AUSTIN, Texas, Aug. 04, 2022 (GLOBE NEWSWIRE) — Vital Farms (Nasdaq: VITL), a Certified B Corporation that offers a range of ethically produced foods nationwide, today reported financial results for its second quarter ended June 26, 2022.
Financial highlights for the second quarter include:
- Second Quarter 2022 Net Revenue increase of 37.4% to $82.9 million
- Second Quarter 2022 Net Income of $0.2 million
- Second Quarter 2022 Adjusted EBITDA of $3.7 million1
“We are pleased that our crew continues to surpass our expectations despite a tough operating climate,” said Russell Diez-Canseco, Vital Farms’ President and Chief Executive Officer. “Vital Farms remains the fastest-growing brand in dollars and gained more than double the amount of units relative to our next largest competitor in the egg category over the past 52 weeks2. We continue to see gains in retail distribution and household penetration, which is up over 225 basis points from 3.5% in eggs around the time of our IPO. Our capacity build continues with a network that now exceeds 300 family farms and a fully operational expanded Egg Central Station, which puts us in position to double our current net revenue base to over $650 million.”
Diez-Canseco continued, “Vital Farms was built as a brand that is challenging the norms of the food system, and as I look back on our two-year journey as a public company, I want to take a moment to acknowledge some important achievements. We exceeded our stated goals on net revenues by roughly $15 million in each of the past two years. Additionally, we delivered our expected profits despite a tough operating environment, which included significant cost increases across both inputs and freight. I would like to take this opportunity to thank our entire community of stakeholders for making these accomplishments possible. Our crewmembers in particular have proven remarkably collaborative, resilient, and adaptable.”
1 Adjusted EBITDA is a non-GAAP financial measure defined in the section titled “Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.
2 Source: SPINS 52 Weeks Ended 6/26/2022.
For the 13 Weeks Ended June 26, 2022
Net revenue increased 37.4% to $82.9 million in the second quarter of 2022, compared to $60.3 million in the second quarter of 2021. Growth in net revenue in the second quarter of 2022 was primarily due to continued growth in egg-related sales, driven by volume increases at our customers, as well as distribution gains at both new and existing retail partners and an increase in butter-related sales.
Gross profit was $24.9 million, or 30.1% of net revenue, in the second quarter of 2022, compared to $21.9 million, or 36.4% of net revenue, in the prior year quarter. The change in gross profit was driven by higher sales. The change in gross margin was mainly attributable to an increase in input costs in both eggs and butter. Increased pricing across our entire portfolio took effect in late May, partially offsetting some of the input cost headwinds.
Income from operations in the second quarter of 2022 was $0.7 million, compared to income from operations of $3.0 million in the second quarter of 2021. The change in income from operations was primarily attributable to elevated input costs, increased employee-related costs as we grew headcount to support our growth, and higher shipping and distribution expenses.
Net income was $0.2 million in the second quarter of 2022, compared to net income of $3.9 million in the prior year quarter.
Net income per diluted share was $0.00 for the second quarter of 2022 compared to net income per diluted share of $0.09 in the prior year quarter.
Adjusted EBITDA was $3.7 million in the second quarter of 2022, compared to Adjusted EBITDA of $5.1 million in the second quarter of 2021. The change in Adjusted EBITDA was primarily due to gross margin pressure, increased employee-related costs, and higher shipping and distribution expenses. Our Adjusted EBITDA excludes certain non-cash items. Adjusted EBITDA is a non-GAAP financial measure defined in the section titled “Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents and investment securities were $90.3 million as of June 26, 2022, and we had no outstanding debt. Net cash used in operating activities was $3.0 million for the 26 weeks ended June 26, 2022, compared to net cash provided by operating activities of $15.7 million for the 26 weeks ended June 27, 2021.
Capital expenditures totaled $4.4 million in the 26 weeks ended June 26, 2022, compared to $7.8 million in the prior year period.
Update on Fiscal 2022 Outlook
Bo Meissner, Vital Farms’ Chief Financial Officer, commented: “We remain pleased with our revenue performance and continued demand for our products. We enter the second half with price increases across our portfolio, which have been well-received by retailers and consumers. We believe these prudent increases will return us to low-to-mid 30% gross margins and support our continued progress toward our long-term goal of low double-digit Adjusted EBITDA Margin.”
- For the full fiscal year 2022, management is maintaining its guidance for net revenue of more than $340 million, a projected increase of 30% compared to fiscal year 2021.
- Management is also maintaining its guidance for Adjusted EBITDA of more than $13 million for the full fiscal year 2022, an increase of 62% compared to fiscal year 2021.
Vital Farms’ guidance continues to assume that there are no additional significant disruptions to the supply chain or its customers or consumers, including any issues from adverse macroeconomic factors. Vital Farms cannot provide a reconciliation between its forecasted Adjusted EBITDA and net income, its most directly comparable GAAP measure, without unreasonable effort due to the unavailability of reliable estimates for income taxes, among other items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results.
About Vital Farms
Vital Farms is a Certified B Corporation that offers a range of ethically produced foods nationwide. Started on a single farm in Austin, Texas in 2007, Vital Farms has become a national consumer brand that works with over 300 family farms and is the leading U.S. brand of pasture-raised eggs by retail dollar sales. Vital Farms’ ethics are exemplified by its focus on the humane treatment of farm animals and sustainable farming practices. In addition, as a Delaware public benefit corporation, Vital Farms prioritizes the long-term benefits of each of its stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, crew members, and stockholders. Vital Farms’ products, including shell eggs, butter, hard-boiled eggs, ghee, and liquid whole eggs, are sold in over 21,500 stores nationwide. For more information, please visit www.vitalfarms.com.