Beyond Meat, Inc. (NASDAQ: BYND) (“Beyond Meat” or “the Company”),
a leader in plant-based meat, today reported financial results for
its fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Financial
Highlights1
- Net revenues were $79.9 million, a decrease of 20.6%
year-over-year.
- Gross profit was a loss of $2.9 million, or gross margin of
-3.7% of net revenues.
- Net loss was $66.9 million, or $1.05 per common share. Net loss
as a percentage of net revenues was -83.6%.
- Adjusted EBITDA was a loss of $56.5 million, or -70.7% of net
revenues.
Full Year 2022 Financial
Highlights1
- Net revenues were $418.9 million, a decrease of 9.8%
year-over-year.
- Gross profit was a loss of $23.7 million, or gross margin of
-5.7% of net revenues.
- Net loss was $366.1 million, or $5.75 per common share. Net
loss as a percentage of net revenues was -87.4%.
- Adjusted EBITDA was a loss of $278.0 million, or -66.4% of net
revenues.
Beyond Meat President and CEO Ethan Brown commented, “We are
making solid progress in our transition to a sustainable growth
model, one that emphasizes the achievement of cash flow positive
operations within the second half of 2023. We continue to execute
this pivot upon three primary pillars. One, driving margin recovery
and operating expense reduction through the implementation of lean
value streams across our beef, pork, and poultry platforms. Two,
bringing inventory levels down while generating cash flow through
more aggressive, efficient management. And three, placing greater
emphasis on near-term retail and foodservice growth drivers while
also supporting strategic key long-term partners and
opportunities.”
Brown continued, “Our fourth quarter results clearly demonstrate
delivery against our strategy and plan, including solid sequential
progress on margin recovery and operating expense reduction, and
continued inventory drawdown. We are proud of our team's continued
pace of innovation including Beyond Steak, which continues to win
awards for its taste and outstanding health profile, as well as the
just launched McPlant Nuggets in Germany, the second plant-based
protein co-developed with Beyond Meat as part of the McPlant
platform. As we navigate current conditions, we remain intently
focused on positioning Beyond Meat to capture the vast opportunity
to be a major protein provider in the $1.4 trillion meat industry
and play a leadership role in transitioning global consumers to
delicious plant-based meats in support of critically important
health, climate, environmental, and animal welfare objectives."
________________________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.
Fourth Quarter 2022
Net revenues decreased 20.6% to $79.9 million in the fourth
quarter of 2022, compared to $100.7 million in the year-ago period.
The decrease in net revenues was driven by a 16.9% decrease in
total pounds sold and an approximately 4.4% decrease in net revenue
per pound. All markets and channels were negatively impacted by
continued softness in demand in the category. The decrease in net
revenue per pound was primarily attributable to strategic but
limited price reductions in the U.S. and broader list price
reductions in the EU implemented in the first quarter of 2022,
increased trade discounts and unfavorable changes in foreign
exchange rates, partially offset by changes in sales mix. U.S.
retail channel net revenues decreased 17.1% compared to the
year-ago period primarily driven by a 22.5% decrease in pounds
sold, partially offset by increased net revenue per pound primarily
driven by changes in sales mix. U.S. foodservice channel net
revenues decreased 30.1% compared to the year-ago period primarily
driven by sales to a large QSR customer in the year-ago period that
did not repeat in the fourth quarter of 2022 and, to a lesser
extent, soft demand across the remainder of the channel.
International retail channel net revenues decreased 24.2% compared
to the year-ago period primarily driven by a 19.4% decrease in net
revenue per pound due to list price reductions in the EU
implemented in the first quarter of 2022, unfavorable foreign
exchange rate impact and changes in sales mix. International
foodservice channel net revenues decreased 16.0% compared to the
year-ago period primarily due to a 14.9% decrease in net revenue
per pound due to unfavorable foreign exchange rate impact and
changes in sales mix.
