Tattooed Chef, Inc. (Nasdaq: TTCF) (“Tattooed Chef” or the
“Company”), a leader in plant-based foods, today announced
financial results for the first quarter ended March 31, 2022. The
Company also reiterated its financial guidance for full year 2022.
First Quarter 2022 Financial Overview
Compared to 2021 First Quarter
- Revenue rose 37.3% to $72.1
million
- Tattooed Chef branded product
revenue increased 21.2% to $43.5 million, or 60% of total
revenue
- Adjusted EBITDA (1) was negative
$13.4 million
- Net loss was $17.6 million
First Quarter 2022 Operational
Highlights
- Branded SKUs rose to 90 as of March
31, 2022 from 78 as of December 31, 2021
- Added more than 10,000 new points
of distribution
- Commenced production of frozen,
ready-to-eat Mexican food items
- Enterprise-wide
automation initiative underway and expected to be completed by the
end of 2022
Additional Operational
Highlights
- Branded oat butter bars set to
commence production in Q2 2022
- Cold storage facility operational
April 2022
“After a record 2021, our growth continued
during the 2022 first quarter and we reported our highest ever
quarterly revenue of approximately $72 million,” said Sam Galletti,
President and CEO. “We are continuing to scale our business, and
during the first quarter we saw increased contributions from the
facilities acquired as part of the New Mexico Food Distributors,
Inc. and Karsten Tortilla Factory, LLC
transactions.”
Mr. Galletti continued, “We are advancing
initiatives designed to leverage our increased manufacturing
capacity and demand profile to drive efficiencies, reduce costs,
expand margins, and enhance our competitive profile. These include
increasing our retail footprint and product count in existing
retailers; expanding our presence outside of the freezer aisle to
include refrigerated and ambient products; and integrating
automation across our operations. We commenced operations at our
dedicated cold storage facility in April 2022 and expect to
generate significant savings this year by bringing this capability
in-house. I am extremely proud of our team as they continue to
deliver growth and maintain the highest levels of quality and
client service while navigating multiple macroeconomic
challenges.”
(1) Adjusted EBITDA is a
non-GAAP financial measure defined below under “Non-GAAP Measures.”
Please see “Adjusted EBITDA Reconciliation” at the end of this
press release.
Sarah Galletti, the Tattooed Chef, Founder and
Chief Creative Officer added, “We believe everybody has a
plant-based side, and the introduction of a broad range new product
SKUs during the 2022 first quarter reflects our ability to craft
delicious plant-based food for a wide range of eating occasions,
flavor profiles, and nutritional needs. Through our nostalgic
innovation approach, we continue to create meals that people know
and love, now made healthier. We are particularly enthusiastic
about our expansion into new frozen product categories: burritos,
quesadillas and Mexican entrees that include a variety of tasty
plant-based meat alternatives and ingredient combinations, such as
the Plant Based Chorizo and Egg Burrito, the Plant Based Al Pastor
Quesadilla, and Plant Based Chicken Mole Enchiladas. In addition,
we are significantly expanding our vegan line by incorporating
vegan eggs and proprietary meat alternatives, including plant-based
pork into our meals. Finally, we are on plan to commence production
of Tattooed Chef branded oat butter bars during the second quarter
of 2022, expanding the brand out of the freezer aisle.”
First Quarter 2022 Results
Revenue increased 37.3% to $72.1 million during
the first quarter of 2022 (“Q1 2022”) from $52.5 million in the
first quarter of 2021 (“Q1 2021”), primarily the result of a 21.2%
increase in “Tattooed Chef” branded products, as well as continued
increases in both private label and foodservice sales that carried
over from the acquisitions made in 2021. Higher branded product
sales were driven by a significant increase in U.S. distribution
points that started in late 2020 and continued through 2021,
increased volume at existing retail stores, and new product
introductions.
