EX-99.1 2 d74265dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Laird Superfood Reports Third Quarter 2020 Financial Results

Net Sales Increased to $7.6 Million, up 118% Year-Over-Year

Completed Initial Public Offering, Raising $64.1 Million of Net Cash

National Roll Out of Laird Superfood Liquid Creamer in Q320

SISTERS, Oregon – November 12, 2020 Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood”), today reported financial results for its third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

 

   

Net Sales increased to $7.6 million, an increase of 118% year over year.

 

   

Online sales contributed 49% of net sales, with lairdsuperfood.com sales growing 115% year over year.

 

   

Wholesale sales contributed 50%, increasing 223% year over year, as retail door expansion reached approximately 7,200 locations.

 

   

Liquid creamer rolled out to more than 1,200 locations, including Whole Foods and Kroger.

 

   

Gross profit was $1.9 million and gross margin was 24.7%, compared to gross profit of $1.5 million and a gross margin of 41.9% in the prior year period.

 

   

Net loss attributable to common stockholders was $4.0 million, or $0.86 per diluted share, compared to net loss of $2.4 million, or $0.66 per diluted share in the prior year period.

Paul Hodge Jr., Co-founder, President and Chief Executive Officer of Laird Superfood, commented, “The third quarter of 2020, our first quarter as a publicly traded company, was a record quarter for us with 118% year over year revenue growth, reflecting continued strength across the business. Our plant-based superfood products appeal to the growing desire for high quality, all-natural whole food ingredients that are also sustainably sourced and packaged.”

Hodge Jr. continued, “We are in the early stages of a long-term growth strategy built on market penetration into billion dollar-plus addressable markets like creamer, coffee and hydration. As a native digital platform, our loyal customer community continues to grow, reflecting the authenticity associated with the Laird Superfood brand. Mahalo to our dedicated team who achieved so much so far this year, despite adapting quickly through the pandemic, while staying focused on our operating goals and true to our culture and values.”


For the Three Months Ended September 30, 2020

 

     Three Months Ended September 30,  
     2020     2019  
     $     % of Total     $     % of Total  

Coffee Creamers

   $ 5,223,724       69   $ 2,224,596       64

Hydration and Beverage Enhancing Supplements

     1,031,834       14     633,264       18

Coffee, Tea, and Hot Chocolate Products

     2,188,022       29     578,379       16

Other

     168,720       2     139,096       4
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Sales

     8,612,300       114     3,575,335       102

Shipping income

     25,737       0     132,033       4

Returns and discounts

     (1,024,964     (14 %)      (220,033     (6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales, net

   $ 7,613,073       100   $ 3,487,335       100
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended September 30,  
     2020     2019  
     $     % of Total     $     % of Total  

Online

   $ 3,713,773       49   $ 2,229,878       64

Wholesale

     3,773,285       50     1,168,306       34

Food Service

     126,015       1     89,151       2
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales, net

   $ 7,613,073       100   $ 3,487,335       100
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales increased 118% to $7.6 million in the third quarter of 2020 compared to $3.5 million in the third quarter of 2019. Growth in net sales in the third quarter of 2020 was driven primarily by a combination of growth in online and wholesale channels, primarily caused by an increase in sales volume across product lines.

Gross profit was $1.9 million compared to $1.5 million in the prior year period. Gross margin was 24.7% of net sales in the third quarter of 2020, compared to 41.9% of net sales in the prior year period. The decrease in gross margin was primarily due to disposal costs related to the early production and distribution of the liquid creamer product line, elevated outbound shipping costs, and increased co-packing costs primarily associated with the liquid creamer product line.

Operating expenses of $5.3 million compared to $3.9 million in the year ago period reflect General and Administrative expense increases of $843,000, primarily related to the Company’s Initial Public Offering, as well as Sales and Marketing expense increases of $554,000, primarily related to a stock option modification expense.

Loss from operations was $3.4 million in the third quarter of 2020, compared to a loss of $2.4 million in the prior year period.

Net loss attributable to common stockholders was $4.0 million, or $0.86 per diluted share, in the third quarter of 2020, compared to a loss of $2.4 million, or $0.66 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “We are thrilled with our record net sales performance in the third quarter, which furthers our conviction in the strength of our brand and the compelling addressable market opportunities in front of us. Market share and customer growth are our major priorities and this quarter demonstrated that our authentic brand, and meeting consumers where they are across our omnichannel platform, resonates with today’s consumer seeking healthy, plant-based and sustainable products. We remain confident in our ability to leverage our fixed cost structure as we focus on driving the top line while taking steps toward long-term profitability.”