Net revenues by channel (unaudited):
The following tables present our net revenues by channel for the
periods presented:
|
|
Three Months EndedDecember 31, |
|
Change |
|
(in
thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
|
Retail |
|
$ |
41,446 |
|
|
$ |
49,978 |
|
|
$ |
(8,532 |
) |
|
(17.1 |
)% |
Foodservice |
|
|
14,413 |
|
|
|
20,633 |
|
|
|
(6,220 |
) |
|
(30.1 |
)% |
U.S. net revenues |
|
|
55,859 |
|
|
|
70,611 |
|
|
|
(14,752 |
) |
|
(20.9 |
)% |
International: |
|
|
|
|
|
|
|
|
|
Retail |
|
|
10,883 |
|
|
|
14,349 |
|
|
|
(3,466 |
) |
|
(24.2 |
)% |
Foodservice |
|
|
13,196 |
|
|
|
15,718 |
|
|
|
(2,522 |
) |
|
(16.0 |
)% |
International net
revenues |
|
|
24,079 |
|
|
|
30,067 |
|
|
|
(5,988 |
) |
|
(19.9 |
)% |
Net revenues |
|
$ |
79,938 |
|
|
$ |
100,678 |
|
|
$ |
(20,740 |
) |
|
(20.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Year EndedDecember 31, |
|
Change |
|
(in
thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
Amount |
|
% |
|
U.S.: |
|
|
|
|
|
|
|
|
|
Retail |
|
$ |
234,744 |
|
|
$ |
243,360 |
|
|
$ |
(8,616 |
) |
|
(3.5 |
)% |
Foodservice |
|
|
69,289 |
|
|
|
76,475 |
|
|
|
(7,186 |
) |
|
(9.4 |
)% |
U.S. net revenues |
|
|
304,033 |
|
|
|
319,835 |
|
|
|
(15,802 |
) |
|
(4.9 |
)% |
International: |
|
|
|
|
|
|
|
|
|
Retail |
|
|
60,907 |
|
|
|
81,483 |
|
|
|
(20,576 |
) |
|
(25.3 |
)% |
Foodservice |
|
|
53,993 |
|
|
|
63,382 |
|
|
|
(9,389 |
) |
|
(14.8 |
)% |
International net
revenues |
|
|
114,900 |
|
|
|
144,865 |
|
|
|
(29,965 |
) |
|
(20.7 |
)% |
Net revenues |
|
$ |
418,933 |
|
|
$ |
464,700 |
|
|
$ |
(45,767 |
) |
|
(9.8 |
)% |
|
|
|
|
|
|
|
|
|
|
Pounds sold by channel (unaudited):
The following table presents consolidated pounds sold by channel
for the periods presented:
|
|
Three Months EndedDecember 31, |
|
Change |
|
Year EndedDecember 31, |
|
Change |
(in
thousands) |
|
2022 |
|
2021 |
|
Amount |
|
% |
|
2022 |
|
2021 |
|
Amount |
|
% |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
7,413 |
|
|
9,565 |
|
|
(2,152 |
) |
|
(22.5 |
)% |
|
44,784 |
|
|
44,568 |
|
|
216 |
|
|
0.5 |
% |
Foodservice |
|
2,691 |
|
|
3,607 |
|
|
(916 |
) |
|
(25.4 |
)% |
|
12,786 |
|
|
13,047 |
|
|
(261 |
) |
|
(2.0 |
)% |
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
2,480 |
|
|
2,635 |
|
|
(155 |
) |
|
(5.9 |
)% |
|
13,435 |
|
|
14,120 |
|
|
(685 |
) |
|
(4.9 |
)% |
Foodservice |
|
3,543 |
|
|
3,591 |
|
|
(48 |
) |
|
(1.3 |
)% |
|
13,951 |
|
|
12,848 |
|
|
1,103 |
|
|
8.6 |
% |
Total pounds sold |
|
16,127 |
|
|
19,398 |
|
|
(3,271 |
) |
|
(16.9 |
)% |
|
84,956 |
|
|
84,583 |
|
|
373 |
|
|
0.4 |
% |
Gross profit was a loss of $2.9 million, or gross margin of
-3.7% of net revenues, in the fourth quarter of 2022, compared to
gross profit of $14.2 million, or gross margin of 14.1% of net
revenues, in the year-ago period. Gross margin decreased primarily
as a result of increased cost per pound and decreased net revenue
per pound in the fourth quarter of 2022 compared to the year-ago
period. The increase in cost per pound was primarily driven by
higher inventory reserves, materials and logistics costs per pound,
partially offset by reduced manufacturing costs per pound,
including depreciation. These unfavorable impacts were partially
offset by a $3.6 million benefit resulting from actions taken to
restructure certain contracts and operating activities related to
Beyond Meat Jerky.
Loss from operations in the fourth quarter of 2022 was $65.7
million compared to $77.7 million in the year-ago period. The
reduced loss from operations was primarily driven by lower general
and administrative expenses, reduced expenses associated with
production trial activities, lower marketing expenses, and reduced
non-production headcount expenses, partially offset by lower gross
profit and one-time separation costs related to the Company’s
previously announced reduction in force.
Net loss was $66.9 million in the fourth quarter of 2022
compared to $80.4 million in the year-ago period. Net loss per
common share was $1.05 in the fourth quarter of 2022 compared to
$1.27 in the year-ago period. The reduction in net loss in the
fourth quarter of 2022 was primarily driven by the reduction in
loss from operations and a $5.4 million increase in realized and
unrealized foreign currency gains due to favorable changes in
foreign exchange rates of the Euro and Chinese Yuan, partially
offset by a $6.3 million increase in joint venture losses related
to the Company’s joint venture with PepsiCo, Inc., the Planet
Partnership, LLC (“TPP”).
Adjusted EBITDA was a loss of $56.5 million, or -70.7% of net
revenues in the fourth quarter of 2022 compared to an Adjusted
EBITDA loss of $62.9 million, or -62.5% 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 $322.5 million and total outstanding debt was
$1.1 billion as of December 31, 2022. Net cash used in operating
activities was $320.2 million for the year ended December 31, 2022,
compared to $301.4 million for the year-ago period. Capital
expenditures totaled $70.5 million for the year ended December 31,
2022, compared to $136.0 million for the year-ago period. Net cash
used in investing activities also included $13.3 million of
payments for investment in the Company’s joint venture, TPP, for
the year ended December 31, 2022 compared to $11.0 million for the
year-ago period.
