Q4 2020 Tattooed Chef Inc Earnings Call
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Thank you for standing by this is the conference operator.
Welcome to the tattooed chef fourth quarter 'twenty 'twenty earnings call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity for you to ask questions.
To join the question queue. You May Press Star then one on your telephone keypad should.
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I would now like to turn the conference over to Rachel Perkins Investor Relations. Please go ahead.
Thank you good afternoon, and welcome to tattooed chef fourth quarter and full year 2020 earnings conference call on our call today, our sand and bloody President and Chief Executive Officer, Derek Galotti, Chief Creative Officer, and need tattooed shop, and shop Argyle, Chief Financial Officer, Jackie Dykeman, Chief operating officer, and Matt Wyatt.
And as Chief growth Officer will also be available for questions.
And now everyone's share that that's the earnings release, which went out at approximately four O. Five P. M. Eastern time today March 10, 2021. He has not had a chance to review the release, it's available on the investors portion of our website at www dot catchy shaft outcome before.
Before we begin I'd like to remind everyone that the prepared remarks contain forward looking statements such statements involve a number of known and unknown uncertainties. Many of which are outside the company's control and can cause future results performance or achievements to differ significantly from the results performance or achievements expressed or implied by such forward looking statements.
Important factors and risks that could cause or contribute to such differences are detailed on the company's filings with the securities and exchange Commission, except as required by law. The company undertakes no obligation to update any forward looking or other statements herein, whether as a result of new information future events or otherwise and I.
In addition, within our earnings release and in today's prepared remarks, adjusted EBITDA and adjusted EBITDA margin are referenced it is important to note that these are non-GAAP financial measures that we believe are useful metrics that better reflect and performance on our business on on ongoing basis. A reconciliation of these non-GAAP financial measures. The most directly comparable GAAP financial measures.
And are included in today's press release, which has also been posted on our website and when.
That is my pleasure to turn the call over and attach your chest, President and CEO Sam Galotti.
You Rachel and good afternoon, and we appreciate everyone, taking the time to join us on today's call.
I'll begin today's discussion with key business highlights, including an update on average.
New distribution win Daryl will discuss our marketing and innovation and then Chuck will provide greater detail on the financials first started fourth quarter revenue items. We are pleased to report revenue increased 48% to $39 6 million compared to the fourth quarter last year drill.
And by our tattooed chef branded products are branded product sales for the quarter were a record $23 9 billion and increase of 172% compared to $8 8 billion and the fourth quarter last year.
Net sales accounted for 60% of the total revenue and the fourth quarter of 2000 and twice.
For the full year revenue was 145 million, a 75% increase year over year graduate sales increased 363%.
$84 6 million or 57% of debt total revenue for 2020 compared to 22% and 2019 and.
This is the first year on the company's history, the branded exceeded private label sales and we expect that split to reach as high as 75% to 80% branded within the next two to three years.
We believe we are still on the early innings of the tattooed check growth as a brand and as a company we formed chassis, Jeff and 2017 after share and recognize a lack of readily available high quality clean label ready to Cook plant based products and the market.
Ford We ended fiscal 2020 with 38 branded Skus or products are sold in all 50 States and we took the company public with tattoos chef Brad it's for every lifestyle and we attract consumers of all ages and demographics.
We believe our historic and continued success with club across an array of tattooed share branded product indicates.
Two just brand resonates with consumers and will be attractive conventional retail grocery customers.
Coupled with the fact that we have spent a little money on increasing brand awareness because we were historically focused on private label. We believe there is untapped potential.
We participate in the 55 billion U S frozen food category of 380 billion market globally, and we are aligned with many major food trends, we have the innovative products and the vertically integrated supply chain and manufacturing capabilities.
Compete across multiple categories within frozen.
And little brand recognition of our household penetration today as we announced in December we hired the national marketing firm nitrous seat and implement a comprehensive brand marketing campaign, this year, which Sarah will touch on in a few minutes our growth strategy is focused on expanding and increasing distribution of tattooed chip branded products with new.
