Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 25, 2022 | Mar. 06, 2023 | Jun. 26, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 25, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-25 | ||
Entity Registrant Name | Vital Farms, Inc. | ||
Entity Central Index Key | 0001579733 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
ICFR Auditor Attestation Flag | false | ||
Security 12b Title | Common Stock, - par value $0.0001 per share | ||
Trading Symbol | VITL | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-39411 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-0496985 | ||
Entity Address, Address Line One | 3601 South Congress Avenue | ||
Entity Address, Address Line Two | Suite C100 | ||
Entity Address, City or Town | Austin | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78704 | ||
City Area Code | 877 | ||
Local Phone Number | 455-3063 | ||
Entity Common Stock, Shares Outstanding | 40,748,747 | ||
Entity Public Float | $ 266 | ||
Auditor Firm ID | 185 | ||
Auditor Name | KPMG LLP | ||
Auditor Location | Austin, Texas | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the registrant’s 2023 annual meeting of stockholders, to be filed within 120 days after the close of the registrant’s fiscal year, are incorporated by reference into Part III of this Annual Report. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 12,914 | $ 30,966 |
Investment securities available-for-sale | 65,814 | 68,621 |
Accounts receivable, net | 40,227 | 26,938 |
Inventories | 26,849 | 10,945 |
Prepaid expenses and other current assets | 3,810 | 3,817 |
Total current assets | 149,614 | 141,287 |
Property, plant and equipment, net | 59,155 | 44,608 |
Operating lease right-of-use assets | 1,895 | 0 |
Goodwill | 3,858 | 3,858 |
Other assets | 144 | 189 |
Total assets | 214,666 | 189,942 |
Current liabilities: | ||
Accounts payable | 25,972 | 22,520 |
Accrued liabilities | 18,477 | 15,143 |
Operating lease liabilities, current | 1,208 | 0 |
Finance lease liabilities, current | 1,570 | 327 |
Income taxes payable | 425 | 0 |
Total current liabilities | 47,652 | 37,990 |
Operating lease liabilities, non-current | 892 | 0 |
Finance lease liabilities, non-current | 7,023 | 0 |
Other liability, non-current | 767 | 192 |
Total liabilities | 56,334 | 38,182 |
Commitments and contingencies (Note 17) | 0 | 0 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value per share, 310,000,000 shares authorized as of December 25, 2022 and December 26, 2021; 40,746,990 and 40,493,969 shares issued as of December 25, 2022 and December 26, 2021, respectively | 4 | 5 |
Additional paid-in capital | 155,716 | 149,000 |
Retained earnings | 4,159 | 2,746 |
Accumulated other comprehensive loss | (1,547) | (281) |
Total stockholders’ equity attributable to Vital Farms, Inc. stockholders | 158,332 | 151,470 |
Noncontrolling interests | 0 | 115 |
Total stockholders’ equity | 158,332 | 151,585 |
Total liabilities, redeemable noncontrolling interest, redeemable convertible preferred stock and stockholders’ equity | 214,666 | 189,942 |
Variable Interest Entity, Primary Beneficiary | ||
Current liabilities: | ||
Redeemable noncontrolling interest | $ 0 | $ 175 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 25, 2022 | Dec. 26, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 310,000,000 | 310,000,000 |
Common stock, shares issued | 40,746,990 | 40,493,969 |
Common stock, shares outstanding | 40,746,990 | 40,493,969 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Income Statement [Abstract] | |||
Net revenue | $ 362,050 | $ 260,901 | $ 214,280 |
Cost of goods sold | 252,606 | 178,002 | 139,752 |
Gross profit | 109,444 | 82,899 | 74,528 |
Operating expenses: | |||
Selling, general and administrative | 77,236 | 57,868 | 47,396 |
Shipping and distribution | 30,104 | 24,979 | 14,904 |
Total operating expenses | 107,340 | 82,847 | 62,300 |
Income from operations | 2,104 | 52 | 12,228 |
Interest expense | (114) | (52) | (488) |
Interest income | 992 | 381 | 97 |
Other income (expense), net | (151) | (27) | (183) |
Total other income (expense), net | 727 | 302 | (574) |
Net income before income taxes | 2,831 | 354 | 11,654 |
Income tax provision (benefit) | 1,601 | (2,028) | 2,770 |
Net income | 1,230 | 2,382 | 8,884 |
Less: Net (loss) income attributable to noncontrolling interests | (21) | (47) | 84 |
Net income attributable to Vital Farms, Inc. common stockholders | $ 1,251 | $ 2,429 | $ 8,800 |
Earnings Per Share | |||
Basic: | $ 0.03 | $ 0.06 | $ 0.31 |
Diluted: | $ 0.03 | $ 0.06 | $ 0.27 |
Weighted average common shares outstanding: | |||
Weighted average common shares outstanding - basic | 40,648,592 | 40,027,278 | 28,667,264 |
Diluted: | 43,469,586 | 43,321,733 | 32,914,653 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,230 | $ 2,382 | $ 8,884 |
Other comprehensive loss | |||
Unrealized net holding loss on available-for-sale debt securities, net of deferred tax benefit of $383, $80 and $10 for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively | (1,266) | (250) | (31) |
Total comprehensive income | $ (36) | $ 2,132 | $ 8,853 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized holding loss on available-for-sale securities, tax | $ 383 | $ 80 | $ 10 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK , REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Variable Interest Entity, Primary Beneficiary | Initial Public Offering | Redeemable Convertible Preferred Stock | Redeemable Noncontrolling Interest Variable Interest Entity, Primary Beneficiary | Common Stock | Common Stock Initial Public Offering | Common Stock Employee Stock Purchase Plan | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Initial Public Offering | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss | Total Stockholders' Equity Attributable to Vital Farms, Inc. Stockholders | Total Stockholders' Equity Attributable to Vital Farms, Inc. Stockholders Initial Public Offering | Noncontrolling Interests |
Beginning balance at Dec. 29, 2019 | $ 8,638 | $ 3 | $ (16,276) | $ 19,593 | $ 5,239 | $ 8,559 | $ 79 | |||||||||
Beginning balance, shares at Dec. 29, 2019 | 8,192,876 | |||||||||||||||
Beginning balance at Dec. 29, 2019 | $ 23,036 | |||||||||||||||
Beginning balance at Dec. 29, 2019 | $ 175 | |||||||||||||||
Beginning balance, shares at Dec. 29, 2019 | 31,429,898 | (5,494,918) | ||||||||||||||
Issuance of common stock, net of issuance costs | $ 98,671 | $ 1 | $ 98,670 | $ 98,671 | ||||||||||||
Issuance of common stock, net of issuance costs, Shares | 5,040,323 | |||||||||||||||
Issuance of common stock upon conversion of preferred stock | 23,036 | $ 1 | 23,035 | 23,036 | ||||||||||||
Issuance of common stock upon conversion of preferred stock, Shares | (8,192,876) | |||||||||||||||
Issuance of common stock upon conversion of preferred stock | $ (23,036) | |||||||||||||||
Issuance of common stock upon conversion of preferred stock, Shares | 8,192,876 | |||||||||||||||
Exercise of warrant | 283 | 283 | 283 | |||||||||||||
Exercise of warrant, Shares | 196,800 | |||||||||||||||
Vesting of restricted stock, Shares | 3,097 | |||||||||||||||
Other comprehensive loss, net | (31) | $ (31) | (31) | |||||||||||||
Exercise of stock options | 221 | 221 | 221 | |||||||||||||
Exercise of stock options, Shares | 75,964 | |||||||||||||||
Stock-based compensation expense | 2,509 | 2,509 | 2,509 | |||||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | 83 | 83 | ||||||||||||||
Net income attributable to Vital Farms, Inc. stockholders -basic and diluted | 8,800 | 8,800 | 8,800 | |||||||||||||
Ending balance at Dec. 27, 2020 | 142,210 | $ 5 | $ (16,276) | 144,311 | 14,039 | (31) | 142,048 | 162 | ||||||||
Ending balance at Dec. 27, 2020 | 175 | |||||||||||||||
Ending balance, shares at Dec. 27, 2020 | 44,938,958 | (5,494,918) | ||||||||||||||
Vesting of restricted stock, Shares | 15,000 | |||||||||||||||
Retirement of treasury stock | $ 16,276 | (2,554) | (13,722) | |||||||||||||
Retirement of treasury stock, Shares | (5,494,918) | 5,494,918 | ||||||||||||||
Other comprehensive loss, net | (250) | (250) | (250) | |||||||||||||
Exercise of stock options | 2,803 | 2,803 | 2,803 | |||||||||||||
Exercise of stock options, Shares | 1,034,929 | |||||||||||||||
Stock-based compensation expense | 4,440 | 4,440 | 4,440 | |||||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | (47) | (47) | ||||||||||||||
Net income attributable to Vital Farms, Inc. stockholders -basic and diluted | 2,429 | 2,429 | 2,429 | |||||||||||||
Ending balance at Dec. 26, 2021 | 151,585 | $ 5 | 149,000 | 2,746 | (281) | 151,470 | 115 | |||||||||
Ending balance at Dec. 26, 2021 | $ 175 | 175 | ||||||||||||||
Ending balance, shares at Dec. 26, 2021 | 40,493,969 | |||||||||||||||
Issuance of common stock, net of issuance costs, Shares | 20,334 | |||||||||||||||
Vesting of restricted stock | (9) | (9) | (9) | |||||||||||||
Vesting of restricted stock, Shares | 51,852 | |||||||||||||||
Other comprehensive loss, net | (1,266) | (1,266) | (1,266) | |||||||||||||
Exercise of stock options | $ 685 | 685 | 685 | |||||||||||||
Exercise of stock options, Shares | 180,835 | 180,835 | ||||||||||||||
Stock-based compensation expense | $ 6,040 | 6,040 | 6,040 | |||||||||||||
Dissolution of noncontrolling interest | 67 | $ (175) | $ (1) | (1) | 68 | |||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | (21) | 162 | 162 | $ (183) | ||||||||||||
Net income attributable to Vital Farms, Inc. stockholders -basic and diluted | 1,251 | 1,251 | 1,251 | |||||||||||||
Ending balance at Dec. 25, 2022 | $ 158,332 | $ 4 | $ 155,716 | $ 4,159 | $ (1,547) | $ 158,332 | ||||||||||
Ending balance at Dec. 25, 2022 | $ 0 | |||||||||||||||
Ending balance, shares at Dec. 25, 2022 | 40,746,990 |
CONSOLIDATED STATEMENTS OF RE_2
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK , REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 27, 2020 USD ($) | |
Initial Public Offering | |
Issuance of common stock, issuance costs | $ 12,215 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 1,230 | $ 2,382 | $ 8,884 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 5,441 | 3,540 | 2,550 |
Amortization of right-of-use assets | 1,840 | ||
Amortization of available-for-sale debt securities | 711 | 1,301 | 210 |
Stock-based compensation expense | 6,040 | 4,440 | 2,509 |
Bad debt expense (recovery) | 430 | 73 | (108) |
(Decrease) increase in inventory provision | (330) | 224 | 16 |
Deferred taxes | 632 | (2,536) | 1,792 |
Other | 84 | 44 | (449) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (13,718) | (6,078) | (4,718) |
Inventories | (15,574) | 1,733 | 29 |
Income taxes receivable | 199 | 1,354 | 61 |
Prepaid expenses and other current assets | (271) | 426 | (2,255) |
Deposits and other assets | 45 | (46) | 11 |
Income taxes payable | 425 | ||
Accounts payable | 2,352 | 6,796 | 1,807 |
Accrued liabilities | 3,843 | 4,029 | 1,173 |
Operating lease liabilities | (1,477) | ||
Net cash (used in) provided by operating activities | (8,098) | 17,682 | 11,512 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (10,468) | (16,711) | (10,300) |
Purchases of leasehold improvements | (89) | ||
Purchases of available-for-sale debt securities | (33,817) | (51,688) | (77,202) |
Sales of available-for-sale debt securities | 0 | 1,436 | 4,504 |
Maturities and call redemptions of available-for-sale debt securities | 34,345 | 48,523 | 4,500 |
Proceeds from the sale of property, plant and equipment | 100 | ||
Dissolution of noncontrolling interest | (108) | ||
Repayment of notes receivable provided to related parties | 846 | ||
Net cash used in investing activities | (10,037) | (18,440) | (77,652) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock pursuant to the initial public offering, net of issuance costs | 99,671 | ||
Proceeds from borrowings under term loan | 5,000 | ||
Proceeds from borrowings under equipment loan | 1,461 | ||
Proceeds from Paycheck Protection Program loan | 2,593 | ||
Repayment of revolving line of credit | (1,325) | ||
Repayment of equipment loan | (2,015) | ||
Repayment of term loan | (8,245) | ||
Repayment of Paycheck Protection Program loan | (2,593) | ||
Payment of contingent consideration | (38) | (152) | (192) |
Principal payments under finance lease obligation | (554) | (471) | (449) |
Proceeds from exercise of stock options | 675 | 2,803 | 221 |
Proceeds from exercise of warrant | 283 | ||
Net cash provided by financing activities | 83 | 2,180 | 94,410 |
Net (decrease) increase in cash and cash equivalents | (18,052) | 1,422 | 28,270 |
Cash and cash equivalents at beginning of the period | 30,966 | 29,544 | 1,274 |
Cash and cash equivalents at end of the period | 12,914 | 30,966 | 29,544 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 114 | 43 | 414 |
Cash paid for income taxes | 99 | 102 | 2,214 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Purchases of property, plant and equipment included in accounts payable and accrued liabilities | $ 1,143 | $ 1,493 | $ 167 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 12 Months Ended |
Dec. 25, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Vital Farms, Inc. (the "Company," "we," "us" or "our") was incorporated in Delaware on June 6, 2013 and is headquartered in Austin, Texas. The Company packages, markets and distributes shell eggs, butter and other products. These products are sold under the trade names Vital Farms and RedHill Farms, primarily to retail and foodservice channels in the United States. Vital Farms of Missouri, LLC, Backyard Eggs, LLC, Barn Door Farms, LLC, Sagebrush Foodservice, LLC and Vital Farms, LLC were, as of the fiscal year ended December 25, 2022, all wholly owned subsidiaries of Vital Farms. Each such subsidiary (other than Vital Farms of Missouri, LLC) was dissolved during the fiscal quarter ending March 26, 2023. All significant intercompany transactions and balances have been eliminated in the audited consolidated financial statements. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Fiscal Year: The Company’s fiscal year ends on the last Sunday in December and contains either 52 or 53 weeks. Therefore, the financial results of certain 53-week years will not be exactly comparable to the prior and subsequent 52-week years. The fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 all contain operating results for 52 weeks. Forward Stock Split: In July 2020, the board of directors and the stockholders of the Company approved a 2.46 -for-1 forward stock split of the Company’s outstanding common stock and preferred stock, which was effected on July 22, 2020. Stockholders entitled to fractional shares as a result of the forward stock split received a cash payment in lieu of receiving fractional shares. All common stock, preferred stock, and per share information has been retroactively adjusted to give effect to this forward stock split for all periods presented. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities. There were no changes in the par values of the Company’s common stock and preferred stock as a result of the forward stock split. Initial Public Offering: In August 2020, the Company completed its initial public offering (“IPO”) of 10,699,573 shares of common stock at an offering price of $ 22.00 per share. The Company offered 5,040,323 shares of common stock and the selling stockholders offered an additional 5,659,250 shares of common stock, including the underwriter’s option to purchase up to an additional 1,395,596 shares of common stock from the selling stockholders. The Company received gross proceeds of approximately $ 110,887 before deducting underwriting discounts, commissions and offering related transaction costs; the Company did not receive any proceeds from the sale of shares by the selling stockholders. Upon the closing of the IPO in August 2020, all of the then-outstanding shares of preferred stock automatically converted into 8,192,876 shares of common stock on a one-for-one basis. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. The consolidated financial statements as of December 25, 2022, including share and per share amounts, include the effects of the IPO. Secondary Public Offering: In November 2020, the Company completed a secondary public offering of 5,000,000 shares of common stock from selling stockholders in which no proceeds from the sale of shares were received by the Company and the Company incurred $ 0.5 million of expenses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates principally include revenue recognition, determination of useful lives for property and equipment, trade spend accruals, goodwill, allowance for doubtful accounts, inventory obsolescence, stock option valuations, accrued liabilities and income taxes. Actual results could differ from those estimates. Concentrations of Credit Risk and Significant Customers: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments and accounts receivable. The Company maintains deposits with large financial institutions that the Company believes are of high credit quality. At times the Company’s cash and cash equivalents balances with individual banking institutions are in excess of federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents balances. As of December 25, 2022 and December 26, 2021, the Company had customers that individually represented 10% or more of the Company’s accounts receivable, net. During fiscal years 2022, 2021 and 2020 the Company also had customers that individually exceeded 10% or more of the Company’s net revenue. Significant customer information is presented below as follows: Net Revenue Net Revenue Net Revenue Accounts Receivable, Net Accounts Receivable, Net Customer A 26 % 18 % 15 % 23 % 19 % Customer B * 14 % 18 % * * Customer C * 10 % 12 % * * Customer D 11 % 12 % 13 % 12 % 13 % Customer E * * * 13 % 12 % * Revenue and/or accounts receivable was less than 10%. The increase in the percentage of net revenue for Customer A for fiscal 2022 is due a net shift in the Company’s distribution channels away from Customer B during the fiscal year ended December 26, 2021 . The decrease in percentage of net revenue for Customer C and D is due to shifts in the Company's distribution channels. Cash and Cash Equivalents: The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. As of December 25, 2022 , cash and cash equivalents consisted of cash on deposit with balances denominated in U.S. dollars and investments in money market funds. Investment Securities: The Company accounts for its investment securities in accordance with ASC 320, Investments-Debt and Equity Securities . The Company considers all of its debt securities for which there is a determinable fair market value, and there are no restrictions on the Company's ability to sell within the next 12 months, as available-for-sale. We classify these securities as current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, recorded in other comprehensive income until the security is settled or sold. