Core Viewpoint - Sow Good Inc. is set to hold a conference call on May 14, 2025, to discuss its Q1 2025 financial results, showcasing its commitment to transparency and investor engagement [1][2]. Company Overview - Sow Good Inc. is a U.S.-based manufacturer specializing in freeze dried candy and snacks, utilizing proprietary freeze-drying technology to create innovative and flavorful treats [4]. - The company focuses on five core pillars: innovation, scalability, manufacturing excellence, meaningful employment opportunities, and food quality standards [4]. Conference Call Details - The conference call will take place at 10:00 a.m. Eastern time, with registration required for phone access [2]. - The call will be broadcast live and available for replay on the company's website [3]. Investor and Media Inquiries - For investor inquiries, Cody Slach from Gateway Group, Inc. can be contacted at 1-949-574-3860 or via email [5]. - Media inquiries can be directed to Sow Good, Inc. at 1-214-623-6055 or through their press email [5].

Product Development and Manufacturing - Sow Good launched its freeze dried candy product line in Q1 2023, with 21 SKUs as of December 31, 2024[42]. - The company operates a 20,945 square foot freeze drying facility in Irving, Texas, capable of producing up to 24 million units of freeze dried candy annually[25]. - Sow Good's Crunch Cream line, launched in October 2023, includes 3 SKUs of freeze dried ice cream products[43]. - The company has invested over $10 million in developing its manufacturing facility and freeze drying equipment[33]. - The company utilizes a proprietary freeze drying process that removes up to 99% of moisture, enhancing flavor and texture[24]. - The company has six operational freeze driers in its Irving, Texas facility, with plans to have an additional six operational by the end of 2025[61]. - The company plans to vertically integrate operations to enhance manufacturing efficiency and control quality[40]. - Sow Good is exploring adjacent product categories, such as yogurt snacks, to broaden its product offerings[44]. Market Presence and Distribution - Sow Good's products are available in approximately 3,000 retail outlets across the U.S., with less than 2% of sales coming from e-commerce as of December 31, 2024[23]. - The company estimates its products are available in approximately 3,000 retail locations across the United States, providing a strong competitive advantage and a larger total addressable market (TAM)[62]. - The company has a diverse omnichannel distribution strategy, including retailers, e-commerce, and distributors, enhancing its market reach[60]. - The company believes its existing treats could represent a multi-billion-dollar TAM, focusing on distribution expansion and increased marketing to drive growth[65]. Financial Performance and Projections - Revenue increased from approximately $88.4 thousand in 2021 to approximately $16.1 million in 2023, with a projected $32.0 million for 2024[115]. - Sow Good Inc. incurred net losses of approximately $3.6 million and $3.1 million for the years ended December 31, 2024 and 2023, respectively[109]. - Significant revenue declines were observed in the third and fourth quarters of 2024, attributed to increased competition and loss of significant customers[115][130]. - The company anticipates significant increases in operating expenses as it seeks to expand retail distribution and invest in brand awareness and production capacity[109]. Regulatory and Compliance Issues - The company operates under a comprehensive food safety plan compliant with the Food Safety Modernization Act (FSMA), ensuring rigorous food safety and quality management[54]. - Sow Good's operations are subject to extensive regulation by the FDA and other authorities, which may impact compliance and operational costs[106]. - The company has instituted audits to address allergen control and sanitation, ensuring compliance with food safety regulations[58]. - Noncompliance with food product quality regulations could result in enforcement actions, including product recalls and legal liabilities[160]. - The company is subject to numerous privacy and data security regulations, and failure to comply could result in significant liability and reputational harm[189]. Challenges and Risks - The retail food and non-chocolate confectionary segments are highly competitive, posing risks to the company's market position[106]. - The competitive landscape is intensifying, with new entrants potentially reducing market share and revenue[126][136]. - The company faces challenges in managing growth effectively, which could adversely affect financial results and operational execution[121][124]. - The company relies on a small number of suppliers for raw materials, which could disrupt its supply chain[106]. - The company may encounter challenges in successfully integrating newly acquired products or businesses, which could adversely affect profitability and operational efficiency[223]. Employee and Operational Considerations - The company has 86 full-time employees as of December 31, 2024, and provides a living wage, full benefits, and stock options to all employees[76]. - Labor costs are a significant component of operating expenses, and any increase in labor costs or shortages could adversely affect growth and financial results[176]. - The company relies heavily on the continued efforts of senior management, and loss of key personnel could severely disrupt operations[216]. Marketing and Brand Management - The company manages all marketing activities in-house, focusing on authentic engagement with its community through social media and its website[67]. - Brand visibility and reputation are critical for growth, with potential negative impacts from product quality issues and public perception[141][142]. - The effectiveness of the company's digital marketing strategy is crucial for brand positioning and customer retention, with risks associated with negative publicity and compliance with legal requirements[177]. Future Outlook and Capital Needs - Future growth depends on factors such as increasing sales and marketing efforts, expanding production capacity, and managing supply chain costs[116][122]. - Future capital needs may require raising additional funds, which could lead to dilution of existing stockholder equity[114]. - Economic conditions and consumer spending trends are critical, with potential declines in revenue during economic turmoil or uncertainty impacting the company's business strategy[220]. Miscellaneous - The company has not paid dividends on its common stock and does not intend to do so in the foreseeable future[106]. - The market price of Sow Good's common stock is likely to be highly volatile and subject to wide fluctuations[106]. - The company maintains a cybersecurity incident response plan to manage risks from cybersecurity threats, overseen by an internal IT specialist[231].

