SNAX - Earnings call 3 2023 | Stryve Foods, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Stryve Foods, Inc.

Third Quarter Fiscal 2020 Financial Results Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded on November 14, 2023, I will now turn the conference over to Will He. Please go ahead.

Unknown Executive

Thank you, operator, and welcome to the Stryve Foods Third Quarter Earnings Conference Call. Stryve's Alex Officer, Hawkins. are Chief Boever; today Officer, Financial me Chief Chris Executive and With

forward-looking made Before remind provisions of of include XXXX. everyone begin, of that that we I Litigation part our would the Private discussion Reform safe to the pursuant like Securities to statements harbor are Act will

and Forward-looking company's expectations. could performance, results from statements these undue control. These and of refer date, their are therefore, differ We are guarantees they undertake later to and uncertain not to today. upon nature, by update should Actual statements, outside these the not statements be forward-looking of reliance them. a only not materially at future placed do

including be the and the webcast be for the can ir.stryve.com. measures that, non-GAAP GAAP been adjusted Non-GAAP call section nearest through financial would today's and website, our the the substitute over With as I link copy not posted refer in Chris the considered release EPS. you call and EBITDA turn included Also, Form to to now details. This is reconciliation press on Investors today's earnings discussion addition, earnings In release Boeaver. at would measures, to the Chris? SEC. page the Events a the include adjusted should being News call and supplement has like submitted on measures. is of accessed of audio release to X-K press We further for a GAAP a in of to a financial measures and included the financial of to non-GAAP

Christopher Boever

another as our us initiatives. of third I year Thanks, transformational appreciate progress you key discuss Will. our fiscal to today earnings for call the afternoon, quarter on quarter Good and everyone, XXXX. joining we of welcome

the been innovation not also healthy market has in growth and commitment and a reinforce our to amidst sustained team's resilience only our but testament conditions. We've dedication excellence quarter to snacking our segment. This challenging trajectory

our our Our operational has of business. These will built. to strategy profitable, future steps upon promise pivotal long-term our taking our multifaceted, presence, to our long-term delivering been quarter a this success strengthening are brand pillars shareholders which be the sustainable driving are areas building focus on efficiencies and and towards

and we reminded I share performance metrics The specifics pursuit we of speak As volumes the retail transformation, about our just residents journey financial This of today, metrics, our the the the embarked and brands, incredible story market but is channels. broader am accomplishments into upon. in a plans about of our measured have leadership not of excellence. Delving in relentless market.

XX the by impressive part was our consumers. largely increased October market retail of to to grew points expansion our weeks outpacing an which growth flat. This be X.X% and year-over-year, For ending XX%, seen attributed presence dollar the as category, of reported total an of sales our can have accessibility distribution, in which XXXX, growth spin, demonstrating

more are am I accelerated distribution pleased am I we the progress, regards momentum that wins. with to excited even generating While about in the

focus, strategic versus improving fostering pivotal previously, packaging improving to by will significantly This in price supported drive year both our up loyalty. which growth to redesign strategy equivalized over quality, is profitable As are consumer brand help mix product a I'm pricing been that driving which economics, and to time. our improved XX.X% key and unit and is it we've period. The discussed is our prior pleased has report the trial

centered from promising velocity select Initial and a since the packaging. consumers. to at feedback approach to retail. The food has redesign Turning at squarely around the clear transition. product of been making is results. showing enhancing focus consumer This unit new our The introducing notable products more appealing indicates and retailers aimed our depiction photography experience and packaging vivid attributes accessible on is increase

take overall the consumer of And these part and our will supply through, our the healthy redesign production the as snacking, Virtually a decision. Remember can aesthetic to the replenishment steps appealing from to strategic is chain, driving the packaging these through now are new which the and pull of and points While continue all not effectiveness in transitions vary retailer. retailer multiple new and just they transition market. purchase due an preliminary consumer This accessible to make to mission base. in that upgrade. It's the underscore of engagement packaging to bags. is and time retailers broader flow is to ongoing, fundamental our the indicators touch redesign

