Full Year 2023 Stryve Foods Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to <unk>.
Fourth quarter and year end 2023 earnings call at this time all lines are in a listen only mode.
Within your presentation, we will conduct a question and answer session.
<unk> will be provided at that time for you to queue up for a question.
If anyone has any difficulties hearing the conference. Please press star zero for operator assistance at any time.
None: I would now like to turn the conference over to <unk>. Please go ahead.
None: Thank you operator, and welcome to the stride towards fiscal year 2023 earnings Conference call with me today are stripes, Chief Executive Officer, Chris Beaver and Chief Financial Officer, Alex Hawkins before we begin I would like to remind everyone that part of our discussion today will include forward looking statements that are made.
None: She went to the safe Harbor provisions of the private Securities Litigation Reform Act of $99.
None: Forward looking statements by their nature are uncertain and output.
None: Out of the company's control.
Results could differ materially from these expectations. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We do not undertake to update. These forward looking statements at a later date and they only referred to today in.
None: In addition, today's call will include a discussion of non-GAAP financial measures, including adjusted EBITDA and adjusted EPS non-GAAP financial measures should be considered as a supplement to and not a substitute for GAAP financial measures.
None: We refer you to the reconciliation of non-GAAP to the nearest GAAP measure included in today's earnings press release for further detail on.
None: This call is being webcast and can be accessed through the audio link on the news and events page at investors section at IR Dot stride Dot com.
None: The earnings press release is posted on our website and a copy of the release has been included in a form 8-K submitted to the SEC.
None: With that I would now like to turn the call over to Chris Beaver Chris.
Christopher J. Boever: Thanks will good afternoon, I want to start by acknowledging the incredible journey strive food has embarked on throughout the last 18 months and.
And recognize the incredible efforts and progress by the team.
Christopher J. Boever: Reflecting on our fiscal 2023 year, we have navigated through the transformation that now has our company on a solid foundation, one that has been right sized with structural improvements across the enterprise.
<unk> that is positioned and energized to deliver against the enormous potential in front of us.
Christopher J. Boever: This year has been has been pivotal for our long term strategy designed to position and prepare us for our next phase, which is delivering profitable growth.
Christopher J. Boever: Our team's dedication has translated into tangible achievements.
<unk> underscore our potential and the strength of our business model.
Christopher J. Boever: I'm encouraged by the progress and highly confident in our future.
Christopher J. Boever: We simplified our organization and portfolio, we implemented pricing actions and now have our unit economics and positioned to accelerate profitable growth.
Christopher J. Boever: We completed an important project focused on product quality addressing the entire profit including packaging.
Christopher J. Boever: We are focused on delivering the very best consumer experience and sharing.
Christopher J. Boever: High confidence and repeat purchases and consumer loyalty.
Christopher J. Boever: As a reminder, we are the first to market USDA certified manufacturer of air dried beef a truly innovative manufacturing process that delivers game changing consumer benefits are.
Christopher J. Boever: Our products deliver 50% more protein than the leading brand of beef jerky and nearly triple the protein of the leading brand of meat sticks.
Christopher J. Boever: These are important product attributes considering the number one reason consumers purchasing the category is protein.
Christopher J. Boever: I am very pleased that the new and improved product quality and the consistency that we deliver each and every time.
Christopher J. Boever: In parallel path, we developed and are now executing our new brand positioning expressed by our packaging.
We are utilizing food photography.
Christopher J. Boever: Our message.
Christopher J. Boever: During the shopper can quickly and clearly identify are superior and delicious steak quality.
Along with the product attributes of higher protein zero preservative and low to no sugar.
Christopher J. Boever: The early indicators are extremely encouraging.
Christopher J. Boever: As evidenced by our increasing velocity improvement of nearly 40%.
Christopher J. Boever: As reported by spend in addition, we introduced several innovative products such as new flavors in the back of deals and formats for the strive in deca deals brands.
Incremental products deliver margin accretive revenue streams and further establish us as leaders in the healthy protein snacking segment.
Our operational transformation has been crucial to our overall strategy.
Our MVP program.
Christopher J. Boever: Maximizing value through productivity delivering across all fronts yield.
Yielding efficiencies and what and how we manufacture.
Christopher J. Boever: We have improved our conversion costs developed a strategic and collaborative approach to procurement lowering our unit economics and improving free cash flow.
Christopher J. Boever: Investments in technology and process improvements have led to significant cost savings.
Christopher J. Boever: And product quality.
Christopher J. Boever: We are now a lean agile operation with the efficiency gained up and down the enterprise.
Christopher J. Boever: Evidenced by the reduction in operating expenses and adjusted EBITDA improvements over the last 18 months.
