Stryve Foods, Inc. (“Stryve” or “the Company”) (NASDAQ: SNAX), an
emerging healthy snack and eating platform disrupting traditional
consumer packaged goods (CPG) categories, and a leader in the
air-dried meat snack industry in the United States, today announces
preliminary results for its second quarter of 2023 including
updated retail consumption data and that it will effect a reverse
stock split of its outstanding shares of Class A and Class V common
stock at a ratio of 1-for-15, to be effective as of 12:01 a.m.
Eastern Time on July 14, 2023.
Preliminary Second Quarter
Results1 and Retail
Data
Chris Boever, Chief Executive Officer,
commented, “We are pleased to share a preliminary snapshot of our
second quarter results. We continue to make great progress on our
transformation, and we are encouraged by the consumer response to
our new strategic brand positioning.”
The Company’s preliminary estimates for net
revenue will be within a range of $5.8 million to $6.0 million for
the quarter ended June 30, 2023, which represents sequential growth
of 26.1% to 30.4% from the first quarter of 2023.
Mr. Boever continued, “I’m particularly
encouraged by the progress we are achieving on the business
fundamentals, with increased focus on the core portfolio and our
overall executional improvements. The most recent SPINs data2
indicates a significant year over year improvement in measured
channels with dollar sales increasing 38.0%, total distribution
points expanding 19.0%, price-mix improving 12.5%, and ultimately
earning 15.1 basis points of category share. These key metrics are
indicative of the growing strength of our brands, our retail
partnerships, and the positive response from our expanding consumer
base.”
The Company anticipates reporting greatly
improved gross margins year-over-year as a result of pricing,
product mix, and productivity; however, a slight decrease in gross
margins on a sequential basis is expected for the quarter.
Based on the information currently available,
the Company estimates that its Adjusted EBITDA Loss3 will be within
a range of $2.4 million to $2.7 million representing a
year-over-year improvement of $8.7 million to $9.0 million from the
prior year quarter as well as a $0.8 million to $1.1 million
reduction in Adjusted EBITDA Loss when compared to the first
quarter of 2023 on a sequential basis. The Company also expects to
report Net Working Capital (excluding cash and debt) of
approximately $5.8 million to $6.2 million as well as a cash
balance for the second quarter similar to that of the first quarter
of 2023.
“As the actions we’ve taken to improve our
financial outcomes become realized, we will continue to carefully
manage our liquidity position. We anticipate that the progress
made, as supported by the retail metrics, will help to deliver our
future growth initiatives and expectations. Sales growth paired
with our rationalized cost structure and productivity agenda
creates operating leverage and positions us to deliver a
profitable, sustainable business over time,” Mr. Boever
concluded.
1 These estimates represent the most current
information available to management and could change. Our second
quarter financial closing and financial statement preparation
process has not been completed. As a result, our actual financial
results could be different, and those differences could be
material.
2 4-week SPINS data as of June 18, 2023, as compared to the same
period in the prior year.
3 Adjusted EBITDA Loss is a non-GAAP financial measure. See the
section titled “Non-GAAP Financial Information” at the end of this
press release.
1-for-15 Reverse Stock
Split
The Company will affect a reverse stock split of
its outstanding shares of Class A and Class V common stock at a
ratio of 1-for-15, to be effective as of 12:01 a.m. Eastern Time on
July 14, 2023. The reverse stock split is intended for the Company
to regain compliance with the minimum bid price requirement of
$1.00 per share of common stock for continued listing on Nasdaq.
The Company’s stockholders previously approved the Reverse Stock
Split at the Company’s Annual Meeting of Stockholders held on June
9, 2023.
The Company’s Class A common stock will begin
trading on a reverse stock split-adjusted basis at the opening of
the Nasdaq Capital Market on Friday, July 14, 2023. Following the
reverse stock split, the Class A common stock will continue to
trade on Nasdaq under the symbol “SNAX” with the new CUSIP number,
863685202.
No fractional shares will be issued in
connection with the reverse stock split. Stockholders of record who
otherwise would be entitled to receive fractional shares will be
entitled to an amount in cash (without interest or deduction) equal
to the fraction of one share to which such stockholder would
otherwise be entitled multiplied by the closing price of the
Company’s Class A common stock on Nasdaq on July 13, 2023. Except
for the right to receive the cash payment in lieu of fractional
shares, stockholders will not have any voting, dividend or other
rights with respect to the fractional shares they would otherwise
be entitled to receive.
Stockholders who are holding their shares in
electronic form at brokerage firms or with the Company’s transfer
agent (Continental Stock Transfer & Trust Company) do not have
to take any action as the effect of the Reverse Stock Split will
automatically be reflected in their accounts. In addition, the
reverse stock split will apply to the Common Stock issuable upon
the exercise of the Company’s other outstanding securities, with
proportionate adjustments to be made to the exercise prices and
number of derivates securities, and under the Company’s equity
incentive plans. The Company’s 10,997,500 outstanding public
warrants that trade on Nasdaq under the symbol “SNAXW” will adjust
to the right to purchase 0.0666667 shares of Class A common stock
for an exercise price of $172.50.
The Reverse Stock Split did not impact the
number of authorized shares of Class A common stock. In light of
the limited purpose of the Class V common stock, the Company will
reduce the number of authorized shares of Class V common stock from
200 million to 15 million (and will correspondingly reduce the
total authorized shares by such amount).