New and existing customers, we continue to set the foundation for broad market expansion at the end of 2020 are tattooed chef branded products were nearly 4300 stores and had 23000 points of distribution, we have made significant progress and gaining new retail distribution at the start.
2021.
Based on our new retailer partners that are committed and Q1 tattooed chef will be available and an additional 1765 chain stores with 8000, new points of distribution. This is a 41% increase and stores and at 35% increase and points of distribution over where.
We finished 2020 versus what we expect for the first quarter of 2021, we will further discuss the positive momentum as we expand our channel performance.
Starting with the club channel, we launched our first M. B M with Costco and March with this program tattooed chef six pack organic on Z boys will be available and every costco nationwide for the entire month.
And this program will continue to allow us to introduce tattooed chef to more consumers through the Costco member.
And Sams clubs, we continue to demonstrate our leadership position as a plant based frozen food partner. In addition to our force tattooed chef items that are sold on an everyday basis nationally. We have had for limited time offers and Q1 three of or limited time offers where new items and protocols are wings with Buffalo and Sui.
And chili sauce qualifier white pizza and our plant based sausage breakfast Bowl or force L. T. O was the veggie Hempel, which has performed so well that will be brought back on rotation later this year.
We were also able to continue to share the tattooed chef brand message with Sam's club member and Q1, tattooed chef, which featured and choose Sams club and store booklet on the front page and both January and March the January ISP focused on plant based foods and featured the tattooed chef portfolio and on the March ISP features circle.
And if the warrants history with the circulation of 18 million, we were honored to be part of both programs. We continue to see this momentum translate and our business performance for the 52 weeks and the 12 27 2020 as reported and spin tattooed chef is up 376% and Sam's club.
Which is significantly outpacing the frozen categories, and which we compete.
Got you Jeff is the number three brand in the combined frozen categories, and which we compete which includes frozen breakfast.
Entrees, and fruits and vegetables, and more specifically in the frozen fruits and vegetables category tattooed chef as the number one selling bread and both dollar.
Total dollar sales and dollar growth and Sams clubs, we are confident that our strong business performance as well and pipeline of innovation will allow us to build on this strong foundation on the future. We have achieved this category leadership position and only one year of sales.
Got to chess momentum and mass channel continues with 33% growth for the 52 weeks ending 12 27 2020. According to spins tattooed chef grew three times faster than the category in 2020, our ACB and math, it's 59, eight which is up 300%.
Year over year.
R T D piece or total distribution points are up 285%.
We are also excited to share we've expanded our partnership with target as we announced this morning, six new Skus will be available nationally starting next week. These new Skus plus our current multiple line will now give the target guests the opportunity to enjoy it tattooed chef for breakfast lunch and dinner.
And grocery natural patchy chef is currently offering 38 unique skus across five different frozen categories by the end of Q1, and we will have retailer and distributor selling 24. These skus.
We're starting to see the results of the work we did in the fourth quarter to develop our retail program start materialize and the market.
And two chip products will be on shelf by the end of Q1 and key retailers across the country, such as stop and shop, southeastern Grocers and Ingalls.
Retailers will feature a variety of product categories, including Pizza, Entre bowls, vegetables, and Smoothie Bowl.
In addition to the retail retailer commitments that we'll start selling tattooed chef and Q1. We also have additional retail retailer could limits, including whole foods Meyer Lowes foods, and United supermarket, a division of average.
Our new distributor relationships with UNFI, Katy and the party are showing promise as well as future products are now available on these distributors warehouses across the country and we are encouraged by the progress and sales teams are making to introduce a full line of tattooed chef to local and regional growth Street and natural cats.
And the new distribution and math and the grocery natural commitments along with other retailer negotiations that are underway. We are now confident that we will achieve our 2020 objectives of 10000 stores and 65000 distribution points for tattooed chef at year end just to recap all the new stores that are expanding their tattooed chef.
