LSF - Earnings call transcript Q1 2022

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Operator

Good afternoon. Thank you for standing by and welcome to the First Quarter 2022 Earnings Conference Call and Webcast for Laird Superfood, Inc. I would now turn the call over to Mr. Reed Anderson of ICR to begin. Please go ahead.

Reed Anderson

you. Thank welcome webcast. first and conference XXXX Laird and call to afternoon quarter Superfood's earnings Good call Jason Chief today's Financial On are Officer; Ells, Officer; and Chief Valerie Andy Judd, Commercial Vieth, Officer. Chief Executive press should have close. the quarter after By now, release access today everyone filed company's to first earnings market Laird This is of available www.lairdsuperfood.com. at Investor the website on section Relations Superfood's

to may within the Before uncertainties results to for call actual And made is today's meaning the today's expressed from Officer we cause presented differ course this Executive the call federal filings with These or detailed over information of a refer actual on described securities begin, statements risks materially in and expectations risks cause statements please like of on Please statements financial note other results any release beliefs make call, the from statements. Jason of are Superfood. and materially today. that management and Chief and could SEC press Vieth, involve the those management's that during now to forward-looking Laird and all laws. turn that implied of I'd forward-looking unaudited discussion the current to based could those differ these to in forward-looking

Jason Vieth

Thank you, for you Reed. today. Welcome everyone joining us and thank

efforts. results million. primarily over take I'll the and and outlook a prepared it our with for to the of XX% today for balance additional on pleased business Judd, Commercial steps milestones close you our and taken financials with turn I'm call appointed company's recently included roadmap your for as first upcoming to Chief of overview our then $X.X today progress. were continued an to the channels. growth results to and Val focus position on Andy are both that Andy our commentary in we've further questions. XXXX. our me to well strengthen of and as our give online the solid then Chief QX topline will These wholesale the My Financial marketing, will products, On with We'll remarks Valerie solid, that gains report Ells, strategic Officer, quarter our Officer. development actions comments

to As margin the our up the for challenged necessary in expected gross in through is our year, set proving will half make adjustments operations be and known we success. of structure first constraints way work that as the future us

in hires efficiencies of over we've From power potential. chain and profitability make make identify month and we our of QX, and offset that cost the its perspective, to impact on brand tremendous key an structure, to some will right-sizing growth progress supply quarterly we made speak continue much did organizational and During the the significant Superfood to address which helped to past the operation. Laird our moves

industry. As all quarter mentioned of us was in on Daryl for and March Darryl food a sales $XXX of to Performance million led excellence, Kitchen, omni-channel has it around having Xx Head retail the responsibility Moore recently COO revenue. as natural experience physical most Sales Bulletproof in Sales call, track of President and Daryl channels. as proven decades increased the Vice for in with has record our of at joined fourth Senior

and leverage online across wholesale further our strategy, will product as the responsible development, be customer also Andy to experience our overseeing We platform drive to share growth and Chief Officer. sales, Andy Laird market recently and Judd channels. marketing added Commercial aggressively commercial for business our expand Superfoods'

as As of Chief the Andy Yasso. with in industry, experience products most Officer has natural consumer Daryl, extensive the in recently Marketing goods

other introduce strategic held and Brands, we as three-year are the Board of week, Boulder major with our at Foods, completed Campbell's. for a new of Brands review WhiteWave, our to business and in clear. companies, Andy of served Last Before CMO previously several strategies will goals including you and aligned and plan minutes. and few of Pinnacle VP Directors unit leadership Marketing he and ONE a himself and our that, of Saputo, positions various

We will focuses business online. a ritual true the on continue daily build channel to omni that

functional leveraging the and While our retail and country. strength hydration creamers, in broader coffee outlets across

in sales clear and them and team as and moments. renewed commercial will vigor a and with already is has Our a executing Andy set objectives measures against of share excellence few marketing

will on forward, long-term on with focus laser-focused improving a we our gross exceeding be Moving again margin XX%.

