美國
證券交易委員會
華盛頓特區 20549
表格
（標記一）
截至季度結束日期的財務報告
或者
過渡期從______________到______________
委託文件編號：001-39866
(根據其章程規定的註冊人準確名稱)
（國家或其他管轄區的 公司成立或組織） |
（IRS僱主 |
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，（主要行政辦公地址） |
(郵政編碼) |
(
(註冊人電話號碼，包括區號)
根據該法第12（b）條註冊的證券：
每一類的名稱 |
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交易 符號: |
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在其上註冊的交易所的名稱 |
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請在以下複選框中打勾，指示註冊人：(1)在前12個月(或註冊人被要求提交這些報告的更短期間內)已經提交了1934年證券交易法第13或15(d)條規定需要提交的所有報告；以及(2)在過去的90天內一直受到了此類文件提交要求的限制。
請在以下複選框中打勾，指示註冊人是否已經電子提交了根據Regulation S-T規則405條(本章節的§232.405條)需要提交的所有互動數據文件在過去的12個月內(或註冊人被要求提交這些文件的更短期間內)。
請用複選標記指示註冊人是大型加速申報人、加速申報人、非加速申報人 a 或者是較小的報告公司，或是新興成長型公司。請參閱《交易所法規》第120億.2條中對「大型加速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速報告人 |
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非加速文件提交人 |
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較小的報告公司 |
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新興成長公司 |
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如果是新興成長型公司，請在複選框中打勾，以確定註冊人是否選擇不使用在1934年證券交易法第13(a)條項下提供的任何新的或修訂的財務會計準準則的延長過渡期。
勾選表示註冊人是否爲外殼公司（根據證券交易法規則120億.2規定）。是☐ No
截至2024年11月4日，登記人擁有的
目錄
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ii |
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第I部分 |
1 |
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項目1。 |
基本報表(未經審計) |
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1 |
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2 |
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3 |
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4 |
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6 |
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7 |
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事項二 |
22 |
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第3項。 |
35 |
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事項4。 |
35 |
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第二部分 |
36 |
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項目1。 |
36 |
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項目1A。 |
36 |
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事項二 |
66 |
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第3項。 |
66 |
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事項4。 |
66 |
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項目5。 |
66 |
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項目6。 |
67 |
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68 |
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i
關於FO的特別說明前瞻性聲明
本季度報告表格10-Q（以下簡稱"季度報告"）中包含關於我們和我們所在行業的「前瞻性陳述」（根據1933年證券法修正案第27A條和1934年證券交易法修正案第21E條的定義），涉及重大風險和不確定性。本季度報告中除了歷史事實陳述之外的所有陳述，包括關於我們未來經營業績或財務狀況、業務策略、計劃以及管理層對未來經營的目標等陳述，均屬前瞻性陳述。在某些情況下，您可以識別前瞻性陳述，因爲它們包含諸如"預期"、"相信"、"考慮"、"繼續"、"可能"、"估計"、"期望"、"打算"、"可能"、"規劃"、"潛在"、"預測"、"計劃"、"應當"、"目標"、"將會"或"將"等詞語，或這些詞語的否定形式或其他類似術語或表達。這些前瞻性陳述包括但不限於以下內容：
ii
您不應將前瞻性聲明視爲未來事件的預測。我們在本季度報告中包含的前瞻性聲明主要基於我們對未來事件和趨勢的當前期望和預測，我們認爲這些事件和趨勢可能會影響到我們的業務，財務狀況和運營結果。這些前瞻性聲明描述的事件的結果受到風險、不確定性和本季度報告中「風險因素」部分以及其他地方描述的其他因素的影響。我們業務相關的部分風險概要列在「風險因素」部分開頭。此外，我們運營在一個競爭激烈且快速變化的環境中。新的風險和不確定性不時出現，我們無法預測所有可能影響到本季度報告中包含的前瞻性聲明的風險和不確定性。前瞻性聲明中反映的結果、事件和情況可能無法實現或發生，實際結果、事件或情況可能與前瞻性聲明中描述的有實質性差異。
此外，我們的陳述「我們相信」等陳述反映了我們對相關主題的信仰和意見。這些陳述基於我們截至本季度報告日期所掌握的信息。雖然我們認爲這些信息爲這些陳述提供了合理的依據，但該信息可能有限或不完整。我們的陳述不應被視爲表明我們對所有相關信息進行了詳盡的調查或審查。這些陳述本質上具有不確定性，投資者應謹慎使用這些陳述，不要過度依賴這些陳述。
本季度報告中所做的前瞻性聲明僅與陳述時的事件有關。我們不承擔更新本季度報告中所做的任何前瞻性聲明以反映本季度報告日期之後的事件或情況，或反映新信息或出現意外事件的要求，除非法律規定許可。我們可能無法實際實現、達成或實現我們在前瞻性聲明中披露的計劃、意圖或期望，您應該不過度依賴我們的前瞻性聲明。我們的前瞻性聲明沒有反映任何未來收購、合併、處置、合資或投資的潛在影響。
iii
第一部分 - 財務信息財務信息
要緊農場股份有限公司。
壓縮的綜合資產負債表TED資產負債表
（金額以千計，股票金額除外）
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2023年9月29日 |
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12月31日, |
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（未經審計） |
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資產 |
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流動資產： |
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現金及現金等價物 |
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$ |
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$ |
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投資證券，可供出售 |
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應收賬款，減去2024年4月30日和2024年1月31日的信用損失準備，分別爲 |
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存貨 |
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預付費用和其他流動資產，扣除$的信用損失準備 |
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應收所得稅款項 |
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總流動資產 |
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物業、廠房和設備，淨值 |
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經營租賃權使用資產 |
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商譽和其他資產 |
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資產總額 |
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$ |
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$ |
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負債和股東權益 |
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流動負債: |
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應付賬款 |
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$ |
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$ |
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應計負債 |
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經營租賃負債，流動負債 |
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融資租賃負債，流動 |
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應付所得稅 |
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流動負債合計 |
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非流動經營租賃負債 |
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金融租賃負債，非流動負債 |
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其他負債 |
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負債合計 |
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$ |
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$ |
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股東權益: |
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優先股，$0.0001 |
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普通股，每股面值爲 $0.0001； |
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額外實收資本 |
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保留盈餘 |
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累計其他綜合損失 |
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( |
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股東權益總額 |
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$ |
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$ |
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負債和股東權益總額 |
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$ |
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$ |
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請查看附註的未經審計的簡明合併財務報表。
1
要緊農場股份有限公司。
簡明合併財務報表收入表
（除股份和每股數據外，單位：千元）
（未經審計）
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13 周已結束 |
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39 周已結束 |
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9月29日， |
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9月24日 |
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9月29日， |
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9月24日 |
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淨收入 |
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$ |
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$ |
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$ |
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$ |
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售出商品的成本 |
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毛利潤 |
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運營費用： |
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銷售、一般和管理 |
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運輸和配送 |
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運營費用總額 |
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運營收入 |
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其他收入（支出），淨額： |
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利息支出 |
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利息收入 |
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其他費用，淨額 |
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其他收入（支出）總額，淨額 |
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所得稅前淨收入 |
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所得稅條款 |
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淨收入 |
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每股淨收益： |
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基本： |
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$ |
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$ |
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$ |
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$ |
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稀釋： |
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$ |
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$ |
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$ |
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已發行普通股的加權平均值： |
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基本： |
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稀釋： |
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請查看附註的未經審計的簡明合併財務報表。
2
要緊農場股份有限公司。
綜合收益的壓縮綜合財務狀況表綜合收益的情況
（以千爲單位）
（未經審計）
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結束了13周 |
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39週年結束 |
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2023年9月29日 |
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截至9月24日 |
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2023年9月29日 |
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截至9月24日 |
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淨利潤 |
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$ |
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$ |
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$ |
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$ |
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其他綜合收益，在稅前： |
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可供出售的債務證券： |
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未實現的淨持有收益 |
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重新分類爲已實現收益(虧損)的金額 |
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待售債務證券，稅前 |
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其他綜合收益，在稅前 |
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1.3 |
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其他綜合收益，扣除稅後 |
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綜合收益 |
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$ |
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$ |
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$ |
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$ |
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請查看附註的未經審計的簡明合併財務報表。
3
要緊農場股份有限公司。
簡明合併報表綜合損益表股東權益變動表
(以千爲單位，除每股金額外)
（未經審計）
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普通股 |
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股份 |
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金額 |
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額外的 |
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留存收益 |
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累積的 |
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總計 |
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截至2023年12月31日的餘額 |
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$ |
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$ |
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$ |
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$ |
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行使股票期權 |
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— |
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— |
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受限制股票單位解除限制 |
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— |
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— |
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— |
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扣除稅務責任的股票留作解除限制的股票單位 |
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股票補償費用 |
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— |
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— |
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— |
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其他綜合收益，淨額 |
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— |
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淨利潤 |
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— |
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截至2024年3月31日的餘額 |
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$ |
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$ |
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$ |
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$ |
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行使股票期權 |