Christopher J. Boever: Do not underestimate how important it was to address quality cost process and capacity in our transformation.
Christopher J. Boever: We now have the operational foundation prepared and ready to respond to the growing consumer demand.
Christopher J. Boever: The strategic initiatives, we have implemented this year.
Christopher J. Boever: Just the beginning of our journey.
Christopher J. Boever: Or becoming a profitable innovative consumer centric company.
Our commitment to operational excellence combined with our focus on strategic market opportunities.
Christopher J. Boever: Physician us well to capitalize on the growth we expect ahead.
Christopher J. Boever: I am incredibly proud of what we've accomplished this year and grateful for the hard work and dedication of the entire strive team.
Christopher J. Boever: Our achievements in 2023, Alright Testament to our collective effort.
And we have built a foundation.
Christopher J. Boever: 124 is the start.
Christopher J. Boever: Multiyear growth agenda that will leverage the operational footprint create footprint created.
Christopher J. Boever: In a manner that delivers increased velocity.
Christopher J. Boever: Increased distribution and increased market share.
Christopher J. Boever: Each of our brands, while unified under the strive foods umbrella caters to distinct consumer preferences and occasion.
Christopher J. Boever: Packaging redesign has been instrumental in differentiating our brand in a crowded marketplace.
Christopher J. Boever: Enabling consumers to easily identify and connect with a unique value proposition each brand offers.
Christopher J. Boever: Right.
Christopher J. Boever: Besides leadership in providing premium high protein low fat snacking option that fuel an active lifestyle.
Christopher J. Boever: Stake don't be a jerk.
None: Hello, Hari seller.
None: Celebrates its roots with flavors and textures.
None: Aspired by traditional South African built on.
None: Appealing to the adventure seeker.
None: Hello, Biltong Goodbye jerky.
None: Vaca deals captures the essence of authentic carnesecca offering a bold taste.
Inspired flavors with its vibrant and culturally rich packaging.
None: Audio Sturkie all our stake.
None: The implementation of these packaging redesign supported by our commitment to operational excellence.
Streamlined our processes to ensure a seamless transition minimizing disruption.
Optimizing our supply chain to meet anticipated increase in demand.
None: We have fully transitioned and shipping 100% of current orders and the new packaging.
None: We estimate to be transitioned at approximately 50% at shelf, where we have fully transitioned at specific customers.
None: Those customers, we have indications and data.
None: So increases our velocity on the stride brand.
None: Over 80%.
None: The new packaging clearly is working.
None: Proving our shelf appeal and significantly boosting our consumer trial rates.
Initial feedback indicate a marked increase in unit velocity.
None: Firming the effectiveness of our strategic focus on packaging.
None: Key driver for an acceleration of distribution, leading to brand growth and market share gains.
None: As we look to the future.
None: <unk> redesigned combined with our operational improvements.
None: Form the cornerstone for accelerated growth margin expansion and ultimately delivering a profitable business model.
None: We are poised to build on the momentum generated in more confident than ever in our future outlook.
As we pivot to operational highlights I'm excited to share the progress and milestones we've achieved underscoring our commitment to operational excellence and innovation.
None: This past year has been marked by significant achievements.
None: It reflects our dedication to operational excellence and our strategic vision.
None: We're successfully optimizing our production process, resulting in increased efficiency and reduce costs.
None: Our focus on supply chain optimization, certainly improved all of our fundamentals.
None: Simultaneously unlocking more capacity.
None: We are more agile and connected cross functionally.
None: Providing us the ability to respond more effectively to the increasing customer and consumer demand.
None: Our market expansion efforts are starting to reflect.
None: As expressed by our accelerating consumption data, we have made significant inroads into new customers channels and geographies.
None: Further establishing stride two.
None: As a leader in the healthy protein snacking segment.
None: Consumer preferences and trends continue to guide our innovation pipeline.
None: During that our product offerings meet and exceed their expectations.
None: The operational efficiencies. We've achieved this year are a testament to our team's hard work and dedication.
None: Through targeted initiatives aimed at reducing waste.
None: And improving production line speeds, we've enhanced our overall operational efficiency.
None: These improvements will contribute to increased gross margin as we scale the business.
None: Leverage our fixed assets.
None: We remain focused on driving continuous improvement across all aspects of our operations.
None: Our strategic investments in technology process and capabilities are key pillars of our strategy.
None: These initiatives are designed to further enhance our operational efficiencies reduce costs.
None: Our growth trajectory.
None: Other expanding gross margin and EBITDA.
In summary, the progress we've made through our strategic initiatives in 2023 underscores the resilience of potential as dry foods.
None: I'm incredibly optimistic about our future and remain committed to delivering the best tasting better for you set of products that category has ever seen.
