Tattooed Chef, Inc. (Nasdaq: TTCF) (“Tattooed Chef” or the
“Company”), a leader in plant-based foods, today announced
financial results for the three and twelve months ended December
31, 2020.
“We are pleased with our solid financial results
for the fourth quarter and full year 2020 driven by record sales of
our Tattooed Chef branded products,” said Sam Galletti, President
and CEO of Tattooed Chef. “We are successfully executing on our
growth strategy and have kept the momentum going with a strong
start to 2021. Based on current retailer commitments, we will
increase store count by 41% and points of distribution of Tattooed
Chef branded products by 35% by the end of the first quarter. We
have a long runway for growth, particularly in conventional food
retailers and are thrilled with our early success.”
Sarah Galletti, Chief Creative Officer and “The
Tattooed Chef”, added, “The success of our brand is attributable to
our ability to connect with consumers through our food. We are
revolutionizing the way people think about plant-based food and
disrupting the frozen aisle with a differentiated offering. We
ended 2020 with 38 branded SKUs and have a pipeline of 150 more
plant-based ideas we can’t wait to share with the world.”
Financial Highlights for the Fourth
Quarter of 2020 Compared to the Fourth Quarter of 2019
- Revenue was $39.6 million, a 48%
increase compared to $26.8 million in the prior year period;
Tattooed Chef branded product revenue was a record $23.9 million,
an increase of 172% compared to $8.8 million in the prior year
period.
- Net income was $41.5 million
compared to net income of $2.2 million in the prior year period.
The current period net income included a one-time tax benefit
resulting from the Company’s change from an S-corporation to a
C-corporation at the time of the reverse merger in October 2020.
The restructuring in anticipation of the merger caused a step-up in
the tax basis of intangible assets creating a deferred tax asset
and a tax benefit of $39.3 million.
- Adjusted EBITDA was $3.7 million,
or 9% of revenue, compared to $2.2 million, or 8% of revenue, in
the prior year period. Adjusted EBITDA is a non-GAAP financial
measure defined under “Non-GAAP Measures.” Please see “Adjusted
EBITDA Reconciliation” at the end of this press release.
Financial Highlights for Full Year 2020
Compared to Full Year 2019
- Revenue was $148.5 million, a 75%
increase compared to $84.9 million in the prior year; Tattooed Chef
branded product revenue was a record $84.6 million, a 363% increase
compared to $18.3 million in the prior year.
- Net income was $45.4 million
compared to $5.6 million in the prior year. The tax benefit noted
for the fourth quarter had the same impact on the full year net
income.
- Adjusted EBITDA was $9.6 million,
or 6% of revenue, compared to $6.9 million, or 8% of revenue, in
the prior year.
Fourth Quarter 2020 Results
Revenue increased by $12.8 million, or 48%, to
$39.6 million in the three months ended December 31, 2020
compared to $26.8 million in the three months ended December 31,
2019. The revenue increase was primarily driven by a $15.1 million
increase in “Tattooed Chef” branded products, offset by a $2.3
million decrease in private label products and legacy products for
select private label retailers. The increase in Tattooed Chef
branded products resulted from expansion in the number of U.S.
distribution points, as well as increased volume at existing retail
customers with our current portfolio of products and new product
introductions including smoothie bowls, vegetable blends, buffalo
cauliflower, and other value-added riced cauliflower meals.
Gross profit was $6.9 million in the three
months ended December 31, 2020 compared to $3.9 million in the
three months ended December 31, 2019. Gross margin in the three
months ended December 31, 2020 was 17.4% compared to 14.4% in
the three months ended December 31, 2019. Gross profit and gross
margin in the three months ended December 31, 2020 improved
compared to the prior year period primarily due to production
efficiencies and to cost of goods sold being spread over greater
revenue.
Operating expenses increased $6.0 million to
$7.9 million in the three months ended December 31, 2019 compared
to $1.9 million in the three months ended December 31, 2019. The
increase in operating expenses was primarily due to $3.4 million of
stock compensation expense resulting from equity grants made
subsequent to the merger with Forum Merger II Corporation (FMCI) in
October of 2020; increases in spending to support the growth of the
Tattooed Chef branded products; and to support the costs of being a
public company since October 15, 2020.
Net income was $41.5 million in the three months
ended December 31, 2020 compared to $2.2 million in the prior year
period. The Company recorded a tax benefit of $41.9 million in the
fourth quarter compared to a benefit of $0.2 million in the prior
year period. In October 2020, the restructuring in anticipation of
the merger with FMCI caused a step-up in the tax basis of
intangibles assets of approximately $140.5 million, and the tax
status of the Company to change from an S-corporation to a
C-corporation. The tax effect of these changes created a deferred
tax asset and income tax benefit of $39.3 million.
