Tattooed Chef Reports Second Quarter 2022 Financial Results
Tattooed Chef reported a 15.6% increase in net revenue for Q2 2022, totaling $58.1 million, compared to $50.3 million in Q2 2021. The net loss narrowed to $26.4 million, or $(0.32) per share, from $57.5 million year-over-year. Adjusted EBITDA loss was $20.5 million. The company expanded its distribution to approximately 17,200 retail locations and invested heavily in brand marketing. However, cost of goods sold soared 36.7%, leading to a decline in gross profit margin to 1.3%. Full year revenue guidance remains unchanged at $280-$285 million, but gross margin forecast was lowered to 8-10%.
- Net revenue increased 15.6% to $58.1 million in Q2 2022.
- Distribution expanded to 17,200 retail locations.
- Narrowed net loss to $26.4 million from $57.5 million year-over-year.
- Introduced over 30 new products in Q2.
- Confidence expressed in achieving positive adjusted EBITDA by the end of 2023.
- Cost of goods sold increased 36.7% to $57.4 million.
- Gross profit margin declined to 1.3% compared to 16.5% in Q2 2021.
- Adjusted EBITDA loss increased to $20.5 million from $6.1 million year-over-year.
- Lowered gross margin guidance to 8-10% from 10-12% due to ongoing inflationary pressures.
PARAMOUNT, Calif., Aug. 08, 2022 (GLOBE NEWSWIRE) -- Tattooed Chef, Inc. (Nasdaq: TTCF) (“Tattooed Chef” or the “Company”), a leader in plant-based foods, today announced financial results for the second quarter ended June 30, 2022.
Second Quarter 2022 Financial Overview Compared to Second Quarter 2021
- Net revenue rose
15.6% to$58.1 million - Tattooed Chef™ branded product net revenue increased to
$33.9 million , or58.4% of total net revenue - Net loss was
$26.4 million - Adjusted EBITDA (1) loss was
$20.5 million
(1) Adjusted EBITDA is a non-GAAP financial measure defined below under “Non-GAAP Measures.” Please see “Adjusted EBITDA Reconciliation” at the end of this press release.
Subsequent to quarter end, we expanded the UMB asset-based lending line from
Operational Highlights
- Added more than 35,000 new points of distribution during the second quarter of 2022; strengthened brand presence in traditional grocery stores
- Integrated a new, 45,000 square foot Tattooed Chef-operated cold storage facility
- Completed first run of Tattooed Chef refrigerated plant-based oat butter bars at the Belmont facility
- Increased capacity and streamlined production process at New Mexico Food Distributors facility
- Completed construction of new in-house food safety laboratory in Paramount facility
“We continued to increase revenue year-over-year, expanded our channel presence, and elevated the Tattooed Chef brand, all while investing in strategic capacity to strengthen our position as a premier, fully-integrated value-added plant-based food company,” said Sam Galletti, President and CEO. “During the second quarter of 2022, we introduced more than 30 new products, invested in a targeted sales and marketing campaign that is attracting new consumers and driving sales, and expanded our retail presence to approximately 17,200 retail locations across the country. We generated a
“We continue to increase household awareness and introduce new consumers into the plant-based world,” said Sarah Galletti, the Tattooed Chef and Chief Creative Officer. “Our nostalgic innovation combined with what the Tattooed Chef brand stands for is attracting new and valuable consumers into retail freezer aisles for our partners. We are confident that this trend will continue and expand into the refrigerated and ambient aisles with the broad availability of our plant-based oat butter bars and dairy and grain-free chips later this year and into early 2023.”
Second Quarter 2022 Results
Revenue increased
Cost of goods sold increased
Gross profit was
Operating expenses increased
Net loss in the second quarter of 2022 was
Adjusted EBITDA loss was
Financial Condition
At June 30, 2022, cash was
Full Year 2022 Outlook
Based on the current business environment and outlook for the remainder of the year, the Company is reiterating guidance on revenue, marketing and capital expenditures, and lowering guidance with respect to gross margin:
- Revenue of
$280 -$285 million , unchanged from prior guidance. - Gross margin of 8
-10% , down from prior guidance of 10-12% , due to continued cost inflationary pressures and the timeline for implementation of automation initiatives at our facilities. - Marketing expenses of
$27 -$32 million . Marketing expenses in the first six months of 2022 totaled$17.5 million as we continue to invest in the Tattooed Chef brand and expand points of distribution. - Capital expenditures of approximately
$20 million , with investments focused on automation and robotics at our manufacturing facilities, unchanged from prior guidance. Capital expenditures in the first six months of 2022 totaled$15.6 million .
For more detailed information about our quarterly results, see our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, which we expect to file on August 9, 2022
Conference Call and Webcast
The Company will host a conference call after close of market on August 8 at 5:00 p.m. Eastern Time. Investors interested in participating in the live call can dial:
- (877) 407-9753 from the U.S.