None: We have invested a tremendous amount of resources.
None: Our inception.
None: Refined the business model and have improved every element of our organization.
None: It is our time to bring customers a complete category solution.
None: Our shared consumers locate our brands in more stores.
None: And and grow the category and deliver exceptional value for our shareholders.
CFO Alexander: With that I'll turn it over our CFO Alexander.
Alexander: Thanks, Chris.
Alexander: As we turn our attention to the financial results for the year fiscal year 2023, I want to underscore the pivotal efforts and strategic decisions that have shaped our performance during this period.
Alexander: We closed the year with net sales of $17 7 million, reflecting the strategic recalibration of our topline.
To focus on our core product offerings generating through long term value enhancing quality revenue streams.
Alexander: While this represents a decrease of 49%.
Alexander: From the $29 9 million reported in 2022.
Alexander: As we've discussed on several occasions.
Alexander: A key part of our transformation strategy was the strategic rationalization of low quality revenue.
Alexander: The benefits of those rationalization efforts are seeing throughout the business, but simply put we were able to reduce our adjusted EBITDA loss this year by $13 $3 million.
Alexander: It's not often you see a company take out over 40% of its annual sales and still improve its bottom line results with adjusted EBITDA loss dropping back to 52, 9%.
That just speaks to the low quality nature of the rationalized sales as well as to the ingenuity and resilience of the organization to transform into a profit focused business.
Alexander: Net sales in the fourth quarter of 2023 came in at $2 $9 million.
Alexander: But the quarter is it perfectly comparable to the prior year period, nor to the prior quarters.
Alexander: Not only did we not only do we see continuing effects of our rationalization efforts.
Alexander: We also increased our trade accruals executed liquidation sales of our slow moving and obsolete inventories both of which affected net realized price in the quarter.
Alexander: Additionally, as we've seen great success with our new packaging on shelf, we worked closely with several of our key partners to phase out the legacy items.
Alexander: The transition fully to the new packaged items.
This resulted in some regular flows in the quarter as the retailers and distributors sold through legacy Skus in their inventory ahead of January 2024 launches of the new items in many places.
Alexander: Now in 2024 since that transition were seeing significantly improved retail velocities at these retailers.
Alexander: They have exceeded even our expectations.
Back to the full year results.
Alexander: Our gross profit turned positive at $2 4 million a notable improvement from a gross profit loss of Europe was $7 million in 2022.
Alexander: This improvement came.
Alexander: <unk> from the strides we've made in pricing year over year, as well as strategic enhancements to our supply chain and manufacturing processes, which reduced our per unit costs.
Alexander: Now given that we are vertically integrated.
Alexander: Our plant in labor.
Alexander: Labor and overhead curious certain amount of fixed cost they can impact our gross margin performance.
Alexander: So the rationalization efforts, which brought down our manufacturing volumes.
Alexander: Led to under absorption of those fixed manufacturing costs weighing on our margins.
Alexander: But despite that effect.
Alexander: We still showed significant year over year improvements.
Alexander: And as our volume scale throughout the throughout the year in 2024 and beyond we would expect to see better absorption and even more gross margin expansion.
Alexander: In 2023, we made tremendous progress in streamlining our operating expenses, which were reduced to $17 9 million down four.
Alexander: 33, 2%.
Alexander: From the $31 5 million in 2022.
Alexander: This is a testament to our transformational efforts across the organization.
Alexander: Not only do we find significant savings at the start of this transformation, but each quarter since we've been able to identify more to further streamline our operations and advance our productivity agenda.
Alexander: Ultimately the net loss for 2023 was reduced to $19 million.
Alexander: From $33 1 million in 2022, an improvement of 42, 6% year over year.
Alexander: Throughout 2023, we executed several strategic initiatives aimed at strengthening our financial position and setting the foundation for future growth.
Alexander: Optimization of our product portfolio, coupled with significant efforts in packaging redesigns and operational efficiencies has been central to our strategy.
Alexander: These initiatives not only enhanced our brand appeal, but also improved our cost structure and market competitiveness.
Alexander: As we look ahead, we are focused on leveraging the progress we made in 2023 to drive sustainable growth and improved profitability.
Alexander: Our strategic investments in innovation brand development and market expansion are designed to capitalize on the growing demand for healthy snacking options and deliver long term value to our shareholders.
Alexander: Continuing our discussion on the financial performance overview, let's shift our focus to the balance sheet liquidity and significant financing arrangements that underscore our strategic approach to navigating the liquidity constraints typical in a transformation such as ours.
Alexander: Our cash and cash equivalents at year end.
Alexander: And zero point $4 million, reflecting our careful cash management practices.
