10-Q 1 vitl-20230924.htm 10-Q 10-Q
0001579733Q3--12-25false2021-040001579733us-gaap:CommonStockMember2022-06-272022-09-250001579733vitl:OtherMember2023-09-240001579733vitl:EmployeeStockPurchasePlanMember2021-12-272022-09-250001579733us-gaap:AdditionalPaidInCapitalMember2021-12-272022-03-270001579733us-gaap:EmployeeStockOptionMember2022-12-262023-09-240001579733us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembervitl:CustomerBMember2021-12-272022-09-250001579733us-gaap:CostOfSalesMembervitl:InventoryObsolescenceMember2022-09-250001579733vitl:AssetWriteDownsMemberus-gaap:CostOfSalesMember2022-09-250001579733vitl:CornMember2023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2023-09-2400015797332021-12-272022-12-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-260001579733vitl:PNCBankNationalAssociationMembervitl:TenthAmendmentMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-12-262023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-260001579733vitl:PNCBankNationalAssociationMembervitl:CreditFacilityMembervitl:EleventhAmendmentMember2022-12-262023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2022-03-2700015797332022-06-260001579733us-gaap:BuildingAndBuildingImprovementsMember2023-09-240001579733vitl:OtherReceivablesMember2023-03-260001579733vitl:PNCBankNationalAssociationMembervitl:CreditFacilityMember2022-12-262023-09-240001579733vitl:ButterAndButterRelatedProductsMember2023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-240001579733us-gaap:RetainedEarningsMember2023-03-272023-06-250001579733us-gaap:TradeAccountsReceivableMember2022-12-250001579733us-gaap:StockCompensationPlanMembervitl:TwentyTwentyEquityIncentivePlanAndTwentyTwentyEmployeeStockPurchasePlanMember2023-09-2400015797332021-12-272022-09-250001579733us-gaap:CommonStockMembervitl:TwentyTwentyEquityIncentivePlanMember2020-07-012020-07-310001579733vitl:PulletsMember2023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2022-09-250001579733us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-06-272022-09-250001579733vitl:PNCBankNationalAssociationMemberus-gaap:RevolvingCreditFacilityMember2017-10-310001579733us-gaap:MachineryAndEquipmentMember2022-12-250001579733vitl:OtherReceivablesMember2023-06-262023-09-240001579733us-gaap:RestrictedStockUnitsRSUMember2022-12-262023-09-240001579733vitl:AssetWriteDownsMemberus-gaap:CostOfSalesMember2021-12-272022-09-250001579733us-gaap:RetainedEarningsMember2022-06-260001579733us-gaap:CustomerConcentrationRiskMembervitl:CustomerBMemberus-gaap:AccountsReceivableMember2021-12-272022-12-250001579733vitl:ButterAndButterRelatedProductsMember2022-12-250001579733vitl:EggsAndEggRelatedMember2021-12-272022-09-250001579733us-gaap:NondesignatedMemberus-gaap:CommodityContractMember2023-06-262023-09-240001579733us-gaap:ContractTerminationMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-09-250001579733us-gaap:RestrictedStockUnitsRSUMember2023-09-240001579733us-gaap:SalesMembervitl:CustomerAllowancesMember2021-12-272022-09-250001579733us-gaap:USTreasurySecuritiesMember2022-12-250001579733us-gaap:AdditionalPaidInCapitalMember2023-06-262023-09-240001579733us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733vitl:USCorporateBondsAndUSDenominatedForeignBondsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:RestrictedStockUnitsRSUMember2021-12-272022-09-250001579733us-gaap:CustomerConcentrationRiskMembervitl:CustomerCMemberus-gaap:AccountsReceivableMember2022-12-262023-09-240001579733vitl:ButterAndButterRelatedProductsMember2021-12-272022-09-250001579733us-gaap:ParentMember2022-03-282022-06-260001579733vitl:RedeemableNoncontrollingInterestMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-12-260001579733us-gaap:LandMember2023-09-240001579733us-gaap:RevolvingCreditFacilityMember2023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-272022-03-270001579733vitl:OtherReceivablesMember2022-12-262023-03-260001579733vitl:ButterAndButterRelatedProductsMember2022-06-272022-09-250001579733us-gaap:TradeAccountsReceivableMember2023-06-262023-09-240001579733us-gaap:ParentMember2022-09-250001579733us-gaap:CustomerConcentrationRiskMembervitl:CustomerCMemberus-gaap:AccountsReceivableMember2021-12-272022-12-250001579733vitl:OtherReceivablesMember2022-12-250001579733us-gaap:CustomerConcentrationRiskMembervitl:CustomerBMemberus-gaap:AccountsReceivableMember2022-12-262023-09-240001579733us-gaap:RetainedEarningsMember2021-12-260001579733us-