Outlook
The Company's operating environment continues to be affected by
near-term uncertainty related to macroeconomic issues, including
inflation and rising interest rates, demand in the plant-based meat
category, increasing concerns about the likelihood of a recession,
increased competition, supply chain disruptions, challenges related
to labor availability and, to a lesser extent, COVID-19 and its
potential impact on consumer behavior and demand levels, 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 providing the
following outlook for the full year 2023:
- Net revenues are expected to be in the range of approximately
$375 million to $415 million, representing a decrease of
approximately 10% to 1% compared to 2022.
- Gross margin is expected to be in the low double-digit range,
increasing sequentially throughout the year.
- Operating expenses are expected to be approximately $250
million, weighted slightly more towards the first half of the
year.
- Capital expenditures are expected to be in the range of $30
million to $35 million.
- The Company continues to target achievement of cash flow
positive operations within the second half of 2023.
The Company is in the process of restructuring certain operating
activities related to Beyond Meat Jerky. Pending the timing and
specific actions related to these efforts, management’s outlook
provided above may be subject to change.
Total distribution points by channel
(unaudited):
The following table presents the approximate number of
distribution outlets by channel for the periods presented:
|
Q2 2021 |
|
Q3 2021 |
|
Q4 2021 |
|
Q1 2022 |
|
Q2 2022 |
|
Q3 2022 |
|
Q4 2022 |
U.S.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail(1) |
34,000 |
|
|
34,000 |
|
|
34,000 |
|
|
35,000 |
|
|
78,000 |
|
|
78,000 |
|
|
78,000 |
|
Foodservice |
34,000 |
|
|
36,000 |
|
|
38,000 |
|
|
39,000 |
|
|
41,000 |
|
|
42,000 |
|
|
43,000 |
|
International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
29,000 |
|
|
32,000 |
|
|
30,000 |
|
|
31,000 |
|
|
33,000 |
|
|
35,000 |
|
|
35,000 |
|
Foodservice |
22,000 |
|
|
26,000 |
|
|
28,000 |
|
|
30,000 |
|
|
31,000 |
|
|
33,000 |
|
|
34,000 |
|
Total distribution points |
119,000 |
|
|
128,000 |
|
|
130,000 |
|
|
135,000 |
|
|
183,000 |
|
|
188,000 |
|
|
190,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(1) Q2, Q3 and Q4 2022 includes distribution points
associated with Beyond Meat Jerky. Excluding Beyond Meat Jerky,
total U.S. retail distribution outlets were approximately 34,000 in
Q4 2022.
Conference Call and Webcast
The Company will host a conference call to discuss these results
today at 5:00 p.m. Eastern, 2:00 p.m. Pacific. Investors interested
in participating in the live call can dial 412-902-4255 which will
be answered by an operator or by clicking Call me™:
https://callme.viavid.com/?$Y2FsbG1lPXRydWUmcGFzc2NvZGU9JmluZm89Y29tcGFueSZyPXRydWUmYj0xNQ==
and entering the Call me™ Passcode = 9094704. 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. As of December 2022, Beyond Meat branded products were
available at approximately 190,000 retail and foodservice outlets
in over 80 countries worldwide. Visit www.BeyondMeat.com and follow
@BeyondMeat, #BeyondBurger and #GoBeyond on Facebook, Instagram,
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 2023 outlook, cost-reduction initiatives,
transition to a sustainable growth model and ability to execute on
its strategic plan, restructuring of certain operating activities,
and the timing and success of achieving its cash flow positive
targets. The Company may be unable to realize the contemplated
benefits in connection with the cost-reduction initiatives and
restructuring of certain operating activities, which may have an
adverse impact on the Company’s performance, results of operations
and financial condition. Additionally, the Company’s ability to
meet its cash flow positive targets is subject to a number of
assumptions and uncertainties, including, without limitation, the
Company’s ability to reduce costs and achieve positive gross
margins; the Company’s ability to meet certain revenue and
operating expense targets, which may be subject to factors beyond
the Company’s control; and the Company’s ability to monetize
inventory and manage working capital.
