  —

 

0

%

Other

 

  452,002

 

4

%

 

  159,906

 

2

%

Gross sales

 

  11,864,431

 

109

%

 

  8,612,300

 

115

%

Shipping income

 

  195,085

 

2

%

 

  25,737

 

0

%

Returns and discounts

 

  (1,193,602

)

(11

%)

 

  (1,147,395

)

(15

%)

Sales, net

 $

             10,865,914

 

100

%

 $

              7,490,642

 

100

%

 
Three months ended September 30,

2021

2020

$ % of Total $ % of Total
Online

 $

              6,331,003

 

58

%

 $

              3,713,773

 

50

%

Wholesale

 

  4,415,867

 

41

%

 

  3,650,854

 

49

%

Food service

 

  119,044

 

1

%

 

  126,015

 

1

%

Sales, net

 $

             10,865,914

 

100

%

 $

              7,490,642

 

100

%

Net sales increased 45% to $10.9 million in the third quarter of 2021 compared to $7.5 million in the third quarter of 2020, primarily driven by strong gains in direct-to-consumer (“DTC”) sales. Growth was broad based, including solid increases in Coffee creamers and Hydration and beverage enhancing supplements from both legacy offerings as well as recent product launches, plus the addition of Harvest Snacks.

Gross profit was $3.2 million, an 82% increase compared to the prior year period of $1.8 million. Gross margin was 29.4% of net sales in the third quarter of 2021, compared to 23.4% of net sales in the prior year period. The year over year increase in gross margin reflected several factors, including optimization of inventory cost and DTC parcel cost, as well as improvement in liquid creamer disposals, partially offset by elevated wholesale fulfilment related expenses.

Operating expenses were $8.5 million compared to $5.1 million in the year ago period and reflect General and Administrative expense increases of $2.0 million, with $0.8 million attributable to increased non-cash expenses, such as stock-based compensation and amortization of intangibles, as well as increased insurance expense, professional fees and personnel costs. Sales and Marketing expense further contributed with increases of $1.2 million, primarily due to advertising and marketing fees.

Loss from operations was $5.3 million in the third quarter of 2021, compared to a loss of $3.4 million in the prior year period.

Net loss attributable to common stockholders was $5.4 million, or $0.59 per diluted share, in the third quarter of 2021, compared to net loss attributable to common stockholders of $4.0 million, or $0.86 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “Our continued focus on optimization helped drive favorable trends in margins and expense levels during the third quarter, along with robust sales growth. We are very pleased with the direction and progress towards our long-term targets. Our balance sheet remains strong with nearly $40 million of cash and investments and effectively zero debt, and we remain focused on maximizing the leverage across our business to continue driving forward toward profitability, while maintaining strong growth rates.”

For the Nine Months Ended September 30, 2021

Nine months ended September 30,

2021

2020

$ % of Total $ % of Total
Coffee creamers

 $

             16,590,542

 

60

%

 $

             13,285,967

 

72

%

Hydration and beverage enhancing supplements

 

  3,907,111

 

14

%

 

  2,877,694

 

16

%

Coffee, tea, and hot chocolate products

 

  5,286,882

 

19

%

 

  4,116,891

 

22

%

Harvest snacks and other food items

 

  3,353,178

 

12

%

 

  —

 

0

%

Other

 

  987,076

 

4

%

 

  378,318

 

2

%

Gross sales

 

  30,124,789

 

110

%

 

  20,658,870

 

112

%

Shipping income

 

  261,495

 

1

%

 

  221,082

 

1

%

Returns and discounts

 

  (2,942,890

)

(11

%)

 

  (2,381,455

)

(13

%)

Sales, net

 $

             27,443,394

 

100

%

 $

             18,498,497

 

100

%

 
Nine months ended September 30,

2021

2020

$ % of Total $ % of Total
Online

 $

             16,492,513

 

60

%

 $

             10,049,039

 

54

%

Wholesale

 

  10,529,593

 

38

%

 

  8,117,655

 

44

%

Food service

 

  421,288

 

2

%

 

  331,803

 

2

%

Sales, net

 $

             27,443,394

 

100

%

 $

             18,498,497

 

100

%

Net sales increased 48% to $27.4 million in the first nine months of 2021 compared to $18.5 million in the first nine months of 2020.Year-to-date growth in net sales was due to growth in both online and wholesale channels, and broad based with all categories showing strong double-digit increases.

