Beyond Meat, Inc. — FY 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing; the supplied filing text does not provide a complete set of Q4-only financial results.
Business context and key financial results
Beyond Meat sells plant-based meat products across beef, pork and poultry platforms. At year-end, its products were available in approximately 133,000 retail and foodservice outlets across more than 65 countries. The company reported one operating and reportable segment.
| Metric | FY 2023 | FY 2022 |
|---|---|---|
| Net revenue | $343.4 million | $418.9 million |
| Gross profit (loss) | $(82.7) million | $(23.7) million |
| Gross margin | (24.1)% | (5.7)% |
| Operating loss | $(341.9) million | $(342.8) million |
| Net loss | $(338.1) million | $(366.1) million |
| Adjusted EBITDA (non-GAAP) | $(269.2) million | $(278.0) million |
| Net cash used in operating activities | $(107.8) million | $(320.2) million |
Cash, cash equivalents and restricted cash totaled $205.9 million at year-end, including $190.5 million unrestricted and $15.4 million restricted. Inventory was $130.3 million, down from $235.7 million. Current assets were $372.8 million and current liabilities $74.4 million. The company had $1.15 billion principal amount of 0% convertible senior notes due 2027, carried at $1.138 billion net of unamortized issuance costs. Total contractual obligations were reported as $1.311 billion, including leases and purchase commitments.
Material changes versus the prior year
- Revenue fell 18.0%, reflecting an 8.1% decline in volume and a 10.8% decrease in net revenue per pound. U.S. revenue declined 32.3%; international revenue increased 19.7%.
- U.S. retail revenue fell 33.9% and U.S. foodservice fell 26.9%. International foodservice increased 40.3%; international retail increased 1.3%.
- Gross loss widened by $58.9 million. The negative gross margin reflected lower selling price per pound, lower volume, higher cost per pound and elevated inventory provisions.
- Operating expenses declined, including lower R&D and SG&A, but this did not restore gross profitability. Net loss narrowed year over year, while operating loss was broadly similar.
- Operating cash use improved substantially, aided in part by working-capital changes, including a $106.1 million cash benefit from lower inventory. Investing cash use declined to $9.5 million from $87.5 million.
Outlook, management commentary and notable items
- Management cited prolonged weakness in plant-based meat demand, competitive pressure, premium pricing versus animal protein, inflation and higher interest rates. It warned these factors may continue to weigh on sales, margins and cash flow.
- The November 2023 Global Operations Review prioritizes gross-margin expansion and cash generation. Actions include narrowing commercial focus, inventory reduction, pricing changes, capacity and real-estate optimization, and continued review of China operations. The company discontinued Beyond Meat Jerky.
- The review generated $84.5 million of non-cash charges in 2023, including $38.0 million for excess and obsolete inventory, $23.9 million of accelerated depreciation, a $5.0 million prepaid raw-material write-off and $16.6 million of fixed-asset sale/write-down losses. Inventory write-offs for the full year were $57.4 million.
- A 2023 workforce reduction affected approximately 65 employees, about 8% of total global staff. Management estimated $9.5–$10.5 million of 2024 cash operating-expense savings, plus $1.0–$2.0 million of non-cash savings. It expects 2024 R&D and SG&A expenses to decline from 2023 levels.
- Management said existing cash balances and anticipated operating cash flow should fund foreseeable needs for at least 12 months, but anticipates seeking additional capital in 2024. The $200 million ATM equity program had not been used as of year-end; any issuance could dilute shareholders. Management did not provide a clear numerical revenue or profitability forecast in the supplied text.
- The company met its stated cash-flow-positive target in Q3 2023, but attributed that result to transitory factors and did not sustain free-cash-flow-positive operations in Q4. It cautioned that sustained positive cash flow depends on demand, cost reductions, positive gross margins and working-capital execution.
- A change in estimated useful lives for certain equipment reduced 2023 depreciation expense by $21.0 million and net loss per share by $0.33. This accounting estimate change improved reported results but did not represent a cash inflow.
- Notable legal matters include a Canadian co-manufacturer claim seeking CAD 129.8 million, a securities class action and related derivative litigation, consumer class actions over protein and ingredient claims, and French litigation concerning product naming and trademarks. Management said it could not estimate reasonably possible losses beyond accrued amounts for certain proceedings.
- Beyond IV Burger and Beef products were scheduled for U.S. retail launch in spring 2024; management described expected nutritional improvements versus the prior Burger formulation. The filing cautions that consumer acceptance and commercial success are uncertain.
Most important facts for investors to verify
- Whether sales volumes and net revenue per pound stabilize, especially in U.S. retail and foodservice, and whether international growth can continue.
- Whether gross margin improves after inventory charges, underutilized-capacity costs and other Global Operations Review items; distinguish recurring performance from one-time and non-cash effects.
- Whether cash burn remains manageable and whether management raises capital in 2024, including potential dilution from the ATM program.
- The notes’ $1.15 billion principal repayment/conversion exposure in 2027, lease commitments and the company’s ability to meet obligations from available liquidity.
- Execution and costs of product discontinuations, facility and real-estate optimization, and the China review; confirm realized savings against management’s estimates.
- Developments and potential financial exposure in the pending litigation, and regulatory changes affecting plant-based product names and marketing.
- Key accounting estimates: the useful-life revision that reduced depreciation and the demand assumptions underlying inventory provisions. The auditor identified excess-and-obsolete inventory estimates as a critical audit matter.
Audit and controls: Deloitte issued unqualified opinions on the consolidated financial statements and internal control over financial reporting as of December 31, 2023. Management also concluded disclosure controls and internal controls were effective.