Record First Quarter Net Revenue of $147.9 million, up 24.1% versus Prior Year PeriodRaises Fiscal Year 2024 OutlookAnnounces Plans for New State-of-the-Art Egg Washing and Packing Facility AUSTIN, Texas, May 09, 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 first quarter ended March 31, 2024. Financial highlights for the first quarter ended March 31, 2024, compared to the first quarter ended March 26, 2023, include: Net Revenue increased 24.1% to a record $147.9 million, compared to $119.2 million Gross Margin expanded 400 basis points to 39.8%, compared to 35.8% Net Income of $19.0 million, compared to $7.2 million Net Income per Diluted Share of $0.43, compared to $0.16 Adjusted EBITDA of $29.1 million, compared to $13.9 million1 "2024 is off to a very strong start with record net revenue in the first quarter of $147.9 million, reflecting net revenue growth of 24.1%. Thanks to our stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, crew members, and stockholders, we are able to succeed in our mission of bringing ethical food to the table. As a result of the momentum we have seen so far this year and our improved visibility into the rest of the year, we are raising our fiscal year 2024 outlook. These first quarter results demonstrate our ability to expand our commercial presence as well as the Vital Farms brand's growing resonance with consumers. This leads to growing demand for our products, and I am thrilled to announce that we have signed an agreement to acquire land for a new, state-of-the-art egg washing and packing facility in southern Indiana. This strategic investment is part of our commitment to expansion and innovation and is an integral part of our journey to achieve at least $1 billion in annual net revenue by 2027," said Russell Diez-Canseco, Vital Farms' President and CEO. 1 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. For the 13 Weeks Ended March 31, 2024 Net revenue increased 24.1% to $147.9 million in the first quarter of 2024, compared to $119.2 million in the first quarter of 2023. Net revenue growth in the first quarter of 2024 was driven by price/mix benefits and volume gains of 18.4%. The volume growth was driven by velocity increases, expanded item offerings, and store distribution gains at new and existing retail customers. Gross profit was $58.9 million, or 39.8% of net revenue, in the first quarter of 2024, compared to $42.7 million, or 35.8% of net revenue, in the prior year quarter. Gross profit growth was primarily driven by price/mix benefit, enhanced operational efficiencies, and benefits of scale. Lower costs of commodities and diesel also contributed to the margin favorability. This was partially offset by a return to a normal promotional rate, as well as increased investments in crew members at Egg Central Station. Income from operations in the first quarter of 2024 was $24.2 million, compared to income from operations of $10.9 million in the first quarter of 2023. The change in income from operations was primarily attributable to higher sales and gross profit, partially offset by higher marketing costs to support brand development and increased employee-related expenses as Vital Farms continues to scale its world-class organization. Net income was $19.0 million in the first quarter of 2024, compared to net income of $7.2 million in the prior year quarter. The increase in net income was primarily due to higher sales and improved gross profit performance, partially offset by increased marketing spend and higher employee-related expenses. Net income per diluted share was $0.43 for the first quarter of 2024, compared to net income per diluted share of $0.16 in the prior year quarter. Adjusted EBITDA was $29.1 million, or 19.7% of net revenue, in the first quarter of 2024, compared to $13.9 million, or 11.6% of net revenue, in the first quarter of 2023. The change in Adjusted EBITDA was primarily due to higher sales and improved gross profit, partially offset by ongoing investment in increased brand awareness driven by higher marketing spend, as well as increased pay for crew members at Egg Central Station as Vital Farms scales its 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 $137.5 million as of March 31, 2024, and the company had no outstanding debt. Net cash provided by operating activities was $23.9 million for the 13-week period ended March 31, 2024, compared to net cash provided by operating activities of $5.4 million for the 13-week period ended March 26, 2023. Capital expenditures totaled $1.3 million in the 13-week period ended March 31, 2024, compared to $1.9 million in the 13-week period ended March 26, 2023. Fiscal 2024 Outlook Thilo Wrede, Vital Farms' Chief Financial Officer, commented: "After a very strong first quarter, I am pleased to update our guidance for 2024. Our outlook reflects increased confidence in our performance for the remainder of the year, firmer expectations for a more favorable commodity outlook, and the successful execution of our marketing reinvestment strategy. We remain committed to increasing brand awareness, deepening loyalty with consumers, and driving household penetration through our focused efforts on marketing and retail expansion." For the fiscal year 2024, management now expects: Net revenue of at least $575 million, which represents at least 22% growth over fiscal year 2023, compared to the previous expectation of at least $552 million, or at least 17% growth. Adjusted EBITDA of at least $70 million, which represents at least 45% growth over fiscal year 2023, compared to the previous expectation of at least $57 million, or at least 18% growth. Capital expenditures in the range of $35 million to $45 million, consistent with the previous expectation. Vital Farms will continue to evaluate its capital allocation priorities and will provide updates in future earnings reports as necessary. Vital Farms' guidance assumes that there are no additional significant disruptions to the supply chain or its customers or consumers, including any issues from adverse macroeconomic factors. Vital Farms cannot provide a reconciliation between its forecasted Adjusted EBITDA and net income and Adjusted EBITDA Margin and net income margin, their most directly comparable GAAP measures, without unreasonable effort due to the unavailability of reliable estimates for income taxes, among other items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results. New State-of-the-Art Egg Washing and Packing Facility In April 2024, Vital Farms signed an agreement to acquire land for its planned new, cutting-edge egg washing and packing facility in southern Indiana, a testament to the company's commitment to expansion and innovation. Groundbreaking for the facility, which will be modeled after the Egg Central Station facility in Springfield, Missouri, is expected in 2025. The project is expected to involve collaboration with over 165 new family farmers, who would join the more than 300 existing farmers who have made Vital Farms the leading U.S. brand of pasture-raised eggs by retail dollar sales. The facility is expected to become operational in late 2026, supporting the company's goal of $1 billion in total annual net revenue by 2027. Vital Farms plans to incorporate Egg Central Station's high-quality design principles at this new facility, emphasizing energy efficiency and environmental design, together with advanced automation technology. The existing Egg Central Station facility in Springfield will remain integral to the Vital Farms supply chain during and after the development of this new facility, ensuring continued ability to meet growing demand and maintain high levels of quality, consistency, and customer satisfaction. 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 Q1 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 over 300 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 our new egg washing and packing facility, the effect of such facility on our future revenue, future growth of our 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, and to attract and retain its personnel, farmers, suppliers, distributors, and co-manufacturers; 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; 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 impact of Vital Farms' implementation of a new enterprise resource planning system; 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; 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 anticipates filing on May 9, 2024, its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which Vital Farms filed on March 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 Investors:Anthony VITAL FARMS, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands, except share amounts)(Unaudited)     13-Weeks Ended       March 31,2024     March 26,2023   Net revenue   $ 147,929     $ 119,172   Cost of goods sold     89,032       76,504   Gross profit     58,897       42,668   Operating expenses:             Selling, general and administrative     27,132       23,946   Shipping and distribution     7,596       7,826   Total operating expenses     34,728       31,772   Income from operations     24,169       10,896   Other income (expense), net: