Financial Data and Key Metrics Changes - Revenue in Q4 2024 was 9.5 million in Q4 2023, while full-year revenue increased to 16.1 million in 2023 [13][14] - Gross loss for Q4 2024 was 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 0.40 per diluted share, compared to net income of 0.26 per diluted share in Q4 2023 [17] - Adjusted EBITDA for Q4 2024 was negative 2.3 million for the same period in 2023, while full-year adjusted EBITDA was 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 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 2.4 million at the end of 2023, primarily due to a public offering [18][19] - Inventory at year-end increased to 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]
Sow Good Inc.(SOWG) - 2024 Q4 - Earnings Call Transcript