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Laird Superfood Reports Fourth Quarter & FY2021 Financial Results

03/08/2022

FY2021 Net Sales Increased 43% Year Over Year to $36.8 Million

Online Sales Contribute 62% of FY2021 Net Sales, with Direct-To-Consumer Sales Up 87% Year Over Year

SISTERS, Ore.--(BUSINESS WIRE)-- Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,” “we” and “our”), today reported financial results for its fourth quarter and fiscal year ended December 31, 2021.

Fourth Quarter 2021 Highlights

  • Net Sales increased 29% year over year to $9.4 million.
  • Online contributed 66% of Net Sales, increasing 39% year over year with direct-to-consumer up 49%.
  • Wholesale contributed 33% of Net Sales, increasing 16% year over year, driven by continued expansion in grocery from both liquid creamer and shelf stable products.
  • Gross Profit was $2.2 million and gross margin was 23.6% compared to Gross Profit of $1.5 million and gross margin of 20.1% in the prior year period.
  • Net loss attributable to common stockholders was $6.9 million, or $0.76 per diluted share, compared to a net loss of $4.5 million, or $0.51 per diluted share, in the prior year period.

“Fourth quarter results were in line with the revised expectations that we shared with you at the end of January. Our Net Sales growth of 29% reflects the continued progress across our multi-channel platform, and across our various expanding product lines,” said Jason Vieth, President and Chief Executive Officer of Laird Superfood. “Over the past five weeks since I joined the Company, our team has been focusing on prioritizing strategies and tactics to accelerate our near-term growth and to shore-up our cost structure in this challenging supply chain environment. We continue to identify opportunities across products and channels that we’ll begin to implement in the coming months to leverage our strengths and drive top-line gains in 2022 and also improve margins and profitability. The power of the Laird Superfood brand remains a key point of differentiation, reflecting our deep connections with consumers who share our passion and vision for real food that tastes great and is made from the highest quality, plant-based ingredients. We remain well positioned for significant long-term growth in sales and profitability on our journey to becoming a leading player in the natural food and beverage industry.”

For the Three Months Ended December 31, 2021

Three Months Ended December 31,

2021

 

2020

$

 

% of Total

 

$

 

% of Total

Coffee creamers

$

5,177,126

 

55

%

$

5,146,268

 

71

%

Hydration and beverage enhancing supplements

 

1,290,336

 

14

%

 

1,015,709

 

14

%

Harvest snacks and other food items

 

1,821,220

 

19

%

 

135,509

 

2

%

Coffee, tea, and hot chocolate products

 

1,874,473

 

20

%

 

1,805,126

 

25

%

Other

 

438,459

 

5

%

 

195,655

 

3

%

Gross sales

 

10,601,614

 

113

%

 

8,298,267

 

114

%

Shipping income

 

196,384

 

2

%

 

27,783

 

0

%

Returns and discounts

 

(1,430,439

)

(15

)%

 

(1,041,321

)

(14

)%

Sales, net

$

9,367,559

 

100

%

$

7,284,729

 

100

%

 
Online

 

6,195,224

 

66

%

 

4,452,667

 

61

%

Wholesale

 

3,069,198

 

33

%

 

2,655,690

 

36

%

Food service

 

103,137

 

1

%

 

176,372

 

2

%

Sales, net

$

9,367,559

 

100

%

$

7,284,729

 

100

%

Net Sales increased 29% to $9.4 million in the fourth quarter of 2021 compared to $7.3 million in the fourth quarter of 2020, led by 39% growth online, reflecting strong direct-to-consumer (“DTC”) sales, and mid-teens gains in wholesale. Expanded offerings drove strong growth in Harvest Snacks, while Coffee Creamers were stable, with growth in refrigerated liquid creamer sales offset by the timing of Club shelf stable creamer revenues.

Gross Profit was $2.2 million, a 51% increase compared to the prior year period of $1.5 million. Gross margin was 23.6% of Net Sales in the fourth quarter of 2021, compared to 20.1% of Net Sales in the prior year period. The year-over-year increase in gross margin stemmed from lower inventory costs due to operational efficiencies, continued optimization of our DTC shipping expense, and improvements in both distributor chargebacks and production waste from our refrigerated liquid creamer, partially offset by higher wholesale fulfillment costs, timing of promotional activity and other inflationary pressures.

