Laird Superfood Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

Laird Superfood reported a 64% increase in net sales for Q2 2021, totaling $9.2 million, driven by strong online and wholesale performances. Online sales surged 94%, while wholesale grew 77%. Gross profit rose to $2.2 million, with a gross margin of 23.9%. However, the company experienced a net loss of $6.3 million, widening from a loss of $4.0 million year-over-year. The acquisition of Picky Bars contributed positively, though operating expenses doubled, leading to operational losses.

Positive

• Net sales increased 64% to $9.2 million in Q2 2021.
• Online sales jumped 94%, highlighting strong direct-to-consumer growth.
• Gross profit rose 66%, totaling $2.2 million.
• Acquisition of Picky Bars enhanced product offerings and revenue diversification.

Negative

• Net loss grew to $6.3 million in Q2 2021 from $4.0 million in Q2 2020.
• Operating expenses rose significantly to $8.5 million, up from $4.3 million the previous year.
• Gross margin slightly decreased to 23.9% from 23.6% year-over-year.

Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood”, “we” and “our”), today reported financial results for its second quarter ended June 30, 2021.

Second Quarter 2021 Highlights

• Net Sales increased to $9.2 million, an increase of 64% year over year.
• Online sales contributed 63% of net sales, increasing 57% year over year with direct-to-consumer up 94%.
• Wholesale sales contributed 35% of net sales, increasing 77% year over year, and included continued traction in grocery and liquid creamer gains.
• Gross profit was $2.2 million and gross margin was 23.9% compared to gross profit of $1.3 million and gross margin of 23.6% in the prior year quarter.
• Net loss attributable to common stockholders was $6.3 million, or $0.70 per diluted share, compared to net loss attributable to common stockholders of $4.0 million, or $0.93 per diluted share, in the prior year period.

“Broad-based growth was a key theme from our second quarter results as we delivered solid gains across all major channels and categories,” said Paul Hodge Jr., Co-founder, President and Chief Executive Officer of Laird Superfood. “Our direct-to-consumer sales were up 94% reflecting our strong metrics around attracting, converting and retaining customers. Wholesale increased 77% as we continued to make solid progress expanding our presence in the grocery channel. We introduced several new innovative products during the quarter and are very pleased with the early results from the acquisition of Picky,” concluded Hodge. “Our powerful omnichannel platform remains a key point of differentiation enabling multiple growth drivers for new and existing products. During the second quarter, approximately one-third of our revenue growth was attributable to products introduced over the past year. As we continue gaining share in our legacy categories and expanding our total addressable market via new offerings, Laird Superfood’s long-term vision of delivering better for you, plant-based alternatives for every moment of consumers’ daily ritual comes closer to reality.”

For the Three Months Ended June 30, 2021

		Three Months Ended June 30,
		2021						2020
		$				% of Total		$				% of Total
Coffee creamers		$	5,078,739			55%		$	4,005,430			71%
Hydration and beverage enhancing supplements			1,511,630			16%			981,471			17%
Coffee, tea, and hot chocolate products			1,661,130			18%			1,222,617			22%
Harvest snacks and other food items			1,344,802			15%			-			0%
Other			317,422			3%			173,607			3%
Gross sales			9,913,723			108%			6,383,125			114%
Shipping income			40,750			0%			43,793			1%
Returns and discounts			(758,687	)		(8%)			(818,088	)		(15%)
Sales, net			9,195,786			100%			5,608,830			100%
		Three Months Ended June 30,
		2021						2020
		$				% of Total		$				% of Total
Online		$	5,799,104			63%		$	3,684,526			66%
Wholesale			3,235,230			35%			1,823,188			33%
Food service			161,452			2%			101,116			2%
Sales, net		$	9,195,786			100%		$	5,608,830			100%

Net sales increased 64% to $9.2 million in the second quarter of 2021 compared to $5.6 million in the second quarter of 2020. Growth in net sales in the second quarter of 2021 was due primarily to solid gains in DTC, including two months of newly acquired Picky Bars.