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 inflation and rising interest
rates, demand in the plant-based meat category, increasing concerns
about the likelihood of a recession, increased competition, supply
chain disruptions, challenges related to labor availability, and
COVID-19 and its potential impact on consumer behavior and demand
levels, 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, in
particular, the COVID-19 pandemic, 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, macroeconomic factors, reduced
consumer confidence and changes in consumer spending, including
spending to purchase our products, and negative trends in consumer
purchasing patterns due to consumers’ disposable income, credit
availability and debt levels, as well as due to recessionary and
inflationary pressures; factors negatively impacting demand in the
plant-based meat category; the effects of increased competition
from our market competitors and new market entrants; the effects of
the COVID-19 pandemic on our business, financial condition, cash
flows and results of operations, including on our supply chain, the
demand for our products, demand in the plant-based meat category,
our product and channel mix, labor needs at the Company as well as
in the supply chain and at customers, the timing and level of
retail purchasing, the timing and level of foodservice purchasing,
our manufacturing and co-manufacturing facilities and operations,
our inventory levels, our ability to expand and produce in new
geographic markets or the timing of such expansion efforts, the
pace and success of new product introductions, the timing of new
foodservice launches, and on overall economic conditions and
consumer confidence and spending levels; the impact of uncertainty
in our domestic and international supply chain, including labor
shortages and disruption and shipping delays and disruption; a
resurgence of COVID-19 and the impact of variants of the virus that
causes COVID-19 which could slow, halt or reverse the reopening
process, or result in the reinstatement of social distancing
measures, business closures, restrictions on operations,
quarantines, lockdowns and travel bans; the impact of inflation and
rising interest rates across the economy, including higher food,
grocery, raw materials, transportation, energy, labor and fuel
costs; the impact of uncertainty as a result of doing business in
China and Europe; the impact of adverse and uncertain economic and
political conditions in the U.S. and international markets,
including due to an economic recession, downturn or periods of
rising or high inflation; the volatility of capital markets and
other macroeconomic factors, including due to geopolitical tensions
or the outbreak of hostilities or war; foreign exchange rate
fluctuations; risks and uncertainties related to certain
cost-reduction initiatives, workforce reductions, executive
leadership changes, and the timing and success of achieving certain
financial goals or cash flow positive targets; 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 downsizing and exiting
certain operations, domestically and/or abroad; our ability to
identify and execute cost-down initiatives intended to achieve
price parity with animal protein; the success of operations
conducted by joint ventures, such as the Planet Partnership, LLC
with PepsiCo, Inc., where we share ownership and management of a
company with one or more parties who may not have the same goals,
strategies or priorities as we do and where we do not receive all
of the financial benefit; changes in the retail landscape,
including the timing 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, and our ability to maintain and
increase sales velocity of our products; changes in the foodservice
landscape, including the timing 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 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; our estimates of the size of our market
opportunities and ability to accurately forecast market growth; our
ability to effectively expand or optimize our manufacturing and
production capacity, including effectively managing capacity for
specific products with shifts in demand; risks associated with
underutilization of capacity which could give rise to increased
costs, underutilization fees and termination fees to exit certain
supply chain arrangements and/or the write-off of certain
equipment; our inability to sell our inventory in a timely manner
requiring us to sell our products through liquidation channels at
lower prices, write-down or write off obsolete inventory, or
increase inventory reserves; our ability to accurately forecast our
future results of operations and financial goals or targets,
including 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 such as reductions in targeted inventory levels, and supply
chain and labor disruptions; our operational effectiveness and
ability to fulfill orders in full and on time; variations in
product selling prices and costs, and the mix of products sold; our
ability to successfully enter new geographic markets, manage our
international expansion 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; the effects of global outbreaks of pandemics
or contagious diseases or fear of such outbreaks, such as COVID-19;
the success of our marketing initiatives and the ability to
maintain and grow brand awareness, maintain, protect and enhance
our brand, attract and retain new customers and maintain and grow
our market share; our ability to attract, maintain and effectively
expand our relationships with key strategic foodservice partners;
our ability to attract and retain our suppliers, distributors,
co-manufacturers and customers; our ability to procure sufficient
high-quality raw materials at competitive prices to manufacture our
products; the availability of pea and other proteins that meet our
standards; our ability to diversify the protein sources used for
our products; our ability to differentiate and continuously create
innovative products, respond to competitive innovation and achieve
speed-to-market; our ability to successfully execute our strategic
initiatives; the volatility associated with ingredient, packaging,
transportation and other input costs; real or perceived quality or
health issues with our products or other issues that adversely
affect our brand and reputation; our ability to accurately predict
consumer taste preferences, trends and demand and successfully
innovate, introduce and commercialize new products and improve
existing products, including in new geographic markets; significant
disruption in, or breach in security of our information technology
systems and resultant interruptions in service and any related
impact on our reputation, including related to data privacy; the
ability of our transportation providers to ship and deliver our
products in a timely and cost effective manner; management and key
personnel changes, the attraction, training and retention of
qualified employees and key personnel, and our ability to maintain
our company culture; the effects of organizational changes
including reductions-in-force, senior management changes and
realignment of reporting structures; risks related to use of a
