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THE REAL GOOD FOOD COMPANY, INC.

(RGF)
  Report
Delayed Nasdaq  -  04:00 2022-12-09 pm EST
6.990 USD    0.00%
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Real Good Food : Q2 2022 Earnings Presentation

08/12/2022 | 07:25am EST

Second Quarter 2022 Earnings Presentation

August 2022

(Nasdaq: RGF)

Disclaimer

Forward-Looking Statements

This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.All statements other than statements of historical fact or relating to present facts or current conditions included in this presentation are forward-looking statements. Forward-looking statements give The Real Good Food Company, Inc.'s (the "Company," "we," "us," or "our") current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "will continue," "will likely result," "will," and similar expressions, as they relate to our Company, our business and our management, are intended to identify forward looking statements.

In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially from those anticipated in or implied by the forward-looking statements, including as a result of the following factors: our limited operating history and significant operating losses; our ability to (i) increase our net sales from existing customers and acquire new customers; (ii) retain our customers; (iii) compete successfully in our industry; (iv) respond to new trends and changes in consumer preferences; (v) introduce new products or successfully improve existing products;

  1. implement our growth strategy; (vii) effectively expand our manufacturing and production capacity; (viii) retain our co-manufacturers and identify new co-manufacturers; (ix) obtain ingredients in sufficient quantities to meet demand for our products; or (x) obtain financing to achieve our goals to develop and commercialize new products, invest in our manufacturing facilities, and expand our product offerings; the impact of the COVID-19 pandemic on our supply chain and consumer behaviors; the requirements of becoming a public company; failure or interruption of our data systems; and cybersecurity incidents, or real or perceived errors, failures, or bugs in our systems or other technology disruptions or failure to comply with laws and regulations relating to privacy and the protection of data relating to our confidential information or our customers' personal information.

Forward-looking statements contained within this presentation include statements regarding our projected financial results and future financial performance; our future sales growth; new customer relationships; the price of our products; our expanding production capabilities, including adding incremental capacity at our newly commenced production at our Bolingbrook, IL facility; and our ability to drive future growth and success. Any forward-looking statement made by us in this presentation speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Industry Information

This presentation contains statistical data, estimates, and forecasts that are based on various sources, including independent industry publications and other publicly available information, as well as other information based on our internal sources. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these data, estimates, and forecasts. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Our industry and market data are subject to a variety of risks and uncertainties, including those described in the section entitled "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2021, which could cause results to differ materially from those expressed in these publications and reports.

Non-GAAP Financial Measures

We present adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures and should not be considered alternatives to measures calculated and presented in accordance with GAAP. Adjusted gross profit means, for any reporting period, gross profit adjusted to exclude the impacts of costs and adjustments identified by management as affecting the comparability of our gross profit from period to period. Adjusted gross margin means adjusted gross profit as a percentage of net sales. Adjusted EBITDA means, for any reporting period, net income (loss) before depreciation and amortization, income taxes, and interest expense, and adjusted to exclude the impact of transaction expenses, as well as other costs and adjustments identified by management as affecting the comparability of our operating results from period to period. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. Adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin should not be considered as alternatives to gross profit, gross profit margin, net loss or any other measure of financial performance calculated and presented in accordance with GAAP. There are a number of limitations related to the use of adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin rather than gross profit, gross profit margin, and net loss, which are the most directly comparable GAAP measures, respectively. Our presentation of adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin in the future, and any such modifications may be material. In addition, adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

Additional Information

All third-party brand names and logos appearing in this presentation are trademarks or registered trademarks of their respective holders. Any such appearance does not necessarily imply any affiliation with or endorsement of the Company.

1

Today's Presenters

Bryan Freeman

Gerard G. Law

Akshay Jagdale

ExecutiveChairman

CEO

CFO

  • 20+ years in the frozen foods industry
  • Scaled and successfully exited three businesses
  • Served on the senior leadership team of AdvancePierre Foods (TKR: APFH) that
    IPO'd at $2.2B in 2016 and eventually sold to Tyson Foods at $4.2B in 2017
  • 29+ years as an operator in the frozen foods industry
  • Was part of the senior leadership team at J&J Snack Foods (TKR: JJSF) where he managed 16 manufacturing facilities and had a team of approximately 4.2K employees
  • Successfully integrated over ten acquisitions
  • Strong public company experience
  • Part of a three-person equity road show team for JJSF
  • 15+ years of experience as a securities analyst in the food and beverage sector
  • Covered ~100 public food companies with a SMID-cap focus
  • Strong relationships with institutional investors

SnackWorks,

LLC

2

2Q22 Financial Summary

($ in thousands)

