Vital Farms(US:VITL)2025-11-04 12:30Financial Performance - The company reported net revenue of $198.9 million for the 13-week period ended September 28, 2025, compared to $145.0 million for the same period in 2024, representing a growth of approximately 37.2%[111] - Adjusted EBITDA for the 39-week period ended September 28, 2025, was $84.8 million, up from $67.6 million in the same period in 2024, indicating a year-over-year increase of about 25.5%[111] - Net revenue for the 39-week period ended September 28, 2025, was $545.9 million, representing a $105.6 million increase or 24% compared to $440.3 million for the same period in 2024[157] - Net income for the 13-week period ended September 28, 2025, was $16.4 million, representing 8% of net revenue, compared to $7.4 million, or 5% of net revenue, in the same period in 2024[142] - The company had net income of $50.0 million for the 39-week period ended September 28, 2025, compared to $42.8 million in 2024[155] - The company reported a net income of $49,958,000 for the 39-week period ended September 28, 2025, compared to $42,808,000 for the same period in 2024, reflecting a year-over-year increase of 16.3%[186] Revenue Composition - Eggs and egg-related products generated $192.6 million in net revenue, approximately 97% of total net revenue, in the 13-week period ended September 28, 2025[131] - Whole Foods accounted for approximately 20% and 21% of retail sales for the 13-week periods ended September 28, 2025, and September 29, 2024, respectively[127] Expenses and Costs - Selling, general and administrative expenses increased by $8.3 million, or 23%, to $44.4 million for the 13-week period ended September 28, 2025, primarily due to business expansion and increased marketing costs[147][150] - Selling, general and administrative expenses rose by $18.7 million, or 19%, totaling $115.3 million, accounting for 21% of net revenue[160] - The income tax provision increased by $8.5 million, or 81%, to $18.9 million, reflecting higher net income for the 39-week period[166] - The company anticipates an increase in cost of goods sold due to the development of a second egg washing and packing facility in Indiana[137] Cash Position and Investments - The company has a cash position of $145.1 million as of September 28, 2025, along with $60.0 million available under its JPMorgan Credit Facility, ensuring sufficient liquidity for long-term growth investments[119] - The net cash used in investing activities was $(84,336,000), significantly lower than the net cash provided of $8,355,000 in the prior year, indicating increased investments in U.S. Treasury Bills and property, plant, and equipment[176][178] - The company expects to incur approximately $110.0 million to $130.0 million in capital expenditures for a new egg washing and packing facility over the next 12 months[171] Market and Operational Insights - The company has a household penetration rate of approximately 10.8% for its shell eggs, compared to 97.3% for the overall shell egg category in the U.S., indicating significant growth potential[124] - The company is expanding its retail presence, with strong relationships with major retailers such as Kroger, Target, and Walmart, and offers 23 retail SKUs through a multi-channel distribution network[104] - As of September 28, 2025, approximately 23,500 stores are selling the company's products, with expectations for the retail channel to remain the largest source of net revenue[128] - The company has experienced outbreaks of Highly Pathogenic Avian Influenza (HPAI) and Egg Drop Syndrome (EDS), which could impact supply and pricing in the egg market, although it has not faced material disruptions to date[112][113] - The company incurred incremental farm recruitment costs in 2024, expected to range from $30.0 million to $40.0 million in fiscal 2025 due to elevated construction costs associated with new farms[103] Economic and Market Risks - The company anticipates that economic uncertainties, including inflation and interest rate volatility, may affect its operations and financial position in the near future[115] - The company has not reported any material changes in its exposure to market risks, which include fluctuations in raw materials, inflation, and interest rates[194][195] Seasonal Trends - The company experienced seasonal fluctuations in demand, with sales peaking before major holidays and declining during summer months, impacting quarterly comparisons[188] Compliance and Financial Ratios - The company maintained compliance with the JPMorgan Credit Facility, which requires a net leverage ratio of no greater than 3.25 to 1.00 and a fixed charge coverage ratio of no less than 1.35 to 1.00[174] Other Financial Metrics - Interest expense decreased by $46,000, or 18%, to $213, primarily due to a reduction in interest paid on finance leases[149] - Interest income for the 39-week period ended September 28, 2025, was $3.8 million, a slight increase of $3, or 0%, compared to the previous year[164] - Other expense, net for the 39-week period ended September 28, 2025, was $(1.3) million, an increase of $0.9 million or 243% compared to $(0.4) million in 2024[165] - The decrease in net cash provided by operating activities was primarily due to a $39.1 million decrease in changes in operating assets and liabilities, partially offset by a $9.8 million increase in non-cash adjustments and a $7.2 million increase in net income[177] Marketing and Future Plans - The company anticipates increased marketing expenditures during fiscal 2025 to support long-term marketing goals[171]