Record Second Quarter Revenue - Full Year Revenue Guidance of
New Leadership Restructuring with Expected Profit Inflection During First Half 2023
Positioned for New Debt Financing Including Over
“In addition, I am excited to announce a major Restructuring Plan to build on the positives, accelerate gross margins, and deliver a profitable business in the future. This plan not only includes a goal to reduce operating expenses in the second half by greater than 50% year-over-year, but also includes an introduction of a productivity program, focused on quality growth, efficiencies, and disciplined execution. Additionally, a key piece of the plan is a continuous price action review process, which has already resulted in our recent announcement of a second price increase this year which will take effect in the coming months.
“Although we have reduced the Company’s full year net sales guidance range to
“Looking forward, we are encouraged by our early Q3 results as we are seeing meaningful gross margin recovery. We view this as a testament to our plan and the non-recurring nature of many of the pressures we faced in the second quarter.
“Finally, I’m excited to share we are under letter of intent to secure in excess of
Second Quarter Highlights
- Net sales of
$10.9 million , increased 49% from$7.4 million versus the year ago quarter. - Gross profit was negative
($4.4) million for the quarter, compared to positive gross profit of$3.6 million or 48.7% of net sales in the 2021 quarter. The negative gross margin during the second quarter was largely attributable to price/mix on a large scale, but most significantly by a limited-time, retailer specific promotional program. - Operating loss of
($16.0) million , compared to operating loss of($5.0) million in the 2021 second quarter. The material increase in the operating loss was mainly due to unprofitable sales and volume-related operations expenses from limited-time retailer specific promotional program, as well as one-time charges related to the Company’s restructuring efforts in the 2022 second quarter. - Net loss of
($16.4) million , or ($0.53 ) per share, compared to a net loss of($5.6) million , or ($0.55 ) per share, in the 2021 second quarter. - Adjusted loss per share of (
$0.39 ) 1 for the second quarter of 2022, was adjusted for restructuring charges, stock-based compensation and other one-time items, which compares favorably to Adjusted loss per share of ($0.58 ) for the year ago period. - Adjusted EBITDA loss1 of
($11.4) million for the 2022 second quarter, compared to($4.4) million in the prior year quarter.
1 Adjusted EBITDA and Adjusted loss per share are a non-GAAP financial measure as defined and reconciled to GAAP below.
First Six Months Highlights
- Net sales of
$18.4 million for the first half, increased 30% from$14.2 million versus the year ago period. - Gross profit was negative
($3.3) million for the first half, compared to positive gross profit of$6.3 million , or 44.1% of net sales in the 2021 period. - Operating loss of
($23.1) million for the first half, compared to operating loss of($11.6) million in the 2021 prior year period. The material increase in the operating loss was mainly due to unprofitable sales and volume-related operations expenses from a second quarter limited-time retailer specific promotional program. In addition, significant one-time charges from restructuring efforts under new leadership were recorded in the second quarter. - Net loss of
($23.7) million , or ($0.78 ) per share for the first half, compared to a net loss of($11.3) million , or ($1.12 ) per share, in the 2021 prior year period. - Adjusted loss per share of (
$0.62 ) 1 for the first half of 2022, was adjusted for restructuring charges, stock-based compensation and other one-time items, which compares favorably to Adjusted loss per share of ($1.28 ) for the year ago period. - Adjusted EBITDA loss1 of
($17.6) million for the first half, compared to a($10.2) million Adjusted EBITDA loss in the comparable period.
1 Adjusted EBITDA and Adjusted loss per share are a non-GAAP financial measure as defined and reconciled to GAAP below.
Conference Call
The Company will conduct a conference call today at
About
Stryve is an emerging healthy snacking and food company that manufactures, markets and sells highly differentiated healthy snacking and food products that Stryve believes can disrupt traditional snacking and CPG categories. Stryve’s mission is “to help Americans eat better and live happier, better lives.” Stryve offers convenient products that are lower in sugar and carbohydrates and higher in protein than other snacks and foods. Stryve’s current product portfolio consists primarily of air-dried meat snack products marketed under the Stryve®, Kalahari®, Braaitime®, and Vacadillos® brand names. Unlike beef jerky, Stryve’s all-natural air-dried meat snack products are made of beef and spices, are never cooked, contain zero grams of sugar*, and are free of monosodium glutamate (MSG), gluten, nitrates, nitrites, and preservatives. As a result, Stryve’s products are Keto and Paleo diet friendly. Further, based on protein density and sugar content, Stryve believes that its air-dried meat snack products are some of the healthiest shelf-stable snacks available today.
