Borealis Foods'; CEO Reza Soltanzadeh Issues Letter to Shareholders; Highlights Continued Gross Margin Expansion and Expectation for Stronger Second Half of 2024
Borealis Foods Inc. (Nasdaq: BRLS) CEO Reza Soltanzadeh issued a letter to shareholders highlighting Q2 2024 results and strategic developments. Key points include:
1. Gross margin improved to 7.9%, marking the third consecutive quarter of positive margins.
2. Pivot to higher-margin products, especially the Chef Woo brand, which saw shipments increase over 5x year-over-year.
3. Expectation of stronger sales in the second half of 2024 due to seasonal demand and expanded distribution channels.
4. New agreements with retailers, food service, and humanitarian programs are broadening distribution.
5. Institutional sales, particularly to schools in 20 states, are set to increase this fall.
6. Gordon Ramsay joined as Brand Ambassador and investor, with new flavors expected to launch in fall 2024.
Il CEO di Borealis Foods Inc. (Nasdaq: BRLS), Reza Soltanzadeh, ha emesso una lettera agli azionisti evidenziando i risultati del secondo trimestre del 2024 e gli sviluppi strategici. I punti chiave includono:
1. Il margine lordo è migliorato al 7,9%, segnando il terzo trimestre consecutivo di margini positivi.
2. Un cambiamento verso prodotti a margini più elevati, in particolare il marchio Chef Woo, che ha visto un aumento delle spedizioni di oltre 5 volte rispetto all’anno precedente.
3. Aspettativa di vendite più forti nella seconda metà del 2024 grazie alla domanda stagionale e all'espansione dei canali di distribuzione.
4. Nuovi accordi con rivenditori, servizi alimentari e programmi umanitari stanno ampliando la distribuzione.
5. Le vendite istituzionali, in particolare per le scuole in 20 stati, sono destinate ad aumentare quest'autunno.
6. Gordon Ramsay è entrato come Brand Ambassador e investitore, con nuovi gusti previsti per il lancio nell'autunno del 2024.
El CEO de Borealis Foods Inc. (Nasdaq: BRLS), Reza Soltanzadeh, emitió una carta a los accionistas destacando los resultados del segundo trimestre de 2024 y los desarrollos estratégicos. Los puntos clave incluyen:
1. El margen bruto mejoró al 7.9%, marcando el tercer trimestre consecutivo de márgenes positivos.
2. Un cambio hacia productos de mayor margen, especialmente la marca Chef Woo, que vio un aumento de envíos de más de 5 veces en comparación con el año anterior.
3. Expectativa de ventas más fuertes en la segunda mitad de 2024 debido a la demanda estacional y a la expansión de los canales de distribución.
4. Nuevos acuerdos con minoristas, servicios de alimentos y programas humanitarios están ampliando la distribución.
5. Las ventas institucionales, especialmente a escuelas en 20 estados, están preparadas para aumentar este otoño.
6. Gordon Ramsay se unió como Embajador de Marca e inversor, con nuevos sabores que se espera lanzar en otoño de 2024.
Borealis Foods Inc. (Nasdaq: BRLS)의 CEO Reza Soltanzadeh가 2024년 2분기 결과 및 전략적 발전을 강조하는 주주 서한을 발표하였습니다. 주요 내용은 다음과 같습니다:
1. 매출 총 이익률이 7.9%로 개선되었습니다, 이는 긍정적인 이익률이 이어진 세 번째 분기입니다.
2. Chef Woo 브랜드를 포함하여, 더 높은 이익률의 제품으로의 전환이 이루어졌으며, 이 브랜드의 출하량은 작년 대비 5배 이상 증가했습니다.
3. 2024년 하반기에 강한 판매가 예상됩니다, 이는 계절적 수요와 확장된 유통 경로 덕분입니다.
4. 소매업체, 식품 서비스 및 인도적 프로그램과의 새로운 계약이 유통을 확장하고 있습니다.
5. 20개 주의 학교를 대상으로 한 기관 판매가 이번 가을에 증가할 예정입니다.
6. 고든 램지가 브랜드 앰배서더 및 투자자로 합류하며, 2024년 가을에 새로운 맛이 출시될 예정입니다.
