In a press release dated November 6th Beyond Meat Inc. (BYND) announced results for Q3 ending September 28th 2024. The Company reported a lower EPS loss than consensus ($0.44) but fell short of the Zack’s revenue projection by 1.5 percent. BYND fell sharply over the two trading days following the release based on concerns over refinancing convertible notes with the prospect of default in 2017.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
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3rd Quarter Ending:
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September 28th
2024
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September 30th 2023
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Difference (%)
|
|
Sales:
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$81,006
|
$75,312
|
+7.5*
|
|
Gross profit /(loss):
|
$14,308
|
$(7,254)
|
+297.2*
|
|
Operating income/ (loss):
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$(30,909)
|
$(69,620)
|
+55.6*
|
|
Pre-tax Income/ (loss)
Net Income/ (loss)
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$(26,532)
$(26,576)
|
$(70,366)
$(70,492)
|
+62.3*
+62.3*
|
|
Diluted earnings per share:
|
$(0.41)
|
$(1.09)
|
+59.6*
|
|
Gross Margin (%)
|
17.6
|
(9.6)
|
+83.3*
|
|
Operating Margin (%)
|
(38.2)
|
(92.4)
|
+58.7*
|
|
Profit Margin (%)
|
(32.8)
|
(93.6)
|
+65.0*
|
|
Long-term Debt: Sept. 28th ‘24 / Dec. 31st ‘23
|
$1,218,271
|
$1,213,464
|
+0.4
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
(14.1)
|
|
|
|
Return on Equity (%)
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N/A
|
|
|
|
Operating Margin (%)
|
(38.2)
|
|
|
|
Profit Margin (%)
|
(83.6)
|
|
|
|
Total Assets: Sept. 28th ‘24 / Dec. 31st 2023
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$692,938
|
$774,450
|
-10.5
|
|
Market Capitalization Nov 11th ‘24/Dec 31st 2023
|
$350,140
|
$574,410
|
-39.0
|
* ‘+’ denotes improvement (or ‘less bad’)
NOTES:
R&D expenditure declined 33 percent from Q3 2023 to $6.1 million or 7.6 percent of revenue (was 5.9 percent in Q3 2013)
S&G expenditure declined 26 percent from Q3 2023 to $39.1 million or 48.3 percent of revenue (was 45.2 percent in Q3 2013)
For Q3 FY 2024:-
52-Week Range in Share Price: $12.12 down to $5.13 50-day Moving average $6.35
On November 6th BYND closed at $6.58 pre-release but declined over the subsequent two trading days to $5.15 at the November 11th open
Forward P/E: Neg.
Insiders hold 4.9 percent of equity (was 9.2, Q1 2024), Institutions 43.9 percent (was 47.9 percent, Q1 2024).
Comments for Q2 2024:-
U.S. sales represented 61 percent of Q3 revenue almost unchanged from Q3 2023.
Of U.S sales 70.7 percent were through retail channels, compared to 70.9 percent in Q3 2023
Of International sales 52.4 percent were through retail channels, down from 43.9 percent in Q3 2023
Average unit revenue in Q3 2024 for all sales attained $4.85/lb. compared to $4.19/lb.
during the corresponding quarter of 2023.
Guidance for FY 2024 included:
Net revenue of between $320 and $340 million.
Gross margin in mid-‘teens’.
Operating expenses $180 to $190 million
Capital expenditure $10 to $15 million
Continued negative cash flow
Beyond Meat has apparently hired Goldman Sachs to raise $250 million in private capital to shore up liquidity. The Company issued $1 billion in convertible notes in March 2021 that mature in early 2017. Given the trajectory of the share price and continued losses default appears inevitable.
In commenting on results Ethan Brown president and CEO stated:- “We are pleased to report that in the third quarter we returned to growth, increasing net revenues on a year-over-year basis, while continuing to expand gross margin and reduce operating expenses on both a sequential and year-over-year basis. Looking ahead, we expect to increase our cash reserves by year-end and pursue further balance sheet restructuring in 2025.”
Despite this optimistic commentary the reality includes:-
- An accumulated deficit of $1,197 million.
- Trailing 12-month negative operating cash flow of $71.1 million
- Inventory of $175,158 represents 1.5 times Q3 FY 2024 sales
- Effective July 15th2 percent of float was short
- Share price of $5.15 on November 11th open, 57 percent off 12-month high of $12.12
- Convertible notes trading at 25 cents on the dollar