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is recorded in interest income. The cost of securities sold is based on the specific identification method with realized gains and losses on the sale of debt securities and declines in value due to credit-related factors, reclassified out of accumulated other comprehensive income when sold and recorded in other income. Income tax effects related to realized gains and losses on available-for-sale securities are released from accumulated other comprehensive income quarterly with the recognition of the Company's tax provision. Interest and dividends on securities classified as available-for-sale are recorded in interest income. Variable Interest Entity: The Company consolidates all entities where a controlling financial interest exists. The Company has considered its relationships with a certain entity to determine whether the Company has a variable interest in that entity, and if so, whether the Company is the primary beneficiary of the relationship. GAAP requires variable interest entities (“VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest. Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The consolidation status of a VIE may change as a result of such reassessments. Changes in consolidation status are applied prospectively in accordance with GAAP. Segment Information: The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of evaluating financial performance and allocating resources. All of the Company’s long-lived assets and customers are located in the United States. Fair Value of Financial Instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. Accounts Receivable: Accounts receivable are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any anticipated losses on the accounts receivable balances and charged to the allowance for doubtful accounts. These losses have been immaterial to date. Subsequent recoveries, if any, are credited to the allowance. The allowance for doubtful accounts is evaluated on a regular basis by management and is based on the credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The Company generally does not have collateral for its receivables, but the Company does periodically evaluate the creditworthiness of its customers. Inventories: Inventories are stated at the lower of cost (determined under the first-in, first-out method) or net realizable value. In addition to product cost, inventory costs include expenditures such as in-bound shipping and handling and warehousing costs incurred in bringing the inventory to its existing condition and location. Inventory includes eggs and egg-related products, butter and butter-related products, packaging, feed, laying hens, pullets, and equipment parts. A reduction in the carrying value of an inventory item from cost to net realizable value is recorded in cost of goods sold with the offset to inventory. Any inventory that does not meet the quality control standards of the Company is separated and written down to its net realizable value. Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. The general range of useful lives of other property, plant and equipment is as follows: Estimated Useful Life Land N/A Land improvements 15 to 20 years Buildings and improvements 15 to 39 years Vehicles 5 years Machinery and equipment 2 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of lease term or 5 years When assets are sold or retired, the cost and related accumulated depreciation or amortization of assets disposed of are removed from the accounts, with any resulting gain or loss recorded in operations in the consolidated statements of operations. Normal repairs and maintenance costs are expensed as incurred to operations. Goodwill: Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually on the first day of the fourth fiscal quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s goodwill impairment test is performed at the enterprise level given the single reporting unit. The Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of the reporting unit is below its carrying amount. If the Company determines that it is more likely than not that the fair value of the reporting unit is below the carrying amount based on qualitative factors or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill assessment would be required. In the quantitative evaluation, the fair value of the reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value and a charge is reported as impairment of goodwill in the consolidated statements of operations. To date, the Company has not recorded any impairment charges associated with its goodwill. Impairment of Long-Lived Assets: The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects and the effects of obsolescence, demand, competition and other economic factors. The Company did no t recognize an impairment loss during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 . Contingent Consideration: In connection with the Company’s acquisition of certain assets of Heartland Eggs, LLC in 2014, the Company was required to make royalty payments to prior owners of certain assets of Heartland Eggs. The royalty payments were contingent on the Company’s future purchase of eggs from supplier contracts that were acquired in the certain assets of Heartland Eggs acquisition. The royalty payments were deemed to be contingent because the future egg purchases were not guaranteed, and the timing and amount of any such purchases were unknown. The fair value of the contingent consideration was determined at the acquisition date using unobservable inputs (Level 3 inputs). These inputs included projected financial information, market volatility, risk-adjusted discount rates and timing of contractual payments. Subsequent to the acquisition date, at each reporting date, the contingent consideration liability was remeasured to fair value with changes in fair value recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations. As of the second quarter of fiscal year 2022, this contingent liability was reduced to zero . Noncontrolling Interest: The Company recognizes noncontrolling interest related to VIEs, in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of operations. Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. Affiliate equity interests where the Company has certain rights to demand settlement are presented at their current redemption values, as redeemable noncontrolling interest in the consolidated balance sheet. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets. Income Taxes: Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements. In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized. The Company follows the provisions of the authoritative guidance from the Financial Accounting Standards Board (“FASB”) on accounting for uncertainty in income taxes. These provisions provide a comprehensive model for the recognition, measurement and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under these provisions, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. Assessing an uncertain tax position begins with the initial determination of the sustainability of the position and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed. Additionally, the Company must accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 25, 2022 and December 26, 2021 the Company had accrued interest and penalties related to uncertain tax positions of $ 85 and $ 0 . Net Income (Loss) per Share Attributable to Vital Farms, Inc. Common Stockholders: The Company applies the two-class method to compute basic and diluted net income (loss) per share attributable to the Company’s common stockholders when shares meet the definition of participating securities. The two-class method determines net income per share for each class of the Company’s common stock and Preferred Stock according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between the Company’s common stock and Preferred Stock based upon their respective rights to share in the earnings as if all income for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the Preferred Stock does not have a contractual obligation to share in the Company’s losses. Basic net income per share attributable to the Company’s stockholders is computed by dividing net income by the weighted-average number of shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares of the Company’s common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company unless inclusion of such shares would be anti-dilutive. For periods in which the Company reports net losses, diluted net loss per common share attributable to the Company’s common stockholders is the same as basic net loss, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Revenue Recognition: The Company generates revenue primarily through sales of products to its customers, which include natural channel retailers, mainstream channel retailers and foodservice customers. The Company sells its products to customers on a purchase-order basis. Revenue is recognized when control of the product is transferred to the customer and the related performance obligation is satisfied, which typically occurs upon delivery of the product to the customer, for an amount that reflects the net consideration the Company expects to receive in exchange for delivering the product. We offer sales incentives through various programs to customers and allow deductions from our customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site. The cost associated with promotions and chargebacks is estimated and recorded as a reduction in revenue and is recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of this cost therefore requires management judgement regarding the volume of promotional offers that will be redeemed. Differences between estimated cost and actual redemptions are recognized as a change in management estimate in a subsequent period. In many cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer arrangements and related incentives have a duration of less than one year. Amounts billed and due from customers are short term in nature and are classified as receivables since payments are unconditional and only the passage of time is required before payments are due. Treasury Stock: The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company’s common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares). Shipping and Distribution: The Company’s shipping and distribution costs include costs incurred with third-party carriers to transport products to customers and salaries and overhead costs related to activities to prepare the Company’s products for shipment. Shipping and distribution costs were $ 30,104 , $ 24,979 , and $ 14,904 during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, respectively. Freight-in costs are included within Cost of Goods Sold and were $ 9,610 , $ 7,623 , and $ 5,126 during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 , respectively. Stock-Based Compensation: The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards, over the requisite service period, which is generally the vesting period of the respective award. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing valuation model, which requires inputs based on certain subjective assumptions, including the fair market value of the Company’s common stock, expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Advertising and Promotion Expenses: Advertising and promotion expenses consist primarily of production costs and the costs to communicate the advertisements to promote and market the Company’s products. Production costs such as idea development, artwork, audio and video crews and other up-front development costs are expensed the first time the associated advertising campaign is launched or aired. The costs to communicate the advertisements such as airtime and distribution costs are expensed as incurred. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company incurred advertising and promotion expenses of approximately $ 13,301 , $ 11,469 , and $ 9,815 , respectively. Emerging Growth Company Status: The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. The Company elected to use the extended transition period for complying with the adoption of new or revised accounting standards, and, as a result of this election, the Company’s financial statements may not be comparable to companies that comply with public company effective dates. Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) and also issued subsequent amendments to the initial guidance, ASU 2017-13, ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20, ASU 2019-01, ASU 2019-10, ASU 2020-02, and ASU 2020-05 (collectively, “Topic 842”). The guidance in Topic 842 supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statement of operations. An entity may adopt the guidance either (1) retrospectively to each prior reporting period presented in the financial statements with a cumulative-effect adjustment recognized at the beginning of the earliest comparative period presented or (2) retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company adopted Topic 842 as of the beginning of the period of adoption, December 27, 2021, and has not applied the new standard to comparative periods presented. To reduce the burden of adoption and ongoing compliance with Topic 842, a number of practical expedients and policy elections are available under the new guidance. The Company elected the "package of practical expedients" permitted under the transition guidance, which among other things, did not require reassessment of whether contracts entered into prior to adoption are or contain leases, and allowed carryforward of the historical lease classification for existing leases. The Company has not elected to adopt the “hindsight” practical expedient, and therefore will measure the right-of-use (“ROU”) assets and lease liabilities using the remaining portion of the lease term at adoption on December 27, 2021. The Company made an accounting policy election under Topic 842 not to recognize ROU assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease (or December 27, 2021 for existing leases upon the adoption of Topic 842). The Company’s recognized ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date, which are reduced by any lease incentives. Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the Consumer Price Index measured by the U.S. Bureau of Labor Statistics). Subsequent index changes and other periodic market-rate adjustments to base rent are recorded as variable lease expense during the period in which they are incurred. Residual value guarantees or payments for terminating the lease are included in the lease payments only when it is probable they will be incurred. The Company has made an accounting policy election to account for lease and non-lease components in its contracts as a single lease component for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred. As an emerging growth company, the Company uses its lease-specific collateralized incremental borrowing rate to determine the present value of lease payments at lease commencement or upon the adoption of Topic 842. The adoption of the new lease standard had an immaterial impact on our consolidated net earnings and consolidated cash flows and did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of Topic 842 as of December 27, 2021, resulted in the recording of right-of-use assets and lease liabilities of $ 4.1 million and $ 3.8 million, respectively. Recently Issued Accounting Pronouncements Not Yet Adopted: In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, and ASU 2020-03 (collectively, “Topic 326”), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Topic 326 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For non-public companies, Topic 326 is effective for years beginning after December 15, 2022, including interim periods within those years. The Company expects to adopt Topic 326 on December 26, 2022. The Company is currently evaluating the impact of its pending adoption of Topic 326 on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for years beginning after December 15, 2021, and interim periods within years beginning after December 15, 2022. The Company expects to adopt ASU 2019-12 on December 26, 2022. Although the Company is currently evaluating the impact of the adoption of ASU 2019-12, the Company does not expect it to have a material impact on its consolidated financial statements. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 25, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | 3. Investment Securities The following table summarizes the Company’s available-for-sale investment securities as of December 25, 2022: Amortized Cost Unrealized Losses Fair Value U.S. Corporate Bonds and U.S. Dollar $ 66,658 $ ( 1,996 ) $ 64,662 U.S. Treasury 1,176 ( 24 ) 1,152 Total $ 67,834 $ ( 2,020 ) $ 65,814 The following table summarizes the Company’s available-for-sale investment securities as of December 26, 2021: Amortized Cost Unrealized Losses Fair Value U.S. Corporate Bonds and U.S. Dollar $ 64,816 $ ( 364 ) $ 64,452 Commercial Paper 2,999 — 2,999 U.S. Treasury 1,177 ( 7 ) 1,170 Total $ 68,992 $ ( 371 ) $ 68,621 For the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, proceeds from the sale of available-for-sale securities were $ 0 , $ 1,436 , and $ 4,504 , respectively. Realized gains and losses on the sale of available-for-sale securities were not material for the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020. Net unrealized holding losses for the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, were $ 1,745 , $ 384 , and $ 41 , before tax, respectively. During the fiscal year ended December 25, 2022, the unrealized losses in our U.S. corporate bond portfolio consist of losses on 93 diversified issuances with credit ratings from BBB to AAA. As of December 25, 2022, there are no individual bonds with unrealized losses exceeding $ 92 , and 44 issuances have been in a loss position greater than 12 months with aggregate unrealized losses of $ 1,136 . The decline in fair value has resulted primarily from rising interest rates over the last 12 months and the Company does not believe there has been any significant decline in the creditworthiness of the issuers. The Company also does not believe it is likely that the bonds will be called early given the current interest rate environment, and it does not have current liquidity needs that would necessitate a sale of the investments prior to maturity. Therefore, the Company has no t recorded an allowance for credit losses on the investment securities as of December 25, 2022. Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Contractual maturities of investment securities as of December 25, 2022 are as follows: Amortized Cost Fair Value Due within one year $ 25,291 $ 24,816 Due in 1-5 years 42,543 40,998 Total available-for-sale $ 67,834 $ 65,814 The following tables present information about the Company's financial assets measured at fair value on a recurring basis for the periods presented: Fair Value Measurements as of December 25, 2022, Using: Level 1 Level 2 Level 3 Total Assets: U.S. Corporate Bonds and U.S. Dollar $ — $ 64,662 $ — $ 64,662 Money Market 6,740 — — 6,740 U.S. Treasury — 1,152 — 1,152 Total assets measured at fair value $ 6,740 $ 65,814 $ — $ 72,554 Fair Value Measurements as of December 26, 2021, Using: Level 1 Level 2 Level 3 Total Assets: U.S. Corporate Bonds and U.S. Dollar $ — $ 64,452 $ — $ 64,452 Commercial Paper — 2,999 — 2,999 Money Market 20,101 — — 20,101 U.S. Treasury — 1,170 — 1,170 Total assets measured at fair value $ 20,101 $ 68,621 $ — $ 88,722 During the fiscal years ended December 25, 2022 and December 26, 2021 , there were no transfers between fair value measurement levels. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition The following table summarizes the Company’s net revenue by primary product for the periods presented: Fiscal Year Ended December 25, December 26, December 27, Net Revenue: Egg and egg-related products $ 339,214 $ 239,967 $ 196,695 Butter and butter-related products 22,836 20,934 17,585 Net Revenue $ 362,050 $ 260,901 $ 214,280 Net revenue is primarily generated from the sale of eggs and butter. The Company's product offerings include shell eggs, hard-boiled eggs, liquid whole eggs, butter (including stick butter and spreadable tub butter) and ghee. The Company's previous convenient breakfast product line (including egg bites and egg-based breakfast bars) was discontinued in 2022. The fiscal year ended December 27, 2020 includes revenue totaling $ 624 resulting from the reduction of a sales promotion incentive settled in Q2 2020 that related to a prior year’s gross sales. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 25, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable, net was $ 40,227 and $ 26,938 as of December 25, 2022 and December 26, 2021, respectively. As of December 25, 2022 and December 26, 2021, the Company recorded an allowance for doubtful accounts of $ 699 and $ 269 , respectively. Changes in the allowance for doubtful accounts were as follows: Allowance for As of December 29, 2019 $ ( 304 ) Provisions Charged to Operating Results ( 217 ) Account Write-off and Recoveries, net 325 As of December 27, 2020 $ ( 196 ) Provisions Charged to Operating Results ( 184 ) Account Write-off and Recoveries, net 111 As of December 26, 2021 $ ( 269 ) Provisions Charged to Operating Results ( 752 ) Account Write-off and Recoveries, net 322 As of December 25, 2022 $ ( 699 ) |
Inventories
Inventories | 12 Months Ended |
Dec. 25, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventory consisted of the following as of the periods presented: December 25, December 26, Eggs and egg-related products $ 13,675 $ 5,850 Butter and butter-related products 5,718 2,359 Packaging 5,452 2,166 Pullets 981 267 Other 1,121 731 Reserve for inventory obsolescence ( 98 ) ( 428 ) Inventories $ 26,849 $ 10,945 On a periodic basis, the Company compares the amount of inventory on hand with its latest forecasted requirement to determine whether charges for excess or obsolete inventory reserves are required. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 25, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 7. Property, Plant and Equipment Property, plant and equipment consisted of the following as of the periods presented: December 25, December 26, Land $ 552 $ 525 Land improvements 835 — Buildings and improvements 29,667 14,214 Vehicles 894 695 Machinery and equipment 34,978 15,523 Leasehold improvements 919 830 Furniture and fixtures 685 503 Construction in progress 3,312 21,164 71,842 53,454 Less: Accumulated depreciation and amortization ( 12,687 ) ( 8,846 ) Property, plant and equipment, net $ 59,155 $ 44,608 During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, depreciation and amortization of property, plant and equipment was approximately $ 5,441 , $ 3,540 , and $ 2,550 , respectively. |
Leases
Leases | 12 Months Ended |
Dec. 25, 2022 | |
Leases [Abstract] | |
Leases | 8. Leases The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Under Topic 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset. The Company leases office facilities, warehouses, office equipment and vehicles for delivery of products under lease agreements with initial terms approximating one to five years . In addition, substantially all the Company’s long-term supply contracts with farms contain components that meet the definition of embedded leases within the scope of Topic 842, Leases. These arrangements convey to the Company the right to control implicitly identified property, plant and equipment as it takes substantially all the utility generated by these assets over the term of the arrangements at a variable price. The initial term of these supply agreements ranges from one to seven years. As total purchase commitments contained in these arrangements are variable, the amounts attributable to the lease components are contingent rentals; there are no minimum lease payments associated with these long-term supply contracts. As the classification and timing of recognition of costs attributable to the eggs and embedded cost of the lease rentals are identical, the Company does not allocate the total purchase cost of eggs between the cost of the eggs and the embedded cost of the lease rentals or distinguish between them in its accounting records. The Company records the total purchase cost of eggs, which includes costs associated with the eggs and the corresponding cost of embedded lease rentals from the same arrangement, into inventory. These costs are expensed to cost of goods sold when the associated eggs are sold to customers and are also reported as part of the Company's variable lease cost. For the fiscal year ended December 25, 2022, these costs totaled $ 144 million. The Company's office lease for our corporate headquarters facility in Austin, Texas includes an option to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to five years . In addition, certain leases contain termination options, where the rights to terminate are held by the Company, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that the Company will exercise that option. As of December 25, 2022, it is not reasonably certain that the Company will exercise the right to extend its office lease and therefore, the Company has not included the extended term in the calculation of its ROU assets or liabilities. The Company’s leases do not contain any material restrictive covenants or residual value guarantees. Operating lease cost is recognized on a straight-line basis over the lease term and is classified within cost of goods sold and selling, general and administrative cost in the consolidated statement of operations for the fiscal year ended December 25, 2022. Finance lease cost is recognized as amortization expense for ROU assets and interest expense associated with finance lease liabilities. Amortization expense associated with the Company's finance leases during the fiscal year ended December 25, 2022 was $ 439 and is recorded within cost of goods sold and selling, general and administrative costs in the consolidated statement of operations. The components of lease cost consisted of the following for the periods presented: December 25, December 26, Operating lease cost $ 1,445 $ — Finance lease cost - amortization of right-of-use assets 439 — Finance lease cost - interest on lease liabilities 87 28 Short-term lease cost 67 — Variable lease cost 2,967 — Variable lease cost - long-term supply contracts 143,696 — Total lease cost $ 148,701 $ 28 Supplemental balance sheet information related to leases is as follows: As of December 25, 2022 As of December 26, 2021 Operating Leases Operating lease right-of-use assets $ 1,895 $ — Operating lease liabilities, current $ 1,208 $ — Operating lease liabilities, non-current 892 — Total operating lease liabilities $ 2,100 $ — Finance Leases Property, plant and equipment, net $ 8,659 $ 876 Finance lease liabilities, current $ 1,570 $ 327 Finance lease liabilities, non-current 7,023 — Total finance lease liabilities $ 8,593 $ 327 As of December 25, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 2.18 4.85 Weighted-average discount rate 3.32 % 6.34 % Future undiscounted cash flows are as follows: As of December 25, 2022 Operating Leases Finance Leases 2023 $ 1,254 $ 2,059 2024 471 2,059 2025 338 2,059 2026 115 2,059 2027 — 1,711 Thereafter — — Total lease payments 2,178 9,947 Less imputed interest ( 78 ) ( 1,354 ) Total present value of lease liabilities $ 2,100 $ 8,593 Supplemental cash flow information related to leases is as follows: Cash paid for amounts included in measurement of lease liabilities: Fiscal Year Ended December 25, December 26, Operating cash outflows - payments on operating leases $ 1,477 $ — Operating cash outflows - interest payments on finance leases $ 87 $ 28 Financing cash outflows - principal payments on finance leases $ 554 $ 471 Right-of-use assets obtained in exchange for new lease obligations: As of December 25, 2022 As of December 26, 2021 Operating leases $ — $ — Finance leases 8,931 — |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 25, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 9. Accrued Liabilities Accrued liabilities consisted of the following as of the periods presented: December 25, December 26, Accrued employee related costs $ 7,453 $ 3,039 Accrued promotions and customer deductions 4,414 3,599 Accrued distribution fees and freight 2,351 3,875 Accrued marketing and broker commissions 1,598 769 Accrued purchases of inventory 1,349 1,197 Accrued professional fees 761 344 Accrued property, plant and equipment 153 1,258 Other 398 1,062 Accrued liabilities $ 18,477 $ 15,143 |
Product Exit Costs
Product Exit Costs | 12 Months Ended |
Dec. 25, 2022 | |
Restructuring and Related Activities [Abstract] | |
Product Exit Costs | 10. Product Exit Costs During the fiscal year ended December 25, 2022, the Company made the determination to exit its convenient breakfast product category due to a shift in the Company's focus to product categories that are core to its operations. Charges incurred in connection with these product exits were substantially complete by December 25, 2022. Due to the relatively short term over which the charges will ultimately be settled, the Company believes the actual charges as shown below approximate fair value. The following table summarizes the activity related to the exit of the Company's convenient breakfast products during the fiscal year ended December 25, 2022: For the Fiscal Year Ended December 25, 2022 Description Statement of Operations Charges Incurred Amounts Paid or Settled Amounts Released as Unutilized Ending Liability Balance Contract terminations Selling, general and administrative $ 1,126 $ ( 1,126 ) $ — $ — Inventory obsolescence Cost of goods sold 749 ( 749 ) — — Customer allowances Net revenue 146 ( 111 ) ( 35 ) — Asset write-downs Cost of goods sold 119 — — 119 Co-manufacturer charges Cost of goods sold 135 ( 135 ) — — Asset disposals Selling, general and administrative 66 ( 66 ) — — Total $ 2,341 $ ( 2,187 ) $ ( 35 ) $ 119 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 25, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 11. Long-Term Debt In October 2017, the Company entered into a credit facility agreement with PNC Bank, National Association (the “Credit Facility”) that initially included a $ 4.7 million term a loan, a $ 10.0 million revolving line of credit and an equipment loan with a maximum borrowing capacity of $ 1.5 million. Subsequently, the terms of the Credit Facility were modified at various times between fiscal 2018 and fiscal 2022 . Such amendments (i) amended various definitions, (ii) waived a technical default in May 2020 which was triggered by exceeding the capital expenditure limit, (iii) increased borrowing capacity and (iv) extended the maturity date. The Ninth Amendment to the Credit Facility in April 2021 eliminated the term loan and equipment loan. The Tenth Amendment to the Credit Agreement in December 2022 modified certain covenants related to commodity hedging, consented to the dissolution of immaterial subsidiaries and implemented changes related to the discontinuation of LIBOR. The revolving line of credit matures in April 2024 . The maximum borrowing capacity under the Revolving Line of Credit is $ 20.0 million . Interest on borrowings under the revolving line of credit, as well as loan advances thereunder, accrues at a rate, at the Company’s election at the time of borrowing, equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York plus 2.00 % or (ii) 1.00 % plus the alternate base rate, as defined in the Credit Facility. In April 2020, all then-outstanding amounts under the revolving line of credit were repaid and the interest rate applicable to borrowings under the revolving line of credit was 4.5 %. As of December 25, 2022 , there were no outstanding amounts under the revolving line of credit. The Credit Facility is secured by all of the Company’s assets (other than real property and certain other property excluded pursuant to the terms of the Credit Facility) and requires the Company to maintain three financial covenants: a fixed charge coverage ratio, a leverage ratio and a minimum tangible net worth requirement. The Credit Facility also contains various covenants relating to limitations on indebtedness, acquisitions, mergers, consolidations and the sale of properties and liens. As a result of the limitations contained in the Credit Facility, certain of the net assets on the Company’s consolidated balance sheet as of December 25, 2022 are restricted in use. Vital Farms’ wholly owned subsidiaries are non-operating and do not hold any assets or liabilities; therefore, these subsidiaries have no restricted net assets within the meaning of Rule 4-08(e)(3) or Rule 12-04 of Regulation S-X. The Credit Facility also contains other customary covenants, representations and events of default. As of December 25, 2022 , the Company was in compliance with all covenants under the Credit Facility. Debt issuance costs associated with the Credit Facility are reflected as a reduction of the carrying value of long-term debt on the Company’s consolidated balance sheets and are being amortized to interest expense over the term of the Credit Facility using the effective interest method. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company recognized interest expense of $ 0 , $ 52 , and $ 488 , respectively, which includes amortization of debt issuance costs of $ 0 , $ 0 , and $ 68 , respectively. Paycheck Protection Program Loan: In April 2020, the Company received loan proceeds of approximately $ 2,593 under the Paycheck Protection Program (“PPP”) (the “PPP Loan”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, provides for loans to qualified businesses for amounts up to 2.5 times of the average monthly payroll expenses for the qualifying business. The Company elected to not use any of the PPP Loan proceeds of $ 2,593 and repaid the entire balance of the PPP Loan in April 2020. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 25, 2022 | |
Equity [Abstract] | |