to and and more. in shipping continue do We manufacturing to we distribution In volume. so a see operations impact begun that have meaningful and $XX, our recently and on investments eliminated below did March, orders to behind we'll we've made not already streamline software our automation, free

the by will our addition, of increase will which $X price more of a soon per our and announcing assess year million basis. optimize month, have initiated be we during And than of we've or years. approximately In we bulk the taste, portfolio and address list XX% we our SKU credentials, across health reduction, XX% cost inflation action Last reducing cost. and the difficult annualized identified to took two operations work our that finally, for past incurred recently the portfolio, on headcount across products an cost

to service I processes that decision, the we've move, progress While we move last in that it this improve to continue supply this efficiency. and a business am any and without was year pleased to difficult the a Despite report our given automate our shortfalls. is always significant made necessary manufacturing

sale reduction, can sheet balance by believe our that through cash to activities such also XXXX. we during inventory and our more million and from expect than $X We free increase across up assets cash the of non-productive balance targeted

operation us will forward, better go for of we products. we portfolio As great commercializing to on our focus make simplify you our that continue to moves and allow tasting

stated and and long-term goals position. can the of our sales, our see, against very team, shoring busy couple and months up making As been a rapidly cash our are profitability of progress you we it's for improving

remain we three key areas. will Looking focused on forward,

team while retailers platform, distribution and we commercial and continue product our overhaul expand core targeting with our our our approach on own First, the across lines. to meet customers Amazon to will retaining our site to

teams, Second, substantial to create quarter Judd will the profitable vision overcome our And and success, underway, cost players our one significant making is I necessary food remain over to the based the right economy am plaguing With to detail. With natural but leading next operations we chains and and I to long-term the to expand products, our tirelessly while to on Net of Officer, extremely are the and our space. Chief better and bit phase to challenging, core are in poised continue that a optimistic for capabilities build worldwide. Promoter that, Score we and And well additional leading and you market G&A ongoing across first more discuss in finally, actions Superfood of tasting will in trajectory. margin to and a are And and maintain In continue will great Commercial also annual our summary, Andy company's beverage we'll U.S. our the pre-pandemic challenges become about journey supply take that it on levels. of plant to achieve structure. Laird a and work we're gross back capture company. portfolio areas to Andy? share our commercial entire our our operation including trend a market progress to hand the we

Andy Judd

soon. find of you forward right to a more are Thanks very and brands meeting plant the emerging it better and of combination board passion. based functional I'm There's to great food and foods has excited high moment Superfood, at products the Laird consumers intersection people, and will look to Jason. two many shopping. I to the you earth. we Hello my very attracted passion Laird experiences everyone. this and of be eat and was personal growing for momentum tools for flexible building powerful on as Superfood and combine growth and have that to

infrastructure significantly powerful, and portfolio create to look the a a to consumers coffee. digital have poised across is In And Superfood new across positioned and of Laird and in flexibility to we has lifestyle across well and approach. portfolio. This multiple creamers create ever ability holistic from creamers second, landscape are the channel and platforms. and how we shoppers capture the great coffee coffee categories partner necessary parts an omni at to shop growth a continue with our physical sunrise truly platforms First, with with day evolving to the can retailers brand we expand core sunset. our near-term, active with

pod enjoy are future, all that single of bright cups With A coffee our compostable. a consumers BPI commercially with certified the pods, launch future enabling coffee but to use pods, recent is for indeed. brighter we functional

plans protein this of summer have coming the grams Each later Laird in pumpkin XX our Superfood. reach and of blend from plant of plant to line months expand nutritional Laird Superfood the made With up launches bar a and clean We bars. based with protein lives and ingredient seeds. standards to pea of new also snacks a of based hemp

to portfolio satisfy snack each tastes of about wait category These can't to taste a incredible by and increasing I excited them. key and are We you tastes. attacking our for bars

digital platforms. growth have agenda more ton retail we a holistic of great to mentioned, Jason potential As unlock both a across and

affinity costs, brand. acceleration we on with class digital still actively improvement our Despite LTV our our and continue Amazon. our new and CAC an slight platform For see databases continued pressure growing SMS acquisition experiencing year sequential QX, did over with and retention in and CRM a DTC year consumers XXX,XXX our on we deep growth mission program in loyalty nearly solid in with platforms, consumers and and best to and of engaged see are

reach have rollout lock opportunity balance more the across even right investment as to platforms. and We growth of in the we

coffee redefine about wholesale plant can out every lead business, the what should charge For alternatives to get power our consumers based the non-dairy I'm and of of From to cup. more helping how creamers simple excited be. we

our needs growth, footprint to consistent based key than with achieve the at create with and partnered We potential seen wen incremental plant plant to transformative based a upside retailers a with significant expand ACV seen have competitors. our firsthand less for retail I non-functional from to states. moolah destination level brands have XX% to other

and is food. traditional beverages functional same opportunity that We coffee largely the and untapped for have