Alexander: And operation operational effectiveness and efficiencies achieved throughout the year.
Alexander: Our liquidity is further supported by our asset based line of credit and.
Alexander: In other credit facilities.
Alexander: Furthermore, in 2023, our inventory management has been a key tool to optimize our liquidity, we significantly enhanced our ways of working connecting supply and demand to ensure we maintain a healthy balance of stock levels aligned with demand forecast contributing to our operational agility doing so throughout the year.
<unk> allowed us to generate over $3 million of cash from the drawdown of our excess inventories.
I am pleased to announce a development and our financing arrangements as well.
Alexander: We have successfully renewed our asset based credit facility with alternative capital extending it beyond its original maturity of September 2024 for a new two year term.
Alexander: The new maturity of this facility is March 2026.
This renewal is a testament to the confidence our financial partners have in our business model and our strategic direction. It provides us with continued financial flexibility to support our operational needs and strategic growth initiatives.
Alexander: Additionally.
Alexander: We successfully negotiated a 12 month extension of the bridge notes from April 2023, which.
Alexander: Which were initially set to mature at the end of last year.
Alexander: We extended their maturity to December 2024.
This extension reflects our financial partners continued support ensuring that we have the necessary runway to execute on our strategic plans without immediate financial pressures.
Alexander: In another strategic financial move we have terminated the at the market equity facility, we had in place with Craig Hallum as of March 2024.
Alexander: This decision aligns with our strategy to manage our equity more efficiently and reflects our commitment to utilizing our financial instruments in a manner that best supports our long term value creation for shareholders.
Alexander: These developments not only reflect our ability to effectively manage our financial resources, but also the strength of our relationships with our financial partners. They provide us with a solid foundation to pursue our strategic objectives, ensuring we had the financial stability and flexibility to adapt to market dynamics and capitalize on growth opportunities moving forward.
Alexander: In 2024, our focus remains on growing the business the right way maintaining a disciplined approach to spending ensuring we have access to attractiveness attractive sources of liquidity and managing our debt responsibly.
Alexander: We are committed to the financial stewardship that supports our strategic goals and drive shareholder value.
Alexander: Now.
Alexander: Let's turn our attention to our forward looking financial guidance for the upcoming fiscal year.
Alexander: Our guidance reflects not only the strategic progress we've made but also our confidence in the trajectory of Shrive foods as we continued to execute on our growth strategy.
Alexander: For the fiscal year ahead, we are projecting net sales to be in the range of 24 million to $30 million to $30 million.
Alexander: This guidance is based on our expectations of volumes accelerating each quarter.
Alexander: A significant advancement in our gross margins year over year. This year is also anticipated.
Alexander: Consistent with the previous commentary, we expect this progress to be primarily driven by the anticipated volume increases projected each quarter, which will more effectively absorb our fixed cost of production in.
In addition to increased volumes, our ongoing efforts to enhance operational efficiencies and manage costs are central to achieving these improved gross margins.
Alexander: The operating leverage derived from increasing volumes each quarter, coupled with advancing gross margins positions us to approach an adjusted EBITDA breakeven point in the fourth quarter.
This year should we reach the higher end or exceed our net sales guidance range.
Alexander: Absent any externalities or unforeseen fluctuations in beef prices.
Alexander: This outlook underscores our strategic focus on achieving profitability through disciplined growth and operational excellence.
Alexander: Our guidance reflects a balanced view of our growth opportunities and the operational challenges we navigate.
Alexander: We remain committed to executing our strategy strategic plans driving operational efficiencies and leveraging market opportunities to achieve sustainable growth and improved financial performance.
Alexander: As we move forward, we will continue to monitor market conditions consumer trends and operational metrics closely ready to adjust our strategies as needed to meet our financial goals and deliver value to our shareholders.
Alexander: In conclusion as we reflect on the past year and look ahead, our financial guidance and strategic initiatives are set against the backdrop of operational improvements market expansion and innovative packaging solutions.
Alexander: To drive further growth.
Alexander: The journey, we've embarked on is one of transformation with clear focus on driving sustainable growth improving profitability and enhancing shareholder value.
Alexander: Our projected net sales range.
Alexander: Anticipated advancement in gross margins and our path to two <unk> adjusted EBITDA breakeven or.
Alexander: Our all testaments to the strength of our strategy and the dedication of our team not just numbers they represent the tangible outcomes of our collective efforts and strategic decisions.
My commitment is to continue steering our financial strategy with Prudence agility and forward looking perspective.
Alexander: We are poised to navigate the challenges and seize the opportunities that lie ahead.
Alexander: With a solid financial foundation.
Alexander: Ports are ambitious growth objectives.