As of July 12, 2023, there were 26,367,185
shares of Class A common stock and 6,080,196 shares of Class V
common stock outstanding. As a result of the Reverse Stock Split,
there will be approximately 1,757,812 shares of Class A common
stock outstanding and 405,346 shares of Class V common stock
outstanding (subject in each instance to adjustment due to the
effect of providing cash for fractional shares). The Reverse Stock
Split will not have any effect on the stated par value of the
common stock.
About Stryve Foods, Inc.
Stryve is a premium air-dried meat snack company
that is conquering the intersection of high protein, great taste,
and health under the brands of Braaitime, Kalahari, Stryve, and
Vacadillos is a healthy snacking and food company that
manufactures, markets and sells highly differentiated healthy
snacking and food products that is planned to disrupt traditional
snacking and CPG categories. Stryve’s mission is “to help Americans
eat better and live happier, better lives.” Stryve offers
convenient products that are lower in sugar and carbohydrates and
higher in protein than other snacks and foods. Stryve’s current
product portfolio consists primarily of air-dried meat snack
products marketed under the Stryve®, Kalahari®, Braaitime®, and
Vacadillos® brand names. Unlike beef jerky, Stryve’s all-natural
air-dried meat snack products are made of beef and spices, are
never cooked, contain zero grams of sugar*, and are free of
monosodium glutamate (MSG), gluten, nitrates, nitrites, and
preservatives. As a result, Stryve’s products are Keto and Paleo
diet friendly. Further, based on protein density and sugar content,
Stryve believes that its air-dried meat snack products are some of
the healthiest shelf-stable snacks available today. Stryve also
markets and sells human-grade pet treats under the brand Two Tails,
made with simple, all-natural ingredients and 100% real beef with
no fillers, preservatives, or by-products.
Stryve distributes its products in major retail
channels, primarily in North America, including convenience,
grocery, mass, and other retail outlets, as well as directly to
consumers through its ecommerce websites and through the Amazon
platform. For more information about Stryve, visit www.stryve.com
or follow us on social media at @stryvebiltong.
* All Stryve air-dried products contain zero
grams of added sugar, with the exception of the Chipotle Honey
flavor of Vacadillos, which contains one gram of sugar per
serving.
Cautionary Note Regarding
Forward-Looking Statements
Certain statements made herein are
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by the use of
words such as “anticipate”, “may”, “will”, “would”, “could”,
“intend”, “aim”, “believe”, “anticipate”, “continue”, “target”,
“milestone”, “expect”, “estimate”, “plan”, “outlook”, “objective”,
“guidance” and “project” and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters, including, but not limited to, statements
regarding Stryve’s expected results for the second quarter of 2023
and the year ended December 31, 2023, expectations regarding
commodity prices, plans, strategies, objectives, targets and
expected financial performance. These forward-looking statements
reflect Stryve’s current views and analysis of information
currently available. This information is, where applicable, based
on estimates, assumptions and analysis that Stryve believes, as of
the date hereof, provide a reasonable basis for the information and
statements contained herein. These forward-looking statements
involve various known and unknown risks, uncertainties and other
factors, many of which are outside the control of Stryve and its
officers, employees, agents and associates. These risks,
uncertainties, assumptions and other important factors, which could
cause actual results to differ materially from those described in
these forward-looking statements, include: (i) the inability to
achieve profitability due to commodity prices, inflation, supply
chain interruption, transportation costs and/or labor shortages;
(ii) competition, supply chain interruptions, the ability to pursue
a growth strategy and manage growth profitability, maintain
relationships with customers, suppliers and retailers and retain
its management and key employees; (iii) the risk that retailers
will choose to limit or decrease the number of retail locations in
which Stryve’s products are carried or will choose not to carry or
not to continue to carry Stryve’s products; (iv) the possibility
that Stryve may be adversely affected by other economic, business,
and/or competitive factors; (v) the effect of the COVID-19 pandemic
on Stryve; (vi) the possibility that Stryve may not achieve its
financial outlook; (vii) risks around the Company’s ability to
continue as a going concern and (viii) other risks and
uncertainties described in the Company’s public filings with the
SEC. Actual results, performance or achievements may differ
materially, and potentially adversely, from any projections and
forward-looking statements and the assumptions on which those
projections and forward-looking statements are based.
Non-GAAP Financial
Information
Stryve uses non-GAAP financial information and
believes it is useful to investors as it provides additional
information to facilitate comparisons of historical operating
results, identify trends in operating results, and provide
additional insight on how the management team evaluates the
business. Stryve’s management team uses Adjusted EBITDA to make
operating and strategic decisions, evaluate performance and comply
with indebtedness related reporting requirements. The Company
defines Adjusted EBITDA Loss as Net Loss before Interest Expense,
Income Tax Expense, and Depreciation and Amortization Expense as
further adjusted for stock-based compensation expense. Stryve
believes this non-GAAP measure should be considered along with net
income (loss), the most closely related GAAP financial measure. The
Company has not reconciled non-GAAP Adjusted EBITDA Loss to net
income (loss) in this press release because the Company does not
provide guidance for amortization expense, depreciation expense,
stock-based compensation expense or interest expense as we are
unable to quantify certain of these amounts that would be required
to be included in the GAAP measure without unreasonable efforts as
of the date of this release. In addition, the Company believes such
reconciliations would imply a degree of precision at this time that
could be confusing or misleading to investors.
Investor Relations Contact:
Three Part Advisors, LLCSandy Martin or Phillip
Kuppersmartin@threepa.com or pkupper@threepa.com214-616-2207 or
817-368-2556
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