Adjusted EBITDA was $3.7 million, or 9% of net
revenue, in the three months ended December 31, 2020, an increase
of $1.5 million compared to $2.2 million, or 8% of net revenue, in
the three months ended December 31, 2019. The increase in Adjusted
EBITDA was primarily due to the higher revenue and gross profit
amounts resulting from the increase in Tattooed Chef branded
products.
Full Year 2020 Results
Revenue increased by $63.6 million, or 75%, to
$148.5 million for the year ended December 31, 2020 compared to
$84.9 million in the year ended December 31, 2019. The revenue
increase was primarily driven by a $66.3 million increase in sales
of Tattooed Chef branded products, partially offset by a $0.9
million decrease in sales of private label products and a $1.8
million decrease in sales of legacy products for select private
label retailers resulting from our shift in focus to branded
product sales. The increase in Tattooed Chef branded products
resulted from expansion in the number of U.S. distribution points,
as well as increased volume at existing club channel customers of
our current portfolio of products and new product introductions
including smoothie bowls, vegetable blends, buffalo cauliflower,
and other value-added riced cauliflower meals.
Gross profit increased $10.0 million to $23.7
million in the year ended December 31, 2020 compared to $13.7
million in the year ended December 31, 2019. Gross margin in the
year ended December 31, 2020 was 15.9%, slightly lower than 16.1%
in the year ended December 31, 2019. The gross profit increase was
primarily due to the higher revenue levels for the year ended
December 31, 2020 compared to the prior year. Gross margin declined
slightly due to higher costs for raw materials and other variable
manufacturing costs in the year ended December 31, 2020 as compared
to the prior year.
Operating expenses increased $12.0 million to
$19.5 million in the year ended December 31, 2020 compared to $7.5
million in the year ended December 31, 2019, primarily due to costs
resulting from increased headcount and wages to manage the increase
in revenue and public company costs which did not exist in the
prior year; $3.4 million of stock compensation; and $0.6 million in
non-recurring bonus payments in connection with the merger with
FMCI.
Net income was $45.4 million in the full year of
2020 compared to $5.6 million in the prior year. Net income in the
year ended December 31, 2020 includes the same $39.3 million income
tax benefit described above in the fourth quarter 2020 results.
Adjusted EBITDA was $9.6 million, or 6% of
revenue, in the year ended December 31, 2020 compared to $6.9
million, or 8% of revenue, in the year ended December 31, 2019. The
improvement in Adjusted EBITDA was primarily the result of the
increase in revenues and gross profit compared to the prior year.
As a percentage of revenue, EBITDA was slightly lower in the year
ended December 31, 2020 due to the increases in operating expenses
as described above.
Balance Sheet and Cash Flow
As of December 31, 2020, the Company had cash
and cash equivalents of $131.6 million. As previously announced,
including the cash proceeds from the exercise of public warrants,
the Company’s total cash balance was approximately $200 million as
of February 22, 2021.
Outlook
The Company reaffirmed its annual guidance for
2021:
- Revenue of $222 million, an
increase of 49% compared to fiscal year 2020.
- Gross margin in the range of 20% to
25%.
- Adjusted EBITDA in the range of $8
million to $10 million; and
- Net income in the range of $2.5
million to $5 million.
Conference Call and WebcastThe
Company will host a conference call and webcast to discuss the
results today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
Investors interested in participating in the live call can dial
855-327-6837 from the U.S. and 631-891-4304 internationally. A
telephone replay will be available approximately two hours after
the call concludes through Wednesday, March 24, 2021, and can be
accessed by dialing 844-512-2921 from the U.S., or 412-317-6671
internationally, and entering the confirmation ID 10013372. The
webcast will be available on the Investors section of the Company’s
website at www.tattooedchef.com and archived for 30 days.
About Tattooed ChefTattooed
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, and
cauliflower pizza crusts, which are available in the frozen food
sections of leading national retail food 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.