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— |
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— |
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受限制股票單位解除限制 |
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股份被暫扣用於支付已獲限制性股票單位的稅務責任 |
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— |
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員工股票購買計劃下發行的股票 |
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股票補償費用 |
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— |
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其他綜合收益，淨額 |
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— |
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淨利潤 |
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— |
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截至2024年6月30日的餘額 |
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$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
|
|||||
行使股票期權 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
受限制股票單位解除限制 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
股份被扣留，用於支付已獲限制性股票單位的稅務責任 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
股票補償費用 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益，淨額 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
截至2024年9月29日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
請查看附註的未經審計的簡明合併財務報表。
4
要緊農場股份有限公司。
股東權益的簡明合併報表
(以千爲單位，除每股金額外)
（未經審計）
|
|
普通股 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
額外的 |
|
|
留存收益 |
|
|
累積的 |
|
|
總計 |
|
||||||
2022年12月25日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
受限制股票單位解除限制 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
股份被用於支付已獲授的限制性股票單位的稅務責任 |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
股票補償費用 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益，淨額 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
2023年3月26日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
行使股票期權 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|||
受限制股票單位解除限制 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
已扣留股份以支付授予的受限制股票單位的稅款 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
員工股票購買計劃下發行的股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票補償費用 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益，淨額 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
截至2023年6月25日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
行使股票期權 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
受限制股票單位解除限制 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
以應稅責任暫扣的已授予限制性股票單位爲基礎 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
||
股票補償費用 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益，淨額 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
截至2023年9月24日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
請查看附註的未經審計的簡明合併財務報表。
5
要緊農場股份有限公司。
簡明合併財務報表現金流量表
（以千爲單位）
（未經審計）
|
|
39 周已結束 |
|
|||||
|
|
9月29日， |
|
|
9月24日 |
|
||
來自經營活動的現金流： |
|
|
|
|
|
|
||
淨收入 |
|
$ |
|
|
$ |
|
||
爲使淨收入與經營活動提供的淨現金保持一致而進行的調整： |
|
|
|
|
|
|
||
折舊 |
|
|
|
|
|
|
||
減少使用權資產的賬面金額 |
|
|
|
|
|
|
||
可供出售債務證券的攤銷 |
|
|
|
|
|
|
||
債務發行成本的攤銷 |
|
|
|
|
|
|
||
股票薪酬支出 |
|
|
|
|
|
|
||
遞延稅 |
|
|
( |
) |
|
|
|
|
衍生工具的未實現虧損 |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
|
||
經營資產和負債的淨變動 |
|
|
( |
) |
|
|
( |
) |
經營活動提供的淨現金 |
|
$ |
|
|
$ |
|
||
來自投資活動的現金流： |
|
|
|
|
|
|
||
購置不動產、廠房和設備 |
|
|
( |
) |
|
|
( |
) |
購買可供出售的債務證券 |
|
|
|
|
|
( |
) |
|
衍生工具的購買和結算 |
|
|
( |
) |
|
|
( |
) |
可供出售債務證券的銷售 |
|
|
|
|
|
|
||
可供出售債務證券的到期日和看漲贖回 |
|
|
|
|
|
|
||
出售不動產、廠房和設備的收益 |
|
|
|
|
|
|
||
對可變利息實體的投資回報 |
|
|
|
|
|
|
||
投資活動提供的淨現金 |
|
$ |
|
|
$ |
|
||
來自融資活動的現金流： |
|
|
|
|
|
|
||
循環信貸額度下的借款收益 |
|
|
|
|
|
|
||
行使股票期權的收益 |
|
|
|
|
|
|
||
根據員工股票購買計劃發行普通股的收益 |
|
|
|
|
|
|
||
償還循環信貸額度 |
|
|
|
|
|
( |
) |
|
繳納既得限制性股票單位股份的預扣稅義務 |
|
|
( |
) |
|
|
( |
) |
融資租賃債務項下的本金付款 |
|
|
( |
) |
|
|
( |
) |
支付融資費用 |
|
|
( |
) |
|
|
|
|
由（用於）融資活動提供的淨現金 |
|
$ |
|
|
$ |
( |
) |
|
現金和現金等價物的淨增長 |
|
|
|
|
|
|
||
期初的現金和現金等價物 |
|
|
|
|
|
|
||
期末的現金和現金等價物 |
|
$ |
|
|
$ |
|
||
現金流信息的補充披露： |
|
|
|
|
|
|
||
支付利息的現金 |
|
$ |
|
|
$ |
|
||
爲所得稅支付的現金 |
|
$ |
|
|
$ |
|
||
非現金投資和融資活動的補充披露： |
|
|
|
|
|
|
||
應付賬款和應計負債中包含的不動產、廠房和設備的採購 |
|
$ |
|
|
$ |
|
||
請查看附註的未經審計的簡明合併財務報表。
6
vital farms公司
基本合併簡要附註合併財務報表簡表
(金額以千爲單位，除每股份額和每股份額之外)
(未經審計)
註釋 1. 業務性質及呈報基礎
Vital Farms, Inc.（以下簡稱「公司」）於 2023 年在特拉華州成立，
截至2024年9月29日的未經審計的合併簡明基本報表以及截至2024年9月29日和2023年9月24日的13周和39週期間的基本報表，均按照美國的一般公認會計原則（「U.S. GAAP」或「GAAP」）和證券交易委員會（「SEC」）有關中期基本報表的規則和規定編制。根據這些規則和規定，通常包括在符合U.S. GAAP編制的基本報表中的某些信息和附註披露已被簡化或省略。這些未經審計的合併簡明基本報表應與公司2023財年截至2023年12月31日的審計合併基本報表及其附註一起閱讀（「年度報告」）。
在管理層看來，所包含的披露信息是足夠的，隨附的未經審計的合併簡明基本報表包含2024年9月29日公司合併財務狀況的公平表述所需的所有調整，包含截至2024年9月29日和2023年9月24日的13周和39週期間的合併經營結果，以及截至2024年9月29日和2023年9月24日的39週期間的合併現金流。這些調整屬於正常和週期性的性質，並且已對先前報告的某些金額進行了重新分類以符合本年度的呈現情況。2023年12月31日的合併簡明資產負債表來源於經過審計的年度基本報表，但不包含審計年度基本報表中的所有腳註披露。2024年9月29日結束的13周和39週期間的合併經營結果並不一定表明預計的2024年12月29日財年結束的合併經營結果。
財政年度： 公司的財政年度在十二月的最後一個星期日結束，包含52或53周。在一個52周的財政年度中，公司每個財政季度均由13周組成。在一個53周的財政年度中，多出的一週被添加到第四季度，使得該季度由14周組成。因此，某些53周財政年度的財務結果以及相關的14周季度與之前和之後的52周財政年度及相關的13周季度不完全可比。財政季度於2024年9月29日和2023年9月24日結束， 均包含13周的運營結果。2023年12月31日結束的財政年度由53周組成。
注意事項 2。重要會計政策摘要
公司截至2023年12月31日財年的經審計的合併財務報表及其附註中描述了編制未經審計的簡明合併財務報表時使用的重要會計政策和估計，這些報表包含在年度報告中。除了採用下文進一步描述的新會計聲明和準則外，在截至2024年9月29日的39週期間，公司的重大會計政策沒有重大變化。
最近通過的會計公告
公司最近通過的新會計聲明在公司截至2023年12月31日的財政年度的經審計的合併財務報表及其附註中進行了描述，這些附註包含在年度報告中。在截至2024年9月29日的39週期間，公司沒有通過任何新的會計公告。
最近發佈的會計公告尚未通過
2023年11月，財務會計準則委員會（「FASB」）發佈了亞利桑那州立大學2023-07分部報告（主題280）——對應申報分部披露的改進（「ASU 2023-07」），旨在通過加強對應申報細分市場的披露來提高股東對實體業務活動的理解。亞利桑那州立大學 2023-07 將需要增量和更多
7
詳細披露所有板塊費用的年度和 interim 基本報表。對於公衆公司，ASU 2023-07適用於2023年12月15日之後開始的財政年度以及2024年12月15日之後開始的財政年度的 interim 期間。公司計劃在截至2024年12月29日的年度採用該標準，因此將包括任何額外的披露在本財政年度的10-K表格年度報告中。
2023年12月，FASB發佈了ASU No 2023-09，所得稅（主題740）——改善所得稅披露（「ASU 2023-09」），以增強所得稅披露的透明度和有用性。該指導適用於所有受所得稅管轄的實體，並將要求披露某些類別的稅率調整，以提高一致性，以及披露符合某些數量閾值的調節項目，以提高透明度。此外，實體必須披露支付給聯邦、州和外國市政當局的稅款金額。對於公衆公司，ASU 2023-09適用於2024年12月15日之後開始的年度期間。公司預計在2024年12月30日開始的財政年度採用該標準。公司目前正在評估ASU 2023-09的待定採納對其合併基本報表的影響。
備註 3. 投資證券
下表總結了截至 2024年9月29日公司可供出售的投資證券：
|
|
攤銷成本 |
|
|
未實現的總收益額 |
|
|
毛額未實現虧損 |
|
|
信用損失準備 |
|
|
公允價值 |
|
|||||
美國公司債券和美元 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
總計 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
以下表格總結了截至2023年12月31日公司可供出售的投資證券：
|
|
攤銷成本 |
|
|
未實現的總收益額 |
|
|
毛額未實現虧損 |
|
|
信用損失準備 |
|
|
公允價值 |
|
|||||
美國公司債券和美元 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
總計 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
可供出售證券出售的收益爲 $
實際到期可能與合同到期不同，因爲某些借款人有權在不支付或支付違約金的情況下看漲或提前還款。
|
|
攤銷成本 |
|
|
公允價值 |
|
||
一年內到期 |
|
$ |
|
|
$ |
|
||
一年至五年到期 |
|
|
|
|
|
|
||
總可供出售證券投資餘額 |
|
$ |
|
|
$ |
|
||
8
以下表格展示了該公司的情況。按照呈現期間未實現的損失，按類型和持續未實現損失的時間長度，展示可供出售證券。
|
|
2024年9月29日 |
|
|||||||||||||||||||||
|
|
不超過12個月 |
|
|
12個月或更長時間 |
|
|
總計 |
|
|||||||||||||||
|
|
公允價值 |
|
|
未實現損失 |
|
|
公允價值 |
|
|
未實現損失 |
|
|
公允價值 |
|
|
未實現損失 |
|
||||||
美國企業債券和美元 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
總計 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
|
|
2023年12月31日 |
|
|||||||||||||||||||||
|
|
不超過12個月 |
|
|
12個月或更長時間 |
|
|
總計 |
|
|||||||||||||||
|
|
公允價值 |
|
|
未實現損失 |
|
|
公允價值 |
|
|
未實現損失 |
|
|
公允價值 |
|
|
未實現損失 |
|
||||||
美國公司債券和美元 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
總計 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
截至2024年9月29日, there were
過去12個月來，公允價值下降主要是因爲利率期貨上升，公司認爲發行人的信用價值沒有明顯下降。公司也認爲很可能不會有大量債券提前贖回，也沒有當前的流動性需求需要在到期前出售任何重要投資。因此，公司
所有投資證券的公允價值和位置均包括在附註5「公允價值計量」中。下方。
註解 4. 衍生金融工具
本公司進入衍生工具以減緩商品價格波動的影響。這些工具可能包括商品價格合約的看漲期權。未指定為對沖工具的本公司商品衍生品的實現和未實現盈虧記錄在其他費用中，淨額。本公司將所有衍生工具認定為資產或負債。
下表列出了與本公司的衍生金融工具相關的總體未到期名義金額：
|
|
公制 |
|
9月29日 |
|
|
12月31日, |
|
||
商品： |
|
|
|
|
|
|
|
|
||
玉米 |
|
蒲式耳（以千計） |
|
|
|
|
|
|
||
豆粕 |
|
Tons |
|
|
|
|
|
|
||
截至2024年9月29日及2023年9月24日的13週期間，認列於其他費用淨額中的商品合約衍生損失的稅前金額為 $
所有未結算衍生金融工具的公允價值和位置均在第5註釋的「公允價值計量」中列示。 以下。
9
註釋5. 公允價值計量
公允價值被定義爲在計量日期市場參與者之間進行有序交易時，爲出售資產而收到的價格或爲轉移負債而支付的價格。用於計量公允價值的三種輸入級別定義如下：
以公允價值計量的定期持有的資產
公允價值層次結構要求在可用時使用可觀察的市場數據。當用於計量公允價值的輸入落入公允價值層次結構的不同級別時，公允價值的計量是基於對公允價值計量整體而言重要的最低級別輸入所確定。公司對特定項目對整體公允價值計量的重要性評估需要判斷，包括對特定於資產或負債的輸入的考慮。
下表提供公司在所示期間內以公允價值定期計量的金融資產的信息：
|
|
截至2024年9月29日的公允價值計量，使用： |
|
|||||||||||||
|
|
一級 |
|
|
二級 |
|
|
三級 |
|
|
總計 |
|
||||
資產: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金及現金等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
可供出售的投資證券： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國公司債券和美元 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
以公允價值計量的總資產 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
截至2023年12月31日的公允價值計量，使用： |
|
|||||||||||||
|
|
一級 |
|
|
二級 |
|
|
三級 |
|
|
總計 |
|
||||
資產: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金及現金等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
可供出售的投資證券： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國公司債券和美元 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
衍生金融工具 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
以公允價值計量的總資產 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
截至2024年9月29日的39週期間, there were
10
其他金融工具的公允價值
公司的賬面價值 未包含在上述的短期金融工具，包括現金、應收賬款、其他應收款和應付賬款，由於其短期性質，估計接近其公允價值。
注意事項6。營業收入確認
以下表格總結了公司按主要產品分類的淨營業收入。
|
|
結束了13周 |
|
|
39週年結束 |
|
||||||||||
|
|
九月二十九日， |
|
|
截至9月24日 |
|
|
九月二十九日， |
|
|
截至9月24日 |
|
||||
淨營業額： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
蛋類及與蛋相關的產品 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
黃油及與黃油相關的產品 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
營業收入 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
淨營業收入主要來自蛋類和黃油的銷售。公司的產品包括雞蛋、熟雞蛋、液體全蛋和條狀黃油。公司以前提供的便捷早餐產品線（包括蛋塊和基於蛋的早餐棒）於2022年停產，公司的酥油和可塗抹黃油產品也於2023年停產。與已停產產品線相關的收入對截至2024年9月29日和2023年9月24日的13周和39週期間的財務影響微乎其微。
截至2024年9月29日和2023年9月24日的13週期間以及截至2024年9月29日和2023年9月24日的39週期間公司存在單個客戶佔公司淨營業收入的10%或更多的情況。
|
|
營業收入 |
|
營業收入 |
|
營業收入 |
|
營業收入 |
客戶A |
|
|
|
|
||||
客戶B |
|
|
* |
|
|
* |
||
* 淨營業收入少於10% |
|
|
|
|
|
|
|
|
|
|
2024年9月29日的應收賬款淨額 |
|
2023年12月31日的應收賬款淨額 |
客戶A |
|
|
||
客戶B |
|
|
||
客戶C |
|
* |
|
|
客戶D |
|
|
||
客戶E |
|
|
* |
|
應收賬款淨額低於10% |
|
|
|
|
11
注7. 壞賬準備
截至2024年9月29日和2023年12月31日，公司的壞賬準備爲 $
公司認定應收賬款和其他應收款的當前估計信用損失（「CECL」）。應收賬款的CECL根據應收賬款賬齡分類、特定客戶的信用風險、過往收款歷史以及管理層對應收賬款的評估而估計。公司還擁有分類爲預付款和其他流動資產的其他應收款。其他應收款的CECL根據其他應收款賬齡分類和違約概率而估計。CECL的準備金屬於銷售、總務和管理成本內分類。
截至2024年9月29日的壞賬準備變動 39週期截至2024年9月29日的壞賬準備變動如下：
|
|
應收賬款 |
|
|
預付費用和其他流動資產 |
|
|
總計 |
|
|||
截至2023年12月31日 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
減值準備(預提)計入營業成果 |
|
|
|
|
|
( |
) |
|
|
|
||
帳戶註銷 |
|
|
|
|
|
|
|
|
|
|||
截至2024年3月31日 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
減值準備(預提)計入營業成果 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
帳戶註銷 |
|
|
|
|
|
|
|
|
|
|||
截至2024年6月30日 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
(減值準備)減少計入經營成果 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
帳戶註銷 |
|
|
|
|
|
|
|
|
|
|||
截至2024年9月29日 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
注意8.存貨
以下爲所示時段的存貨組成：
|
|
九月二十九日， |
|
|
2023年12月31日, |
|
||
雞蛋及相關產品 |
|
$ |
|
|
$ |
|
||
黃油及相關產品 |
|
|
|
|
|
|
||
包裝 |
|
|
|
|
|
|
||
小雞 |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
|
||
存貨陳舊預備 |
|
|
( |
) |
|
|
( |
) |
存貨 |
|
$ |
|
|
$ |
|
||
公司定期將手頭庫存與最新預測需求進行比對，以判斷是否需要提供過多或過時庫存準備。
12
注9. 不動產、工廠和設備
截至所示期間，不動產、工廠和設備包括以下內容:
|
|
九月二十九日， |
|
|
2023年12月31日, |
|
||
土地 |
|
$ |
|
|
$ |
|
||
土地改良 |
|
|
|
|
|
|
||
建築物和改善 |
|
|
|
|
|
|
||
車輛 |
|
|
|
|
|
|
||
機械和設備 |
|
|
|
|
|
|
||
租賃改良 |
|
|
|
|
|
|
||
傢俱和固定裝置 |
|
|
|
|
|
|
||
建設中的工程 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
減：累計折舊及攤銷 |
|
|
( |
) |
|
|
( |
) |
物業、廠房和設備，淨值 |
|
$ |
|
|
$ |
|
||
截至2024年9月29日和2023年9月24日的13週期間，物業、廠房和設備的折舊約爲 $
註釋10.租約
經營租賃費用按租賃期限的直線法確認，融資租賃費用作爲使用權（「ROU」）資產的攤銷費用和與融資租賃負債相關的利息費用確認。
租賃成本的元件，分類在營業成本、銷售、一般和行政以及利息費用中， 截至2024年9月29日和2023年9月24日的13周和39週期間的情況如下：
|
|
結束了13周 |
|
|
39週年結束 |
|
||||||||||
|
|
九月二十九日， |
|
|
截至9月24日 |
|
|
九月二十九日， |
|
|
截至9月24日 |
|
||||
經營租賃成本 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
融資租賃成本 - 使用權資產的攤銷 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
融資租賃成本 - 租賃負債的利息 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
短期租賃成本 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
變量租賃成本 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
可變租賃成本 - 長期供應合同 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
總租金成本 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13
未來未折現現金流量如下：
|
|
截至2024年9月29日 |
|
|||||
|
|
營運租賃 |
|
|
財務租賃 |
|
||
2024 |
|
$ |
|
|
$ |
|
||
2025 |
|
|
|
|
|
|
||
2026 |
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
|
||
總租賃付款 |
|
|
|
|
|
|
||
扣除假定利息 |
|
|
( |
) |
|
|
( |
) |
租賃負債的總現值 |
|
$ |
|
|
$ |
|
||
在截至2024年9月29日和2023年9月24日的39週期間內，獲得的ROU資產是用於交換新的融資租賃義務。 $
註11. 商譽及其他資產
截至所示期間，商譽及其他資產包含以下項目：
|
|
9月29日 |
|
|
12月31日, |
|
||
商譽 |
|
$ |
|
|
$ |
|
||
軟件開發成本 |
|
|
|
|
|
|
||
其他非流動資產 |
|
|
|
|
|
|
||
商譽及其他資產 |
|
$ |
|
|
$ |
|
||
截至2024年9月29日公司已將成本資本化，金額為$
注意事項12. 應計負債
應計負債包括以下內容，截至所示期間：
|
|
九月二十九日， |
|
|
2023年12月31日, |
|
||
員工相關成本 |
|
$ |
|
|
$ |
|
||
促銷和客戶扣款 |
|
|
|
|
|
|
||
配送費和運費 |
|
|
|
|
|
|
||
營銷和經紀佣金 |
|
|
|
|
|
|
||
庫存採購 |
|
|
|
|
|
|
||
專業費用 |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
|
||
應計負債 |
|
$ |
|
|
$ |
|
||
14
註釋 13.長期債務
PNC 信貸額度
