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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2022

 

Vital Farms, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware	001-39411	27-0496985
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3601 South Congress Avenue Suite C100 Austin, Texas		78704
(Address of Principal Executive Offices)		(Zip Code)

(877) 455-3036

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		VITL		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

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Item 2.02Results of Operations and Financial Condition.

 

On May 5, 2022, Vital Farms, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 27, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information provided in this Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.		Description
99.1		Press Release, dated May 5, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		Vital Farms, Inc.
Dated: May 5, 2022		By:	/s/ Bo Meissner
			Bo Meissner
			Chief Financial Officer

 

 

Exhibit 99.1

 

Vital Farms Reports First Quarter 2022 Financial Results

 

First Quarter Net Revenue exceeds $77 million, up over 31% versus Prior Year

Maintains Fiscal Year 2022 Outlook

 

 

AUSTIN, TX – May 5, 2022 – Vital Farms (Nasdaq: VITL), a Certified B Corporation that offers a range of ethically produced foods nationwide, today reported financial results for its first quarter ended March 27, 2022.

 

Financial highlights for the first quarter include:

 

 

“This year is off to the strong start we projected,” said Russell Diez-Canseco, Vital Farms’ President and Chief Executive Officer. “Vital Farms is the fastest-growing brand in dollars in the egg category.² We’re delivering on our growth plans with continued gains in retail distribution and household penetration, and we are building capacity with a network of nearly 300 family farms and the expansion of Egg Central Station, which is now fully operational and positions us to double our current net revenue base in the coming years.”

 

Diez-Canseco continued, “Vital Farms has always been a brand that has challenged the norms of the food system. We do this through maintaining a commitment to our stakeholders—farmers and suppliers, crew members, customers and consumers, communities and the environment, and stockholders—and by building a refreshingly honest and transparent brand that evokes a sense of trust from the over 6.5 million households that choose our pasture-raised eggs. Our stakeholder commitment and transparency attract new households to Vital Farms, drive loyalty, and give us confidence in our plans to continue to grow through existing businesses and new categories.”

 

¹ Adjusted EBITDA is a non-GAAP financial measure defined in the section titled “Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.

² Source: SPINS 52 Weeks Ended 3/20/2022.

 

For the 13 Weeks Ended March 27, 2022

 

Net revenue increased 31.6% to $77.1 million in the first quarter of 2022, compared to $58.5 million in the first quarter of 2021. Growth in net revenue in the first quarter of 2022 was primarily due to continued growth in egg-related sales, driven by volume increases at our customers, as well as distribution gains at both new and existing retail partners and an increase in butter-related sales.

 

Gross profit was $21.7 million, or 28.2% of net revenue, in the first quarter of 2022, compared to $21.3 million in the prior year quarter. The change in gross profit was driven by higher sales. offset by $1.0 million in costs related to our exit of the convenient breakfast product line. The change in gross margin was mainly attributable to an increase in input costs across both eggs and butter. Increased pricing on our organic shell eggs and across butter took effect in January, partially offsetting some of the input cost headwinds.

 

Loss from operations in the first quarter of 2022 was $4.1 million, compared to income from operations of $3.1 million in the first quarter of the prior year. The change in income from operations was primarily attributable to higher input costs and higher shipping and distribution expenses.

 

Net loss was $1.5 million in the first quarter of 2022, compared to net income of $3.5 million in the prior year quarter.

 

Net loss per diluted share was $0.04 for the first quarter of 2022 compared to net income per diluted share of $0.08 in the prior year quarter.

 

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Adjusted EBITDA was $0.5 million in the first quarter of 2022, compared to Adjusted EBITDA of $4.7 million in the first quarter of 2021. The change in Adjusted EBITDA was primarily due to gross margin pressure and higher shipping and distribution expenses. Our Adjusted EBITDA excludes certain non-cash items, as well as $2.3 million in costs related to the exit of our convenient breakfast product line. Adjusted EBITDA is a non-GAAP financial measure defined in the section titled “Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.

 

Balance Sheet and Cash Flow Highlights

 

Cash and cash equivalents and investment securities were $91.8 million as of March 27, 2022, and we had no outstanding debt. Net cash used in operating activities was $4.9 million for the 13 weeks ended March 27, 2022, compared to net cash generated of $8.0 million for the 13 weeks ended March 28, 2021.  

 

Capital expenditures totaled $1.7 million for the 13 weeks ended March 27, 2022, compared to $3.5 million in the prior year period.

 

Bo Meissner, Vital Farms’ Chief Financial Officer, commented: “We remain pleased with our revenue performance and the impressive level of demand for our products. As the year progresses, we expect to continue this level of top-line momentum, while thoughtfully navigating the evolving operating cost environment.”

 

Update on Fiscal 2022 Outlook

 

 

Vital Farms’ guidance continues to assume that there are no additional significant disruptions to the supply chain or its customers or consumers, including any issues from adverse macroeconomic factors. Vital Farms cannot provide a reconciliation between its forecasted Adjusted EBITDA and net revenue metrics without unreasonable effort due to the unavailability of reliable estimates for stock-based compensation, among other items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results.

