Third Quarter Net Revenue of $145.0 million, up 31.3% versus Prior Year Period
Raises Fiscal Year 2024 Guidance and Reiterates Long-term Guidance
On Track to Reach $1 Billion Net Revenue Target in 2027
AUSTIN, Texas, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Vital Farms (Nasdaq: VITL), a Certified B Corporation that offers a range of ethically produced foods nationwide, today reported financial results for its third quarter ended September 29, 2024.
Financial highlights for the third quarter ended September 29, 2024, compared to the third quarter ended September 24, 2023, include:
- Net Revenue increased 31.3% to $145.0 million, compared to $110.4 million
- Gross Margin expanded 368 basis points to 36.9%, compared to 33.2%
- Net Income of $7.4 million, compared to $4.5 million
- Net Income per Diluted Share of $0.16, compared to $0.10
- Adjusted EBITDA of $15.2 million, compared to $9.3 million1
1Adjusted EBITDA is a non-GAAP financial measure defined in the section titled "Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.
For the 13 Weeks Ended September 29, 2024
Net revenue increased 31.3% to $145.0 million in the third quarter of 2024, compared to $110.4 million in the third quarter of 2023. Net revenue growth in the third quarter of 2024 was driven by volume-related revenue growth of 21.7% and price/mix benefits. Volume growth was driven by higher velocities on our current products, new offerings, and retail distribution gains with new and current customers.
Gross profit was $53.5 million, or 36.9% of net revenue, in the third quarter of 2024, compared to $36.7 million, or 33.2% of net revenue, in the prior year quarter. In-line with our performance in the first half of 2024, gross profit and gross margin growth was driven by higher net revenue, scale and price/mix benefits, operational efficiencies, and favorable conventional commodity and diesel costs. This was partially offset by an increase in promotions, as well as increased investment in crew members.
Income from operations in the third quarter of 2024 was $9.2 million, compared to income from operations of $5.2 million in the third quarter of 2023. This performance was driven by higher sales and gross profit, partially offset by higher promotions and personnel and marketing investments.
Net income was $7.4 million in the third quarter of 2024, compared to net income of $4.5 million in the prior year quarter. The rise in net income was driven by higher sales and improved gross profit performance.
Net income per diluted share was $0.16 for the third quarter of 2024, compared to net income per diluted share of $0.10 in the prior year quarter.
Adjusted EBITDA was $15.2 million, or 10.5% of net revenue, in the third quarter of 2024, compared to $9.3 million, or 8.4% of net revenue, in the third quarter of 2023. Adjusted EBITDA growth was driven by higher sales and gross profit, partially offset by new investments in marketing and employee-related expenses as we continue to scale a world-class organization.
Adjusted EBITDA excludes certain non-cash items. Adjusted EBITDA is a non-GAAP financial measure defined in the section titled "Non-GAAP Financial Measures” below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release.
Balance Sheet and Cash Flow Highlights
Cash, cash equivalents and marketable securities were $163.0 million as of September 29, 2024, and Vital Farms had no outstanding debt. Net cash provided by operating activities was $50.0 million for the 39-week period ended September 29, 2024, compared to net cash provided by operating activities of $27.2 million for the 39-week period ended September 24, 2023.
Capital expenditures totaled $10.5 million in the 39-week period ended September 29, 2024, compared to $9.1 million in the 39-week period ended September 24, 2023.
Fiscal 2024 Outlook
Thilo Wrede, Vital Farms' Chief Financial Officer, commented: "With another solid performance in the third quarter, I am pleased to again update our guidance for 2024. Our new outlook reflects the strong performance of the business for the first nine months of this year and our good visibility for the fourth quarter of 2024. Our revised guidance is built around a favorable commodity outlook and strong consumer demand supported by our marketing reinvestment strategy. Vital Farms' long-term strategy is built to increase brand awareness, drive deeper loyalty with consumers, and grow our household penetration through focused energies on brand marketing and continuous retail expansion.”
For the fiscal year 2024, management now expects:
- Net revenue of at least $600 million, which represents at least 27% growth versus fiscal year 2023, compared to our previous expectation of at least $590 million, or 25% growth.
- Adjusted EBITDA of at least $80 million, which represents at least 65% growth versus fiscal year 2023, compared to our previous expectation of at least $75 million, or 55% growth.