2017年10月，公司與全國協會PNC銀行簽訂了信貸額度協議（「PNC信貸額度」），該協議在2018財年至2023財年期間曾多次修改。此類修正包括（i）對各種定義和契約的修訂，（ii）豁免2020年5月的技術違約，（iii）提高借貸能力，（iv）取消定期貸款和設備貸款，以及（v）延長到期日。PNC信貸額度於以下時間終止
PNC信貸額度下的最大借款能力’的循環信貸額度爲 $
摩根大通信貸額度
2024年4月9日，公司簽訂了摩根大通信貸額度，該信貸額度爲五年，美元
摩根大通信貸額度包括 $
摩根大通信貸額度由公司幾乎所有股權的留置權擔保s 資產，包括某些知識產權資產和投資證券。它要求公司保持 (i) 淨槓桿率不大於
截至2024年9月29日，有
15
註釋14. 普通股
截至2024年9月29日公司經修訂的公司章程授權本公司發行
本公司的普通股股東的投票權、分紅派息權和清算權受到優先股股東的權利、權力和偏好的約束和限制（如有）。
截至每個資產負債表日期，公司已預留普通股以用於以下事項：
|
|
九月二十九日， |
|
|
2023年12月31日, |
|
||
期權購買普通股 |
|
|
|
|
|
|
||
限制性股票單位（「RSUs」） |
|
|
|
|
|
|
||
績效股單位（「PSUs」） |
|
|
|
|
|
— |
|
|
2020年股權激勵計劃下可授予的股份 |
|
|
|
|
|
|
||
總計 |
|
|
|
|
|
|
||
注15. 股票爲基礎的薪酬
公司根據授予日期的預估公允價值來衡量所有股票爲基礎的獎勵的薪酬費用。期權一般按授予日期起按比例分配成熟，期限爲
公司在呈現的時段內，在簡化的綜合損益表中確認了股權酬金支出：
|
|
結束了13周 |
|
|
39週年結束 |
|
||||||||||
|
|
九月二十九日， |
|
|
截至9月24日 |
|
|
九月二十九日， |
|
|
截至9月24日 |
|
||||
銷售成本 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
銷售、一般及行政費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總計 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
期權活動
以下表格總結了公司自...以來的股票期權活動 2023年12月31日：
|
|
數量 |
|
|
加權- |
|
|
加權- |
|
|
總計 |
|
||||
2023年12月31日持有量 |
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|
$ |
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|
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$ |
|
||||
已授予 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
已行權 |
|
|
( |
) |
|
$ |
|
|
|
|
|
$ |
|
|||
取消/棄權 |
|
|
( |
) |
|
$ |
|
|
|
|
|
$ |
|
|||
截至2024年9月29日爲止優秀表現 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
可行使的期權截至2024年9月29日 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
截至2024年9月29日已授和預期授予的期權 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
截至2024年9月29日和2023年9月24日結束的13週期內，期權的公允價值爲 $
限制性股票單位活動
下表總結了公司自以來的RSU活動 2023年12月31日：
|
|
數量 |
|
|
加權- |
|
||
截至2023年12月31日未歸屬 |
|
|
|
|
$ |
|
||
已授予 |
|
|
|
|
$ |
|
||
歸屬1 |
|
|
( |
) |
|
$ |
|
|
被取消 |
|
|
( |
) |
|
$ |
|
|
截至2024年9月29日尚未歸屬 |
|
|
|
|
$ |
|
||
1
2024年9月29日和2023年9月24日結束的13週期間解鎖的RSU股份的公允價值是 $
績效股票單位活動
在2024財年，公司向其部分高管和其他員工授予了PSUs。這些PSUs將在依賴於特定公司績效指標的達成水平以及受讓人在該期間內持續服務的三年期結束時獲得。可以獲得的股份數量將在
17
以下表格總結了公司自以來的PSU活動 2023年12月31日：
|
|
數量 |
|
|
加權- |
|
||
截至2023年12月31日未歸屬 |
|
|
|
|
$ |
|
||
已授予 |
|
|
|
|
$ |
|
||
被取消 |
|
|
( |
) |
|
$ |
|
|
截至2024年9月29日尚未歸屬 |
|
|
|
|
$ |
|
||
截至2024年9月29日和2023年9月24日的13周和39週期間歸屬的PSU股票的公允價值爲$
2020年股權激勵計劃： 2020年7月，董事會通過了2020年激勵計劃，該計劃隨後得到了公司的股東批准，並於2020年7月30日生效。
員工股票購買計劃： 2020年7月，董事會採納了2020年員工股票購買計劃（ESPP），該計劃隨後獲得了公司股東的批准，並於2020年7月30日生效。
注16所得稅
截至2024年9月29日和2023年9月24日的13週期，公司的有效稅率約爲
就中期而言，公司的所得稅費用和由此產生的有效稅率基於估算的年度有效稅率，經調整以考慮需要視爲離散處理的項目的影響，包括稅法變化，估計的不確定稅收風險的變化，和其他事項。公司的估算年度有效稅率由於州稅，與股票期權行使相關的永久差異以及根據《內部稅收法典第162(m)條款》下的補償扣除限制而不同於21%的聯邦法定稅率。
18
第17條。每股淨利潤
基本和稀釋淨利潤歸屬於Vital Farms，Inc.普通股股東的每股淨利潤如下計算：
|
|
結束了13周 |
|
|
39週年結束 |
|
||||||||||
|
|
九月二十九日， |
|
|
截至9月24日 |
|
|
九月二十九日， |
|
|
截至9月24日 |
|
||||
分子： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
淨利潤 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
分母： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
加權平均普通股份數-基本 |
|
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|
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|
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|
||||
潛在稀釋證券的加權平均影響: |
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|
||||
潛在稀釋期權的影響 |
|
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|
||||
潛在稀釋RSU的影響 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
潛在稀釋PSU的影響 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
根據ESPP發行的潛在稀釋普通股的影響 |
|
|
|
|
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|
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|
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|
||||
帶稀釋效果的加權平均普通股股份 |
|
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|
||||
歸屬於Vital Farms, Inc.股東的每股淨利潤 |
|
|
|
|
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|
|
|
|
|
|
|
||||
基本 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
攤薄 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
公司排除了每個期末未流通的普通股份，以計算稀釋後的 歸屬於Vital Farms, Inc.普通股東的每股淨利潤，因爲將它們包含進來會產生防稀釋效應：
|
|
結束了13周 |
|
|
39週年結束 |
|
||||||||||
|
|
九月二十九日， |
|
|
截至9月24日 |
|
|
九月二十九日， |
|
|
截至9月24日 |
|
||||
期權購買普通股 |
|
|
- |
|
|
|
|
|
|
|
|
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|
|||
未歸屬的RSU |
|
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|
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|
||||
未歸屬的PSU股票權益 |
|
|
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|
|
- |
|
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|
|
|
|
- |
|
||
|
|
|
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|
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|
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|
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|
||||
註釋18. 累計其他綜合收益
從累計其他綜合收益（「AOCI」）重分類到未經審計的合併運營報表的金額如下（以千爲單位）：
|
|
|
|
重新分類的從AOCI金額 |
|
|||||
|
|
|
|
13週期結束 |
|
|||||
AOCI成分 |
|
經營業績分類 |
|
九月二十九日， |
|
|
截至9月24日 |
|
||
可供出售證券的損失 |
|
其他費用，淨額 |
|
$ |
|
|
$ |
|
||
|
|
稅前合計 |
|
$ |
|
|
|
|
||
|
|
稅收益 |
|
$ |
|
|
|
( |
) |
|
|
|
稅後淨額 |
|
$ |
|
|
$ |
|
||
19
|
|
|
|
重新分類的從AOCI金額 |
|
|||||
|
|
|
|
39週期結束 |
|
|||||
AOCI成分 |
|
經營業績分類 |
|
九月二十九日， |
|
|
截至9月24日 |
|
||
可供出售證券的損失 |
|
其他費用，淨額 |
|
$ |
( |
) |
|
$ |
|
|
|
|
稅前合計 |
|
|
( |
) |
|
|
|
|
|
|
稅收益 |
|
|
|
|
|
( |
) |
|
|
|
稅後淨額 |
|
$ |
( |
) |
|
$ |
|
|
其他綜合收益的各組成部分記錄的總金額和相關稅收（費用）收益如下（以千爲單位）：
|
|
結束了13周 |
|
|||||||||||||||||
|
|
2024年9月29日 |
|
|
2023年9月24日 |
|
||||||||||||||
|
|
稅前 |
|
稅收 |
|
稅後 |
|
|
稅前 |
|
稅收 |
|
稅後 |
|
||||||
可供出售的債務證券： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
未實現的淨持有收益 |
|
|
|
$ |
( |
) |
$ |
|
|
$ |
|
$ |
( |
) |
$ |
|
||||
已重新分類至損益表的實現損失金額 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|||||
其他綜合收益總額 |
|
$ |
|
$ |
( |
) |
$ |
|
|
$ |
|
$ |
( |
) |
$ |
|
||||
|
|
39週年結束 |
|
|||||||||||||||||
|
|
2024年9月29日 |
|
|
2023年9月24日 |
|
||||||||||||||
|
|
稅前 |
|
稅收 |
|
稅後 |
|
|
稅前 |
|
稅收 |
|
稅後 |
|
||||||
可供出售的債務證券： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
未實現的淨持有收益 |
|
$ |
|
$ |
( |
) |
$ |
|
|
$ |
|
$ |
( |
) |
$ |
|
||||
已重新分類金額以彌補虧損 |
|
|
( |
) |
|
|
|
( |
) |
|
|
|
|
( |
) |
|
|
|||
其他綜合收益總額 |
|
$ |
|
$ |
( |
) |
$ |
|
|
$ |
|
$ |
( |
) |
$ |
|
||||
註釋19. 承諾和或有事項
供應商合同： 公司根據與農場簽訂的長期供應合同購買雞蛋庫存。這些安排中的採購承諾是變量，取決於農場生產的雞蛋數量。因此，與這些供應商合同相關的未來採購承諾無法估計，並且與這些長期供應合同無最低支付要求。公司將雞蛋的總成本記錄入庫存，並在相關雞蛋出售給客戶時費用化到營業成本，並作爲公司的變量租賃成本的一部分進行報告。
公司已與某些合格供應商達成協議，提供一次性付款，金額高達$
賠償協議： 在業務的正常過程中，公司可能會向供應商、出租方、業務合作伙伴和其他相關方提供範圍和條款各異的賠償，涉及的事項包括但不限於因違反此類協議而導致的損失或第三方提起的知識產權侵權索賠。此外，公司已與董事會成員及其高管簽署賠償協議，這將要求公司在某些方面對他們進行賠償，這些情況可能由於他們作爲董事或高管的身份或服務而產生。公司根據這些賠償協議可能需要支付的未來款項的最大潛在金額在許多情況下是無限的。截至2024年9月29日，公司並未因這些賠償協議而產生任何重大成本。
20
訴訟： 公司面臨各種索賠和或有事項，這些事項屬於與其業務相關的普通和例行訴訟，包括與監管、訴訟、商業交易、員工相關事務和稅收等相關的事項。當公司意識到索賠或潛在索賠時，將評估任何損失或風險的可能性。根據這些評估和估算，公司可能會適當設立準備金。這些評估和估算是基於管理層當時可獲得的信息，並涉及大量管理判斷。實際結果或損失可能與公司的評估和估算存在重大差異。
在2021年5月20日，公司及其部分現任和前任高管被列爲一起名爲的集體訴訟投訴的被告 尼古拉斯·A·尤斯勒等訴維塔農場股份有限公司等 在美國德克薩斯州西部地區法院（「地區法院」）提起。原告聲稱對公司雞蛋的虛假廣告進行索賠。公司指定的高管隨後在此案中被駁回爲被告。2024年7月9日，美國地方法官發佈了一項命令及報告和建議，供地區法院審查和採納。總體而言，該命令及報告和建議(i) 駁回了原告的集體認證動議，(ii) 排除了原告損害專家的證詞和報告，並且(iii) 對公司就兩名原告和三項原告的州索賠授予了簡易判決。’2024年9月23日，地區法院採納了法官的命令及報告和建議，原告在規定的時間內沒有對地區法院的裁決提出上訴。雖然地區法院的命令阻止了此事作爲集體訴訟進行，但原告可以選擇繼續剩餘的個別索賠。然而，公司不認爲這些索賠對公司個別或整體而言會是重要的。’
儘管公司爲某些潛在責任維持了保險，但該保險並不覆蓋所有類型和金額的潛在責任，並且受到各種排除條款和可追回金額上限的限制。即使公司認爲某項索賠受到保險保障，保險公司可能會出於多種潛在原因爭議公司索賠的權益，這可能會影響索賠的時效，如果保險公司勝訴，則可能影響公司所能獲得的金額。如果損失很可能發生且損失金額能夠合理估計，公司會記錄該損失的負債。如果損失不太可能發生或者損失金額無法合理估計，那麼如果潛在損失的可能性合理存在，公司將披露該索賠。
第20條. 關聯方交易
Sandpebble Builders Preconstruction, Inc.： 公司利用Sandpebble Builders Preconstruction, Inc.和Sandpebble South, Inc.（統稱「Sandpebble」）進行公司雞蛋加工設施的施工和擴建相關項目管理和服務，包括選址、項目管理以及公司在印第安納州西摩計劃中的雞蛋包裝設施的相關服務。公司與Sandpebble就公司在印第安納州西摩計劃中的雞蛋包裝設施服務的合同是在經過競爭性招標過程後授予的。Victor Canseco，Sandpebble的所有者和負責人，同時也是Russell Diez-Canseco，公司總裁兼首席執行官兼董事會成員的父親。關於上述服務，公司向Sandpebble支付了 $
21
項目2. 管理層對財務狀況和營運結果的討論與分析。
以下討論包含前瞻性聲明，涉及風險和不確定性。我們的實際結果可能會因各種因素而與前瞻性聲明中討論的結果有重大差異，包括在本季度報告的第二部分第一項“A項風險因素”和“關於前瞻性聲明的特別說明”中列出的信息。以下信息應與本季度報告中包含的未經審核的財務信息及其附註，以及我們最新的年度報告中包含的經審核的財務信息及其附註一起閱讀。
概述
我們的使命是將具有道德價值的食物端上餐桌，我們正在透過建立一個挑戰現有食品模式規範的框架，來打破美國的食品系統，這使我們能夠將高品質的產品從我們的家族農場網絡帶給全國觀眾。這個框架使我們成為了領先的美國草養蛋品牌，以零售銷售額計屬美國第二大雞蛋品牌。我們的道德標準體現在我們對動物福利和可持續養殖業的關注上。我們相信我們的標準會產生擁有多樣飲食的快樂母雞，進而產生更好的蛋。消費者對天然、可追蹤、清晰標紋、口感出色和營養豐富食物的需求出現了劇烈變化。 我們堅守創立價值觀，設計我們的品牌和產品，以迎合這股消費者運動。
我們的使命根植於對意識資本主義的承諾，優先考慮我們所有利益相關者（農民和供應商、客戶和消費者、社區和環境、員工和股東）的長期利益。我們根據對所有利益相關者可持續的決策來做出選擇。我們的集體可持續業務實踐將使我們能夠實現我們的使命，即通過食物改善人、動物和地球的生活，無論在現在還是未來。對我們來說，這不是關於短期的結果或使命與利潤之間的權衡。我們是強勁的業務競爭者，堅信優先考慮所有利益相關者的長期可行性將隨著時間的推移為每個人帶來更強的結果。這些原則指導著我們的日常運作，我們相信，幫助我們提供更可持續和成功的業務。我們的做法已經通過我們的財務表現和2022年1月的重新認證作為認證B型企業得到了驗證，這一稱號僅保留給那些能夠平衡利潤和使命以滿足社會和環保表現、公眾透明度和法律問責最高驗證標準的企業。我們正在申請重新認證為認證B型企業，這是每三年所需的。
我們的蛋來源於超過375個家庭農場的網絡。我們的奶油來自與我們的奶油供應商簽約的家庭農場網絡。我們有策略性地設計了供應鏈，以確保高生產標準和全年最佳的控制項。我們受到對農村社區積極影響的驅動，並享有與我們的農民網絡良好的關係和聲譽。
我們主要與合約的蛋農合作，根據買賣合同進行交易。在這些安排下，農民負責所有生產蛋和經營農場所需的運營資本和投資，包括購買家禽和飼料供應。在2023財政第四季度，由於我們新的蛋農所需的施工成本增加，我們承擔了須要在這些農場開始生產蛋之前提前支付的增量蛋農招聘成本，我們預計這些增量成本將持續到2024財政年度。這些成本預計將在與新農場相關的買賣合同期內確認，這些合同通常為四到五年。我們認為這些前期成本對我們運營資本的不利影響可能在2024財政年度範圍內從1200萬美元到1400萬美元。對2023財政年度工作資本的影響微不足道，我們對毛利率的影響也預計在這些協議期內微不足道。我們有合約義務在合同期內按協議價格購買農民生產的所有蛋，該價格取決於托盤重量，並根據飼料成本的變化每季度進行調整。
我們認為自己是零售商的戰略性和有價值的合作夥伴。我們一直為我們的產品，包括我們的蛋殼，收取高價。我們忠實而不斷增長的消費者基礎推動了我們品牌從自然渠道擴展到主流渠道。我們相信我們品牌的成功表明，消費者要求符合更高食品生產道德標準的高端產品。我們在The Kroger Co.、或克羅格、sprouts farmers market、Target Corporation 和Whole Foods Market, Inc.、或Whole Foods，均有強大的存在，我們還在艾伯森、Publix Super Markets, Inc. 和沃爾瑪等公司銷售我們的產品。我們通過多渠道的零售分銷網絡提供23種零售庫存單位，或者SKU。我們相信我們在零售和餐飲渠道中有巨大的增長空間，通過增加品牌知名度，獲得額外的分銷點和新產品創新。
我們的雞蛋由第三方貨運承運商從農民處收集，放置在冷藏庫中，直到我們在密蘇里州的最先進的雞蛋加工設施Egg Central Station為客戶打包運送。該設施面積約為153,000平方英尺，使用高度自動化設備來分級和包裝我們的雞蛋產品。該設施能夠每天打包約六百萬顆雞蛋，並獲得了全球食品安全倡議組織的最高級別SQF優秀評級。此外，2024年6月，我們宣布計劃在印第安納州西摩設立第二個雞蛋洗淨和包裝設施，預計將於2027年全面投入運營。我們打算以密蘇里州Egg Central Station設施的基礎關鍵經驗和成功為基礎，進一步擴展我們已經具有彈性的供應鏈。
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截至2024年財政年度至今，我們已購入印第安那州約587英畝的農田，價值約420萬美元。我們的意圖是開發這片農地（連同未來購買的其他潛在土地），並將其用於“加速器農場”，為我們的農場網絡提供學習和發展機會，並幫助確保我們位於印第安納州西摩市的未來蛋洗淨和包裝設施有足夠的供應，同時保留未來將即買即用的農場出售給感興趣的農民的能力。
我們的產品是通過經紀人-分銷商-零售商網絡分銷的，經紀人代表我們的產品向分銷商和零售商推廣，後者將銷售我們的產品給消費者。我們通過食品分銷商來服務大部分天然通道客戶，他們購買、儲存、賣出並將我們的產品遞送給我們的客戶。我們通過直接安排送貨至主流零售商的配送中心來為他們提供服務。我們還利用分銷商關係來滿足某些獨立雜貨店和其他客戶的訂單。
我們已經經驗到連續的銷售增長。我們在截至2024年9月29日和2023年9月24日的13周內，營業收入分別為14500萬和11040萬美元，凈利潤分別為740萬和450萬美元，調整後的EBITDA分別為1520萬和930萬美元。我們在截至2024年9月29日和2023年9月24日的39周內，營業收入分別為44030萬和33600萬美元，凈利潤分別為4280萬和1840萬美元，調整後的EBITDA分別為6760萬和3450萬美元。調整後的EBITDA是一項非依據通用會計準則(GAAP)的財務衡量指標。請參見下面標題為“—非依GAAP財務衡量標準—調整EBITDA”的部分，以瞭解調整後的EBITDA的定義，以及調整後的EBITDA與最相關的財務指標凈利潤之間根據GAAP陳述的調解。
已知趨勢、事件和不確定因素
高致病性禽流感(HPAI)及其他農產品疾病
自2022年初HPAI的初次疫情以來，我們一直密切關注病毒的進展，並與農民、獸醫、政府衛生官員和動物福利審計人員合作，以確保我們的禽群儘可能安全。目前為止，我們在五個農場經歷了疫情發生，其中一個位於密蘇里州、一個在田納西州，另外三個在堪薩斯州。
我們已經得知midwest爆發了一種名為雞蛋下降綜合症（EDS）的病毒，並且我們在密蘇里州的三個農場受到了影響。 EDS以看似健康的下蛋母雞生產薄殼、軟殼或無殼蛋為特徵。
雖然我們未因HPAI或EDS疫情而經歷重大供應中斷，但如果我們的農場或生產設施中有相當一部分受到影響，這可能會對我們的供應鏈和運營結果產生重大負面影響。此外，像HPAI或EDS這樣的農產品疾病可能會導致蛋市場的供應短缺和價格上漲。對於我們已採取的減少HPAI和EDS在農場及生產設施上風險的措施（包括採購新可用的EDS疫苗），以及減輕供應影響的能力，我們充滿信心。然而，鑑於對未來疫情及政府對這些疫情的反應仍存在的持續不確定性，我們無法預測農產品疾病如HPAI和EDS對我們業務的最終影響。
經濟不確定性
目前的通脹環境可能會影響到我們的業務和相應的財務狀況和現金流量。通脹因素，例如材料和供應品成本、利率和日常開支的增加，可能對我們的營運結果造成不利影響。提高的利率也對美國經濟構成了最近的挑戰，未來可能會使我們更難以取得傳統融資，在接受的條件下，或者幾乎不可能。此外，一些經濟觀察人士認為，我們應該預計在未來一年內更高的經濟衰退風險，這將與上述因素一起，在短期內可能導致資本市場進一步的經濟不確定性和波動，並可能對我們的業務產生負面影響。此外，這樣的經濟條件有時產生股價下壓力。我們經歷過並可能繼續經歷營運成本增加，包括我們的勞動成本和研發成本，這是由於供應鏈限制、全球衛生大流行的後果、地緣政治緊張局勢以及員工供應量和薪資增加所導致的，所有這些可能會對我們的營運資金造成額外壓力。我們與農民、供應商和第三方製造商密切合作，以管理我們的供應鏈活動，並減輕由於供應鏈干擾而導致我們產品供應中斷的潛在風險。我們目前預計將在2024財政年度通過擁有足夠的產品、包裝和運費。
流動資金和資本資源概覽
截至2024年9月29日，我們擁有現金、現金等價物和可市場化證券共16300萬美元，以及根據我們與摩根大通銀行及其他貸方簽署的綜合循環信貸協議可使用的6000萬美元，即摩根大通信貸工具，我們預計將擁有足夠的流動性來對我們的業務進行投資，以支持我們的長期發展。
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增長策略。我們預計，截至2024年9月29日的現金、現金等價物和有市場流通性的證券，加上我們營業活動提供的現金和我們摩根大通信用設施下的借款可供利用，將足夠支持我們至少未來12個月的營業費用。有關我們摩根大通信用設施的其他信息，請參閱本季度報告的附錄中包含的《基本報表》中的第13條“長期負債”。
我們未來的資本需求將取決於多種因素，包括我們新客戶和現有客戶的增長速度、對創新的投資、對併購或其他增長機會的投資、對合作夥伴和尚未開發渠道的投資，以及與擴大生產能力相關的持續成本。我們可能需要尋求額外的股權或債務融資。然而，全球金融市場的重大干擾（包括因公共健康疫情、地緣政治緊張局勢和戰爭、通脹或其他因素造成的干擾）可能會導致我們無法獲得額外的資本，這在未來可能會對我們的運營產生負面影響。若我們需要額外的融資，我們可能無法以我們可接受的條件或根本無法籌集到這樣的資金。如果我們無法籌集額外資本或產生擴展我們業務和持續創新及產品擴展所需的現金流，我們可能無法成功競爭，這將損害我們的業務、運營和業務成果。欲了解更多信息，請參閱以下標題為「流動性和資本資源」的部分。
Our Fiscal Year
We report on a 52-53-week fiscal year, ending on the last Sunday in December. In a 52-53-week fiscal year, each fiscal quarter consists of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. Our fiscal year 2024 will include 52 weeks, and our fiscal year 2023 consisted of 53 weeks. See “Nature of the Business and Basis of Presentation” in Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details related to our fiscal calendar.
Key Factors Affecting Our Business
We believe that the growth of our business and our future success are dependent upon many factors. While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to sustain the growth of our business and improve our results of operations.
Expand Household Penetration
