BOULDER, Colo.--(BUSINESS WIRE)--Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,” the “Company”, “we”, and “our”), today reported financial results for the third quarter ended September 30, 2024.
Jason Vieth, Chief Executive Officer, commented, “I am pleased to report that Laird Superfood is once again among the fastest growing food companies in the US, with Net Sales increasing by over 28% in the third quarter of 2024. Year-to-date our 2024 Net Sales growth rate is nearly 27% and has been driven by positive growth across both e-commerce and wholesale channels, and across all of our core categories including Creamers, Coffee, and Hydration products. Even more impressive, we have done this while expanding our Gross Margin to more than 41% during 2024, which is also among best-in-class companies in the Food industry. We continue to see strong uptake among retailers nationwide, and the growth rate in our ecommerce business demonstrates our ability to maintain a leading position in omnichannel food sales.”
Vieth continued: “It is a clear trend that consumers continue to accelerate their focus on the impact of food ingredients to their own health and wellness, and I believe that Laird Superfood is now among the best positioned brands to support them on this journey.”
Third Quarter 2024 Highlights
- Net Sales of $11.8 million compared to $9.2 million in the corresponding prior year period and $10.0 million in the second quarter of 2024.
- E-commerce sales increased by 42% year-over-year and contributed 58% of total Net Sales, with significant improvements in media efficiency in this channel. Sales on Amazon.com increased by 133% year-over-year, building on the strong performance over the last two quarters as compared to the reduced prior year sales volume stemming from out-of-stock products caused by the quality event in 2023. Direct-to-Consumer (“DTC”) platform sales grew 10% year-over-year, driven by strong performance in both subscription revenue and repeat consumer purchases, higher average order value, and improved discount rates due to strategic shifts in our promotional strategies.
- Wholesale sales increased by 13% year-over-year and contributed 42% of total Net Sales, driven by growth in grocery due to velocity improvement and distribution expansion, as well as more efficient promotional spend.
- Gross Margin was 43.0% compared to 31.0% in the corresponding prior year period, and 41.8% in the second quarter of 2024. This margin expansion was driven by lower ingredient costs due to a shift to the direct procurement of key raw materials, settlement recoveries, as well as planned reductions in trade spend.
- Net Loss was $0.2 million, or $0.02 per diluted share, compared to Net Loss of $2.7 million, or $0.28 per diluted share, in the corresponding prior year period and Net Loss of $0.2 million, or $0.02 per diluted share, in the second quarter of 2024. The improvement was driven by Gross Margin expansion, as well as lower marketing, and general and administrative (G&A) costs.
- Adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation, and non-recurring items (“Adjusted EBITDA”), which is a non-GAAP financial measure, was ($11.4) thousand, or $0.00 per diluted share, compared to ($2.5) million, or ($0.27) per diluted share, in the corresponding prior year period and ($41.8) thousand, or ($0.00) per diluted share, in the second quarter of 2024. This improvement was driven by significantly expanded Gross Margins and lower sales and marketing and G&A costs. For more details on non-GAAP financial measures, refer to the information in the non-GAAP financial measures section of this press release.
Year-to-Date 2024 Highlights
- Net Sales of $31.7 million compared to $25.0 million in the corresponding prior year period, representing 27% growth.
- E-commerce sales increased by 41% year-over-year and contributed 59% of total Net Sales, with significant improvements in media efficiency in this channel. Sales on Amazon.com and the DTC platform increased year-over-year by 85% and 22%, respectively, driven by growth in subscription revenue and repeat consumer purchases, as well as higher order values.
- Wholesale sales increased by 11% year-over-year and contributed 41% of total Net Sales, driven by velocity improvement and distribution expansion in grocery, as well as more efficient promotional spend.
- Gross Margin was 41.7% compared to 26.4% in the corresponding prior year period. This margin expansion was driven by the full realization of the cost savings resulting from our transition to a variable cost third-party co-manufacturing business model, lower ingredient costs due to a shift to the direct procurement of key raw materials, as well as planned reductions in trade spend.