Operating expenses were $9.2 million compared to $6.0 million in the year ago period with $1.2 million of the increase attributable to General and Administrative expense, primarily related to elevated personnel costs, professional fees and amortization of intangible assets. Sales and Marketing expense rose $2.0 million due to growth in advertising and marketing, accounting for the balance of the increase in operating expenses.

Loss from operations was $7.0 million in the fourth quarter of 2021, compared to a loss of $4.5 million in the prior year period.

Net loss was $6.9 million, or $0.76 per diluted share, in the fourth quarter of 2021, compared to a net loss of $4.5 million, or $0.51 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “Our focus on optimization, including in operational efficiencies and in our direct-to-consumer shipping expenses, helped offset a challenging inflationary environment. We continue to emphasize leveraging the power of our multi-channel platform, balancing key initiatives aimed at driving strong, consistent growth with our ongoing commitment to improving margins and profitability.”

For the Year Ended December 31, 2021

Years Ended December 31,

2021

 

2020

$

 

% of Total

 

$

 

% of Total

Coffee creamers

$

21,767,409

 

59

%

$

18,432,236

 

71

%

Hydration and beverage enhancing supplements

 

5,814,629

 

16

%

 

3,893,406

 

15

%

Harvest snacks and other food items

 

5,228,888

 

14

%

 

135,509

 

1

%

Coffee, tea, and hot chocolate products

 

7,108,361

 

19

%

 

5,922,017

 

23

%

Other

 

808,352

 

2

%

 

588,754

 

2

%

Gross sales

 

40,727,639

 

110

%

 

28,971,922

 

112

%

Shipping income

 

457,879

 

1

%

 

248,865

 

1

%

Returns and discounts

 

(4,374,565

)

(11

)%

 

(3,437,561

)

(13

)%

Sales, net

$

36,810,953

 

100

%

$

25,783,226

 

100

%

 
Online

 

22,687,736

 

62

%

 

14,501,706

 

56

%

Wholesale

 

13,598,792

 

37

%

 

10,773,345

 

42

%

Food service

 

524,425

 

1

%

 

508,175

 

2

%

Sales, net

$

36,810,953

 

100

%

$

25,783,226

 

100

%

Net Sales increased 43% to $36.8 million for the year ended December 31, 2021, compared to $25.8 million in the prior year. The increase was primarily driven by higher volumes in our online and wholesale channels, reflecting growth in existing products, new product launches during 2021, and the addition of Picky Bars.

Gross Profit was $9.4 million for the year ended December 31, 2021, an increase of 43% compared to the prior year. Gross margin was 25.6%, in line with our 2020 gross margin of 25.5% as benefits from initiatives to improve inbound freight costs, labor efficiency, and optimizing DTC parcel costs were largely offset by elevated outbound wholesale freight expenses, increased co-packing costs primarily associated with our liquid creamer product line, along with price and mix factors.

Operating expenses were $33.4 million for the year ended December 31, 2021, compared to $19.5 million in 2020. General and Administrative expense increased $7.6 million, including $2.5 million related to stock-based comp and other non-cash items, as well as higher personnel, professional fees and insurance expense. Sales and Marketing expense rose $5.7 million primarily due to increases in advertising and marketing.

Loss from operations was $24.0 million in the year ended December 31, 2021, compared to a loss of $12.9 million in 2020.

Net loss attributable to common stockholders was $23.9 million, or $2.66 per diluted share, compared to a net loss attributable to common stockholders of $14.5 million, or $2.61 per diluted share, in 2020.

Balance Sheet and Cash Flow Highlights

The Company had $31.7 million of cash, cash equivalents and investments as of December 31, 2021 and no outstanding debt. Net cash used in operating activities was $22.1 million for the year ended December 31, 2021, compared to $14.7 million in 2020, and related to the Company’s net loss position and investment in inventory.