For the Nine Months Ended September 30, 2020

 

     Nine Months Ended September 30,  
     2020     2019  
     $     % of Total     $     % of Total  

Coffee Creamers

   $ 13,241,592       71   $ 5,933,639       66

Hydration and Beverage Enhancing Supplements

     2,881,132       15     1,475,051       16

Coffee, Tea, and Hot Chocolate Products

     4,167,163       22     1,309,524       15

Other

     368,983       2     346,210       4
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Sales

     20,658,870       110     9,064,424       101

Shipping income

     221,082       1     329,342       4

Returns and discounts

     (2,174,824     (11 %)      (461,124     (5 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales, net

   $ 18,705,128       100   $ 8,932,642       100
  

 

 

   

 

 

   

 

 

   

 

 

 
     2020     2019  
     $     % of Total     $     % of Total  

Online

   $ 10,049,039       54   $ 5,325,768       60

Wholesale

     8,324,286       45     3,449,941       39

Food Service

     331,803       1     156,933       1
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales, net

   $ 18,705,128       100   $ 8,932,642       100
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales increased 109% to $18.7 million for the nine months ended September 30, 2020 compared to $8.9 million in the prior year period.

Gross profit was $5.3 million, or 28.4% of net sales, for the nine months ended September 30, 2020, compared to $3.6 million, or 40.7% of net sales, in the prior year period. The increase in gross profit was primarily due to sales growth. The decrease in gross margin was primarily due to elevated inbound freight expenses in response to an unanticipated increase in demand associated with COVID-19, elevated disposal costs related to the early production and distribution of the new liquid creamer product line and increased co-packing costs primarily associated with the liquid creamer product line.

Operating expenses of $13.7 million compared to $10.2 million in the year ago period reflect General and Administrative expense increases of $1.9 million, primarily related to the Company’s Initial Public Offering and an asset impairment recorded during the second quarter, as well as Sales and Marketing increases of $1.5 million, primarily related to stock option modification expense and increased advertising and payroll expenses.

Loss from operations was $8.4 million for the nine months ended September 30, 2020, compared to $6.5 million in the prior year period.

Net loss attributable to common stockholders was $10.0 million, or $2.26 per diluted share, for the nine months ended September 30, 2020 compared to $6.3 million, or $1.79 per diluted share, in the prior year period.

Balance Sheet and Cash Flow Highlights

The Company’s cash and cash equivalents were $72.9 million as of September 30, 2020 and total outstanding debt was $51,000. Cash and cash equivalents as of September 30, 2020 includes the net proceeds from the Company’s IPO. Net cash used in operating activities was $7.1 million in the nine months ended September 30, 2020, compared to $6.9 million in the prior year period.

Capital expenditures totaled $875,000 for the nine months ended September 30, 2020, compared to $1.6 million in the prior year period.


Successful Initial Public Offering

On September 25, 2020, the Company completed its initial public offering (“IPO”), in which it issued and sold 3,047,500 shares of common stock at a public offering price of $22.00 per share for net proceeds to the Company of approximately $62.1 million, after deducting underwriting discounts, commissions and estimated offering expenses. Danone Manifesto Ventures purchased $2.0 million of the Company’s common stock in a private placement immediately subsequent to the consummation of the IPO, at a price per share of $22.00. The Company continues to expect to use the net proceeds from the IPO for working capital and general corporate purposes, including operating expenses and capital expenditures. Additionally, the Company may use a portion of the net proceeds to acquire businesses or products. On September 30, 2020, subsequent to the IPO, there were 8,874,890 shares of common stock outstanding.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss the results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally and using access code 1754637. 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 2020. 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.

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 and other operating results; (3) our ability to acquire new customers and successfully retain existing customers; (4) our ability to attract and retain our suppliers, distributors and co-manufacturers; (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 cost-effective basis, predict changes in consumer preferences and develop successful new products and marketing strategies in response; (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 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.