Redeemable Convertible Preferred Stock | 12. Redeemable Convertible Preferred Stock Upon the closing of the IPO in August 2020, all of the then-outstanding shares of Preferred Stock automatically converted into 8,192,876 shares of common stock on a one-for-one basis. Subsequent to the closing of the IPO, there were no shares of Preferred Stock outstanding. As of December 25, 2022 , the Company’s amended and restated certificate of incorporation authorized the Company to issue 10,000,000 shares, par value $ 0.0001 per share, of preferred stock, in one or more series and with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors (collectively, the “Preferred Stock”). As of December 25, 2022 , there were no shares of Preferred Stock issued or outstanding. |
Common Stock and Common Stock W
Common Stock and Common Stock Warrant | 12 Months Ended |
Dec. 25, 2022 | |
Equity [Abstract] | |
Common Stock and Common Stock Warrant | 13. Common Stock and Common Stock Warrant Common Stock: As of December 25, 2022 , Vital Farms’ amended and restated certificate of incorporation authorized the Company to issue 310,000,000 shares of common stock, par value $ 0.0001 per share, of which 40,746,990 shares were issued and outstanding. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of Preferred Stock, if any. Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders . Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Company’s board of directors, if any, subject to the preferential dividend rights of Preferred Stock, if any. No cash dividends had been declared or paid during the periods presented. As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following: December 25, December 26, Options to purchase common stock 4,634,205 4,927,033 Restricted stock units 505,504 107,867 Shares available for grant under the 2020 Equity Incentive 11,503,459 9,993,187 Total 16,643,168 15,028,087 Common Stock Warrant: In June 2015, the Company issued a warrant to the guarantor of a line of credit agreement that was entered into in 2015. During 2017 the line of credit matured and was repaid in full. The guarantor was also the Company’s Chief Executive Officer. The warrant provided for the purchase of a total of 196,800 shares of Vital Farms common stock at an exercise price of $ 1.43 per share. The warrant was scheduled to expire on the earlier of June 12, 2020 or the completion of the IPO. At the time of issuance, the Company classified the warrant as equity in its consolidated balance sheets. On June 9, 2020, the guarantor exercised the warrant to purchase 196,800 shares of Vital Farms’ common stock resulting in net proceeds of approximately $ 282 . Treasury Stock : In August 2021, the Company retired an aggregate of 5,494,918 shares of its common stock held in treasury. Upon retirement, the shares were redesignated as authorized but unissued shares of the Company’s common stock. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 25, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 14. Stock-Based Compensation During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company recognized stock-based compensation expense of $ 6,040 , $ 4,440 , and $ 2,509 , respectively. The related tax benefit from stock-based compensation during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, was $ 970 , $ 3,872 , and $ 85 , respectively. The Company measures compensation expense for all stock-based awards based on the estimated fair values on the date of the grant. Stock options generally vest ratably over three years from the date of grant and expire 10 years from the date of grant. Restricted stock awards generally vest ratably over three years from the date of grant and contain no other service or performance conditions. The Company's policy is to recognize stock-based compensation expense on a straight-line basis over the requisite service or vesting period. Forfeitures for stock options and restricted stock awards are recognized as they occur. The Company records stock-based compensation expense in selling, general and administrative expenses and cost of goods sold. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, $ 188 , $ 133 , and $ 0 of stock-based compensation expense was recognized in cost of goods sold, respectively. Stock Option Activity The following table summarizes the Company's stock option activity since December 26, 2021: Number of Weighted- Weighted- Aggregate Outstanding as of December 26, 2021 4,927,033 $ 9.25 $ 48,222 Granted 159,270 $ 12.47 Exercised ( 180,835 ) $ 3.14 $ 1,827 Cancelled/Forfeited ( 271,263 ) $ 13.31 $ 1,082 Outstanding as of December 25, 2022 4,634,205 $ 9.35 5.6 $ 38,522 Options exercisable as of December 25, 2022 3,117,209 $ 6.64 4.7 $ 31,626 Options vested and expected to vest as of December 25, 2022 4,633,974 $ 9.35 5.6 $ 38,520 We estimate the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which we believe the option will remain outstanding. We elected to use the simplified method to determine the expected option term, for all periods presented, which is the average of the option’s vesting and contractual term. Our computation of expected volatility is based on the historical volatility of selected comparable publicly traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant. The following table summarizes the valuation model assumptions, fair values and intrinsic values of stock options during the fiscal years indicated: December 25, December 26, December 27, Expected term (in years) 6.0 6.0 - 6.5 5.2 - 6.5 Expected stock price volatility 27.6 % - 28.6 % 28.5 % - 29.4 % 29.1 % - 42.9 % Risk-free interest rate 1.64 % - 4.16 % 0.57 % - 1.36 % 0.34 % - 0.49 % Expected dividend yield 0 % 0 % 0 % Weighted average fair value at grant date $ 3.97 $ 7.31 $ 6.83 Fair value of stock options vested $ 3,245 $ 2,694 $ 3,320 Intrinsic value of stock options exercised $ 1,827 $ 20,343 $ 1,022 Proceeds from stock options exercised $ 568 $ 2,776 $ 221 As of December 25, 2022, total unrecognized stock-based compensation expense related to unvested stock options was $ 5,507 , which is expected to be recognized over a weighted-average period of 1.93 years. Restricted Stock Unit Activity The following table summarizes the restricted stock units ("RSU") activity since December 26, 2021: Number of Weighted- Unvested as of December 26, 2021 107,867 $ 27.53 Granted 515,191 $ 12.28 Vested ( 56,922 ) $ 27.17 Forfeited ( 60,632 ) $ 14.57 Unvested as of December 25, 2022 505,504 $ 13.58 As of December 25, 2022, total unrecognized stock-based compensation expense related to the Company's unvested RSU activity was $ 4,732 , which is expected to be recognized over a weighted-average period of 1.97 years. The fair value of RSU shares vested during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 was $ 1,549 , $ 564 , and $ 118 , respectively. 2020 Equity Incentive Plan: In July 2020, the Company’s board of directors adopted the Vital Farms, Inc. 2020 Equity Incentive Plan (“2020 Incentive Plan”), which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2020 Incentive Plan was 8,595,871 shares. The 2020 Incentive Plan provides that the number of shares reserved and available for issuance under the 2020 Incentive Plan will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 4 % of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s board of directors . As of December 25, 2022, 9,824,414 shares were available for future grants of the Company's common stock, which excludes 1,629,884 shares of common stock that were automatically added to the available reserve on January 1, 2023. Employee Stock Purchase Plan: In July 2020, the Company's board of directors adopted the 2020 Employee Stock Purchase Plan (“2020 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. The 2020 ESPP authorizes the initial issuance of up to 900,000 shares of the Company’s common stock to certain eligible employees or, as designated by the board of directors, employees of a related company. The 2020 ESPP provides that the number of shares reserved and available for issuance under the 2020 ESPP will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to the lesser of (i) 1 % of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii) 900,000 , or such lesser number of shares as determined by the Vital Farms board of directors. As of December 25, 2022, 1,679,045 shares of the Company's common stock were available for future issuance, which excludes 407,471 shares of common stock that were automatically added to the available reserve on January 1, 2023. In November 2021, the Company's board of directors authorized an offering period commencing on March 1, 2022 and ending on May 15, 2022. The Company's board of directors has authorized subsequent additional six-month offering periods, with the most recent beginning on November 16, 2022. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes For the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the provision for income taxes consisted of the following: December 25, December 26, December 27, Current: Federal $ 384 $ 225 $ 587 State 539 282 412 Deferred: Federal 803 ( 2,164 ) 1,677 State ( 125 ) ( 371 ) 94 Provision (benefit) for income taxes $ 1,601 $ ( 2,028 ) $ 2,770 The Company’s income before income taxes is entirely derived from domestic sources for all periods presented. The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows: December 25, December 26, December 27, Provision at statutory rate of 21 % $ 594 $ 74 $ 2,446 State income taxes 51 ( 416 ) 300 Stock-based compensation 225 ( 2,846 ) 373 Non-deductible costs 279 12 211 Charitable deduction ( 87 ) ( 88 ) ( 206 ) Change in deferred tax asset valuation allowance ( 53 ) 774 ( 138 ) Revisions to prior year 212 — — Changes in uncertain tax positions 347 — — Other, net 33 462 ( 216 ) Provision (benefit) for income taxes $ 1,601 $ ( 2,028 ) $ 2,770 Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities at December 25, 2022 and December 26, 2021 were comprised of the following: December 25, December 26, Deferred tax assets: Accrued expenses $ 2,594 $ 1,383 Allowances and other reserves 171 212 Inventory 963 387 Net operating loss carryforwards 1,503 2,220 Charitable contributions 230 774 Stock-based compensation 1,046 460 Lease liability 2,624 — Other 581 90 Total deferred tax assets 9,712 5,526 Less: Valuation allowance — ( 774 ) Net deferred tax assets $ 9,712 $ 4,752 Deferred tax liabilities: Prepaid expenses $ 590 $ 784 Property and equipment 6,273 3,610 Operating and finance lease right of use assets 2,589 — Intangibles 430 279 Total deferred tax liabilities $ 9,882 $ 4,673 Net deferred tax assets (liabilities) $ ( 170 ) $ 79 A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered, including the Company’s current and past performance, the market environments in which the Company operates, the utilization of past tax credits, the length of carry back and carry forward periods and tax planning strategies that might be implemented. Management considered the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. The net change in the total valuation allowance for the fiscal year ended December 25, 2022 was a decrease of $ 774 . The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 25, 2022 and December 26, 2021 was as follows: December 25, December 26, Valuation allowance as of beginning of year $ 774 $ — Increases recorded to income tax provision — 774 Decreases recorded as benefit to income tax provision ( 774 ) — Valuation allowance as of end of year $ — $ 774 As of December 25, 2022, the Company had unrecognized tax benefits, which represent the aggregate tax effect of the differences between tax return positions and the benefits recognized in the Company’s financial statements. At December 25, 2022, all of the unrecognized tax benefits, if recognized, would affect the Company’s annual effective tax rate. The unrecognized tax benefits are long-term in nature and we do not anticipate the balance of the unrecognized tax benefits to change in the next 12 months. The following table reflects changes in gross unrecognized tax benefits: December 25, December 26, Gross tax contingencies as of beginning of year $ 219 $ 219 Increase in gross tax contingencies 320 — Decrease in gross tax contingencies ( 28 ) — Gross tax contingencies as of end of year $ 511 $ 219 As of December 25, 2022, the Company had federal net operating loss carryforwards of $ 6.7 million which can be carried forward indefinitely. The Company also had state net operating loss carryforwards of $ 0.4 million which begin to expire in 2022 . The Company files a U.S. federal income tax return, as well as income tax returns in various states. Tax years 2018 and forward remain open to examination by the tax jurisdictions to which the Company is subject, with certain state taxing jurisdictions being open back to 2017. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 25, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 16. Net Income Per Share Basic and diluted net income per share attributable to the Company’s common stockholders were calculated as follows: Fiscal Year Ended December 25, December 26, December 27, Numerator: Net income $ 1,230 $ 2,382 $ 8,884 Less: Net (loss) income attributable to noncontrolling interests ( 21 ) ( 47 ) 84 Net income attributable to Vital Farms, Inc. stockholders’ — basic and diluted $ 1,251 $ 2,429 $ 8,800 Denominator: Weighted average common shares outstanding — basic 40,648,592 40,027,278 28,667,264 Weighted average effect of potentially dilutive securities: Effect of potentially dilutive stock options 2,745,161 3,290,615 4,142,947 Effect of potentially dilutive common stock warrants — — 82,993 Effect of potentially dilutive restricted stock units 64,455 3,840 21,449 Effect of potentially dilutive common stock issuable pursuant to the ESPP 11,378 — — Weighted average common shares outstanding — diluted 43,469,586 43,321,733 32,914,653 Net income per share attributable to Vital Farms, Inc. stockholders Basic $ 0.03 $ 0.06 $ 0.31 Diluted $ 0.03 $ 0.06 $ 0.27 The company excluded the following shares of common stock, outstanding at each period end, from the computation of diluted net income per share attributable to Vital Farms, Inc. common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Fiscal Year Ended December 25, December 26, December 27, Options to purchase common stock 27,954 4,817 826,883 Unvested restricted stock 45,386 18,927 — 73,340 23,744 826,883 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 25, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies Supplier Contracts: The Company purchases its egg inventories under long-term supply contracts with farms. Purchase commitments contained in these arrangements are variable dependent upon the quantity of eggs produced by the farms. Accordingly, there are no estimable future purchase commitments associated with these supplier contracts and there are no minimum payments associated with these long-term supply contracts. The Company records the total cost of eggs into inventory and they are expensed to cost of goods sold when the associated eggs are sold to customers and are also reported as part of our variable lease cost. Indemnification Agreements: In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of December 25, 2022, the Company has not incurred any material costs as a result of such indemnifications. Litigation: The Company is subject to various claims and contingencies which are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. The liability recorded includes probable and estimable legal costs incurred to date and future legal costs to the point in the legal matter where the Company believes a conclusion to the matter will be reached. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 25, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 18. Related Party Transactions Guarantor Warrant: The Company’s executive chairperson and former Chief Executive Officer (the “Guarantor”) guaranteed the Company’s obligations under a line of credit agreement that was entered into in 2015 and that matured and was repaid in full in 2017. The Company issued a warrant to purchase 196,800 shares of the Company’s common stock at an exercise price of $ 1.43 to the Guarantor in exchange for his guaranty. See Note 13 , “Common Stock and Common Stock Warrant.” The warrant expired on the earlier of June 12, 2020 or the completion of the IPO. On June 9, 2020, the Guarantor exercised the warrant to purchase 196,800 shares of the Company’s common stock resulting in net proceeds of approximately $ 282 . Ovabrite: Ovabrite, Inc., a Delaware corporation (“Ovabrite”), has been deemed a related party because its founders were stockholders of the Company, with the majority stockholder in Ovabrite also serving as the Company’s executive chairperson and member of the Company’s board of directors. Since Ovabrite’s incorporation in November 2016, the Company has been deemed to have had a variable interest in Ovabrite, and Ovabrite has been deemed to have been a VIE, of which the Company has been the primary beneficiary. Accordingly, the Company has consolidated the results of Ovabrite since November 2016. All significant intercompany transactions between the Company and Ovabrite have been eliminated in consolidation. The results of operations of the Ovabrite entity were immaterial for the fiscal year ended December 25, 2022. Effective August 30, 2022, Ovabrite’s board of directors and the holders of the majority of its outstanding capital stock consented to dissolving the entity, and a Certificate of Dissolution was filed with the Delaware Secretary of State. As of December 25, 2022 , Ovabrite was in the process of winding up its business activities and liquidating its remaining assets. The derecognition of the Company's investment in Ovabrite resulted in a loss of $ 122 , included in other income (expense), net in the Company's condensed consolidated statements of operations and a related-party receivable of $ 552 , included in prepaid expenses and other current assets in the Company's consolidated balance sheets for and as of the fiscal year ended December 25, 2022. Notes Receivable from Related Parties: In February 2019, the Company issued promissory notes in the aggregate amount of $ 4,000 to its founder and a former member of the board of directors that is currently a board observer, both of whom are also stockholders of the Company. The promissory notes bore monthly interest at LIBOR plus 2.0 % and were to mature on the earlier of August 7, 2022 or the date of closing of a liquidity transaction which is defined as a merger, consolidation or sale of the Company’s assets or such time as the notes would be prohibited by the Sarbanes-Oxley Act (“Promissory Note Maturity Date”). All unpaid principal and accrued and unpaid interest was due on the Promissory Note Maturity Date. The borrower has the ability to prepay all or any portion of the promissory note at any time without premium or penalty. In November 2019, $ 3,200 of the promissory notes were repaid. In August 2020, the remaining $ 800 of the promissory notes were repaid. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company recorded interest income of $ 0 , $ 0 , and $ 97 , respectively, in connection with the promissory notes. Sandpebble Builders Preconstruction, Inc.: The Company utilizes Sandpebble Builders Preconstruction, Inc. and Sandpebble South, Inc. (collectively “Sandpebble”) for project management and related services associated with the construction and expansion of our egg processing facilities, including site selection, project management and related services for our potential future egg packing facility. The owner and principal of Sandpebble is the father of an executive of the Company. In connection with the services described above, the Company paid Sandpebble $ 962 , $ 1,037 , and $ 842 during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, respectively. Amounts paid to Sandpebble are included in property, plant and equipment, net, selling, general and administrative costs, accounts payable and accrued liabilities in the audited condensed consolidated balance sheets. Whole Foods Market, Inc: A member of the Company’s board of directors was, until February 2022, an executive vice president and senior advisor at Whole Foods. The Company serves the majority of its natural channel retail customers through food distributors, such as US Foods Inc. and United Natural Foods, Inc., who purchase, store, sell and deliver products to Whole Foods. While the Company cannot precisely determine its specific revenue attributable to Whole Foods, it is a significant customer. |