Gross profit was $2.2 million, a 66% increase compared to the prior year period of $1.3 million. Gross margin was 23.9% of net sales in the second quarter of 2021, compared to 23.6% of net sales in the prior year period. The year over year increase in gross margin was primarily due to optimization of direct-to-consumer shipping costs and improvements in liquid creamer distribution and disposals.

Operating expenses were $8.5 million compared to $4.3 million in the year ago period and reflect General and Administrative expense increases of $2.3 million, primarily due to stock-based compensation, personnel costs, insurance expense, reserves against prepaid assets, and professional fees, as well as Sales and Marketing expense increases of $1.5 million, primarily due to advertising and marketing fees.

Loss from operations was $6.3 million in the second quarter of 2021, compared to a loss of $3.0 million in the prior year period.

Net loss attributable to common stockholders was $6.3 million, or $0.70 per diluted share, in the second quarter of 2021, compared to net loss attributable to common stockholders of $4.0 million, or $0.93 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “In addition to delivering strong top-line growth, we’ve made significant strides operationally through the first half of 2021 putting us firmly on track toward our long-term goals around margins and profitability. Continued optimization of our direct-to-consumer shipping expenses, driven by an improvement in our average order value, aided our gross margin this quarter. Similarly, continued improvements related to our liquid creamer products, including an extended shelf life and logistical enhancements, resulted in significant improvement in manufacturing waste and spoils. With over $43 million of cash and investments and essentially no debt, our balance sheet remains strong providing the capacity and flexibility to pursue multiple growth drivers on our path to scale and profitability.”

For the Six Months Ended June 30, 2021

		Six Months Ended June 30,
		2021						2020
		$				% of Total		$				% of Total
Coffee creamers		$	10,100,647			61%		$	8,024,792			72%
Hydration and beverage enhancing supplements			2,576,206			15%			1,840,177			17%
Coffee, tea, and hot chocolate products			3,561,962			21%			1,963,189			18%
Harvest snacks and other food items			1,487,705			9%			-			0%
Other			533,838			3%			233,197			2%
Gross sales			18,260,358			110%			12,061,355			109%
Shipping income			66,410			0%			195,345			2%
Returns and discounts			(1,704,729	)		(10%)			(1,164,645	)		(10%)
Sales, net			16,622,039			100%			11,092,055			100%
		Six Months Ended June 30,
		2021						2020
		$				% of Total		$				% of Total
Online		$	10,161,510			61%		$	6,335,267			59%
Wholesale			6,158,286			37%			4,551,000			41%
Food service			302,243			2%			205,788			1%
Sales, net		$	16,622,039			100%		$	11,092,055			100%

Net sales increased 50% to $16.6 million in the first six months of 2021 compared to $11.1 million in the first six months of 2020. Year-to-date growth in net sales was due to growth in both online and wholesale channels, and broad based with all categories showing strong double-digit increases. In addition, we completed the acquisition of Picky Bars in early May, which significantly increased our business in Harvest snacks and other food products.

Gross profit was $4.1 million, an increase of 18% compared to the prior year period of $3.4 million. Gross margin was 24.4% of net sales in the first six months of 2021, compared to 31.0% of net sales in the prior year period. The year over year decrease in gross margin was primarily due to elevated outbound shipping costs combined with the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com, increased personnel costs and costs associated with our liquid creamer product line.

Operating expenses were $15.7 million compared to $8.5 million in the first six months of 2021 and reflect General and Administrative expense increases of $4.4 million, primarily due to stock-based compensation, personnel costs, insurance expense, reserves against prepaid assets, and professional fees, as well as Sales and Marketing expense increases of $2.5 million, primarily due to advertising and marketing fees.

Loss from operations was $11.6 million in the first six months of 2021, compared to a loss of $5.0 million in the prior year period.

Net loss attributable to common stockholders was $11.6 million, or $1.30 per diluted share, in the first six months of 2021, compared to net loss attributable to common stockholders of $6.0 million, or $1.40 per diluted share.