And why and carrying products for the first time, our target stop and shop, southeastern Grocers Ingalls, Bristol farms whole foods Myers low speeds and United Supermarkets. We have also started working with drive market and we will have product available on their online marketplace. Starting next week, we look forward to announcing on.
Second quarter wins to you soon with our retail expansion well underway, our net sales channel focus will be booster.
With COVID-19 restrictions expecting to mitigate and students and employees return to campus and the workplace.
We think the time is right to introduce tattooed chef to the business industry and education channel with our existing Entre and Smoothie Bowl portfolio distribution network and a new foodservice broker partner. We are excited about what the future holds for us and foodservice, we will share our progress and these chat.
Throughout the year.
We expect our growth to continue giving the different channels for growth, including grocery club bass as well as our innovation pipeline as we outlined in our analyst day in December we believe that given the white space within the frozen food aisle, we can achieve 300 million and revenue primarily from product expansion and current and existing.
Retailers and new platforms, like desserts and family meals, and increasing our SKU count to over 200 and through innovation, we see a path to 590 day sales is when we look to expand beyond the frozen food section and into the grocery aisle with shelf stable products, and we will consider strategic M&A to accelerate our growth and certain areas.
We have approximately 200 million and cash and we'll invest and the business and capitalize on opportunities that we think will create long term shareholder value.
One of our key competitive advantages is that we are vertically integrated by being the manufacturers on their own product. We can take a new idea from concept to production to shop and as little as three months, we have two facilities today, one in the U S and one in Italy, and the U S facility, we had double their capacity and 2020 and added additional pro.
<unk> and square footage for example on one of the lines were able to manufacture around 15000 Boes per ship per day through investment and equipment, we're able to manufacture over 35000 Boes per shift on the same line using the same number of people. The Italian facility also increased production of breast collared price from 110000 pounds per day.
Eight to 200 and that 200000 pounds per day and in August. We expect this increase to 400000 pounds per day, we will continue to increase capacity during 2021 to keep up with the expanded growth and demand and tattooed chip products.
And now I'd like to turn the call over to Sarah to discuss our innovation and our marketing efforts.
Thank you and good afternoon, everyone I'm excited to be here to provide a little more insight on our innovation and marketing initiatives.
We are disrupting the frozen aisle and retailers nationwide with our plant based foods and our ability to spot trends quickly and confidently and if he is what resonates with consumers and retailers and alike.
And we're the first to go to the mass market with cauliflower crust pizza, and I'll say evil and habit.
Pipeline of over 150 additional classes and yet.
We make food that you want to eat and we make it easy for consumers to enjoy with little to no prep.
Plenty 20th of Big innovation year for Techy check, we've released 17, new branded Skus during the year, bringing our total to 38 Skus as of December 31 2020.
We've been happy with the performance of these new items and it has prompted more discussions with retailers around future innovation.
We have 24, new Skus plan for 'twenty, and 'twenty 113 of which we'll be watching and the first half of 'twenty 'twenty, one o'clock and conventional retailers nationally.
We are especially excited about the launch of our 100% certified plant based pizza we.
We have five skus at Eugene vegetable meat lovers, pepperoni, and a white pizza.
And these Lubbock, and pepperoni and alternative clean ingredient deck and we believe her because she is superior to any other and the market today and he's known pieces on one only to have a plant be certified scanner, which is important for us to have on our packaging.
And meat alternative space continues to be attractive to enhance our value added and Neil we are developing.
Moving more products, not only and it's been weak alternatives.
But also think alternatives, whether that right pasta and dessert.
We continue to push the limits of what is possible and creating new food concepts and are making a stamp and multiple spaces and George we are continuously bringing new ideas to the marketplace and give them what Sam spoke about earlier with new retail distribution, there was a slight miss bringing tattooed chef into the food aisle.
Or do the resonates with consumers and we're encouraged to see the retailer reception to our product portfolio has been so positive.
