SNAX - Earnings call transcript Q1 2024

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Operator

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

First Quarter 2024 Earnings Call. on the presentation, we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on Tuesday, May 14, 2024. to conference like to now would turn over the Mr. I Weil. ahead. go Please

Luke Weil

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

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

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

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

Christopher Boever

for Weil. Thanks, afternoon, and you joining us thank today. Good

for The Foods. of marks transformation of Stryve XXXX the first phase next quarter

us. significant mostly the capabilities, and on have cost, made we behind process improvements With quality

and energized future. about We are excited the

the with are that healthier, vision executing today's consumers. category snacking redefine to meet high-protein evolving our We needs supporting solutions the the of strategy,

quarter, and our that has several progress seen of consumer year-over-year has strategic velocity. our to driving been growth efficiency. retail we've to which operational new standout packaging response packaging success in our significant in exceeding is instrumental achievement areas exceptional This the initiative, new the expectations. improvements in The A our are our vital been

We X way. are up experiencing Retail is metric, per up improvements our rate XX up at XX% amazing for leading X the an March the has over Retail XX.X% increased an brand weeks velocity Stryve accelerated the over ending on weeks. velocity with measured as of an weeks, velocity of sales distribution. and of rate, each over brand, important SPINS Stryve point data XX, by sales XX.X% XX the capturing brands

market and consumer and We the shelf the category, fit performance are improved greatly exceeding presence, showcasing design. of appeal our packaging new the of

shelf our enhancements As in the to to consumer data The improvements new These shelves. little is critical but on look our position considerable of the ensuring has appealing market, now, in achieved products also the the engagement and Moreover, secure share. processes. a reception only while on products we've our in allowing have over the role elevated expand earning believe outside, supporting play halfway changes not more retail improved enhance will deliver and bolstered market a of reach we packaging through positive presence on quality ongoing rollout our that transition This our distribution. to consistently consumer experience, and additional taste. ability to complete that us manufacturing the our

advancements, Alongside we confidence improved high, is also quality, repeat ultimately stronger loyalty. and strategic our continued throughout our And our drive product product gaining position. velocities be have fueling organization. and levels to brand are We with efficiencies that and new the packaging productivity high users with will these

on has reduce structure. strong These improve overall us and our foundation profitability. waste efforts and cost excellence collectively set quarter our ultimately, for Our optimize operational performance growth resources, to a this allowed and focus contribute to

momentum focus reach, a Our the rotation on channels at fully to indicators are performance. have built. our of will a capitalize Southeast on strong is once category. ability velocities. available by also we I not now strategy Vacadillos leveraging to We brand to positive, we have we enhance only am we meat improved distribution the our as distribution expandable snack expand positively Costco aim for division, retail the increasing clubs. By our highly result demonstrated additional impact which our pleased share again Early the footprint, in warehouse but regained

strategy. to look our in this we category we've will can robust be enable built to will upon future. in driven ensure excellence costs. front will innovation further remain processes even manufacturing capacity effectively The capabilities that a and to have be the that our will leverage pipeline we the our a scale brand future, expansion. on there cornerstone built more managing As and to we efficiencies of while Certainly, share Operational greater

centered near continuous evolving will category technology core, supported further excellence. us expanding on operational execution, These position drive our involve and to investments while improvement success term for agility will and margins. In the our in in our in summary, enhance strategy by future growing performance and industry. commitment processes Our that pillars is our the

ever to category the that, consumers, continue leading Our partners the value Alex? Hawkins. protein shareholders, CFO, to most exceptional it experienced. best I'll and deliver over our clear: Alex highly to while to With products, with our the differentiated, tasting turn way snacking is has goal better-for-you

R. Hawkins

focus. a Thanks, the of everyone. first both detailed results overview of strategic which financial Chris. and execution strong for I'm reflect our to afternoon, Good pleased provide quarter operational XXXX, our

reported This sales we of million. quarter, net $X.X

our in penetration. change we net of represents same the performance is traction. period enhanced marginal significant packaging, to compared quality made terms traditional and important the as and year, decision the but a of have attributed our last market these product enhance initiatives decrease was initially for approximately While to this strategic sales recognize to some in X% slight stage to gain continue it slowed profitability which to have of sales strides channels largely The set