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:RestrictedStockMember2022-12-262023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-282022-06-260001579733us-gaap:RetainedEarningsMember2022-12-262023-03-260001579733us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-06-272022-09-250001579733us-gaap:AdditionalPaidInCapitalMember2023-06-250001579733vitl:TwentyTwentyEmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2020-07-310001579733us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-12-262023-09-2400015797332023-09-240001579733vitl:CommonStockIssuablePursuantToTheESPPMember2021-12-272022-09-250001579733us-gaap:ConstructionInProgressMember2023-09-240001579733vitl:EmployeeStockPurchasePlanMember2022-06-272022-09-250001579733vitl:TwentyTwentyEmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2020-07-012020-07-310001579733us-gaap:CommonStockMembervitl:TwentyTwentyEquityIncentivePlanMember2022-12-262023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2022-12-250001579733vitl:PNCBankNationalAssociationMembervitl:TenthAmendmentMemberus-gaap:RevolvingCreditFacilityMembervitl:AlternateBaseRateMember2022-12-262023-09-240001579733vitl:PackagingMember2022-12-250001579733us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-06-262023-09-240001579733us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733vitl:TwentyTwentyEmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2023-01-012023-01-010001579733vitl:RedeemableNoncontrollingInterestMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-03-270001579733us-gaap:AdditionalPaidInCapitalMember2022-06-260001579733us-gaap:CostOfSalesMember2022-12-262023-09-240001579733vitl:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-12-272022-12-250001579733us-gaap:VehiclesMember2022-12-250001579733us-gaap:RetainedEarningsMember2022-03-282022-06-260001579733us-gaap:CommonStockMember2023-03-272023-06-250001579733us-gaap:CommonStockMember2023-06-262023-09-240001579733us-gaap:BuildingAndBuildingImprovementsMember2022-12-250001579733us-gaap:EmployeeStockOptionMember2021-12-272022-09-250001579733vitl:AssetWriteDownsMemberus-gaap:CostOfSalesMember2023-09-240001579733us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-2400015797332021-12-260001579733vitl:OtherReceivablesMember2023-06-250001579733us-gaap:CommonStockMember2023-09-2400015797332023-06-262023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-270001579733vitl:PNCBankNationalAssociationMembervitl:EquipmentLoanMember2017-10-310001579733us-gaap:LandImprovementsMember2023-09-240001579733us-gaap:RetainedEarningsMember2022-12-250001579733vitl:OtherReceivablesMember2023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-272022-09-250001579733vitl:EmployeeStockPurchasePlanMember2023-06-262023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2021-12-260001579733vitl:AssetWriteDownsMemberus-gaap:CostOfSalesMember2022-12-262023-09-240001579733us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:LeaseholdImprovementsMember2022-12-250001579733vitl:CornMember2022-12-250001579733us-gaap:RevolvingCreditFacilityMember2022-06-272022-09-250001579733us-gaap:ConstructionInProgressMember2022-12-250001579733us-gaap:CommonStockMember2023-03-260001579733us-gaap:RestrictedStockUnitsRSUMember2023-06-262023-09-2400015797332022-03-270001579733us-gaap:NoncontrollingInterestMember2022-03-270001579733us-gaap:ParentMember2021-12-272022-03-2700015797332023-06-250001579733vitl:RedeemableNoncontrollingInterestMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-06-260001579733us-gaap:LeaseholdImprovementsMember2023-09-240001579733us-gaap:NoncontrollingInterestMember2022-06-260001579733us-gaap:AdditionalPaidInCapitalMember2022-12-262023-03-260001579733vitl:EggsAndEggRelatedMember2023-06-262023-09-240001579733us-gaap:CommonStockMembervitl:TwentyTwentyEquityIncentivePlanMember2023-01-012023-01-010001579733us-gaap:RetainedEarningsMember2023-06-262023-09-240001579733vitl:OtherMember2022-12-250001579733us-gaap:FairValueInputsLevel2Memberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:EmployeeStockOptionMember2022-06-272022-09-250001579733vitl:EmployeeStockPurchasePlanMember2022-12-262023-09-240001579733vitl:CommonStockIssuablePursuantToTheESPPMember2022-12-262023-09-240001579733vitl:USCorporateBondsAndUSDenominatedForeignBondsMember2023-09-240001579733us-gaap:ParentMember2022-06-272022-09-250001579733us-gaap:RestrictedStockUnitsRSUMember2023-06-262023-09-2400015797332022-12-250001579733