401(k) Savings Plan
401(k) Savings Plan | 12 Months Ended |
Dec. 25, 2022 | |
Retirement Benefits [Abstract] | |
401(K) Savings Plan | 19. 401(k) Savings Plan The Company established a defined contribution savings plan in 2017 under Section 401(k) of the Internal Revenue Code of 1986, as amended. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Company’s board of directors. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company made contributions totaling $ 861 , $ 651 , and $ 401 respectively, to the plan. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 25, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events On February 4, 2023, the Company’s board of directors appointed Thilo Wrede as Chief Financial Officer and principal financial officer of the Company, effective on or about March 15, 2023 (the “Transition Date”). Mr. Wrede will replace Bo Meissner, who will step down from his role as Chief Financial Officer and principal financial officer, effective as of the Transition Date. As of the Transition Date, Mr. Meissner will no longer be an officer, executive or agent of the Company but will remain with the Company through April 30, 2023 to ensure a smooth leadership transition, before transitioning to a non-employee advisory role through July 31, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates principally include revenue recognition, determination of useful lives for property and equipment, trade spend accruals, goodwill, allowance for doubtful accounts, inventory obsolescence, stock option valuations, accrued liabilities and income taxes. Actual results could differ from those estimates. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments and accounts receivable. The Company maintains deposits with large financial institutions that the Company believes are of high credit quality. At times the Company’s cash and cash equivalents balances with individual banking institutions are in excess of federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents balances. As of December 25, 2022 and December 26, 2021, the Company had customers that individually represented 10% or more of the Company’s accounts receivable, net. During fiscal years 2022, 2021 and 2020 the Company also had customers that individually exceeded 10% or more of the Company’s net revenue. Significant customer information is presented below as follows: Net Revenue Net Revenue Net Revenue Accounts Receivable, Net Accounts Receivable, Net Customer A 26 % 18 % 15 % 23 % 19 % Customer B * 14 % 18 % * * Customer C * 10 % 12 % * * Customer D 11 % 12 % 13 % 12 % 13 % Customer E * * * 13 % 12 % * Revenue and/or accounts receivable was less than 10%. The increase in the percentage of net revenue for Customer A for fiscal 2022 is due a net shift in the Company’s distribution channels away from Customer B during the fiscal year ended December 26, 2021 . The decrease in percentage of net revenue for Customer C and D is due to shifts in the Company's distribution channels. |
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. As of December 25, 2022 , cash and cash equivalents consisted of cash on deposit with balances denominated in U.S. dollars and investments in money market funds. |
Investment Securities | Investment Securities: The Company accounts for its investment securities in accordance with ASC 320, Investments-Debt and Equity Securities . The Company considers all of its debt securities for which there is a determinable fair market value, and there are no restrictions on the Company's ability to sell within the next 12 months, as available-for-sale. We classify these securities as current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, recorded in other comprehensive income until the security is settled or sold. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is recorded in interest income. The cost of securities sold is based on the specific identification method with realized gains and losses on the sale of debt securities and declines in value due to credit-related factors, reclassified out of accumulated other comprehensive income when sold and recorded in other income. Income tax effects related to realized gains and losses on available-for-sale securities are released from accumulated other comprehensive income quarterly with the recognition of the Company's tax provision. Interest and dividends on securities classified as available-for-sale are recorded in interest income. |
Variable Interest Entity | Variable Interest Entity: The Company consolidates all entities where a controlling financial interest exists. The Company has considered its relationships with a certain entity to determine whether the Company has a variable interest in that entity, and if so, whether the Company is the primary beneficiary of the relationship. GAAP requires variable interest entities (“VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest. Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The consolidation status of a VIE may change as a result of such reassessments. Changes in consolidation status are applied prospectively in accordance with GAAP. |
Segment Information | Segment Information: The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of evaluating financial performance and allocating resources. All of the Company’s long-lived assets and customers are located in the United States. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. |
Accounts Receivable | Accounts Receivable: Accounts receivable are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any anticipated losses on the accounts receivable balances and charged to the allowance for doubtful accounts. These losses have been immaterial to date. Subsequent recoveries, if any, are credited to the allowance. The allowance for doubtful accounts is evaluated on a regular basis by management and is based on the credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The Company generally does not have collateral for its receivables, but the Company does periodically evaluate the creditworthiness of its customers. |
Inventories | Inventories: Inventories are stated at the lower of cost (determined under the first-in, first-out method) or net realizable value. In addition to product cost, inventory costs include expenditures such as in-bound shipping and handling and warehousing costs incurred in bringing the inventory to its existing condition and location. Inventory includes eggs and egg-related products, butter and butter-related products, packaging, feed, laying hens, pullets, and equipment parts. A reduction in the carrying value of an inventory item from cost to net realizable value is recorded in cost of goods sold with the offset to inventory. Any inventory that does not meet the quality control standards of the Company is separated and written down to its net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. The general range of useful lives of other property, plant and equipment is as follows: Estimated Useful Life Land N/A Land improvements 15 to 20 years Buildings and improvements 15 to 39 years Vehicles 5 years Machinery and equipment 2 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of lease term or 5 years When assets are sold or retired, the cost and related accumulated depreciation or amortization of assets disposed of are removed from the accounts, with any resulting gain or loss recorded in operations in the consolidated statements of operations. Normal repairs and maintenance costs are expensed as incurred to operations. |
Goodwill | Goodwill: Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually on the first day of the fourth fiscal quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s goodwill impairment test is performed at the enterprise level given the single reporting unit. The Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of the reporting unit is below its carrying amount. If the Company determines that it is more likely than not that the fair value of the reporting unit is below the carrying amount based on qualitative factors or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill assessment would be required. In the quantitative evaluation, the fair value of the reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value and a charge is reported as impairment of goodwill in the consolidated statements of operations. To date, the Company has not recorded any impairment charges associated with its goodwill. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects and the effects of obsolescence, demand, competition and other economic factors. The Company did no t recognize an impairment loss during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 . |
Contingent Consideration | Contingent Consideration: In connection with the Company’s acquisition of certain assets of Heartland Eggs, LLC in 2014, the Company was required to make royalty payments to prior owners of certain assets of Heartland Eggs. The royalty payments were contingent on the Company’s future purchase of eggs from supplier contracts that were acquired in the certain assets of Heartland Eggs acquisition. The royalty payments were deemed to be contingent because the future egg purchases were not guaranteed, and the timing and amount of any such purchases were unknown. The fair value of the contingent consideration was determined at the acquisition date using unobservable inputs (Level 3 inputs). These inputs included projected financial information, market volatility, risk-adjusted discount rates and timing of contractual payments. Subsequent to the acquisition date, at each reporting date, the contingent consideration liability was remeasured to fair value with changes in fair value recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations. As of the second quarter of fiscal year 2022, this contingent liability was reduced to zero . |
Noncontrolling Interest | Noncontrolling Interest: The Company recognizes noncontrolling interest related to VIEs, in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of operations. Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. Affiliate equity interests where the Company has certain rights to demand settlement are presented at their current redemption values, as redeemable noncontrolling interest in the consolidated balance sheet. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets. |
Income Taxes | Income Taxes: Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements. In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized. The Company follows the provisions of the authoritative guidance from the Financial Accounting Standards Board (“FASB”) on accounting for uncertainty in income taxes. These provisions provide a comprehensive model for the recognition, measurement and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under these provisions, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. Assessing an uncertain tax position begins with the initial determination of the sustainability of the position and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed. Additionally, the Company must accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 25, 2022 and December 26, 2021 the Company had accrued interest and penalties related to uncertain tax positions of $ 85 and $ 0 . |
Net Income (Loss) per Share Attributable to Vital Farms, Inc. Common Stockholders | Net Income (Loss) per Share Attributable to Vital Farms, Inc. Common Stockholders: The Company applies the two-class method to compute basic and diluted net income (loss) per share attributable to the Company’s common stockholders when shares meet the definition of participating securities. The two-class method determines net income per share for each class of the Company’s common stock and Preferred Stock according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between the Company’s common stock and Preferred Stock based upon their respective rights to share in the earnings as if all income for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the Preferred Stock does not have a contractual obligation to share in the Company’s losses. Basic net income per share attributable to the Company’s stockholders is computed by dividing net income by the weighted-average number of shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares of the Company’s common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company unless inclusion of such shares would be anti-dilutive. For periods in which the Company reports net losses, diluted net loss per common share attributable to the Company’s common stockholders is the same as basic net loss, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Revenue Recognition | Revenue Recognition: The Company generates revenue primarily through sales of products to its customers, which include natural channel retailers, mainstream channel retailers and foodservice customers. The Company sells its products to customers on a purchase-order basis. Revenue is recognized when control of the product is transferred to the customer and the related performance obligation is satisfied, which typically occurs upon delivery of the product to the customer, for an amount that reflects the net consideration the Company expects to receive in exchange for delivering the product. We offer sales incentives through various programs to customers and allow deductions from our customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site. The cost associated with promotions and chargebacks is estimated and recorded as a reduction in revenue and is recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of this cost therefore requires management judgement regarding the volume of promotional offers that will be redeemed. Differences between estimated cost and actual redemptions are recognized as a change in management estimate in a subsequent period. In many cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer arrangements and related incentives have a duration of less than one year. Amounts billed and due from customers are short term in nature and are classified as receivables since payments are unconditional and only the passage of time is required before payments are due. |
Treasury Stock | Treasury Stock: The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company’s common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares). |
Shipping and Distribution | Shipping and Distribution: The Company’s shipping and distribution costs include costs incurred with third-party carriers to transport products to customers and salaries and overhead costs related to activities to prepare the Company’s products for shipment. Shipping and distribution costs were $ 30,104 , $ 24,979 , and $ 14,904 during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, respectively. Freight-in costs are included within Cost of Goods Sold and were $ 9,610 , $ 7,623 , and $ 5,126 during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 , respectively. |
Stock-Based Compensation | Stock-Based Compensation: The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards, over the requisite service period, which is generally the vesting period of the respective award. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing valuation model, which requires inputs based on certain subjective assumptions, including the fair market value of the Company’s common stock, expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. |
