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Beyond Meat: Reports First Quarter 2019 Financial Results

El Segundo / CA. (bmi) Beyond Meat Inc., a leader in plant-based meat, reported financial results for its first quarter ended March 30, 2019. First quarter 2019 financial highlights compared to prior year period:

  • Net revenues were USD 40.2 million, an increase of 215 percent;
  • Net loss was USD 6.6 million, or a loss of USD 0.95 per common share, compared to net loss of USD 5.7 million, or a loss of USD 0.98 per common share in the year-ago period; Pro forma basic and diluted net loss per common share, which is a non-GAAP financial measure, was USD 0.14 per common share in the first quarter of 2019 compared to USD 0.13 per common share in the year-ago period; and
  • Adjusted Ebitda, which is a non-GAAP financial measure, was a loss of USD 2.1 million compared to a loss of USD 4.3 million in the year-ago period.

Successful Initial Public Offering

Subsequent to the quarter end, on May 6, 2019, the Company completed its initial public offering (IPO) in which it issued 11,068,750 shares of common stock at an IPO price of USD 25.00 per share for net proceeds of approximately USD 252.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company continues to expect to use the net proceeds from the IPO to invest in current and additional manufacturing facilities, to expand its research and development and its sales and marketing capabilities, and for working capital and general corporate purposes. On May 31, 2019, subsequent to the IPO, there were 60,122,797 shares of common stock outstanding.

«We are very pleased with our successful IPO during the month of May and our strong first quarter financial results that we believe demonstrate mainstream consumers’ desire for plant-based meat products in the United States and internationally,» said Ethan Brown, Beyond Meat’s President and Chief Executive Officer. «Our team continued to scale our business in both retail and foodservice as we benefited from broad-based growth in the first quarter. Looking ahead, we believe we are in the early stages of achieving the growth that Beyond Meat is capable of as we remain focused on efforts to increase brand awareness, expand our distribution channels, launch additional innovative products, and invest in our infrastructure and capacity to be able to serve a robust global market for plant-based meats.»

First Quarter 2019

Net revenues increased 215 percent to USD 40.2 million in the first quarter of 2019 compared to USD 12.8 million in the first quarter of 2018. Growth in total net revenues in the first quarter of 2019 was driven primarily by an increase in sales of The «Beyond Burger», expansion in the number of retail and foodservice points of distribution, including new strategic customers, and greater demand from our existing customers. The Company discontinued its frozen chicken strips product line during the first quarter of 2019, causing a decline in frozen product revenues consistent with its shift to concentrate more on its fresh products platform.

Three Months Ended Change
(in thousands) 2019/03/30 2018/03/31 Amount Percentage
Revenues:
Fresh Platform USD 38,806 USD 9,596 USD 29,210 304.4 %
Frozen Platform 4,512 4,748 (236 ) (5.0 )%
Less: Discounts (3,112 ) (1,568 ) (1,544 ) 98.5 %
Total net revenues USD 40,206 USD 12,776 USD 27,430 214.7 %

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Three Months Ended Change
(in thousands) 2019/03/30 2018/03/31 Amount Percentage
Net revenues:
Retail USD 19,579 USD 9,288 USD 10,291 110.8 %
Restaurant and Foodservice 20,627 3,488 17,139 491.4 %
Total net revenues USD 40,206 USD 12,776 USD 27,430 214.7 %

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Gross profit was USD 10.8 million, or 26.8 percent as a percentage of net revenues, in the first quarter of 2019, compared to USD 2.1 million, or 16.1 percent as a percentage of net revenues, in the prior-year period. The increase in gross profit and gross margin was primarily due to an increase in the amount of product sold with resulting operating leverage, and improved production efficiencies. A greater proportion of revenues from the Company’s fresh platform products also contributed to the improvement in gross margin.

Loss from operations in the first quarter of 2019 was USD 5.3 million compared to a loss of USD 5.6 million in the first quarter of the prior year. This improvement was driven entirely by the year-over-year increase in gross profit, partially offset by higher operating expenses as the Company continues to invest in its internal research and development and marketing capabilities and incur higher absolute costs to support its expanded manufacturing and supply chain operations.

Net loss was USD 6.6 million in the first quarter of 2019 compared to a net loss of USD 5.7 million in the prior-year period. The expanded net loss was primarily the result of higher operating expenses, higher interest expense as well as an increase in other non-operating expenses, a majority of which were related to mark-to-market adjustments on outstanding warrants, partially offset by the increase in gross profit.

Adjusted Ebitda was a loss of USD 2.1 million in the first quarter of 2019 compared to a loss of USD 4.3 million in the first quarter of 2018. Adjusted Ebitda is a non-GAAP financial measure and is reconciled to net loss, its closest comparable GAAP measure.

Mark Nelson, Chief Financial Officer and Treasurer commented, «We are pleased with our expansion in gross margin and the progress we are achieving in Adjusted Ebitda, which gives us confidence in our ability to continue to improve profitability and cash flow generation as we rapidly scale our business.»

Balance Sheet and Cash Flow Highlights

The Company’s cash balance was USD 35.4 million as of March 30, 2019 and total outstanding debt was USD 30.4 million. Net cash used in operating activities was USD 13.3 million in the quarter ended March 30, 2019, compared to USD 4.9 million during the prior-year period. Capital expenditures totaled USD 3.8 million during the first three months of 2019 compared to USD 3.7 million in the prior-year period. The March 30, 2019 cash balance excludes net proceeds from the IPO of approximately USD 252.5 million, after deducting underwriting discounts and commissions and estimated offering expenses.

2019 Outlook

For the full year 2019, the Company is providing the following guidance:

  • Net revenues to exceed USD 210 million, an increase of greater than 140 percent compared to 2018; and
  • Adjusted Ebitda to be approximately break-even.

The Company does not provide guidance for net loss, the most directly comparable GAAP measure, and similarly cannot provide a reconciliation between its forecasted Adjusted Ebitda and net loss metrics without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.