vitl:PNCBankNationalAssociationMemberus-gaap:RevolvingCreditFacilityMembervitl:SixthAmendmentMember2023-09-240001579733us-gaap:AdditionalPaidInCapitalMember2023-03-272023-06-250001579733vitl:PackagingMember2023-09-240001579733us-gaap:ContractTerminationMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-12-272022-09-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-260001579733us-gaap:AdditionalPaidInCapitalMember2022-03-282022-06-2600015797332022-03-282022-06-260001579733us-gaap:CostOfSalesMembervitl:InventoryObsolescenceMember2021-12-272022-09-250001579733us-gaap:AdditionalPaidInCapitalMember2022-06-272022-09-250001579733us-gaap:RevolvingCreditFacilityMember2023-06-262023-09-240001579733vitl:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-12-262023-09-240001579733us-gaap:CommonStockMember2022-03-282022-06-260001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2023-09-240001579733vitl:EggsAndEggRelatedProductsMember2023-09-240001579733vitl:EggsAndEggRelatedMember2022-12-262023-09-240001579733vitl:CustomerAMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-12-272022-09-250001579733us-gaap:NoncontrollingInterestMember2021-12-260001579733vitl:SoybeanMealMember2022-12-250001579733us-gaap:CommonStockMember2022-09-250001579733us-gaap:CostOfSalesMember2021-12-272022-09-2500015797332022-12-262023-03-260001579733us-gaap:NoncontrollingInterestMember2022-03-282022-06-260001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-250001579733vitl:EggsAndEggRelatedMember2022-06-272022-09-250001579733us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-12-272022-09-250001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2022-09-250001579733us-gaap:AdditionalPaidInCapitalMember2023-03-260001579733us-gaap:MachineryAndEquipmentMember2023-09-240001579733us-gaap:RestrictedStockUnitsRSUMember2022-12-250001579733us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-262023-03-260001579733vitl:AssetWriteDownsMemberus-gaap:CostOfSalesMember2022-12-250001579733us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:RestrictedStockUnitsRSUMember2022-12-262023-09-240001579733us-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-06-262023-09-240001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2021-12-272022-09-250001579733us-gaap:LandImprovementsMember2022-12-2500015797332023-03-260001579733us-gaap:CostOfSalesMember2023-06-262023-09-240001579733us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-12-272022-09-250001579733us-gaap:CommonStockMember2022-12-262023-03-260001579733us-gaap:TradeAccountsReceivableMember2023-03-260001579733us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembervitl:CustomerBMember2022-06-272022-09-250001579733us-gaap:LandMember2022-12-250001579733us-gaap:RetainedEarningsMember2023-03-260001579733us-gaap:NondesignatedMemberus-gaap:CommodityContractMember2022-12-262023-09-240001579733us-gaap:EmployeeStockOptionMember2021-12-272022-09-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-272023-06-250001579733us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2022-12-262023-09-2400015797332022-09-250001579733us-gaap:EmployeeStockOptionMember2023-06-262023-09-240001579733us-gaap:RetainedEarningsMember2022-03-2700015797332021-12-272022-03-270001579733vitl:EggsAndEggRelatedProductsMember2022-12-250001579733us-gaap:TradeAccountsReceivableMember2022-12-262023-03-260001579733us-gaap:FurnitureAndFixturesMember2023-09-240001579733vitl:TwentyTwentyEmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2023-09-240001579733us-gaap:CostOfSalesMembervitl:CoManufacturerChargesMember2021-12-272022-09-250001579733vitl:CommonStockIssuablePursuantToTheESPPMember2023-06-262023-09-240001579733us-gaap:RetainedEarningsMember2021-12-272022-03-270001579733vitl:CommonStockIssuablePursuantToTheESPPMember2022-06-272022-09-250001579733vitl:AfsSecuritiesMember2023-09-240001579733us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-262023-09-240001579733us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:RevolvingCreditFacilityMember2022-12-262023-09-2400015797332023-03-272023-06-250001579733us-gaap:EmployeeStockOptionMember2022-12-250001579733us-gaap:RestrictedStockUnitsRSUMember2021-12-272022-09-250001579733vitl:SoybeanMealMember2023-09-240001579733us-gaap:FairValueInputsLevel2Membervitl:USCorporateBondsAndUSDenominatedForeignBondsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:CommonStockMember2021-12-272022-03-270001579733vitl:ButterAndButterRelatedProductsMember2022-12-262023-09-2400015797332022-12-262023-09-240001579733vitl:OtherReceivablesMember2023-03-272023-06-250001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2022-06-272022-09-250001579733vitl:PNCBankNationalAssociationMembervitl:CreditFacilityMembervitl:TermLoanAndEquipmentLoanMember2022-12-262023-09-240001579733us-gaap:RetainedEarningsMember2023-09-240001579733us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733vitl:CustomerAMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-06-272022-09-250001579733us-gaap:CostOfSalesMembervitl:CoManufacturerChargesMember2022-09-250001579733us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:SellingGeneralAndAdministrativeExpensesMembervitl:AssetDisposalsMember2021-12-272022-09-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-250001579733us-gaap:CommonStockMember2022-12-250001579733vitl:PulletsMember2022-12-250001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-250001579733vitl:USCorporateBondsAndUSDenominatedForeignBondsMember2022-12-250001579733us-gaap:CommonStockMember2023-06-250001579733us-gaap:EmployeeStockOptionMember2023-09-240001579733us-gaap:TradeAccountsReceivableMember2023-09-240001579733vitl:CustomerAMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2023-06-262023-09-240001579733us-gaap:NondesignatedMemberus-gaap:CommodityContractMember2021-12-272022-09-250001579733us-gaap:TradeAccountsReceivableMember2023-03-272023-06-250001579733vitl:CustomerAMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-12-262023-09-240001579733us-gaap:SalesMembervitl:CustomerAllowancesMember2022-09-250001579733vitl:PNCBankNationalAssociationMembervitl:TermLoanMember2017-10-310001579733us-gaap:FairValueInputsLevel2Membervitl:USCorporateBondsAndUSDenominatedForeignBondsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733vitl:SandpebbleBuildersPreconstructionIncorporationMember2023-06-262023-09-240001579733us-gaap:RevolvingCreditFacilityMember2021-12-272022-09-2500015797332023-10-300001579733us-gaap:VehiclesMember2023-09-240001579733us-gaap:ParentMember2022-03-270001579733us-gaap:ParentMember2022-06-260001579733vitl:RedeemableNoncontrollingInterestMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-09-250001579733us-gaap:RetainedEarningsMember2023-06-250001579733us-gaap:EmployeeStockOptionMember2022-12-262023-09-240001579733us-gaap:CommonStockMember2021-12-260001579733us-gaap:StockCompensationPlanMembervitl:TwentyTwentyEquityIncentivePlanAndTwentyTwentyEmployeeStockPurchasePlanMember2022-12-250001579733us-gaap:NoncontrollingInterestMember2021-12-272022-03-270001579733vitl:TwentyTwentyEmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2022-12-262023-09-240001579733us-gaap:NondesignatedMemberus-gaap:CommodityContractMember2022-06-272022-09-250001579733srt:MaximumMember2023-09-2400015797332022-06-272022-09-250001579733us-gaap:RestrictedStockUnitsRSUMember2022-06-272022-09-250001579733us-gaap:EmployeeStockOptionMember2023-06-262023-09-240001579733us-gaap:CommonStockMember2022-06-260001579733us-gaap:RestrictedStockUnitsRSUMember2022-06-272022-09-250001579733us-gaap:CostOfSalesMember2022-06-272022-09-250001579733vitl:RedeemableNoncontrollingInterestMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-06-272022-09-250001579733vitl:USCorporateBondsAndUSDenominatedForeignBondsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-240001579733us-gaap:CommonStockMember2022-03-270001579733us-gaap:EmployeeStockOptionMember2022-06-272022-09-250001579733us-gaap:NoncontrollingInterestMember2022-06-272022-09-250001579733vitl:ButterAndButterRelatedProductsMember2023-06-262023-09-240001579733us-gaap:RetainedEarningsMember2022-06-272022-09-250001579733us-gaap:SellingGeneralAndAdministrativeExpensesMembervitl:AssetDisposalsMember2022-09-250001579733us-gaap:RetainedEarningsMember2022-09-250001579733us-gaap:TradeAccountsReceivableMember2023-06-250001579733us-gaap:FurnitureAndFixturesMember2022-12-250001579733us-gaap:ParentMember2021-12-260001579733us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-250001579733us-gaap:CommonStockMembervitl:TwentyTwentyEquityIncentivePlanMember2020-07-310001579733us-gaap:CommonStockMembervitl:TwentyTwentyEquityIncentivePlanMember2023-09-240001579733us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-262023-09-24xbrli:purevitl:Securityxbrli:sharesvitl:Positionvitl:Bushelsutr:Tiso4217:USDxbrli:sharesiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-39411