Forward Looking
StatementsCertain 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, the words
“estimates,” “projected,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,”
“future,” “propose,” “trend,” “accelerate,” “continues,”
“opportunities,” “next,” “increase,” “runway,” “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; competition and the
ability of the business to grow and manage growth profitably; the
ability to meet Nasdaq’s listing requirements; costs related to our
recent business combination; anticipated but unpredictable
increased costs associated with our transition to a public company;
and other risks and uncertainties indicated from time to time in
the definitive proxy statement filed with the Securities and
Exchange Commission (the “SEC”) in connection with our recent
business combination, 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 the COVID-19 outbreak. Tattooed
Chef undertakes any 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’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
INVESTORSRachel Perkinsrachel@ulshir.com
MEDIANatania
Reedtattooedchef@praytellagency.com
TATTOOED CHEF, INC. (f/k/a FORUM MERGER
II CORPORATION)CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in
thousands, except per share information)
|
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December
31, |
|
|
December
31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
$ |
39,596 |
|
|
$ |
26,802 |
|
|
|
$ |
148,492 |
|
|
$ |
84,919 |
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF GOODS SOLD |
|
|
|
32,710 |
|
|
|
22,946 |
|
|
|
|
124,836 |
|
|
|
71,209 |
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
6,886 |
|
|
|
3,856 |
|
|
|
|
23,656 |
|
|
|
13,710 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
7,861 |
|
|
|
1,862 |
|
|
|
|
19,506 |
|
|
|
7,454 |
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM OPERATIONS |
|
|
|
(975 |
) |
|
|
1,994 |
|
|
|
|
4,150 |
|
|
|
6,256 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
(166 |
) |
|
|
(1 |
) |
|
|
|
(735 |
) |
|
|
(494 |
) |
Other
income |
|
|
|
713 |
|
|
|
- |
|
|
|
|
1,826 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE PROVISION FOR INCOME TAXES |
|
|
|
(428 |
) |
|
|
1,993 |
|
|
|
|
5,241 |
|
|
|
5,762 |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE) |
|
|
|
41,903 |
|
|
|
192 |
|
|
|
|
40,128 |
|
|
|
(154 |
) |
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME |
|
|
|
41,475 |
|
|
|
2,185 |
|
|
|
|
45,369 |
|
|
|
5,608 |
|
|
|
|
|
|
|
|
|
|
|
|
LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS |
|
|
|
274 |
|
|
|
550 |
|
|
|
|
1,475 |
|
|
|
1,082 |
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME ATTRIBUTABLE TO TATTOOED CHEF, INC. |
|
|
$ |
41,201 |
|
|
$ |
1,635 |
|
|
|
$ |
43,894 |
|
|
$ |
4,526 |
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME PER SHARE |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.63 |
|
|
$ |
0.03 |
|
|
|
$ |
0.74 |
|
|
$ |
0.10 |
|
Diluted |
|
|
$ |
0.56 |
|
|
$ |
0.03 |
|
|
|
$ |
0.66 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
65,641,321 |
|
|
|
57,266,916 |
|
|
|
|
59,071,646 |
|
|
|
44,881,119 |
|
Diluted |
|
|
|
73,212,082 |
|
|
|
57,266,916 |
|
|
|
|
66,642,407 |
|
|
|
44,881,119 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
$ |
978 |
|
|
$ |
38 |
|
|
|
$ |
777 |
|
|
$ |
(174 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total other
comprehensive income (loss), net of tax |
|
|
|
978 |
|
|
|
38 |
|
|
|
|
777 |
|
|
|
(174 |
) |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
42,453 |
|
|
|
2,223 |
|
|
|
|
46,146 |
|
|
|
5,434 |
|
Less: income attributable to the noncontrolling interest |
|
|
|
539 |
|
|
|
1,106 |
|
|
|
|
1,559 |
|
|
|
1,089 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Tattooed Chef, Inc.