Provide delicious approachable and innovative products not only to the growing group of consumers and keep the plant based lifestyle, but also to the mainstream market.
Broad portfolio of products can satisfy all occasions, whether that be and Neil snack or side dish waking up and go to supplier for retailers seeking to offer a complete cleansing portfolio.
As we discussed at our analyst day, we have hired the National marketing fund measure to help increase our brand awareness as we grow our distribution growth.
Be investing $15 million across digital and video connected TV and digital display social media and search engine marketing.
And it's bringing them onboard at the start of the year, we have successfully deployed and initial test campaign with banner ads and the Los Angeles and Atlanta market share.
And in March we will be moving into phase two with Intubated and fix and 15 second video campaign commercial and expanding to additional markets across the country.
And we'll prioritize investment and bucket and ZIP codes, and the highest density and distribution and.
And concentration of our target plant based and tendered and we will dynamically adjust to drive demand with each new retailer SKU and door.
And key areas, we will explore a how high is high approach with broad based media, including T to understand the dynamics demand beyond the core can be simple.
On the consumer.
Through our investment and approach we are building a system that will grow as we grow and plant the seeds for inclusive national movement to revolutionize plant based eating we are still on the early day collecting marketing data points, but we our company and our strategy I can't wait to share more with you and the months to come and now I'll turn it over to Chad to walk through on finance.
Yes.
Thank you Sarah and good afternoon, everyone.
And the fourth quarter of 2020, we continued on our growth trajectory.
Revenue increased by almost 50% to $39 6 million compared to $26 8 million for the prior year fourth quarter.
As Sam mentioned the revenue increase was driven by a $15 1 million increase and revenue of tattooed chef branded products, which now account for almost 60% of our total revenue.
Our gross profit was $6 9 million or 17, 4% of revenue.
<unk> to $3 9 million or 14, 4% for the comparable quarter of 2019.
The improvement in gross profit and gross margin was primarily due to production efficiencies and the cost of goods sold being stressed spread over a greater revenue.
We anticipate continued gross margin expansion as we increase our volume.
Operating expenses increased to $7 9 million for the three months ended December 31, and 2020 compared to $1 9 million for the three months ended December 31 2019.
The increase in operating expenses was primarily due to $3 4 million of stock compensation, resulting from equity grants made subsequent to the merger with FMC I and October of 2020.
So increases and spending to support the growth of the tattooed chef branded products.
And to support the cost of being a public company since October 15 2020.
We expect operating expenses to increase in 2020, one to accommodate the growth invest in the brand and incur a full year of public company costs.
Net income was $41 5 million and the three months ended December 31 and 2020.
Compared to $2 2 million in the prior year period.
We recorded a tax benefit of $41 9 million and the fourth quarter compared to a benefit of <unk> 2 million and the prior year period.
In October 2020, the restructuring and anticipation of the merger with FMC I caused a step up and the tax basis of intangible assets of approximately $140 5 million.
And the stat tax status of the company to change from an S Corp to a C Corp.
The tax effect of these changes created a deferred tax asset and income tax benefit of $39 3 million.
For the full year revenue increased by $63 6 million or 74, 9% to $148 5 million.
The increase was driven by the exceptional growth of tattooed chef branded products.
In 2020, our branded product growth resulted from expansion and the number of U S distribution points.
As well as increased volume and existing club channel customers of our current portfolio of products.
And new product introductions, including Smoothie Bowl vegetable blends.
Hello, Cauliflower, and other value added rice cauliflower and meals.
Gross profit increased $10 million to $23 7 million for the year ended December 31, and 2020 compared to $13 7 million for the year ended December 31 2019.
Gross margin for the full year 2020 was $15, 9% slightly lower than 16, 1% in the year ended December 31 and 2019.
The gross profit increase was primarily due to the higher revenue levels for the current year. The gross margin declined slightly due to higher costs for raw materials and other variable manufacturing costs and the current year.