We have positioned our brand to capitalize on growing consumer interest in natural, clean-label, traceable, ethical, great-tasting and nutritious foods. We believe there is substantial opportunity to grow our consumer base and increase the velocity at which households purchase our products. U.S. household penetration for the shell egg category is approximately 96.9%, while the household penetration for our shell eggs is approximately 8.6%. We intend to increase household penetration by continuing to invest significantly in sales and marketing to educate consumers about our brand, our values and the premium quality of our products. We believe these efforts will educate consumers on the attractive attributes of our products, generate further demand for our products and ultimately expand our consumer base. Our ability to attract new consumers will depend, among other things, on the perceived value and quality of our products, the offerings of our competitors and the effectiveness of our marketing efforts. Our performance depends significantly on factors that may affect the level and pattern of consumer spending in the U.S. natural food market in which we operate. Such factors include consumer preference, consumer confidence, consumer income, consumer perception of the safety and quality of our products and shifts in the perceived value for our products relative to alternatives.
Grow Within the Retail Channel
We believe that our ability to increase the number of customers that sell our products to consumers is an indicator of our market penetration and our future business opportunities. We define our customers as the entities that sell our products to consumers. With certain of our retail customers, like Whole Foods, we sell our products through distributors. We are not able to precisely attribute our net revenue to a specific retailer for products sold through such channels. We rely on third-party data to calculate the portion of retail sales attributable to such retailers, but this data is inherently imprecise because it is based on gross sales generated by our products sold at retailers, without accounting for price concessions, promotional activities or chargebacks, and because it measures retail sales for only the portion of our retailers serviced through distributors. Based on this third-party data and internal analysis, Whole Foods accounted for approximately 21% and 22% of our retail sales for the 13-week periods ended September 29, 2024 and September 24, 2023, respectively and 21% and 23% for the 39-week periods ended September 29, 2024 and September 24, 2023, respectively.
As of September 29, 2024, there were approximately 24,000 stores selling our products. We expect the retail channel to be our largest source of net revenue for the foreseeable future. By capturing greater shelf space, driving higher product velocities and increasing our SKU count, we believe there is meaningful runway for further growth with existing retail customers. Additionally, we believe there is significant opportunity to gain incremental stores from existing customers as well as by adding new retail customers. We also believe there is significant further long-term opportunity in additional distribution channels, including the convenience,
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drugstore, club, military and international markets. Our ability to execute this strategy will increase our opportunities for incremental sales to consumers, and we also believe this growth will allow for margin expansion. To accomplish these objectives, we intend to continue leveraging consumer awareness of and demand for our brand, offering targeted sales incentives to our customers and utilizing customer-specific marketing tactics. Our ability to grow within the retail channel will depend on a number of factors, such as our customers’ satisfaction with the sales, product velocities and profitability of our products.
Expand Footprint Across Foodservice
We believe there is significant demand for our products in the foodservice channel since we offer versatile ingredients with high menu penetrations across commercial and non-commercial operator segments. We see considerable opportunity to continue to grow the channel in the medium- to long-term with our two-pronged sales approach to values-aligned foodservice operators and their distributors. We are working with ROOTED Food Service Sales Agency, a foodservice sales and marketing agency in the consumer packaged goods industry, to increase our category share in broad-line distribution and to get on national and regional restaurant menus.
We are also leveraging foodservice as a critical consumer touchpoint to drive brand awareness, and we are investing in co-marketing to reach new households. We believe co-branding is mutually beneficial to foodservice operators because it helps to differentiate their brands, enhances their perceived customer value and drives loyalty. A multi-unit example from our successful foodservice program is True Food Kitchen, an award-winning restaurant brand and a pioneer of wellness-driven dining with locations across the United States that shares our values for improving the lives of people, animals, and the planet through ethically produced food.
Expand Our Product Offerings
We intend to continue to strengthen our product offerings by investing in innovation in new and existing categories. We have a history of product introductions and intend to continue to innovate by introducing new products from time to time. Eggs and egg-related products generated $138.1 million, or approximately 95%, of net revenue in the 13-week period ended September 29, 2024. Eggs and egg-related products generated $424.9 million, or approximately 96%, of net revenue in the 39-week period ended September 29, 2024. We expect eggs and egg-related products to be our largest source of net revenue for the foreseeable future. We believe that investments in innovation will contribute to our long-term growth, including by reinforcing our efforts to increase household penetration. Our ability to successfully develop, market and sell new products will depend on a variety of factors, including the availability of capital to invest in innovation, as well as changing consumer preferences and demand for food products.
Key Components of Results of Operations
Net Revenue
We generate net revenue primarily from sales of our products, including eggs and butter, to our customers, which include natural retailers, mainstream retailers and foodservice customers. We sell our products to customers on a purchase-order basis. We serve the majority of our natural channel customers and certain independent grocers and other customers through food distributors, which purchase, store, sell and deliver our products to these customers.
We periodically offer promotional incentives to our customers, including rebates, temporary price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities. At the end of each accounting period, we recognize a liability for an estimated promotional allowance reserve. We periodically provide credits or discounts to our customers in the event that products do not conform to customer expectations upon delivery or expire at a customer’s site. We treat these credits and discounts as a reduction of the sales price of the related transaction at the time of sale. We anticipate that these promotional activities, credits and discounts could materially impact our net revenue and that changes in such activities could impact period-over-period results.
Our shell eggs are sold to consumers at a premium price point, and when prices for commodity shell eggs fall relative to the price of our shell eggs (including due to any price increases we may implement), price-sensitive consumers may choose to purchase commodity shell eggs offered by our competitors instead of our eggs. As a result, low commodity shell egg prices may adversely affect our net revenue. We increased prices on certain of our products in each of fiscal years 2023 and 2024. While we have not seen significant decreases in sales volume due to previous price increases, if we further increase prices to offset higher commodity prices or other costs, we could experience lower demand for our products, decreased ability to attract new customers and lower sales volumes. Net revenue may also vary from period to period depending on the purchase orders we receive, the volume and mix of our products sold, and the channels through which our products are sold.
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Cost of Goods Sold
Cost of goods sold consists of the costs directly attributable to producing our products which include labor, raw material and packaging costs as well as overhead. The labor cost is comprised of wages and related costs for our processing crew members. The raw material is comprised of those items necessary to process our finished egg and butter products and the packaging costs are the cost of the packaging materials our finished products are sold in. Overhead costs in cost of goods sold include utilities, insurance, inbound freight and storage fees related to our warehouse.
Selling, General and Administrative
Selling, general and administrative expenses consist primarily of broker and contractor fees for sales and marketing, as well as personnel costs for sales and marketing, finance, human resources and other administrative functions, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions. Selling, general and administrative expenses also include advertising and digital media costs, agency fees, travel and entertainment costs, and costs associated with consumer promotions, product samples, sales aids incurred to acquire new customers, retain existing customers and build our brand awareness, overhead costs for facilities, including associated depreciation and amortization expenses, and information technology-related expenses, including those associated with our implementation of a new enterprise resource planning system.
Shipping and Distribution
Shipping and distribution expenses consist primarily of costs related to third-party freight for our products. Even though shipping and distribution expenses have decreased in absolute dollars in the short-term, we expect shipping and distribution expenses to increase in absolute dollars in the medium-to-long term as we continue to scale our business, and there is a risk that such expenses could continue to increase due to economic uncertainty, geopolitical tensions or wars.
Results of Operations
The results of operations data for the 13-week and 39-week periods ended September 29, 2024 and September 24, 2023 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Comparison of the 13-Week Periods Ended September 29, 2024 and September 24, 2023
The following table sets forth our consolidated statement of income data expressed as a percentage of net revenue for the periods presented:
|
|
13-Weeks Ended |
|
|||||||||||||
|
|
September 29, |
|
|
September 24, |
|
||||||||||
|
|
Amount |
|
|
% of |
|
|
Amount |
|
|
% of |
|
||||
|
|
(dollars in thousands) |
|
|||||||||||||
Net revenue |
|
$ |
145,002 |
|
|
|
100 |
% |
|
$ |
110,429 |
|
|
|
100 |
% |
Cost of goods sold(1) |
|
|
91,526 |
|
|
|
63 |
% |
|
|
73,764 |
|
|
|
67 |
% |
Gross profit |
|
|
53,476 |
|
|
|
37 |
% |
|
|
36,665 |
|
|
|
33 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative(1) |
|
|
36,102 |
|
|
|
25 |
% |
|
|
25,081 |
|
|
|
23 |
% |
Shipping and distribution |
|
|
8,134 |
|
|
|
6 |
% |
|
|
6,355 |
|
|
|
6 |
% |
Total operating expenses |
|
|
44,236 |
|
|
|
31 |
% |
|
|
31,436 |
|
|
|
28 |
% |
Income from operations |
|
|
9,240 |
|
|
|
6 |
% |
|
|
5,229 |
|
|
|
5 |
% |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(259 |
) |
|
|
— |
|
|
|
(238 |
) |
|
|
— |
|
Interest income |
|
|
1,407 |
|
|
|
1 |
% |
|
|
707 |
|
|
|
1 |
% |
Other expense, net |
|
|
(6 |
) |
|
|
— |
|
|
|
(642 |
) |
|
|
(1 |
)% |
Total other income (expense), net |
|
|
1,142 |
|
|
|
1 |
% |
|
|
(173 |
) |
|
|
— |
|
Net income before income taxes |
|
|
10,382 |
|
|
|
7 |
% |
|
|
5,056 |
|
|
|
5 |
% |
Income tax provision |
|
|
2,936 |
|
|
|
2 |
% |
|
|
533 |
|
|
|
0 |
% |
Net income |
|
$ |
7,446 |
|
|
|
5 |
% |
|
$ |
4,523 |
|
|
|
4 |
% |
26
Net Revenue
|
|
13-Weeks Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Net revenue |
|
$ |
145,002 |
|
|
$ |
110,429 |
|
|
$ |
34,573 |
|
|
|
31 |
% |
The increase in net revenue of $34.6 million, or 31%, was primarily driven by volume-related increases of $24.0 million and price-related increases of $10.5 million. The volume favorability was driven by accelerated demand for existing products, expanded item offerings, and store distribution at existing customers. Net revenue from sales through our retail channel was $139.0 million and $104.8 million for the 13-week periods ended September 29, 2024 and September 24, 2023, respectively. Additionally, we had a two-day production shutdown due to a water main break near our Egg Central Station processing facility in Springfield, Missouri. This resulted in net $2.0 million less revenue after recovery efforts were made.