Additionally, the the the that attractive secured, our year efforts the more increased promote securing display largely economics. with to making to not more made pursue product program we we prior elected towards our how unit with distribution we temporary benefited our enhancements distribution in and products. by a points as by of program Ultimately, respect we targeted and to and was look and period better quality of decisions products XXXX as driven have when some packaging sell-through well new have as for display up improved permanent our

cost million despite This direct future. quarter, with XX.X% We to efficiencies prices volatility in better our efforts showed the still for reduce improvement management, year efforts even considerably unit. for margin $X.XX for expect the in $X.X a have gross beef Our more the mix, gross higher margin. compared focused profit cost margin a they that beef which given in is that influencing improved the an prevailing million of a period. some allowed of to us year meaningful and and continued with were the gross is were result period resources XX.X%. But manufacturing this prior quarter gross prices ago was leverage on year price of our product than do per dynamic, to result transformation This see our

out we do Either to we so for way, we ago. quarter $X.X to past. and reduction a that can position with $X million and compared driving to down of quarter, progress REPREVE optimizing find last and we're a that in in pull transformation cost approximately hope This reduction the the expenses However, effectiveness see is trend in as period we consistent operating XX.X% quarter in operational far losses, our our second loss XX% our unit significant in loss system improved This ways operating respond and income year. in Operating the to experiencing economics. strategy towards ago continuing XX% stand to million shown continue. strategically as underscores year loss and operating same years operating were our down as operating the are profitability. welcome the leverage a ready showed from $X.X a X same the the scale we million, for Consequently, with from improving ourselves period have to

first Our we quarter place in net of bridge loss $X.X for the year, is $X.X year notes million, which the was first in from a this quarter of In April. the put last period. certain maturities extended prior improvement marked million

as $X.X million XX.X% in in adjusted adjusted a our XXXX notes As first of that year-over-year quarter for roughly current associated were charge period. treatment basis That's sales basis year to represents extension, $X.X for million of expense on year $X.X our those compared at the accounting warrants a the an same such of quarter on to the our the with EBITDA EBITDA net quarter. EBITDA modified part bridge adjusted best other loss figure. was certain onetime in on reduction a ago the noncash of million modification Accordingly, loss the and loss ever

foundation our during first that at turnaround initiatives. and path our profitability the the sheet to come. outlook our our sustained for those critical XXXX, to of model for provide working, the the we're and we remainder recognize underlying balance continue this the performance of a end in in phase of year. of are progress efforts transformation results is the strength quarter These exercising of optimistic of to of to solid our Our benefits In indicative see support expect our important the it's strategic and quarters This business strategy. to prudence assessing financial success of the

at strategy, are currently cash million. emphasizing bearing significant is stringent which position liquidity realignments This the through as strategic cash $X.X managed navigate a we operational Our enhancements and carefully conservation fruit. approximately now reflects

controls are our Our managed operational extend actively liquidity expenditure being with in financial enhancements and rigorous on to runway. efficiency constraints

Additionally, our near last ramp we recently manage extended term day-to-day line seeing the market we previously required to from by the the $X.X capital us working and the of near-term credit, in success announced with our which in along million in bridge notes we're packaging. provided ability with convertible believe, have the operations of month, the closing

balance sheet through our to planning. financial and our by This continue financial on conditions work approach we through brand's management, control careful towards strengthening prudent and is crucial our navigate strengthening our we sustainability at strategic challenging is and success financial cash position retail, disciplined As long-term as expense ensuring focus juxtaposed these growth.

As forward constraints currently face, to acknowledging remainder the achieving to still targets. liquidity strategic financial committed goals our we we we the and of look XXXX, are

on our net and the to including several of factors, we the to $XX sales the in of volumes improvements net reiterating are as year expected project We in our $XX XXXX, For based execution drive the million guidance sales fiscal million. be This year are capital anticipated of sales. full guidance our retail is for rollout factors velocities packaging, new progresses. the increased to These expected plans. range

controlling strategic priorities. We resources structure, and ensure manufacturing expenditures that inventory our This rigorously our our to includes operational are our manage are more enhance improve effectively. efficiencies cost financial with our processes efforts optimizing aligned and to continuous

our While prudence, are sustainable and financial we profitability. are navigating foundation growth for the to through improved a designed lay period significant of strategies

initiatives in gradual we ultimate performance we with financial the and breakeven to continues point execute the our gain our as strategic an packaging traction see in expect our As to new to requisite on improvement volumes. market,

vision are ability our exciting to share this I'll committed opportunities shareholders initiatives. Chris, our and CEO, to management optimistic Chris? strategic to Stryve. targets back We to more and growth about our driving and financial our about through turn value meet that, With it are disciplined the strategic for for ahead our these