Gross profit was $7.2 million, an increase of 41% compared to the prior year period of $5.1 million. Gross margin was 26.3% of net sales in the first nine months of 2021, compared to 27.6% of net sales in the prior year period. The year over year decrease in gross margin was primarily due to the full period impact from the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com combined with increased co-packing and distribution expenses associated with our liquid creamer product line, partially offset by optimization of DTC shipping costs.

Operating expenses were $24.2 million compared to $13.5 million in the first nine months of 2020 and reflect General and Administrative expense increases of $6.4 million, with $2.4 million attributable to increased non-cash expenses, such as stock-based compensation and amortization of intangibles, as well as increased personnel costs, insurance expense, professional fees, and reserves against prepaid assets. Sales and Marketing expense further contributed with increases of $3.7 million, primarily due to advertising and marketing fees.

Loss from operations was $16.9 million in the first nine months of 2021, compared to a loss of $8.4 million in the prior year period.

Net loss attributable to common stockholders was $17.0 million, or $1.90 per diluted share, in the first nine months of 2021, compared to net loss attributable to common stockholders of $10.0 million, or $2.26 per diluted share, in the prior year period.

Balance Sheet and Cash Flow Highlights

The Company had $39.7 million of cash, cash equivalents, and investment securities as of September 30, 2021 and total outstanding debt was $51,000. Net cash used in operating activities was $14.2 million for the nine months ended September 30, 2021, compared to $7.1 million in the comparative prior year period.

Capital expenditures totaled $1.0 million for the nine months ended September 30, 2021, compared to $0.9 million in the 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 3562448. 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) our limited operating history and ability to become profitable; (2) our reliance on third parties for raw materials and production of some of our products; (3) our ability to manage our growth and scale our manufacturing and processing capabilities effectively, including our human resource requirements; (4) our future capital needs; (5) our ability to retain and grow our customer base; (6) our reliance on independent distributors for a substantial portion of our sales; (7) our ability to evaluate and measure our business, prospects and performance metrics; (8) our ability to compete and succeed in a highly competitive and evolving industry; (9) the health of the premium organic and natural food industry as a whole; (10) risks related to our intellectual property rights and developing a strong brand; (11) our reliance on key personnel, including Laird Hamilton and Gabrielle Reece; (12) regulatory risks; (13) risks associated with the COVID-19 pandemic, including those related to any variant strains of the virus that may emerge; (14) risks related to our international operations; (15) the risk of substantial dilution from future issuances of our equity securities; and (16) the other risks described in our most recent Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission.

LAIRD SUPERFOOD, INC.
STATEMENTS OF OPERATIONS
 
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Sales, net

 $

       10,865,914

 

 $

         7,490,642

 

 $

       27,443,394

 

 $

       18,498,497

 

Cost of goods sold

 

  (7,667,075

)

 

  (5,734,144

)

 

  (20,225,269

)

 

  (13,384,880

)

Gross profit

 

  3,198,839

 

 

  1,756,498

 

 

  7,218,125

 

 

  5,113,617

 

General and administrative
Salaries, wages and benefits

 

  1,252,664

 

 

  1,031,425

 

 

  3,478,362

 

 

  2,652,500

 

Stock-based compensation

 

  911,467

 

 

  290,148

 

 

  2,766,071

 

 

  589,600

 

Professional fees

 

  551,368

 

 

  274,244

 

 

  1,504,438

 

 

  647,422

 

Insurance expense

 

  537,174

 

 

  89,136

 

 

  1,560,395

 

 

  146,197

 

Office expense

 

  235,109

 

 

  142,269

 

 

  628,388

 

 

  364,518

 

Occupancy

 

  68,251

 

 

  57,378

 

 

  187,729

 

 

  167,151

 

Merchant service fees

 

  171,050

 

 

  103,306

 

 

  429,307

 

 

  248,355

 

Netsuite subscription expense

 

  64,886

 

 

  33,173

 

 

  194,024

 

 

  90,491

 

Impairment on property, plant, and equipment

 

  8,317

 

 

  —

 

 

  8,317

 

 

  239,734

 

Other expense

 

  453,838

 

 

  197,740

 

 

  1,303,398

 

 

  504,864

 

Total general and administrative expenses

 

  4,254,124

 

 

  2,218,819

 

 

  12,060,429

 

 

  5,650,832

 

Research and product development
Salaries, wages and benefits

 

  118,105

 

 

  54,454

 

 

  304,653

 

 

  202,287

 

Stock-based compensation

 

  7,864

 

 

  2,310

 

 

  16,816

 

 

  6,694

 

Product development expense

 

  107,418

 

 

  43,589

 

 

  520,210

 

 

  141,506

 

Other expense

 

  9,217

 

 

  2,526

 