Balance Sheet and Cash Flow Highlights

The Company’s current assets include cash, cash equivalents, and restricted cash of $34.9 million and investment securities of $8.7 million as of June 30, 2021. Total outstanding debt was $51,000 as of June 30, 2021. Net cash used in operating activities was $11.0 million in the six months ended June 30, 2021, compared to $4.6 million in the comparative prior year period.

Capital expenditures totaled $0.5 million for the six months ended June 30, 2021, compared to $0.3 million in the comparative prior year period.

Leadership Transition

Also announced today, Paul Hodge, Jr. will be transitioning to a non-executive role and stepping down as President and Chief Executive Officer. The Company’s Board of Directors has commenced a search for his successor. Additional details on this transition can be found in a separate media release issued this afternoon.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally. The conference I.D. code is 3667069. Alternatively, participants may access the live webcast on the Laird Superfood Investor Relations website at https://investors.lairdsuperfood.com under “Events.”

About Laird Superfood

Laird Superfood, Inc. creates award-winning, plant-based superfood products that are both delicious and functional. The Company's products are designed to enhance your daily ritual and keep consumers fueled naturally throughout the day. The Company was co-founded in 2015 by the world's most prolific big-wave surfer, Laird Hamilton. Laird Superfood's offerings are environmentally conscientious, responsibly tested, and made with real ingredients. Shop all products online at lairdsuperfood.com and join the Laird Superfood community on social media for the latest news and daily doses of inspiration.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Laird Superfood’s future financial performance, including our outlook for fiscal year 2021. These forward-looking statements are based on Laird Superfood’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Laird Superfood’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. We expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The risks and uncertainties referred to above include, but are not limited to: (1) the effects of the current COVID-19 pandemic, or of other global outbreaks of pandemics or contagious diseases or fear of such outbreaks, including on our supply chain, the demand for our products, and on overall economic conditions and consumer confidence and spending levels; (2) our expectations regarding our revenue, expenses, including shipping expenses, and other operating results; (3) our ability to acquire new direct and wholesale customers and successfully retain existing customers; (4) our ability to attract and retain our suppliers, distributors and co-manufacturers, and effectively manage their costs and performance; (5) our expectations regarding real or perceived quality with our products or other issues that adversely affect our brand and reputation; (6) our ability to innovate on a timely and cost-effective basis, predict changes in consumer preferences and develop successful new products, or updates to existing products, and develop innovative marketing strategies; (7) expectations regarding prices and availability of raw materials and other inputs, a substantial amount of which come from a limited number of suppliers outside the United States, including in areas which may be adversely affected by climate change; (8) effects of changes in the tastes and preferences of our consumers and consumer preferences for natural and organic food products; (9) the financial condition of, and our relationships with, our suppliers, co-manufacturers, distributors, retailers and foodservice customers, as well as the health of the foodservice industry generally; (10) effects of real or perceived quality or health issues with our products or other issues that adversely affect our brand and reputation; (11) the ability of ourselves, our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations; (12) our plans for future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (13) the costs and success of our marketing efforts, and our ability to promote our brand; (14) our reliance on our executive team and other key personnel and our ability to identify, recruit and retain skilled and general working personnel; (15) our ability to effectively manage our growth; (16) our ability to compete effectively with existing competitors and new market entrants; (17) the impact of adverse economic conditions; and (18) the growth rates of the markets in which we compete.