Gross Profit and Gross Margin
|
|
13-Weeks Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Gross profit |
|
$ |
53,476 |
|
|
$ |
36,665 |
|
|
$ |
16,811 |
|
|
|
46 |
% |
Gross margin |
|
|
37 |
% |
|
|
33 |
% |
|
|
|
|
|
|
||
The increase in gross profit of $16.8 million, or 46%, was driven by higher net revenue generated during the period, as well as benefits of scale and operational efficiencies. The increase in gross margin during the 13-week period ended September 29, 2024 compared to the corresponding period in the prior year was primarily driven by price/mix benefits, including price increases on our organic egg portfolio in January 2024, as well as benefits of scale, operational efficiencies and more favorable commodity and diesel costs. This was partially offset by an increase in trade as a percentage of gross revenue, labor and overhead costs.
Operating Expenses
Selling, General and Administrative
|
|
13-Weeks Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
$ |
36,102 |
|
|
$ |
25,081 |
|
|
$ |
11,021 |
|
|
|
44 |
% |
Percentage of net revenue |
|
|
25 |
% |
|
|
23 |
% |
|
|
|
|
|
|
||
The increase in selling, general and administrative expenses of $11.0 million, or 44%, was primarily driven by:
27
配送和分發
|
|
已結束 13 周 |
|
|
|
|
|
|
|
|||||||
|
|
九月 29, |
|
|
9月24日 |
|
|
$ 零錢 |
|
|
百分比變化 |
|
||||
|
|
（以千計） |
|
|
|
|
|
|
|
|||||||
運輸和配送 |
|
$ |
8,134 |
|
|
$ |
6,355 |
|
|
$ |
1,779 |
|
|
|
28 |
% |
淨收入的百分比 |
|
|
6 |
% |
|
|
6 |
% |
|
|
|
|
|
|
||
運輸和分銷成本增加180萬元，增長28%，主要是由於銷售量增加，部分抵消了線路和燃油費率的優勢。
利息費用
|
|
已結束 13 周 |
|
|
|
|
|
|
|
|||||||
|
|
九月 29, |
|
|
9月24日 |
|
|
$ 零錢 |
|
|
百分比變化 |
|
||||
|
|
（以千計） |
|
|
|
|
|
|
|
|||||||
利息支出 |
|
$ |
(259 |
) |
|
$ |
(238 |
) |
|
$ |
(21 |
) |
|
|
9 |
% |
利息費用增加了2.1萬美元，或9%，主要是由於債務發行成本攤銷的利息費用增加所致。
利息收入
|
|
已結束 13 周 |
|
|
|
|
|
|
|
|||||||
|
|
九月 29, |
|
|
9月24日 |
|
|
$ 零錢 |
|
|
百分比變化 |
|
||||
|
|
（以千計） |
|
|
|
|
|
|
|
|||||||
利息收入 |
|
$ |
1,407 |
|
|
$ |
707 |
|
|
$ |
700 |
|
|
|
99 |
% |
770000美元的利息收入增長，或99%，主要是由於可供出售證券和可交易證券投資組合的利息收入增加，這源於更高的餘額和更高的利率期貨。
其他費用，淨額
|
|
已結束 13 周 |
|
|
|
|
|
|
|
|||||||
|
|
九月 29, |
|
|
9月24日 |
|
|
$ 零錢 |
|
|
百分比變化 |
|
||||
|
|
（以千計） |
|
|
|
|
|
|
|
|||||||
其他費用，淨額 |
|
$ |
(6 |
) |
|
$ |
(642 |
) |
|
$ |
636 |
|
|
|
(99 |
%) |
其他費用減少60萬美元，主要是由於2024年9月29日結束的13週期相比於2023年9月24日結束的13週期，商品衍生工具損失減少。
所得稅準備金
|
|
已結束 13 周 |
|
|
|
|
|
|
|
|||||||
|
|
九月 29, |
|
|
9月24日 |
|
|
$ 零錢 |
|
|
百分比變化 |
|
||||
|
|
（以千計） |
|
|
|
|
|
|
|
|||||||
所得稅條款 |
|
$ |
2,936 |
|
|
$ |
533 |
|
|
$ |
2,403 |
|
|
|
451 |
% |
28
截至2024年9月29日的13週期間，所得稅準備金增加了240萬美元，增長了451%，這與與去年同期相比的淨利潤增長有關，而在一定程度上被2024年9月29日結束的13週期間發生的非合格股票期權行使和限制性股票單位釋放所帶來的稅收利益部分抵消。
截至2024年9月29日和2023年9月24日結束的39週期比較
下表列出了我們合併的收入數據，表示爲所報期間淨營業收入的百分比：
|
|
39 週期限已結束 |
|
|||||||||||||
|
|
九月 29, |
|
|
9月24日 |
|
||||||||||
|
|
金額 |
|
|
的百分比 |
|
|
金額 |
|
|
的百分比 |
|
||||
|
|
（以千美元計） |
|
|||||||||||||
淨收入 |
|
$ |
440,318 |
|
|
|
100 |
% |
|
$ |
336,046 |
|
|
|
100 |
% |
售出商品的成本(1) |
|
|
270,268 |
|
|
|
61 |
% |
|
|
218,913 |
|
|
|
65 |
% |
毛利潤 |
|
|
170,050 |
|
|
|
39 |
% |
|
|
117,133 |
|
|
|
35 |
% |
運營費用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
銷售、一般和管理(1) |
|
|
96,569 |
|
|
|
22 |
% |
|
|
72,935 |
|
|
|
22 |
% |
運輸和配送 |
|
|
22,933 |
|
|
|
5 |
% |
|
|
20,034 |
|
|
|
6 |
% |
運營費用總額 |
|
|
119,502 |
|
|
|
27 |
% |
|
|
92,969 |
|
|
|
28 |
% |
運營收入 |
|
|
50,548 |
|
|
|
11 |
% |
|
|
24,164 |
|
|
|
7 |
% |
其他收入（支出），淨額： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息支出 |
|
|
(771 |
) |
|
|
— |
|
|
|
(513 |
) |
|
|
— |
|
利息收入 |
|
|
3,811 |
|
|
|
1 |
% |
|
|
1,497 |
|
|
|
— |
|
其他收入（支出），淨額 |
|
|
(370 |
) |
|
|
— |
|
|
|
(2,508 |
) |
|
|
(1 |
)% |
其他收入（支出）總額，淨額 |
|
|
2,670 |
|
|
|
1 |
% |
|
|
(1,524 |
) |
|
|
0 |
% |
所得稅前淨收入 |
|
|
53,218 |
|
|
|
12 |
% |
|
|
22,640 |
|
|
|
7 |
% |
所得稅條款 |
|
|
10,410 |
|
|
|
2 |
% |
|
|
4,284 |
|
|
|
1 |
% |
淨收入 |
|
$ |
42,808 |
|
|
|
10 |
% |
|
$ |
18,356 |
|
|
|
5 |
% |
營業收入
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Net revenue |
|
$ |
440,318 |
|
|
$ |
336,046 |
|
|
$ |
104,272 |
|
|
|
31 |
% |
The increase in net revenue of $104.3 million, or 31%, was primarily driven by volume-related increases of $84.1 million and price-related increases of $20.2 million. The volume favorability was primarily driven by increases at both new and existing customers. Net revenue from sales through our retail channel was $423.2 million and $312.6 million for the 39-week periods ended September 29, 2024 and September 24, 2023, respectively. Additionally, we had a two-day production shutdown due to a water main break near our Egg Central Station processing facility in Springfield, Missouri. This resulted in net $2.0 million less revenue after recovery efforts were made.
29
Gross Profit and Gross Margin
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Gross profit |
|
$ |
170,050 |
|
|
$ |
117,133 |
|
|
$ |
52,917 |
|
|
|
45 |
% |
Gross margin |
|
|
39 |
% |
|
|
35 |
% |
|
|
|
|
|
|
||
The increase in gross profit of $52.9 million, or 45%, was driven by higher net revenue generated during the period, as well as benefits of scale and enhanced operational efficiencies. The increase in gross margin during the 39-week period ended September 29, 2024 compared to the corresponding period in the prior year was primarily driven by price/mix benefits, including price increases on our organic egg portfolio in January 2024 and fully realizing our February 2023 price increase across the entire shell egg portfolio, as well as benefits of scale, operational efficiencies and more favorable commodity and diesel costs. This was partially offset by an increase in trade as a percentage of gross revenue, labor and overhead costs.
Operating Expenses
Selling, General and Administrative
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
$ |
96,569 |
|
|
$ |
72,935 |
|
|
$ |
23,634 |
|
|
|
32 |
% |
Percentage of net revenue |
|
|
22 |
% |
|
|
22 |
% |
|
|
|
|
|
|
||
The increase in selling, general and administrative expenses of $23.6 million, or 32%, was primarily driven by:
Shipping and Distribution
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Shipping and distribution |
|
$ |
22,933 |
|
|
$ |
20,034 |
|
|
$ |
2,899 |
|
|
|
14 |
% |
Percentage of net revenue |
|
|
5 |
% |
|
|
6 |
% |
|
|
|
|
|
|
||
The increase in shipping and distribution costs of $2.9 million, or 14%, was driven by higher sales volumes, partially offset by favorable linehaul and fuel rates.
30
Interest Expense
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
Interest expense |
|
$ |
(771 |
) |
|
$ |
(513 |
) |
|
$ |
(258 |
) |
|
|
50 |
% |
The increase in interest expense of $0.3 million, or 50%, was primarily driven by an increase in finance leases, which generated an increase in interest expense related to those leases.
Interest Income
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Interest income |
|
$ |
3,811 |
|
|
$ |
1,497 |
|
|
$ |
2,314 |
|
|
|
155 |
% |
The increase in interest income of $2.3 million, or 155%, was primarily driven by higher interest income on our available-for-sale securities and marketable securities portfolios resulting from a higher balance and higher interest rates.
Other Expense, Net
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Other expense, net |
|
$ |
(370 |
) |
|
$ |
(2,508 |
) |
|
$ |
2,138 |
|
|
|
(85 |
%) |
The decrease in other expense, net of $2.1 million was primarily driven by a reduction in losses on our commodity derivative instruments during the 39-week period ended September 29, 2024, as compared to those in the 39-week period ended September 24, 2023.
Income Tax Provision
|
|
39-Week Period Ended |
|
|
|
|
|
|
|
|||||||
|
|
September 29, |
|
|
September 24, |
|
|
$ Change |
|
|
% Change |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||
Income tax provision |
|
$ |
10,410 |
|
|
$ |
4,284 |
|
|
$ |
6,126 |
|
|
|
143 |
% |
The increase in income tax provision of $6.1 million, or 143%, was driven by an increase in net income for the 39-week period ended September 29, 2024, as compared to the same period in the prior year, partially offset by the tax benefit of non-qualified option exercises and RSU releases that occurred during the 39-week period ended September 29, 2024.
31
Liquidity and Capital Resources
Since inception, we have funded our operations with proceeds from sales of our capital stock, proceeds from borrowings and cash flows from the sale of our products. We had net income of $7.4 million and $42.8 million in the 13-week and 39-week periods ended September 29, 2024, and retained earnings of $72.5 million as of September 29, 2024.
Funding Requirements
We expect that our cash, cash equivalents and marketable securities, together with cash provided by our operating activities and available borrowings under our existing JPMorgan Credit Facility, will be sufficient to fund our operating expenses for at least the next 12 months. We further believe that we will be able to fund potential operating expenses and cash obligations beyond the next 12 months, through a combination of existing cash, cash equivalents and marketable securities, cash provided by our operating activities and available borrowings under our JPMorgan Credit Facility.
Our future capital requirements will depend on many factors, including our pace of new and existing customer growth, our investments in innovation, our investments in acquisitions, partnerships and unexplored channels and the potential costs associated with future expansion of our production capacity. As of September 29, 2024, future minimum lease payments under non-cancelable operating leases totaled $8.9 million, and future minimum lease payments under non-cancelable finance leases totaled $14.3 million. In addition, as a result of increasing construction costs associated with our new farms, we incurred incremental farm recruitment costs that will be required to be paid in advance of these farms being able to produce eggs, and we expect such incremental costs to continue through fiscal 2024. These costs are expected to be recognized over the term of the related buy-sell contracts with the new farms, which are generally four to five years in length.
Additionally, in April 2024 we signed an agreement to acquire land in Seymour, Indiana for a planned additional egg washing and packing facility. We anticipate that we will incur approximately $7.0 million to $10.0 million in capital expenditures related to the new egg washing and packing facility in the next 12 months and will incur further expenditures in the years following. We also anticipate that we will incur approximately $20.0 million to $30.0 million in capital expenditures over the next 12 months related to the development of accelerator farms on previously acquired farmland in Indiana or the purchase and development of future parcels, with further expenditures incurred in the years following. Finally, we anticipate increased expenditures in marketing during fiscal 2024 to support progress toward our long-term marketing goals.
Credit Facility
On April 9, 2024, we entered into the JPMorgan Credit Facility with JPMorgan Chase Bank, N.A. and the other lenders party thereto, which provides for a five-year, $60.0 million revolving credit facility. The JPMorgan Credit Facility replaced the PNC Credit Facility, which terminated concurrently with our entry into the JPMorgan Credit Facility. The JPMorgan Credit Facility includes a $5.0 million letter of credit sub-limit and an accordion option that would allow the Company to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $35.0 million and (ii) an amount equal to 100% of consolidated adjusted EBITDA.
Any borrowings under the JPMorgan Credit Facility bear interest, at our election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10% plus a margin of either 0.75%, 1.00% or 1.25% depending on the Company's net leverage ratio, or (ii) an alternative base rate plus a margin or either 1.75%, 2.00% or 2.25%, depending on the Company's net leverage ratio. We are required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrues at either 0.20% or 0.375% per annum depending on our revolving exposure. Additionally, we are required to pay a participation fee on the account of each lender for each outstanding letter of credit at a rate equal to the applicable rate used to determine the interest rate applicable to term benchmark revolving loans.
The JPMorgan Credit Facility is secured by liens on substantially all of our assets, including certain intellectual property assets and investment securities. It requires us to maintain (i) a net leverage ratio of no greater than 3.25 to 1.00, subject to two increases up to 4.00 to 1.00 for a certain period following material acquisitions, and (ii) a fixed charge coverage ratio of no less than 1.35 to 1.00. The JPMorgan Credit Facility contains other customary covenants, representations and events of default. As a result of the limitations contained in the JPMorgan Credit Facility, certain of the net assets on our consolidated balance sheet as of September 29, 2024 are restricted in use. As of September 29, 2024, there was no outstanding balance under the JPMorgan Credit Facility, and we were in compliance with all covenants under the JPMorgan Credit Facility.
See “Long-Term Debt” in Note 13 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details related to the JPMorgan Credit Facility.
32
Cash Flows
The following table summarizes our cash flows for the 39-week period indicated:
|
|
39-Week Period Ended |
|
|||||
|
|
September 29, |
|
|
September 24, |
|
||
|
|
(in thousands) |
|
|||||
Net cash provided by operating activities |
|
$ |
50,043 |
|
|
$ |
27,177 |
|
Net cash provided by investing activities |
|
|
8,355 |
|
|
|
18,347 |
|
Net cash provided by (used in) financing activities |
|
|
6,987 |
|
|
|
(1,628 |
) |
Net increase in cash and cash equivalents |
|
$ |
65,385 |
|
|
$ |
43,896 |
|
Operating Activities
The increase in net cash provided by operating activities during the 39-week period ended September 29, 2024 compared to the corresponding period in the prior year was due primarily to $24.5 million higher net income earned in the current period due to higher sales, gross margin improvements and better leverage of selling, general and administrative costs.
Investing Activities
The decrease in cash provided by investing activities is primarily due to an increase in purchases of property, plant and equipment during the 39-week period ended September 29, 2024 and fewer proceeds received on the maturities of available-for-sale debt securities, compared to the corresponding period in the prior year.
Financing Activities
The increase in cash provided by (used in) financing activities during the 39-week period ended September 29, 2024 compared to the corresponding period in the prior year was due primarily to an increase in the proceeds received from the exercise of stock options in the current period.