 

Conference Call and Webcast Details

Vital Farms will host a conference call and webcast at 8:30 a.m. ET today to discuss the results. The live conference call can be accessed by dialing (833) 519-1345 from the U.S. or (914) 800-3907 internationally and using access code 3059376. Alternatively, participants may access the live webcast on the Vital Farms Investor Relations website at https://investors.vitalfarms.com under “Events.” The webcast will be archived in 30 days.

 

About Vital Farms

Vital Farms is a Certified B Corporation that offers a range of ethically produced foods nationwide. Started on a single farm in Austin, Texas in 2007, Vital Farms has become a national consumer brand that works with nearly 300 family farms and is the leading U.S. brand of pasture-raised eggs by retail dollar sales. Vital Farms' ethics are exemplified by its focus on the humane treatment of farm animals and sustainable farming practices. In addition, as a Delaware public benefit corporation, Vital Farms prioritizes the long-term benefits of each of its stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, crew members, and stockholders. Vital Farms' products, including shell eggs, butter, hard-

 

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boiled eggs, ghee, and liquid whole eggs, are sold in over 21,000 stores nationwide. For more information, please visit www.vitalfarms.com.

 

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Vital Farms’ market opportunity, anticipated growth, and future financial performance, including management’s outlook for fiscal year 2022. These forward-looking statements are based on Vital Farms’ current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause Vital Farms’ actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement. 

 

The risks and uncertainties referred to above include, but are not limited to: the effects of the ongoing COVID-19 pandemic on Vital Farms’ supply chain, the demand for its products, and on overall economic conditions and consumer confidence and spending levels; Vital Farms’ expectations regarding its revenue, expenses and other operating results; Vital Farms’ ability to acquire new customers, to successfully retain existing customers and to attract and retain its suppliers, distributors, and co-manufacturers; Vital Farms’ ability to sustain or increase its profitability; Vital Farms’ ability to procure sufficient high-quality eggs, cream and other raw materials; real or perceived quality with Vital Farms’ products or other issues that adversely affect Vital Farms’ brand and reputation; changes in the tastes and preferences of consumers; the financial condition of, and Vital Farms’ relationships with, its suppliers, co-manufacturers, distributors, retailers, and foodservice customers, as well as the health of the foodservice industry generally; the impact of agricultural risks, including diseases such as avian influenza; the ability of Vital Farms, its suppliers, and its co-manufacturers to comply with food safety, environmental or other laws or regulations; future investments in its business, anticipated capital expenditures and estimates regarding capital requirements; the costs and success of marketing efforts; Vital Farms’ ability to effectively manage its growth and to compete effectively with existing competitors and new market entrants; the potential negative impact of Vital Farms’ focus on a specific public benefit purpose and producing a positive effect for society on its financial performance; seasonality; and the growth rates of the markets in which Vital Farms competes. 

 

These risks and uncertainties are more fully described in Vital Farms’ filings with the Securities and Exchange Commission (SEC), including in the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 26, 2021, and other filings and reports that Vital Farms may file from time to time with the SEC. Moreover, Vital Farms operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to predict all risks, nor can Vital Farms assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Vital Farms may make. In light of these risks, uncertainties and assumptions, Vital Farms cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent management’s beliefs and assumptions only as of the date of this press release. Vital Farms disclaims any obligation to update forward-looking statements except as required by law. 

 

Contacts:

 

Media:

Nisha Devarajan

Nisha.Devarajan@vitalfarms.com

 

Investors:

Matt Siler

Matt.Siler@vitalfarms.com

 

 

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VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share amounts)

(Unaudited)

 

 

 

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VITAL FARMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share amounts)

 

 

 

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VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

 

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Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes that adjusted EBITDA, a non-GAAP financial measure, provide investors with additional useful information in evaluating our performance.

 

Adjusted EBITDA is a financial measure that is not required by or presented in accordance with GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provide meaningful supplemental information regarding our operating performance and facilitate internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

 

We calculate adjusted EBITDA as net income, adjusted to exclude: (1) depreciation and amortization; (2) (benefit) or provision for income taxes as applicable; (3) stock-based compensation expense; (4) interest expense; (5) change in fair value of contingent consideration; (6) interest income; and (7) the costs related to our exit of the convenient breakfast product line. We believe the costs directly related to the convenient breakfast exit should be excluded as they are unlikely to recur.

 

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of stock-based compensation expense, (4) it does not reflect other non-operating expenses, including interest expense, (5) it does not consider the impact of any contingent consideration liability valuation adjustments and (6) it does not reflect tax payments that may represent a reduction in cash available to us. In addition, our use of adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider adjusted EBITDA alongside other financial measures, including our net income and other results stated in accordance with GAAP.

 

The following table presents a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP, for the 13-week period presented:

 

 

VITAL FARMS, INC.

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)

(Unaudited)

 

 

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