Contacts:

Investors:

Ashley DeSimone

Ashley.DeSimone@icrinc.com


LAIRD SUPERFOOD, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

 

     For the Three Months Ended
September 30,
    For the Nine Months Ended
September 30,
 
     2020     2019     2020     2019  

Sales, net

   $ 7,613,073     $ 3,487,335     $ 18,705,128     $ 8,932,642  

Cost of goods sold

     (5,734,144     (2,026,930     (13,384,880     (5,296,485
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     1,878,929       1,460,405       5,320,248       3,636,157  
  

 

 

   

 

 

   

 

 

   

 

 

 

General and administrative

        

Salaries, wages and benefits

     1,031,425       637,913       2,652,500       1,758,080  

Stock-based compensation

     290,148       145,281       589,600       436,996  

Professional fees

     274,244       143,424       647,422       362,134  

Office expense

     142,269       125,594       364,518       306,075  

Occupancy

     57,378       52,095       167,151       95,985  

Merchant service fees

     103,306       44,100       248,355       111,683  

Netsuite subscription expense

     33,173       35,125       90,491       112,559  

Impairment on asset held for sale

     —         —         239,734       —    

Other expense

     286,876       192,770       651,061       526,289  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total general and administrative expenses

     2,218,819       1,376,302       5,650,832       3,709,801  
  

 

 

   

 

 

   

 

 

   

 

 

 

Research and product development

        

Salaries, wages and benefits

     54,454       77,970       202,287       132,691  

Stock-based compensation

     2,310       2,045       6,694       5,549  

Other expense

     46,115       29,963       155,009       48,172  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total research and product development expenses

     102,879       109,978       363,990       186,412  
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales and marketing

        

Salaries, wages and benefits

     613,961       744,964       2,057,517       1,930,485  

Stock-based compensation

     520,022       70,271       630,456       101,150  

General marketing

     325,033       525,521       895,917       1,279,391  

Advertising

     1,250,169       730,912       3,340,592       1,998,131  

Amazon selling fee

     179,425       159,153       575,313       386,648  

Travel expense

     4,908       82,937       78,872       266,978  

Other expense

     45,543       71,322       148,911       302,517  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total sales and marketing expenses

     2,939,061       2,385,080       7,727,578       6,265,300  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     5,260,759       3,871,360       13,742,400       10,161,513  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (3,381,830     (2,410,955     (8,422,152     (6,525,356
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

        

Interest and dividend income

     20,496       56,602       51,521       149,332  

Gain on sale of available-for-sale securities

     6,250       —         13,927       —    

Interest expense

     —         (18,829     —         (18,829

Grant income

     —         —         —         50,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     26,746       37,773       65,448       180,503  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (3,355,084     (2,373,182     (8,356,704     (6,344,853

Benefit from income taxes

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (3,355,084   $ (2,373,182   $ (8,356,704   $ (6,344,853
  

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (4,001,023   $ (2,373,182   $ (8,356,704   $ (6,344,853
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

   $ (0.86   $ (0.66   $ (1.89   $ (1.79
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.86   $ (0.66   $ (1.89   $ (1.79
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding used in computing net loss per share of common stock

     4,672,041       3,592,735       4,427,114       3,541,001  
  

 

 

   

 

 

   

 

 

   

 

 

 


LAIRD SUPERFOOD, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

     For the Nine Months Ended
September 30,
 
     2020     2019  

Cash flows from operating activities

    

Net loss

   $ (8,356,704   $ (6,344,853

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

    

Depreciation

     344,162       198,970  

Loss on disposal of equipment

     —         483  

Stock-based compensation

     1,382,864       546,475  

Noncash conversion of note payable to grant income

     —         (50,000

Impairment on asset held for sale

     239,734       —    

Gain on sale of investment securities available-for-sale

     13,927       —    

Changes in operating assets and liabilities:

    

Accounts receivable

     (397,669     (214,122

Inventory

     (1,441,766     (1,402,745

Prepaid expenses and other current assets

     (1,582,315     (61,736

Deferred rent

     270,731       163,365  

Deposits

     33,009       3,115  

Other assets

     7,599       3,528  

Accounts payable

     1,613,754       (166,799

Payroll liabilities

     207,675       318,513  

Accrued expenses

     567,103       62,447  
  

 

 

   

 

 

 

Net cash from operating activities

     (7,097,896     (6,943,359
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchase of property, equipment, and software

     (874,764     (1,645,800

Deposits on equipment to be acquired

     —         (338,560

Sale of investment securities available-for-sale

     516,459       —    

Purchase of investment securities available-for-sale

     —         (13,445,050

Proceeds from maturities of investment securities available-for-sale

     4,475,000       7,004,232  
  

 

 

   

 

 

 

Net cash from investing activities

     4,116,695       (8,425,178
  

 

