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Category: Tattooed Chef (TTCF)
Date: 25 January 2021 Stock price of Tattooed Chef : $24.54 We take a look at the 3rd quarter 2020 earnings report of Tattooed Chef (TTCF) a leading plant-based food company offering a broad portfolio of innovative plant-based food products that taste great and are sustainably sourced. For the 3rd quarter 2020 the group reported revenues of $41 million and a net loss of -$3.1 million
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Sam Galletti, President and CEO of Tattooed Chef - Our third quarter revenue marks the highest level in company history. We are pleased to achieve such a milestone in our last quarter as a private company. 2020 has been a monumental year for us, most notably with the completion of our merger with FMCI and Tattooed Chef becoming a public company. "
More About Tattooed Chef
Tattooed Chef is a leading plant-based food company offering a broad portfolio of innovative plant-based food products that taste great and are sustainably sourced. Tattooed Chef’s signature products include ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, and cauliflower pizza crusts, which are available in the frozen food sections of leading national retail food stores across the United States. Understanding consumer lifestyle and food trends, and a commitment to innovation, allows Tattooed Chef to continuously introduce new products. Tattooed Chef provides great-tasting, approachable, and innovative products not only to the growing group of consumers who seek to adopt a plant-based lifestyle, but to any of the “People Who Give a Crop”.
Overview of Tattooed Chef's 3rd quarter 2020 earnings report
Financial Highlights for the Third Quarter of 2020 Compared to Third Quarter of 2019
Third Quarter 2020 Results
Revenue increased by $16.2 million, or 65.3%, to $41.0 million for the three months ended September 30, 2020 compared to $24.8 million for the three months ended September 30, 2019. The revenue increase was primarily driven by a $16.8 million increase in revenue of “Tattooed Chef” branded products, offset by a $0.1 million decrease in revenue of private label products and a $0.5 million decrease in legacy fish and commodity vegetable products for select private label retailers. The increase in Tattooed Chef branded products resulted from expansion in the number of U.S. distribution points, as well as increased volume at existing retail customers with our current portfolio of products and new product introductions including acai bowls, spring vegetable blends, buffalo cauliflower, and other value-added riced cauliflower meals.
Gross profit was $3.8 million for the three months ended September 30, 2020 compared to $4.5 million for the three months ended September 30, 2019. Gross margin in the three months ended September 30, 2020 was 9.2% compared to 18.2% in the three months ended September 30, 2019. The decline in both gross profit and gross margin was primarily due to a $1.4 million program with one of our top club customers to promote our Organic Acai Bowls. No such program occurred in the prior year period. This successful promotion gave the Tattooed Chef brand exposure in 450 stores for an eight-week period across the entire U.S. and resulted in increased sales and brand awareness.
Operating expenses increased $4.8 million to $7.2 million for the three months ended September 30, 2020 compared to $2.4 million for the three months ended September 30, 2019. The increase in operating expenses was primarily due to $4.6 million in nonrecurring expenses related to the merger with FMCI, as well as a $0.6 million increase in sales and marketing expenses resulting from a shift in focus to building the Tattooed Chef brand and initiatives to accelerate sales to retail grocery store outlets. As a percentage of revenue, total operating expenses were 17.5% for the three months ended September 30, 2020, compared to 9.5% for the prior year period. Excluding the $4.6 million of transaction expenses, operating expenses for the three months ended September 30, 2020 would have been $2.6 million, slightly higher than the prior year period, or 6.3% of sales.