stockholders |
|
|
$ |
41,914 |
|
|
$ |
1,117 |
|
|
|
$ |
44,587 |
|
|
$ |
4,345 |
|
|
|
|
|
|
|
|
|
|
|
|
The financial data
presented for the year ended December 31, 2020 should be considered
preliminary and is subject to change, as the Company's independent
auditors have not completed their audit. |
|
|
|
|
|
|
|
|
|
|
|
TATTOOED CHEF, INC (f/k/a FORUM MERGER II
CORPORATION)CONSOLIDATED BALANCE SHEETS
(in thousands, except per share information)
|
December
31, |
|
December
31, |
|
2020 |
|
2019 |
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
Cash |
$ |
131,579 |
|
$ |
4,537 |
|
Accounts receivable |
|
33,159 |
|
|
9,440 |
|
Inventory |
|
38,660 |
|
|
17,960 |
|
Prepaid expenses and other current assets |
|
4,032 |
|
|
3,013 |
|
TOTAL CURRENT ASSETS |
|
207,430 |
|
|
34,950 |
|
|
|
|
|
Property,
plant and equipment, net |
|
16,083 |
|
|
8,238 |
|
|
|
|
|
Deferred
taxes |
|
43,298 |
|
|
227 |
|
|
|
|
|
Other
assets |
|
605 |
|
|
481 |
|
|
|
|
|
TOTAL ASSETS |
$ |
267,416 |
|
$ |
43,896 |
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
25,314 |
|
$ |
15,813 |
|
Accrued expenses |
|
2,961 |
|
|
1,948 |
|
Distribution payable |
|
- |
|
|
1,868 |
|
Line of credit |
|
22 |
|
|
10,054 |
|
Notes payable to related parties, current portion |
|
66 |
|
|
357 |
|
Notes payable, current portion |
|
111 |
|
|
610 |
|
Other current liabilities |
|
1,798 |
|
|
65 |
|
TOTAL CURRENT LIABILITIES |
|
30,272 |
|
|
30,715 |
|
|
|
|
|
|
|
|
|
Notes
payable to related parties, net of current portion |
|
- |
|
|
443 |
|
Notes
payable net of current portion |
|
1,990 |
|
|
2,662 |
|
TOTAL LIABILITIES |
$ |
32,262 |
|
$ |
33,820 |
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTEREST |
$ |
- |
|
$ |
6,930 |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Preferred stock- $0.0001 par value; 10,000,000 shares authorized,
none issued and outstanding at December 31, 2020 and 2019 |
|
- |
|
|
- |
|
Common shares- $0.0001 par value; 1,000,000,000 shares authorized;
63,331,437 shares issued and outstanding at December 31, 2020,
49,685,829 shares issued and outstanding at December 31,
2019 |
6 |
|
|
5 |
|
Additional paid in capital |
|
193,912 |
|
|
2,312 |
|
Accumulated other comprehensive (income) loss |
|
1 |
|
|
(692 |
) |
Retained earnings |
|
41,235 |
|
|
1,265 |
|
Total equity attributable to Tattooed Chef, Inc. |
|
235,154 |
|
|
2,890 |
|
Noncontrolling interest |
|
- |
|
|
256 |
|
|
|
235,154 |
|
|
3,146 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
STOCKHOLDERS' EQUITY |
$ |
267,416 |
|
$ |
43,896 |
|
|
|
|
|
|
|
|
|
The financial data presented for the year ended
December 31, 2020 should be considered preliminary and is subject
to change, as the Company's independent auditors have not completed
their audit. |
|
TATTOOED CHEF, INC (f/k/a FORUM MERGER II
CORPORATION)Adjusted EBITDA
Reconciliation (in thousands)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
December
31, |
|
|
December
31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
41,475 |
|
|
$ |
2,185 |
|
|
|
$ |
45,369 |
|
|
$ |
5,608 |
|
Interest
expense |
|
|
166 |
|
|
|
1 |
|
|
|
|
735 |
|
|
|
494 |
|
Tax
(benefit) expense |
|
|
(41,903 |
) |
|
|
(192 |
) |
|
|
|
(40,128 |
) |
|
|
154 |
|
Depreciation
and amortization |
|
|
734 |
|
|
|
181 |
|
|
|
|
1,427 |
|
|
|
658 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
472 |
|
|
|
2,175 |
|
|
|
|
7,403 |
|
|
|
6,914 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Gain on
foreign currency contracts |
|
|
(713 |
) |
|
|
- |
|
|
|
|
(1,827 |
) |
|
|
- |
|
Stock
compensation expense |
|
|
3,399 |
|
|
|
- |
|
|
|
|
3,399 |
|
|
|
- |
|
Transaction related employees' bonuses |
|
575 |
|
|
|
- |
|
|
|
|
575 |
|
|
|
- |
|
Total
adjustments |
|
|
3,261 |
|
|
|
- |
|
|
|
|
2,147 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
3,733 |
|
|
$ |
2,175 |
|
|
|
$ |
9,550 |
|
|
$ |
6,914 |
|
As a percentage of revenue |
|
|
9.4 |
% |
|
|
8.1 |
% |
|
|
|
6.4 |
% |
|
|
8.1 |
% |
|
|
|
|
|
|
|
|
|
|
The financial data
presented for the year ended December 31, 2020 should be considered
preliminary and is subject to change, as the Company's independent
auditors have not completed their audit. |
|
|
|
|
|
|
|
|
|
|
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