- Net Loss was $1.4 million, or $0.14 per diluted share, compared to Net Loss of $10.3 million, or $1.11 per diluted share, in the corresponding prior year period. The improvement was driven by Gross Margin expansion, and lower marketing, and G&A costs.
- Adjusted EBITDA was ($0.8) million, or ($0.08) per diluted share, compared to ($9.2) million, or ($0.99) per diluted share, in the corresponding prior year period. This improvement was driven by significantly expanded Gross Margins and lower marketing and G&A costs. For more details on non-GAAP financial measures, refer to the information in the non-GAAP financial measures section of this press release.
Revenue Disaggregation
|
|
Three Months Ended September 30, |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
|
|
$ |
|
% of Total |
|
$ |
|
% of Total |
||||||||
Coffee creamers |
|
$ |
6,273,157 |
|
|
|
53 |
% |
|
$ |
5,804,273 |
|
|
|
63 |
% |
Coffee, tea, and hot chocolate products |
|
|
3,298,363 |
|
|
|
28 |
% |
|
|
1,981,731 |
|
|
|
22 |
% |
Hydration and beverage enhancing supplements |
|
|
2,520,402 |
|
|
|
21 |
% |
|
|
1,726,512 |
|
|
|
19 |
% |
Harvest snacks and other food items |
|
|
1,558,611 |
|
|
|
13 |
% |
|
|
1,747,908 |
|
|
|
19 |
% |
Other |
|
|
75,339 |
|
|
|
1 |
% |
|
|
132,284 |
|
|
|
1 |
% |
Gross sales |
|
|
13,725,872 |
|
|
|
116 |
% |
|
|
11,392,708 |
|
|
|
124 |
% |
Shipping income |
|
|
142,002 |
|
|
|
1 |
% |
|
|
214,982 |
|
|
|
2 |
% |
Discounts and promotional activity |
|
|
(2,091,528 |
) |
|
|
(17 |
)% |
|
|
(2,427,909 |
) |
|
|
(26 |
)% |
Sales, net |
|
$ |
11,776,346 |
|
|
|
100 |
% |
|
$ |
9,179,781 |
|
|
|
100 |
% |
|
|
Three Months Ended September 30, |
||||||||||||
|
|
2024 |
|
2023 |
||||||||||
|
|
$ |
|
% of Total |
|
$ |
|
% of Total |
||||||
E-commerce |
|
$ |
6,887,356 |
|
|
58 |
% |
|
$ |
4,842,389 |
|
|
53 |
% |
Wholesale |
|
|
4,888,990 |
|
|
42 |
% |
|
|
4,337,392 |
|
|
47 |
% |
Sales, net |
|
$ |
11,776,346 |
|
|
100 |
% |
|
$ |
9,179,781 |
|
|
100 |
% |
|
|
Nine Months Ended September 30, |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
|
|
$ |
|
% of Total |
|
$ |
|
% of Total |
||||||||
Coffee creamers |
|
$ |
16,540,456 |
|
|
|
52 |
% |
|
$ |
15,583,969 |
|
|
|
62 |
% |
Coffee, tea, and hot chocolate products |
|
|
7,977,157 |
|
|
|
25 |
% |
|
|
5,894,632 |
|
|
|
24 |
% |
Hydration and beverage enhancing supplements |
|
|
6,855,274 |
|
|
|
22 |
% |
|
|
3,395,671 |
|
|
|
14 |
% |
Harvest snacks and other food items |
|
|
4,546,448 |
|
|
|
14 |
% |
|
|
5,350,252 |
|
|
|
21 |
% |
Other |
|
|
289,261 |
|
|
|
1 |
% |
|
|
286,965 |
|
|
|
1 |
% |
Gross sales |
|
|
36,208,596 |
|
|
|
114 |
% |
|
|
30,511,489 |
|
|
|
122 |
% |
Shipping income |
|
|
373,832 |
|
|
|
1 |
% |
|
|
778,051 |
|
|
|
3 |
% |
Discounts and promotional activity |
|
|
(4,893,490 |
) |
|
|
(15 |
)% |
|
|
(6,272,730 |
) |
|
|
(25 |
)% |
Sales, net |
|
$ |
31,688,938 |
|
|
|
100 |
% |
|
$ |
25,016,810 |
|
|
|
100 |
% |
|
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
2023 |
||||||||||
|
|
$ |
|
% of Total |
|
$ |
|
% of Total |
||||||
E-commerce |
|
$ |
18,854,020 |
|
|
59 |
% |
|
$ |
13,409,443 |
|
|
54 |
% |
Wholesale |
|
|
12,834,918 |
|
|
41 |
% |
|
|
11,607,367 |
|
|
46 |
% |
Sales, net |
|
$ |
31,688,938 |
|
|
100 |
% |
|
$ |
25,016,810 |
|
|
100 |
% |
Balance Sheet and Cash Flow Highlights
We had $8.2 million of cash, cash equivalents, and restricted cash as of September 30, 2024, and no outstanding debt.