Christopher Boever

Alex. Thank you,

quarter our by significant management. This operations, our has to commitment been enhancements demonstrating cost across marked

outcome. us profitable value. enhance in to for As leverage leading we shareholder pivotal are lower-cost sustained we growth, layer These operational network, growth and our our improvements strategy will to a

greater anticipate been an product delivered and The with for solid demand partners. and a consumer experienced growth This improvements in category upgraded the continues protein, broker primarily driven leaders team sales driven and and coming packaging acceleration our has sustainable of more emphasis snack I quarter, quality. growth quarters. results anticipate stronger to with in protein and we increasing health evolve fully by significant on evolving The by category lifestyle options. wellness. healthier We trends

trends, most changing Our to high with and outlook of well these preservatives. sugar nutritional In their products demand, to optimistic. meet alignment conclusion, for thanks dietary reduction positioned the Stryve free of value are Foods current is consumer notable and

capitalize to and on the path are equipped opportunities We solid ahead. ready a with on right to the strategies

future the like over and that, Operator? Q&A. what I'd turn believe profitability. for to will the to holds excited and are to accelerated approach that lead operator it We about our With focused growth

Operator

we gentlemen, the Ladies session. question-and-answer and begin will [Operator Instructions]. now

from comes Our line Securities. from Northland question first Mike Grondahl the of

Mike Grondahl

little of years talk you promotional. region? And got you into Could time wasn't a into going you can Southeast Vacadillos it like a is getting Costco? priced about think you highly around division. you it I'm what asking argue that said just And back talk maybe reason getting a couple the bit is appropriately. And maybe think think more in Can how ago, you and improved? this and Vacadillos to about Costco look you guys was is, I pricing

Christopher Boever

puts to such properly, consistent to now customer but club win. for thanks patient that for getting time. and Yes, economics our all priced in solution a journey a Costco it's a position to then long is this positioned accurate, Mike, Costco Look, the a deliver and unit able engage actually member, and question. us Their right be as complete well Stryve with parties to properly certainly as been

we've the brand Vacadillos give has to opportunity to that an a So us to shopper show Costco attributes program in great region. the that the designed

regions. with have other discussions We ongoing

We May. early in We went just the of week indicators. have some first

So the we're just strong. very early basically and results are seeing some of velocities

all, momentum. the that but we is pricing, we a feel in division, the tremendous it's divisions proposition, only that repeat this not is win-win-win, other and value So can for gain the as and something we

Mike Grondahl

footprint, mean give that question. you distribution going or gives ramp? the it things Got of Is the it. improved repurchases? what of visibility most business you like looking Chris, at things expansion expectations comfort repeat X just year? maybe packaging, a X the the for follow-up revenues rest the on I that the are And are what ramp revenue to you the top then are the

Christopher Boever

again. Thanks

velocity. from velocity spike like all my change it's foremost, the have have I XX-plus in In and First I industry, years package that experiencing. we're seen a never a

largest brands Now seeing X a Stryve in renovation point and all brand are significantly of accelerating the going that's the velocity through distribution higher. but from velocity, standpoint, all we're largest increase went per the

but creating opportunities with a In challenges. it's as fact, come result, many opportunities

surprise back So we and speed were as therefore, up. the of taken by the to improvements. the velocity a had bit And catch and pivot we've immediacy to

that. catching is a below this little up where ultimately, shipments our are So probably bit consumption and we're on quarter

So very, very optimistic.

from more So basis discussions customers it's obviously we marketplace. stores that distribution around in expanding the velocity so within a more that direct XXX% over leads much on see improvement either that retailer which like-to-like stores and/or new will drive in that

with provide we more fact-based marketplace. the lot comes solutions a category data can broader So to that that

several gotten pretty after we've last I've since we now our pricing rounds the Secondly, pricing months of positioned been XX much properly took here. over that