professional employer organization to administer human resources,
payroll and employee benefits functions for certain of our
international employees, and use of certain third party service
providers for the performance of several business operations
including payroll and human capital management services; the
effects of natural or man-made catastrophic or severe weather
events particularly involving our or any of our co-manufacturers’
manufacturing facilities or our suppliers’ facilities; the impact
of marketing campaigns aimed at generating negative publicity
regarding our products, brand and the plant-based industry
category; the effectiveness of our internal controls; accounting
estimates based on judgment and assumptions that may differ from
actual results; the requirements of being a public company and
effects of increased administrative costs related to compliance and
reporting obligations; our significant indebtedness and ability to
repay such indebtedness; risks related to our debt, including
limitations on our cash flow from operations and our ability to
satisfy our obligations under the convertible senior notes; our
ability to raise the funds necessary to repurchase the convertible
senior notes for cash, under certain circumstances, or to pay any
cash amounts due upon conversion; provisions in the indenture
governing the convertible senior notes delaying or preventing an
otherwise beneficial takeover of us; and any adverse impact on our
reported financial condition and results from the accounting
methods for the convertible senior notes; estimates of our
expenses, future revenues, capital expenditures, capital
requirements and our needs for additional financing; our ability to
meet our obligations under our campus headquarters lease, the
timing of occupancy and completion of the build-out of our space,
cost overruns, delays and the impact of COVID-19, workforce
reductions or other cost-reduction initiatives on our space
demands; our ability to meet our obligations under leases for our
corporate offices, manufacturing facilities and warehouses, or
risks related to excess space capacity under our leases due to
workforce reductions or other cost-reduction initiatives; changes
in laws and government regulation affecting our business, including
the U.S. Food and Drug Administration and the U.S. Federal Trade
Commission governmental regulation, and state, local and foreign
regulation; new or pending legislation, or changes in laws,
regulations or policies of governmental agencies or regulators,
both in the U.S. and abroad, affecting plant-based meat, the
labeling or naming of our products, or our brand name or logo; the
failure of acquisitions and other investments to be efficiently
integrated and produce the results we anticipate; risks inherent in
investment in real estate; the financial condition of, and our
relationships with our suppliers, co-manufacturers, distributors,
retailers and foodservice customers, and their future decisions
regarding their relationships with us; our ability and the ability
of our suppliers and co-manufacturers to comply with food safety,
environmental or other laws or regulations; seasonality, including
increased levels of purchasing by customers ahead of holidays,
customer shelf reset activity and the timing of product restocking
by our retail customers; the sufficiency of our cash and cash
equivalents to meet our liquidity needs and service our
indebtedness, including the inability to access restricted cash
that collateralizes letters of credit, and our ability to access
capital markets upon favorable terms, including due to rising
interest rates and market volatility; economic conditions and the
impact on consumer spending; the impact of increased scrutiny from
stakeholders, institutional investors and governmental bodies on
environmental, social and governance (“ESG”) practices, including
expanding mandatory and voluntary reporting, diligence and
disclosure on ESG matters; the outcomes of legal or administrative
proceedings, or new legal or administrative proceedings filed
against us; our, our suppliers’ and our co-manufacturers’ ability
to protect our proprietary technology, intellectual property and
trade secrets adequately; the impact of tariffs and trade wars; the
impact of changes in tax laws; and the risks discussed under the
heading “Risk Factors” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2021 filed with the SEC on March 2,
2022, the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended October 1, 2022 filed with the SEC on November 10,
2022, and the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022 to be filed with the SEC, as well as other
factors described from time to time in the Company's filings with
the SEC. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements set forth above. Such
forward-looking statements are made only as of the date of this
release. Beyond Meat undertakes no obligation to publicly update or
revise any forward-looking statement because of new information,
future events, changes in assumptions or otherwise, except to the
extent required by applicable laws. If we do update one or more
forward-looking statements, no inference should be made that we
will make additional updates with respect to those or other
forward-looking statements.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not
recognized under U.S. generally accepted accounting principles
(GAAP) in this press release, including: Adjusted net loss,
Adjusted net loss per diluted common share, Adjusted EBITDA and
Adjusted EBITDA as a % of net revenues. See “Non-GAAP Financial
Measures” below for additional information and reconciliations of
such non-GAAP financial measures.
Availability of Information on Beyond Meat’s Website and
Social Media Channels
Investors and others should note that Beyond Meat routinely
announces material information to investors and the marketplace
using SEC filings, press releases, public conference calls,
webcasts and the Beyond Meat Investor Relations website. We also
intend to use certain social media channels as a means of
disclosing information about us and our products to consumers, our
customers, investors and the public (e.g., @BeyondMeat,
#BeyondBurger and #GoBeyond on Facebook, Instagram and Twitter, and
@BeyondMeatOfficial on TikTok). The information posted on social
media channels is not incorporated by reference in this press
release or in any other report or document we file with the SEC.
While not all of the information that the Company posts to the
Beyond Meat Investor Relations website or to social media accounts
is of a material nature, some information could be deemed to be
material. Accordingly, the Company encourages investors, the media
and others interested in Beyond Meat to review the information that
it shares at the “Investors” link located at the bottom of the
Company’s webpage at
https://investors.beyondmeat.com/investor-relations and to sign up
for and regularly follow the Company’s social media accounts. Users
may automatically receive email alerts and other information about
the Company when enrolling an email address by visiting “Request
Email Alerts” in the “Investors” section of Beyond Meat’s website
at https://investors.beyondmeat.com/investor-relations.