Le PDG de Borealis Foods Inc. (Nasdaq: BRLS), Reza Soltanzadeh, a publié une lettre aux actionnaires mettant en lumière les résultats du deuxième trimestre 2024 et les développements stratégiques. Les points clés incluent :
1. La marge brute a été améliorée à 7,9%, marquant le troisième trimestre consécutif de marges positives.
2. Un pivot vers des produits à plus forte marge, en particulier la marque Chef Woo, qui a vu ses expéditions augmenter de plus de 5 fois par rapport à l'année précédente.
3. Attente de ventes plus fortes au deuxième semestre de 2024 en raison de la demande saisonnière et de l'extension des canaux de distribution.
4. De nouveaux accords avec les détaillants, le service alimentaire et les programmes humanitaires élargissent la distribution.
5. Les ventes institutionnelles, en particulier à destination des écoles dans 20 États, devraient augmenter cet automne.
6. Gordon Ramsay a rejoint en tant qu'ambassadeur de la marque et investisseur, avec de nouvelles saveurs attendues pour cet automne 2024.
Der CEO von Borealis Foods Inc. (Nasdaq: BRLS), Reza Soltanzadeh, hat einen Brief an die Aktionäre veröffentlicht, in dem die Ergebnisse des zweiten Quartals 2024 und strategische Entwicklungen hervorgehoben werden. Die wichtigsten Punkte umfassen:
1. Die Bruttomarge verbesserte sich auf 7,9%, was das dritte aufeinanderfolgende Quartal mit positiven Margen markiert.
2. Fokus auf Produkte mit höherer Marge, insbesondere die Marke Chef Woo, deren Lieferungen im Vergleich zum Vorjahr um über das 5-Fache gestiegen sind.
3. Erwartungen an stärkere Verkäufe in der zweiten Hälfte von 2024 aufgrund saisonaler Nachfrage und erweiterter Vertriebskanäle.
4. Neue Vereinbarungen mit Einzelhändlern, Gastronomiebetrieben und humanitären Programmen erweitern den Vertrieb.
5. Institutionelle Verkäufe, insbesondere an Schulen in 20 Bundesstaaten, sollen in diesem Herbst zunehmen.
6. Gordon Ramsay trat als Markenbotschafter und Investor bei, mit neuen Geschmacksrichtungen, die im Herbst 2024 erwartet werden.
- Gross margin improved to 7.9%, marking the third consecutive quarter of positive margins
- Chef Woo brand shipments increased over 5x year-over-year
- Expanded distribution channels including food service and humanitarian food programs
- Institutional sales to schools in 20 states set to increase in fall 2024
- Gordon Ramsay joined as Brand Ambassador and investor, with new product launches expected
- Intense price and promotion activity from competitors in the value ramen category
- Going concern issue mentioned in recent SEC filings, though progress is being made to resolve it
Insights
Borealis Foods' Q2 results show mixed signals. Positive developments include a
However, the going concern issue mentioned in recent SEC filings is a significant red flag, indicating potential financial instability. The lack of specific revenue figures and the emphasis on future prospects rather than current performance suggest ongoing challenges. The company's focus on margin improvement over revenue growth in a competitive market could be a double-edged sword, potentially limiting market share gains.
Investors should closely monitor Q3 and Q4 results to validate the company's optimism about a stronger second half, particularly regarding sales growth and continued margin expansion.
Borealis Foods is making strategic moves in a competitive landscape. The 5x increase in Chef Woo brand shipments indicates strong product-market fit and potential for growth. The company's expansion into food service, humanitarian programs and partnerships with multinational food companies could significantly broaden its market reach.
The seasonal nature of the soup market presents both an opportunity and a challenge. While fall typically brings increased demand, it also intensifies competition. Borealis' success will depend on how effectively it can leverage its expanded distribution channels and new product offerings to capture market share.
The partnership with Gordon Ramsay as a brand ambassador could provide a significant boost to brand visibility and consumer appeal, potentially driving sales growth. However, the effectiveness of celebrity endorsements in the value food segment remains to be seen.
Dear Fellow Shareholders:
We continued to make steady progress during the second quarter and while our reported results included some important accomplishments, the real excitement lies in the transformative work happening behind the scenes as we laid critical groundwork for advancing our goal of being a leading, innovative food-tech company with accelerating sales in the second half of 2024 and beyond.