 

  16,464

 

 

  13,503

 

Total research and product development expenses

 

  242,604

 

 

  102,879

 

 

  858,143

 

 

  363,990

 

Sales and marketing
Salaries, wages and benefits

 

  589,941

 

 

  613,961

 

 

  1,854,020

 

 

  2,057,517

 

Stock-based compensation

 

  65,441

 

 

  520,022

 

 

  162,536

 

 

  630,456

 

Advertising

 

  1,954,377

 

 

  1,140,369

 

 

  5,313,881

 

 

  3,146,592

 

General marketing

 

  1,131,023

 

 

  312,402

 

 

  3,079,181

 

 

  883,286

 

Amazon selling fee

 

  196,053

 

 

  179,425

 

 

  609,171

 

 

  575,313

 

Travel expense

 

  11,828

 

 

  4,908

 

 

  32,188

 

 

  78,872

 

Other expense

 

  66,090

 

 

  45,543

 

 

  182,788

 

 

  148,911

 

Total sales and marketing expenses

 

  4,014,753

 

 

  2,816,630

 

 

  11,233,765

 

 

  7,520,947

 

Total expenses

 

  8,511,481

 

 

  5,138,328

 

 

  24,152,337

 

 

  13,535,769

 

Operating loss

 

  (5,312,642

)

 

  (3,381,830

)

 

  (16,934,212

)

 

  (8,422,152

)

Other income (expense)
Interest and dividend income

 

  10,721

 

 

  20,496

 

 

  36,246

 

 

  51,521

 

Gain on sale of available-for-sale securities

 

  —

 

 

  6,250

 

 

  —

 

 

  13,927

 

Total other income (expense)

 

  10,721

 

 

  26,746

 

 

  36,246

 

 

  65,448

 

Loss before income taxes

 

  (5,301,921

)

 

  (3,355,084

)

 

  (16,897,966

)

 

  (8,356,704

)

Income tax expense

 

  (49,777

)

 

  —

 

 

  (86,495

)

 

  —

 

Net loss

 $

       (5,351,698

)

 $

       (3,355,084

)

 $

     (16,984,461

)

 $

       (8,356,704

)

Less deemed dividend of beneficial conversion feature

 

  —

 

 

  —

 

 

  —

 

 

  (825,366

)

Less deemed dividend on warrant discount

 

  —

 

 

  (645,939

)

 

  —

 

 

  (825,366

)

Net loss attributable to Laird Superfood, Inc. common stockholders

 $

       (5,351,698

)

 $

       (4,001,023

)

 $

     (16,984,461

)

 $

     (10,007,436

)

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

 $

                (0.59

)

 $

                (0.86

)

 $

                (1.90

)

 $

                (2.26

)

Diluted

 $

                (0.59

)

 $

                (0.86

)

 $

                (1.90

)

 $

                (2.26

)

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

 

  9,001,912

 

 

  4,672,041

 

 

  8,954,875

 

 

  4,427,114

 

LAIRD SUPERFOOD, INC.
STATEMENTS OF CASH FLOWS
 
For the Nine Months Ended
September 30,

 

2021

 

 

2020

 

Cash flows from operating activities
Net loss

 $

        (16,984,461

)

 $

          (8,356,704

)

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

 

  454,400

 

 

  344,162

 

Amortization

 

  243,578

 

 

  7,599

 

Loss on disposal of equipment

 

  5,600

 

 

  —

 

Stock-based compensation

 

  3,142,517

 

 

  1,320,433

 

Reserve for prepaid assets

 

  179,000

 

 

  —

 

Restricted stock awards

 

  —

 

 

  62,431

 

Impairment on property, plant, and equipment

 

  8,317

 

 

  239,734

 

Gain on sale of investment securities available-for-sale

 

  —

 

 

  13,927

 

Changes in operating assets and liabilities:
Accounts receivable

 

  (72,150

)

 

  (397,669

)

Inventory

 

  (3,314,086

)

 

  (1,441,766

)

Prepaid expenses and other current assets

 

  1,137,741

 

 

  (1,582,315

)

Deferred rent

 

  267,787

 

 

  270,731

 

Deposits

 

  2,601

 

 

  33,009

 

Accounts payable

 

  184,722

 

 

  1,613,754

 

Payroll liabilities

 

  81,694

 

 

  207,675

 

Accrued expenses

 

  333,246

 

 

  567,103

 

Deferred taxes

 

  86,495

 

 

  —

 

Net cash from operating activities

 

  (14,242,999

)

 

  (7,097,896

)

Cash flows from investing activities
Purchase of property, plant, and equipment

 