 

 

Vital Farms, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

27-0496985

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

3601 South Congress Avenue

Suite C100

Austin, Texas

78704

(Address of principal executive offices)

(Zip Code)

(877) 455-3063

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

VITL

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

Emerging Growth Company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of October 30, 2023 the registrant had 41,602,263 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

Page

 

Special Note Regarding Forward-Looking Statements

ii

 

 

 

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

 

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Comprehensive Income (Loss)

3

Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders' Equity

4

Condensed Consolidated Statements of Cash Flows

6

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4.

Controls and Procedures

38

PART II.

OTHER INFORMATION

39

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

66

Item 3.

Defaults Upon Senior Securities

66

Item 4.

Mine Safety Disclosures

66

Item 5.

Other Information

66

Item 6.

Exhibits

67

 

Signatures

68

 

 

 

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

our expectations regarding our revenue, expenses and other operating results;
our ability to acquire new customers and successfully retain existing customers;
our ability to attract and retain our suppliers, distributors and co-manufacturers;
our ability to maintain relationships with our existing farm networks or further expand such networks;
our ability to sustain or increase our profitability;
our expectations regarding our future growth in the foodservice channel, including commercial and non-commercial foodservice business;
our ability to procure sufficient high-quality eggs, cream for our butter and other raw materials;
real or perceived quality or food safety issues with our products or other issues that adversely affect our brand and reputation;
changes in the tastes and preferences of our consumers;
the financial condition of, and our relationships with, our farmers, suppliers, co-manufacturers, distributors, retailers and foodservice customers, as well as the health of the foodservice industry generally;
the effects of outbreaks of agricultural diseases, such as avian influenza, or the perception that such outbreaks may occur or regulatory or market responses to such outbreaks generally;
the ability of our farmers, suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations;
the effects of a public health pandemic or contagious disease, such as COVID-19, or fear of such outbreaks, on our supply chain, the demand for our products, and on overall economic conditions and consumer confidence and spending levels;
the impact of the completed expansion of our Egg Central Station facility or future expansions of our processing capacity on our revenue;
future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;
anticipated changes in our product offerings and our ability to innovate to offer successful new products;
our ability to successfully enter into new product categories;
the costs and success of our marketing efforts, and our ability to promote our brand;
our reliance on key personnel and our ability to identify, recruit and retain personnel;
our ability to effectively manage our growth;
the potential influence of our focus on a specific public benefit purpose and producing a positive effect for society;
our environmental, sustainability and governance goals, opportunities and initiatives, as well as the standards and expectations of third parties regarding these matters;
our ability to compete effectively with existing competitors and new market entrants;
the impact of adverse economic conditions, including as a result of unfavorable global economic and political conditions, increased interest rates and inflation;