Advertising and Promotion Expenses | Advertising and Promotion Expenses: Advertising and promotion expenses consist primarily of production costs and the costs to communicate the advertisements to promote and market the Company’s products. Production costs such as idea development, artwork, audio and video crews and other up-front development costs are expensed the first time the associated advertising campaign is launched or aired. The costs to communicate the advertisements such as airtime and distribution costs are expensed as incurred. During the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the Company incurred advertising and promotion expenses of approximately $ 13,301 , $ 11,469 , and $ 9,815 , respectively. |
Emerging Growth Company Status | Emerging Growth Company Status: The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. The Company elected to use the extended transition period for complying with the adoption of new or revised accounting standards, and, as a result of this election, the Company’s financial statements may not be comparable to companies that comply with public company effective dates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) and also issued subsequent amendments to the initial guidance, ASU 2017-13, ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20, ASU 2019-01, ASU 2019-10, ASU 2020-02, and ASU 2020-05 (collectively, “Topic 842”). The guidance in Topic 842 supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statement of operations. An entity may adopt the guidance either (1) retrospectively to each prior reporting period presented in the financial statements with a cumulative-effect adjustment recognized at the beginning of the earliest comparative period presented or (2) retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company adopted Topic 842 as of the beginning of the period of adoption, December 27, 2021, and has not applied the new standard to comparative periods presented. To reduce the burden of adoption and ongoing compliance with Topic 842, a number of practical expedients and policy elections are available under the new guidance. The Company elected the "package of practical expedients" permitted under the transition guidance, which among other things, did not require reassessment of whether contracts entered into prior to adoption are or contain leases, and allowed carryforward of the historical lease classification for existing leases. The Company has not elected to adopt the “hindsight” practical expedient, and therefore will measure the right-of-use (“ROU”) assets and lease liabilities using the remaining portion of the lease term at adoption on December 27, 2021. The Company made an accounting policy election under Topic 842 not to recognize ROU assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease (or December 27, 2021 for existing leases upon the adoption of Topic 842). The Company’s recognized ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date, which are reduced by any lease incentives. Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the Consumer Price Index measured by the U.S. Bureau of Labor Statistics). Subsequent index changes and other periodic market-rate adjustments to base rent are recorded as variable lease expense during the period in which they are incurred. Residual value guarantees or payments for terminating the lease are included in the lease payments only when it is probable they will be incurred. The Company has made an accounting policy election to account for lease and non-lease components in its contracts as a single lease component for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred. As an emerging growth company, the Company uses its lease-specific collateralized incremental borrowing rate to determine the present value of lease payments at lease commencement or upon the adoption of Topic 842. The adoption of the new lease standard had an immaterial impact on our consolidated net earnings and consolidated cash flows and did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of Topic 842 as of December 27, 2021, resulted in the recording of right-of-use assets and lease liabilities of $ 4.1 million and $ 3.8 million, respectively. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted: In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, and ASU 2020-03 (collectively, “Topic 326”), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Topic 326 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For non-public companies, Topic 326 is effective for years beginning after December 15, 2022, including interim periods within those years. The Company expects to adopt Topic 326 on December 26, 2022. The Company is currently evaluating the impact of its pending adoption of Topic 326 on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for years beginning after December 15, 2021, and interim periods within years beginning after December 15, 2022. The Company expects to adopt ASU 2019-12 on December 26, 2022. Although the Company is currently evaluating the impact of the adoption of ASU 2019-12, the Company does not expect it to have a material impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Customers Information | Significant customer information is presented below as follows: Net Revenue Net Revenue Net Revenue Accounts Receivable, Net Accounts Receivable, Net Customer A 26 % 18 % 15 % 23 % 19 % Customer B * 14 % 18 % * * Customer C * 10 % 12 % * * Customer D 11 % 12 % 13 % 12 % 13 % Customer E * * * 13 % 12 % * Revenue and/or accounts receivable was less than 10%. |
Schedule of Useful Lives of Property Plant and Equipment | The general range of useful lives of other property, plant and equipment is as follows: Estimated Useful Life Land N/A Land improvements 15 to 20 years Buildings and improvements 15 to 39 years Vehicles 5 years Machinery and equipment 2 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of lease term or 5 years |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-sale Investment Securities | The following table summarizes the Company’s available-for-sale investment securities as of December 25, 2022: Amortized Cost Unrealized Losses Fair Value U.S. Corporate Bonds and U.S. Dollar $ 66,658 $ ( 1,996 ) $ 64,662 U.S. Treasury 1,176 ( 24 ) 1,152 Total $ 67,834 $ ( 2,020 ) $ 65,814 The following table summarizes the Company’s available-for-sale investment securities as of December 26, 2021: Amortized Cost Unrealized Losses Fair Value U.S. Corporate Bonds and U.S. Dollar $ 64,816 $ ( 364 ) $ 64,452 Commercial Paper 2,999 — 2,999 U.S. Treasury 1,177 ( 7 ) 1,170 Total $ 68,992 $ ( 371 ) $ 68,621 |
Summary of Contractual Maturities of Investment Securities | Contractual maturities of investment securities as of December 25, 2022 are as follows: Amortized Cost Fair Value Due within one year $ 25,291 $ 24,816 Due in 1-5 years 42,543 40,998 Total available-for-sale $ 67,834 $ 65,814 |
Schedule of Financial Assets Measured at Fair Value | The following tables present information about the Company's financial assets measured at fair value on a recurring basis for the periods presented: Fair Value Measurements as of December 25, 2022, Using: Level 1 Level 2 Level 3 Total Assets: U.S. Corporate Bonds and U.S. Dollar $ — $ 64,662 $ — $ 64,662 Money Market 6,740 — — 6,740 U.S. Treasury — 1,152 — 1,152 Total assets measured at fair value $ 6,740 $ 65,814 $ — $ 72,554 Fair Value Measurements as of December 26, 2021, Using: Level 1 Level 2 Level 3 Total Assets: U.S. Corporate Bonds and U.S. Dollar $ — $ 64,452 $ — $ 64,452 Commercial Paper — 2,999 — 2,999 Money Market 20,101 — — 20,101 U.S. Treasury — 1,170 — 1,170 Total assets measured at fair value $ 20,101 $ 68,621 $ — $ 88,722 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Revenue by Primary Product | The following table summarizes the Company’s net revenue by primary product for the periods presented: Fiscal Year Ended December 25, December 26, December 27, Net Revenue: Egg and egg-related products $ 339,214 $ 239,967 $ 196,695 Butter and butter-related products 22,836 20,934 17,585 Net Revenue $ 362,050 $ 260,901 $ 214,280 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Receivables [Abstract] | |
Schedule of Changes in Allowance for Doubtful Accounts Receivable | Changes in the allowance for doubtful accounts were as follows: Allowance for As of December 29, 2019 $ ( 304 ) Provisions Charged to Operating Results ( 217 ) Account Write-off and Recoveries, net 325 As of December 27, 2020 $ ( 196 ) Provisions Charged to Operating Results ( 184 ) Account Write-off and Recoveries, net 111 As of December 26, 2021 $ ( 269 ) Provisions Charged to Operating Results ( 752 ) Account Write-off and Recoveries, net 322 As of December 25, 2022 $ ( 699 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of the periods presented: December 25, December 26, Eggs and egg-related products $ 13,675 $ 5,850 Butter and butter-related products 5,718 2,359 Packaging 5,452 2,166 Pullets 981 267 Other 1,121 731 Reserve for inventory obsolescence ( 98 ) ( 428 ) Inventories $ 26,849 $ 10,945 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following as of the periods presented: December 25, December 26, Land $ 552 $ 525 Land improvements 835 — Buildings and improvements 29,667 14,214 Vehicles 894 695 Machinery and equipment 34,978 15,523 Leasehold improvements 919 830 Furniture and fixtures 685 503 Construction in progress 3,312 21,164 71,842 53,454 Less: Accumulated depreciation and amortization ( 12,687 ) ( 8,846 ) Property, plant and equipment, net $ 59,155 $ 44,608 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Cost | The components of lease cost consisted of the following for the periods presented: December 25, December 26, Operating lease cost $ 1,445 $ — Finance lease cost - amortization of right-of-use assets 439 — Finance lease cost - interest on lease liabilities 87 28 Short-term lease cost 67 — Variable lease cost 2,967 — Variable lease cost - long-term supply contracts 143,696 — Total lease cost $ 148,701 $ 28 |
Summary of Cash Flow Information related to Leases | Supplemental cash flow information related to leases is as follows: Cash paid for amounts included in measurement of lease liabilities: Fiscal Year Ended December 25, December 26, Operating cash outflows - payments on operating leases $ 1,477 $ — Operating cash outflows - interest payments on finance leases $ 87 $ 28 Financing cash outflows - principal payments on finance leases $ 554 $ 471 Right-of-use assets obtained in exchange for new lease obligations: As of December 25, 2022 As of December 26, 2021 Operating leases $ — $ — Finance leases 8,931 — |
Summary of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: As of December 25, 2022 As of December 26, 2021 Operating Leases Operating lease right-of-use assets $ 1,895 $ — Operating lease liabilities, current $ 1,208 $ — Operating lease liabilities, non-current 892 — Total operating lease liabilities $ 2,100 $ — Finance Leases Property, plant and equipment, net $ 8,659 $ 876 Finance lease liabilities, current $ 1,570 $ 327 Finance lease liabilities, non-current 7,023 — Total finance lease liabilities $ 8,593 $ 327 As of December 25, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 2.18 4.85 Weighted-average discount rate 3.32 % 6.34 % |
Summary of Operating and Finance Leases Future Undiscounted Cash Flows | Future undiscounted cash flows are as follows: As of December 25, 2022 Operating Leases Finance Leases 2023 $ 1,254 $ 2,059 2024 471 2,059 2025 338 2,059 2026 115 2,059 2027 — 1,711 Thereafter — — Total lease payments 2,178 9,947 Less imputed interest ( 78 ) ( 1,354 ) Total present value of lease liabilities $ 2,100 $ 8,593 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of the periods presented: December 25, December 26, Accrued employee related costs $ 7,453 $ 3,039 Accrued promotions and customer deductions 4,414 3,599 Accrued distribution fees and freight 2,351 3,875 Accrued marketing and broker commissions 1,598 769 Accrued purchases of inventory 1,349 1,197 Accrued professional fees 761 344 Accrued property, plant and equipment 153 1,258 Other 398 1,062 Accrued liabilities $ 18,477 $ 15,143 |
Product Exit Costs (Tables)
Product Exit Costs (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Restructuring and Related Activities [Abstract] | |
Summary of Activity Related to Exit of Breakfast Products | The following table summarizes the activity related to the exit of the Company's convenient breakfast products during the fiscal year ended December 25, 2022: For the Fiscal Year Ended December 25, 2022 Description Statement of Operations Charges Incurred Amounts Paid or Settled Amounts Released as Unutilized Ending Liability Balance Contract terminations Selling, general and administrative $ 1,126 $ ( 1,126 ) $ — $ — Inventory obsolescence Cost of goods sold 749 ( 749 ) — — Customer allowances Net revenue 146 ( 111 ) ( 35 ) — Asset write-downs Cost of goods sold 119 — — 119 Co-manufacturer charges Cost of goods sold 135 ( 135 ) — — Asset disposals Selling, general and administrative 66 ( 66 ) — — Total $ 2,341 $ ( 2,187 ) $ ( 35 ) $ 119 |
Common Stock and Common Stock_2
Common Stock and Common Stock Warrant (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following: December 25, December 26, Options to purchase common stock 4,634,205 4,927,033 Restricted stock units 505,504 107,867 Shares available for grant under the 2020 Equity Incentive 11,503,459 9,993,187 Total 16,643,168 15,028,087 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the Company's stock option activity since December 26, 2021: Number of Weighted- Weighted- Aggregate Outstanding as of December 26, 2021 4,927,033 $ 9.25 $ 48,222 Granted 159,270 $ 12.47 Exercised ( 180,835 ) $ 3.14 $ 1,827 Cancelled/Forfeited ( 271,263 ) $ 13.31 $ 1,082 Outstanding as of December 25, 2022 4,634,205 $ 9.35 5.6 $ 38,522 Options exercisable as of December 25, 2022 3,117,209 $ 6.64 4.7 $ 31,626 Options vested and expected to vest as of December 25, 2022 4,633,974 $ 9.35 5.6 $ 38,520 |
Summary of Assumptions, Fair Values and Intrinsic Values of Stock Options | We estimate the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which we believe the option will remain outstanding. We elected to use the simplified method to determine the expected option term, for all periods presented, which is the average of the option’s vesting and contractual term. Our computation of expected volatility is based on the historical volatility of selected comparable publicly traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant. The following table summarizes the valuation model assumptions, fair values and intrinsic values of stock options during the fiscal years indicated: December 25, December 26, December 27, Expected term (in years) 6.0 6.0 - 6.5 5.2 - 6.5 Expected stock price volatility 27.6 % - 28.6 % 28.5 % - 29.4 % 29.1 % - 42.9 % Risk-free interest rate 1.64 % - 4.16 % 0.57 % - 1.36 % 0.34 % - 0.49 % Expected dividend yield 0 % 0 % 0 % Weighted average fair value at grant date $ 3.97 $ 7.31 $ 6.83 Fair value of stock options vested $ 3,245 $ 2,694 $ 3,320 Intrinsic value of stock options exercised $ 1,827 $ 20,343 $ 1,022 Proceeds from stock options exercised $ 568 $ 2,776 $ 221 |
Summary of Restricted Stock Unit Activity | The following table summarizes the restricted stock units ("RSU") activity since December 26, 2021: Number of Weighted- Unvested as of December 26, 2021 107,867 $ 27.53 Granted 515,191 $ 12.28 Vested ( 56,922 ) $ 27.17 Forfeited ( 60,632 ) $ 14.57 Unvested as of December 25, 2022 505,504 $ 13.58 As of December 25, 2022, total unrecognized stock-based compensation expense related to the Company's unvested RSU activity was $ 4,732 , which is expected to be recognized over a weighted-average period of 1.97 years. The fair value of RSU shares vested during the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020 was $ 1,549 , $ 564 , and $ 118 , respectively. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | For the fiscal years ended December 25, 2022, December 26, 2021, and December 27, 2020, the provision for income taxes consisted of the following: December 25, December 26, December 27, Current: Federal $ 384 $ 225 $ 587 State 539 282 412 Deferred: Federal 803 ( 2,164 ) 1,677 State ( 125 ) ( 371 ) 94 Provision (benefit) for income taxes $ 1,601 $ ( 2,028 ) $ 2,770 |
Reconciliation of Federal Statutory Income Tax Provision | The Company’s income before income taxes is entirely derived from domestic sources for all periods presented. The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows: December 25, December 26, December 27, Provision at statutory rate of 21 % $ 594 $ 74 $ 2,446 State income taxes 51 ( 416 ) 300 Stock-based compensation 225 ( 2,846 ) 373 Non-deductible costs 279 12 211 Charitable deduction ( 87 ) ( 88 ) ( 206 ) Change in deferred tax asset valuation allowance ( 53 ) 774 ( 138 ) Revisions to prior year 212 — — Changes in uncertain tax positions 347 — — Other, net 33 462 ( 216 ) Provision (benefit) for income taxes $ 1,601 $ ( 2,028 ) $ 2,770 |
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities at December 25, 2022 and December 26, 2021 were comprised of the following: December 25, December 26, Deferred tax assets: Accrued expenses $ 2,594 $ 1,383 Allowances and other reserves 171 212 Inventory 963 387 Net operating loss carryforwards 1,503 2,220 Charitable contributions 230 774 Stock-based compensation 1,046 460 Lease liability 2,624 — Other 581 90 Total deferred tax assets 9,712 5,526 Less: Valuation allowance — ( 774 ) Net deferred tax assets $ 9,712 $ 4,752 Deferred tax liabilities: Prepaid expenses $ 590 $ 784 Property and equipment 6,273 3,610 Operating and finance lease right of use assets 2,589 — Intangibles 430 279 Total deferred tax liabilities $ 9,882 $ 4,673 Net deferred tax assets (liabilities) $ ( 170 ) $ 79 |
