BYND - Beyond Meat® Reports First Quarter 2024 Financial Results | Benzinga

EL SEGUNDO, Calif., May 08, 2024 (GLOBE NEWSWIRE) -- Beyond Meat, Inc. (NASDAQ:BYND) ("Beyond Meat" or "the Company"), a leader in plant-based meat, today reported financial results for its first quarter ended March 30, 2024.

First Quarter 2024 Financial Highlights¹

• Net revenues were $75.6 million, a decrease of 18.0% year-over-year.
• Gross profit was $3.7 million, or gross margin of 4.9%, compared to gross profit of $6.2 million, or gross margin of 6.7%, in the year-ago period.
• Loss from operations was $53.5 million, or operating margin of -70.7%, compared to loss from operations of $57.7 million, or operating margin of -62.6%, in the year-ago period.
  
  • Adjusted loss from operations was $46.0 million, or adjusted operating margin of -60.8%, reflecting the exclusion of a $7.5 million accrual related to a consumer class action settlement.
• Net loss was $54.4 million, or $0.84 per common share, compared to net loss of $59.0 million, or $0.92 per common share, in the year-ago period.
  
  • Adjusted net loss was $46.9 million, or $0.72 per diluted common share, reflecting the exclusion of a $7.5 million accrual related to a consumer class action settlement.
• Adjusted EBITDA was a loss of $32.9 million, or -43.5% of net revenues, compared to an Adjusted EBITDA loss of $45.8 million, or -49.6% of net revenues, in the year-ago period.
  

¹ This release includes references to non-GAAP financial measures. Refer to "Non-GAAP Financial Measures" later in this release for the definitions of the non-GAAP financial measures presented and a reconciliation of these measures to their closest comparable GAAP measures.

Beyond Meat President and CEO Ethan Brown commented, "In Q1, we made solid progress against our 2024 priorities, including: hitting our first quarter revenue objective; reducing operating expenses and cash consumption year-over-year; bringing production in-house to reduce costs and improve quality; and commencing shipments of Beyond IV, the fourth generation of Beyond Burger and Beyond Beef, to our customers, to the praise of nutritionists and consumers alike."

Brown continued, "Together with measures we are exploring to bolster our balance sheet, we continue to work to position 2024 as a pivotal year as we strive to achieve sustainable and profitable operations."

First Quarter 2024

Net revenues decreased 18.0% to $75.6 million in the first quarter of 2024, compared to $92.2 million in the year-ago period. The decrease in net revenues was primarily driven by a 16.1% decrease in volume of products sold and a 2.3% decrease in net revenue per pound. The decrease in net revenue per pound was primarily driven by increased trade discounts and, to a lesser extent, pricing changes, partially offset by favorable changes in foreign currency exchange rates.

U.S. retail channel net revenues decreased 16.0% to $37.1 million in the first quarter of 2024, compared to $44.2 million in the year-ago period, primarily due to a 10.2% decrease in volume of products sold, primarily reflecting demand softness in the category and reduced sales of Beyond Meat Jerky which is in the process of being discontinued, and, to a lesser extent, a 6.5% decrease in net revenue per pound, primarily resulting from changes in product sales mix and higher trade discounts. U.S. retail channel net revenues included $1.6 million from ingredient sales in the quarter.

U.S. foodservice channel net revenues decreased 16.2% to $12.3 million in the first quarter of 2024, compared to $14.7 million in the year-ago period, primarily due to a 20.7% decrease in volume of products sold, primarily reflecting loss of distribution for certain items and demand softness in the category, partially offset by a 5.8% increase in net revenue per pound, primarily resulting from changes in product sales mix and lower trade discounts.

International retail channel net revenues decreased 12.0% to $12.6 million in the first quarter of 2024, compared to $14.3 million in the year-ago period, primarily due to a 12.7% decrease in volume of products sold, primarily reflecting reduced sales of chicken products in the EU and softer demand for certain products in Canada, partially offset by a 0.8% increase in net revenue per pound. The increase in net revenue per pound was primarily due to lower trade discounts, changes in product sales mix and favorable changes in foreign currency exchange rates, partially offset by reduced pricing of certain products.