Stryve distributes its products in major retail channels, primarily in
For more information about Stryve, visit www.stryve.com or follow us on social media at @stryvebiltong.
* All Stryve Biltong and Vacadillos products contain zero grams of added sugar, with the exception of the Chipotle Honey flavor of Vacadillos, which contains one gram of sugar per serving.
Cautionary Note Regarding Forward-Looking Statements
Certain statements made herein are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate”, “may”, “will”, “would”, “could”, “intend”, “aim”, “believe”, “anticipate”, “continue”, “target”, “milestone”, “expect”, “estimate”, “plan”, “outlook”, “objective”, “guidance” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, including, but not limited to, statements regarding Stryve’s plans, strategies, objectives, targets and expected financial performance. These forward-looking statements reflect Stryve’s current views and analysis of information currently available. This information is, where applicable, based on estimates, assumptions and analysis that Stryve believes, as of the date hereof, provide a reasonable basis for the information and statements contained herein. These forward-looking statements involve various known and unknown risks, uncertainties and other factors, many of which are outside the control of Stryve and its officers, employees, agents and associates. These risks, uncertainties, assumptions and other important factors, which could cause actual results to differ materially from those described in these forward-looking statements, include: (i) the inability to achieve profitability due to commodity prices, inflation, supply chain interruption, transportation costs and/or labor shortages; (ii) the ability to recognize the anticipated benefits of the Business Combination or meet financial and strategic goals, which may be affected by, among other things, competition, supply chain interruptions, the ability to pursue a growth strategy and manage growth profitability, maintain relationships with customers, suppliers and retailers and retain its management and key employees; (iii) the risk that retailers will choose to limit or decrease the number of retail locations in which Stryve’s products are carried or will choose not to carry or not to continue to carry Stryve’s products; (iv) the possibility that Stryve may be adversely affected by other economic, business, and/or competitive factors; (v) the effect of the COVID-19 pandemic on Stryve; (vi) the possibility that Stryve may not achieve its financial outlook and (vii) other risks and uncertainties described in the Company’s public filings with the
Investor Relations Contact:
Three
Sandy Martin or Phillip Kupper
smartin@threepa.com or pkupper@threepa.com
214-616-2207 or 817-368-2556
-Financial Statements Follow-
Unaudited Condensed Consolidated Statement of Operations | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
For The Three Months Ended | For The Six Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
SALES, net | $ | 10,946 | $ | 7,351 | $ | 18,367 | $ | 14,186 | ||||||||
COST OF GOODS SOLD (exclusive of depreciation shown separately below) | 15,371 | 3,770 | 21,668 | 7,927 | ||||||||||||
GROSS (LOSS) MARGIN | $ | (4,425 | ) | $ | 3,581 | $ | (3,301 | ) | $ | 6,259 | ||||||
OPERATING EXPENSES | ||||||||||||||||
Selling expenses | $ | 4,717 | $ | 5,593 | $ | 8,743 | $ | 12,047 | ||||||||
Operations expense | 1,350 | 970 | 2,580 | 2,030 | ||||||||||||
Salaries and wages | 3,510 | 1,602 | 6,096 | 3,003 | ||||||||||||
Depreciation and amortization expense | 503 | 397 | 948 | 792 | ||||||||||||
Prepaid media reserve | 1,489 | - | 1,489 | - | ||||||||||||
Gain on disposal of fixed assets | (24 | ) | (10 | ) | (24 | ) | (9 | ) | ||||||||
Total operating expenses | 11,545 | 8,552 | 19,831 | 17,863 | ||||||||||||
OPERATING LOSS | (15,970 | ) | (4,971 | ) | (23,133 | ) | (11,604 | ) | ||||||||
OTHER (EXPENSE) INCOME | ||||||||||||||||
Interest expense | (181 | ) | (1,147 | ) | (369 | ) | (1,957 | ) | ||||||||
PPP loan forgiveness | - | - | - | 1,670 | ||||||||||||