 

   

 

 

 

Cash flows from financing activities

    

Issuance of common stock

     66,104,477       6,663,910  

Issuance of preferred stock

     10,000,006       —    

Common stock repurchases

     (20,532     (1,079,878

Stock options exercised

     119,838       34,667  

Common stock issuance costs

     (1,131,291     —    

Preferred stock issuance costs

     (147,721     (52,073
  

 

 

   

 

 

 

Net cash from financing activities

     74,924,777       5,566,626  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     71,943,576       (9,801,911

Cash and cash equivalents, beginning of period

     1,004,109       17,340,023  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 72,947,685     $ 7,538,112  
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information

    

Interest paid

   $ —       $ 18,829  
  

 

 

   

 

 

 

Supplemental disclosures of non-cash information

    

Unrealized gain on available-for-sale securities

   $ 924     $ 56,081  
  

 

 

   

 

 

 

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

   $ 14,699     $ 4,577  
  

 

 

   

 

 

 

Purchases of land included in prepaids and other current assets at the beginning of the period

   $ —       $ 40,000  
  

 

 

   

 

 

 


LAIRD SUPERFOOD, INC.

BALANCE SHEETS

(Unaudited)

 

     As of  
     September 30,
2020
    December 31,
2019
 
Assets     

Current assets

    

Cash and cash equivalents

   $ 72,947,685     $ 1,004,109  

Accounts receivable, net

     782,475       384,806  

Investment securities available-for-sale

     480,747       5,485,209  

Inventory

     3,877,731       2,435,965  

Prepaid expenses and other current assets

     2,173,123       590,808  

Deposits

     95,619       143,327  
  

 

 

   

 

 

 

Total current assets

     80,357,380       10,044,224  
  

 

 

   

 

 

 

Noncurrent assets

    

Property and equipment, net

     3,208,853       3,153,286  

Fixed assets held for sale

     250,000       —    

Licensing agreement—intangible

     132,100       132,100  

Deferred rent

     2,786,701       3,057,432  

Other assets

     7,544       15,143  
  

 

 

   

 

 

 

Total noncurrent assets

     6,385,198       6,357,961  
  

 

 

   

 

 

 

Total assets

   $ 86,742,578     $ 16,402,185  
  

 

 

   

 

 

 
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)     

Current liabilities

    

Accounts payable

   $ 2,338,505     $ 724,751  

Payroll liabilities

     698,767       491,092  

Accrued expenses

     868,149       301,046  
  

 

 

   

 

 

 

Total current liabilities

     3,905,421       1,516,889  
  

 

 

   

 

 

 

Long-term liabilities

    

Note payable

     51,000       51,000  
  

 

 

   

 

 

 

Total long-term liabilities

     51,000       51,000  
  

 

 

   

 

 

 

Total liabilities

     3,956,421       1,567,889  
  

 

 

   

 

 

 

Commitments and contingencies (Note 9)

    

Convertible preferred stock

    

Preferred stock, $0.001 par value, 5,000,000 and 1,329,680 shares authorized as of September 30, 2020 and December 31, 2019, respectively;

    

Series A-1 Preferred Stock, 0 shares authorized, issued, and outstanding as of September 30, 2020; 1,177,426 shares authorized, 162,340 issued and outstanding, and 609,078 undesignated as of December 31, 2019; Series A-2 Preferred Stock 0 shares authorized, issued, and outstanding as of September 30, 2020; 152,253 shares authorized, issued, and outstanding as of December 31, 2019

     —         6,722,951  
  

 

 

   

 

 

 

Total convertible preferred stock

     —         6,722,951  
  

 

 

   

 

 

 

Stockholders’ equity

    

Common stock, $0.001 par value, 100,000,000 and 9,600,000 shares authorized as of September 30, 2020 and December 31, 2019; 9,239,638 and 8,874,890 issued and outstanding at September 30, 2020, respectively; 4,551,950 and 4,188,558 issued and outstanding at December 31, 2019, respectively

     8,875       4,188  

Additional paid-in capital

     110,210,155       27,184,250  

Accumulated other comprehensive income (loss)

     698       (226

Accumulated deficit

     (27,433,571     (19,076,867
  

 

 

   

 

 

 

Total stockholders’ equity

     82,786,157       8,111,345  
  

 

 

   

 

 

 

Total liabilities, convertible preferred stock and stockholders’ equity

   $ 86,742,578     $ 16,402,185