Adjusted EBITDA of $1.5 million, or 3.6% of net revenue, for the three months ended September 30, 2020 decreased $0.9 million compared to $2.3 million, or 9.4% of net revenue, in the three months ended September 30, 2019. The decrease in Adjusted EBITDA was primarily due to the lower gross profit from the promotional program explained above. Adjusted EBITDA for the third quarter of 2020 was also lower sequentially, compared to $2.0 million in the second quarter of 2020 due to increased growth in sales from the products manufactured by our facilities in Italy and timing of delivery to key customers
- Revenue was a record $41.0 million, a 65% increase compared to $24.8 million in the prior year period; Tattooed Chef branded product revenue was a record $22.6 million, an increase of 288% compared to $5.8 million in the prior year period;
- Net loss attributable to common stockholders was $3.3 million compared to a net income of $1.8 million in the prior year period due to $4.6 million of non-recurring transaction costs; and
- Adjusted EBITDA was $1.5 million, or 3.6% of net revenue, compared to $2.3 million, or 9.4% of net revenue, in the prior year period.
Third Quarter 2020 Results
Revenue increased by $16.2 million, or 65.3%, to $41.0 million for the three months ended September 30, 2020 compared to $24.8 million for the three months ended September 30, 2019. The revenue increase was primarily driven by a $16.8 million increase in revenue of “Tattooed Chef” branded products, offset by a $0.1 million decrease in revenue of private label products and a $0.5 million decrease in legacy fish and commodity vegetable products for select private label retailers. The increase in Tattooed Chef branded products resulted from expansion in the number of U.S. distribution points, as well as increased volume at existing retail customers with our current portfolio of products and new product introductions including acai bowls, spring vegetable blends, buffalo cauliflower, and other value-added riced cauliflower meals.
Gross profit was $3.8 million for the three months ended September 30, 2020 compared to $4.5 million for the three months ended September 30, 2019. Gross margin in the three months ended September 30, 2020 was 9.2% compared to 18.2% in the three months ended September 30, 2019. The decline in both gross profit and gross margin was primarily due to a $1.4 million program with one of our top club customers to promote our Organic Acai Bowls. No such program occurred in the prior year period. This successful promotion gave the Tattooed Chef brand exposure in 450 stores for an eight-week period across the entire U.S. and resulted in increased sales and brand awareness.
Operating expenses increased $4.8 million to $7.2 million for the three months ended September 30, 2020 compared to $2.4 million for the three months ended September 30, 2019. The increase in operating expenses was primarily due to $4.6 million in nonrecurring expenses related to the merger with FMCI, as well as a $0.6 million increase in sales and marketing expenses resulting from a shift in focus to building the Tattooed Chef brand and initiatives to accelerate sales to retail grocery store outlets. As a percentage of revenue, total operating expenses were 17.5% for the three months ended September 30, 2020, compared to 9.5% for the prior year period. Excluding the $4.6 million of transaction expenses, operating expenses for the three months ended September 30, 2020 would have been $2.6 million, slightly higher than the prior year period, or 6.3% of sales.
Adjusted EBITDA of $1.5 million, or 3.6% of net revenue, for the three months ended September 30, 2020 decreased $0.9 million compared to $2.3 million, or 9.4% of net revenue, in the three months ended September 30, 2019. The decrease in Adjusted EBITDA was primarily due to the lower gross profit from the promotional program explained above. Adjusted EBITDA for the third quarter of 2020 was also lower sequentially, compared to $2.0 million in the second quarter of 2020 due to increased growth in sales from the products manufactured by our facilities in Italy and timing of delivery to key customers
Tattooed Chef management commentary on their 3rd quarter 2020 earnings report
PARAMOUNT, Calif., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Tattooed Chef, Inc. (Nasdaq: TTCF, TTCFW) (“Tattooed Chef” or the “Company”), a leading plant-based frozen food company with a broad portfolio of innovative products, today announced financial results for the three and nine months ended September 30, 2020.