Non-GAAP Financial Measures
Adjusted EBITDA
We report our financial results in accordance with GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance.
We calculate Adjusted EBITDA as net income, adjusted to exclude:
Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.
33
Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA include the following:
In addition, our use of Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net income or loss and other results stated in accordance with GAAP.
The following table presents a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable financial measure stated in accordance with GAAP, for the periods presented:
|
|
13-Weeks Ended |
|
|
39-Weeks Ended |
|
||||||||||
|
|
September 29, |
|
|
September 24, |
|
|
September 29, |
|
|
September 24, |
|
||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Net income |
|
$ |
7,446 |
|
|
$ |
4,523 |
|
|
$ |
42,808 |
|
|
$ |
18,356 |
|
Depreciation and amortization(1) |
|
|
3,330 |
|
|
|
2,860 |
|
|
|
9,829 |
|
|
|
7,297 |
|
Stock-based compensation expense |
|
|
2,674 |
|
|
|
1,815 |
|
|
|
7,572 |
|
|
|
5,502 |
|
Income tax provision |
|
|
2,936 |
|
|
|
533 |
|
|
|
10,410 |
|
|
|
4,284 |
|
Interest expense |
|
|
259 |
|
|
|
238 |
|
|
|
771 |
|
|
|
513 |
|
Interest income |
|
|
(1,407 |
) |
|
|
(707 |
) |
|
|
(3,811 |
) |
|
|
(1,497 |
) |
Adjusted EBITDA |
|
$ |
15,238 |
|
|
$ |
9,262 |
|
|
$ |
67,579 |
|
|
$ |
34,455 |
|
Seasonality
Demand for our products fluctuates in response to seasonal factors. Demand tends to increase with the start of the school year and is highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter, and lowest during the summer months. As a result of these seasonal and quarterly fluctuations, comparisons of our sales and results of operations between different quarters within a single fiscal year are not necessarily meaningful comparisons.
Critical Accounting Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in the financial statements and related notes thereto. Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our unaudited condensed consolidated financial statements. Management has determined that our most critical accounting estimates are those relating to trade promotion accruals and income taxes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ materially from those estimates. For further discussion about our accounting policies, see “Summary of Significant Accounting Policies” in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
The significant accounting estimates used in preparation of the unaudited condensed consolidated financial statements are described in our audited consolidated financial statements as of and for the fiscal year ended December 31, 2023, and the notes thereto, which are included in our Annual Report. Except as detailed in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, there have been no material changes to our significant accounting policies or critical accounting estimates during the 39-week period ended September 29, 2024.
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Recent Accounting Pronouncements
See the sections titled “Summary of Significant Accounting Policies—Recently Adopted Accounting Pronouncements” and “—Recently Issued Accounting Pronouncements Not Yet Adopted” in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a discussion of recent accounting pronouncements.
Emerging Growth Company Status
In April 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until such time that we are no longer an emerging growth company. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
We will cease to be an emerging growth company on the date that is the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (2) December 31, 2025; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission, or the SEC. We may choose to take advantage of some but not all of these exemptions. Based on the market value of our common stock held by non-affiliates as of the last business day of our fiscal quarter ending June 30, 2024, our emerging growth company status will expire on December 29, 2024 because we will qualify as a large accelerated filer under the rules of the SEC and will be required to provide, among other items, an auditor’s attestation of management’s assessment of internal control over financial reporting required under Sarbanes-Oxley Act Section 404(b) beginning with our Annual Report on Form 10-K for the fiscal year ending December 29, 2024.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in raw materials, ingredients, inflation and interest rates.
There have been no material changes in our exposure to market risk during the 13-week and 39-week periods ended September 29, 2024 from the information provided in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 29, 2024. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
35
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. For additional information regarding legal proceedings, if any, see Note 19 “Commitments and Contingencies—Litigation” to our unaudited condensed consolidated financial statements included elsewhere in this report. We are not aware of any material pending or threatened legal proceedings, other than ordinary routine litigation incidental to the business, against us that we believe could have an adverse effect on our business, operating results or financial condition.
Item 1A. Risk Factors
Our operations and financial results are subject to various risks and uncertainties. The following is a description of the known factors that may materially affect our business, results of operations or financial condition. You should carefully consider the following risk factors, as well as the other information in this Quarterly Report. If any of the following risks actually occurs, our business, results of operations and financial condition could be adversely affected. In this case, the trading price of our common stock would likely decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may adversely affect our business, results of operations and financial condition.
Summary of Selected Risks Associated with Our Business
Our business faces significant risks and uncertainties. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. These risks include, among others, the following:
36
37
與我們的增長和資本需求有關的風險
我們最近快速增長可能不代表我們未來的增長，如果我們繼續快速增長，可能無法有效管理我們的增長或評估我們的未來前景。如果我們未能有效管理我們的增長或評估我們的未來前景，我們的業務可能會受到不利影響。
自成立以來，我們已經迅速發展，並預計將進一步增長。例如，我們的淨營業收入從2023年9月24日結束的13周內的11040萬美元增長到2024年9月29日結束的13周內的14500萬美元，我們的淨營業收入從2023年9月24日結束的39周內的33600萬美元增長到2024年9月29日結束的39周內的44030萬美元，我們的淨營業收入從2022財年的36210萬美元增長到2023財年的47190萬美元。這種增長給我們的管理、財務、運營、技術和其他資源帶來了重大壓力。我們業務的持續增長和擴張取決於許多因素，包括我們的能力：
我們業務的增長和擴展給我們的管理和運營團隊帶來了巨大的壓力，並將繼續這樣做，這需要大量額外的資源，無論是財務資源還是其他資源，以滿足我們的需求，而這些資源可能無法以成本有效的方式獲取，或者根本無法獲取。我們預計將繼續在當前和未來的處理設施、銷售和市場營銷、產品創新和開發以及作爲一家上市公司所需的日常管理上投入大量資源。
這些投資可能不會導致我們業務持續增長。即使這些投資導致了我們業務的增長，如果我們不能有效管理成長，可能無法執行我們的業務計劃，應對競爭壓力，利用市場機會，滿足客戶需求，或維持高質量的產品供應，任何一項都可能對我們的業務、財務狀況和經營業績產生不利影響。
未來我們可能無法維持或增加我們的盈利能力。
我們維持或增加盈利能力的能力取決於各種因素，其中許多是我們無法控制的。隨着我們繼續擴大業務，我們預計在可預見的未來，隨着我們繼續投資以增加家庭滲透率、客戶基礎、供應商網絡、營銷渠道和產品組合，擴展和增強我們的加工、製造和分銷設施，並僱傭額外的乘務員，我們的營業費用和資本支出將大幅增加。我們不斷擴張的努力可能比我們預期的更昂貴（包括通貨膨脹、成本上漲或與公共衛生流行病、貿易戰、國內或地緣政治緊張關係或其他因素相關的供應鏈中斷等因素），我們可能無法成功地提高淨營業收入和利潤率以足以抵消預期的更高費用。我們在投資加工能力、開發共同製造和合作包裝關係以及獲取和存儲原材料方面已經承擔了重大費用，我們將繼續承擔在開發和營銷產品方面的重大費用。此外，我們的許多費用，包括與我們現有和任何未來的加工和製造設施相關的成本，可能是固定的。我們希望繼續承擔重大法律、會計和
38
隨着我們作爲上市公司不斷髮展壯大，其他費用也會增加。如果我們的營業收入增長速度未能超過成本和費用的增長，我們可能無法維持或增加盈利能力，未來可能會遭受損失。
殼蛋的銷售佔我們淨營業收入的絕大部分，減少這些銷售將對我們的財務控件產生不利影響。
Shell eggs accounted for approximately 92% and 92% of our net revenue in the 13-week periods ended September 29, 2024 and September 24, 2023, respectively, and approximately 94% and 92% of our net revenue in the 39-week periods ended September 29, 2024 and September 24, 2023, respectively. Shell eggs are our flagship product and have been the focal point of our sales and marketing efforts, and we believe that sales of shell eggs will continue to constitute a significant portion of our net revenue, net income and cash flow for the foreseeable future. We cannot be certain that we will be able to continue to expand sales, processing and distribution of shell eggs, or that consumer and customer demand for our other existing and future products will expand to allow such products to represent a larger percentage of our revenue than they do currently. Accordingly, any factor adversely affecting sales of our shell eggs (including consumers’ election to purchase lower-priced private-label or other economy brands during times of economic uncertainty) could have an adverse effect on our business, financial condition and results of operations.
Failure to introduce successful new products, successfully enter into new product categories or successfully pursue growth by other means may adversely affect our ability to continue to grow.
One element of our growth strategy involves the development and marketing of new products that meet our standards for quality and appeal to consumer preferences. The success of our innovation and product development efforts is affected by our ability to anticipate changes in consumer preferences, the technical capability of our crew members in developing and testing product prototypes, our ability to comply with applicable governmental regulations, and the success of our management, sales and marketing teams in introducing and marketing new products, in current or new product categories. There can be no assurance that we will successfully develop and market new products or successfully introduce products in current or new categories. The development and introduction of new products requires substantial marketing expenditures, which we may be unable to recoup if new products do not gain widespread market acceptance. If we introduce new or improved products that ultimately do not meet our objectives, it could impact our growth, sales and profitability. Any failure to successfully develop, market and launch future products or successfully enter into new product categories may lead to decreased growth, sales and profitability.