inward. Turning

improving a has is transformation enhancing before, our continued we our demand. operation results continue can cost The been streamline and lead and only refining costs. we shared processes where strategy performance our overall reduce comprehensive optimize our of not identify market journey areas but operating I've on our efficiency. Based of to enhanced our critical at have been improvements of rate. a review operations, cornerstone turnover swiftly managed resulted our reducing inventory respond have This our and These a times operational also significant. our to supply and chain, identified aspect As in transformation. aimed to savings We've to ability

led as a automate to invested that in operations overall in remain reduction in our step errors agile grow, increase and of and we It's forward automation productivity. ensuring we've Additionally, technology our in key a processes. an efficient. to several This manual has

the prepared our and operating been culture skills to employees creating growth our model. the operational our area with equipped processes, technology Another a the are people our on is of fostering programs This and and It's resilient, being business scalable investment improvement as enhance about workforce. right for continuous driving is of about people. transformation force focus future our implemented more a efficient behind in pivotal of essence, innovation. success. In We've training has they

This transformation beginning towards achievements long-term and just the excellence. quarter's a operational operational journey of are

for creating shareholders. to to to our As emphasize look I unwavering value we our future, an potential growth commitment the want immense

growth gain strategic firmly in not Our are about long-term sustainability. just current initiatives rooted and but are

opportunities diversifying to portfolio new exploring the with our cater market channels, consumer into to trends actively that evolving ethos. This product align brand expanding and includes our consumer territories preferences. are new geographies, We and

Our this introduce met and been innovative we offerings. more to with we enthusiasm, recent health-conscious product anticipate momentum and have continue launches as

In on collaborations. These our also By visibility. we to into partners, strategic partnerships addition product for are expansion, brand enhancing new incremental to growth. are synergies focused our our with and tap and and customer and crucial drive alliances we aim market extending reach segments leveraging

strategic we've be gross complementary Additionally, our margin capacity and space. I revenue, anticipate working to to near a in and our leverage for investments the significant bottom months utilize contributor results better overall in many co-manufacture products capital for been partner noncompetitive a to a line future. this very better to

management. is Our in bottom line. We to that also is a not efficiency just and believe operational commitment growth our strategy cost sustainable improving expanding top line, growth underpinned but our by also

in this you our -- critical I and consistent are are in cost financial our that my strategies ensuring robust shareholder operations fellow and streamlining efforts enhancing geared optimizing can shareholders, we structure that and regard, deliver assure actions assure Our performance. To value. towards

this are of our with We growth responsibility initiatives aligned the are deliver returns to objective. and mindful

delivering around the ability our and third sustained to that, provide the to We future CFO, to our turn and ahead performance on in over confident opportunities I'd quarter. With the capitalize Alex are you stakeholders. shareholders with color very financial Hawkins, it like details and to value for about to our our excited

R. Hawkins

Thanks, Chris.

significant As processes made and we Gap] within important have our These transformation. We've financial year we model in operational growth quarter our efforts to our strategic on results optimizing cost structure. for reflects leverage sustainable ongoing operational in are our a to third XXXX, critical frame focusing redesigned strides scalability. discuss streamlining this discussion fiscal of context building business for and efficiency, foundation [Audio of our the the our it's and the transformation

poised Our to headwinds create disciplined rising to has market an in evident clear allowed strategy opportunities. This approach challenges, navigate face prices that of cost the including reset growth, effectively. market, is commodity transformation only approach challenges to has but a in business impact capitalize category cycle category our retailer is where our us post in on the flat in of Despite streamlined the our is been financials, COVID, not our beef the and resilient atypical these base. also

analysis comparing our picture of to our strategy detailed our continue this with are setting year the to long-term the will financials stage focus a of we financial prior now we the the for performance today efforts. our a stronger you that are performance confident make in areas and where current and to provide our decisions unwavering, clearer commitment Our we give progress shareholders. I value is creation for

market and sales strategic part XX.X% our $X.X XXXX, net million period. This choices is year-over-year QX $X.X the year in For to in million our compared by approximately product decrease and of rationalization approximately prior driven were positioning.