Schedule of Deferred Tax Asset Valuation Allowance | The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 25, 2022 and December 26, 2021 was as follows: December 25, December 26, Valuation allowance as of beginning of year $ 774 $ — Increases recorded to income tax provision — 774 Decreases recorded as benefit to income tax provision ( 774 ) — Valuation allowance as of end of year $ — $ 774 |
Unrecognized Tax Benefits | The following table reflects changes in gross unrecognized tax benefits: December 25, December 26, Gross tax contingencies as of beginning of year $ 219 $ 219 Increase in gross tax contingencies 320 — Decrease in gross tax contingencies ( 28 ) — Gross tax contingencies as of end of year $ 511 $ 219 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share | Basic and diluted net income per share attributable to the Company’s common stockholders were calculated as follows: Fiscal Year Ended December 25, December 26, December 27, Numerator: Net income $ 1,230 $ 2,382 $ 8,884 Less: Net (loss) income attributable to noncontrolling interests ( 21 ) ( 47 ) 84 Net income attributable to Vital Farms, Inc. stockholders’ — basic and diluted $ 1,251 $ 2,429 $ 8,800 Denominator: Weighted average common shares outstanding — basic 40,648,592 40,027,278 28,667,264 Weighted average effect of potentially dilutive securities: Effect of potentially dilutive stock options 2,745,161 3,290,615 4,142,947 Effect of potentially dilutive common stock warrants — — 82,993 Effect of potentially dilutive restricted stock units 64,455 3,840 21,449 Effect of potentially dilutive common stock issuable pursuant to the ESPP 11,378 — — Weighted average common shares outstanding — diluted 43,469,586 43,321,733 32,914,653 Net income per share attributable to Vital Farms, Inc. stockholders Basic $ 0.03 $ 0.06 $ 0.31 Diluted $ 0.03 $ 0.06 $ 0.27 |
Schedule of Commom Shares Excluded from Computation of Diluted Earnings Per Share | The company excluded the following shares of common stock, outstanding at each period end, from the computation of diluted net income per share attributable to Vital Farms, Inc. common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Fiscal Year Ended December 25, December 26, December 27, Options to purchase common stock 27,954 4,817 826,883 Unvested restricted stock 45,386 18,927 — 73,340 23,744 826,883 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Jul. 22, 2020 | Nov. 30, 2020 USD ($) shares | Aug. 31, 2020 USD ($) $ / shares shares | Dec. 25, 2022 shares | Dec. 26, 2021 shares | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Date of incorporation | Jun. 06, 2013 | ||||
Forward stock split | 2.46-for-1 | ||||
Forward stock split conversion ratio | 2.46 | ||||
Common stock, shares issued | 40,746,990 | 40,493,969 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
IPO | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Shares issued | 10,699,573 | ||||
Share price | $ / shares | $ 22 | ||||
Common stock, shares issued | 5,040,323 | ||||
Additional common stock shares issued | 5,659,250 | ||||
Gross proceeds from sale of common stock | $ | $ 110,887,000 | ||||
Shares issued upon conversion of preferred stock | 8,192,876 | ||||
Preferred stock, shares outstanding | 0 | ||||
IPO | Maximum | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Additional common stock shares issued | 1,395,596 | ||||
Secondary Public Offering | |||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||
Shares issued | 5,000,000 | ||||
Gross proceeds from sale of common stock | $ | $ 0 | ||||
Stock issuance cost | $ | $ 500,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Significant Customers Information (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Net Revenue | Customer A | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 26% | 18% | 15% |
Net Revenue | Customer B | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 14% | 18% | |
Net Revenue | Customer C | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10% | 12% | |
Net Revenue | Customer D | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11% | 12% | 13% |
Accounts Receivable | Customer A | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 23% | 19% | |
Accounts Receivable | Customer D | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 12% | 13% | |
Accounts Receivable | Customer E | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 13% | 12% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||||
Dec. 25, 2022 USD ($) Segment | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | Jun. 26, 2022 USD ($) | Dec. 27, 2021 USD ($) | Dec. 29, 2019 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of reportable segment | Segment | 1 | |||||
Number of operating segment | Segment | 1 | |||||
Allowance for doubtful accounts | $ 699,000 | $ 269,000 | $ 196,000 | $ 304,000 | ||
Impairment of long-lived assets | 0 | 0 | 0 | |||
Contingent liability | $ 0 | |||||
Accrued interest or penalties on uncertain tax position | 85,000 | 0 | ||||
Shipping and distribution costs | 30,104,000 | 24,979,000 | 14,904,000 | |||
Cost of goods sold | 252,606,000 | 178,002,000 | 139,752,000 | |||
Marketing and advertising expense | 13,301,000 | 11,469,000 | 9,815,000 | |||
Right-of-use asset | 1,895,000 | 0 | ||||
Lease liability | 2,100,000 | |||||
ASU 2016-02 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Right-of-use asset | $ 4,100,000 | |||||
Lease liability | $ 3,800,000 | |||||
Freight | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cost of goods sold | $ 9,610,000 | $ 7,623,000 | $ 5,126,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Useful Lives of Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 25, 2022 | |
Land | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | N/A |
Land improvements | Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 15 years |
Land improvements | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 20 years |
Buildings and Improvements | Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 15 years |
Buildings and Improvements | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 39 years |
Vehicles | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 5 years |
Machinery and Equipment | Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 2 years |
Machinery and Equipment | Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 7 years |
Furniture and Fixtures | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | 5 years |
Leasehold Improvements | |
Summary Of Significant Accounting Policies [Line Items] | |
Property plant and equipment, estimated useful life | Lesser of lease term or 5 years |
Fair Value - Summary of Financi
Fair Value - Summary of Financial Liabilities Measured at Fair Value on a Recurring Basis (Details) | Jun. 26, 2022 USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Total liabilities measured at fair value | $ 0 |
Investment Securities - Summary
Investment Securities - Summary of Available-for-sale Investment Securities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 67,834 | $ 68,992 |
Unrealized Losses | (2,020) | (371) |
Fair Value | 65,814 | 68,621 |
US Corporate Bonds and US Denominated Foreign Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 66,658 | 64,816 |
Unrealized Losses | (1,996) | (364) |
Fair Value | 64,662 | 64,452 |
Commercial Paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 2,999 | |
Unrealized Losses | 0 | |
Fair Value | 2,999 | |
US Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 1,176 | 1,177 |
Unrealized Losses | (24) | (7) |
Fair Value | $ 1,152 | $ 1,170 |
Investment Securities - Additio
Investment Securities - Additional Information (Details) | 12 Months Ended | ||
Dec. 25, 2022 USD ($) Security Position | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | |
Debt Securities, Available-for-Sale [Line Items] | |||
Proceeds from the sale of available-for-sale securities | $ 0 | $ 1,436,000 | $ 4,504,000 |
Aggregate unrealized losses | 0 | ||
Unrealized holding losses | 1,745,000 | 384,000 | $ 41,000 |
Unrealized Losses | 2,020,000 | 371,000 | |
Fair value liabilities transfers, Level 2 to Level 1 | $ 0 | 0 | |
US Corporate Bonds and US Denominated Foreign Bonds | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Number of Securities Issuances for unrealized losses | Security | 93 | ||
Unrealized Losses | $ 1,996,000 | $ 364,000 | |
Unrealized Loss Position greater than 12 months | Position | 44 | ||
Aggregate unrealized losses | $ 1,136,000 | ||
US Corporate Bonds and US Denominated Foreign Bonds | Maximum | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Unrealized Losses | $ 92 |
Investment Securities - Summa_2
Investment Securities - Summary of Contractual Maturities of Investment Securities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Due within one year Amortized Cost | $ 25,291 | |
Due in 1-5 years Amortized Cost | 42,543 | |
Amortized Cost | 67,834 | $ 68,992 |
Due within one year Fair Value | 24,816 | |
Due in 1-5 years Fair Value | 40,998 | |
Total available-for-sale Fair Value | $ 65,814 |
Investment Securities - Schedul
Investment Securities - Schedule of Financial Assets Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | $ 72,554 | $ 88,722 |
US Corporate Bonds and US Denominated Foreign Bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 64,662 | 64,452 |
Money Market | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 6,740 | 20,101 |
US Treasury Securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 1,152 | 1,170 |
Commercial Paper [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 2,999 | |
Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 6,740 | 20,101 |
Level 1 | Money Market | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 6,740 | 20,101 |
Level 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 65,814 | 68,621 |
Level 2 | US Corporate Bonds and US Denominated Foreign Bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | 64,662 | 64,452 |
Level 2 | US Treasury Securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | $ 1,152 | 1,170 |
Level 2 | Commercial Paper [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets measured at fair value | $ 2,999 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Net Revenue by Primary Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Disaggregation Of Revenue [Line Items] | |||
Net revenue | $ 362,050 | $ 260,901 | $ 214,280 |
Eggs and Egg Related Products | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | 339,214 | 239,967 | 196,695 |
Butter and Butter Related Products | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenue | $ 22,836 | $ 20,934 | $ 17,585 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 27, 2020 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue resulting from reduction of sales promotion incentive related to prior year sales | $ 624 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | Dec. 29, 2019 |
Receivables [Abstract] | ||||
Accounts receivable, net | $ 40,227 | $ 26,938 | ||
Allowance for doubtful accounts | $ 699 | $ 269 | $ 196 | $ 304 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Receivables [Abstract] | |||
Allowance for doubtful accounts, Beginning balance | $ (269) | $ (196) | $ (304) |
Provisions Charged to Operating Results | (752) | (184) | (217) |
Account Write-off and Recoveries, net | 322 | 111 | 325 |
Allowance for doubtful accounts, Ending balance | $ (699) | $ (269) | $ (196) |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Inventory [Line Items] | ||
Reserve for inventory obsolescence | $ (98) | $ (428) |
Inventories | 26,849 | 10,945 |
Eggs and Egg Related Products | ||
Inventory [Line Items] | ||
Inventory gross | 13,675 | 5,850 |
Butter and Butter Related Products | ||
Inventory [Line Items] | ||
Inventory gross | 5,718 | 2,359 |
Packaging | ||
Inventory [Line Items] | ||
Inventory gross | 5,452 | 2,166 |
Pullets | ||
Inventory [Line Items] | ||
Inventory gross | 981 | 267 |
Other | ||
Inventory [Line Items] | ||
Inventory gross | $ 1,121 | $ 731 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 71,842 | $ 53,454 |
Less: Accumulated depreciation and amortization | (12,687) | (8,846) |
Property, plant and equipment, net | 59,155 | 44,608 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 552 | 525 |
Land improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 835 | 0 |
Buildings and Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 29,667 | 14,214 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 894 | 695 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 34,978 | 15,523 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 919 | 830 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 685 | 503 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,312 | $ 21,164 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Property Plant And Equipment [Line Items] | |||
Depreciation and amortization of property, plant and equipment | $ 5,441 | $ 3,540 | $ 2,550 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Variable lease costs | $ 144,000 |
Option to extend | The Company's office lease for our corporate headquarters facility in Austin, Texas includes an option to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to five years. |
Renewal term | 5 years |
Option to terminate | In addition, certain leases contain termination options, where the rights to terminate are held by the Company, the lessor, or both parties. |
Finance lease- amortization expense | $ 439 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Initial term of lease contract | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Initial term of lease contract | 5 years |
Leases - Schedule of Compenents
Leases - Schedule of Compenents of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,445 | |
Finance lease cost - amortization of right-of-use assets | 439 | |
Finance lease cost - interest on lease liabilities | 87 | $ 28 |
Short-term lease cost | 67 | |
Variable lease cost | 2,967 | |
Variable lease cost - long-term supply contracts | 143,696 | |
Total lease cost | $ 148,701 | $ 28 |
Leases - Summary of Cash Flow I
Leases - Summary of Cash Flow Information related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Leases [Abstract] | ||
Operating cash outflows - payments on operating leases | $ 1,477 | $ 0 |
Operating cash outflows - interest payments on finance leases | 87 | 28 |
Financing cash outflows - principal payments on finance leases | $ 554 | $ 471 |
Leases - Summary of Right-of-Us
Leases - Summary of Right-of-Use Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2022 USD ($) | |
Leases [Abstract] | |
Finance leases | $ 8,931 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 1,895 | $ 0 |
Operating lease liabilities, current | 1,208 | 0 |
Operating lease liabilities, non-current | 892 | 0 |
Total operating lease liabilities | 2,100 | |
Property, plant and equipment, net | 8,659 | 876 |
Finance lease liabilities, current | 1,570 | 327 |
Finance lease liabilities, non-current | 7,023 | 0 |
Total finance lease liabilities | $ 8,593 | $ 327 |
Weighted-average remaining lease term (years) | 2 years 2 months 4 days | |
Weighted-average discount rate | 3.32% | |
Weighted-average remaining lease term (years) | 4 years 10 months 6 days | |
Weighted-average discount rate | 6.34% |
Leases - Summary of 0perating a
Leases - Summary of 0perating and Finance Leases Future Undiscounted to Leases (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Leases [Abstract] | ||
Operating leases 2023 | $ 1,254 | |
Operating leases 2024 | 471 | |
Operating leases 2025 | 338 | |
Operating leases 2026 | 115 | |
Operating lease, 2027 | 0 | |
Operating leases Thereafter | 0 | |
Total lease payments | 2,178 | |
Less imputed interest | (78) | |
Total present value of lease liabilities | 2,100 | |
Finance leases 2023 | 2,059 | |
Finance leases 2024 | 2,059 | |
Finance leases 2025 | 2,059 | |
Finance leases 2026 | 2,059 | |
FinanceLease, 2027 | 1,711 | |
Finance leases Thereafter | 0 | |
Total lease payments | 9,947 | |
Less imputed interest | (1,354) | |
Total present value of lease liabilities | $ 8,593 | $ 327 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Payables and Accruals [Abstract] | ||
Accrued employee related costs | $ 7,453 | $ 3,039 |
Accrued promotions and customer deductions | 4,414 | 3,599 |
Accrued distribution fees and freight | 2,351 | 3,875 |
Accrued marketing and and broker commissions | 1,598 | 769 |
Accrued purchases of inventory | 1,349 | 1,197 |
Accrued professional fees | 761 | 344 |
Property, plant and equipment | 153 | 1,258 |
Other | 398 | 1,062 |
Accrued liabilities | $ 18,477 | $ 15,143 |
Product Exit Costs- Summary of
Product Exit Costs- Summary of Activity Related to Exit of Breakfast Products (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | $ 2,341 |
Amounts Paid or Settled | (2,187) |
Amounts Released as Unutilized | (35) |
Ending Liability Balance | 119 |
Net Revenue | Customer Allowances | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 146 |
Amounts Paid or Settled | (111) |
Amounts Released as Unutilized | (35) |
Ending Liability Balance | 0 |
Cost of Goods Sold | Inventory Obsolescence | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 749 |
Amounts Paid or Settled | (749) |
Amounts Released as Unutilized | 0 |
Ending Liability Balance | 0 |
Cost of Goods Sold | Asset Write-downs | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 119 |
Amounts Paid or Settled | 0 |
Amounts Released as Unutilized | 0 |
Ending Liability Balance | 119 |
Cost of Goods Sold | Co-manufacturer Charges | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 135 |