Operating expenses increased $12 million to $19 5 million.
For 2020 compared to $7 5 million for 2019 Pri.
Primarily due to increases in costs, resulting from higher head count and wages to manage the increase in revenue.
And public company costs, which did not exist and the prior year.
We also had $3 4 million of stock compensation expense.
And $1 $6 million and nonrecurring bonus payments for the merger with Mci.
Net income was $45 4 million and the full year of 2020 compared to $5 6 million and the prior year.
The net income.
For the year ended December 31 includes the same $39 3 million income tax benefit I described a minute ago.
Adjusted EBITDA was $9 6 million or six four percentage of revenue for the year ended December 31, and 2020 compared to $6 9 million or eight 1% of revenue for 2019.
The improvement and adjusted EBITDA was primarily the result of the increase in revenues and gross profit compared to the prior year period.
Our quarterly split of adjusted EBITDA was impacted by transaction costs, which were expensed prior to the merger closing in the fourth quarter.
Once the transaction closed in accordance with accounting rules. These costs were credited to income and the fourth quarter and no longer and add back for adjusted EBITDA.
I recognize that there's a lot of unusual activity and our fourth quarter financial statements due to the complex accounting for the reverse merger the nonrecurring transaction costs and the large tax benefit.
But irrespective of the one time activities. We're pleased to post strong profit, while managing through significant growth and dramatic organization changes during 2020.
As of December 31, we had cash and cash equivalents of 131 6 million.
As previously announced including the cash proceeds from the exercising of public warrants as of February 22nd the Companys total cash balance was approximately $200 million.
Lastly, I'll mention that we've been fortunate that the COVID-19 pandemic had a minimal impact to our business in 2020.
And the food manufacturer our operations are deemed essential and all of our facilities are currently open and operating both in the U S and Italy.
Since the start of the year, we've had we have experienced some shipping delays, particularly imports that are continuing to closely monitor the situation.
At this time, we don't expect the delays to materially impact our first quarter results.
Yes.
Now turning to our outlook, we are reaffirming our 2021 annual guidance provided at our analyst day in December which includes continued growth and revenue.
We anticipate following up on this years, 75% revenue growth with an additional 50% growth in 2020, one or approximately $222 million of revenue the.
The growth will yet again come from tattooed chef products.
We expect expansion of our gross margin into the range of 20% to 25% of revenue.
And we expect adjusted EBITDA for the year to be and the range of 8 million to $10 million as we continue to invest and driving the growth invest in our brand and add the cost required to be a public company.
And we expect net income to be and the range of two and a half million to $5 million.
With that we're now available to take your questions operator.
Thank you.
We will now begin the question answer session.
And to join the question queue. You May Press Star then one on your telephone keypad and you will hear a tone acknowledging your request.
If you were using a speakerphone please pick up your handset before pressing any keys.
To withdraw your question. Please press Star then two.
We will pause for a moment of callers to join the queue.
Uh huh.
The first question comes from George Kelly with Roth Capital Partners. Please go ahead.
And.
Hey, everybody. Thanks for taking my question.
Thank you and just have a couple.
And then on Oh, I have a couple and then I'll hop back in the queue, but maybe if you could start Sam.
You listed a lot of new partners that youre launching with a new groceries and the first quarter and I think first half of the year. So.
So I guess the question is are you surprised how quickly youre, bringing on additional distribution points and is there one or two things that are that as youre sort of pitching.
And these folks are there one or two things that they're most focused on and attracted to your brand like how is it happening so quickly.
Thanks George.
Okay.
The.
I don't think that is we've been on such a aggressive path.
Past few years.
It's just when we started offering products to Sam's and Costco the branches connected right away with them and so we've been on this great momentum and.
So.
We did feel that when our teams started going to retail that we were going to continue this momentum that we had and it.
It is happening and it's very exciting and.
And so am I am I surprised at it I'm not surprised I'm I'm very pleasantly pleased though because I know that there was a lot of people questioning about the conversion from club to retail and I I was never concerned with it and obviously, it's proving out that the retail consumer is just as is.