Cash provided by operating activities was $0.5 million for the nine months of 2024, compared to cash used in operating activities of $10.9 million in the same period in 2023. The improvement in cash used relative to the corresponding prior year period was driven by Gross Margin expansion and significant reductions in marketing and G&A costs. Cash increased by $0.4 million in the third quarter of 2024, marking the second consecutive quarter of positive cash flow.
2024 Outlook
Based on the year-to-date 2024 results and management's best assessment of the environment today, we are raising the guidance for the full year 2024:
- Net Sales are expected to be in the range of approximately $43 to $44 million, representing growth of 26% to 29% compared to 2023.
- Gross Margin is expected to expand to approximately 41% to 42%, representing an 11 to 12-point improvement compared to 2023.
2025 Outlook
In 2025, management strategy is to drive growth well in excess of consumer goods and food industry averages:
- Net Sales are expected to grow between 20 to 25%, driven by continued expansion across Wholesale accounts and further penetration of consumers on ecommerce platforms.
- Management intends to maintain slightly positive EBITDA and Cash Flow during 2025, investing incremental margin back into the business to strategically drive topline growth initiatives.
Conference Call and Webcast Details
We will host a conference call and webcast at 5:00 p.m. ET today to discuss our financial results. Participants may access the live webcast on the Laird Superfood Investor Relations website at https://investors.lairdsuperfood.com under “Events”. The webcast will be archived on the Company's website and will be available for replay for at least two weeks.
About Laird Superfood
Laird Superfood, Inc. creates award-winning, plant-based superfood products that are clean, delicious, and functional. Our products are designed to enhance a consumer's daily ritual and keep them fueled naturally throughout the day. Laird Superfood 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 www.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 conference 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 anticipated cash runway, future financial performance, and growth. Such forward-looking statements may be identified by words such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "outlook," "plans," "potential," predicts," "projects," "seeks," "should," "will," "would", or the antonyms of these terms or other comparable terminology. 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 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) volatility 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) effects of real or perceived quality or health issues 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) adverse developments 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 food service customers, as well as the health of the food service industry generally; (10) the ability of ourselves, our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations; (11) our plans for future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements, including our ability to continue as a going concern; (12) the costs and success of our marketing efforts, and our ability to promote our brand; (13) our reliance on our executive team and other key personnel and our ability to identify, recruit and retain skilled and general working personnel; (14) our ability to effectively manage our growth; (15) our ability to compete effectively with existing competitors and new market entrants; (16) the impact of adverse economic conditions; (17) the growth rates of the markets in which we compete, and (18) the other risks described in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings we make with the Securities and Exchange Commission.