Amounts Paid or Settled | (135) |
Amounts Released as Unutilized | 0 |
Ending Liability Balance | 0 |
Selling, General and Administrative | Asset Disposals | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 66 |
Amounts Paid or Settled | (66) |
Amounts Released as Unutilized | 0 |
Ending Liability Balance | 0 |
Selling, General and Administrative | Contract Terminations | |
Restructuring Cost and Reserve [Line Items] | |
Charges Incurred | 1,126 |
Amounts Paid or Settled | (1,126) |
Amounts Released as Unutilized | 0 |
Ending Liability Balance | $ 0 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2020 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | Oct. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 0 | $ 52,000 | $ 488,000 | ||
Amortization of debt issuance costs | $ 0 | $ 0 | 68,000 | ||
Proceeds from Paycheck Protection Program loan | 2,593,000 | ||||
Repayment of Paycheck Protection Program loan | $ 2,593,000 | ||||
CARES Act | |||||
Debt Instrument [Line Items] | |||||
Proceeds from Paycheck Protection Program loan | $ 2,593,000 | ||||
Number of times of average monthly payroll expense as loan amount | 2.5 times | ||||
Repayment of Paycheck Protection Program loan | $ 2,593,000 | ||||
Revolving Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Outstanding debt | $ 0 | ||||
PNC Bank, National Association | Revolving Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility maximum borrowing capacity | $ 10,000,000 | ||||
Debt instrument, maturity | 2024-04 | ||||
PNC Bank, National Association | Revolving Line of Credit | Sixth Amendment | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility maximum borrowing capacity | $ 20,000,000 | ||||
Line of Credit Facility, Interest Rate at Period End | 4.50% | ||||
PNC Bank, National Association | Revolving Line of Credit | Tenth Amendment | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 2% | ||||
PNC Bank, National Association | Revolving Line of Credit | Tenth Amendment | Alternate Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 1% | ||||
PNC Bank, National Association | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument face amount | 4,700,000 | ||||
PNC Bank, National Association | Equipment Loan | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility maximum borrowing capacity | $ 1,500,000 | ||||
PNC Bank, National Association | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility covenant terms | The Credit Facility is secured by all of the Company’s assets (other than real property and certain other property excluded pursuant to the terms of the Credit Facility) and requires the Company to maintain three financial covenants: a fixed charge coverage ratio, a leverage ratio and a minimum tangible net worth requirement. The Credit Facility also contains various covenants relating to limitations on indebtedness, acquisitions, mergers, consolidations and the sale of properties and liens. | ||||
Line of credit facility covenant compliance | As of December 25, 2022, the Company was in compliance with all covenants under the Credit Facility. | ||||
PNC Bank, National Association | Credit Facility | Term Loan And Equipment Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument eliminated | 2021-04 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Additional Information (Details) - $ / shares | 1 Months Ended | |
Aug. 31, 2020 | Dec. 25, 2022 | |
Class Of Stock [Line Items] | ||
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, authorized | 10,000,000 | |
Preferred stock, par value per share | $ 0.0001 | |
Preferred stock, shares issued | 0 | |
IPO | ||
Class Of Stock [Line Items] | ||
Shares issued upon conversion of preferred stock | 8,192,876 | |
Preferred stock convertible into common stock conversion ratio | 100% | |
Preferred stock, shares outstanding | 0 |
Common Stock and Common Stock_3
Common Stock and Common Stock Warrant - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jun. 09, 2020 | Aug. 31, 2021 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Class Of Stock [Line Items] | |||||
Common stock, shares authorized | 310,000,000 | 310,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock, shares issued | 40,746,990 | 40,493,969 | |||
Common stock, shares outstanding | 40,746,990 | 40,493,969 | |||
Common stock voting rights | Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders | ||||
Common stock dividend declared or paid | $ 0 | ||||
Proceeds from exercise of warrant | $ 283,000 | ||||
Treasury Stock | |||||
Class Of Stock [Line Items] | |||||
Retirement of treasury stock, Shares | 5,494,918 | 5,494,918 | |||
Guarantor | |||||
Class Of Stock [Line Items] | |||||
Warrants issued to purchase of common stock shares | 196,800 | ||||
Warrant exercise price per share | $ 1.43 | ||||
Proceeds from exercise of warrant | $ 282,000 |
Common Stock and Common Stock_4
Common Stock and Common Stock Warrant - Schedule of Reserved Shares of Common Stock for Issuance (Details) - shares | Dec. 25, 2022 | Dec. 26, 2021 |
Class Of Stock [Line Items] | ||
Common stock for issuance | 16,643,168 | 15,028,087 |
Options to Purchase Common Stock | ||
Class Of Stock [Line Items] | ||
Common stock for issuance | 4,634,205 | 4,927,033 |
Restricted Stock Units | ||
Class Of Stock [Line Items] | ||
Common stock for issuance | 505,504 | 107,867 |
Shares Available for Grant | 2020 Equity Incentive Plan and 2020 Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Common stock for issuance | 11,503,459 | 9,993,187 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2023 | Jul. 31, 2020 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 6,040 | $ 4,440 | $ 2,509 | ||
Tax Provision (Benefit) | (970) | (3,872) | 85 | ||
Fair value of shares vested | $ 3,245 | $ 2,694 | 3,320 | ||
Common stock for issuance | 16,643,168 | 15,028,087 | |||
Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 4,732 | ||||
Expected weighted-average period of recognition | 1 year 11 months 19 days | ||||
Common stock for issuance | 505,504 | 107,867 | |||
RSU of shares vested | $ 1,549 | $ 564 | 118 | ||
Number of shares granted | 515,191 | ||||
Restricted stock awards | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options - vest year | 3 years | ||||
Employee Stock Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options - date of grant and expire | 10 years | ||||
Stock options - vest year | 3 years | ||||
Unrecognized stock-based compensation expense | $ 5,507 | ||||
Expected weighted-average period of recognition | 1 year 11 months 4 days | ||||
Common stock for issuance | 4,634,205 | 4,927,033 | |||
2020 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Maximum number of shares issuable | 8,595,871 | ||||
Percentage of outstanding common stock | 4% | ||||
Share-based compensation award, description | Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2020 Incentive Plan was 8,595,871 shares. The 2020 Incentive Plan provides that the number of shares reserved and available for issuance under the 2020 Incentive Plan will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s board of directors | ||||
Number of shares available for future grants | 9,824,414 | ||||
Number of new shares issued | 1,629,884 | ||||
2020 Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation award, description | The 2020 ESPP authorizes the initial issuance of up to 900,000 shares of the Company’s common stock to certain eligible employees or, as designated by the board of directors, employees of a related company. The 2020 ESPP provides that the number of shares reserved and available for issuance under the 2020 ESPP will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to the lesser of (i) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii) 900,000, or such lesser number of shares as determined by the Vital Farms board of directors. | ||||
2020 Employee Stock Purchase Plan | Common Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Maximum number of shares issuable | 900,000 | ||||
Percentage of outstanding common stock | 1% | ||||
Number of new shares issued | 407,471 | ||||
Common stock for issuance | 1,679,045 | ||||
Cost of Goods Sold | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 188 | $ 133 | $ 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Number of Options, Beginning balance | 4,927,033 | ||
Number of Options, Granted | 159,270 | ||
Number of Options, Exercised | (180,835) | ||
Number of Options, Cancelled/Forfeited | (271,263) | ||
Number of Options, Ending balance | 4,634,205 | 4,927,033 | |
Number of Options, Options exercisable as of December 25, 2022 | 3,117,209 | ||
Number of Options, Options vested and expected to vest as of December 25, 2022 | 4,633,974 | ||
Weighted-Average Exercise Price, Beginning balance | $ 9.25 | ||
Weighted-Average Exercise Price, Options Granted | 12.47 | ||
Weighted-Average Exercise Price, Options Exercised | 3.14 | ||
Weighted-Average Exercise Price, Options Cancelled | 13.31 | ||
Weighted-Average Exercise Price, Ending balance | 9.35 | $ 9.25 | |
Weighted-Average Exercise Price, Options exercisable as of December 25, 2022 | 6.64 | ||
Weighted-Average Exercise Price, Options vested and expected to vest as of December 25, 2022 | $ 9.35 | ||
Weighted Average Remaining Contractual Life (Years), Balance | 5 years 7 months 6 days | ||
Weighted Average Remaining Contractual Life (Years), Options exercisable as of December 25, 2022 | 4 years 8 months 12 days | ||
Weighted Average Remaining Contractual Life (Years), Options vested and expected to vest as of December 25, 2022 | 5 years 7 months 6 days | ||
Aggregate Intrinsic Value | $ 38,522 | $ 48,222 | |
Aggregate Intrinsic Value, Exercised | 1,827 | $ 20,343 | $ 1,022 |
Aggregate Intrinsic Value, Cancelled | 1,082 | ||
Aggregate Intrinsic Value, Options exercisable as of December 25, 2022 | 31,626 | ||
Aggregate Intrinsic Value, Options vested and expected to vest as of December 25, 2022 | $ 38,520 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions, Fair Values and Intrinsic Values of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average fair value at grant date | $ 12.47 | ||
Fair value of shares vested | $ 3,245 | $ 2,694 | $ 3,320 |
Intrinsic value of stock options exercised | 1,827 | 20,343 | 1,022 |
Proceeds from stock options exercised | $ 568 | $ 2,776 | $ 221 |
Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years | ||
Expected stock price volatility, minimum | 27.60% | 28.50% | 29.10% |
Expected stock price volatility, maximum | 28.60% | 29.40% | 42.90% |
Risk-free interest rate, minimum | 1.64% | 0.57% | 0.34% |
Risk-free interest rate, maximum | 4.16% | 1.36% | 0.49% |
Expected dividend yield | 0% | 0% | 0% |
Weighted average fair value at grant date | $ 3.97 | $ 7.31 | $ 6.83 |
Minimum | Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years | 5 years 2 months 12 days | |
Maximum | Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 6 months | 6 years 6 months |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 25, 2022 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of RSUs, beginning balance | shares | 107,867 |
Number of RSUs, Granted | shares | 515,191 |
Number of RSUs, Vested | shares | (56,922) |
Number of RSUs, forfeited | shares | (60,632) |
Number of RSUs, Ending balance | shares | 505,504 |
Weighted-Average Grant Date Fair Value, beginning balance | $ / shares | $ 27.53 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 12.28 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 27.17 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 14.57 |
Weighted-Average Grant Date Fair Value, ending balance | $ / shares | $ 13.58 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Current: | |||
Federal | $ 384 | $ 225 | $ 587 |
State | 539 | 282 | 412 |
Deferred: | |||
Federal | 803 | (2,164) | 1,677 |
State | (125) | (371) | 94 |
Provision (benefit) for income taxes | $ 1,601 | $ (2,028) | $ 2,770 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Income Tax Disclosure [Abstract] | |||
Provision at statutory rate of 21% | $ 594 | $ 74 | $ 2,446 |
State income taxes | 51 | (416) | 300 |
Stock-based compensation | 225 | (2,846) | 373 |
Non-deductible costs | 279 | 12 | 211 |
Charitable deduction | (87) | (88) | (206) |
Change in deferred tax asset valuation allowance | (53) | 774 | (138) |
Revisions to prior year | 212 | 0 | 0 |
Changes in uncertain tax positions | 347 | 0 | 0 |
Other, net | 33 | 462 | (216) |
Provision (benefit) for income taxes | $ 1,601 | $ (2,028) | $ 2,770 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Federal Statutory Income Tax Provision (Parenthetical) (Details) | 12 Months Ended |
Dec. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision at statutory rate | 21% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 2,594 | $ 1,383 |
Allowances and other reserves | 171 | 212 |
Inventory | 963 | 387 |
Net operating loss carryforwards | 1,503 | 2,220 |
Charitable contributions | 230 | 774 |
Stock-based compensation | 1,046 | 460 |
Lease liability | 2,624 | |
Other | 581 | 90 |
Total deferred tax assets | 9,712 | 5,526 |
Less: Valuation allowance | 0 | (774) |
Net deferred tax assets | 9,712 | 4,752 |
Deferred tax liabilities: | ||
Prepaid expenses | 590 | 784 |
Property and equipment | 6,273 | 3,610 |
Operating and finance lease right of use assets | 2,589 | |
Intangibles | 430 | 279 |
Total deferred tax liabilities | 9,882 | 4,673 |
Net deferred tax assets (liabilities) | $ 170 | $ 79 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2022 USD ($) | |
Income Taxes [Line Items] | |
Decrease in valuation allowances period | $ (774) |
Federal | |
Income Taxes [Line Items] | |
Net operating loss carryforwards | 6,700 |
State | |
Income Taxes [Line Items] | |
Net operating loss carryforwards | $ 400 |
Net operating loss carryforwards expiration year | 2022 |
Income Taxes - Schedule of De_2
Income Taxes - Schedule of Deferred Tax Asset Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance as of beginning of year | $ 774 | $ 0 |
Increases recorded to income tax provision | 0 | 774 |
Decreases recorded as benefit to income tax provision | (774) | 0 |
Valuation allowance as of end of year | $ 0 | $ 774 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Income Tax Disclosure [Abstract] | ||
Gross tax contingencies as of beginning of year | $ 219 | $ 219 |
Increase in gross tax contingencies | 320 | 0 |
Decrease in gross tax contingencies | (28) | 0 |
Gross tax contingencies as of end of year | $ 511 | $ 219 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Numerator: | |||
Net income | $ 1,230 | $ 2,382 | $ 8,884 |
Less: Net (loss) income attributable to noncontrolling interests | (21) | (47) | 84 |
Net income attributable to Vital Farms, Inc. common stockholders | $ 1,251 | $ 2,429 | $ 8,800 |
Denominator: | |||
Weighted average common shares outstanding - basic | 40,648,592 | 40,027,278 | 28,667,264 |
Weighted Average effect of potentially dilutive securities: | |||
Effect of potentially dilutive common stock warrants | 0 | 0 | 82,993 |
Weighted average common shares outstanding — diluted | 43,469,586 | 43,321,733 | 32,914,653 |
Net income per share attributable to Vital Farms, Inc. stockholders | |||
Basic | $ 0.03 | $ 0.06 | $ 0.31 |
Diluted | $ 0.03 | $ 0.06 | $ 0.27 |
Options to Purchase Common Stock | |||
Weighted Average effect of potentially dilutive securities: | |||
Effect of potentially dilutive stock options | 2,745,161 | 3,290,615 | 4,142,947 |
Restricted Stock Units | |||
Weighted Average effect of potentially dilutive securities: | |||
Effect of potentially dilutive stock options | 64,455 | 3,840 | 21,449 |
Employee Stock Purchase Plan | |||
Weighted Average effect of potentially dilutive securities: | |||
Effect of potentially dilutive stock options | 11,378 | 0 | 0 |
Net Income Per Share - Schedu_2
Net Income Per Share - Schedule of Excluded Common Shares Including at Anti-dilutive Effects (Details) - shares | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 73,340 | 23,744 | 826,883 |
Options to Purchase Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 27,954 | 4,817 | 826,883 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 45,386 | 18,927 | 0 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jun. 09, 2020 | Aug. 31, 2020 | Nov. 30, 2019 | Feb. 28, 2019 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Related Party Transaction [Line Items] | |||||||
Proceeds from exercise of warrant | $ 283 | ||||||
Promissory notes repaid | $ 800 | 846 | |||||
Interest income with promissory notes | $ 0 | $ 0 | 97 | ||||
Sandpebble Builders Preconstruction, Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Expense paid to related party | 962 | $ 1,037 | $ 842 | ||||
Ovabrite Inc [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Gain Loss On Derecognition | 122 | ||||||
Ovabrite Inc [Member] | Prepaid expenses and other current assets member | |||||||
Related Party Transaction [Line Items] | |||||||
Related party receivable | $ 552 | ||||||
Notes Receivable | Founder and Former Board of Directors | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory notes issued | $ 4,000 | ||||||
Promissory maturity date | Aug. 07, 2022 | ||||||
Promissory notes repaid | $ 3,200 | ||||||
LIBOR | Notes Receivable | Founder and Former Board of Directors | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory notes interest rate | 2% | ||||||
Guarantor | |||||||
Related Party Transaction [Line Items] | |||||||
Warrants issued to purchase of common stock shares | 196,800 | ||||||
Warrant exercise price per share | $ 1.43 | ||||||
Proceeds from exercise of warrant | $ 282 |
401(k) Savings Plan - Additiona
401(k) Savings Plan - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
401(k) Saving Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions made by the company | $ 861 | $ 651 | $ 401 |