Third quarter 2020 financial results for Tattooed Chef reflect the three months ended September 30, 2020, prior to the closing of the recent business combination (the “Business Combination”) between Ittella International and Forum Merger II Corporation (FMCI) which occurred on October 15, 2020. In connection with the closing of the Business Combination, the Company changed its name to Tattooed Chef, Inc
Third quarter 2020 financial results for Tattooed Chef reflect the three months ended September 30, 2020, prior to the closing of the recent business combination (the “Business Combination”) between Ittella International and Forum Merger II Corporation (FMCI) which occurred on October 15, 2020. In connection with the closing of the Business Combination, the Company changed its name to Tattooed Chef, Inc
Sam Galletti, President and CEO of Tattooed Chef said, “Our third quarter revenue marks the highest level in company history. We are pleased to achieve such a milestone in our last quarter as a private company. 2020 has been a monumental year for us, most notably with the completion of our merger with FMCI and Tattooed Chef becoming a public company. We expect to continue to drive top-line growth based on the ongoing success with our key club customers, expansion in new and existing retail customers, and our direct-to-consumer e-commerce site. We are pleased to have completed the merger and are more determined than ever to capitalize on the tremendous growth opportunities we have.”
Sarah Galletti, Creative Director and “The Tattooed Chef”, added, “There is so much to be excited about at the Tattooed Chef. Our branded product sales increased to a record $22.6 million in the third quarter and surpassed private label sales for the third consecutive quarter. Since launching our e-commerce site two weeks ago, the reaction in the marketplace has been overwhelmingly positive and we are thrilled with the initial success. Our brand awareness is growing, our distribution is expanding, our innovation pipeline is robust, and we are confident that we can and will continue to build off the excellent foundation we have established and drive significant growth in the years to come.
Balance Sheet and Cash Flow
As of September 30, 2020, Tattooed Chef had cash and cash equivalents of $3.2 million and an outstanding balance on the line of credit of $19.7 million. Following the completion of the Business Combination on October 15, 2020, the Company had cash and cash equivalents of approximately $95 million and an outstanding balance on the line of credit of approximately $5 million.
Sarah Galletti, Creative Director and “The Tattooed Chef”, added, “There is so much to be excited about at the Tattooed Chef. Our branded product sales increased to a record $22.6 million in the third quarter and surpassed private label sales for the third consecutive quarter. Since launching our e-commerce site two weeks ago, the reaction in the marketplace has been overwhelmingly positive and we are thrilled with the initial success. Our brand awareness is growing, our distribution is expanding, our innovation pipeline is robust, and we are confident that we can and will continue to build off the excellent foundation we have established and drive significant growth in the years to come.
Balance Sheet and Cash Flow
As of September 30, 2020, Tattooed Chef had cash and cash equivalents of $3.2 million and an outstanding balance on the line of credit of $19.7 million. Following the completion of the Business Combination on October 15, 2020, the Company had cash and cash equivalents of approximately $95 million and an outstanding balance on the line of credit of approximately $5 million.
Tattooed Chef (TTCF) stock price chart over the last 5 years
The image below shows the stock price history of Intel over the last 5 years. And its been a good time for Tattooed Chef stockholders with the stock increasing sharply by 156.4% over the last 5 years.
The stock of Tattooed Chef is trading at closer to its 52 week high than it is to itw 52 week low which is a clear indication that the short term sentiment and momentum of Tattooed Chef's stock is positive at this point in time.
The stock of Tattooed Chef is trading at closer to its 52 week high than it is to itw 52 week low which is a clear indication that the short term sentiment and momentum of Tattooed Chef's stock is positive at this point in time.
Latest stock valuation of Tattooed Chef
So what is Tattooed Chef stock worth based on their 3rd quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Tattooed Chef at $4.50 a stock.
We therefore believe the stock of Intel is undervalued at its current price of $24.54
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $4.50, thus a good entry point into Intel would be at $4 or below.
Since the stock of Tattooed Chef is trading at well above our suggested entry point we rate the stock of Tattooed Chef as a sell
We therefore believe the stock of Intel is undervalued at its current price of $24.54
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $4.50, thus a good entry point into Intel would be at $4 or below.
Since the stock of Tattooed Chef is trading at well above our suggested entry point we rate the stock of Tattooed Chef as a sell
Next earnings release of Tattooed Chef
It is expected that Tattooed Chef will release their 4th quarter 2021 earnings report in early February 2021
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