Capital expenditures totaled $1.6 million for the year ended December 31, 2021, compared to $1.1 million a year earlier.

2022 Outlook

We estimate Net Sales for full year 2022 will be in a range of $41 million to $44 million, an increase of 15% at the midpoint over 2021. Gross margin for full year 2022 is estimated to be in a range of 24% to 26% compared to 25.6% in 2021. The Company’s guidance assumes that there are no significant disruptions to the supply chain, or its customers or consumers, including any disruptions from adverse macroeconomic factors or additional adverse changes related to the duration, magnitude and effects of the COVID-19 pandemic.

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 (844) 200-6205 from the U.S. or (929) 526-1599 internationally. The conference I.D. code is 741608. 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 conference 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 and growth. 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) volatility 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) effects of real or perceived quality or health issues 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) adverse developments 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) the ability of ourselves, our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations; (11) our plans for future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (12) the costs and success of our marketing efforts, and our ability to promote our brand; (13) our reliance on our executive team and other key personnel and our ability to identify, recruit and retain skilled and general working personnel; (14) our ability to effectively manage our growth; (15) our ability to compete effectively with existing competitors and new market entrants; (16) the impact of adverse economic conditions; and (17) the growth rates of the markets in which we compete.

LAIRD SUPERFOOD, INC.
STATEMENTS OF OPERATIONS

For the Three Months Ended

December 31,

2021

 

2020

Sales, net

$

9,367,559

 

$

7,284,729

 

Cost of goods sold

 

(7,153,814

)

 

(5,819,762

)

Gross profit

 

2,213,745

 

 

1,464,967

 

General and administrative
Salaries, wages and benefits

 

1,289,719

 

 

886,214

 

Stock-based compensation

 

803,345

 

 

835,203

 

Professional fees

 

727,733

 

 

316,368

 

Insurance expense

 

579,813

 

 

519,848

 

Office expense

 

350,592

 

 

217,715

 

Occupancy

 

116,115

 

 

100,606

 

Merchant service fees

 

169,350

 

 

127,437

 

Other expense

 

362,163

 

 

174,056

 

Total general and administrative expenses

 

4,398,830

 

 

3,177,447

 

Research and product development
Salaries, wages and benefits

 

116,868

 

 

70,318

 

Stock-based compensation

 

6,745

 

 

3,567

 

Product development expense

 

46,485

 

 

67,769

 

Other expense

 

1,886

 

 

2,526

 

Total research and product development expenses

 

171,984

 

 

144,180

 

Sales and marketing
Salaries, wages and benefits

 

675,211

 

 

611,868

 

Stock-based compensation

 

66,432

 

 

30,570

 

Advertising

 

2,256,998

 

 

1,111,371

 

General marketing

 

1,412,265

 

 

684,972

 

Other expense

 

250,229

 

 

211,578

 

Total sales and marketing expenses

 

4,661,135

 

 

2,650,359

 

Total expenses

 

9,231,949

 

 

5,971,986

 

Operating loss

 

(7,018,204

)

 

(4,507,019

)

Other income (expense)
Interest and dividend income

 

12,458

 

 

13,423

 

Gain on sale of available-for-sale securities

 

 

 

 

Grant income

 

51,000

 

 

 

Total other income

 

63,458

 

 

13,423

 

Loss before income taxes

 

(6,954,746

)

 

(4,493,596

)

Income tax expense

 

68,661

 

 

 

Net loss

$

(6,886,085

)

$

(4,493,596

)

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

$

(0.76

)

$

(0.51

)

Diluted

$

(0.76

)

$

(0.51

)

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

 

9,067,235

 

 

8,876,431

 

LAIRD SUPERFOOD, INC.
STATEMENTS OF OPERATIONS

For the Years Ended

December 31,

2021

 

2020

Sales, net

$

36,810,953

 

$

25,783,226

 

Cost of goods sold

 

(27,379,082

)

 

(19,204,642

)

Gross profit

 

9,431,871

 

 

6,578,584

 

General and administrative
Salaries, wages and benefits

 