Cost of goods sold increased 41.1% to $63.9
million in Q1 2022 from $45.3 million in Q1 2021, due to higher
revenue, and inflationary pressures that resulted in significant
quarter-over-quarter increases in freight costs (inbound and
outbound), cold storage expenses (which are expected to be
mitigated due to the commencement of operations at the Company’s
dedicated cold storage facility in April 2022), and labor
costs.
Gross profit was $8.2 million in Q1 2022, or
11.3% of revenue, compared to $7.2 million, or 13.7% of revenue, in
Q1 2021. The decline in gross profit margin was due to a greater
increase in cost of goods sold than the increase in revenues as a
result of inflationary pressures.
Net loss was $17.6 million, or $(0.22) per
diluted share, as compared to a net loss of $8.2 million, or
$(0.11) per diluted share, in Q1 2021.
Adjusted EBITDA was negative $13.4 million in Q1
2022 compared to Adjusted EBITDA of negative $3.4 million in Q1
2021. The quarter-over-quarter difference was due to the increases
in costs of goods sold previously mentioned
above.
Financial Condition
At March 31, 2022, cash and cash equivalents
were $57.4 million and long-term debt was approximately $0.6
million. Net cash used in operating activities was $26.4 million,
$21.4 million of which was attributable to an increase in accounts
receivable reflecting significantly higher sales in Q1 2022.
Capital expenditures during Q1 2022 were $8.8 million and primarily
reflected down payments made on new equipment for automation during
2022.
Full Year 2022 Outlook
The Company reiterated its outlook for 2022:
- Revenue of
$280-$285 million, driven by a combination of new product
introductions, an increase in retail distribution via new
relationships and penetrating existing accounts compared to 2021,
and contributions from acquisitions consummated in 2021.
- Gross margin of
10-12%
- Marketing
expenses of $27- $32 million
- Capital expenditures of
approximately $20 million, with investments focused on automation
and robotics at our manufacturing facilities.
Conference Call and Webcast
The Company will host a conference call today at
5:00 p.m. Eastern Time. Investors interested in participating in
the live call can dial:
- (877) 407-9753
from the U.S.
- (201) 493-6739
internationally.
The call will be webcast and available on the Investors section
of the Company’s website at www.tattooedchef.com. The webcast will
be archived for 30 days.
About Tattooed Chef Tattooed
Chef is a leading plant-based food company offering a broad
portfolio of innovative and sustainably sourced plant-based foods.
Tattooed Chef’s signature products include ready-to-cook bowls,
zucchini spirals, riced cauliflower, acai and smoothie bowls, and
cauliflower pizza crusts, handheld burritos, and quesadillas, which
are available in the frozen food sections of leading national
retail food and club stores across the United States as well as on
Tattooed Chef’s e-commerce site. Understanding consumer lifestyle
and food trends, a commitment to innovation, and self-manufacturing
allows Tattooed Chef to continuously introduce new products.
Tattooed Chef provides approachable, great tasting and chef-created
products to the growing group of plant-based consumers as well as
the mainstream marketplace. For more information, please visit
www.tattooedchef.com.
Follow us on social: Facebook, Instagram,
TikTok, Twitter, and LinkedIn and Taste the Jams on Spotify.