to year prior out-of-stocks QX by was Despite was in in catch-up a catch benefited of network-wide not normal in rationalize dynamic challenges the faced execution that following net we to spike persisted decrease present the Additionally, focus on up XXXX. This seen sustainable long-term the we've significant non period company shipments to aligned believe prices, revenue still commodity increase. beef our With the to strategy growth. decisions low-quality XXXX. sales, in with a our were respect

One, remain subject the it closely limited to. ways. otherwise that This we to as served And QX the built an from levels to beef regular served of will to limit on of do of year. And in mitigate $X.X impact also expect this the accordingly, inventory it our we run in increased the take but would ways. year. We inventory production return have beef quarter, benefited should and the manage we our schedules beef we our summer us and the our QX levels business. the QX, mitigate production increased a to our elevated, commodity source approximately been other in prices in began X as However, a cadence that over intentionally early near-term of watch business to the commodity costs they up third impact more could impact this in down before course costs have liquidity as steps by to intentionally purchasing million on QX necessary prices

to XX.X%. quarter million schedule create margins. the margin through Our million acknowledge gross XX.X%. margin gross continue gross of $X.X of profit stood decisions production absorption XXXX We In the that manage near-term volumes on rationalized comparison, and $X.X that QX challenges dynamically are a lower at saw of our with plant profit to a gross drag our of this and

our economics see An in to as packaged all However, margin and increases, moving product strong. comes quarters rationalized notwithstanding inputs. in the volume we coming equal expand, this relates contributor products. gross to and commodity are additional And and production legacy our to online our our QX of potential performance year margins gross expect through unit more things

from moving $X.X in operating As of in XXXX. previous strategy represents a to some which which success has dynamics challenging while third we've a discussed $X.X reduction on desirable reduction a million operational achieve market put in been in commitment did reduction. And leverage. were our before, XXXX operational the than This we yielded expenses, million and a that significant the in keep pressure operating decreased million, We've liquidation mind, less years. to to price, efficiency, quarter expenses market margins. demonstrates control X this of inventory essential in which in $XX.X components And further the XX% have our over XX.X% seen cost year, QX, of

$X.X $X.X $X.XX last per was share Our quarter loss from year. The million, for to the decreased approximately million loss better year-over-year. $X.XX than loss net

in of of comparability this issued in the year these year. in in warrants that $X.X However, were periods quarter is not the the to a noncash connection of present presence XXXX, interest April third approximately with the million that expense prior the key relates the affecting of notes of bridge variable

of Accordingly, was year on adjusted the per per of basis, measures assessing a loss $X.XX pro $X.XX. progress our as key to forma is use quarter adjusted the in we adjusted EBITDA. share share The XXXX for compared loss our third prior

million of are reflects in loss from impressive operational adjusted metrics improved the $X.X critical positive period. This rationalization in in improvement million trajectory our QX understanding impact and context is efforts the our our Our we of These financial year that top more and vision $X.X efforts. line to XX% EBITDA in even transformation current prior the are the on.

decisions and laying strategic While for groundwork face model. stronger our challenges, and more business are the a improvements resilient operational we

our investing and driving on optimizing in remains portfolio focus growth product Our strategically opportunities. efficiency,

area crucial Turning health growth business. our an that's to and liquidity, our for attention of the