ii


 

the sufficiency of our cash, cash equivalents, marketable securities and availability of credit under our credit facility to meet our liquidity needs;
seasonality; and
the growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. A summary of selected risks associated with our business is set forth at the beginning of the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

iii


 

PART I – FINANCIAL INFORMATION

VITAL FARMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share amounts)

 

 

September 24,
2023

 

 

December 25,
2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,810

 

 

$

12,914

 

Investment securities, available-for-sale

 

 

39,256

 

 

 

65,814

 

Accounts receivable, net

 

 

37,401

 

 

 

38,895

 

Inventories

 

 

38,271

 

 

 

26,849

 

Prepaid expenses and other current assets

 

 

5,026

 

 

 

5,142

 

Total current assets

 

 

176,764

 

 

 

149,614

 

Property, plant and equipment, net

 

 

67,859

 

 

 

59,155

 

Operating lease right-of-use assets

 

 

1,512

 

 

 

1,895

 

Goodwill and other assets

 

 

3,904

 

 

 

4,002

 

Total assets

 

$

250,039

 

 

$

214,666

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

21,970

 

 

$

25,972

 

Accrued liabilities

 

 

26,729

 

 

 

18,477

 

Operating lease liabilities, current

 

 

685

 

 

 

1,208

 

Finance lease liabilities, current

 

 

3,118

 

 

 

1,570

 

Income taxes payable

 

 

456

 

 

 

425

 

Total current liabilities

 

 

52,958

 

 

 

47,652

 

Operating lease liabilities, non-current

 

 

961

 

 

 

892

 

Finance lease liabilities, non-current

 

 

11,120

 

 

 

7,023

 

Other liabilities

 

 

2,125

 

 

 

767

 

Total liabilities

 

$

67,164

 

 

$

56,334

 

Commitments and contingencies (Note 19)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value per share, 310,000,000 shares authorized as of September 24, 2023 and December 25, 2022; 41,574,449 and 40,746,990 shares issued and outstanding as of September 24, 2023 and December 25, 2022, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

161,081

 

 

 

155,716

 

Retained earnings

 

 

22,515

 

 

 

4,159

 

Accumulated other comprehensive loss

 

 

(725

)

 

 

(1,547

)

Total stockholders’ equity

 

$

182,875

 

 

$

158,332

 

Total liabilities and stockholders’ equity

 

$

250,039

 

 

$

214,666

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


 

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

(Unaudited)

 

 

13-Weeks Ended

 

 

39-Weeks Ended

 

 

 

September 24,
2023

 

 

September 25,
2022

 

 

September 24,
2023

 

 

September 25,
2022

 

Net revenue

 

$

110,429

 

 

$

92,040

 

 

$

336,046

 

 

$

251,969

 

Cost of goods sold

 

 

73,764

 

 

 

62,549

 

 

 

218,913

 

 

 

175,838

 

Gross profit

 

 

36,665

 

 

 

29,491

 

 

 

117,133

 

 

 

76,131

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

25,081

 

 

 

20,561

 

 

 

72,935

 

 

 

55,193

 