Now, let CFO call results. discuss Valerie turn Ells, me to our over first further quarter the our to

Valerie Ells

to standpoint, in driving enhancing to progress the DTC our nearly in to gross factors, events promotional first elevated decline shelf up including beverage sales a year prior net sales expenses, last creamer up as growth sales were as production of rates. well growth as both channels compared and increasing rates, improvement business Thanks be reported in of our and to harvest increase XX% from margins supplements due period. From contribution new year, such primary in to product in Bars compression May was rose growing and which both $X.X increased as freight the reflected category We XXXX. related our continued million solid of intangible These other and Activate XX% goodwill with first to first business expenses basis primary well strong optimizing we as as year asset online growth growth. $X.X reflecting year sales. one-time with And business. the DTC creamer both majority of to club combination a a groceries, as wholesale our combined compared portfolio, million average stable acquired of of Rest, to online $XX.X elevated XX.X% Hydration the as adoption quarter and our Botanicals, period, pressures. Results snacks. for of inflationary the the impairment our a for Recover refrigerated in of Tiki products activity, and strong quarter Andy. in in including to inventory of Bar the due to continue liquid and $X.X basis million XXXX specific had waste part expense, across assortment, in in the liquid liquid creamers well offset $X totaled net factor by of X% promotional around compared ago in Renew, the retail due in Immune. XX%, with powdered non-cash of coffee Mushroom factors partially inbound and million slight to XX.X% year XXXX in XXX Operating both Net related The in improvements points XX% declined over in and driven wholesale Tiki XX% shipping to continued retention improvement ongoing stemming progress creamer due costs values by on million. acquired a order quarter charge

as million $X.X these previously. period, intangible operating prior or all General was mentioned were reported Excluding by from million, expenses charge items, expenses year goodwill, the and of $XX.X asset non-cash, administrative million. driven and nearly which up $X.X the impairment

an Excluding up elevated relating $XX,X ago charge, of down the asset earnings On $X.X the the personnel percent were elevated partially impairment to reconciliation net a to goodwill executive professional non-GAAP departure. increased in basis, $X loss and was million, $X.X growth adjusted approximately benefit fees, XX% the and Sales adjusted to as with with were reflecting expenses release. the year due quarter, included marketing forfeiture the improvement current expenses the transitioned $XXX,XXX a quarter approximately up ago fourth reported from $XXX,XXX, however, million, associated by fees G&A of loss of costs intangible A and is as period. from from period. in $XXX,XXX in from million. million million Net compared detailed approximately net $X.X was offset sales stock in executive units to our and sequential expense market-based net in an approximately marketing XX% to period, loss sales marketing an year advertising

to remains year over Cash we million in primarily of $XX the period, improved driven the and debt. ago rationalization. million Our healthy no sheet balance $X.X in versus quarter and investments inventory operating and activities cash XX% million used with by ended $X.X

position inventory our for balancing we level remains turns Our strive growth to improving support of strong, the and mitigate continue in and chain while investment supply disruptions.

our require half of our portfolio. well particularly At The to we XXXX and in progress $XX coffee this ramp gains growth future net our but growth, million, more referenced XXXX implying and Andy functional previously in Jason for products, in by retail, strategies and second across million will early maintaining well wholesale driven $XX to visible creamers bode wholesale online provided point, our the as anticipating as up, sales outlook. for are of time XXXX XXXX. Now in guidance, of building

XX% turn expect by to to efficiencies, to XXXX our continue We full call optimization, year liquid profile, back by offset driven inflationary of operational pressures. gross margin XX%, improvements and in price I'll the refrigerated margins Jason. creamer

Jason Vieth

a months, than I've the made few excited and for clearly been I'm lot We've over Val. this more Thanks of can where ever progress past brand go.

across a review online of into and pay first product distribution able the am head we be we and attracting Laird the the environment our I Superfood As our and results schedule, the the leaving quarter continue to products heart proposition branding, of channels. I'm the identifying and brand business, gain significant wholesale packaging costs macro is targeting in insights that moment transformative will Andy dividends And our both expansion relentlessly XXXX. across retailer optimistic expand that a our and attack the demonstrate will consumers revamp in to order will we in in to both and that to gross confident strength our our Though brand we portfolio. our are optimize margin. challenging our for in

remarks. call Operator, Moving our consumers. based now build we to to deliver and open forward, our best This these the to ready off prepared to we will plant to foods of tasting concludes assets healthiest are the continue questions.