4,822,910

 

 

3,546,489

 

Stock-based compensation

 

3,569,416

 

 

1,424,803

 

Professional fees

 

2,232,171

 

 

963,791

 

Insurance expense

 

2,140,208

 

 

666,045

 

Office expense

 

1,217,651

 

 

735,669

 

Occupancy

 

430,148

 

 

612,998

 

Merchant service fees

 

598,657

 

 

375,792

 

Other expense

 

1,448,101

 

 

502,692

 

Total general and administrative expenses

 

16,459,262

 

 

8,828,279

 

Research and product development
Salaries, wages and benefits

 

421,521

 

 

272,605

 

Stock-based compensation

 

23,561

 

 

10,261

 

Product development expense

 

566,695

 

 

209,275

 

Other expense

 

18,350

 

 

16,029

 

Total research and product development expenses

 

1,030,127

 

 

508,170

 

Sales and marketing
Salaries, wages and benefits

 

2,529,231

 

 

2,669,384

 

Stock-based compensation

 

228,968

 

 

661,026

 

Advertising

 

7,570,879

 

 

4,257,963

 

General marketing

 

4,491,446

 

 

1,568,258

 

Other expense

 

1,074,374

 

 

1,014,675

 

Total sales and marketing expenses

 

15,894,898

 

 

10,171,306

 

Total expenses

 

33,384,287

 

 

19,507,755

 

Operating loss

 

(23,952,416

)

 

(12,929,171

)

Other income (expense)
Interest and dividend income

 

48,704

 

 

64,943

 

Gain on sale of available-for-sale securities

 

 

 

13,927

 

Grant income

 

51,000

 

 

 

Total other income

 

99,704

 

 

78,870

 

Loss before income taxes

 

(23,852,712

)

 

(12,850,301

)

Income tax expense

 

(17,834

)

 

 

Net loss

$

(23,870,546

)

$

(12,850,301

)

Less deemed dividend of beneficial conversion feature

 

 

 

(825,366

)

Less deemed dividend on warrant discount

 

 

 

(825,366

)

Net loss attributable to Laird Superfood, Inc. common stockholders

$

(23,870,546

)

$

(14,501,033

)

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

$

(2.66

)

$

(2.61

)

Diluted

$

(2.66

)

$

(2.61

)

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

 

8,983,294

 

 

5,546,078

 

LAIRD SUPERFOOD, INC.
STATEMENTS OF CASH FLOWS

For the Years Ended

December 31,

2021

 

2020

Cash flows used in operating activities
Net loss

$

(23,870,546

)

$

(12,850,301

)

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

 

596,505

 

 

474,621

 

Amortization

 

385,093

 

 

10,152

 

Gain on disposal of equipment

 

(6,400

)

 

 

Stock-based compensation

 

4,040,207

 

 

2,318,502

 

Reserve for prepaid assets

 

179,000

 

 

 

Restricted stock awards

 

 

 

62,431

 

Noncash conversion of note payable to grant income

 

(51,000

)

 

 

Impairment on property, plant, and equipment

 

8,317

 

 

239,734

 

Deferred taxes

 

7,534

 

 

 

Gain on sale of investment securities available-for-sale

 

 

 

13,927

 

Changes in operating assets and liabilities:
Accounts receivable

 

(382,970

)

 

(454,853

)

Inventory

 

(3,199,439

)

 

(3,859,932

)

Prepaid expenses and other current assets

 

(922,058

)

 

(2,256,511

)

Deferred rent

 

368,894

 

 

360,786

 

Deposits

 

(86,920

)

 

30,954

 

Accounts payable

 

(474,519

)

 

591,213

 

Payroll liabilities

 

82,059

 

 

231,824

 

Accrued expenses

 

1,230,436

 

 

403,481

 

Net cash from operating activities

 

(22,095,807

)

 

(14,683,972

)

Cash flows used in investing activities
Purchase of property, plant, and equipment

 

(1,555,191

)

 

(1,059,858

)

Proceeds on sale of property, plant, and equipment

 

12,700

 

 

 