Here's a glimpse of the progress we're making:
- Continued margin improvement – We reported second quarter gross margin of
7.9% , marking the third consecutive quarter of positive margins and reflecting an expansion of margins from the first quarter and an improvement in gross profit dollars of24% from the year-ago quarter. To be successful, it is imperative that we continue to expand margins. During the quarter we were faced with intense price and promotion activity from our competitors in the value ramen category. We responded by accelerating our longer-term strategy of pivoting to our higher margin products, led by our flagship Chef Woo brand, which saw shipments increase over 5x from the year ago quarter. This strategic decision enabled us to continue our margin expansion and we intend to continue working hard to maximize our margins. Stay tuned as we continue to optimize our product lineup and introduce groundbreaking offerings to the market - Stronger second half ahead – Historically, the soup market heats up with the arrival of fall, and this year is poised to be no different. We're strategically positioned to capitalize on this seasonal surge with a revamped sales mix and expanded product lines. Our efforts to increase our distribution channels give me optimism that we are on a path to deliver a combination of growing sales and expanded margins.
- Distribution expansion & plant utilization – Our efforts to broaden our distribution network are paying off. New agreements are bringing Borealis products to a wider range of retailers and distribution channels, including food service and humanitarian food programs. We're also forming strategic partnerships with major multinational food companies and look forward to sharing more about these developments. Additionally, our institutional channel sales, especially with schools across the
U.S. , are set to ramp up this fall. We've already begun shipping to schools in 20 states, and this expansion is driving improved plant utilization and cost absorption, further boosting our margins. - Gordon Ramsay, Borealis Brand Ambassador & investor – We're thrilled to have culinary superstar Chef Ramsay as our Brand Ambassador and shareholder. His latest creations are sure to dazzle ramen aficionados and set new standards in the industry. We can't wait to unveil these exciting new flavors and expect to see them hit store shelves this fall.
In summary, we have a lot to be excited about, especially as our much-anticipated second half is now at hand. During the last few months, we have accomplished a tremendous amount and I look forward to being able to share those initiatives with our fellow shareholders soon. Our vision is to be a leading innovative food tech company that creates a range of products that advance our mission of fighting malnutrition. We're still very much in the early stages of our journey and hope to share more news on all we've been working on very soon.
In addition to executing on the many pieces of our strategic plan, we are also highly focused on resolving the going concern issue that was contained in reference to the financial statements in our recent SEC filings, and are making solid progress on this front. We are enthusiastic about Borealis' growth strategy and outlook, and I look forward to reporting on Borealis Foods' continued developments.
In Good Health,
Reza Soltanzadeh
CEO
Borealis Foods Inc.
About Borealis
Borealis is an innovative food technology company with a mission to address global food security challenges through its research and development of tasty, highly nutritious and functional food products that are both affordable and sustainable. The Company's focus on affordability and sustainability reflects its commitment to making a positive impact on both human life and the planet. Borealis distributes its food products throughout
Forward Looking Statements
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the and future financial condition and performance of Borealis, and the expected financial impacts of the Business Combination (including future revenue and pro forma enterprise value), markets, and expected future growth and market opportunities. Forward-looking statements generally relate to management's current expectations, hopes, beliefs, intentions, strategies, plans, objections or projections about future events or Borealis' future financial condition or operating performance. When used in this press release, the words "estimates," "projected," "expect," "anticipate," "forecasts," "plans," "intend," "believe," "seek," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors are detailed in the Company's periodic and current reports filed with the Securities and Exchange Commission, including the disclosures under "Risk Factors" in the Company's Form 10-Q for the quarter ended March 31, 2024 and its Form 8-K/A filed with the Securities and Exchange Commission on April 15, 2024. As such, readers are cautioned not to place undue reliance on any forward-looking statements and readers should not rely on these forward-looking statements as predictions of future events.
Forward-looking statements are based upon estimates and assumptions that, while considered reasonable by management of Borealis, are inherently uncertain. Factors that may cause actual result to differ from current expectations include, but are not limited to: financial and operating performance; changes to existing applicable laws or regulations; the possibility that Borealis or the combined company may be adversely affected by economic, business, or competitive factors; Borealis' estimates of revenue, expenses, operating costs and profitability; the evolution of the markets in which Borealis competes and Borealis' ability to enter new markets effectively; and the ability of Borealis to implement its strategic initiatives and continue to innovate its existing services.
Forward-looking statements speak only as of the date they are made. Investors are cautioned not to put undue reliance on forward-looking statements and Borealis assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities and other applicable laws.
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SOURCE Borealis Foods, Inc.
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