Financial Data and Key Metrics Changes - Revenue in Q4 2024 was $1.4 million, down from $9.5 million in Q4 2023, while full-year revenue increased to $32 million from $16.1 million in 2023 [13][14] - Gross loss for Q4 2024 was $1.2 million, compared to a gross profit of $3.4 million in Q4 2023, resulting in a gross margin of negative 88% versus 36% in the prior year [14][15] - Net loss in Q4 2024 was $4.2 million or negative $0.40 per diluted share, compared to net income of $1.3 million or $0.26 per diluted share in Q4 2023 [17] - Adjusted EBITDA for Q4 2024 was negative $2.8 million, compared to $2.3 million for the same period in 2023, while full-year adjusted EBITDA was $4.1 million compared to $0.1 million in 2023 [18] Business Line Data and Key Metrics Changes - The decline in Q4 revenue was attributed to increased competitive pressure, shipment pauses, and higher promotional activity [14] - Full-year gross profit increased significantly to $13 million from $4.5 million in 2023, with a gross margin for the year at 41% compared to 20% in 2023 [15] Market Data and Key Metrics Changes - The company faced challenges from low-quality imports from China and increased competition from major candy companies like Mars and Hershey [7][8] - Despite challenges, there are early signs of recovery in the sales pipeline for candy in Q1 2025 [9] Company Strategy and Development Direction - The company aims to expand its retail footprint, optimize manufacturing, and launch new product categories, including beef jerky and freeze-dried yogurt snacks [11][27] - Cost-saving initiatives and operational efficiencies are prioritized, with a focus on maintaining high food safety standards [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024 but expressed confidence in navigating them and emphasized a strategic path forward in the freeze-dried candy market [9][11] - The company is optimistic about Q1 2025 being marginally better than Q4 2024, with expectations for Q2 to outperform Q1 [37] Other Important Information - The company ended 2024 with cash and cash equivalents of $3.7 million, up from $2.4 million at the end of 2023, primarily due to a public offering [18][19] - Inventory at year-end increased to $20.3 million from $19.4 million, driven by new production [19] Q&A Session Summary Question: Inquiry about new product categories - Management explained the attraction to freeze-dried yogurt and beef jerky due to existing expertise and market opportunities, with a feasible second-half launch timeline [40][42] Question: Signs of improvement in sales - Management noted recovery in key customers and stabilization in sales velocity, particularly in core retail channels [46][49] Question: Strategy for reducing inventory - Management confirmed that inventory has a minimum two-year shelf life and is stored in a temperature-controlled environment, with a focus on opening new retail doors to drive sales [55][58]

Company Performance - Sow Good Inc. reported a quarterly loss of $0.40 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.21, and compared to earnings of $0.23 per share a year ago, indicating a significant decline [1] - The company posted revenues of $1.38 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 71.17%, and down from $9.52 million in the same quarter last year [2] - Over the last four quarters, Sow Good has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Movement and Outlook - Sow Good shares have increased by approximately 34.8% since the beginning of the year, contrasting with a decline of 3.7% in the S&P 500 [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at -$0.11 on revenues of $6.5 million, and -$0.32 on revenues of $33.5 million for the current fiscal year [7] - The current Zacks Rank for Sow Good is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Discretionary industry, to which Sow Good belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Sow Good's stock performance [5]