LAIRD SUPERFOOD, INC.
STATEMENTS OF OPERATIONS
			For the Three Months Ended June 30,								For the Six Months Ended June 30,
			2021				2020				2021				2020
Sales, net			$	9,195,786			$	5,608,830			$	16,622,039			$	11,092,055
Cost of goods sold				(6,998,695	)			(4,285,128	)			(12,558,194	)			(7,650,736	)
Gross profit				2,197,091				1,323,702				4,063,845				3,441,319
General and administrative
Salaries, wages and benefits				1,019,845				804,903				2,225,698				1,621,075
Stock-based compensation				955,369				116,249				1,854,604				299,452
Professional fees				609,448				191,130				953,070				373,177
Insurance expense				500,821				25,866				1,023,221				57,061
Office expense				206,448				108,883				393,279				222,248
Occupancy				62,957				56,343				119,478				109,774
Merchant service fees				151,882				89,014				258,257				145,049
Netsuite subscription expense				74,117				30,923				129,138				57,318
Impairment on asset held for sale				-				239,734				-				239,734
Other expense				582,024				169,397				847,235				307,124
Total general and administrative expenses				4,162,911				1,832,442				7,803,980				3,432,012
Research and product development
Salaries, wages and benefits				116,187				72,931				186,548				147,833
Stock-based compensation				5,385				2,192				8,952				4,384
Product development expense				249,948				40,175				412,792				97,917
Other expense				3,332				2,499				7,247				10,977
Total research and product development expenses				374,852				117,797				615,539				261,111
Sales and marketing
Salaries, wages and benefits				630,328				697,547				1,264,079				1,443,556
Stock-based compensation				55,706				35,938				97,095				110,434
Advertising				1,699,865				1,154,060				3,381,209				2,090,423
General marketing				1,260,489				261,662				1,971,012				570,884
Amazon selling fee				210,842				208,317				413,118				395,889
Travel expense				11,604				3,950				20,360				73,964
Other expense				67,658				34,227				116,698				103,368
Total sales and marketing expenses				3,936,492				2,395,701				7,263,571				4,788,518
Total expenses				8,474,255				4,345,940				15,683,090				8,481,641
Operating loss				(6,277,164	)			(3,022,238	)			(11,619,245	)			(5,040,322	)
Other income (expense)
Interest and dividend income				11,623				8,171				25,525				31,025
Loss on sale of fixed assets				-				-				(2,325	)			-
Gain on sale of available-for-sale securities				-				7,677				-				7,677
Total other income (expense)				11,623				15,848				23,200				38,702
Loss before income taxes				(6,265,541	)			(3,006,390	)			(11,596,045	)			(5,001,620	)
Income tax expense				(36,718	)			-				(36,718	)			-
Net loss			$	(6,302,259	)		$	(3,006,390	)		$	(11,632,763	)		$	(5,001,620	)
Less deemed dividend of beneficial conversion feature				-				(825,366	)			-				(825,366	)
Less deemed dividend on warrant discount				-				(179,427	)			-				(179,427	)
Net loss attributable to Laird Superfood, Inc. common stockholders			$	(6,302,259	)		$	(4,011,183	)		$	(11,632,763	)		$	(6,006,413	)
Net loss per share attributable to Laird Superfood, Inc common stockholders:
Basic			$	(0.70	)		$	(0.93	)		$	(1.30	)		$	(1.40	)
Diluted			$	(0.70	)		$	(0.93	)		$	(1.30	)		$	(1.40	)
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted				8,967,797				4,325,265				8,931,736				4,303,305

