Beyond Meat: Reports Q4-2019 Financial Results

El Segundo / CA. (bmi) Beyond Meat Inc., a leader in plant-based meat, reported financial results for its fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Financial Highlights Compared to Prior Year Period

• Net revenues were USD 98.5 million, an increase of 212 percent, compared to net revenues of USD 31.5 million in the year-ago period;
• Gross profit was USD 33.5 million, or 34.0 percent of net revenues, compared to gross profit of USD 7.9 million, or 25.0 percent of net revenues, in the year-ago period;
• Net loss was USD 0.5 million, or USD 0.01 per common share, compared to net loss of USD 7.5 million, or USD 1.10 per common share in the year-ago period; and
• Adjusted Ebitda, which is a non-GAAP financial measure, was USD 9.5 million compared to an Adjusted Ebitda loss of USD 3.8 million in the year-ago period.

Full Year 2019 Financial Highlights Compared to Prior Year

• Net revenues were USD 297.9 million, an increase of 239 percent, compared to net revenues of USD 87.9 million in the prior year;
• Gross profit was USD 99.8 million, or 33.5 percent of net revenues, compared to gross profit of USD 17.6 million, or 20.0 percent of net revenues, in the prior year;
• Net loss was USD 12.4 million, or USD 0.29 per common share, compared to net loss of USD 29.9 million, or USD 4.75 per common share in the prior year; and
• Adjusted Ebitda, which is a non-GAAP financial measure, was USD 25.3 million compared to an Adjusted Ebitda loss of USD 19.3 million in the prior year.

See «Non-GAAP Financial Measures» below for how Beyond Meat defines Adjusted Ebitda and the financial table that accompanies this release for a reconciliation of this measure to the closest comparable GAAP measure.

«Our outstanding fourth quarter and full-year 2019 results are a testament to the vitality of the movement that we continue to lead,” said Ethan Brown, Beyond Meat’s President and Chief Executive Officer. “With our simple objective of building a perfect piece of meat from plants, our greater mission is much larger than us and seeks to address some of the key challenges of our time—improving health and nutrition, enhancing the sustainability of our global food supply, while lowering our environmental impact, and promoting animal welfare.»

Fourth Quarter 2019

Net revenues increased 212 percent to USD 98.5 million in the fourth quarter of 2019 compared to USD 31.5 million in the fourth quarter of 2018. Growth in net revenues in the fourth quarter of 2019 was primarily due to an increase in volume sold in Beyond Meat’s Fresh platform products across Retail, and Restaurant and Foodservice channels. Growth in volume sold was driven by increased sales to international customers, expansion in the number of points of distribution, including new strategic customers, higher sales velocities at existing customers, and contribution from new products introduced in 2019.

(Unaudited)		Three Months Ended								Change							Year Ended								Change
(in thousands)		2019-12-31				2018-12-31				Amount				%			2019-12-31				2018-12-31				Amount				%
Net revenues:
Gross Fresh Platform		USD	102,062			USD	30,156			USD	71,906			238.4	%		USD	306,585			USD	81,686			USD	224,899			275.3	%
Gross Frozen Platform		3,614				4,347				(733		)		(16.9	)%		17,772				15,896				1,876				11.8	%
Less: Discounts		(7,197		)		(2,989		)		(4,208		)		140.8	%		(26,460		)		(9,648		)		(16,812		)		174.3	%
Net revenues		USD	98,479			USD	31,514			USD	66,965			212.5	%		USD	297,897			USD	87,934			USD	209,963			238.8	%

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		Three Months Ended								Change							Year Ended								Change
(in thousands)		2019-12-31				2018-12-31				Amount				%			2019-12-31				2018-12-31				Amount				%
Net revenues:
Retail		USD	40,645			USD	13,606			USD	27,039			198.7	%		USD	144,809			USD	50,779			USD	94,030			185.2	%
Restaurant and Foodservice		57,834				17,908				39,926				223.0	%		153,088				37,155				115,933				312.0	%
Net revenues		USD	98,479			USD	31,514			USD	66,965			212.5	%		USD	297,897			USD	87,934			USD	209,963			238.8	%

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Gross profit was USD 33.5 million, or 34.0 percent of net revenues, in the fourth quarter of 2019, compared to USD 7.9 million, or 25.0 percent of net revenues, in the year-ago period. The increase in gross profit and gross margin was primarily due to an increase in the volume of products sold, production efficiency improvements, and more favorable mix as the Company’s Fresh platform contributed a greater proportion of gross revenues in the fourth quarter of 2019 compared to the year-ago period. Temporary disruptions related to capacity expansion projects at two co-manufacturing partners’ plants partially offset the year-over-year improvements in gross margin in the fourth quarter of 2019 and contributed to the sequential decline in gross margin relative to the third quarter of 2019.

Loss from operations in the fourth quarter of 2019 was USD 0.9 million compared to a loss from operations of USD 7.1 million in the fourth quarter of the prior year. The narrowed loss from operations in the fourth quarter of 2019 was driven by the year-over-year increase in gross profit, partially offset by higher operating expenses primarily to support the Company’s marketing initiatives, higher stock-based compensation costs, higher restructuring expense, continued investment in innovation, and increased administrative costs associated with being a public company.

Net loss was USD 0.5 million in the fourth quarter of 2019 compared to a net loss of USD 7.5 million in the year-ago period. The reduction in net loss was primarily the result of the increase in net revenues and gross profit compared to the fourth quarter of 2018.

Adjusted Ebitda was USD 9.5 million, or 9.7 percent of net revenues, in the fourth quarter of 2019 compared to an Adjusted Ebitda loss of USD 3.8 million, or (11.9 percent) of net revenues, in the fourth quarter of 2018. Adjusted Ebitda is a non-GAAP financial measure defined under «Non-GAAP Financial Measures,» and is reconciled to net loss, the closest comparable GAAP measure, at the end of this release.

Chief Financial Officer and Treasurer, Mark Nelson commented, «We are pleased with our strong financial results and operating performance in 2019. In 2020, we seek to build on this foundation while continuing to prioritize aggressive growth by increasing our intensity with respect to our marketing and R+D initiatives, and accelerating our global expansion plans to capitalize on our strong positive momentum.»

Balance Sheet and Cash Flow Highlights

The Company’s cash and cash equivalents balance was USD 276.0 million as of December 31, 2019 and total outstanding debt was USD 30.6 million. Net cash used in operating activities was USD 47.0 million for the year ended December 31, 2019, compared to USD 37.7 million for the prior year. Capital expenditures totaled USD 23.8 million for the year ended December 31, 2019 compared to USD 22.2 million for the prior year.

2020 Outlook

For the full year 2020, the Company is providing the following guidance and expects:

• Net revenues in the range of USD 490 million to USD 510 million, an increase of 64 percent to 71 percent from 2019;
• Gross margin in the range of 33 percent to 35 percent; and
• Adjusted Ebitda as a percent of net revenues approximately equivalent to 2019 levels, as the Company anticipates accelerated investments in marketing, R+D and international expansion initiatives in 2020.

The Company’s 2020 Outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.

The Company does not provide guidance for net income, the most directly comparable GAAP measure, and similarly cannot provide a reconciliation between its forecasted Adjusted Ebitda and net income metrics without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.