Alexander: I want to thank our shareholders customers and especially our strive team.
<unk> support and belief in our mission.
Alexander: Your trust fuels, our determination to achieve our goals and to drive strive foods to new Heights.
Alexander: I'll turn it back to Chris our CEO to share more about our strategic vision.
Christopher J. Boever: The opportunities ahead, Chris.
Christopher J. Boever: Thank you Alex.
Christopher J. Boever: As we reflect on the operational milestones achieved and the solid financial Foundation. We built it is crucial to look forward and articulate the strategic vision that will guide strive food into the future.
Christopher J. Boever: Our strategy and outlook are grounded in our commitment to innovation operational excellence and market leadership and healthy snacking.
Christopher J. Boever: Our strategic priorities for the upcoming year are designed to accelerate growth enhanced profitability and solidify our market position.
Key focus areas include one <unk>.
Christopher J. Boever: Enhanced operational efficiencies.
Christopher J. Boever: Operational excellence remains the cornerstone of our strategy, we will continue to invest in process improvements technology and talent to drive efficiencies and further reduce costs.
Christopher J. Boever: Two.
Christopher J. Boever: Expanding market presence building on our existing partnerships and distribution networks, we will grow the core and expand our reach both domestically and internationally targeting new channels and segments.
Christopher J. Boever: Yeah.
Christopher J. Boever: Continuing product innovation.
Christopher J. Boever: Will persist in our effort to innovate across our product line, ensuring we meet the evolving needs of our consumers a healthy high quality snacking options.
The healthy snacking industry is poised for growth and protect the protein snacking segment, driven by increasing consumer awareness and demand for nutritious and convenient snacking options.
As a pioneer in this space.
Christopher J. Boever: <unk> foods is well positioned.
Christopher J. Boever: Capitalizing on these trends.
Christopher J. Boever: Our commitment to quality execution and sustainability aligns with the expectations of today's consumers and sets us apart in a competitive market.
Christopher J. Boever: Our goals for the coming year, our ambitious yet achievable, reflecting our confidence in our strategic plan and our team's ability to execute.
Christopher J. Boever: First <unk>.
Christopher J. Boever: Cheating sustainable revenue growth.
Christopher J. Boever: We are committed to achieve accelerated and sustainable revenue growth through strategic market expansion product innovation and enhancing our brand penetration delivering approximately a range of 35% to 70% growth accelerating.
Christopher J. Boever: Accelerating as the year progresses.
Christopher J. Boever: To continue.
Christopher J. Boever: Continued improvement in bottom line results.
Christopher J. Boever: With a clear path to profitability outlined our efforts will be geared towards improving gross margin and achieving adjusted EBITDA breakeven by the end of the year as highlighted in our financial guidance.
Christopher J. Boever: Third strengthening brand loyalty.
Christopher J. Boever: We aim to deepen our connection with consumers building brand loyalty through expanding distribution.
Delivering high quality, great tasting consumer experiences increasing engagement and advocacy.
Christopher J. Boever: In conclusion, our strategy and outlook for strive food are both ambitious and grounded in a realistic assessment of our opportunity.
Christopher J. Boever: With a clear strategic direction a dedicated team.
Christopher J. Boever: <unk> operational and financial Foundation in place I am.
Christopher J. Boever: I'm extremely excited and confident about our future.
Christopher J. Boever: We are committed to driving value for our shareholders. The lighting, Arkansas are cuts are delighting, our customers and making a positive impact on the communities we serve.
I want to express my gratitude to each of you for joining us today.
Christopher J. Boever: Of course of this call we shared a comprehensive overview of the progress on our transformation the performance in fiscal year 2023, highlighting the operational improvements made strategic financial management, we have in place.
Christopher J. Boever: <unk> our foundation and.
Christopher J. Boever: And the support and support the forward looking growth strategies that will propel us.
Christopher J. Boever: Into a profitable future.
Christopher J. Boever: Our achievements this past year reflect the resilience creativity and dedication of our entire team.
Every step we have taken has been with a clear focus on driving sustainable profitable growth and enhancing shareholder value.
Christopher J. Boever: We are poised to capture exciting opportunities that lie ahead with our robust yet simplified strategic plan passionate team.
Christopher J. Boever: Our relentless focus on execution.
Christopher J. Boever: I am confident in our ability to achieve our goals.
Our journey is one of transformation growth to profitability, while we have made meaningful progress in many ways. We are just getting started.
None: As we move to the Q&A session I want to thank our shareholders customers and the strive foods team for your support and belief in our mission.
None: Your commitment passion and partnership fuel, our ambition and raised my confidence levels.
None: With that I'll turn it over to our operator to begin the Q&A.