ContactsMedia:Shira
Zackaishira.zackai@beyondmeat.com
Investors:Raphael
Grossbeyondmeat@icrinc.com
BEYOND MEAT, INC. AND SUBSIDIARIES |
Consolidated Statements of Operations |
(In thousands, except share and per share
data) |
(Unaudited) |
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net revenues |
|
$ |
79,938 |
|
|
$ |
100,678 |
|
|
$ |
418,933 |
|
|
$ |
464,700 |
|
Cost of goods sold |
|
|
82,869 |
|
|
|
86,433 |
|
|
|
442,676 |
|
|
|
347,419 |
|
Gross (loss) profit |
|
|
(2,931 |
) |
|
|
14,245 |
|
|
|
(23,743 |
) |
|
|
117,281 |
|
Research and development
expenses |
|
|
12,971 |
|
|
|
22,336 |
|
|
|
62,264 |
|
|
|
66,946 |
|
Selling, general and
administrative expenses |
|
|
46,881 |
|
|
|
65,872 |
|
|
|
239,505 |
|
|
|
209,474 |
|
Restructuring expenses |
|
|
2,938 |
|
|
|
3,726 |
|
|
|
17,259 |
|
|
|
15,794 |
|
Total operating expenses |
|
|
62,790 |
|
|
|
91,934 |
|
|
|
319,028 |
|
|
|
292,214 |
|
Loss from operations |
|
|
(65,721 |
) |
|
|
(77,689 |
) |
|
|
(342,771 |
) |
|
|
(174,933 |
) |
Other income (expense),
net |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(793 |
) |
|
|
(992 |
) |
|
|
(3,966 |
) |
|
|
(3,648 |
) |
Other, net |
|
|
7,757 |
|
|
|
144 |
|
|
|
(420 |
) |
|
|
(487 |
) |
Total other income (expense),
net |
|
|
6,964 |
|
|
|
(848 |
) |
|
|
(4,386 |
) |
|
|
(4,135 |
) |
Loss before taxes |
|
|
(58,757 |
) |
|
|
(78,537 |
) |
|
|
(347,157 |
) |
|
|
(179,068 |
) |
Income tax expense |
|
|
11 |
|
|
|
33 |
|
|
|
32 |
|
|
|
60 |
|
Equity in losses of
unconsolidated joint venture |
|
|
8,099 |
|
|
|
1,801 |
|
|
|
18,948 |
|
|
|
2,977 |
|
Net loss |
|
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(182,105 |
) |
Net loss per share available
to common stockholders—basic and diluted |
|
$ |
(1.05 |
) |
|
$ |
(1.27 |
) |
|
$ |
(5.75 |
) |
|
$ |
(2.88 |
) |
Weighted average common shares
outstanding—basic and diluted |
|
|
63,751,119 |
|
|
|
63,357,486 |
|
|
|
63,622,432 |
|
|
|
63,172,368 |
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets (Unaudited) |
(In thousands, except share and per share
data) |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
309,922 |
|
|
$ |
733,294 |
|
Accounts receivable, net |
|
34,198 |
|
|
|
43,806 |
|
Inventory |
|
235,696 |
|
|
|
241,870 |
|
Prepaid expenses and other current assets |
|
20,700 |
|
|
|
33,078 |
|
Assets held for sale |
|
5,943 |
|
|
|
— |
|
Total current assets |
$ |
606,459 |
|
|
$ |
1,052,048 |
|
Restricted cash |
|
12,627 |
|
|
|
— |
|
Property, plant, and
equipment, net |
|
257,002 |
|
|
|
226,489 |
|
Operating lease right-of-use
assets |
|
87,595 |
|
|
|
26,815 |
|
Prepaid lease costs,
non-current |
|
85,472 |
|
|
|
59,188 |
|
Other non-current assets,
net |
|
10,744 |
|
|
|
6,836 |
|
Investment in unconsolidated
joint venture |
|
2,325 |
|
|
|
8,023 |
|
Total assets |
$ |
1,062,224 |
|
|
$ |
1,379,399 |
|
Liabilities and stockholders’
(deficit) equity: |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
55,300 |
|
|
$ |
69,040 |
|
Current portion of operating lease liabilities |
|
3,812 |
|
|
|
4,458 |
|
Accrued expenses and other current liabilities |
|
16,729 |
|
|
|
20,691 |
|
Total current liabilities |
$ |
75,841 |
|
|
$ |
94,189 |
|
Long-term liabilities: |
|
|
|
Convertible senior notes, net |
$ |
1,133,608 |
|
|
$ |
1,129,674 |
|
Operating lease liabilities, net of current portion |
|
55,854 |
|
|
|
22,599 |
|
Finance lease obligations and other long-term liabilities |
|
469 |
|
|
|
442 |
|
Total long-term liabilities |
$ |
1,189,931 |
|
|
$ |
1,152,715 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ (deficit)
equity: |
|
|
|
Preferred stock, par value
$0.0001 per share—500,000 shares authorized, none issued and
outstanding |
$ |
— |
|
|
$ |
— |
|
Common stock, par value
$0.0001 per share—500,000,000 shares authorized at December 31,
2022 and 2021; 63,773,982 and 63,400,899 shares issued and
outstanding at December 31, 2022 and 2021, respectively |
|
6 |
|
|
|
6 |
|
Additional paid-in
capital |
|
544,357 |
|
|
|
510,014 |
|
Accumulated deficit |
|
(743,109 |
) |
|
|
(376,972 |
) |
Accumulated other
comprehensive loss |
|
(4,802 |
) |
|
|
(553 |
) |
Total stockholders’ (deficit) equity |
$ |
(203,548 |
) |
|
$ |
132,495 |
|
Total liabilities and stockholders’ (deficit) equity |
$ |
1,062,224 |
|
|
$ |
1,379,399 |
|
BEYOND MEAT, INC. AND SUBSIDIARIES |
Consolidated Statements of Cash Flows |
(In thousands) |
(Unaudited) |
|
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(366,137 |
) |
|
$ |
(182,105 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
32,582 |
|
|
|
21,663 |
|
Non-cash lease expense |
|
|
5,167 |
|
|
|
3,418 |
|
Share-based compensation expense |
|
|
33,857 |
|
|
|
27,698 |
|
Loss on sale of fixed assets |
|
|
486 |
|
|
|
199 |
|
Amortization of debt issuance costs |
|
|
3,934 |
|
|
|
3,322 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
1,037 |
|
Equity in losses of unconsolidated joint venture |
|
|
18,948 |
|
|
|
2,977 |
|
Unrealized losses on foreign currency transactions |
|
|
5,106 |
|
|
|
— |
|
