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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Beyond Meat Reports on Q4 and FY 2022

02/26/2023

In a press release dated February 3rd Beyond Meat Inc. (BYND) announced results for the 4th Quarter of FY 2022 ending December 31st 2022. The Company attained consensus on the top line with sales of $79.9 million. The bottom line miss was a negative EPS of $(1.05). Compared to Q4 of FY 2021 results can be characterized as “less bad” but it is questioning if and ever profitability will be attained given declining sales and a persistently negative gross margin.

 

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

 

4th Quarter Ending December 31st.

2022

2021

Difference (%)

Sales:

$79,938

$100,678

-20.6

Gross profit/(loss):

$(2,931)

$14,245

-120.0

Operating (loss):

$(65,721)

$(77,689)

+15.4

Pre-tax (loss)

Net Income / (loss)

$(58,757)

$(66,860)

$(78,537)

$(80,371)

+25.2

+16.8

Diluted loss per share:

$(1.05)

$(1.27)

+17.3

Gross Margin (%)

(3.6)

(14.1)

+76.5

Operating Margin (%)

(82.2)

(77.1)

-6.6

Profit Margin (%)

(83.6)

(79.8)

-4.7

Long-term Debt and lease obligations:

$1,189,931

$1,152,715

-3.2

12 Months Trailing:

     

Return on Assets (%)

-16.7

   

Return on Equity (%)

negative

   

Operating Margin (%)

-77.7

   

Profit Margin (%)

-87.4

   

Total Assets July 2nd.

$1,062,224

$1,379,399

-22.9

Market Capitalization August 5th

$1,090,000

   

 

Notes for the 4th Quarter and FY 2022 derived from data presented:

SGA FY ’22 $47 million comprising 58.9% of sales compared to FY’21 $66.5 million or 66.0% of sales

R&D FY ’22 $13.0 million comprising 16.0% of sales compared to FY’21 at $7.2 million or 22.0% of sales

 

Inventory: Dec 31st 2022, $236 million represented 56.3% of annual sales compared to $242 million or 52.1% at end of FY2021

In Q4 ’22 16.1 million lbs. sold compared to 19.4 million lbs. in Q4 ‘21

In Q4 ’22 Unit revenue attained $4.96/lb. compared to $5.19/lb. in Q4 2021

In Q4 ’22 each of claimed 190,000 outlets received an average of 85 lbs. product compared to 130,000 outlets receiving 149 lbs. in Q4 ‘21

 

For FY 2022 Beyond Meat lost $(366.2) million on sales of $418.9 million with a negative diluted EPS of $(5.75). Comparative values for FY 2021 were a loss of $(182.1 million) on sales of $464.7 million with a negative diluted EPS of $(2.88)

In Q4 2022 U.S sales represented 69.9 percent of revenue of which 74.2 percent was retail, the remainder, food service.

In Q4 2022 International sales represented 30.1 percent of revenue of which 40.3 percent was retail, the remainder, food service.

52-Week Range in Share Price: $53.47 to $18.42 50-day Moving average $15.42

 

In commenting on Q4 2022 results, Ethan Brown Founder and CEO stated, “We are making solid progress in our transition to a sustainable growth model, one that emphasizes the achievement of cash flow positive operations within the second half of 2023. We continue to execute this pivot upon three primary pillars. One, driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork, and poultry platforms. Two, bringing inventory levels down while generating cash flow through more aggressive, efficient management. And three, placing greater emphasis on near-term retail and foodservice growth drivers while also supporting strategic key long-term partners and opportunities.”

 

Brown continued, “Our fourth quarter results clearly demonstrate delivery against our strategy and plan, including solid sequential progress on margin recovery and operating expense reduction, and continued inventory drawdown. We are proud of our team's continued pace of innovation including Beyond Steak, which continues to win awards for its taste and outstanding health profile, as well as the just launched McPlant Nuggets in Germany, the second plant-based protein co-developed with Beyond Meat as part of the McPlant platform. As we navigate current conditions, we remain intently focused on positioning Beyond Meat to capture the vast opportunity to be a major protein provider in the $1.4 trillion meat industry and play a leadership role in transitioning global consumers to delicious plant-based meats in support of critically important health, climate, environmental, and animal welfare objectives."

 

Despite this optimistic statement of affairs the reality includes:-

  • An accumulated deficit of $203.6 million.
  • Trailing 12-month negative operating cash flow of $407 million
  • Effective June 31st 41 percent of float was short
  • News reports of mismanagement and failure to execute and deliver on products offered to food service prospects
  • Share price off 65 percent in FY 2022

 

Notwithstanding the Q4 report BYND opened Friday 24th February post release at $22.00 but closed at $18.88 on a down-market. Management may attribute this market affirmation to promises to cut expenses by laying off non-essential staff and other economies to reduce cash burn. A more likely explanation is that some investors see the inevitability of an acquisition with a premium or alternatively a short squeeze in the near future. Analysts still envision Beyond Meat running out of cash with a share price below $5. As stated after the release of Q2 financials “This will create an opportunity for a Grey or even a Black knight (the White knights have passed it over) to acquire and dismember the Company.” Tyson Foods correctly assessed the prospects for Beyond Meat when they disposed of their equity before the IPO.


 
Copyright © 2024 Simon M. Shane