2Q22

2Q21

$ Chg y/y

% Chg y/y

Net Sales

$30,809

$18,685

$12,124

65%

Cost of Sales

$28,458

$16,023

$12,435

78%

Gross Profit

$2,351

$2,662

($311)

-12%

Gross Margin(1)

7.6%

14.2%

n/m

Adjusted Gross Profit(2)

$6,785

$3,896

$2,889

74%

Adjusted Gross Margin(1)(2)

22.0%

20.9%

110 bps

Adjusted Operating Expenses

$10,412

$5,537

$4,875

88%

Adjusted EBIT

($3,650)

($1,641)

($2,009)

n/m

Adjusted EBITDA(2)(3)

($3,246)

($1,447)

($1,799)

n/m

    • Net sales increased 65% to $30.8 million primarily due to strong growth in sales volumes of the Company's core products (Entrees and Breakfast), driven by expansion in the unmeasured channel, and greater demand from existing retail customers.
      • Measured channel sales grew ~97% driven by strong velocity gains of our core products and to a lesser extent new product and new customers
      • Unmeasured channel sales grew ~30% driven by distribution gains and strong velocities
    • Adjusted gross margin(2) increased to 110 bps primarily due to an increase in net price realization as well as an increase in the amount of products sold that were self-manufactured, partially offset by increases in labor and raw material costs.
    • Adjusted EBITDA(2)(3) loss increased to $3.2 million compared to Adjusted EBITDA loss of $1.4 million in the second quarter of 2021. Sequentially, as compared to the first quarter of 2022, the adjusted EBITDA loss narrowed by approximately $100 thousand and adjusted EBITDA margin increased by 170 basis points. The sequential improvement in adjusted EBITDA and adjusted EBITDA margin was driven by improvement in gross margin, partially offset by the increase in administrative expenses.
  1. Change is shown as changes to basis points.
  2. Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted EBITDA are non-GAAP financial measures. Adjusted Gross Profit means, for any reporting period, Gross Profit adjusted to exclude the impacts of costs and adjustments identified by management as affecting the comparability of our Gross Profit from period to period. Adjusted Gross Margin means Adjusted Gross Profit as a percentage of Net Sales. Please see appendix for a reconciliation of Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measures, Gross Profit and Gross Margin, respectively.
  3. Adjusted EBITDA means, for any reporting period, net income (loss) before depreciation and amortization, income taxes, and interest expense, adjusted to exclude the impact of transaction expenses, as well as other costs and

adjustments identified by management as affecting the comparability of our operating results from period to period. Please see appendix for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net

3

loss.

Updated FY 2022 Financial Outlook

Net Sales

Adjusted

Gross

Margin (1)

Adjusted

EBITDA (2)

PreviousCurrent

$150 - $160 million

$155 - $160 million

78% - 90% growth

84% - 90% growth

17% - 23%19% - 21%

$(4.0) - $(9.0) $(7.0) - $(9.0)

millionmillion

Change

+2.5M mid-

point

Narrowed

Narrowed

  1. Adjusted gross margin is a non-GAAP financial measure. Adjusted gross profit means, for any reporting period, gross profit adjusted to exclude the impacts of costs and adjustments identified by management as affecting the comparability of our gross profit from period to period. Adjusted gross margin means adjusted gross profit as a percentage of net sales. Please see appendix for a reconciliation of adjusted gross profit and adjusted gross margin to the most directly comparable GAAP measures, gross profit and gross margin, respectively.
  2. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA means, for any reporting period, net income (loss) before depreciation and amortization, income taxes, and interest expense, adjusted to exclude the impact of

transaction expenses, as well as other costs and adjustments identified by management as affecting the comparability of our operating results from period to period. Please see appendix for a reconciliation of adjusted EBITDA to the

4

most directly comparable GAAP measure, net loss

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Real Good Food Company Inc. published this content on 12 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2022 11:24:05 UTC.


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Financials (USD)
Sales 2022 155 M - -
Net income 2022 -31,4 M - -
Net Debt 2022 - - -
P/E ratio 2022 -6,41x
Yield 2022 -
Capitalization 43,3 M 43,3 M -
Capi. / Sales 2022 0,28x
Capi. / Sales 2023 0,22x
Nbr of Employees 107
Free-Float 23,6%
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Mean consensus BUY
Number of Analysts 4
Last Close Price 6,99 $
Average target price 14,33 $
Spread / Average Target 105%
EPS Revisions
Managers and Directors
Gerard Garfield Law Chief Executive Officer & Director
Akshay Jagdale Chief Financial Officer
Bryan T. Freeman Executive Chairman
George F. Chapelle Lead Independent Director
Deanna T. Brady Independent Director
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