Core Insights - Sow Good Inc. reported significant challenges in 2024, including product integrity issues and increased competition, leading to a notable decline in fourth-quarter revenue and gross profit [2][3][7] - The company is focusing on innovation and expanding its product portfolio, including new categories like jerky and yogurt melts, to drive future growth [4][11] - Despite a challenging fourth quarter, Sow Good's annual revenue for 2024 increased significantly compared to 2023, reflecting the growing market for freeze-dried candy [7][13] Financial Performance - Fourth-quarter revenue for 2024 was $1.4 million, a decrease from $9.5 million in the same quarter of 2023, primarily due to competitive pressures and quality concerns [7] - Gross profit for the fourth quarter was a loss of $1.2 million, with a gross margin of (88)%, compared to a profit of $3.4 million and a margin of 36% in the prior year [7] - For the full year 2024, revenue increased to $32.0 million from $16.1 million in 2023, with gross profit rising to $13.0 million and a gross margin of 41% [7][13] Operating Expenses - Operating expenses in the fourth quarter of 2024 were $2.9 million, up from $1.6 million in the same period in 2023, driven by increased share compensation and other growth-related expenses [7] - For the year ended December 31, 2024, total operating expenses were $14.5 million compared to $4.5 million in 2023, reflecting the company's rapid growth [13] Net Loss and Adjusted EBITDA - The net loss for the fourth quarter of 2024 was $4.2 million, or $(0.40) per diluted share, compared to net income of $1.3 million, or $0.26 per diluted share, in the same quarter of 2023 [7][23] - Adjusted EBITDA for the fourth quarter was $(2.8) million, a decline from income of $2.3 million in the previous year [7][31] - For the full year, the net loss was $3.7 million, or $(0.40) per diluted share, compared to a net loss of $3.1 million, or $(0.59) per diluted share, in 2023 [13][23] Cash Position - Cash and cash equivalents at the end of 2024 were $3.7 million, an increase from $2.4 million at the end of 2023 [13] - The company reported a net cash used in operating activities of $(9.4) million for the year ended December 31, 2024 [29]

Core Viewpoint - Sow Good Inc. is set to announce its financial results for Q4 and the full year of 2024 on March 21, 2025, during a conference call [1] Group 1: Conference Call Details - The conference call will take place on March 21, 2025, at 12:00 p.m. Eastern time [2] - Registration is required to access the call, and participants will receive dial-in instructions upon registration [2] - The call will be broadcast live and available for replay on the Company's website [3] Group 2: Company Overview - Sow Good Inc. is a U.S.-based manufacturer specializing in freeze dried candy and snacks, focusing on innovative and flavorful products [4] - The Company utilizes proprietary freeze-drying technology and a specialized manufacturing facility to create a new category of confectionaries known as freeze dried candy [4] - Sow Good is committed to innovation, scalability, manufacturing excellence, meaningful employment opportunities, and high food quality standards [4]

Core Viewpoint - Sow Good Inc. is set to hold a conference call on March 21, 2025, to discuss its financial results for Q4 and the full year ended December 31, 2024 [1]. Company Overview - Sow Good Inc. is a U.S.-based manufacturer specializing in freeze dried candy and snacks, focusing on innovative and flavorful products [4]. - The company utilizes proprietary freeze-drying technology and a specialized manufacturing facility to create a new category of confectionaries known as freeze dried candy [4]. - Sow Good aims to foster growth for customers, investors, and employees through its core pillars: innovation, scalability, manufacturing excellence, meaningful employment opportunities, and food quality standards [4]. Conference Call Details - The conference call will take place at 12:00 p.m. Eastern time on March 21, 2025, with registration required for phone access [2]. - The call will be broadcast live and available for replay on the company's website [3].