Christopher Boever

Alex, I'll we lost there. you up. pick

an area liquidity, our business, liquidity financial and Turning our health complexity. to of reflection attention of the to is crucial our position current for ability our our market that's a management growth navigate strategic and

and strategic higher our today's landscape, economic current market. in is of environment. We're mindful operating liquidity management the the position, liquidity conscious a through influenced approach a by navigate cost of we to decision with the As both capital financial broader tight

closely taken common with utilized going liquidity. average we've strengthen initiatives our approximately to of lenders a This which short-term of ensure This to pursuing $X capacity of of facility overall. liquidity to flexibility financial our strategy our shares stock at-market worked access borrowing the contributing of quarter, to actively credit. million, our results XXX,XXX generated and while proactive weighted at our yield improved under untapped part have has should $X.XX. This augment we growth equity critical move is line operations position. We've our our we've liquidity steps previously price effort Furthermore, net Class our A positively effectively manage to proceeds

to capital approach We continue to our be disciplined expenditures. in

with strategic do been vital This healthy and liquidity our calibrated in a position. align our our maintaining carefully unnecessarily has have not assets cash burden longterm they flow. to and ensure goals approach We investments

proving liquidity while growth our to inventory contributing strategic only It positively challenges operating streamlining approach positively flow. In inventory maintaining opportunities. effectively capital manage we cash transactions, supply to the operating but financial effectively and our our economic have able not agility working our is with requirements. effort, to prudent involves us strategy the impacted Additionally, our working and have also navigate operational essence, future current optimizing levels, more efficiency our capitalize capital positions By our multifaceted. management. been on chain, to efficiencies This capital our

confident trajectory. growth project in our I the forward, am we path As

plan strategic promising to time, ahead. the showing and well I'm opportunities capitalize positioned is Our on

positive seeing of leading of nature the indicators are the -- momentum in lending business, by driven products. in We differentiated our our

trends. appealing a dynamics market, Our of with offerings these favorably our products in are strongly resonating our the health-conscious are of category the base consumers. The changes, forefront stand in the market to and growing out evolving of

inflection are are losses and reduced Looking the now ultimately, growth point. that confident ahead, will pave we an we for way building the

of Our efficiently strategic grows scale profitability as balance requisite that the and is to profitability heart growth our our strategy. levels, revenue initiatives ensuring are designed the of follow. This to at financial will

of value sustainable steadfast product efficiencies for strategic combined very its confident conclude commitment market path strong we direction in our underscores the potential I lies want unique creating foundation today shareholders discussion only to progress our and offerings growth Stryve we've reiterate effective also in a The made, foods. to remain deliver and we stakeholders. And are to our the that profitability. not had as plan, call, today's with confidence but and strategies operational in our and potential Our We have exciting the significant to ahead.

response marketplace. testament this our has our in been positive a and to operational to and of us step nature journey decisions the has packaging the efficiencies. Each set excellence. growth marked advancements ongoing by products commitment operational quarter the and been improvements Our consumer to apart to strategic differentiated continues to our The and our updated

the in snacking participants segment. just not are healthy We

forward We we poised our our appealing leverage and market further these are offerings. The in are favor, leaders trends innovative with to and driving dynamics the are to growth. category

we potential for Looking enthusiastic growth. are about ahead, significant the

only the strategic ensuring as our products, to in entire as strength geared team belief Our strategy initiatives revenue want team. grows. We and presence, for and of our customers our but expanding thank support our and and that profitability also for shareholders, dedication aligned our our In are continued follows your vision. believe market closing, effectiveness of the I in of the the Foods our Stryve not

open our line that, realize confident now trajectory, in and on I stakeholders. ability potential Operator? substantial questions. I We create all to would the our With value like for full a of our and promising to am for are

Operator

[Operator Instructions]

question Alex comes Fuhrman Craig-Hallum from Group. first Capital from Your

Alex Fuhrman

wanted sounds additionally, rise look and what your I And margins level? about mentioned? recent account more kind here. give volume you would that more mostly gross through prices like then in you gross ask to into gross is us normalized Can It EMV margins the maybe the to then sense perhaps a taking due margin like less looked volume normalized with like of margins of with lower a running gross would more what have facilities. volume

R. Hawkins

Yes.