- Capital expenditures for the full year in the range of $30 million to $40 million, which is reduced from our previous range of $35 million to $45 million due to updated timing on some key projects. We continue to evaluate our capital allocation priorities, and we will provide updates as necessary in future earnings reports.
Conference Call and Webcast Details
Vital Farms will host a conference call and webcast at 8:30 a.m. ET today to discuss the results. To participate in the call and receive dial in information, please register here: Vital Farms Q3 2024 Conference Call. Alternatively, participants may access the live webcast on the Vital Farms Investor Relations website at https://investors.vitalfarms.com under "Events.” The webcast will be archived in 30 days.
About Vital Farms
Vital Farms (Nasdaq: VITL) is a Certified B Corporation that offers a range of ethically produced foods nationwide. Started on a single farm in Austin, Texas, in 2007, Vital Farms is now a national consumer brand that works with more than 375 family farms and is the leading U.S. brand of pasture-raised eggs by retail dollar sales. Vital Farms' ethics are exemplified by its focus on the humane treatment of farm animals and sustainable farming practices. In addition, as a Delaware public benefit corporation, Vital Farms prioritizes the long-term benefits of each of its stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, and crew members and stockholders. Vital Farms' products, including shell eggs, butter, hard-boiled eggs, and liquid whole eggs, are sold in approximately 24,000 stores nationwide. Vital Farms pasture-raised eggs can also be found on menus at hundreds of foodservice operators across the country. For more information, visit https://vitalfarms.com/.
Forward-Looking Statements
This press release and the earnings call referencing this press release contain "forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Vital Farms' market opportunity, anticipated growth, specifications and timing regarding Vital Farms' potential planned egg washing and packing facility in Seymour, Indiana, the effect of such facility on Vital Farms' future revenue, future growth of its family farm network, and future financial performance, including management's outlook for fiscal year 2024 and management's long-term outlook. These forward-looking statements are based on Vital Farms' current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause Vital Farms' actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to: Vital Farms' expectations regarding its revenue, expenses, and other operating results; Vital Farms' ability to acquire new customers, to successfully retain existing customers, to attract and retain its suppliers, distributors, and co-manufacturers, and to maintain its relationships with existing farm networks and further expand its farm networks and future farm development; Vital Farms' ability to sustain or increase its profitability; Vital Farms' ability to procure sufficient high-quality eggs, cream for its butter, and other raw materials; real or perceived quality or food safety issues with Vital Farms' products or other issues that adversely affect Vital Farms' brand and reputation; changes in the tastes and preferences of consumers; the financial condition of, and Vital Farms' relationships with, its farmers, suppliers, co-manufacturers, distributors, retailers, and foodservice customers, as well as the health of the foodservice industry generally; the impact of agricultural risks, including diseases such as avian influenza; the ability of Vital Farms, its farmers, suppliers, and its co-manufacturers to comply with food safety, environmental or other laws or regulations; the effects of a public health pandemic or contagious disease on Vital Farms' supply chain, the demand for its products, and on overall economic conditions and consumer confidence and spending levels; specifications and timing regarding Vital Farms' potential planned egg washing and packing facility in Seymour, Indiana, the effect of such facility on Vital Farms' future revenue, future investments in its business, anticipated capital expenditures and estimates regarding capital requirements; anticipated changes in Vital Farms' product offerings and Vital Farms' ability to innovate to offer successful new products or enter into new product categories; the costs and success of marketing efforts; Vital Farms' ability to effectively manage its growth and to compete effectively with existing competitors and new market entrants; the impact of adverse economic conditions, increased interest rates, and inflation; the potential negative impact of Vital Farms' focus on a specific public benefit purpose and producing a positive effect for society on its financial performance; the sufficiency of Vital Farms' cash, cash equivalents, marketable securities and availability of credit under its credit facility to meet liquidity needs; Vital Farms' expectations regarding the period during which it qualifies as an emerging growth company under the Jumpstart Our Business Startups Act of 2012; seasonality; and the growth rates of the markets in which Vital Farms competes.
