Beyond Meat(US:BYND)2023-11-08 16:00Business Performance - In the first nine months of 2023, the company faced prolonged softening of demand in the plant-based meat category, high inflation, and rising interest rates, which adversely impacted net revenues, gross profit, and cash flows [169]. - In Q3 2023, net revenues decreased by $7.2 million, or 8.7%, compared to the prior year, driven by an 11.6% decrease in net revenue per pound, partially offset by a 3.5% increase in volume sold [200]. - U.S. retail sales in Q3 2023 decreased by $15.7 million, or 33.9%, primarily due to an 18.8% decrease in volume sold and an 18.6% decrease in net revenue per pound [202]. - International net revenues increased by $11.9 million, or 58.7%, in Q3 2023 compared to the prior year, driven by strong performance in retail and foodservice channels [200]. - U.S. retail sales net revenues decreased by $70.1 million, or 36.3%, primarily due to a 30.3% decrease in volume sold and an 8.5% decrease in net revenue per pound [210]. - U.S. foodservice sales net revenues decreased by $14.9 million, or 27.2%, with a 32.0% decrease in volume sold, partially offset by a 7.0% increase in net revenue per pound [211]. Cost Management - The company announced a workforce reduction of approximately 65 employees, representing about 19% of its global non-production workforce, aimed at improving cost structure [172]. - The company expects to incur one-time cash charges of approximately $2.0 million to $2.5 million related to a workforce reduction of about 65 employees, or 19% of the global non-production workforce [192]. - The reduction-in-force is expected to result in cash operating expense savings of approximately $9.5 million to $10.5 million in 2024 [193]. - Selling, general, and administrative expenses for Q3 2023 were $53.3 million, a decrease from $54.5 million in Q3 2022, as part of cost-reduction initiatives [190]. - Research and development expenses for Q3 2023 were $9.1 million, down from $13.4 million in Q3 2022, reflecting a focus on optimizing operating expenses [188]. Strategic Focus - The company is focusing on sustainable long-term growth, including narrowing its commercial focus to certain growth opportunities and prioritizing gross margin expansion and cash generation [171]. - The company is committed to developing a comprehensive ESG program to address environmental and social issues associated with conventional animal protein production [174]. - The company is enhancing its marketing efforts to counter misinformation and drive consumer adoption of its products, focusing on taste, health, and environmental benefits [178]. - The company is investing in localized production and third-party partnerships to improve production costs and increase product availability internationally [178]. - The company is reviewing its global operations to narrow its commercial focus and reduce operating expenses [240][242]. Financial Health - The company incurred a net loss of $183.0 million for the nine months ended September 30, 2023, leading to net cash used in operating activities of $79.3 million [253]. - As of September 30, 2023, the company had $217.5 million in unrestricted cash and cash equivalents, and $15.3 million in restricted cash [249]. - The company achieved cash flow positive operations in Q3 2023 but does not expect to sustain this in Q4 2023 due to various uncertainties [244]. - The company recorded a credit of $(4,000) in restructuring expenses for Q3 2023, compared to $7.0 million in the prior-year period [226][235]. - Total other income, net, for the nine months ended September 30, 2023, was $1.9 million, compared to total other expense of $11.4 million in the prior-year period [230]. Market Presence - As of September 2023, Beyond Meat products were available at approximately 183,000 retail and foodservice outlets in over 75 countries, including about 46,000 U.S. retail outlets unique to Beyond Meat Jerky [168]. - The company had approximately 36,000 international retail outlets and 26,000 international foodservice outlets as of September 2023 [204][205]. - The company is restructuring contracts and operating activities related to Beyond Meat Jerky, which is expected to limit distribution reach and reduce total U.S. retail distribution outlets in subsequent quarters [168]. Research and Development - The company anticipates continued investment in research and development to enhance product formulations and capture a larger share of consumers who typically eat animal-based meats [188]. - Research and development expenses decreased by $4.3 million, or 32.0%, to $9.1 million in Q3 2023, and by $19.0 million, or 38.5%, to $30.3 million in the nine months ended September 30, 2023 [222][223]. Future Outlook - The company is experiencing challenges such as weak demand in the plant-based meat category, macroeconomic headwinds, and increased competitive activity, which may impact future revenue growth [179]. - The company expects to incur costs related to restructuring and may not fully realize the anticipated cost savings from these actions [247]. - The company plans to reduce its workforce by approximately 65 employees, representing about 8% of its total global workforce, with expected one-time cash charges of approximately $2.0 million to $2.5 million [246][247].