Net change in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
|
9,063 |
|
|
|
(8,463 |
) |
Inventories |
|
|
2,572 |
|
|
|
(122,666 |
) |
Prepaid expenses and other assets |
|
|
11,595 |
|
|
|
(21,414 |
) |
Accounts payable |
|
|
(10,826 |
) |
|
|
21,665 |
|
Accrued expenses and other current liabilities |
|
|
(7,148 |
) |
|
|
13,961 |
|
Prepaid lease costs, non-current |
|
|
(55,110 |
) |
|
|
(59,188 |
) |
Operating lease liabilities |
|
|
(4,333 |
) |
|
|
(3,474 |
) |
Net cash used in operating activities |
|
$ |
(320,244 |
) |
|
$ |
(301,370 |
) |
Cash flows from
investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
$ |
(70,475 |
) |
|
$ |
(135,961 |
) |
Purchases of property, plant and equipment held for sale |
|
|
(2,821 |
) |
|
|
— |
|
Payments for investment in joint venture |
|
|
(13,250 |
) |
|
|
(11,000 |
) |
Payment of security deposits |
|
|
(981 |
) |
|
|
(518 |
) |
Net cash used in investing activities |
|
$ |
(87,527 |
) |
|
$ |
(147,479 |
) |
Cash flows from
financing activities: |
|
|
|
|
Proceeds from issuance of convertible senior notes |
|
$ |
— |
|
|
$ |
1,150,000 |
|
Purchase of capped calls related to convertible senior notes |
|
|
— |
|
|
|
(83,950 |
) |
Debt issuance costs |
|
|
— |
|
|
|
(23,605 |
) |
Repayment of revolving credit facility |
|
|
— |
|
|
|
(25,000 |
) |
Principal payments under finance lease obligations |
|
|
(210 |
) |
|
|
(177 |
) |
Proceeds from exercise of stock options |
|
|
1,626 |
|
|
|
8,135 |
|
Payments of minimum withholding taxes on net share settlement of
equity awards |
|
|
(1,140 |
) |
|
|
(3,081 |
) |
Net cash provided by financing activities |
|
$ |
276 |
|
|
$ |
1,022,322 |
|
Net (decrease) increase in
cash, cash equivalents and restricted cash |
|
$ |
(407,495 |
) |
|
$ |
573,473 |
|
Effect of exchange rate
changes on cash |
|
|
(3,250 |
) |
|
|
694 |
|
Cash, cash equivalents and
restricted cash at the beginning of the period |
|
|
733,294 |
|
|
|
159,127 |
|
Cash, cash equivalents and
restricted cash at the end of the period |
|
$ |
322,549 |
|
|
$ |
733,294 |
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
Cash paid (received) during the period for: |
|
|
|
|
Interest |
|
$ |
10 |
|
|
$ |
348 |
|
Taxes |
|
$ |
38 |
|
|
$ |
(10 |
) |
Non-cash investing and financing activities: |
|
|
|
|
Non-cash additions to property, plant and equipment |
|
$ |
3,507 |
|
|
$ |
5,239 |
|
Operating lease right-of-use assets obtained in exchange for lease
liabilities |
|
$ |
37,245 |
|
|
$ |
16,701 |
|
Reclassification of prepaid lease costs to operating lease
right-of-use assets |
|
$ |
29,000 |
|
|
$ |
— |
|
Non-cash additions to financing leases |
|
$ |
280 |
|
|
$ |
580 |
|
Reclassification of other current liability to additional paid-in
capital in connection with the share-settled obligation |
|
$ |
— |
|
|
$ |
2,535 |
|
Non-GAAP Financial Measures
Beyond Meat uses the non-GAAP financial measures
set forth below in assessing its operating performance and in its
financial communications. Management believes these non-GAAP
financial measures provide useful additional information to
investors about current trends in the Company's operations and are
useful for period-over-period comparisons of operations. In
addition, management uses these non-GAAP financial measures to
assess operating performance and for business planning purposes.
Management also believes these measures are widely used by
investors, securities analysts, rating agencies and other parties
in evaluating companies in our industry as a measure of our
operational performance. These non-GAAP financial measures should
not be considered in isolation or as a substitute for the
comparable GAAP measures. In addition, these non-GAAP financial
measures may not be computed in the same manner as similarly titled
measures used by other companies.
Adjusted net loss and Adjusted net loss per diluted
common share
Adjusted net loss is defined as net loss adjusted to exclude,
when applicable, costs attributable to special items, which are
those items deemed not to be reflective of the Company’s ongoing
normal business activities.
Adjusted net loss per diluted common share is defined as
Adjusted net loss divided by the number of diluted common shares
outstanding.
We consider Adjusted net loss and Adjusted net loss per diluted
common share to be useful indicators of operating performance
because excluding special items allows for period-over-period
comparisons of our ongoing operations. Adjusted net loss per
diluted common share is a performance measure and should not be
used as a measure of liquidity.
Adjusted EBITDA and Adjusted EBITDA as a % of net
revenues
Adjusted EBITDA is defined as net loss adjusted to exclude, when
applicable, income tax (benefit) expense, interest expense,
depreciation and amortization expense, restructuring expenses,
share-based compensation expense, and Other, net, including
interest income, loss on extinguishment of debt and foreign
currency transaction gains and losses. Adjusted EBITDA as a % of
net revenues is defined as Adjusted EBITDA divided by net
revenues.