LAIRD SUPERFOOD, INC.
STATEMENTS OF CASH FLOWS
		For the Six Months Ended June 30,
		2021				2020
Cash flows used in operating activities
Net loss		$	(11,632,763	)		$	(5,001,620	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation			302,261				229,284
Amortization			103,803				5,048
Loss on disposal of equipment			2,325				-
Stock-based compensation			2,100,077				471,320
Provision for inventory obsolescence			18,266				-
Reserve for prepaid assets			179,000				-
Restricted stock awards			-				62,431
Impairment on asset held for sale			-				239,734
Gain on sale of investment securities available-for-sale			-				7,677
Changes in operating assets and liabilities:
Accounts receivable			98,534				(324,211	)
Accrued investment income receivable			513				-
Inventory			(3,778,699	)			(1,048,010	)
Prepaid expenses and other current assets			729,881				(371,883	)
Deferred rent			179,503				180,677
Deposits			2,602				10,941
Accounts payable			208,131				568,088
Payroll liabilities			129,397				167,576
Accrued expenses			367,209				155,943
Deferred taxes			36,718				-
Net cash from operating activities			(10,953,242	)			(4,647,005	)
Cash flows used in (provided by) investing activities
Purchase of property, plant, and equipment			(522,564	)			(312,746	)
Deposits on equipment to be acquired			(407,412	)			(319,174	)
Purchase of software			(109,795	)			-
Acquisition of a business, net of cash acquired (note 2)			(10,449,587	)			-
Sale of investment securities available-for-sale			-				513,544
Proceeds from maturities of investment securities available-for-sale			-				475,000
Net cash from investing activities			(11,488,658	)			356,624
Cash flows from financing activities
Issuance of common stock			-				1,997,665
Issuance of preferred stock			-				10,000,006
Common stock issuance costs			(82,043	)			-
Preferred stock issuance costs			-				(147,721	)
Withholding tax payments for share based compensation			(219,156	)			-
Restricted stock units issued			3				-
Repurchased common stock			-				(20,532	)
Stock options exercised			394,666				6,030
Net cash from financing activities			93,470				11,835,448
Net change in cash and cash equivalents			(22,348,430	)			7,545,067
Cash and cash equivalents beginning of period			57,208,080				1,004,109
Cash and cash equivalents end of period		$	34,859,650			$	8,549,176
Supplemental disclosures of non-cash information
Unrealized gain (loss) on available-for-sale securities		$	(24,001	)		$	17,345

LAIRD SUPERFOOD, INC.
BALANCE SHEETS
		As of
		June 30, 2021				December 31, 2020
Assets
Current assets
Cash and cash equivalents		$	34,859,650			$	57,208,080
Accounts receivable, net			789,642				839,659
Investment securities available-for-sale			8,682,330				8,706,844
Inventory			10,782,337				6,295,898
Prepaid expenses and other current assets, net			2,175,604				2,847,319
Deposits			508,484				97,674
Total current assets			57,798,047				75,995,474
Noncurrent assets
Property and equipment, net			3,786,144				3,513,488
Intangible assets, net			5,073,084				137,092
Goodwill			6,486,000				-
Deferred rent			2,517,143				2,696,646
Total noncurrent assets			17,862,371				6,347,226
Total assets		$	75,660,418			$	82,342,700
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	1,571,418			$	1,315,964
Payroll liabilities			861,501				722,915
Accrued expenses			1,219,863				704,543
Total current liabilities			3,652,782				2,743,422
Long-term liabilities
Deferred tax liability, net			36,718				-
Note payable			51,000				51,000
Total long-term liabilities			87,718				51,000
Total liabilities			3,740,500				2,794,422
Stockholders' equity
Common stock, $0.001 par value, 100,000,000 shares authorized as of
June 30, 2021 and December 31, 2020; 9,365,085 and 8,999,381
issued and outstanding at June 30, 2021, respectively; 9,247,758
and 8,892,886 issued and outstanding at December 31, 2020, respectively		$	8,999			$	8,893
Additional paid-in capital			115,480,644				111,452,346
Accumulated other comprehensive income (loss)			(9,794	)			14,207
Accumulated deficit			(43,559,931	)			(31,927,168	)
Total stockholders' equity			71,919,918				79,548,278
Total liabilities and stockholders' equity		$	75,660,418			$	82,342,700

 

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FAQ

What were Laird Superfood's net sales for Q2 2021?

Laird Superfood reported net sales of $9.2 million for Q2 2021, a 64% increase from the prior year.

What was Laird Superfood's net loss in Q2 2021?

The company experienced a net loss of $6.3 million in Q2 2021, compared to a loss of $4.0 million in Q2 2020.

How did Laird Superfood perform in direct-to-consumer sales?

Laird Superfood's direct-to-consumer sales rose by 94% in Q2 2021.

What were the operational challenges faced by Laird Superfood in Q2 2021?

Laird Superfood faced increased operating expenses of $8.5 million, leading to greater operational losses.