BranchOut Food Inc. Announces Record First Quarter 2024 Results, Gross Margin Increased to 19%, On Track for ~$8M Run Rate
BranchOut Food (NASDAQ: BOF) announced record Q1 2024 results, achieving a remarkable 1,407% revenue increase to $1.47 million compared to $97,000 in Q1 2023. Gross margin improved significantly to 19%, up from -3% last year. The company secured $8 million in recurring revenue and $1.1 million in rotational retailer commitments from a major warehouse club. Recent accomplishments include retail expansion, securing a new production facility in Peru to boost efficiency, and a successful sale of notes and warrants raising $1,150,000. New product lines such as salad toppers and kids' snack packs were launched, and strategic partnerships were expanded. The company expects gross margins to increase to 40-50% with the new facility and remains focused on achieving profitability and enhancing shareholder value.
- Revenue increased by 1,407% to $1.47 million in Q1 2024.
- Gross margin improved to 19% from -3% in the previous year.
- Secured $8 million in recurring revenue from new contracts.
- Committed to $1.1 million in rotational orders from a major warehouse club.
- Launched new product lines: salad toppers and kids' snack packs.
- Secured a new production facility in Peru with a $40 million capacity.
- Projected gross margins expected to increase to 40-50% with the new facility.
- Raised $1,150,000 through the sale of Senior Secured Promissory Notes and Warrants.
- Expanded retail presence with contracts placing products in 1,400 stores by September 2024.
- Expanded warehouse club presence into 7 additional states.
- Despite the growth, the company is not yet profitable.
- Potential risk of over-reliance on new contracts for continued revenue growth.
- Initial costs and risks associated with expanding into a new production facility.
- Possible delay in reaching the projected 40-50% gross margins.
Insights
BranchOut Food Inc.'s Q1 2024 financial performance showcased remarkable growth, with a
The commitment of
However, the company's ability to scale and maintain these figures will be critical. The upcoming production facility in Peru, expected to operate with
BranchOut Food's strategic market expansions are noteworthy. Securing its third contract with the nation's largest retailer and receiving reorders from a major warehouse club indicate strong market acceptance and demand for its products. Expanding into additional states and enhancing their presence in 1,400 stores by September 2024 highlights their effective market penetration strategies.
The partnership with the U.S. Army to improve MREs using GentleDry technology showcases the company's innovative edge and diversified market opportunities. The successful product launches at the Natural Products Expo West with salad toppers and kids' snack packs also diversify their product offerings, appealing to broader consumer segments and reducing dependency on traditional snacking categories.
While these expansions are promising, the company must ensure sustained product quality and supply chain efficiency to meet rising demand. The new production facility in Peru is a critical component in this, potentially improving both cost and supply chain control.
BranchOut's use of proprietary GentleDry technology is a key differentiator. This technology enhances the nutritional value of their dehydrated fruit and vegetable products, potentially offering a competitive advantage in the health-conscious consumer market. The successful evaluations for MREs with the U.S. Army further attest to the technology's robustness and utility under rigorous conditions.
The agreement with EnWave for toll manufacturing using REVworx capacity indicates a strategic move to scale production while maintaining product quality. This partnership will likely support BranchOut in meeting its growing demand without compromising on its technological standards.
Continued innovation and leveraging their technology for new product lines will be essential for maintaining their market position and addressing evolving consumer preferences. Investors should keep an eye on how BranchOut continues to integrate and advance its technology to drive product differentiation.
- Achieved a 1,
407% revenue increase to$1.47 million in Q1 2024. - Increased gross margin to
19% in Q1 2024, up from -3% last year. - Secured
$8 million in recurring revenue plus$1.1 million in rotational retailer commitments.
BEND, Ore., May 15, 2024 (GLOBE NEWSWIRE) -- BranchOut Food Inc. (NASDAQ: BOF), a leading food technology company specializing in dehydrated fruit and vegetable-based products, today announced its recent accomplishments and financial results for the first quarter ended March 31, 2024. The Company reported a 1,
Eric Healy, CEO of BranchOut Food, commented, “This quarter's exceptional performance confirms the strong momentum of our growth strategy. We now have contracts totaling about
“The gross margin of
Recent Accomplishments:
- Retail Expansion: BranchOut Food secured its third contract with the nation's largest retailer, bringing total annualized revenue to over
$8M . This new$300,000 commitment will place BranchOut's dried fruit products in 1,400 stores by September 2024. - Warehouse Club Expansion: After several successful rations in the California regions in 2023, selling at nearly 2X the retailer’s threshold, BranchOut receives
$1.1M in reorders for 2024, expanding into 7 additional states. - Production Expansion: BranchOut Food secures a 50,000 square foot production facility in Peru, enhancing vertical integration with a
$40 million capacity and projected 40-50% gross margins, set to begin production in August. - Successful Sale of Notes and Warrants: BranchOut Food raised a total of
$1,150,000 t hrough the sale of Senior Secured Promissory Notes and Warrants and has board approval to raise another$850,000. T his supports its product roadmap and new equipment purchases to meet rising demand, aiming to enhance long-term shareholder value.
Q1 2024 Financial Highlights:
- Net Revenue: BranchOut Food reported net revenue of
$1.47 million for Q1 2024, a substantial increase from$97,000 in Q1 2023. This surge reflects the successful expansion of the Company's product lines and increased sales with large retail partners. - Gross Profit: The company achieved a gross profit of
$283,588 for the quarter, a significant turnaround from a gross loss of$29,642 in the same period last year. This improvement is due to enhanced operational efficiencies and cost-effective sourcing strategies.
Investors are encouraged to read the Company’s Annual Report on Form 10-Qfiled with the Securities and Exchange Commission (SEC), which will contain additional details about BranchOut Food’s financial results as of and for the period ended March 31, 2024.
Q1 2024 Operational Highlights:
- Strategic Partnerships: The Company expanded its relationship with the nation's largest retailer, securing a new agreement estimated at
$8 million annually. This partnership enhances BranchOut Food's presence and accessibility across the country. - Military Collaboration: BranchOut Food partnered with the U.S. Army to enhance MREs using its proprietary GentleDry technology, successfully completing the rigorous 6 month shelf life test, passing troop evaluations and showing promising results in ongoing shelf life testing to deliver greater utility and value.
- Product Expansion: BranchOut Food launched two innovative product lines, salad toppers and kids' snack packs, at the Natural Products Expo West. These launches broaden the company's portfolio beyond traditional snacking categories.
- Manufacturing Partnership: EnWave signed a toll manufacturing agreement with BranchOut Food to produce vegetable snack products using REVworx capacity, securing two months of production starting in early March 2024, with options for additional manufacturing as needed.
- Technology Advancements: BranchOut Food continued to leverage its proprietary GentleDry technology to deliver superior nutritional value in its dehydrated products, contributing to the success of its offerings in nearly 3,400 stores nationwide.
About BranchOut Food Inc.
BranchOut Food is an international food-tech company delivering truly great natural snacks and real superfood ingredients enabled by its licensed dehydration technology. The company’s GentleDry Technology is the next generation in dehydration technology, preserving up to
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified using words such as "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate", "plan," "outlook," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements with respect to the operations of BranchOut Food, Inc., (the Company) strategies, prospects and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
For more information
Jeff Ramson
PCG Advisory
646-863-6893
jramson@pcgadvisory.com
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