Operator

Burleson Instructions] go Canaccord. first from comes ahead. line you. Please Our of Thank [Operator a question Bobby with

Bobby Burleson

for Thanks question. my Great. taking

stuff what the out free managed there? elimination grocery and a these to and about there's shipping price what elsewhere. under lot to your from pushback. couple of hearing we're like, And and price like reiterating you and just solid do you're with sensitivity for it think the cohort congrats customer days of we're hearing just So, of particular it lot that on seeing a when -- obviously a this guidance. about $XX that things comes sensitivity in not you've sounds of But curious, quarter consumer lot impacting the A

Jason Vieth

topic of Jason. couple conversation, a as you'd imagine. conversation something Bobby, the as Hey, question. well, over is for of that a That's is Thanks topic weeks, of this last that for us

with happened shipping through much ended free I went the being great prices a consumers become to non-event, up turns deliberation and we think regards is out, as accustomed general. to So, it pretty deal a in it of what's so rising

of it you're introduce many would a it it shipping, similar other hit. consumers something at in taking consumers with hand and ago, price that some to increase. inflation up to so last few We're were are the this of is willing run pricing that very was a broadly as been just that, moved take trade on silk to going found And well the consumers value premium did I to thoughts and in is and And be And do there that I also period become that. with them. the that ordering that as past. in have first through we're online as the taking We recall we a and to time, free and around, shopping while ended a and some maybe over sequentially concerned we what short going of platforms we that do lower and operating want little don't builds to the concern aware continue believe your a end, their that in to decade they like away business, time franchise have rise always that bit more prices from sensitized share more I'll to Judd you and products, over I have Andy himself question. market that

a really well during come houses as really general, back consuming a for an looking trend That's they're the with we economy. homes, recession continue and natural as foods did well, to where products as consumers I And coffee our you as the other the You're into like feel most and grow portfolio, positioned and that also organic our and of leaving premium inflation sustain frankly, and number they're despite are premium that and products Verizon, organic hit soak, they leaving what mentioned, example, their that that they're did well to restaurants trend. that it's remarkably time, behind. that are in foods, really, attracting saw and just

So similar last understand spent But or start six that the to really really now. I and last, getting feel position been weeks in we're so insights. Andy like has the a in he's our here driving consumer

let me So turn over him. it to

So you can that. little about bit more share a

Andy Judd

Hi, Bobby. question. Thank you for the

addition to brought-- in the that think I comments Jason

Bobby Burleson

Hi, Andy.

Andy Judd

We've deep the threshold. well, this subscription of fall based benefits of in loyalty really the this products, group are those as a lot functional as And a seen a Bobby. well. Hi, hit above really consumer a they deep program pieces AODs cohort, a of were loyalty understand lot our in them in the

this have up pricing we're loyal well. our not that is profitability order really driving on we whole So sure some and also but that that our the consumers, we're on just mix more savvy sure as getting platform to across smaller orders understanding making also make about of

Bobby Burleson

Great.

that's how up, that is, big like what that confidence your free kind given that percentage so just so the is list a $XX represent? or of it elimination -- quick shipping your a and -- of a DTC increases below, on But slice wondering maybe you activity online just little of of on coming. of And price follow sounds

Jason Vieth

percentage profitable percentage, top frankly. happens in. a know as relatively Yes, let alluded it's jump as consumer If small Andy it's the of our well. Val head, Bobby, that her she to, least quite And I'll off to

average we in trade and we we So an as increase is that up saw that. therefore did order what volume our

to we of trade actual right back are of And And in so percentage, right majority through have I the now. the good But terms can metrics get I you to going thus way far. those are to we a QX, able the -- don't with for been us. that consumers handy that. able have up

Bobby Burleson

queue. the into back jump I'll Thanks. Great. Okay.