Change in fair value of Private Warrants | 40 | - | 85 | - | ||||||||||||
Gain on debt extinguishment | - | 545 | - | 545 | ||||||||||||
Other (expense) income | (215 | ) | 12 | (215 | ) | 24 | ||||||||||
Total other (expense) income | (356 | ) | (590 | ) | (499 | ) | 282 | |||||||||
NET LOSS BEFORE INCOME TAXES | (16,326 | ) | (5,561 | ) | (23,632 | ) | (11,322 | ) | ||||||||
Income taxes | 29 | - | 36 | - | ||||||||||||
NET LOSS | $ | (16,355 | ) | $ | (5,561 | ) | $ | (23,668 | ) | $ | (11,322 | ) | ||||
Loss per common share: | ||||||||||||||||
Basic and diluted | $ | (0.53 | ) | $ | (0.55 | ) | $ | (0.78 | ) | $ | (1.12 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 30,946,486 | 10,139,422 | 30,355,697 | 10,141,928 |
Unaudited Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
2022 | 2021 | |||||||
(Unaudited) | (audited) | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalent | $ | 5,011 | $ | 2,217 | ||||
Accounts receivable, net | 4,256 | 2,900 | ||||||
Inventory, net | 6,653 | 7,216 | ||||||
Prepaid media spend, net of reserve | - | 450 | ||||||
Prepaid expenses and other current assets | 1,689 | 2,256 | ||||||
Total current assets | 17,609 | 15,039 | ||||||
Property and equipment, net | 8,015 | 6,826 | ||||||
Right of use asset, net | 669 | 767 | ||||||
Deferred Tax Asset | - | - | ||||||
8,450 | 8,450 | |||||||
Intangible asset, net | 4,483 | 4,604 | ||||||
Prepaid media spend, net of reserve and net of current portion | - | 1,085 | ||||||
Other assets | - | 4 | ||||||
TOTAL ASSETS | $ | 39,226 | $ | 36,775 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 2,557 | $ | 3,098 | ||||
Accrued expenses | 2,568 | 1,635 | ||||||
Current portion of lease liability | 211 | 168 | ||||||
Line of credit | - | 3,500 | ||||||
Current portion of long-term debt | 122 | 3,447 | ||||||
Total current liabilities | 5,458 | 11,848 | ||||||
Long-term debt, net of current portion | 36 | 120 | ||||||
Lease liability, net of current portion | 491 | 599 | ||||||
Financing obligation - related party operating lease | 7,500 | 7,500 | ||||||
Deferred tax liability, net | 67 | 67 | ||||||
Deferred stock compensation liability | 505 | 71 | ||||||
Warrant liability | 43 | 128 | ||||||
TOTAL LIABILITIES | 14,100 | 20,333 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock - | - | - | ||||||
Class A common stock - | 2 | 1 | ||||||
Class V common stock - | 1 | 1 | ||||||
Additional paid-in-capital | 132,902 | 100,551 | ||||||
Accumulated deficit | (107,779 | ) | (84,111 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 25,126 | 16,442 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 39,226 | $ | 36,775 |
Unaudited Condensed Consolidated Statement of Cash Flows | ||||||||
(In thousands) | ||||||||
Six Months Ended | ||||||||
2022 | 2021 | |||||||
(unaudited) | (unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (23,668 | ) | $ | (11,322 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 827 | 667 | ||||||
Amortization of intangible assets | 121 | 124 | ||||||
Amortization of debt issuance costs | - | 281 | ||||||
Gain on disposal of fixed assets | (24 | ) | (9 | ) | ||||
Gain on debt extinguishment | - | (545 | ) | |||||
Prepaid media reserve | 1,489 | - | ||||||
Amortization of right-of-use asset | 98 | - | ||||||
Interest income on members loan receivable | - | (24 | ) | |||||
Bad debt expense | 289 | 263 | ||||||
Forgiveness on paycheck protection program loan | - | (1,670 | ) | |||||
Stock based compensation expense | 712 | - | ||||||
Change in fair value of Private Warrants | (85 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,644 | ) | (2,728 | ) | ||||
Inventory | 563 | (1,433 | ) | |||||
Vendor deposits | 4 | - | ||||||
Prepaid media spend | 45 | (171 | ) | |||||
Prepaid expenses and other current assets | 566 | (800 | ) | |||||
Accounts payable | (540 | ) | 1,645 | |||||
Accrued liabilities | 933 | 279 | ||||||
Operating lease payments | (65 | ) | - | |||||
Net cash used in operating activities | $ | (20,379 | ) | $ | (15,443 | ) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash paid for purchase of equipment | (2,033 | ) | (249 | ) | ||||