None: Thank you again for your continued support and interest in dry food.
None: Operator, thank you.
None: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone.
None: As you will hear three telecom technology Youll request.
None: Questions will be taken in the order received should you wish to cancel your request. Please press the star followed by the two.
None: If youre using a speaker phone please lift the handset before pressing damages.
None: Once again that is star one should you wish to ask a question.
None: Your first question is from Alex Fuhrman from Craig Hallum. Please ask your question.
Alex Joseph Fuhrman: Hey, guys. Thanks, very much for taking my question first thing I wanted to ask about was the new packaging.
Can you give us a little bit of an update.
Alex Joseph Fuhrman: How long that new packaging has been out in the market.
Alex Joseph Fuhrman: At different retailers and different channels. It sounds like it was kind of phased in a.
Alex Joseph Fuhrman: A little bit over time, and can you give us a little bit of a sense of what's really been the bigger driver velocity because I think you mentioned the new packaging is helping to attract.
Alex Joseph Fuhrman: Some some new first time trial.
Alex Joseph Fuhrman: The messaging and the food photography, Gary It you've also seen higher repeat ordering from customers now that you have the foil bag than and a little bit more of a consistently voice products.
Alex Joseph Fuhrman: Well or if <unk> been any.
Alex Joseph Fuhrman: Able to learn anything about repeat ordering maybe from your direct to consumer channel.
Gary: Yes, Thanks, Alex and thanks for the question.
None: It is.
Credibly exciting to see some of the initial response to the packaging with our go to market.
None: Route to market, if you will utilizing many different forms of distributors wholesalers and then some customers that actually buy and purchase directly from us we get a staggered.
None: Clemente's at retail.
None: Many of the distributors carry a fair amount of inventory and then velocity and turns that certain classical trade arent all equal.
Therefore, we see a staggered response at the shelf level from the implementation and execution.
None: What's extremely encouraging in the back half when we started shipping to the majority of the customers that buy direct from us.
None: We've seen a lift like I've never experienced in my 30 plus years.
None: In the industry.
None: That gives me an incredible amount of confidence that we're getting new tires into the brand franchise.
None: The the heavy to medium users in the category really only purchased three to five times a year.
None: It's a little bit early on the repeat numbers, but I would think historically and based on my experience, we will see that repeat.
None: You'll even higher lifts velocity as we continue to bring more new consumers in as well as.
None: Get repeat numbers that will impact the velocity is going forward.
None: From an online perspective, we've historically had really good repeat numbers.
None: It's significantly higher than what you typically see even at retail and those numbers continue to remain very very strong.
None: We've actually use online to move out and <unk>.
None: Move out some of the inventory and some of the packaging with certain discounts and offers to continue to move through as much as we could as fast as we could.
None: The foil pouch is a game changer for quality. In addition to all the improvements we've made from a processing standpoint.
None: And working in a collaborative manner with the USDA.
None: Oil pouch.
Totally sealed in any type of air stupid.
None: <unk> UV rays.
None: We are already experiencing an increase in shelf life.
We're also seeing a significant improvement.
Product quality.
None: So that gives me so much confidence that the repeat numbers are going to be better. So we have a moisture.
None: Better mouthfeel, better tasting more consistent consumer experience today than we've ever had.
None: Really discipline.
None: I can hear it and process improvements that we've put in place.
None: And every step of our unique processes and procedures and this is ultimately yielding the best.
Product, that's being placed in the bag now with a bag that expresses the consumer what they're getting an actually delivers against that expectation and a very consistent high quality way.
None: Really good indicators for customers, we get direct data feeds from.
None: That we can see that impact.
We can see on a macro basis with the spins data the impact.
None: The ones that are the ones that we see the direct data from.
None: Obviously, we're seeing higher lift because it gets melded in across the entire universe with the spins data across all channels, so very encouraging very encouraging numbers.
None: Okay. That's great grit, and then could you just kind of help us unpack that data a little bit more obviously those are impressive numbers 30 plus percent increases in velocity.
None: Can you just help us unpack the growth algorithm, a little bit more I mean, I would think over time as you are adding doors being that big increase in velocity at some point in the future does that mean your revenue growth is going to be kind of approaching those numbers and exceeding it with door growth or is that on the.
None: Maps out of the market here.
None: Yeah.
None: Early indicators through the spins data are very encouraging as well we've seen an increase in velocity, which is the number one driver to our increase in total.
None: Through the register somewhere as around 16% to 18% in total I think on an aggregate basis off the top of my head across all three brands. The velocity portion of it has been the biggest contributor followed by pricing as number two and then lastly, pretty flat like 1% to 2% type TDP growth.