And a ensuring So and a in being compound a good feel lot going we us that value I we're that's the to will that about our investment promotional distribution. that they're tactics from participate thing smarter drive expanded more be good good then and and perspective. for growth with We're at return sharper where next a on price lastly, velocity and about it.

business, currently you know, at where our not pretty We've of to significant the capture As should lower still brand. even and with improvements new And penetrated drive we're a white if outlook, in a velocity will. that, got lowly we're we're diluting lots such distribution. growth penetration space because you

going just experience quality new the with the exceptional. think we've to unlocked the I new for that So first and product get compounded. improved And try things that is we when those all the get to they're time, people

they're our et where to with our repeat us the no and very we experiences they cetera, ever had has delivered, were the #X decent the can franchise, coming come that and convenience reason to and experience We yield now will positive brand, pretty and protein category is But depending top into levels brand portability cetera, consumer which we've and selecting know engagement than like are consistency actual trying first stronger XX% best the more the the and that subscriptions going our think an all-time from to the and with are as preservatives and very and see no total confident leading the jerky, we've online, to velocities business. purchases we are the time, online little consistency have category, sugar, that repeat to the that consumers that is gives with amount days we the et ever be high which consumers on you're us taste, variety new seen quality delivering incredible for our in already early quickly. which from confidence So loyalty. for experience the going of believe see repeat, we

I'm next to be So able solution drive back confidently excited going very optimistic a retail we're base-wide about to now our for now partners. the what complete category and phase is go be and out to

Mike Grondahl

Alex, you working you maybe ramp did as And can revenue for keep question the notes supply that's the Alex. going capital these bridge quarter, last in this the needed. finance

Just being some your insight on comfort do to that? able with

R. Hawkins

to said, going new capital lot is a capacity installed of requires reset significantly to be lumpier distribution growth you're that in a we're where and all shipping to amount distribution, to more inventory. significant a which through have bump tend is that growth, way Like happened and coming. we full We that's see stores, you the of catching of can sudden, your a required hit be don't quickly. going We're velocity has fund to this up. us have Chris for happened, the working has know borrowing today back to what the ramp A the

to today, credit line exactly. that the our existing So it works tie way doesn't of

business can't. to off They'll capital. an These else. to or fund possible need prudent get of we the dilution we're requisite today our for we volumes we outs can notes it's amount bring And will to way finance the have our of No, existing going to with of most of third-party that. something bridge a at to for that. example self-sustaining bridge look we to amount do convertible are whether additional convertible model it so continue to in And But once need some in infusion, ways some least facilities? possible

have think I guidance giving in that's as and we sheet that the evident the we're today. it balance

Mike Grondahl

this execute have through And on what's do to end of needed? rough you range 'XX, a the of

R. Hawkins

We do.

that that and hope near we some the right now, disclosed haven't provide publicly to We future. updates on in

Christopher Boever

done well the One And expectations deliver and thing find solution. always fuel and and meet our is that fulfill exceptionally delight this we've we've most an find we've on prudent going consumers close are working on and manner. is solutions thing to momentum really continue shareholders. we to always a gaps really here, since customer basis actively done exceed One to way in to been created a positive as-needed and I've for effective the certainly those our scrappy and efficient that's

that's to assured, very rest on coming things list able be is to periods, momentum this now excited and of expect accomplish to about. we the that fully the our So marketplace in drive hit to continue

Operator

back Boever like seems final the There questions be to at for no this Mr. further to time. call I'd comments. Instructions]. [Operator now closing over to turn

Christopher Boever

want belief in express their our to and Foods. certainly support for our I all to stakeholders Stryve continued gratitude of

fronts discipline. of our financial substantial are market we expectations and remain progress the to across driving improvements operational We our making certainly to promises, from today, delivering customers. for exceeding dedicated on value expansion our and discussed shareholders all we've As strategic

joining quarters. future a our stake. be upcoming progress the again our are I enthusiastic We Don't sharing look to about jerky. forward you company, of today's call. you. continued Thank once Thank Eat for and the in very

Operator

call disconnect gentlemen, participating Ladies sir. concludes for for conference you today. a your lovely this We lines. please ask you, that Have and Thank your and thank day. you

Stryve Foods (SNAX) 14 May 242024 Q1 Earnings call transcript