Shipping and distribution

 

 

6,355

 

 

 

6,906

 

 

 

20,034

 

 

 

22,279

 

Total operating expenses

 

 

31,436

 

 

 

27,467

 

 

 

92,969

 

 

 

77,472

 

Income (loss) from operations

 

 

5,229

 

 

 

2,024

 

 

 

24,164

 

 

 

(1,341

)

Other (expense) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(238

)

 

 

(12

)

 

 

(513

)

 

 

(27

)

Interest income

 

 

707

 

 

 

312

 

 

 

1,497

 

 

 

652

 

Other expense, net

 

 

(642

)

 

 

(148

)

 

 

(2,508

)

 

 

(151

)

Total other (expense) income, net

 

 

(173

)

 

 

152

 

 

 

(1,524

)

 

 

474

 

Net income (loss) before income taxes

 

 

5,056

 

 

 

2,176

 

 

 

22,640

 

 

 

(867

)

Income tax provision (benefit)

 

 

533

 

 

 

1,465

 

 

 

4,284

 

 

 

(232

)

Net income (loss)

 

 

4,523

 

 

 

711

 

 

 

18,356

 

 

 

(635

)

Less: Net loss attributable to
   noncontrolling interests

 

 

 

 

 

(12

)

 

 

 

 

 

(21

)

Net income (loss) attributable to Vital Farms, Inc.
   common stockholders

 

$

4,523

 

 

$

723

 

 

$

18,356

 

 

$

(614

)

Net income (loss) per share attributable to Vital
   Farms, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

0.11

 

 

$

0.02

 

 

$

0.45

 

 

$

(0.02

)

Diluted:

 

$

0.10

 

 

$

0.02

 

 

$

0.42

 

 

$

(0.02

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

41,375,008

 

 

 

40,695,014

 

 

 

41,037,778

 

 

 

40,618,736

 

Diluted:

 

 

43,135,579

 

 

 

42,879,818

 

 

 

43,299,898

 

 

 

40,618,736

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


 

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

(Unaudited)

 

 

13-Weeks Ended

 

 

39-Weeks Ended

 

 

 

September 24,
2023

 

 

September 25,
2022

 

 

September 24,
2023

 

 

September 25,
2022

 

Net income (loss)

 

$

4,523

 

 

$

711

 

 

$

18,356

 

 

$

(635

)

Other comprehensive income (loss), before tax:

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized net holding gain (loss)

 

 

271

 

 

 

(562

)

 

 

916

 

 

 

(2,159

)

Amounts reclassified for realized losses to earnings

 

 

53

 

 

 

96

 

 

 

182

 

 

 

166

 

Available-for-sale debt securities, before tax

 

 

324

 

 

 

(466

)

 

 

1,098

 

 

 

(1,993

)

Other comprehensive income (loss), before tax

 

 

324

 

 

 

(466

)

 

 

1,098

 

 

 

(1,993

)

Income tax (expense) benefit related to items of other comprehensive income (loss)

 

 

(85

)

 

 

110

 

 

 

(276

)

 

 

471

 

Other comprehensive income (loss), net of tax

 

 

239

 

 

 

(356

)

 

 

822

 

 

 

(1,522

)

Comprehensive income (loss)

 

 

4,762

 

 

 

355

 

 

 

19,178

 

 

 

(2,157

)

Less: Comprehensive loss attributable to noncontrolling interests

 

 

 

 

 

(12

)

 

 

 

 

 

(21

)

Comprehensive income (loss) attributable to Vital Farms, Inc. common stockholders

 

$

4,762

 

 

$

367

 

 

$

19,178

 

 

$

(2,136

)

See accompanying notes to the unaudited condensed consolidated financial statements.

