Laird Superfood Reports Q4 & FY2020 Financial Results

SISTERS, Ore.–(BUSINESS WIRE)–Laird Superfood today reported financial results for its fourth quarter and fiscal year ended December 31, 2020.

Fourth Quarter 2020 Highlights

• Net Sales increased to $7.3 million, an increase of 75% year over year.
• Online sales contributed 61% of net sales, with lairdsuperfood.com sales growing 170% year over year, and subscribers growing 184%.
• Black Friday saw single-day sales grow 474% year over year.
• Wholesale sales contributed 37% of net sales, increasing 45% year over year, as retail door expansion reached approximately 7,100 locations.
• Gross profit was $1.5 million and gross margin was 20.3% compared to gross profit of $1.4 million and gross margin of 34.7% in the prior year quarter.
• Net loss attributable to common stockholders was $4.5 million, or $0.51 per diluted share, compared to net income attributable to common stockholders of $5.3 million, or $0.96 per diluted share, in the prior year period, which included a deemed contribution from the redemption of preferred stock of $7.4 million.
• The Company’s active innovation slate included seven new product introductions, including the launch of Boost Coffee, the first ever coffee with Vitamin D from plant-based whole food sources, as well as Activate Prebiotic Daily Greens supplements, Harvest Pili Nuts and Dates, and Renew Protein.

Paul Hodge Jr., Co-founder, President and Chief Executive Officer of Laird Superfood, commented, “We finished 2020 with an exceptional fourth quarter of 75% year over year revenue growth, completing a full year that saw our revenue nearly double from 2019. Thank you to our incredible team for their tireless work in a year where flexibility and creativity was key to further penetrating the multi-billion-dollar addressable markets we are pursuing. Through all the challenges presented by the pandemic, our supply chain was intact, and we successfully delivered our high quality, innovative products to a record number of customers and consumers, including over 100,000 new customers who came straight to our online platform and over 176,000 repeat orders during the year.”

“We couldn’t be more excited to enter 2021 with considerable resources – including our enhanced senior leadership team, and with over $57.2 million in cash – to execute on our growth strategy centered on maximizing market penetration in our existing product lines, developing new products that conform to both our quality and value standards and further developing our vertically integrated business model. Mahalo to our dedicated team who achieved so much this year and stayed focused on our operating goals and true to our mission to provide healthy, sustainable plant-based products.”

For the Three Months Ended December 31, 2020

Net sales increased 75% to $7.3 million in the fourth quarter of 2020 compared to $4.2 million in the fourth quarter of 2019. Growth in net sales in the fourth 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. Black Friday single-day sales were up 474% year-over-year which also contributed to the increase of net sales.

Gross profit was $1.5 million which is slightly higher compared to the prior year period of $1.4 million. Gross margin was 20.3% of net sales in the fourth quarter of 2020, compared to 34.7% of net sales in the prior year period. The decrease in gross margin was primarily due to elevated outbound shipping costs combined with the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com, elevated labor costs as we built out our team to support our second manufacturing line, and increased co-packing and disposal costs related to the production and distribution of our liquid creamer product line.

Operating expenses were $6.0 million compared to $3.7 million in the year ago period and reflect General and Administrative expense increases of $1.7 million, primarily related to elevated personnel costs, professional fees, and insurance expense, as well as Sales and Marketing expense increases of $621,000, primarily related to elevated marketing expenses.

Loss from operations was $4.5 million in the fourth quarter of 2020, compared to a loss of $2.2 million in the prior year period.

Net loss attributable to common stockholders was $4.5 million, or $0.51 per diluted share, in the fourth quarter of 2020, compared to net income attributable to common stockholders of $5.3 million, or $0.96 per diluted share, in the prior year period, which included a deemed contribution from the redemption of preferred stock of $7.4 million.

Valerie Ells, Chief Financial Officer, commented, “We are thrilled with our net sales performance in the fourth quarter, which furthers our conviction in the strength of our brand and the compelling addressable market opportunities in front of us. We remain confident that our business is set on a path for a strong 2021. This growth will be determined by a few key successful initiatives in the coming year including, but not limited to, timely and innovative new product introductions and a continued strong online performance. We also aim to add more wholesale doors using our liquid creamer as a means for creating these opportunities. 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.”

For the Twelve Months Ended December 31, 2020

Net sales increased 98% to $26.0 million for the twelve months ended December 31, 2020 compared to $13.1 million in the prior year period. This increase was primarily driven by a significant expansion of our customer base in both online and traditional wholesale channels.

Gross profit was $6.8 million, or 26.2% of net sales, for the twelve months ended December 31, 2020, compared to $5.1 million, or 38.8% 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 outbound shipping costs combined with the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com, increased co-packing costs primarily associated with our liquid creamer product line, disposal costs related to the initial production and distribution of our liquid creamer product line, and elevated labor costs.

Operating expenses were $19.7 million compared to $13.8 million in the prior year and reflect General and Administrative expense increases of $3.6 million, primarily related to the Company’s Initial Public Offering related expenses including accelerated stock option vesting, discretionary bonuses, and professional fees, as well as an asset impairment recorded during the second quarter of 2020. The change from the prior year further reflects Sales and Marketing increases of $2.1 million to $10.4 million from $8.3 million in the prior year period, primarily related to elevated advertising and marketing expenses and personnel costs.

Loss from operations was $12.9 million for the twelve months ended December 31, 2020, compared to $8.8 million in the prior year period.

Net loss attributable to common stockholders was $14.5 million, or $2.61 per diluted share, for the twelve months ended December 31, 2020 compared to $1.1 million, or $0.29 per diluted share, in the prior year period.

Balance Sheet and Cash Flow Highlights

The Company’s current assets include cash and cash equivalents of $57.2 million as of December 31, 2020. Total outstanding debt was $51,000 as of December 31, 2020. Net cash used in operating activities was $14.7 million in the twelve months ended December 31, 2020, compared to $9.4 million in the prior year period.

Capital expenditures totaled $1.1 million for the twelve months ended December 31, 2020, compared to $2.4 million in the prior year period.

2021 Outlook

The Company’s guidance assumes that there are no significant disruptions to the supply chain, or its customers or consumers, including any disruptions from adverse macroeconomic factors. In addition, the Company’s guidance reflects management’s expectation that it will continue to execute on the following core strategies: a) the optimized roll out of liquid creamer, b) expansion into additional wholesale channels, c) timely and innovative new product introductions, and d) continuation of strong online performance coupled with the optimization of DTC shipping expenses.

Given the uncertainty regarding the ultimate duration, magnitude and effects of the COVID-19 pandemic, management does not have certainty on the timing or execution of such strategies.

For the full year 2021, management feels confident the business is on a path for strong, double digit growth and expects net revenue of at least $42 million. The Company has a full year 2021 margin goal of 28-30%, which they plan to achieve via the liquid packaging update, optimizing DTC shipping, and continuing to maximize fixed cost leverage available via vertical integration.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally. The conference I.D. code is 5471648. 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.

Contacts