These risks and uncertainties are more fully described in Vital Farms' filings with the Securities and Exchange Commission (SEC), including in the sections entitled "Risk Factors” in its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, which Vital Farms filed on May 7, 2024, its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, which Vital Farms filed on August 8, 2024, its Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 2024, which Vital Farms anticipates filing on November 7, 2024, and other filings and reports that Vital Farms may file from time to time with the SEC. Moreover, Vital Farms operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to predict all risks, nor can Vital Farms assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Vital Farms may make. In light of these risks, uncertainties, and assumptions, Vital Farms cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent management's beliefs and assumptions only as of the date of this press release. Vital Farms disclaims any obligation to update forward-looking statements except as required by law.
Media:
Rob Discher
Investors:
Anthony Bucalo
| VITAL FARMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except share amounts) (Unaudited) | |||||||||||||||
| 13-Weeks Ended | 39-Weeks Ended | ||||||||||||||
| September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
| Net revenue | $ | 145,002 | $ | 110,429 | $ | 440,318 | $ | 336,046 | |||||||
| Cost of goods sold | 91,526 | 73,764 | 270,268 | 218,913 | |||||||||||
| Gross profit | 53,476 | 36,665 | 170,050 | 117,133 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 36,102 | 25,081 | 96,569 | 72,935 | |||||||||||
| Shipping and distribution | 8,134 | 6,355 | 22,933 | 20,034 | |||||||||||
| Total operating expenses | 44,236 | 31,436 | 119,502 | 92,969 | |||||||||||
| Income from operations | 9,240 | 5,229 | 50,548 | 24,164 | |||||||||||
| Other income (expense), net: | |||||||||||||||
| Interest expense | (259 | ) | (238 | ) | (771 | ) | (513 | ) | |||||||
| Interest income | 1,407 | 707 | 3,811 | 1,497 | |||||||||||
| Other expense, net | (6 | ) | (642 | ) | (370 | ) | (2,508 | ) | |||||||
| Total other income (expense), net | 1,142 | (173 | ) | 2,670 | (1,524 | ) | |||||||||
| Net income before income taxes | 10,382 | 5,056 | 53,218 | 22,640 | |||||||||||
| Income tax provision | 2,936 | 533 | 10,410 | 4,284 | |||||||||||
| Net income | 7,446 | 4,523 | 42,808 | 18,356 | |||||||||||
| Net income per share: | |||||||||||||||
| Basic: | $ | 0.17 | $ | 0.11 | $ | 1.01 | $ | 0.45 | |||||||
| Diluted: | $ | 0.16 | $ | 0.10 | $ | 0.95 | $ | 0.42 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic: | 43,249,234 | 41,375,008 | 42,517,088 | 41,037,778 | |||||||||||
| Diluted: | 45,463,862 | 43,135,579 | 44,923,684 | 43,299,898 | |||||||||||
| VITAL FARMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share amounts) | |||||||
| September 29, 2024 | December 31, 2023 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 149,534 | $ | 84,149 | |||
| Investment securities, available-for-sale | 13,480 | 32,667 | |||||
| Accounts receivable, net of allowance for credit losses of $559 and $550 as of September 29, 2024 and December 31, 2023, respectively | 47,752 | 39,699 | |||||
| Inventories | 33,392 | 32,895 | |||||
| Prepaid expenses and other current assets, net of allowance for credit losses of $192 and $227 as of September 29, 2024 and December 31, 2023, respectively | 6,446 | 6,114 | |||||
| Income taxes receivable | 990 | - | |||||
| Total current assets | 251,594 | 195,524 | |||||
| Property, plant and equipment, net | 69,269 | 66,839 | |||||
| Operating lease right-of-use assets | 17,324 | 8,911 | |||||
| Goodwill and other assets | 6,481 | 3,904 | |||||
| Total assets | $ | 344,668 | $ | 275,178 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 35,883 | $ | 33,485 | |||
| Accrued liabilities | 33,345 | 24,218 | |||||
| Operating lease liabilities, current | 4,665 | 3,057 | |||||
| Finance lease liabilities, current | 3,852 | 3,255 | |||||
| Income taxes payable | - | 1,206 | |||||
| Total current liabilities | 77,745 | 65,221 | |||||
| Operating lease liabilities, non-current | 3,675 | 5,771 | |||||
| Finance lease liabilities, non-current | 9,023 | 10,481 | |||||
| Other liabilities | 865 | 1,028 | |||||
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