Jason Vieth

Thanks, Bobby.

Operator

Fuhrman with ahead. Mr. Craig-Hallum Thank Capital. is from go next question The you, Please of Burleson. one Alex

Alex Fuhrman

for that imagine think to And bars bit Jason, from if future. eating? and taking it wanted in loyal protein your Curious bars your trial we consuming something the in timeline get thanks most question. can are customers you the many be your core you this mentioned a is can my guys, of ask, currently protein mean, you at more of to little are remarks, launch Hey, competing near you'll think think of do color customers I sense be? I do a products? customers already you on how that And prepared impactful brands. those have what how I I able of, your launching

Andy Judd

This we're Alex. on excited really to in is plant-based for alters Andy particular, about one bars. Thanks protein foods, jump I'll that in

is this with that standards looking that nutritional in layer against couple leads Picky Queen nice collaboration a components in is our gives from chance that It some build portfolio. for cable been stacking for. the the up occasion, portfolio, our part of a it complimentary there's the products consumer abilities concert space think that also but our that provides here. to leverage One, a us able day and present incremental to we've does I a at -- really afternoon and to summer. the particular Bars the stood and a broader category that opportunity With extends Bars snacking, lower differentiated snacking a really there. of opportunity later Superfood rounds it that in incrementality drive out the us, nutritional launch carbs will as nice here how a acquisition, dollar looked proteins multi-billion business their really can it’s behaviors really for drive when is and Obviously, eating across out to this bundle, consumers Laird continue that the it well, there's that towards shift was and both opportunity business. the great as look Picky this to and And and at higher that Picky we net we us

Alex Fuhrman

yes. That's really. -- Really

Jason Vieth

Alex. Hey,

I think of -- a kind as incorporating on and under is while add for we, considered to Because moved putting that. we, Bars to me brand alluding Andy putting live other just strategically let Picky Let those the product, We've a under alone. the one this Laird was thing those.

And big and as strategic them a gives the Laird shift into that is. the products more going And business, proposition of for energy differentiated plus with makeup as bar that adaptogenic And immediate is sell athletic it’s selling the and same for being that this come us, Bars ingredient, first consumption, that us available way. have same going a so on-the-go then And on to differentiated into in ingredients. its product not with carbs we and Laird’s the think got makeup Laird's very protein, out ability entry we're protein to as it the a bars bars, then complete bringing are too. expansion a very the the that, we're we as source plus at of time of bar ready really the going Pinky Picky the forward though, Picky whereas those for brands sell those Bar package result that's

so really excited do we're us. And about those two for can together what

Alex Fuhrman

terrific. That's

Sounds like a you. opportunity. great Thank

Jason Vieth

thanks, Alex. Yes,

Operator

Thank you.

Capital of from question ahead. Kelly with the next comes ROTH Our Please go George line Partners.

George Kelly

Hey, taking questions. for everybody. Thanks my

just with reductions. cost the for couple start I'll So you. a

respect OpEx and were there talk for could implemented mentioned there wondering you that the cost think, with just you both COGS with savings? still And think were real opportunity, I what through on you that some guys continued Jason, are OpEx areas that reductions you side, already those? there's if

Jason Vieth

a hey, the question. to glad on more this. And get I'm George. details there, to chance great show -- a of Hey, We Yes. bit

go a the over the really last the automation as up well as the As the year in the made with that's scale we back a we and able of revenue a in place. our demand I was of frankly process the today, have the additional team to course even that meet half of team months, because necessary, XX we through and headcount that's mentioned, had is reduction. of plus that And always reality painful improvements as did combination is, team is, it the executing very

really we're floor. done we've on what the So excited about factory

that we one So was that made. move

we we did free or the shipping policy. As I did mentioned, bring down change

$XX the smaller And some implemented of then we some up pick shipping of costs that a orders. we us So allowed on shipping that reduce on that. some threshold those had to income and

forward, the on a benefit now go that really all number expensive. areas, received. product we're realizing we of product ingredients still proposition. product a of them without position One either a have without number on Those formulation. are were that's with of result, simultaneously. We're there's a the As purchasing and the included the become working is product being we consumers. that recognizing or with ingredients sharing superfluous to therefore benefit benefit that as And consumers And the are in