Deposits on equipment to be acquired

 

(489,325

)

 

 

Purchase of software

 

(156,855

)

 

 

Acquisition of a business, net of cash acquired

 

(10,449,587

)

 

 

Purchase of investment securities available-for-sale

 

(1,028

)

 

(8,171,129

)

Proceeds from maturities of investment securities available-for-sale

 

 

 

4,950,000

 

Net cash from investing activities

 

(12,639,286

)

 

(4,280,987

)

Cash flows from financing activities
Issuance of common stock

 

66,744

 

 

66,110,517

 

Issuance of preferred stock

 

 

 

10,000,006

 

Common stock issuance costs

 

(82,043

)

 

(1,268,772

)

Preferred stock issuance costs

 

 

 

(147,721

)

Capital contribution

 

 

 

298,103

 

Restricted stock units issued

 

48

 

 

 

Withholding tax payments for share based compensation

 

(219,158

)

 

 

Repurchased common stock

 

 

 

(20,532

)

Stock options exercised

 

810,656

 

 

197,329

 

Net cash from financing activities

 

576,247

 

 

75,168,930

 

Net change in cash and cash equivalents

 

(34,158,846

)

 

56,203,971

 

Cash and cash equivalents beginning of year

 

57,208,080

 

 

1,004,109

 

Cash and cash equivalents end of year

$

23,049,234

 

$

57,208,080

 

Supplemental disclosures of non-cash information
Noncash conversion of note payable to grant income

$

51,000

 

$

 

Unrealized gain (loss) on available-for-sale securities

$

(75,223

)

$

14,433

 

Common stock issued in connection with the acquisition of a business

$

1,834,857

 

$

 

Conversion of preferred stock to common stock

$

 

$

16,575,236

 

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

$

 

$

14,699

 

Purchases of equipment included in accrued expenses

$

26,141

 

$

 

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

$

23,049,234

 

$

57,208,080

 

Accounts receivable, net

 

1,268,718

 

 

839,659

 

Investment securities available-for-sale

 

8,635,077

 

 

8,706,844

 

Inventory

 

10,221,343

 

 

6,295,898

 

Prepaid expenses and other current assets, net

 

3,827,543

 

 

2,847,319

 

Deposits

 

679,919

 

 

97,674

 

Total current assets

 

47,681,834

 

 

75,995,474

 

Noncurrent assets
Property and equipment, net

 

4,512,935

 

 

3,513,488

 

Intangible assets, net

 

4,838,854

 

 

137,092

 

Goodwill

 

6,486,000

 

 

 

Deferred rent

 

2,327,752

 

 

2,696,646

 

Total noncurrent assets

 

18,165,541

 

 

6,347,226

 

Total assets

$

65,847,375

 

$

82,342,700

 

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable

$

888,768

 

$

1,315,964

 

Payroll liabilities

 

814,163

 

 

722,915

 

Accrued expenses

 

2,083,090

 

 

704,543

 

Total current liabilities

 

3,786,021

 

 

2,743,422

 

Long-term liabilities
Deferred tax liability, net

 

7,534

 

 

 

Note payable

 

 

 

51,000

 

Total long-term liabilities

 

7,534

 

 

51,000

 

Total liabilities

 

3,793,555

 

 

2,794,422

 

Stockholders’ equity
Common stock, $0.001 par value, 100,000,000 shares authorized as of December 31, 2021 and December 31, 2020; 9,460,243 and 9,094,539 issued and outstanding at December 31, 2021, respectively; 9,247,758 and 8,892,886 issued and outstanding at December 31, 2020, respectively

 

9,095

 

 

8,893

 

Additional paid-in capital

 

117,903,455

 

 

111,452,346

 

Accumulated other comprehensive income (loss)

 

(61,016

)

 

14,207

 

Accumulated deficit

 

(55,797,714

)

 

(31,927,168

)

Total stockholders’ equity

 

62,053,820

 

 

79,548,278

 

Total liabilities and stockholders’ equity

$

65,847,375

 

$

82,342,700

 

 

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

Source: Laird Superfood, Inc.

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