Forward Looking
StatementsCertain statements made in this release are
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. When used in this release, words
such as “estimates,” “projected,” “expects,” “anticipates,”
“forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,”
“will,” “should,” “future,” “propose,” “trend,” “accelerate,”
“expansion,” “new,” “leverage,” “continues,” “maintains,”
“opportunities,” “outlook,” “next,” “increase,” “beyond,”
“potential,” “growth,” “pipeline,” “guidance” and variations of
these words or similar expressions (or the negative versions of
such words or expressions) are intended to identify forward-looking
statements. These forward-looking statements are not guarantees of
future performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside Tattooed Chef’s
control, that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or
outcomes include: uncertainty surrounding the ultimate success of
Tattooed Chef’s e-commerce platform; the need to prove Tattooed
Chef’s ability to build brand awareness and continue to launch
innovative products; continued acceptance of Tattooed Chef branded
products by new retail customers; Tattooed Chef’s ability to
increase in-store count and points of distribution; the outcome of
any legal proceedings that may be instituted against Tattooed Chef;
Tattooed Chef’s ability to effectively and efficiently integrate
recent and/or new acquisitions; competition and the ability of the
business to grow and manage growth profitably; the impact of
inflation, particularly with respect to freight and container
expenses; the effect of possible supply chain disruption; and other
risks and uncertainties indicated from time to time in our annual
report on Form 10-K for the year ended December 31, 2021 filed with
the Securities and Exchange Commission (the “SEC”), including those
under “Risk Factors” therein, and other factors identified in past
and future filings with the SEC, available at www.sec.gov. Some of
these risks and uncertainties may be amplified by COVID-19 or
hostilities in Ukraine. Tattooed Chef undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Non-GAAP Measures
The Company seeks to achieve profitable,
long-term growth by monitoring and analyzing key operating metrics,
including Adjusted EBITDA. The Company defines EBITDA as net income
before interest, taxes, and depreciation. Adjusted EBITDA further
adjusts EBITDA by adding back non-cash compensation expenses,
non-recurring expenses, and other non-operational charges. The
Company’s management uses this non-GAAP financial metric and
related computations to evaluate and manage the business and to
plan and make near and long-term operating and strategic decisions.
The management team believes this non-GAAP financial metric is
useful to investors to provide supplemental information in addition
to the GAAP financial results. Management reviews the use of its
primary key operating metrics from time-to-time. Adjusted EBITDA is
not intended to be a substitute for any GAAP financial measure and
as calculated, may not be comparable to similarly titled measures
of performance of other companies in other industries or within the
same industry. The Company’s management team believes it is useful
to provide investors with the same financial information that it
uses internally to make comparisons of historical operating
results, identify trends in underlying operating results, and
evaluate its business.
CONTACTS
INVESTORSStephanie Dieckmann, CFOTattooed
Chef(562) 602-0822
Devin Sullivan, SVPThe Equity Group(212) 836-9608 /
dsullivan@equityny.com
Karin Daly, VPThe Equity Group(212) 836-9623 /
kdaly@equityny.com
TATTOOED CHEF,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONSAND COMPREHENSIVE LOSS
(unaudited)(in thousands, except
for share and per share information)
|
|
Three Months
EndedMarch 31, |
|
|
|
2022 |
|
|
2021 |
|
NET REVENUE |
|
$ |
72,064 |
|
|
$ |
52,469 |
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD |
|
|
63,914 |
|
|
|
45,289 |
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
8,150 |
|
|
|
7,180 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
24,793 |
|
|
|
14,196 |
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(16,643 |