LAIRD SUPERFOOD, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Sales, net |
|
$ |
11,776,346 |
|
|
$ |
9,179,781 |
|
|
$ |
31,688,938 |
|
|
$ |
25,016,810 |
|
Cost of goods sold |
|
|
(6,712,214 |
) |
|
|
(6,332,624 |
) |
|
|
(18,483,424 |
) |
|
|
(18,419,709 |
) |
Gross profit |
|
|
5,064,132 |
|
|
|
2,847,157 |
|
|
|
13,205,514 |
|
|
|
6,597,101 |
|
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries, wages, and benefits |
|
|
1,247,066 |
|
|
|
937,198 |
|
|
|
3,145,282 |
|
|
|
3,342,913 |
|
Other general and administrative |
|
|
1,377,628 |
|
|
|
1,311,138 |
|
|
|
3,785,332 |
|
|
|
4,686,234 |
|
Total general and administrative expenses |
|
|
2,624,694 |
|
|
|
2,248,336 |
|
|
|
6,930,614 |
|
|
|
8,029,147 |
|
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketing and advertising |
|
|
1,579,763 |
|
|
|
2,320,752 |
|
|
|
5,016,446 |
|
|
|
6,505,099 |
|
Selling |
|
|
1,057,800 |
|
|
|
990,437 |
|
|
|
2,757,695 |
|
|
|
2,565,271 |
|
Related party marketing agreements |
|
|
70,465 |
|
|
|
74,701 |
|
|
|
196,532 |
|
|
|
242,740 |
|
Total sales and marketing expenses |
|
|
2,708,028 |
|
|
|
3,385,890 |
|
|
|
7,970,673 |
|
|
|
9,313,110 |
|
Total operating expenses |
|
|
5,332,722 |
|
|
|
5,634,226 |
|
|
|
14,901,287 |
|
|
|
17,342,257 |
|
Operating loss |
|
|
(268,590 |
) |
|
|
(2,787,069 |
) |
|
|
(1,695,773 |
) |
|
|
(10,745,156 |
) |
Other income |
|
|
107,891 |
|
|
|
132,185 |
|
|
|
321,957 |
|
|
|
452,288 |
|
Loss before income taxes |
|
|
(160,699 |
) |
|
|
(2,654,884 |
) |
|
|
(1,373,816 |
) |
|
|
(10,292,868 |
) |
Income tax expense |
|
|
(5,421 |
) |
|
|
— |
|
|
|
(47,902 |
) |
|
|
(13,172 |
) |
Net loss |
|
$ |
(166,120 |
) |
|
$ |
(2,654,884 |
) |
|
$ |
(1,421,718 |
) |
|
$ |
(10,306,040 |
) |
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.14 |
) |
|
$ |
(1.11 |
) |
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted |
|
|
10,256,802 |
|
|
|
9,337,789 |
|
|
|
9,831,927 |
|
|
|
9,279,541 |
|
LAIRD SUPERFOOD, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
||||||||
|
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
||||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(1,421,718 |
) |
|
$ |
(10,306,040 |
) |
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
204,419 |
|
|
|
235,025 |
|
Stock-based compensation |
|
|
1,073,698 |
|
|
|
818,647 |
|
Provision for inventory obsolescence |
|
|
560,519 |
|
|
|
1,260,580 |
|
Allowance for credit losses |
|
|
54,607 |
|
|
|
245,700 |
|
Noncash lease costs |
|
|
114,254 |
|
|
|
114,254 |
|
Other operating activities, net |
|
|
— |
|
|
|
38,098 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(839,991 |
) |
|
|
(937,876 |
) |
Inventory |
|
|
(393,402 |
) |
|
|
(1,958,157 |
) |
Prepaid expenses and other current assets |
|
|
113,083 |
|
|
|
1,061,879 |
|
Operating lease liability |
|
|
(97,520 |
) |
|
|
(94,679 |
) |
Accounts payable |
|
|
50,377 |