Hungry for plant based tattooed chef branded products, so I'm really.
And I'm really excited about what I see happening right now.
Okay, Great and then there was a discussion and the prepared remarks I may have missed part of it but.
But I think you talked about the advertising strategy and I was wondering if you turn that on much so far.
In 2021 and <unk>.
And what has been the response what are the learnings with with what you've seen thus far.
I'm going to turn that over to Sarah.
Hello, So you know with Patrushev, we've had no marketing.
And till 'twenty, 'twenty, one or January and and our first phase we were really focusing on banner ads and and just gathering the data that we need to pivot and be strategic with where we allocate our dollars per marketing and we're gonna be pitching them and launching in March our.
Commercials, which will be going digitally and connected to connected TV, but right. Now we're just still gathering data because we want to really be specific and strategic and where we allocate our dollars.
Okay. Okay got you and then maybe last couple questions just related to guidance 2021 guidance.
On.
Can you.
First just Chuck you mentioned that there were some shipping delays and some port issues and what will growth can you help at all with kind of the sequential growth just throughout the year will we see the fastest growth towards the back half.
And anything we should think about quarterly.
I'm actually going to take that one George this is Stephanie when.
When we start to look at what the growth and revenue is going to do throughout the year, we brought up the port delays and things like that so that the information is out there we have not experienced any delays in our shipments and our product at this time, but we want to be completely transparent as far as revenue goes we have some great promotions.
For first quarter as you guys heard Sam say and which we have the Costco M. P. M. We have some great promotions next quarter, we have some great product rotations and we're building on.
The retail chain and so we expect tattooed shaft, you continue to grow and.
And not released the guidance for each quarter, but tattooed chassis, where it's going and we're going to continue to open up distribution points and new retailers across the country.
Okay, great. Thank you I'll hop back into queue.
That's on a nice quarter. Thank you.
The next question comes from Rob Dickerson with Jefferies. Please go ahead.
Okay, great. Thank you so much excuse me I'm sorry.
And I guess just to go.
I'll go back to the guidance for a minute.
You know there is a decent part of the call right is highlighting.
So tremendous amount of pause and that's right and it sounds like things frankly are are going great or even ahead of plan or maybe expected right and the conversion into grocery.
You called out.
Our success and Costco are doing very well and Sam's and I know there was a press release this morning.
About the six skus nationally and target and then you called out what a stop and shop Meyer I know there are others, maybe getting to thrive.
And so kind of what I kind of put all that together right and then I see that the guidance was reiterated tried and my knee jerk reaction is to think well you know.
And Theres got to be upside to that guidance. If this is all coming through because I thought the guide.
And he was based upon visibility right and maybe from some of the prior increase distribution gains at Walmart.
But maybe not equity and net new business. So I'm just trying to right size you know essentially the held guidance for the year.
You know kind of in relation to what seems to be new business wins.
And it makes sense.
That's my first question.
So Rob this is Matt.
Good afternoon, so odd.
Obviously, the new distribution is we're super excited about it you know again, we are building traction and we have a great story.
But again as you know we're.
Distributing our product across a lot of different categories. We've got 38, skus that we're selling we sell different categories. Obviously that are under different reset timing throughout the year and so because of that when the customers actually come on and when we start realizing revenue this year.
Youre going to see that some of that revenue growth is obviously going to be factored into Q2.
And then obviously mid Q3 and Q4, but the real impact is obviously on our 2022 guidance, which we're re obviously enforcing and that's where we see the full year benefit come in so it just stagger then it comes in and in a staggered way and we're super encouraged by it and we think it's.
A great demonstration of the health of the brand.
That makes sense.
Yeah, I mean, I hate to push on and it kind of makes sense.
Because I do feel like like if you get the new business wins, so on what Youre coming in.
And Q1, maybe in Q2.
What does that or.