None: That type of data gives us far more facts.
None: Hum.
None: Customers and retailers make the right assortment choices to expand the productivity of their shelves utilizing now what our numbers that are very very strong. So as we continue to get refreshed data, we expect to see those velocities increase.
None: We expect to convert more retailers getting more doors. If you will expanding our total PDP is an average number of items along with our ACD levels.
None: Ultimately keep those.
None: Growing and expanding velocities.
None: We'll feel more and more distribution.
In fact based selling and driving to a retailer.
<unk> category solution is the way to help retailers compete and expand their market penetration. We believe we have the products that offer the most unique points of difference with more protein and the absence of all the negatives.
None: No preservatives no to low sugar, just some sugar very low amount kind of couple of Skus.
None: But all in all the healthiest.
None: Better for you products as categories ever seen in many ways everything that we're bringing to the market is considered innovation.
None: On par we have about two items.
None: Little bit less than 20% ACB that tells you and indicate.
None: The running room, we have as we continue to build and grow our penetration in the marketplace.
None: Now with the better quality better positioning and ultimately a far more capable team that is more experienced and talented including our third party partners.
None: Recently, we announced today.
None: Our partnership with the cost of marketing and sales.
None: They are one of the largest if not the largest.
None: Food brokers in the industry that have a strong penetration with all classes of trade.
None: And we're very excited about what they are bringing us from our opportunity to get in front of those key decision makers now that we have the right solution.
None: We always had a great <unk>.
None: Proposition, it's about how well it was going to be executed we took many steps backwards rationalize the revenue.
None: Improved our unit economics that are pricing impact.
<unk> architecture, correct and now we've got the momentum and the early responses from shoppers and consumers that gives us a lot of fuel, which is strong fact based data help retailers compete.
None: So lots of excitement and confidence brewing on Iran.
And the energy levels are very high.
We can indeed execute it now that we've built the foundation on the supply chain side, the financial side and even now our customer facing team. So we're bullish.
None: Well, thanks, very much Chris I really appreciate your answers.
None: Thanks, I'll talk to you soon.
Thank you. Your next question is from Mike Grondahl from Northland Securities. Please ask your question.
Yes. Thank you.
Michael John Grondahl: Hey, Chris.
At a high level.
For Q.
Call it $3 million of revenues.
Michael John Grondahl: And you guys are guiding to $24 30 for 2024.
Michael John Grondahl: At a high level can you kind of help us understand how you're comfortable with that.
Michael John Grondahl: Is that orders from existing retailers.
Michael John Grondahl: Is it orders from new retailers.
Michael John Grondahl: Help us understand better what you're seeing.
Michael John Grondahl: That is going to drive sort of instead of $12 million run rate revenue kind of double or four to five times debt.
Yeah, Great question and thank you for that Mike.
Michael John Grondahl: With every transition there's transformation theres, some lumpiness, especially in <unk>.
Michael John Grondahl: Month to month quarter to quarter.
Michael John Grondahl: Theres certainly some cleanup we didn't there and obviously we went through a complete packaging overhaul.
Looking down those inventories.
Michael John Grondahl: At distributors and wholesalers.
Michael John Grondahl: Timing of shipments transitioning customers from one package designed to the next.
Lots of moving parts there.
Michael John Grondahl: So I'd.
Michael John Grondahl: I'd like to lean on the consumption numbers, because I think that's a really good indicator of what the response in the marketplaces.
Michael John Grondahl: And what we're seeing there is very compelling.
Michael John Grondahl: And very impactful.
Michael John Grondahl: And increasing and improving each and every period, whether you go 52% to 24 to 12 four week data.
Michael John Grondahl: And as we get retailer fed data from customers that provided to US directly we continue to see that type of momentum.
Michael John Grondahl: As we all know that consumption data from spins IRI Nielsen drag a little bit from a timing perspective, but what's actually happening.
Michael John Grondahl: But they also are really good indicators as to.
Michael John Grondahl: Eventually essentially.
Michael John Grondahl: The order processing and timing for order to cash.
Michael John Grondahl: With that being said.
We've got lots.
Michael John Grondahl: Lots of really good.
Michael John Grondahl: Key performance indicators, all working in our favor and we remain very optimistic about our ability to.
Michael John Grondahl: Greatly accelerate our growth and see that momentum growth throughout the course of the year as we've indicated.
Alex anything else you'd like to add to that.
Yes, no I had a couple of things.
Alex: Just briefly on Q4 itself as I mentioned in the.
Alex: Prepared remarks.
Alex: It's not a great proxy for our run rate because of some of the cleanup and transformation.
Alex: Items that Chris mentioned.
Alex:
So.
Alex: It will take that.
You will.