Cash received for sale of equipment | 41 | 74 | ||||||
Net cash used in investing activities | $ | (1,992 | ) | $ | (175 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
PIPE capital raise | 32,311 | - | ||||||
Exercise of Prefunded Warrants | - | - | ||||||
Repurchase of member shares | - | (100 | ) | |||||
Post closing adjustment of BCA | (238 | ) | - | |||||
Repayments on long-term debt | (4,908 | ) | (4,361 | ) | ||||
Borrowings on related party debt | - | 9,294 | ||||||
Repayments on related party debt | - | (7,794 | ) | |||||
Borrowings on short-term debt | - | 19,695 | ||||||
Repayments on short-term debt | (2,000 | ) | - | |||||
Debt issuance costs | - | (507 | ) | |||||
Net cash provided by financing activities | $ | 25,165 | $ | 16,227 | ||||
Net change in cash and cash equivalents | 2,794 | 609 | ||||||
Cash and cash equivalents at beginning of period | 2,217 | 592 | ||||||
Cash and cash equivalents at end of period | $ | 5,011 | $ | 1,201 | ||||
SUPPLEMENTAL INFORMATION: | ||||||||
Cash paid for interest | $ | 403 | $ | 1,507 |
Reconciliation of GAAP to Non-GAAP Information
Stryve uses non-GAAP financial information and believes it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in operating results, and provide additional insight on how the management team evaluates the business. Stryve’s management team uses EBITDA, Adjusted EBITDA, and Adjusted Earnings Per Share to make operating and strategic decisions, evaluate performance and comply with indebtedness related reporting requirements. Below are details on this non-GAAP measure and the non-GAAP adjustments that the management team makes in the definition of EBITDA, Adjusted EBITDA and Adjusted Earnings Per Share. Stryve believes this non-GAAP measure should be considered along with net income (loss), the most closely related GAAP financial measure. A reconciliation between EBITDA and net income (loss) is below:
Three Month Period Ended | Three Month Period Ended | Six Month Period Ended | Six Month Period Ended | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
(in thousands) | ||||||||||||||||
Net loss before income taxes | $ | (16,326 | ) | $ | (5,561 | ) | $ | (23,632 | ) | $ | (11,322 | ) | ||||
Interest expense | 181 | 1,147 | 369 | 1,957 | ||||||||||||
Depreciation and amortization | 503 | 397 | 948 | 792 | ||||||||||||
EBITDA | $ | (15,642 | ) | $ | (4,017 | ) | $ | (22,315 | ) | $ | (8,573 | ) | ||||
Additional Adjustments: | ||||||||||||||||
PPP loan forgiveness | - | - | - | (1,670 | ) | |||||||||||
Severances and One-Time Employee Related Costs | 1,346 | - | 1,425 | - | ||||||||||||
One-Time Reserves and Write Downs | 2,562 | - | 2,562 | - | ||||||||||||
Business combination expenses | - | 193 | - | 1,077 | ||||||||||||
Stock based compensation expense | 384 | - | 712 | - | ||||||||||||
Comparability adjustment - Public vs. Private | - | (527 | ) | - | (1,049 | ) | ||||||||||
Adjusted EBITDA | $ | (11,350 | ) | $ | (4,351 | ) | $ | (17,616 | ) | $ | (10,215 | ) |
Three Month Period Ended | Three Month Period Ended | Six Month Period Ended | Six Month Period Ended | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
(In thousands except share and per share information) | ||||||||||||||||
Net loss | $ | (16,354 | ) | $ | (5,561 | ) | $ | (23,668 | ) | $ | (11,322 | ) | ||||
Weighted average shares outstanding | 30,946,486 | 10,139,422 | 30,355,697 | 10,141,928 | ||||||||||||
Basic & Diluted Net Loss per Share | $ | (0.53 | ) | $ | (0.55 | ) | $ | (0.78 | ) | $ | (1.12 | ) | ||||
Additional Adjustments: | ||||||||||||||||
PPP loan forgiveness | — | — | — | (0.16 | ) | |||||||||||
Severances and One-Time Employee Related Costs | 0.04 | — | 0.05 | — | ||||||||||||
Reserves and Write Downs | 0.08 | — | 0.08 | — | ||||||||||||
Business combination expenses | — | 0.02 | — | 0.11 | ||||||||||||
Stock based compensation expense | 0.01 | — | 0.02 | — | ||||||||||||
Comparability adjustment - Public vs. Private | - | (0.05 | ) | — | (0.10 | ) | ||||||||||
Adjusted Earnings per Share | $ | (0.39 | ) | $ | (0.58 | ) | $ | (0.62 | ) | $ | (1.28 | ) | ||||
Source:
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