in We And teed have half in some have opportunities we fees we off, product say. of external should do working well. then the kicked already number as so So back have reformulation work on or that's the year. up I a of initiatives that be we'll

the about have we that today. off-premise think I warehousing

have related we're that we're costs against reducing lot that, our looking of this executing so as of finding that. targets through and time, quarters, in. well. significant digging internally going that then for each bringing are expenses the software handle ripping them of a We as and and But and being really a with being something first we're be imagine, held out executed of like would they're through, we're still. have front, we still that against have a us space some departments, we've that. really the that as we've put a G&A one be will we we to other number for And that we're you we're off-site really now number how that optimize lot consolidate on at of pallet non-headcount positions And And

are those areas. three the So primary

and of in we'll as to bigger great people seen moves to As areas. other mentioned, made to well. appropriate and And executive a positions forward, as And jobs have lead guys we'll appropriately the as we space, across structure organization go the as the I in already, we've to continue able number G&A bigger team forward, team. we be put consolidate you go continue to

So and to product this be some there's still getting around external that of it's underway primarily, at a going But rid fees. formulation of point. lot those

George Kelly

guidance. And Okay. just sequential helpful. full That's year to your second through me in the I revenue it, super improvement If of on question a kind then throughout year. for I'm play going that

just have on wholesale? on new sort visibility confidence number. anything gives that it is to can I of numbers? execute a And revenue I'm renewed there products and you you that Is hit focus that stepping So is hitting hearing on that What what you up that? within -- your sort those gives of

Jason Vieth

This wins start able going Yes. at I'll got those is -- are Andy products. XXXX. are that our of point, similar as hit we some, year, this to a the in as we few, is, we're through some and going of are strategy. that great out as getting had wholesale cut a of his to the second over expectation perspective the most fact, off to in quite accounts But that come the we cycle, to to to well. half George. similar a in, in We commercial question on year, to with built show turn

are time REI well. this like some to success in we'll think et and that get of fit that next in you and about Beyond, have year spending products. Bed that perhaps There trying bar so an non-traditional prior to And coffee creamer companies that there. be product or those make listed certainly and We'll Bath space expectation them really retailers with & cetera, products where our some are carrying

let that that had a a of are moment. working working Costco couple have of be initiatives I'll a recent to retailers other number speak in with on also will we're expansion. And do that across there today for then on we the we We win Andy executing DTC that We to we have side. in retailers a and where that Last opportunity. -- in folks number There QX, same. year gone staffing resource the we in that to issues, vacant. have positions of have our some are And significant reported a challenges due had that

that. with missed. already know And was do press that to opportunity so there recapture We Amazon. We've there's an what more feel we started like we forward with can to

-- you putting feel where to approach we get additional that that's platform. we and would efforts. additional our like tell and wholesale drive the listings I Amazon, really we're across can consumers is so And multi-pronged And DTC

Andy Judd

only product add the is George Yes, beyond that's channel the of put on top -- I'll on the side. and that

new have item do launches. number a we of So

in towards As Cups, coming prepared creamer up coming I got and the we've coffee beverage relative at summer. Bright bars just our protein were this year. products remarks pods here mentioned some the our to that the other the And end end of of out launched April,

product through, the think as the as continued good I for portfolio confidence. spaces does effect our well incremental that channel So went into size cooler Jason the expansion mix on with us give

George Kelly

Okay. That's much. so great. Thank you

Jason Vieth

Thanks, George.

Operator

I like There you. at pass closing time. to back Jason are it waiting Thank for any this questions remarks. would additional Vieth to no

Jason Vieth

to off trying Sorry, guys. there. I’m with get you

yes, you just So, I'll thank again in of for listening all today.

proud are But for our Superfood are Laird and As economy start as our to through team push same likely time, always, that we we we we're the XXXX position appreciate this the recognize in. that the and the foreseeable a QX and for and for remain future. to at supporting the challenging you market transformation. was excited solid business

confident to brands grow our we're and I'm from continue believe improve and to that here. and business poised So our team our

So you entire all talking your from forward hearty soon. with you we wish families, and and LSF look a to would you our team mahalo

Operator

day. Superfood’s Laird the the quarter call. earnings conference XXXX first enjoy hope concludes all I rest of you That your

You your lines. may now disconnect

Laird Superfood (LSF) 13 May 222022 Q1 Earnings call transcript