to take margin fully Notwithstanding gross dependent upon prices, of moment. happy I'll which a beef potential of number being utilized, our footprint obviously, put product price our be that. mix. structure We the one in when on the them, can So that today -- based for should we get high variables, facility range aside a XXs and able and facility unit into have XXs, the overall. economics low to margin the and in cost gross we mix

we margin, our operating see mean of fully have we significant Now we have will volumes as and have there as gross added and rise, cost we profit, capacity within we into goods the as And the the footprint scale. needs somewhat the to that utilize manufacturing cost over of isn't said, untapped indicative there. business be facility grow have it's continue we'll we -- capacity to we I that much within that gross time. as to to overall leverage more have we incremental do,

Christopher Boever

I taking would size cost job our reflect down done to a streamlining Alex, overall phenomenal team and has the add to the the and identifying size a manner just material Yes, the in of that, labor scale facility our and operations business. and

we lever huge that to we better As margins. the we anticipate impact very know to gross fixed a on that and get the to utilize in achieving future, our going overhead we're our be have -- and assets volumes near

even and gross it, payments hasn't margin there's operations had that and fully with place flow to side cash In been constructing how there levers whether started the partners of that into the haven't the working side. differently reflect multiple procuring addition, a lot of we're the even strategic initiatives ways our of realized in yet, productivity we're we've and

are very revenues a help us So had strategic to arrangement I think line some products to there's our about then margins excited there of a being that and did lot gross improve certainly on my noncompetitive will help arrangement that a mention we partnership still overheads of for there. And and through tolling in complementary be about able co-man a absorb our a dramatically comments we help profitability.

Alex Fuhrman

the months Chris, there We're charge hear the your leading more that hearing for to have coming new been mentioned and some then, been future. weeks products distribution the points will about about great. and as And That's looking distribution you've that likely wins the brands in I in think you really forward here. increasing which more brands?

Raphael Gross

a the level types of Retailers heat profiles are Yes, Across great every and been question. we're flavor the and with and on overall packaging, the is you, single distribution, particular rapid new better channel, the The really able growing get packaging the to pouch trend. for lot great convenience question. combined of is in has in received. It across love well the foil in very call new on all flag. very being channels, positioning at across a that for expression really and marketplace. velocity consumer pace spot backed our

that natural will very very, growing momentum the So has much in continue. Kalahari channel. been

had we also velocity. and of that of picking positioning. quality increasing, up Our on to been penetration well more the getting of bit far in greatest we're the headwinds with in its and our we've and distribution a new little packaging brand distribution improved packaging be the expect Strive rates has its received, has new And undertaken is expression change that and increased significantly some the while velocities and there.

There's we across on total, trade. a to picking on turn that we're all gaining ad. bit little do But in and more. particular and little significantly distribution to are up a month of lots that we've classes work that got more bit brand momentum But

Operator

Your from Securities. Mike next [Operator question Grondahl Instructions] comes Northland from

Mike Grondahl

questions. Two

could low timing like revenues says Just and sort revenue it new or or some to maybe looking more bit little little aggregate? last when on Chris, clarity. for high that you several wins. wins the about of of these of in in range press in from a hit the announce talk bit release, the announce one, weeks, to those new we'll a of Could and coming expect

Christopher Boever

too to chains some different across of even Not announcement tell Yes. in you, several going retail this. before. be new From specific anything formats. see we I a you're had days coming and perspective, national would distribution see weeks placements haven't where to the here you'll products of on that in

distribution as stores. mean a more And XXX% see So incremental going SKUs where in it's you're its in can additional and list customers totality. expanded getting to of we're which new numerous distribution, more

So lot solution life retailers how type to a nothing switching that attributes. And and we result, within difference that types the pleased not of I the optimization excited to front we Historically, is a been complete front our forms team same tremendous extensions category that a that the But different have that will has this our starting discuss have being amount lot has brands impact there's the and as same sometimes because category. out category. There's able about There's been high points is of and in get a have very of innovation am in have. a us like minimal the of our very, flavor productivity opportunities of category have we and on in of lot there's there and level. Nobody a sales because of category processing our assortment a of of deliver that them. and incrementality lot in formats. the products

of cancer-causing the no with even leading meat-stick characteristics no water, make brand. the preservatives, Our sugar jerky, products or have us our broth, we a X.Xx product. no alternative yield leading preservatives are more no protein the And added XX% no that unique to than protein that healthier