- (201) 493-6739 internationally.
The call will be webcast and available on the Investors section of the Company’s website at www.tattooedchef.com. The webcast will be archived for 30 days.
About Tattooed Chef
Tattooed Chef is a leading plant-based food company offering a broad portfolio of innovative and sustainably sourced plant-based foods. Tattooed Chef’s signature products include ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, cauliflower pizza crusts, wood-fired plant based pizzas, handheld burritos, quesadillas, and Mexican entrees, which are available in the frozen food sections of leading national retail food and club stores across the United States as well as on Tattooed Chef’s e-commerce site. Understanding consumer lifestyle and food trends, a commitment to innovation, and self-manufacturing allows Tattooed Chef to continuously introduce new products. Tattooed Chef provides approachable, great tasting and chef-created products to the growing group of plant-based consumers as well as the mainstream marketplace. For more information, please visit www.tattooedchef.com.
Follow us on social: Facebook, Instagram, TikTok, Twitter, and LinkedIn and Taste the Jams on Spotify.
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. When used in this release, words such as “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose,” “trend,” “accelerate,” “expansion,” “new,” “leverage,” “continues,” “maintains,” “opportunities,” “outlook,” “next,” “increase,” “expand,” “beyond,” “potential,” “growth,” “pipeline,” “guidance” 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 Tattooed Chef’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: uncertainty surrounding the ultimate success of Tattooed Chef’s e-commerce platform; the need to prove Tattooed Chef’s ability to build brand awareness and continue to launch innovative products; continued acceptance of Tattooed Chef branded products by new retail customers; Tattooed Chef’s ability to increase in-store count and points of distribution; the outcome of any legal proceedings that may be instituted against Tattooed Chef; Tattooed Chef’s ability to effectively and efficiently integrate recent and/or new acquisitions; competition and the ability of the business to grow and manage growth profitably; the impact of inflation, particularly with respect to freight and container expenses; the effect of possible supply chain disruption; uncertainty around our ability to bring the new operational sites up to full capacity; our ability to raise prices without decrementing sales volumes; and other risks and uncertainties indicated from time to time in our annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”), including those under “Risk Factors” therein, and other factors identified in past and future filings with the SEC, available at www.sec.gov. Some of these risks and uncertainties may be amplified by COVID-19 or hostilities in Ukraine. Tattooed Chef undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Measures
The Company seeks to achieve profitable, long-term growth by monitoring and analyzing key operating metrics, including Adjusted EBITDA. The Company defines EBITDA as net income before interest, taxes, and depreciation. Adjusted EBITDA further adjusts EBITDA by adding back non-cash compensation expenses, non-recurring expenses, and other non-operational charges. The Company’s management uses this non-GAAP financial metric and related computations to evaluate and manage the business and to plan and make near and long-term operating and strategic decisions. The management team believes this non-GAAP financial metric is useful to investors to provide supplemental information in addition to the GAAP financial results. Management reviews the use of its primary key operating metrics from time-to-time. Adjusted EBITDA is not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business.
CONTACTS
INVESTORS
Stephanie Dieckmann, CFO
Tattooed Chef
(562) 602-0822
Devin Sullivan, SVP
The Equity Group
(212) 836-9608 / dsullivan@equityny.com
Karin Daly, VP
The Equity Group
(212) 836-9623 / kdaly@equityny.com
TATTOOED CHEF, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (unaudited)
(in thousands, except for share and per share information)
| Three months Ended | Six months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| NET REVENUE | $ | 58,110 | $ | 50,270 | $ | 130,174 | $ | 102,739 | ||||||||
| COST OF GOODS SOLD | 57,370 | 41,953 | 121,284 | 87,242 | ||||||||||||