Alex: When we think about growth for the year. The distribution is going be the primary means that we see that compounding growth right.
Alex: Actual velocity store velocities that we've been chatting about a lot today.
Alex: That's effectively same store sale.
<unk>.
Alex: Sales of items units per store per week.
Alex: We're seeing a lift materially from from the new packaging, which is fantastic.
Alex: But what that does is it gives retailers confidence to expand our footprint.
Alex: That's more items in the same stores or additional stores or new retailers altogether.
Alex: And so that's how you start to see a pretty quick companion growth in and you overlay that against a category that is enormous compared to our current.
Size.
Alex: You start to see how that growth can ramp pretty quickly.
Alex: And.
Alex: We're confident that we can get there and we have the data to support it.
Got it and then Alex.
Alex: In the press release, and I think your comments talking about.
If you're at the high end or slightly above your $30 million revenue guidance.
Alex: For Q would be roughly breakeven adjusted EBITDA.
Alex: Does that slated to like $10 million to $12 million.
Alex: Of sales required to be adjusted EBITDA breakeven.
Alex: <unk> Park.
I think what we're trying to convey is that we've got pretty clear line of sight to the rough timing.
Alex: And scale, we need to be at.
Alex: To reach that point.
Alex: There's a lot of variables at play as you know we've got mixed considerations, we've got both in terms of product mix and customer mix.
Alex: Yes.
Alex: Variables that come in from that on the cost side like beef pricing.
And then timing of the revenue flows themselves.
Alex: But as we've tried to distill, it down and convey to to the market.
Alex: Is that on the high end of that range. It assumes a quarterly build.
Alex: Each quarter.
Alex: Outpacing the loss in terms of new distribution wins and continued.
Alex: Continued growth in our.
Consumption.
Alex: That puts us at a point, where we would be.
Alex: At a breakeven inflection point sometime in the fourth quarter, if were at the highest end or exceeding that net sales range.
Alex: So order of magnitude it depends on a lot of things, but thats directionally accurate it might be a little lower than that.
Alex: You threw out depending on mix.
Alex: But we're within the ballpark and and we're on our way there.
None: Headed in that direction got it and then just lastly, I know you talked about.
None: The line of credit going out two years now.
None: The bridge node extension.
None: But you have 400000 of cash.
Last year, you kind of created some liquidity from selling $3 million of inventory.
None: How do you feel about liquidity, especially in the first half of the year.
None: We're at the end of March April 1st here. So you know what I mean, we'll get those results before too long, but what comfort can you give us that.
None: Guys can continue.
No.
None: To run on pretty low cash balances.
None: So as with any transformation liquidity is tight.
None: And we've proven youre in and year out.
None: Kevin since you've been there.
None: As we go through this transformation that.
We've been able to to walk that fine line and manage appropriately.
None: Liquidity continues to be tight.
None: However, we we.
None: Hope to be able to share some positive updates on that in the near future.
None: As you can infer based on the financial projections that we got.
None: The immediate sources of liquidity that we have there will be some need for external financing.
None: In in the coming months to quarters to.
None: To support our objectives here.
None: And so we look forward to providing updates on that in the near future.
None: Yes, I would just add I think that'll.
None: Come from your current two Counterparties you've worked with.
None: We will be able to provide more updates soon.
I would also add some color to that with them.
None: Alex maybe a little bit humble on this.
None: At a time when our when we believe our stock price is grossly undervalued relative to.
None: Other types of products brands that the.
Maturation of where we're at and we believe our stock price is undervalued significantly. So we're being very mindful to run as tightened lean as we possibly can which creates a culture of being very scrappy and being very smart on every dollar we use to run and maintain and build the business.
None: With that being said Alex has been extraordinary at finding new.
Created streams to ensure that we mitigate any types of dilution at a pretty at a time when we feel confident that our share prices significantly undervalued.
None: So with that being said, we want to drive that shareholder value, we want to manage the balance sheet. We wanted the absolute stewards of cash each and every day to fuel the growth, which is the next form of our transformation.
None: And we're very excited about some of the avenues that we're continuing to pursue.
None: And that we've consistently delivered.
None: In a very mindful way with that line.
None: Sure Hey, Thanks, a lot guys.
None: Thank you.
None: Thank you.
None: There are no further questions at this time I will now hand, the call back to Chris Tucker for any closing remarks.
Chris Tucker: Well. Thank you operator, and thank you all for your interest in our company.
We've been working really hard we've got lots to do more to accomplish we will continue to deliver exactly what we said we will look for more positive results from stride foods. We will continue to provide you updates on our progress.
First quarter results in the very near future. Thank you and have a great rest of your week.
None: Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.
None: Yeah.