|
|
|
810,908 |
|
Accrued expenses |
|
|
1,107,932 |
|
|
|
(2,217,484 |
) |
Net cash from operating activities |
|
|
526,258 |
|
|
|
(10,929,145 |
) |
Cash flows from investing activities |
|
|
(19,178 |
) |
|
|
567,459 |
|
Cash flows from financing activities |
|
|
(12,495 |
) |
|
|
(23,066 |
) |
Net change in cash and cash equivalents |
|
|
494,585 |
|
|
|
(10,384,752 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
7,706,806 |
|
|
|
17,809,802 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
8,201,391 |
|
|
$ |
7,425,050 |
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
— |
|
|
$ |
344,382 |
|
Supplemental disclosures of non-cash investing activities |
|
|
|
|
|
|
||
Settlement recovery from business interruption claims included in other current assets |
|
$ |
— |
|
|
$ |
158,429 |
|
Receivable from sale of assets held-for-sale included in other current assets at the end of the period |
|
$ |
— |
|
|
$ |
126,268 |
|
LAIRD SUPERFOOD, INC. CONSOLIDATED BALANCE SHEETS (unaudited) |
||||||||
|
|
As of |
||||||
|
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash |
|
$ |
8,201,391 |
|
|
$ |
7,706,806 |
|
Accounts receivable, net |
|
|
1,807,756 |
|
|
|
1,022,372 |
|
Inventory, net |
|
|
6,155,442 |
|
|
|
6,322,559 |
|
Prepaid expenses and other current assets |
|
|
1,172,481 |
|
|
|
1,285,564 |
|
Total current assets |
|
|
17,337,070 |
|
|
|
16,337,301 |
|
Noncurrent assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
81,408 |
|
|
|
122,595 |
|
Intangible assets, net |
|
|
941,177 |
|
|
|
1,085,231 |
|
Related party license agreements |
|
|
132,100 |
|
|
|
132,100 |
|
Right-of-use assets |
|
|
258,490 |
|
|
|
354,732 |
|
Total noncurrent assets |
|
|
1,413,175 |
|
|
|
1,694,658 |
|
Total assets |
|
$ |
18,750,245 |
|
|
$ |
18,031,959 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,682,851 |
|
|
$ |
1,647,673 |
|
Accrued expenses |
|
|
3,682,495 |
|
|
|
2,586,343 |
|
Related party liabilities |
|
|
29,667 |
|
|
|
2,688 |
|
Lease liabilities, current portion |
|
|
141,504 |
|
|
|
138,800 |
|
Total current liabilities |
|
|
5,536,517 |
|
|
|
4,375,504 |
|
Lease liabilities |
|
|
161,624 |
|
|
|
243,836 |
|
Total liabilities |
|
|
5,698,141 |
|
|
|
4,619,340 |
|
Stockholders’ equity |
|
|
|
|
|
|
||
Common stock, $0.001 par value, 100,000,000 shares authorized at September 30, 2024 and December 31, 2023; 10,644,946 and 10,270,662 issued and outstanding at September 30, 2024, respectively; and 9,749,326 and 9,383,622 issued and outstanding at December 31, 2023, respectively. |
|
|
10,271 |
|
|
|
9,384 |
|
Additional paid-in capital |
|
|
120,761,700 |
|
|
|
119,701,384 |
|
Accumulated deficit |
|
|
(107,719,867 |
) |
|
|
(106,298,149 |
) |
Total stockholders’ equity |
|
|
13,052,104 |
|
|
|
13,412,619 |
|
Total liabilities and stockholders’ equity |
|
$ |
18,750,245 |
|
|
$ |
18,031,959 |
|
LAIRD SUPERFOOD, INC.
