Vital Farms(VITL) - 2023 Q4 - Annual Results

Financial Highlights Fourth Quarter 2023 Highlights Record Q4 net revenue grew 23.4% to $135.8 million, driven by volume, pricing, and an extra sales week Q4 2023 vs Q4 2022 Financial Highlights | Metric | Q4 2023 (14 weeks) | Q4 2022 (13 weeks) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $135.8 million | $110.1 million | +23.4% | | Net Income | $7.2 million | $1.9 million | +281% | | Net Income per Diluted Share | $0.17 | $0.04 | +325% | | Adjusted EBITDA | $13.9 million | $6.9 million | +101% | - Excluding the impact of the extra week in Q4 2023, net revenue increased by 15.7% compared to the prior year period[5] Fiscal Year 2023 Highlights Full-year net revenue increased 30.3% to $471.9 million, with significant improvements in profitability Fiscal Year 2023 vs 2022 Financial Highlights | Metric | Fiscal Year 2023 (53 weeks) | Fiscal Year 2022 (52 weeks) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $471.9 million | $362.1 million | +30.3% | | Net Income | $25.6 million | $1.2 million | +2033% | | Net Income per Diluted Share | $0.59 | $0.03 | +1867% | | Adjusted EBITDA | $48.3 million | $16.2 million | +198% | - The company is on track to become a $1 billion business by 2027 and achieved a greater than 10% adjusted EBITDA margin for the year[3][4] Detailed Financial Performance Fourth Quarter 2023 Results Q4 net revenue growth was driven by volume gains and pricing, with gross margin expanding to 33.3% - Net revenue increased 23.4% to $135.8 million, driven by 11.6% volume gains and higher prices, with the extra week contributing $8.5 million[6][7] - Gross profit was $45.2 million (33.3% of net revenue), up from $33.3 million (30.3% of net revenue) in Q4 2022, due to volume gains and price increases[8] - Income from operations increased to $9.1 million from $3.4 million in the prior year quarter, mainly due to higher sales and gross profit[9] - Adjusted EBITDA grew to $13.9 million (10.2% of net revenue) from $6.9 million (6.2% of net revenue) in Q4 2022[11][12] Fiscal Year 2023 Results Full-year revenue growth was supported by a 13.9% increase in volume and higher prices, boosting operating income - Net revenue increased 30.3% to $471.9 million, driven by 13.9% volume gains and higher prices, with the extra week contributing $8.5 million[13][14] - Gross profit was $162.3 million (34.4% of net revenue), up from $109.4 million (30.2% of net revenue) in FY 2022[15] - Income from operations was $33.3 million, a significant increase from $2.1 million in fiscal year 2022[16] - Adjusted EBITDA was $48.3 million (10.2% of net revenue), compared to $16.2 million (4.5% of net revenue) in the prior year period[18] Balance Sheet and Cash Flow Highlights The company ended FY2023 with a strong liquidity position of $116.8 million and no outstanding debt - As of December 31, 2023, the company had $116.8 million in cash, cash equivalents, and marketable securities, with no outstanding debt[20] - Net cash provided by operating activities was $50.9 million for FY 2023, a substantial improvement from a net cash usage of $8.1 million in FY 2022[20] - Capital expenditures totaled $11.5 million in FY 2023, a slight increase from $10.6 million in the prior year[21] Fiscal 2024 Outlook Management Guidance Management projects at least 17% revenue growth and a significant increase in capital expenditures for fiscal 2024 Fiscal Year 2024 Guidance | Metric | FY 2024 Expectation | Growth vs FY 2023 | | :--- | :--- | :--- | | Net Revenue | At least $552 million | ≥ 17% | | Adjusted EBITDA | At least $57 million | ≥ 18% | | Capital Expenditures | $35 million to $45 million | N/A | - The company reaffirmed its long-term financial targets of achieving $1 billion in net revenue, a 35% gross margin, and a 12-14% Adjusted EBITDA margin[22] Financial Statements Condensed Consolidated Statements of Income The income statement reflects substantial year-over-year growth in revenue, gross profit, and net income Fiscal Year Income Statement (in thousands) | Account | 53-Weeks Ended Dec 31, 2023 | 52-Weeks Ended Dec 25, 2022 | | :--- | :--- | :--- | | Net revenue | $471,857 | $362,050 | | Gross profit | $162,326 | $109,444 | | Income from operations | $33,254 | $2,104 | | Net income | $25,566 | $1,230 | | Diluted EPS | $0.59 | $0.03 | Condensed Consolidated Balance Sheets The balance sheet shows a strengthened financial position with total assets increasing to $275.2 million Balance Sheet Highlights (in thousands) | Account | December 31, 2023 | December 25, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $84,149 | $12,914 | | Total current assets | $195,524 | $149,614 | | Total assets | $275,178 | $214,666 | | Total current liabilities | $65,221 | $47,652 | | Total liabilities | $82,501 | $56,334 | | Total stockholders' equity | $192,677 | $158,332 | Condensed Consolidated Statements of Cash Flows Operating activities generated $50.9 million in cash, a major turnaround from the prior year's cash usage Cash Flow Summary (in thousands) | Account | 53-Weeks Ended Dec 31, 2023 | 52-Weeks Ended Dec 25, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $50,906 | $(8,098) | | Net cash provided by (used in) investing activities | $22,383 | $(10,037) | | Net cash (used in) provided by financing activities | $(2,054) | $83 | | Net increase (decrease) in cash | $71,235 | $(18,052) | | Cash and cash equivalents at end of period | $84,149 | $12,914 | Non-GAAP Financial Measures Adjusted EBITDA Reconciliation The reconciliation from Net Income to Adjusted EBITDA shows a significant increase to $48.3 million in FY2023 - Management believes Adjusted EBITDA is a useful supplemental measure for assessing the health of the business, determining incentive compensation, and for internal planning and forecasting[38] Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | 53-Weeks Ended Dec 31, 2023 | 52-Weeks Ended Dec 25, 2022 | | :--- | :--- | :--- | | Net income | $25,566 | $1,230 | | Depreciation and amortization | $10,490 | $5,761 | | Stock-based compensation expense | $7,417 | $6,040 | | Income tax provision | $6,635 | $1,601 | | Other adjustments (net) | $(1,780) | $1,404 | | Adjusted EBITDA | $48,348 | $16,236 |