Is that more trial basis or it doesn't sound like you're able to book.
Booking that revenue, where maybe you are right and you just kind of leaving yourself some leeway because obviously you're still in early innings and high growth mode.
And I'm, just trying to figure out like if they're new business wins that's awesome.
I'm just trying to figure out how how we're supposed to be modeling that in terms of revenue.
The new doors and new distribution points.
Hey, Rob Hey, Rob This is Sam how are you doing.
I don't know if debt.
Hey, when we when we came out with a 222 budget for 'twenty. One we were building in 10% to 15% of you know business that we projected just based on conversations we have to wait so long.
Before these are these customers will allow us to two.
To say to communicate that we win this business. So it's like we did put we do project, 10% to 15% of that 'twenty. One budget was on assumptions that we make based on the conversations of that we already had with these retailers. So.
I'm pretty.
And you know to have a 49% and 50%.
Growth organically year over year with our frozen product line as we're just super excited about it.
Yeah, No I really appreciate.
I appreciate the clarification and that makes complete sense right. So that's.
Just trying to figure it out but the right answer.
And then I guess just in terms of.
And the vertical integration being a benefit yeah, we've heard.
And while every food company, not always and kind of Proteus pros related areas on frozen.
Yeah, we've heard a lot about cost inflation.
Is that you know cost inflation.
Yeah impacting you or potentially could impact you or.
Cause of kind of the contracts you have with the farmers and some sourcing coming from Italy, maybe it doesn't impact you as much maybe if that could actually be a benefit just trying to figure out again kind of cost the cost environment overall relative to the price.
So.
As we strategically source, our raw materials and you are correct with a lot of our probes coming from Italy, we're not as concerned about some of that pricing and costs that are coming into play for other manufacturers, but also being vertically integrated and helps us reduce that additional costs that other companies can see and experience.
But we also work hard to source from around the world to ensure that we are protected from some of these cost increases that come through added with the vertical integration and the ability to manufacture and more products and take up some of those things within our own manufacturing and it allows us to be better protected.
Okay.
That's good to know.
And then I guess, just lastly, just a question on the warrants and and <unk>.
They are complicated.
Sounds like you said cash balance at the end of the year around 200 million, which is partially driven.
I guess by some of the cash coming in from the warrants.
So I just kind of just to clarify again it sounds like as that cash comes in and you can you can actually keep that cash and redeploy into other strategic right are value creating opportunities.
And as necessarily having to go back out into the market and buy back stock right. Its columnists and pick up that's a nice kind of cash generated and vehicle.
Kind of as long as they exist so just kind of want to understand that.
And that cash comes in on the warrants.
Is that something you can redeploy and kind of whether it's capex supply chain and what have you maybe acquisitions.
Persons habit to buy back stock and Thats all I have thank you.
Youre welcome.
And I think two points Rob to answer your question. One is just a clarification, we had $131 million on the books at the end of the year, that's what you'll see and the published financial statements subs.
Subsequent to that there was another 70 million that came in from the warrants and that's what got us to 200 million and.
And there is no restrictions on that that's $200 million is and our coffers, it's ours to spend strategically.
And the other important point is that the $20 million warrants are now fully exercised so theres no more dilution coming from those warrants. So we have the cash we can use the cash and theres no more pending dilution.
Okay great.
Thank you so much great job appreciate it thank you. Thank.
Thank you.
This concludes the question and answer session I would like to turn the conference back over to Sam Galletti for any closing remarks.
Thank you for joining us today from Italy to California, I'd like to thank my dedicated team that has worked so hard to be able to make these strong results possible. We believe there is a significant growth opportunity for the tattooed chef brand with new and existing customers and food retail as well as other areas.
Foodservice, we are off to a strong start in 2021, increasing distribution and launching exciting innovative products and increasing our brand awareness. We look forward to speaking to you again at upcoming Investor conferences on our first quarter earnings call in early May have a great day.
Yeah.
This concludes today's conference call.
You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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