Limitations related to the use of non-GAAP financial
measures
There are a number of limitations related to the use of Adjusted
net loss, Adjusted net loss per diluted common share, Adjusted
EBITDA and Adjusted EBITDA as a % of net revenues rather than their
most directly comparable GAAP measures. Some of these limitations
are:
- Adjusted net loss and Adjusted net loss per diluted common
share exclude costs associated with activities deemed to be
non-recurring or not part of the Company’s normal business
activities, which are subjective determinations made by management
and may not actualize as expected;
- Adjusted EBITDA excludes depreciation and amortization expense
and, although these are non-cash expenses, the assets being
depreciated may have to be replaced in the future increasing our
cash requirements;
- Adjusted EBITDA does not reflect interest expense, or the cash
required to service our debt, which reduces cash available to
us;
- Adjusted EBITDA does not reflect income tax payments that
reduce cash available to us;
- Adjusted EBITDA does not reflect restructuring expenses that
reduce cash available to us;
- Adjusted EBITDA does not reflect share-based compensation
expense and therefore does not include all of our compensation
costs;
- Adjusted EBITDA does not reflect Other, net, including interest
income, loss on extinguishment of debt and foreign currency
transaction gains and losses, that may increase or decrease cash
available to us; and
- other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
The following tables present the reconciliation of Adjusted net
loss and Adjusted net loss per diluted common share to their most
comparable GAAP measures, net loss and net loss per share available
to common stockholders—basic and diluted, respectively, as reported
(unaudited):
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss, as reported |
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(182,105 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,037 |
|
Adjusted net loss |
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(181,068 |
) |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(in thousands, except share and per share
amounts) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Numerator: |
|
|
|
|
|
|
|
Net loss, as reported |
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(182,105 |
) |
Aggregate non-GAAP adjustments
as listed above |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,037 |
|
Adjusted net loss used in
computing Adjusted net loss per diluted common share |
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(181,068 |
) |
Denominator: |
|
|
|
|
|
|
|
Weighted average shares used
in computing Adjusted net loss per diluted common share |
|
63,751,119 |
|
|
|
63,357,486 |
|
|
|
63,622,432 |
|
|
|
63,172,368 |
|
Adjusted net loss per diluted
common share |
$ |
(1.05 |
) |
|
$ |
(1.27 |
) |
|
$ |
(5.75 |
) |
|
$ |
(2.87 |
) |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss per share available
to common stockholders—basic and diluted, as reported |
$ |
(1.05 |
) |
|
$ |
(1.27 |
) |
|
$ |
(5.75 |
) |
|
$ |
(2.88 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Adjusted net loss per diluted
common share |
$ |
(1.05 |
) |
|
$ |
(1.27 |
) |
|
$ |
(5.75 |
) |
|
$ |
(2.87 |
) |
The following table presents the reconciliation of Adjusted
EBITDA to its most comparable GAAP measure, net loss, as reported
(unaudited):
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss, as reported |
|
$ |
(66,867 |
) |
|
$ |
(80,371 |
) |
|
$ |
(366,137 |
) |
|
$ |
(182,105 |
) |
Income tax expense |
|
|
11 |
|
|
|
33 |
|
|
|
32 |
|
|
|
60 |
|
Interest expense |
|
|
793 |
|
|
|
992 |
|
|
|
3,966 |
|
|
|
3,648 |
|
Depreciation and amortization
expense |
|
|
9,327 |
|
|
|
6,753 |
|
|
|
32,582 |
|
|
|
21,663 |
|
Restructuring expenses(1) |
|
|
2,938 |
|
|
|
3,726 |
|
|
|
17,259 |
|
|
|
15,794 |
|
Share-based compensation
expense |
|
|
5,009 |
|
|
|
6,074 |
|
|
|
33,857 |
|
|
|
27,698 |
|
Other, net(2) |
|
|
(7,757 |
) |
|
|
(144 |
) |
|
|
420 |
|
|
|
487 |
|
Adjusted EBITDA |
|
$ |
(56,546 |
) |
|
$ |
(62,937 |
) |
|
$ |
(278,021 |
) |
|
$ |
(112,755 |
) |
Net loss as a % of net
revenues |
|
(83.6 |
)% |
|
(79.8 |
)% |
|
(87.4 |
)% |
|
(39.2 |
)% |
Adjusted EBITDA as a % of net
revenues |
|
(70.7 |
)% |
|
(62.5 |
)% |
|
(66.4 |
)% |
|
(24.3 |
)% |
____________ |
(1 |
) |
Primarily comprised of legal and other expenses associated with the
dispute with a co-manufacturer with whom an exclusive supply
agreement was terminated in May 2017. On October 18, 2022, the
parties entered into a confidential written settlement agreement
and mutual release in connection with this matter. |
(2 |
) |
(a)
Includes $5.6 million in net foreign currency transaction gains and
$4.9 million in net foreign currency transaction losses in the
three and twelve months ended December 31, 2022, respectively, and
$0.1 million in net foreign currency transaction gains and $0.2
million in net foreign currency transaction losses in the three and
twelve months ended December 31, 2021, respectively. (b) Includes
$1.0 million in loss on extinguishment of debt associated with
termination of the Company's credit facility in the year ended
December 31, 2021. |
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