International foodservice channel net revenues decreased 28.7% to $13.6 million in the first quarter of 2024, compared to $19.1 million in the year-ago period, primarily due to a 25.0% decrease in volume of products sold, primarily reflecting reduced sales of burger and chicken products, including as a result of initial sell-ins to large Quick Service Restaurant customers in the year-ago period, and a 4.9% decrease in net revenue per pound, primarily resulting from higher trade discounts, partially offset by changes in product sales mix and favorable changes in foreign currency exchange rates.

Net revenues by channel (unaudited):

The following table presents the Company's net revenues by channel for the periods presented:

Volume of products sold by channel (unaudited):

The following table presents consolidated volume of the Company's products sold in pounds for the periods presented:

Gross profit in the first quarter of 2024 was $3.7 million, or gross margin of 4.9%, compared to $6.2 million, or gross margin of 6.7%, in the year-ago period. Gross profit and gross margin in the first quarter of 2024 were negatively impacted by lower volume of products sold, and by higher manufacturing costs, including depreciation, higher materials costs and lower net revenues per pound, partially offset by lower inventory reserves and, to a lesser extent, lower logistics costs per pound.

Operating expenses were $57.1 million in the first quarter of 2024, compared to $63.9 million in the year-ago period. The decrease in operating expenses was primarily due to reduced non-production headcount expenses and reduced marketing expenses, partially offset by increased general and administrative expenses. General and administrative expenses included a $7.5 million accrual related to a binding settlement term sheet entered into on May 6, 2024 in connection with the settlement of certain consumer class action lawsuits that originated in 2022. Since the settlement is subject to court approval, the timing of payments is uncertain; however, the Company anticipates paying $250,000 in 2024, with the remainder, $7.25 million, anticipated to be paid in 2025. General and administrative expenses in the first quarter of 2024 benefited from a $3.7 million reduction in loss on sale of fixed assets compared to the year-ago period.

Loss from operations was $53.5 million in the first quarter of 2024, compared to $57.7 million in the year-ago period. The decrease in loss from operations was driven by the reduction in operating expenses, partially offset by reduced gross profit. Adjusted loss from operations was $46.0 million, reflecting the exclusion of the $7.5 million accrual related to the consumer class action settlement.

Net loss was $54.4 million in the first quarter of 2024, compared to $59.0 million in the year-ago period. Net loss per common share was $0.84 in the first quarter of 2024, compared to $0.92 in the year-ago period. The decrease in net loss was primarily driven by the reduction in loss from operations and a reduction in losses related to the Company's joint venture with PepsiCo, Inc., The Planet Partnership ("TPP"), partially offset by a reduction in Other income, net. Adjusted net loss was $46.9 million, or $0.72 per diluted common share, reflecting the exclusion of the $7.5 million accrual related to the consumer class action settlement.

Adjusted EBITDA was a loss of $32.9 million, or -43.5% of net revenues, in the first quarter of 2024, compared to an Adjusted EBITDA loss of $45.8 million, or -49.6% of net revenues, in the year-ago period.

Balance Sheet and Cash Flow Highlights

The Company's cash and cash equivalents balance, including restricted cash, was $173.5 million and total outstanding debt was $1.1 billion as of March 30, 2024. Net cash used in operating activities was $31.8 million in the three months ended March 30, 2024, compared to $42.2 million in the year-ago period. Capital expenditures totaled $1.2 million in the three months ended March 30, 2024, compared to $5.3 million in the year-ago period. Net cash used in investing activities was $0.3 million in the three months ended March 30, 2024, compared to $6.3 million in the year-ago period. Net cash used in investing activities in the three months ended March 30, 2024 included $0.5 million in return of security deposits and $0.4 million in proceeds from sales of certain fixed assets.

2024 Outlook

The company's operating environment continues to be affected by uncertainty relating to macroeconomic issues including: ongoing, further weakened demand in the plant-based meat category, inflation and high interest rates and concerns about the likelihood of a recession, among other things, all of which could have unforeseen impacts on the Company's actual realized results. Based on management's best assessment of the environment today, the Company is reaffirming its outlook for the full year 2024:

• Net revenues are expected to be in the range of $315 million to $345 million. Net revenues for the second quarter are expected to be in the range of $85 million to $90 million.
• Gross margin is expected to be in the mid to high teens range for the full year 2024, and is expected to be higher in the second half of the year relative to the first half.
• Operating expenses, excluding the $7.5 million accrual related to the consumer class action settlement, are expected to be in the range of $170 million to $190 million, weighted slightly more towards the first half of the year.
• Capital expenditures are expected to be in the range of $15 million to $25 million.

