Beyond Meat: Reports Q3-2019 Financial Results

El Segundo / CA. (bmi) Beyond Meat Inc., a leader in plant-based meat, reported financial results for its third quarter and nine months ended September 28, 2019.

Third Quarter 2019 Financial Highlights Compared to Q3/2018

  • Net revenues were USD 92.0 million, an increase of 250.0 percent;
  • Gross profit was USD 32.8 million, or 35.6 percent of net revenues, compared to gross profit of USD 5.0 million, or 19.2 percent of net revenues, in the year-ago period;
  • Net income was USD 4.1 million, or USD 0.06 per diluted common share, compared to net loss of USD 9.3 million, or USD 1.45 per common share in the year-ago period; and
  • Adjusted Ebitda, which is a non-GAAP financial measure, was USD 11.0 million compared to an Adjusted Ebitda loss of USD 5.7 million in the year-ago period.

«We are very pleased with our third quarter results which reflect continued momentum across our business and mark an important milestone as we achieved our first ever quarter of net income,» said Ethan Brown, Beyond Meat’s President and Chief Executive Officer. «We remain focused on expanding our distribution footprint, both domestically and abroad, building our brand, introducing new innovative products into the marketplace, and bolstering our infrastructure and internal capabilities to fuel our future growth.»

Third Quarter 2019

Net revenues increased 250 percent to USD 92.0 million in the third quarter of 2019 compared to USD 26.3 million in the third quarter of 2018. Growth in net revenues in the third quarter of 2019 was primarily due to an increase in sales volumes of products in Beyond Meat’s fresh platform across retail, restaurant and foodservice channels, driven by expansion in the number of points of distribution, including new strategic customers, international customers, and greater demand from existing customers.

Three Months Ended Change Nine Months Ended Change
(in thousands) 2019-09-28 2018-09-29 Amount % 2019-09-28 2018-09-29 Amount %
Net revenues:
Gross Fresh Platform USD 97,995 USD 26,815 USD 71,180 265.4 % USD 204,523 USD 51,530 USD 152,993 296.9 %
Gross Frozen Platform 4,007 2,295 1,712 74.6 % 14,158 11,549 2,609 22.6 %
Less: Discounts (10,041 ) (2,833 ) (7,208 ) 254.4 % (19,263 ) (6,659 ) (12,604 ) 189.3 %
Net revenues USD 91,961 USD 26,277 USD 65,684 250.0 % USD 199,418 USD 56,420 USD 142,998 253.5 %

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Three Months Ended Change Nine Months Ended Change
(in thousands) 2019-09-28 2018-09-29 Amount % 2019-09-28 2018-09-29 Amount %
Net revenues:
Retail USD 50,465 USD 16,201 USD 34,264 211.5 % USD 104,164 USD 37,173 USD 66,991 180.2 %
Restaurant and Foodservice 41,496 10,076 31,420 311.8 % 95,254 19,247 76,007 394.9 %
Net revenues USD 91,961 USD 26,277 USD 65,684 250.0 % USD 199,418 USD 56,420 USD 142,998 253.5 %

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Gross profit was USD 32.8 million, or 35.6 percent of net revenues, in the third quarter of 2019, compared to USD 5.0 million, or 19.2 percent of net revenues, in the year-ago period. The increase in gross profit and gross margin was primarily due to an increase in the volume of products sold, resulting in operating leverage and production efficiency improvements. A greater proportion of gross revenues from the Company’s fresh platform also contributed to the improvement in gross margin.

Income from operations in the third quarter of 2019 was USD 3.6 million compared to a loss from operations of USD 8.0 million in the third quarter of the prior year. This improvement was driven entirely by the year-over-year increase in net revenues and the resulting increase in gross profit, partially offset by higher operating expenses primarily to support the Company’s expanded manufacturing and supply chain operations, higher administrative costs associated with being a public company, higher restructuring expense, and continued investment in innovation and marketing capabilities.

Net income was USD 4.1 million in the third quarter of 2019 compared to a net loss of USD 9.3 million in the prior-year period. The improvement in net income was primarily the result of the increase in net revenues and gross profit compared to the third quarter of 2018.

Adjusted Ebitda was USD 11.0 million, or 12.0 percent of net revenues, in the third quarter of 2019 compared to an Adjusted Ebitda loss of USD 5.7 million in the third quarter of 2018. Adjusted Ebitda is a non-GAAP financial measure and is reconciled to net income (loss), the closest comparable GAAP measure, at the end of this release.

Chief Financial Officer and Treasurer, Mark Nelson commented, «We remain pleased with our continued strong sales growth trajectory and are equally pleased with our sequential improvement in profitability in the third quarter. Our 35.6 percent gross margin in the quarter is a validation of our team’s ongoing efforts to improve our operating efficiency and is a critical enabler of greater strategic flexibility in the future.»

Balance Sheet and Cash Flow Highlights

The Company’s cash and cash equivalents balance was USD 312.5 million as of September 28, 2019 and total outstanding debt was USD 30.5 million. Net cash used in operating activities was USD 18.3 million for the nine months ended September 28, 2019, compared to USD 24.4 million for the prior-year period. Capital expenditures totaled USD 16.9 million for the nine months ended September 28, 2019 compared to USD 18.3 million for the prior-year period.

2019 Outlook

For the full year 2019, the Company is raising its guidance and now expects the following:

  • Net revenues in the range of USD 265 million to USD 275 million, updated from its prior expectation of net revenues to exceed USD 240 million; and
  • Adjusted Ebitda to approximate USD 20 million.

The Company does not provide guidance for net income, the most directly comparable GAAP measure, and similarly cannot provide a reconciliation between its forecasted Adjusted Ebitda and net income 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.

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