) |
|
|
(7,016 |
) |
|
|
|
|
|
|
|
|
|
Interest income (expense) |
|
|
(41 |
) |
|
|
(20 |
) |
Other income (expense) |
|
|
(611 |
) |
|
|
(2,681 |
) |
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAX BENEFIT |
|
|
(17,295 |
) |
|
|
(9,717 |
) |
|
|
|
|
|
|
|
|
|
INCOME TAX (EXPENSE) BENEFIT |
|
|
(256 |
) |
|
|
1,475 |
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(17,551 |
) |
|
$ |
(8,242 |
) |
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.21 |
) |
|
$ |
(0.10 |
) |
Diluted |
|
$ |
(0.22 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES |
|
|
|
|
|
|
|
|
Basic |
|
|
82,237,898 |
|
|
|
80,240,105 |
|
Diluted |
|
|
82,248,414 |
|
|
|
80,544,129 |
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(430 |
) |
|
|
109 |
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
|
$ |
(17,981 |
) |
|
$ |
(8,133 |
) |
TATTOOED CHEF,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)(in thousands, except
for share information)
|
|
March 31, 2022 |
|
|
December 31,2021 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
57,417 |
|
|
$ |
92,351 |
|
Accounts receivable, net |
|
|
46,324 |
|
|
|
25,117 |
|
Inventory |
|
|
58,339 |
|
|
|
54,562 |
|
Prepaid expenses and other current assets |
|
|
3,695 |
|
|
|
7,027 |
|
TOTAL CURRENT ASSETS |
|
|
165,775 |
|
|
|
179,057 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
54,217 |
|
|
|
46,476 |
|
Operating lease right-of-use assets, net |
|
|
7,573 |
|
|
|
8,039 |
|
Finance lease right-of-use assets, net |
|
|
5,597 |
|
|
|
5,639 |
|
Intangible assets, net |
|
|
124 |
|
|
|
151 |
|
Deferred income taxes, net |
|
|
555 |
|
|
|
266 |
|
Goodwill |
|
|
26,924 |
|
|
|
26,924 |
|
Other assets |
|
|
771 |
|
|
|
649 |
|
TOTAL ASSETS |
|
$ |
261,536 |
|
|
$ |
267,201 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
36,528 |
|
|
$ |
28,334 |
|
Accrued expenses |
|
|
6,222 |
|
|
|
3,767 |
|
Line of credit |
|
|
1,583 |
|
|
|
1,200 |
|
Notes payable, current portion |
|
|
4,962 |
|
|
|
5,019 |
|
Forward contract derivative liability |
|
|
1,960 |
|
|
|
1,804 |
|
Operating lease liabilities, current portion |
|
|
1,529 |
|
|
|
1,523 |
|
Other current liabilities |
|
|
736 |
|
|
|
122 |
|
TOTAL CURRENT LIABILITIES |
|
|
53,520 |
|
|
|
41,769 |
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
|
607 |
|
|
|
814 |
|
Operating lease liabilities, net of current portion |
|
|
6,171 |
|
|
|
6,599 |
|
Notes payable, net of current portion |
|
|
629 |
|
|
|
716 |
|
TOTAL LIABILITIES |
|
|
60,927 |
|
|
|
49,898 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (See Note 18) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Preferred stock- $0.0001 par value; 10,000,000 shares authorized,
none issued and outstanding at March 31, 2022 and
December 31, 2021 |
|
|
- |
|
|
|
- |
|
Common shares- $0.0001 par value; 1,000,000,000 shares authorized;
82,441,641 shares and 82,237,813 shares issued and outstanding at
March 31, 2022, and December 31, 2021, respectively |
|
|
8 |
|
|
|
8 |
|
Additional paid in capital |
|
|
243,649 |
|
|
|
242,362 |
|
Accumulated other comprehensive loss |
|
|
(1,383 |
) |
|
|
(953 |
) |
Accumulated deficit |
|
|
(41,665 |
) |
|
|
(24,114 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
200,609 |
|
|
|
217,303 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
261,536 |
|
|
$ |
267,201 |
|
TATTOOED CHEF,
INC.Adjusted EBITDA Reconciliation
(in thousands)
|
|
Three Months Ended |
|
(in thousands) |
|
March 31,2022 |
|
|
March 31,2021 |
|
Net loss |
|
$ |
(17,551 |
) |
|
$ |
(8,242 |
) |
Interest |
|
|
41 |
|
|
|
20 |
|
Income tax expense (benefit) |
|
|
256 |
|
|
|
(1,475 |
) |
Depreciation |
|
|
1,507 |
|
|
|
552 |
|
EBITDA |
|
|
(15,747 |
) |
|
|
(9,145 |
) |
Adjustments |
|
|
|
|
|
|
|
|
Stock compensation expense |
|
|
1,287 |
|
|
|
3,185 |
|
Loss on foreign currency forward contracts |
|
|
1,023 |
|
|
|
3,001 |
|
Gain on warrant remeasurement |
|
|
(207 |
) |
|
|
(472 |
) |
Acquisition expenses |
|
|
105 |
|
|
|
- |
|
ERP related expenses |
|
|
159 |
|
|
|
- |
|
Total Adjustments |
|
|
2,367 |
|
|
|
5,714 |
|
Adjusted EBITDA |
|
$ |
(13,380 |
) |
|
$ |
(3,431 |
) |
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