| GROSS PROFIT | 740 | 8,317 | 8,890 | 15,497 | ||||||||||||
| OPERATING EXPENSES | 24,346 | 16,419 | 49,139 | 30,615 | ||||||||||||
| LOSS FROM OPERATIONS | (23,606 | ) | (8,102 | ) | (40,249 | ) | (15,118 | ) | ||||||||
| Interest expense | (42 | ) | (94 | ) | (83 | ) | (114 | ) | ||||||||
| Other (expense) income | (2,334 | ) | 733 | (2,945 | ) | (1,948 | ) | |||||||||
| LOSS BEFORE INCOME TAX EXPENSE | (25,982 | ) | (7,463 | ) | (43,277 | ) | (17,180 | ) | ||||||||
| INCOME TAX EXPENSE | (455 | ) | (50,009 | ) | (711 | ) | (48,534 | ) | ||||||||
| NET LOSS | $ | (26,437 | ) | $ | (57,472 | ) | $ | (43,988 | ) | $ | (65,714 | ) | ||||
| NET LOSS PER SHARE | ||||||||||||||||
| Basic | $ | (0.32 | ) | $ | (0.70 | ) | $ | (0.53 | ) | $ | (0.81 | ) | ||||
| Diluted | $ | (0.32 | ) | $ | (0.70 | ) | $ | (0.53 | ) | $ | (0.81 | ) | ||||
| WEIGHTED AVERAGE COMMON SHARES | ||||||||||||||||
| Basic | 82,284,005 | 81,981,428 | 82,261,079 | 81,121,795 | ||||||||||||
| Diluted | 82,284,005 | 81,981,428 | 82,261,079 | 81,258,427 | ||||||||||||
| OTHER COMPREHENSIVE LOSS, NET OF TAX | ||||||||||||||||
| Foreign currency translation adjustments | (431 | ) | (210 | ) | (861 | ) | (101 | ) | ||||||||
| COMPREHENSIVE LOSS | $ | (26,868 | ) | $ | (57,682 | ) | $ | (44,849 | ) | $ | (65,815 | ) | ||||
TATTOOED CHEF, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except for share information)
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 27,729 | $ | 92,351 | ||||
| Accounts receivable, net | 32,316 | 25,117 | ||||||
| Inventory | 62,622 | 54,562 | ||||||
| Prepaid expenses and other current assets | 10,824 | 7,027 | ||||||
| TOTAL CURRENT ASSETS | 133,491 | 179,057 | ||||||
| Property, plant and equipment, net | 57,687 | 46,476 | ||||||
| Operating lease right-of-use asset, net | 16,883 | 8,039 | ||||||
| Finance lease right-of-use asset, net | 5,554 | 5,639 | ||||||
| Intangible assets, net | 96 | 151 | ||||||
| Deferred income taxes, net | 259 | 266 | ||||||
| Goodwill | 26,705 | 26,924 | ||||||
| Other assets | 175 | 649 | ||||||
| TOTAL ASSETS | $ | 240,850 | $ | 267,201 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 30,579 | $ | 28,334 | ||||
| Accrued expenses | 6,525 | 3,767 | ||||||
| Line of credit | 1,510 | 1,200 | ||||||
| Notes payable, current portion | 5,028 | 5,019 | ||||||
| Forward contract derivative liability | 2,988 | 1,804 | ||||||
| Operating lease liabilities, current portion | 2,190 | 1,523 | ||||||
| Other current liabilities | 386 | 122 | ||||||
| TOTAL CURRENT LIABILITIES | 49,206 | 41,769 | ||||||
| Warrant liability | 146 | 814 | ||||||
| Operating lease liabilities, net of current portion | 14,910 | 6,599 | ||||||
| Notes payable, net of current portion | 1,432 | 716 | ||||||
| TOTAL LIABILITIES | 65,694 | 49,898 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock - | - | - | ||||||
| Common stock- and outstanding at June 30, 2022 and December 31, 2021, respectively | 8 | 8 | ||||||
| Additional paid in capital | 245,064 | 242,362 | ||||||
| Accumulated other comprehensive loss | (1,814 | ) | (953 | ) | ||||
| Accumulated deficit | (68,102 | ) | (24,114 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 175,156 | 217,303 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 240,850 | $ | 267,201 | ||||
TATTOOED CHEF, INC.
Adjusted EBITDA Reconciliation
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net loss | $ | (26,437 | ) | $ | (57,472 | ) | $ | (43,988 | ) | $ | (65,714 | ) | ||||
| Interest expense | 42 | 94 | 83 | 114 | ||||||||||||
| Income tax expense | 455 | 50,009 | 711 | 48,534 | ||||||||||||
| Depreciation and amortization | 1,536 | 896 | 3,043 | 1,448 | ||||||||||||
| EBITDA | (24,404 | ) | (6,473 | ) | (40,151 | ) | (15,618 | ) | ||||||||
| Adjustments | ||||||||||||||||
| Stock compensation expense | 1,415 | 318 | 2,702 | 3,502 | ||||||||||||
| Loss (gain) on foreign currency forward contracts | 2,049 | (1,023 | ) | 3,072 | 1,978 | |||||||||||
| (Gain) loss on warrant remeasurement | (461 | ) | 371 | (668 | ) | 51 | ||||||||||
| Unrealized foreign currency losses | 626 | - | 626 | - | ||||||||||||
| Acquisition expenses | 119 | 726 | 224 | 726 | ||||||||||||
| UMB ATM transaction | - | 22 | - | 22 | ||||||||||||
| ERP related expenses | 179 | - | 338 | - | ||||||||||||
| Total Adjustments | 3,927 | 414 | 6,294 | 6,279 | ||||||||||||
| Adjusted EBITDA | $ | (20,477 | ) | $ | (6,059 | ) | $ | (33,857 | ) | $ | (9,339 | ) | ||||
FAQ
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