3


 

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share amounts)

(Unaudited)

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Total
Stockholders’
Equity

 

Balances as of December 25, 2022

 

 

40,746,990

 

 

$

4

 

 

$

155,716

 

 

$

4,159

 

 

$

(1,547

)

 

$

158,332

 

Vesting of restricted stock units

 

 

127,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for tax liability on vested restricted stock units

 

 

(35,535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,627

 

 

 

 

 

 

 

 

 

1,627

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

421

 

 

 

421

 

Net income

 

 

 

 

 

 

 

 

 

 

 

7,150

 

 

 

 

 

 

7,150

 

Balances as of March 26, 2023

 

 

40,839,050

 

 

$

4

 

 

$

157,343

 

 

$

11,309

 

 

$

(1,126

)

 

$

167,530

 

Exercise of stock options

 

 

307,500

 

 

 

 

 

 

110

 

 

 

 

 

 

 

 

 

110

 

Vesting of restricted stock units

 

 

79,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for tax liability on vested restricted stock units

 

 

(3,924

)

 

 

 

 

 

(636

)

 

 

 

 

 

 

 

 

(636

)

Shares issued under employee stock purchase plan

 

 

11,011

 

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

135

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,060

 

 

 

 

 

 

 

 

 

2,060

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

162

 

 

 

162

 

Net income

 

 

 

 

 

 

 

 

 

 

 

6,683

 

 

 

 

 

 

6,683

 

Balances as of June 25, 2023

 

 

41,232,667

 

 

$

4

 

 

$

159,012

 

 

$

17,992

 

 

$

(964

)

 

$

176,044

 

Exercise of stock options

 

 

335,000

 

 

 

 

 

 

286

 

 

 

 

 

 

 

 

 

286

 

Vesting of restricted stock units

 

 

9,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for tax liability on vested restricted stock units

 

 

(2,743

)

 

 

 

 

 

(32

)

 

 

 

 

 

 

 

 

(32

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,815

 

 

 

 

 

 

 

 

 

1,815

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

239

 

 

 

239

 

Net income

 

 

 

 

 

 

 

 

 

 

 

4,523

 

 

 

 

 

 

4,523

 

Balances as of September 24, 2023

 

 

41,574,449

 

 

$

4

 

 

$

161,081

 

 

$

22,515

 

 

$

(725

)

 

$

182,875

 

See accompanying notes to the unaudited condensed consolidated financial statements.

4


 

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share amounts)

(Unaudited)

 

 

Redeemable
Noncontrolling
Interest

 

 

Common
Stock

 

 

 

 

 

 

 

 

 

 

 

Total
Stockholders’
Equity
Attributable

 

 

 

 

 

 

 

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
Loss

 

 

to Vital
Farms, Inc.
Stockholders

 

 

Noncontrolling
Interests

 

 

Total
Stockholders’
Equity

 

Balances as of December 26, 2021

 

$

175

 

 

 

40,493,969

 

 

$

5

 

 

$

149,000

 

 

$

2,746

 

 

$

(281

)

 

$

151,470

 

 

$

115

 

 

$

151,585

 

Exercise of stock options

 

 

 

 

 

102,328

 

 

 

 

 

 

254

 

 

 

 

 

 

 

 

 

254

 

 

 

 

 

 

254

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

1,296

 

 

 

 

 

 

 

 

 

1,296

 

 

 

 

 

 

1,296

 

Net loss attributable to noncontrolling interests – stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

162

 

 

 

 

 

 

162

 

 

 

(164

)

 

 

(2

)

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(783

)

 

 

(783

)

 

 

 

 

 

(783

)

Net loss attributable to Vital Farms, Inc. stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,536

)

 

 

 

 

 

(1,536

)

 

 

 

 

 

(1,536

)

Balances as of March 27, 2022

 

$

175

 

 

 

40,596,297

 

 

$

5

 

 

$

150,550

 

 

$

1,372

 

 

$

(1,064

)

 

$

150,863

 

 

$

(49

)

 

$

150,814

 

Exercise of stock options

 

 

 

 

 

35,573

 

 

 

 

 

 

143

 

 

 

 

 

 

 

 

 

143

 

 

 

 

 

 

143

 

Vesting of restricted stock units

 

 

 

 

 

47,544

 

 

 

 

 

 

(9

)

 

 

 

 

 

 

 

 

(