And the therefore, very is very, high. incrementality protein. category So form it the least the cleanest is of for

the it quality be are very and they switch consistency our else that with can't walk can repeat bag that out go high. new the we try once in opt somewhere of product because else find levels quality, will store our to extremely to to confident something they the consumers of we So that a and have

a more and doctor and say, that in that in them jerkey that eat available be same as very not our that's tasting deals and with can can and they something help get to we get the market an that time. aisles will brands steak down to there's and steak at marketplace jerky in And adios and the better rare ever way that to they store. people Ola they're we understand great category I've competed with different. combination any the in going for And That's of a unbelievable up the

the are we'd to hear We're come So customers we're and like starting and we're see faster it possible quality, great and that it incremental category the Absolutely. this never seen going positioned and most and a consumer right to But a has form? category delivering different to highly rapid experience consumable the build this best deliver through going been Where expandable consistent going to the do Stryve. way. in to expansion before. best

channels, that retailers that going this. we're purchase around distribution that unique to from little rest we transitioned building. is keep see to to we'll -- give what they're as you the year's announcing out So operating next and a of going color more distribution our versus even But indicator to them, velocity plan. cornerstone we're a more faster an is keep what encouraging. bit We'll assured, key us, a you And anticipate combine through going bit and lay impact have keep early annual on as we directly starting for with

to for to recommendation, our say our trust very in in to therefore, the is So to aggregate venture favorable I and accelerate of availability lot be brands our data to that is to we the going expect continue portfolio a going continue blend to marketplace. and our credibility would which

we marketplace lots have different produce even more that can incrementality. and will forms to also even of new bring We

So.

Mike Grondahl

These May hit and the of April sort shelves the before resets?

Alex Fuhrman

Yes.

Mike Grondahl

Okay.

So timing May. April is and before

Christopher Boever

their until in It's respect more commitments near hand different, optimistic. multifaceted. to their -- are express before shined will retailer's future we we're there be but to very have All it's that color they're actually the don't accelerating, on want assured, into because the the coming we to have We competition. stores aggregating very, what's and retailers rest But confidentiality. in-store, very are and slightly the tip we commitments the

Mike Grondahl

you your what then -- sounds just that you're revenue Is generate of of co-packing like going it like overhead? some doing Got to there kind explain kind -- in facility it. or some And and or a do offering to just do a have of to explain could complementary packaging generate offset agreement like revenue? kind you're

Christopher Boever

Yes. Look, we're of in intersection and protein the portability.

a nearing make to also We have we last ability underserved with only it's serve. parts announcement working community capabilities and for just bring and wouldn't USDA into beef. And certified really products of more of fine types really that. types overheads, some attributes able the and great utilize retail couldn't an here be that, segmented the the and make And the on going products, to our of and market are of our will for manufacturing bring of it's different that with effort manufacturer can brand the comes in sizable that segment But plant that that that creates make really many this but consumer, partner detail we the the our that consumers segment the certainly, We're innings game. And the journey. be assured, avenues and we're to That we benefit that on some in that rest unique talked to of absorb a can for different will this something dried win-win. another marketplace consumers those to can We've think fit getting we air been months. country really market of about. with some also to I benefit co-manufacturing relationship that different

Operator

I are remarks. turn the there further to Chris no questions this call will for back over time. And closing at

Christopher Boever

an interest All best. fourth holiday happy, on providing Well, months prosperous your third quarter company. few and for Thank update our you. you our the season. our results to on in everyone healthy look and -- a thank a few forward progress and all wish results in We quarter a

Operator

today. your for We may thank and Ladies Thank and conference joining, gentlemen, this you concludes you. disconnect call you your lines. now for

Stryve Foods (SNAX) 14 Nov 232023 Q3 Earnings call transcript