如果我們選擇通過收購或投資業務或技術進入新的產品類別，而不是通過新產品推出等方式進行持續增長，可能會面臨進一步的風險。 追求這類機會可能會分散管理層的注意力。此外，這可能導致我們在確定、調查和追求此類交易方面產生各種成本和費用，無論這些機會是否得以實現。 這類收購、交易或投資還可能導致潛在的稀釋性股本發行、債務的產生或附帶責任或與整合有關的挑戰，任何這些都可能對我們的業務、財務狀況和經營成果產生不利影響。
我們對市場機會進行估計，並預測市場增長，這可能會被證明不準確，即使我們競爭的市場實現了預計的增長，我們的業務也可能無法以相似的速度增長，甚至可能根本不增長。
我們在本季度報告及其他地方，包括與我們在2023年宣佈的長期財務目標相關的市場機會和增長預測的估計，存在重大不確定性，並且基於可能不會準確的假設和估計，特別是考慮到經濟不確定性。影響我們市場機會計算的變量會隨着時間變化，無法保證我們的市場機會估計所涵蓋的任何特定客戶數量或百分比將會購買我們的產品，或者爲我們產生任何特定水平的營業收入。我們市場的任何擴展取決於多個因素，包括與我們的產品及競爭對手產品相關的成本和感知價值。即便我們競爭的市場達到規模估計和增長預測，我們的業務也可能無法按預期的速度增長，甚至可能沒有增長。我們的增長受許多因素的影響，包括我們在執行我們的業務策略方面的成功，而這又受到許多風險和不確定性的制約。因此，我們對市場增長的預測不應被視爲我們未來增長的指示。
39
爲了實現我們的目標，我們可能需要額外的融資，如果在需要時無法以可接受的條件獲得這筆必要資本，或者根本無法獲得，可能會迫使我們推遲、限制、減少或終止我們的產品製造和開發，以及其他運營。
自成立以來，我們主要通過股權融資、使用信貸額度和產品銷售來資助運營。我們已經發生了並預計將繼續發生與擴展加工能力相關的重大費用。我們相信，在可預見的未來，隨着我們考慮追求其他市場和其他增長機會，我們將繼續投入大量資源。
我們預計，現有的現金、現金等價物和可交易證券，加上我們的經營活動提供的現金以及來自摩根大通銀行的銀團信貸額度下的可用借款，將足以在接下來的12個月內資助我們的計劃營業費用和資本支出需求。不過，由於目前我們未知的因素，我們的經營計劃可能會改變，因此我們可能需要比計劃更早地尋求額外資金，可能通過公共或股權投資、債務融資或其他來源。我們可能還會尋求融資，以支持潛在的新產品推出或收購，或投資於我們認爲能夠提供增長機會的業務或技術。這些融資可能會導致股東的股份稀釋、債務契約的施加和還款義務，或會對我們的業務產生不利影響的其他限制。此外，即使我們相信有足夠的資金來支持當前或未來的經營計劃，我們也可能因有利的市場條件或戰略考量而尋求額外資本。
我們進一步獲取額外資本的能力可能會受到不利或不確定的經濟條件影響。資本市場和整體經濟的疲弱和波動可能會使我們更難以進入資本市場，並可能增加我們的借貸成本。
約束我們操作和財務靈活性的信貸協議要求我們符合特定的契約條件。
摩根大通信貸安排提供了一個最大借款額爲6000萬美元的循環信貸額度。摩根大通信貸安排包含特定的限制性契約，每種情況均受到某些例外情況的約束。摩根大通信貸安排中的限制性契約限制了我們增加或保證額外債務、承擔抵押、分配利潤、支付分紅、進行投資、進行諸如合併或聯合等重大變革、與公司的關聯方進行交易、改變我們的財政年度或實質性地改變我們業務性質的能力。摩根大通信貸安排還要求我們維持兩項財務契約：固定費用收益率和淨槓桿比率。這些條款可能影響我們追求我們認爲有吸引力的商業機會的能力，或者在應對業務環境變化時保持靈活性。
我們未能遵守摩根大通信用設施或任何當前或未來債務條款，可能會導致在這些債務下發生違約事件，如果未經糾正或豁免，可能會導致這些債務的貸款人宣佈所有義務，連同應計及未付利息，立即到期支付並接管擔保這些債務。這可能要求我們修改或以不利條款再融資債務。
如果我們被迫修改或再融資摩根大通信貸工具，而條件不太有利，或者根本無法做到這一點，我們的業務、財務狀況和運營結果可能會受到不利影響。在任何這種情況下，我們可能無法根據摩根大通信貸工具或其他債務進行借款，也可能無法償還到期的款項。這可能對我們的業務、財務狀況、運營結果和前景產生不利影響。
與我們業務、品牌、產品和行業板塊相關的風險
我們大量的雞蛋加工業務都在密蘇里州現有的Egg Central Station加工設施進行。此設施發生任何損壞或中斷可能會對我們的業務造成損害。
我們在密蘇里州現有的蛋品中心站蛋品加工設施進行了大量蛋殼加工。該設施的任何停工或減產期，可能是由於監管不符合要求或其他問題，以及我們無法控制的因素，如自然災害、天氣、火災、電力或其他公用事業中斷、工作停頓、疾病爆發或大流行、設備故障或原材料交付延遲，都可能嚴重干擾我們及時交付產品、履行合同義務和運營業務的能力。此外，我們用於蛋殼蛋的加工設備成本高且昂貴，尤其是因爲部分設備是國際採購的。我們有時會看到與國際採購設備相關的定價和產能約束，我們的供應鏈可能會在公共衛生大流行、國內或地緣政治緊張局勢、戰爭（如俄烏戰爭和中東地區的持續衝突）、通貨膨脹、貿易戰或其他因素的影響下進一步受到干擾。如果我們的機器設備的任何重要數量
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設備損壞，我們可能無法預測何時，是否能夠更換或修復此類機械，或找到具有適當替代機械的共同製造商，這可能對我們的業務、財務狀況和運營結果產生不利影響。我們保有的財產和業務中斷保險可能無法覆蓋所有潛在損失，也可能無法繼續以可接受的條件或根本無法提供給我們。
我們依賴於市場上雞蛋的供應，市場的波動，包括商品雞蛋價格相對於我們雞蛋價格的下降，可能會對我們的業務、財務狀況和經營成果造成不利影響。
我們與家庭農場簽訂合同，購買其在合同期內的所有蛋產量。我們在合同上有義務購買這些雞蛋，無論我們是否能夠賣出這些雞蛋。我們行業中時期性存在雞蛋過剩的情況，這導致雞蛋價格下降，有時下降幅度很大，因此我們以折扣價格或免費的方式出售或捐贈我們的多餘供應。如果我們無法以商業合理的條件銷售這些雞蛋，或根本無法銷售，我們的毛利、業務、財務狀況和經營結果可能會受到不利影響。相反，最近在雞蛋行業確實出現過供應短缺，供應受多種因素影響，包括禽流感、對雞蛋的需求增加以及飼料和其他投入成本的增加。這些供應短缺，加上我們或行業內其他人實施或未來可能選擇實施的價格上漲，可能導致消費者對外殼雞蛋的需求下降或無法滿足客戶需求，每一種情況都可能對我們的財務狀況、結果和經營產生重大影響。
我們以溢價價格向消費者銷售雞蛋，當商品雞蛋的價格相對於我們的雞蛋價格下降時（包括由於我們可能實施的價格增長或商品雞蛋市場的供應擴張），價格敏感的消費者可能會選擇以更快的速度購買我們競爭對手提供的商品雞蛋，而不是選擇我們的雞蛋。因此，商品雞蛋價格低於我們的雞蛋價格可能會對我們的業務、財務狀況和運營結果產生不利影響。
我們還以商品雞蛋價格的方式，將少部分蛋殼蛋出售給批發商和蛋類加工廠，這些價格波動較大且不在我們的控制範圍之內。生產量的小增加或需求的小減少都可能對這些雞蛋的銷售價格產生很大的負面影響。
商品價格波動和飼料穀物供應的變化可能會對我們的營運業績和財務狀況產生負面影響。
我們從農民那裏購買雞蛋的價格根據托盤重量波動，並且根據飼料成本的變化每季度調整，這可能導致我們在這些合同下約定的價格每季度波動。因此，我們的運營結果和財務狀況，包括我們的毛利率和盈利能力，會根據商品的成本和供應情況波動，包括玉米、豆粕和其他飼料成分。
儘管飼料原料可以從多個來源獲得，但我們幾乎無法控制這些受天氣、投機者、出口限制、各種供需因素、地緣政治緊張局勢、通貨膨脹、運輸和儲存成本，以及美國和國際上的農業和能源政策影響的價格。我們已經看到全球範圍內常規和有機玉米以及大豆作物價格上漲，包括由俄烏戰爭及對應措施、通貨膨脹和供應鏈短缺引發的價格上漲。中東及其他地區持續衝突可能會產生類似影響。我們已就常規飼料原料相關的商品衍生工具合約進行交易。如果我們無法成功執行該計劃以減少商品價格波動的影響，我們的財務狀況和經營業績可能會受到影響。
我們可能無法及時以足夠的幅度提高產品價格，以充分抵消由於消費者價格敏感性或競爭對手定價姿態而導致的商品成本增加，而且在許多情況下，我們的零售商可能不接受價格上漲，或者可能要求在特定時間段後才能提價。如果隨着時間推移，我們無法定價以覆蓋成本增加，也無法通過持續改進節省來抵消運營成本的增加，或者在當前或將來的任何商品衍生工具或類似計劃中不成功，那麼商品價格的波動或上漲可能會對我們的業務、財務狀況和運營結果產生不利影響。
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如果我們在不斷增長和擴展業務的過程中未能有效地擴大加工、製造和生產能力，包括成功開發我們計劃中的下一個雞蛋清洗和包裝設施，那麼我們的運營業績和品牌聲譽可能會受到損害。
雖然我們目前的供應、加工和製造業-半導體能力足以滿足我們當前的業務需求，但我們計劃在未來擴大這些能力，以便繼續發展和擴大我們的業務。在2024年6月，我們宣佈計劃在印第安納州西摩開發第二個洗蛋和包裝設施。我們在有效地繼續擴展生產和加工以及管理我們的供應鏈需求方面面臨風險。我們必須準確預測我們產品的需求，以確保我們擁有足夠的加工和製造業-半導體能力，以有效分配在庫存單位中的產品供應。
我們的預測基於多個假設，如果出現不準確的情況，可能會影響我們維持足夠的加工和製造能力（或共同加工和共同製造能力），以滿足產品需求，這可能導致我們無法滿足增加的客戶需求。如果我們未能滿足產品需求，結果零售客戶或之前購買過我們產品的消費者可能會選擇購買其他品牌，而我們的零售客戶可能會向其他品牌分配貨架空間，每一項可能都會對我們的業務、財務狀況和運營結果造成不利影響。
另一方面，如果我們高估需求或過度擴建產能，我們可能會有大量未充分利用的供應或其他資產，並且我們可能會遇到降低利潤率的情況。如果我們未能準確調整加工和製造能力以適應需求，我們的業務、財務狀況和運營結果可能會受到不利影響。
我們在印第安納州計劃的雞蛋清洗和包裝設施，或者我們未來擴大加工能力的其他項目，可能無法帶來我們預期的收益。
2024年6月，我們宣佈計劃在印第安納州西摩開發第二個蛋洗滌和包裝設施。建造和開設這個設施將需要大量的資本支出，並需要我們管理團隊和其他工作人員的努力和關注，這可能會轉移資源，影響我們現有的業務或運營。此外，我們將需要僱傭和留住更多熟練的工作人員來操作新設施，我們還需要招募和保留更多的家庭農場來爲新設施供應。如果我們無法有效地爲這個設施提供人員和物資支持，可能無法達到我們的運營和財務預期。即使新設施達到全面加工能力，也可能無法提供我們所期望的所有運營和財務利益。
如果我們未能有效地維護現有農場網絡內的關係，或進一步擴大我們的農場網絡，或者如果我們購買、開發和潛在出售農場的計劃未能產生我們預期的收益，那麼我們的業務、運營結果和品牌聲譽可能會受到損害。
我們的雞蛋來自於我們的家庭農場網絡，這是我們供應鏈的基礎。我們黃油的奶油來自於與我們黃油供應商簽約的家庭農場網絡。如果因農民的行動或我們無法控制的其他事件（包括我們黃油供應商未能維護或擴展其合同農場網絡）導致我們無法維持和擴展這一供應鏈，我們可能無法及時向分銷商和客戶提供我們的產品，這可能導致採購訂單被取消、我們的商業關係受損以及品牌受損。例如，我們要求我們的雞蛋農民按照特定標準建設和裝備他們的農場，這需要相當大的前期資本投資，農民在可接受條款下獲得充足融資的任何困難，包括因利率期貨上升而導致的困難，都會影響他們與我們簽訂合同的能力。這些及其他因素，包括經濟不確定性，可能使我們更難以在數量上招聘並吸引足夠的新農民以滿足產品需求。
有很多因素可能會損害我們與農民的關係，其中許多因素超出了我們的控制範圍。雖然我們努力以一種推動長期和可持續利益的方式來運營我們的業務，包括我們的農民，但我們可能會做出農民不同意的戰略決策，這可能導致農民終止與我們的關係。由於與現有農民的關係受損產生的聲譽損害，也可能使我們更難吸引新的農民來擴展我們的網絡。如果我們與現有或未來農民的關係因這些或其他因素而受到干擾，我們可能無法維持必要的供應來滿足客戶和消費對我們產品的需求，這將對我們的經營業績產生負面影響。
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我們的計劃可能會帶來進一步的風險， 在我們以前收購的印第安納州農田上開發加速器農場，或者在我們可能購買的其他地塊上開發加速器農場，並有可能在未來將這些農場出售給感興趣的農民。我們可能無法充分建設、發展或配備這些農場，且它們可能無法帶來我們預期的好處。這些農場的購買、開發和潛在銷售將需要大量的資本支出以及我們管理層和其他工作人員的努力與關注，這可能會分散我們現有業務或運營的資源。未能維持或擴大我們的農場網絡將對我們的業務、財務狀況以及運營結果產生不利影響。
如果我們未能有效定價我們的產品或實施價格上漲，我們的財務控件可能會受到不利影響。
我們產品的價格受到多種因素的影響，包括供應限制、客戶和消費者需求、通貨膨脹、輸入成本和市場環境。針對這些條件，我們有時會提高部分產品的價格。雖然我們尚未看到由於價格上漲導致銷量顯著下降，但如果我們進一步提高價格，我們可能會經歷產品需求下降、吸引新客戶能力降低和銷售成交量降低的情況。如果價格上漲導致我們產品價格與傳統或自有品牌產品價格之間的差距擴大，消費者可能不願意爲我們的產品支付溢價，特別是在經濟不確定時期。此外，零售客戶可能不接受這些價格上漲，或可能要求增加促銷活動。如果我們不能有效定價我們的產品或進行價格上漲，我們的業務、財務狀況和運營結果可能會受到不利影響。
運輸成本和貨運成本增加，或者由於我們的運輸供應商未能按時提取原材料或交付我們的產品，未能遵守適用政府規定，或完全交付，已對我們的營運業績產生不利影響，並預計將繼續對我們的營運業績產生不利影響。
我們依賴第三方運輸供應商來處理我們大量的原材料運輸和產品發貨。我們對發貨的提貨和送達服務的使用面臨風險，包括燃料價格上漲、司機短缺、由於貨運需求普遍增加而導致的公路運輸能力限制、員工和承包商罷工或無法提供服務（包括因疾病爆發或疫情）或惡劣天氣，以上任何因素都可能導致我們的運輸和貨運費用增加。例如，部分由於國際緊張局勢和戰爭（包括紅海集裝箱船遭襲擊）導致的勞動成本和燃料成本上升，我們在近期的某些時期見證了運輸和貨運費用的增加。運輸和貨運費用的進一步上漲可能對我們增加或維持盈利性生產的能力產生負面影響，因此可能會影響我們的運營結果。由於消費者的價格敏感性或我們競爭對手的定價策略，我們可能無法以足夠抵消運費增加的方式定價我們的產品，並且在許多情況下，我們的零售客戶可能不會接受價格上漲，或者可能要求價格上漲在特定時間之後才生效。此外，如果我們提高價格以抵消更高的運輸和貨運成本，我們可能會經歷產品需求下降、吸引新客戶的能力下降和銷量降低。
此外，我們的第三方運輸提供者不遵守適用的監管要求可能會影響提供商提供符合我們運輸需求的交付服務的能力。由於運輸提供者因不符合適用的監管要求而導致的成本上漲或不符，我們可能會更換快遞公司，這可能會導致在任何這種變化中出現後勤困難，從而對交付產生不利影響。此外，我們可能會因此變化而產生成本，並耗費資源。此外，我們可能無法獲得與當前使用的第三方運輸提供者所獲得的優惠條款一樣有利的條款，這反過來會增加我們的成本，並對我們的運營結果產生不利影響。
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我們未來的業務、運營結果和財務控件可能會受到雞蛋、奶油及其他符合我們標準的原材料的供應減少或受限的影響。
我們確保蛋、奶油以及其他產品的原材料能夠以具有競爭力的價格持續供應的能力取決於許多我們無法控制的因素。特別是，我們依賴供應蛋和奶油的農場實施控制和程序來管理暴露動物患病風險的努力，但儘管他們的努力，疫情可能發生。疫情的爆發可能導致政府對我們產品的銷售和分發施加增加的限制，負面宣發可能影響客戶和消費者對我們產品的印象，即使疫情沒有直接影響我們產品原料動物。我們供應貝殼蛋的農場網絡位於一個我們所稱爲牧場地帶的地理區域內，這是一個指代美國氣候適宜母雞儘可能多外出的術語。供應我們奶油的乳製品農場主要位於愛爾蘭。任何這些地區發生自然災害都可能對我們、農民和供應鏈產生重大負面影響。此外，我們產品的原料來源動物、我們依賴飼料的作物以及這些動物所在的牧場都容易受到不利天氣條件和自然災害的影響，如洪災、乾旱、霜凍、地震、颶風和瘟疫。疫病、不利天氣條件和自然災害都可能對牧場數量和質量產生負面影響，導致產量和質量減少，進而可能減少我們的原材料供應，或增加價格。如果我們爲此上調產品價格，可能會導致產品需求減少和銷售量降低，從而對我們的業務、財務狀況和運營結果產生不利影響。
我們還與其他食品公司在採購雞蛋和奶油方面競爭，如果消費對這些商品或含有它們的產品的需求增加，或者競爭對手在這些市場領域提供的產品越來越多，這種競爭可能在未來加劇。如果符合我們質量標準的雞蛋和奶油供應減少或需求增加，我們可能無法以良好的條款或根本無法獲得足夠的供應來滿足我們的需求。
我們的供應也可能受到養雞和滿足我們標準的牛的農場數量和規模、美國和全球經濟狀況的影響，以及我們預測原材料需求的能力。例如，爲了符合我們的標準，我們要求我們合約的蛋雞農場在我們關係建立初期投資於基礎設施。每個農場的典型前期投資都是巨大的，許多農民尋求從當地和區域銀行以及美國農業部農場服務局（USDA）的聯邦政府貸款獲得融資援助。美國和全球經濟狀況的變化、較高的利率或美國政府關門可能會顯著影響可提供給農民的貸款。許多農民有替代收入機會，根據我們的標準養雞的相對財務表現與其他潛在更有利可圖的機會相比可能會影響他們與我們合作的興趣。這些因素中的任何一個都可能影響我們向分銷商和客戶提供產品的能力，可能會對我們的業務、財務狀況和運營結果產生不利影響。
我們可能無法在競爭激烈的市場中成功競爭。
我們與大型雞蛋公司，如Cal-Maine公司，以及大型國際食品公司，如Ornua合作社（Kerrygold）競爭。我們還與本地和區域型的雞蛋及乳製品公司競爭，以及其他雞蛋和乳製品公司的自有品牌產品。這些競爭對手的財務和其他資源可能遠遠超過我們，其中一些競爭對手的產品在市場上得到了良好的接受。這些競爭對手的運營成本可能較低，因此能夠以更低的成本向客戶提供可比或替代的產品。這可能會對我們施加壓力，迫使我們降低價格，導致盈利能力下降；另一方面，如果我們未能降低價格，可能會導致市場份額的下降。相反，如果我們提高價格，包括由於殼蛋市場波動、商品或原材料成本增加、包裝或運輸成本增加等原因，消費對我們產品的需求下降可能會因市場競爭加劇而進一步惡化。
通常，食品行業由資源和運營遠遠大於我們的跨國公司主導。我們無法確定能否成功與擁有更強大財務、銷售和技術資源的大型競爭對手競爭。傳統食品公司可能會收購我們的競爭對手或推出自己的雞蛋和黃油產品，他們可能能夠利用自己的資源和規模，通過推出新產品、降低價格或增加促銷活動等方式來應對競爭壓力和消費者偏好的變化。零售商也會以自有品牌銷售競爭產品，這些產品通常以較低的價格出售，並可能改變我們產品的陳列，使其位置不那麼有利。相比之下，大型競爭對手可能對經濟動盪和不確定性，包括通貨膨脹、全球經濟狀況或農業疾病（如禽流感）的影響較小。這些競爭壓力可能導致我們失去市場份額，這可能需要我們降低價格、增加營銷和廣告支出或增加折扣或促銷活動的使用，而這些都會對我們的利潤率產生不利影響，並可能導致我們的運營結果和盈利能力下降。
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Failure to leverage our brand value propositions to compete against private-label products, especially during an economic downturn, may adversely affect our profitability.
We compete not only with other well-advertised nationally branded products, but also with private-label products. Such private-label products generally are sold at lower prices than our products. Consumers are more likely to purchase our products if they believe that our products provide a higher quality and greater value than less expensive alternatives. If the difference in perceived value between our brands and private-label products narrows, or if there is a perception of such a narrowing, consumers may choose not to buy our products at prices that are profitable for us. In periods of economic uncertainty, particularly in periods of uncertainty driven by high inflation, consumers may purchase more often from lower-priced private-label or other economy brands. To the extent this occurs, we could experience a decrease in the sales volume of our higher margin products or a shift in our product mix to lower margin offerings. In addition, our foodservice product sales will be reduced if consumers reduce the amount of food that they consume away from home at our foodservice customers, including as a result of public health pandemics or economic uncertainty driven by inflation or other factors.
We currently have a limited number of third-party co-manufacturers and cold storage providers. The loss of one or more of our co-manufacturers or cold storage providers or our failure to timely identify and establish new relationships with new co-manufacturers or cold storage providers could harm our business and impede our growth.