Total distribution points by channel (unaudited):

The following table presents the approximate number of distribution outlets by channel for the periods presented:

__________

(1) Excludes U.S. retail outlets unique to Beyond Meat Jerky, which has been discontinued.
(2) The number of retail and foodservice outlets where Beyond Meat branded products are available was derived from rolling 52-week data as of March 2024.

Conference Call and Webcast

The Company will host a conference call to discuss these results at 5:00 p.m. Eastern, 2:00 p.m. Pacific. Investors interested in participating in the live call can dial 412-902-4255. There will also be a simultaneous, live webcast available on the Investors section of the Company's website at www.beyondmeat.com. The webcast will also be archived.

About Beyond Meat

Beyond Meat, Inc. (NASDAQ:BYND) is a leading plant-based meat company offering a portfolio of revolutionary plant-based meats made from simple ingredients without GMOs, no added hormones or antibiotics, and 0 mg of cholesterol per serving. Founded in 2009, Beyond Meat products are designed to have the same taste and texture as animal-based meat while being better for people and the planet. Beyond Meat's brand promise, Eat What You Love®, represents a strong belief that there is a better way to feed our future and that the positive choices we all make, no matter how small, can have a great impact on our personal health and the health of our planet. By shifting from animal-based meat to plant-based protein, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. Visit www.BeyondMeat.com and follow @BeyondMeat, #BeyondBurger and #GoBeyond on Facebook, Instagram, Threads, X (formerly Twitter) and TikTok.

Forward-Looking Statements

Certain statements in this release constitute "forward-looking statements" within the meaning of the federal securities laws, including statements related to the Company's expectations with respect to its full year 2024 outlook.