Financial Data and Key Metrics Changes - For the first nine months ending September 30, 2024, the company achieved $30.6 million in revenue, a substantial increase from $6.5 million in the same period last year, indicating strong growth in the company's financial performance [6] - Revenue in the third quarter of 2024 was $3.6 million compared to $5 million in the prior year period, primarily due to delayed product shipments caused by extreme heat [11] - Gross profit in Q3 2024 was $0.6 million, down from $1.3 million in Q3 2023, with gross margin decreasing to 16% from 27% [12] - Net loss in Q3 2024 was $3.4 million, or $0.33 per diluted share, compared to net income of $0.3 million, or $0.04 per diluted share, for the same period in 2023 [13] - Adjusted EBITDA in Q3 2024 was negative $1.9 million compared to $0.6 million for the same period in 2023 [13] - Cash and cash equivalents at the end of Q3 2024 were $6.9 million, up from $2.4 million as of December 31, 2023, primarily due to a public offering [14] Business Line Data and Key Metrics Changes - The company experienced a decline in sales velocity due to melted products reaching retail shelves, particularly affecting specific SKUs like crunchy worms and sweet worms, which saw a 30% decline from Q2 to Q3 [24] - Despite challenges, other products like sweet bites and sour spheres continued to perform well, indicating a mixed performance across different product lines [24] Market Data and Key Metrics Changes - The entry of large CPG companies into the freeze-dried candy market highlights the growing consumer demand for this category, reinforcing the company's position as a formidable player [9] - The company is focusing on expanding its market share from the current approximate 10% penetration and is actively pursuing shelf space with new retail partners [16] Company Strategy and Development Direction - The company is committed to implementing temperature-controlled distribution to prevent future product quality issues and is focused on long-term growth despite short-term challenges [9][15] - The company plans to launch targeted promotions to drive sales momentum and is enhancing its product offerings with new SKUs [15] - The strategy includes expanding into private label opportunities and increasing production capacity to support growth [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unique challenges faced in Q3 due to extreme heat affecting product quality but remains optimistic about the long-term potential of the freeze-dried candy category [7][10] - The company is focused on operational resilience and flexibility, optimizing operating expenses while continuing to innovate and expand its product range [19] Other Important Information - The company is on the cusp of final regulatory approval for its 2025 launch in Europe and the Middle East, positioning it to enter these markets ahead of competitors [17] - The company is also targeting growth within U.S. ethnic markets, launching products that cater to this demographic [18] Q&A Session Summary Question: Impact of melted products on sales velocity - Management indicated that the impact was primarily seen with three customers: Five Below, Cracker Barrel, and HEB, and acknowledged that they should have taken back affected products [23] Question: Dynamics with other customers like 7/11 and Target - Management stated they are aggressively pursuing shelf space and have received positive feedback from key accounts, indicating a collaborative relationship despite competitive pressures [28] Question: Production plans and inventory management - Management confirmed they are pausing production on certain items while continuing to produce new SKUs, emphasizing the long shelf life of their products [30] Question: Gross margin variability and fixed cost leverage - Management acknowledged variability in gross margins due to production yield variances and indicated that labor costs would decrease with reduced production [32] Question: Retail inventory levels and category performance - Management noted that reorders are strong for products not affected by heat and that the freeze-dried candy category is entering a steady state [34][36] Question: Private labeling opportunities - Management is focused on private label opportunities to fully utilize production capacity but is cautious about co-manufacturing for other brands to protect their own brand identity [38]

分组1 - Sow Good Inc. reported a quarterly loss of $0.33 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.17, and a significant decline from earnings of $0.04 per share a year ago, resulting in an earnings surprise of -94.12% [1] - The company posted revenues of $3.55 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 40.77%, and down from $5.03 million in the same quarter last year [2] - Sow Good shares have underperformed the market, losing about 2.4% since the beginning of the year, while the S&P 500 gained 25.5% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.33 on revenues of $17.8 million, and for the current fiscal year, it is $0.52 on revenues of $50.8 million [7] - The Zacks Industry Rank indicates that the Consumer Products - Discretionary sector is currently in the bottom 20% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8]