NON-GAAP FINANCIAL MEASURES
(unaudited)
In this press release, we report Adjusted EBITDA and Adjusted EBITDA per diluted share, which are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses non-GAAP financial measures, both internally and externally, to assess and communicate the financial performance of the Company. The Company defines Adjusted EBITDA as net income (loss), adjusted to exclude: (1) interest expense and other (income) loss, (2) income tax (benefit) expense, (3) depreciation and amortization expenses, (4) stock-based compensation, (5) expenses related to a product quality issue, (6) costs incurred as part of the strategic downsizing of the Company’s operations, and (7) rebranding costs. The Company believes Adjusted EBITDA is useful to investors because it facilitates comparisons of its core business operations, excluding non-cash costs and non-recurring events, across periods on a consistent basis.
Management uses Adjusted EBITDA internally in analyzing the Company’s financial results to assess operational performance and to determine the Company’s future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring to Adjusted EBITDA in assessing its performance and when planning, forecasting and analyzing future periods. The Company believes Adjusted EBITDA is useful to investors and others to understand and evaluate the Company’s operating results and it allows for a more meaningful comparison between the Company’s performance and that of competitors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA does not reflect, among other things: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; interest expense; income tax expense from continuing operations; our working capital requirements; the potentially dilutive impact of stock-based compensation; and the provision for income taxes. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA along with other financial performance measures, including Net Sales, net loss, cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results presented in accordance with GAAP.
The following table presents a reconciliation of net income (loss), the most directly comparable financial measure stated in accordance with GAAP, to adjusted EBITDA, for each of the periods presented:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net loss |
|
$ |
(166,120 |
) |
|
$ |
(2,654,884 |
) |
|
$ |
(1,421,718 |
) |
|
$ |
(10,306,040 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
65,840 |
|
|
|
71,493 |
|
|
|
204,419 |
|
|
|
235,025 |
|
Stock-based compensation |
|
|
540,425 |
|
|
|
364,937 |
|
|
|
1,073,698 |
|
|
|
818,648 |
|
Income tax expense |
|
|
5,421 |
|
|
|
— |
|
|
|
47,902 |
|
|
|
13,172 |
|
Interest expense and other (income) expense, net |
|
|
(107,891 |
) |
|
|
(132,185 |
) |
|
|
(321,957 |
) |
|
|
(452,288 |
) |
Product quality issue (a) |
|
|
(349,115 |
) |
|
|
(140,019 |
) |
|
|
(384,329 |
) |
|
|
351,842 |
|
Strategic organizational shifts (b) |
|
|
— |
|
|
|
5,342 |
|
|
|
— |
|
|
|
(55,348 |
) |
Company-wide rebranding costs (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
163,806 |
|
Adjusted EBITDA |
|
$ |
(11,440 |
) |
|
$ |
(2,485,316 |
) |
|
$ |
(801,985 |
) |
|
$ |
(9,231,183 |
) |
Net loss per share, diluted: |
|
$ |
(0.02 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.14 |
) |
|
$ |
(1.11 |
) |
Adjusted EBITDA per share, diluted: |
|
$ |
(0.00 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.99 |
) |
Weighted-average shares of common stock outstanding used in computing adjusted EBITDA per share of common stock, diluted |
|
|
10,256,802 |
|
|
|
9,337,789 |
|
|
|
9,831,927 |
|
|
|
9,279,541 |
|
(a) In January 2023, we identified a product quality issue with raw material from one vendor and we voluntarily withdrew any affected finished goods. We previously incurred costs associated with product testing, discounts for replacement orders, and inventory obsolescence costs. We reached settlement with a supplier in the third quarter of 2023 and recorded recoveries in 2024. |
||||||||||||||||
(b) Costs incurred and recovered during the three and nine months ended September 30, 2023, as part of the strategic downsizing of our operations, including severances, forfeitures of stock-based compensation, and other personnel costs, IT integration costs, and freight costs to move inventory to third-party facilities. |
||||||||||||||||
(c) Costs incurred as part of the company-wide rebranding efforts that launched in Q1 2023. |
||||||||||||||||