Forward-looking statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions and projections regarding financial performance, prospects, future events and future results, including ongoing uncertainty related to macroeconomic issues, including high inflation and interest rates, prolonged, weakening demand in the plant-based meat category, ongoing concerns about the likelihood of a recession and increased competition, among other matters, and involve known and unknown risks that are difficult to predict. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "project," "predict," "outlook," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which or whether, such performance or results will be achieved. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While Beyond Meat believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors and, of course, it is impossible to anticipate all factors that could affect actual results. There are many risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein including, but not limited to, the impact of inflation and higher interest rates across the economy, including higher food, grocery, raw materials, transportation, energy, labor and fuel costs; a continued decrease in demand, and the underlying factors negatively impacting demand, in the plant-based meat category; risks and uncertainties related to certain cost-reduction initiatives, cost structure improvements, workforce reductions and executive leadership changes, and the timing and success of reducing operating expenses and achieving certain financial goals and cash flow positive objectives; the timing and success of narrowing our commercial focus to certain growth opportunities; accelerating activities that prioritize gross margin expansion and cash generation, including as part of the review of the Company's global operations initiated in November 2023 to further reduce operating expenses (the "Global Operations Review"); changes to our pricing architecture within certain channels including the recent and planned future price increases of certain of our products; and accelerated, cash-accretive inventory reduction initiatives; our ability to successfully execute our Global Operations Review, including the exit or discontinuation of select product lines such as Beyond Meat Jerky; the impact of non-cash charges such as provision for excess and obsolete inventory, accelerated depreciation on planned write-offs and disposals of fixed assets, and losses on sale and write-down of fixed assets; further optimization of our manufacturing capacity and real estate footprint; and the continued review of our operations in China; the impact of adverse and uncertain economic and political conditions in the U.S. and international markets, including concerns about the likelihood of an economic recession, downturn or periods of rising or high inflation; reduced consumer confidence and changes in consumer spending, including spending to purchase our products, and negative trends in consumer purchasing patterns due to levels of consumers' disposable income, credit availability and debt levels, and economic conditions, including due to recessionary and inflationary pressures; our inability to properly manage and ultimately sell our inventory in a timely manner, which could require us to sell our products through liquidation channels at lower prices, write-down or write-off obsolete inventory, or increase inventory provision; any future impairment charges, including due to any future changes in estimates, judgments or assumptions, failure to achieve forecasted operating results, weakness in the economic environment, changes in market conditions and/or declines in our market capitalization; the sufficiency of our cash and cash equivalents to meet our liquidity needs, including estimates of our expenses, future revenues, capital expenditures, capital requirements and our needs for, and ability to obtain, additional financing, if at all; our ability to accurately predict consumer taste preferences, trends and demand and successfully innovate, introduce and commercialize new products and improve existing products such as our new Beyond IV platform, including in new geographic markets; the effects of competitive activity from our market competitors and new market entrants; disruption to, and the impact of uncertainty in, our domestic and international supply chain, including labor shortages and disruption, shipping delays and disruption, and the impact of cyber incidents at suppliers and vendors; our ability to streamline operations and improve cost efficiencies, which could result in the contraction of our business and the implementation of significant cost cutting measures such as further downsizing and exiting certain operations, including product lines, domestically and/or abroad; the impact of uncertainty as a result of doing business in China and Europe, including as a result of our continued review of our operations in China; the volatility of or inability to access the capital markets, including due to macroeconomic factors, our loss of well-known seasoned issuer status, geopolitical tensions or the outbreak of hostilities or war - for example, the war in Ukraine and the conflict in Israel, Gaza and surrounding areas; changes in the retail landscape, including our ability to maintain and expand our distribution footprint, the timing, success and level of trade and promotion discounts, our ability to maintain and grow market share and increase household penetration, repeat purchases, buying rates (amount spent per buyer) and purchase frequency, our ability to maintain and increase sales velocity of our products, and the timing and success of the Beyond IV launch; changes in the foodservice landscape, including the timing, success and level of marketing and other financial incentives to assist in the promotion of our products, our ability to maintain and grow market share and attract and retain new foodservice customers or retain existing foodservice customers, and our ability to introduce and sustain offering of our products on menus; the timing and success of distribution expansion and new product introductions, including the timing and success of the Beyond IV launch, in increasing revenues and market share; the timing and success of strategic Quick Service Restaurant partnership launches and limited time offerings resulting in permanent menu items; foreign currency exchange rate fluctuations; our ability to identify and execute cost-down initiatives intended to improve our profitability; the effectiveness of our business systems and processes; our estimates of the size of our market opportunities and ability to accurately forecast market growth; our ability to effectively optimize our manufacturing and production capacity, and real estate footprint, including consolidating manufacturing facilities and production lines, exiting co-manufacturing arrangements and effectively managing capacity for specific products with shifts in demand; risks associated with underutilization of capacity which could give rise to increased costs per unit, underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines and/or the write-down or write-off of certain equipment and other fixed assets; our ability to accurately forecast our future results of operations and financial goals or targets, including as a result of fluctuations in demand for our products and in the plant-based meat category generally and increased competition; our ability to accurately forecast demand for our products and manage our inventory, including the impact of customer orders ahead of holidays and shelf reset activities, customer and distributor changes and buying patterns, such as reductions in targeted inventory levels, and supply chain and labor disruptions, including due to the impact of cyber incidents at suppliers and vendors; our operational effectiveness and ability to fulfill orders in full and on time; variations in product selling prices and costs, the timing and success of changes to our pricing architecture within certain channels including the recent and planned future price increases of certain of our products, and the mix of products sold; our ability to successfully enter new geographic markets, manage our international business and comply with any applicable laws and regulations, including risks associated with doing business in foreign countries, substantial investments in our manufacturing operations in China and the Netherlands, and our ability to comply with the U.S. Foreign Corrupt Practices Act or other anti-corruption laws; our ability to protect our brand against misinformation about our products and the plant-based meat category, real or perceived quality or health issues with our products, marketing campaigns aimed at generating negative publicity regarding our products and the plant-based meat category, including regarding the nutritional value of our products, and other issues that could adversely affect our brand and reputation; the effects of global outbreaks of pandemics (such as the COVID-19 pandemic), epidemics or other public health crises, or fear of such crises; the success of our marketing initiatives and the ability to maintain and grow our brand awareness, maintain, protect and enhance our brand, attract and retain new customers and maintain and grow our market share, particularly while we ...

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