  (1,039,350

)

 

  (874,764

)

Proceeds from sale of property, equipment, and software

 

  700

 

 

  —

 

Deposits on equipment to be acquired

 

  (462,507

)

 

  —

 

Purchase of software

 

  (141,546

)

 

  —

 

Acquisition of a business, net of cash acquired (note 2)

 

  (10,449,587

)

 

  —

 

Sale of investment securities available-for-sale

 

  —

 

 

  516,459

 

Proceeds from maturities of investment securities available-for-sale

 

  —

 

 

  4,475,000

 

Net cash from investing activities

 

  (12,092,290

)

 

  4,116,695

 

Cash flows from financing activities
Issuance of common stock

 

  —

 

 

  66,104,477

 

Issuance of preferred stock

 

  —

 

 

  10,000,006

 

Common stock issuance costs

 

  (82,043

)

 

  (1,131,291

)

Preferred stock issuance costs

 

  —

 

 

  (147,721

)

Withholding tax payments for share based compensation

 

  (219,157

)

 

  —

 

Restricted stock units issued

 

  31

 

 

  —

 

Repurchased common stock

 

  —

 

 

  (20,532

)

Stock options exercised

 

  485,916

 

 

  119,838

 

Net cash from financing activities

 

  184,747

 

 

  74,924,777

 

Net change in cash and cash equivalents

 

  (26,150,542

)

 

  71,943,576

 

Cash and cash equivalents beginning of period

 

  57,208,080

 

 

  1,004,109

 

Cash and cash equivalents end of period

 $

          31,057,538

 

 $

          72,947,685

 

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

 $

               (22,049

)

 $

                     924

 

 
Purchases of equipment included in deposits at the beginning of the period

 $

                       —

 

 $

                14,699

 

LAIRD SUPERFOOD, INC.
BALANCE SHEET
 
As of
September 30, 2021 December 31, 2020
Assets
Current assets
Cash and cash equivalents

 $

             31,057,538

 

 $

             57,208,080

 

Accounts receivable, net

 

                    956,870

 

 

                    839,659

 

Investment securities available-for-sale

 

                 8,688,251

 

 

                 8,706,844

 

Inventory

 

               10,335,990

 

 

                 6,295,898

 

Prepaid expenses and other current assets, net

 

                 1,767,744

 

 

                 2,847,319

 

Deposits

 

                    563,580

 

 

                      97,674

 

Total current assets

 

               53,369,973

 

 

               75,995,474

 

Noncurrent assets
Property and equipment, net

 

                 4,139,199

 

 

                 3,513,488

 

Intangible assets, net

 

                 4,965,060

 

 

                    137,092

 

Goodwill

 

                 6,486,000

 

 

                            —

 

Deferred rent

 

                 2,428,859

 

 

                 2,696,646

 

Total noncurrent assets

 

               18,019,118

 

 

                 6,347,226

 

Total assets

 $

             71,389,091

 

 $

             82,342,700

 

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable

 $

              1,548,009

 

 $

              1,315,964

 

Payroll liabilities

 

                    813,798

 

 

                    722,915

 

Accrued expenses

 

                 1,185,900

 

 

                    704,543

 

Total current liabilities

 

                 3,547,707

 

 

                 2,743,422

 

Long-term liabilities
Deferred tax liability, net

 

                      86,495

 

 

                            —

 

Note payable

 

                      51,000

 

 

                      51,000

 

Total long-term liabilities

 

                    137,495

 

 

                      51,000

 

Total liabilities

 

                 3,685,202

 

 

                 2,794,422

 

Stockholders’ equity
Common stock, $0.001 par value, 100,000,000 shares authorized as of September 30, 2021 and
   December 31, 2020; 9,402,959 and 9,037,499 issued and outstanding at September 30, 2021,
   respectively; 9,247,758 and 8,892,886 issued and outstanding at December 31, 2020,
   respectively

 $

                     9,037

 

 $

                     8,893

 

Additional paid-in capital

 

              116,614,323

 

 

              111,452,346

 

Accumulated other comprehensive income (loss)

 

                      (7,842

)

 

                      14,207

 

Accumulated deficit

 

              (48,911,629

)

 

              (31,927,168

)

Total stockholders’ equity

 

               67,703,889

 

 

               79,548,278

 

Total liabilities and stockholders’ equity

 $

             71,389,091

 

 $

             82,342,700

 

 

ICR
Reed Anderson
646-277-1260
Reed.Anderson@icrinc.com

Source: Laird Superfood, Inc.

Multimedia Files:

View all news