Business Operations and Growth - As of September 30, 2024, Sow Good has launched 21 SKUs in its freeze dried candy line and 3 SKUs in its Crunch Cream line, with sales primarily through wholesale and retail channels, accounting for less than 2% of sales from e-commerce[158] - The company has built a 20,945 square foot freeze drying facility in Irving, Texas, and plans to operationalize six additional freeze driers in a new 324,000 square foot facility in Dallas, Texas within the next nine months[159] - Sow Good's products are available in over 6,000 retail outlets across the U.S., including major retailers like Target and Five Below, with plans to increase shelf presence and SKU portfolio[162] - The freeze dried candy market is expected to experience exponential growth due to increasing consumer preferences for novel candy products, with approximately 61% of shoppers seeking new products[168] - The company has entered into co-manufacturing arrangements in China and Colombia to meet strong customer demand while ensuring production quality and safety standards[159] Financial Performance - Revenues for the three months ended September 30, 2024, were $3.6 million, a decrease of $1.5 million or 29% compared to $5.0 million for the same period in 2023, primarily due to delayed shipments caused by extreme heat[182] - Cost of goods sold for the three months ended September 30, 2024, was $3.0 million, a decrease of $700.8 thousand or 19% from $3.7 million in 2023, attributed to lower revenue and higher costs related to a new facility[183] - Gross profit for the three months ended September 30, 2024, was $556.0 thousand, down $779.3 thousand or 58% from $1.3 million in 2023, resulting in a gross profit margin of 16% compared to 27% in the prior year[184][185] - Total operating expenses for the three months ended September 30, 2024, were $3.8 million, an increase of $2.8 million or 282% from $997.6 thousand in 2023, driven by significant increases in salaries and benefits[186][192] - Net operating loss for the three months ended September 30, 2024, was $(3.3) million, a decrease of $3.6 million or 1,065% compared to a net operating income of $337.6 thousand in 2023[192] - Revenues for the nine months ended September 30, 2024, were $30.6 million, an increase of $24.1 million or 367% compared to $6.5 million in 2023, due to a pivot to freeze dried candy and increased capacity[195] - Cost of goods sold for the nine months ended September 30, 2024, was $16.4 million, an increase of $9.7 million or 146% from $6.7 million in 2023, with a gross profit margin of 46% compared to (2)% in the prior year[196] - Total general and administrative expenses for the nine months ended September 30, 2024, were $11.6 million, an increase of $8.8 million or 313% from $2.8 million in 2023, driven by higher salaries, professional services, and other administrative costs[194] - Net income before tax provision for the nine months ended September 30, 2024, was $661.4 thousand, a turnaround of $5.0 million compared to a net loss of $(4.4) million in 2023[194] - Pretax net income for the nine months ended September 30, 2024 was $661.4 thousand, a positive change of $5.0 million compared to a pretax net loss of $4.4 million during the same period in 2023[202] Cash Flow and Liquidity - Working capital increased to $19.7 million as of September 30, 2024, compared to $4.5 million as of December 31, 2023, primarily due to increases in cash, accounts receivable, and inventory[205] - Cash and cash equivalents were $6.9 million as of September 30, 2024, up from $2.4 million at December 31, 2023[205] - Net cash used in operating activities was $6.1 million for the nine months ended September 30, 2024, compared to $3.3 million for the same period in 2023[215] - Net cash used in investing activities was $4.5 million for the nine months ended September 30, 2024, an increase of $3.2 million from $1.3 million in 2023, primarily for additional freezers[216] - Net cash provided by financing activities was $15.1 million for the nine months ended September 30, 2024, compared to $6.5 million in 2023, including $12.0 million from a public offering[217] - The company priced a public offering of 1,200,000 shares at $10.00 per share, netting approximately $12.0 million in proceeds[206] - The company plans to satisfy cash requirements for the next twelve months through cash on hand and additional financing as needed[205] Tax and Regulatory - Sow Good recognizes a federal income tax benefit of $62.3 thousand for the three-month period ended September 30, 2024, compared to $0 for the same period in 2023[178] - The company recognized federal income tax of $195,603 for the nine months ended September 30, 2024, compared to $0 in 2023[203] Operational Challenges - Seasonal fluctuations, particularly during summer months, have impacted shipments and revenue, with the company actively working to address these challenges[173] - Sow Good aims to optimize its liquidity position while scaling production, which requires significant working capital for inventory and capital expenditures for additional freeze driers[170] Lease and Facility Agreements - The company entered into a lease for approximately 324,000 rentable square feet with initial rent payments starting at $122,175 per month, increasing to $297,289.14 by the end of the lease term[220] - The Company entered into a lease agreement for approximately 51,264 rentable square feet in Dallas, TX, starting November 1, 2023, with base rent payments beginning at approximately $42.5 thousand per month in the first year, increasing to approximately $51.7 thousand per month in the last year of the Initial Term[222] - The lease agreement has an Initial Term of approximately five years and two months, with an option to extend for an additional five years at a fair market rent rate[222] Risk Management - The Company does not expect significant effects from commodity price risk outside of inherent inflationary risks[226] - The Company is not exposed to floating rates of interest and does not anticipate entering into transactions that would expose it to direct interest rate risk[226] - As of September 30, 2024, the Company did not hold a material amount of cash in foreign jurisdictions but anticipates increased foreign operations may expose it to greater currency fluctuation risk[227]