A significant amount of our revenue is derived from products manufactured at facilities owned and operated by our co-manufacturers. We currently rely on one co-manufacturer for hard-boiled eggs, one co-manufacturer for bulk butter production, one co-manufacturer for stick butter, one co-manufacturer for liquid eggs and one co-packer for certain shell egg processing. While we currently have written manufacturing contracts with our co-manufacturer for bulk butter production and our co-manufacturer for stick butter, we do not currently have written manufacturing contracts with our other co-manufacturers or with our co-packer for certain shell egg processing. Due to the absence of written contracts with certain of our co-manufacturers, these co-manufacturers can generally seek to alter or terminate their relationships with us at any time, resulting in periods during which we may have limited or no ability to manufacture certain of our products.
In addition, due to the limited number of co-manufacturers, any interruption in, or the loss of operations at, one or more of our co-manufacturing facilities, which may be caused by work stoppages, regulatory issues or noncompliance, disease outbreaks or pandemics, war, terrorism, fire, earthquakes, flooding or other weather or natural disasters, could delay, postpone or reduce production of some of our products, which could have an adverse effect on our business, financial condition and results of operations until such time as the interruption is resolved or an alternate source of production is secured, especially in times of low inventory.
We believe there are a limited number of competent, high-quality co-manufacturers in our industry that meet our geographical requirements and our strict quality and control standards, and should we seek to obtain additional or alternative co-manufacturing arrangements in the future, there can be no assurance that we would be able to do so on satisfactory terms, in a timely manner, or at all. Therefore, the loss of one or more co-manufacturers, any disruption or delay at a co-manufacturer or any failure to identify and engage co-manufacturers for new products and product extensions could delay, postpone or reduce production of our products, which could have an adverse effect on our business, financial condition and results of operations.
Additionally, we rely on a limited number of cold storage providers to store our products. Our financial performance depends in large part on our ability to obtain adequate cold storage facilities services in a timely manner. We are not assured of continued cold storage capacities. Certain of our cold storage providers could discontinue or seek to alter their relationship with us. In addition, we are not assured of sufficient capacities of these providers commensurate with increased product demand.
Outbreaks of agricultural diseases, including avian influenza and egg drop syndrome, the perception that outbreaks may occur or regulatory or market responses to outbreaks could reduce supply or demand for our products and harm our business.
我們的業務活動受到各種農產品風險的影響，包括鳥流感和蛋下降綜合症等疾病，這些事件會在很大程度上對我們分發的產品的質量和數量產生不利影響。
自2022年初高致病性禽流感（HPAI）首次爆發以來，我們一直在密切監測病毒的發展。截至目前，在我們的五家農場中，密蘇里州的一家、田納西州的一家和堪薩斯州的三家都發生了疫情。 2024年10月，我們得知密蘇里州三家農場出現了蛋降綜合症（EDS）的疫情。我們一直與我們的農場主、獸醫、政府衛生官員和動物福利審核員密切合作，遵循規程，確保我們的群禽儘可能安全，包括採購新推出的EDS疫苗。然而，我們可能無法獲得足夠的疫苗來治療我們網絡中的所有群禽。
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儘管我們尚未因此類農產品疫病暴發而遭受實質性雞蛋供應中斷，但如果我們的農場或生產設施的大部分受到高致病性禽流感、鴨瘟病或類似疾病的影響，這可能會對我們的業務、財務狀況和運營結果產生實質和不利影響。此外，高致病性禽流感、鴨瘟病或類似疾病的暴發可能會限制我們利用共包商爲我們的雞蛋外殼提高生產能力，因爲在疫情暴發時，這些共包商可能會實施增加生物安全措施。
即使我們的農場和生產設施沒有直接受到禽類疾病的影響，我們仍可能會由於政府對我們運營和產品銷售及分銷的限制，以及對我們行業的負面宣傳和消費者認知的影響而受到負面影響。這些影響可能會導致消費者對我們產品的需求減少，進而影響我們的運營結果。此外，我們家族農場所在的某些州在某些時候建議或要求農場將母雞限制在室內，以幫助減少接觸禽類疾病的機會。長期要求母雞待在室內可能會對消費者對我們雞蛋產品的認知產生負面影響，相較於我們的競爭對手，這可能會對我們的業務、財務狀況和運營結果產生負面影響。如果發生HPAI或其他農產品疾病廣泛傳播到人類的情況，這些影響可能會加劇。EDS 並不被認爲會傳播給人類，儘管人類感染HPAI的案例很少，美國公共衛生官員認爲人類感染HPAI的風險很低，但HPAI或其他農產品疾病的傳播或傳輸的顯著變化或增加可能會對我們的業務產生負面影響，包括我們招聘和留住農民的能力。
我們可能會受到消費者偏好、感知和消費習慣的變化的負面影響，尤其是在自然食品行業和動物產品方面。任何未能開發或豐富我們的產品系列，或新產品未能獲得市場認可，都可能對我們的業務產生負面影響。
我們已將品牌定位於抓住消費者對天然、清潔標籤、可追溯、道德生產、美味和營養食品日益增長的興趣。我們所運營的市場受到消費者偏好、認知和消費習慣變化的影響。我們的表現在很大程度上依賴於可能影響美國天然食品行業市場的消費者支出水平和模式的因素。這些因素包括消費者偏好、消費者信懇智能、消費者收入、消費者對我們產品安全性和質量的認知，以及相對於替代品的產品價值感知的變化。有關我們產品或其製造中涉及的原材料、成分或流程的安全性或質量，或與飲食或健康問題相關的媒體報道，可能會損害消費者對我們產品的信懇智能。由於消費者偏好、認知、信懇智能和消費習慣的變化，包括不願支付溢價或因經濟困境或價格敏感性增強而無法購買我們的產品，可能會導致我們產品的消費總體下降，這種現象可能隨時發生，尤其在經濟不確定性和通貨膨脹趨勢加劇的情況下。例如，我們和許多客戶都面臨動物權利團體的壓力，要求所有食品產品供應公司以符合這些動物權利團體制定或批准的某些標準的方式經營。如果由於這些原因，消費者的偏好偏向植物性產品，或者出於其他原因，從動物產品轉移開來，我們的業務、財務狀況和運營成果可能會受到負面影響。
我們產品的成功取決於多個因素，包括我們準確預測市場需求和消費偏好的能力、我們將產品質量與競爭對手區分開來的能力，以及我們對產品的營銷和廣告活動的有效性。我們可能無法及時識別消費偏好的趨勢，並開發出回應這些趨勢的產品。我們還可能無法通過營銷和廣告活動有效推廣我們的產品並獲得市場認可。如果我們的產品未能獲得市場認可，受到監管要求的限制或存在質量問題，我們可能無法完全回收在運營中產生的成本和費用，我們的業務、財務狀況或經營業績可能會受到實質性和不利的影響。
我們銷售的大部分產品由少數經銷商代表，影響我們重要經銷商或與這些經銷商的關係的干擾可能會對我們的運營結果產生不利影響。
我們的產品通過經紀商-分銷商-零售商網絡進行分銷，經紀商將我們的產品介紹給分銷商和零售商，零售商再將我們的產品賣給消費者。我們通過食品分銷商服務大多數天然渠道客戶，例如聯合天然食品公司（United Natural Foods, Inc.，簡稱UNFI），他們購買、存儲、銷售並將我們的產品交付給零售客戶。
2024年9月29日和2023年9月24日結束的13週期和2024年9月29日和2023年9月24日結束的39週期中，UNFI（Whole Foods的主要分銷商）分別佔我們淨營業收入的約24%和24%。相應地，UNFI分別佔我們淨營業收入的約24%和25%。由於分銷商充當我們與零售食品雜貨商或餐飲服務提供商之間的中介，一般都是由零售商或餐飲服務商選擇分銷商，所以我們與分銷商的合同中沒有確保未來產品銷售的短期或長期承諾或最低購買量。這些分銷商能夠決定攜帶的產品，並且他們可能限制我們的產品範圍。
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零售客戶進行購買。我們預計，在可預見的未來，我們的銷售將大部分通過核心分銷商進行。如果失去一個或多個重要的分銷商合作關係，無法及時替代，或無法以相似的條款和控件進行替代，將可能對我們的業務、財務狀況和運營結果產生不利影響。
我們依賴孵化場和小母雞養殖場爲我們的家庭農場網絡提供下蛋母雞。任何對供應鏈的干擾都可能實質性地且不利地影響我們的業務、財務狀況或經營成果。
根據我們與家庭農場網絡的合同條款，雖然我們不擁有蛋雞，但我們通常負責協調蛋雞的採購和交付給農民。爲了履行這些責任，我們直接向孵化場下訂單採購小雞，以便爲未來一年的雞蛋生產準備，通常至少提前一年。當小雞孵化出來後，它們會被送往一網絡的育雛場，由它們撫養至大約16到18周齡，此時再送往我們的家庭農場網絡開始產蛋。
我們與多個雛雞孵化場合作，向一個獨立的雛雞農場網絡提供小雞。我們與這些供應商沒有長期供應合同，如果我們當前的大部分孵化場或雛雞農場因任何原因停止與我們合作，我們可能很難尋找和簽訂合適的孵化場或雛雞農場的合同，以滿足我們的需求。雛雞農場可能也會受到產能限制，如果我們無法找到擁有足夠產能的獨立雛雞農場接收來自我們孵化場的小雞，我們可能無法履行客戶承諾。此外，任何原因導致的產蛋雞供應中斷，包括農產品疾病如禽流感、自然災害、火災、電力或其他公用事業中斷、停工或其他災難，如果我們無法及時以可接受的條款替代這些供應商，將對我們的業務、財務狀況和經營結果產生重大不利影響。
高企的利率可能對我們的業務以及我們的家庭農民獲取資金的能力產生不利影響。
我們的業務和運營結果可能受到信用可用性、利率的條款和上升等因素的影響。這些變化可能導致我們的業務成本增加，並限制我們追求增長機會的能力。全球金融市場的干擾和波動可能導致信用可用性的收縮，影響我們融資運營的能力。來自運營的現金流顯著減少或信用可用性減少可能對我們實現計劃的增長和運營結果產生重大不利影響。
提高的利率期貨可能會對我們家庭農民獲取資本的能力產生不利影響。我們要求我們的蛋農按照特定的規格建設和配置他們的農場，這需要大量的前期資本投資，任何農民無法在可接受的條款下獲得足夠融資的情況，包括因提高的利率期貨而導致的，將會影響他們與我們的合作。如果我們與這些蛋農的關係受到干擾，我們可能無法完全收回對鳥類和飼料的投資，這將對我們的運營結果產生負面影響。
零售客戶的整合或重要零售客戶的流失可能會對我們的銷售和盈利能力產生負面影響。
我們的零售客戶包括自然渠道和主流渠道的商店，近年來一直在進行整合。這種整合導致產生更大、更復雜的組織，具有增強的談判和採購能力，能夠抵制價格上漲，以更低的庫存運營，減少他們攜帶的品牌數量，並增加對自有品牌產品的重視，所有這些都可能對我們的業務產生負面影響。
對於我們的一些零售客戶，例如Whole Foods，我們通過分銷商銷售我們的產品。我們無法準確地將我們的淨營業收入歸因於通過分銷商銷售的特定零售商。我們依賴第三方數據來計算歸因於零售商的零售銷售部分，但這些數據本質上是不精確的，因爲它基於我們的產品在零售商處銷售產生的總銷售額，而沒有考慮價格讓步、促銷活動或退款情況，並且只針對通過分銷商服務的零售商的零售銷售進行測量。根據這些第三方數據和內部分析，在截至2024年9月29日和2023年9月24日的每個13週期間，Whole Foods分別佔我們零售銷售的約21%和22%，在截至2024年9月29日和2023年9月24日的每個39週期間，分別佔我們零售銷售的約21%和23%。Kroger在截至2024年9月29日和2023年9月24日的13週期間，分別佔我們零售銷售的約11%；在截至2024年9月29日和2023年9月24日的39週期間，分別佔我們零售銷售的約11%。失去Whole Foods、Kroger或任何其他大型零售客戶，或任何此類客戶的採購水平降低或取消任何業務，如果持續較長時間，可能會對我們的銷售和盈利能力產生負面影響。
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零售商可能會出於我們無法始終預料或控制的原因而採取影響我們的行動，比如他們的財務狀況、業務策略或運營變化、競爭產品的推出或者我們產品的品質評價。儘管在不同的渠道細分市場運營，我們的零售客戶有時會爭奪同一消費者。由於這種競爭可能帶來的實際或感知上的衝突，零售商可能會採取負面影響我們的行動。因此，我們的財務業績可能會因一個或多個重要零售商的行動而在不同時期出現顯著波動。
我們主要從一個唯一的供應商那裏採購絕大部分的蛋盒，任何中斷可能影響我們賣出雞蛋的能力。
我們幾乎所有的蛋殼包裝都是來自唯一的供應商。任何關於我們蛋殼紙箱的供應中斷，包括全球運輸中斷，可能會延遲我們的生產並阻礙我們履行對客戶的承諾。如果我們無法以商業合理的條件或及時地獲得足夠數量的包裝，或者我們無法獲得替代來源，我們的產品銷售可能會被延遲，或者我們可能需要重新設計我們的產品。例如，因COVID-19大流行在2020年對蛋殼的需求增加，幾乎所有我們的蛋殼紙箱的供應商開始優先考慮核心雞蛋產品（如12個裝的包裝），而且我們還單獨遇到了一些我們18個裝的雞蛋紙箱的質量問題。由於這些事件，併爲了滿足我們產品的需求，我們開始爲一些蛋殼產品使用回收塑料包裝。儘管這種包裝的改變並未對我們的運營產生實質性影響，但並不能保證我們未來不會遇到類似的包裝問題，或者任何此類包裝問題不會影響我們滿足蛋殼產品需求的能力。例如，消費者可能不太願意接受使用某些材料包裝的產品，或者修改後的包裝可能使消費者更難在商店中找到我們的產品。上述任何事件都可能導致銷售損失、價格上漲、毛利下降或損害我們與客戶或消費者的關係，這將對我們的業務、財務狀況和運營結果產生重大不利影響。
我們的品牌和聲譽可能會因產品質量或食品安全問題的真實或 perceived 的問題而受損，這可能會對我們的業務、聲譽、運營結果和財務狀況產生不利影響。
我們相信消費者依賴我們提供高質量的產品。因此，真實或感知的質量或食品安全問題，或未能遵守適用的食品法規和要求，無論是否最終基於事實，以及是否涉及我們（例如涉及競爭對手的事件），都可能導致負面宣發和降低公衆對我們公司、品牌或產品的信懇智能，這可能會損害我們的聲譽和銷售，並可能對我們的業務、財務控件和運營結果產生不利影響。
我們的產品可能會受到外部材料或疾病源性微生物或病原體，如沙門氏菌和大腸桿菌的污染。這些微生物和病原體通常存在於環境中，存在一個或多個可能存在於我們的產品中的風險，無論是由於食品加工的結果，還是基於我們產品的性質而存在的固有風險。這些微生物和病原體還可能是由於在進一步加工、食品服務或消費者層級的不當處理而被引入到我們的產品中。通過遵守目前的良好生產規範，或cGMP，以及成品檢測，可能可以控制這些風險，但可能無法完全消除。即使是無意的污染產品的發運可能會導致違法並增加暴露於產品責任索賠、產品召回、聯邦和州監管機構的審查加劇、處罰和負面宣傳的風險。此外，從其他生產者（包括共同製造商）購買的產品可能會含有我們可能會無意中重新分銷的污染物。
如果我們的產品被污染，或者我們的產品存在潛在的健康風險，我們或我們的聯合制造商可能會決定或需要召回產品。任何產品召回都可能導致消費者對我們產品的信任減少，並且對我們與現有和潛在客戶的聲譽產生不利影響。例如，在2019年12月，我們煮熟蛋的聯合制造商自願對其工廠生產的所有煮熟雞蛋進行了一次I類召回，包括我們的產品，原因是生產設施可能受到李斯特菌污染。在召回過程中，我們的聯合制造商決定永久關閉受影響的生產設施，並將所有生產轉移到另一個設施。因此，我們在2020財年第一季度一段時間內無法向客戶提供煮熟雞蛋，導致該產品的某些客戶帳戶的損失，這些帳戶的收入合計微不足道。
一旦消費者購買我們的產品，我們也無法控制它們。 例如，消費者可能會在與美國農業部、美國食品和藥物管理局或FDA以及其他政府指南不一致的條件和時間內儲存我們的產品，這可能會對我們產品的質量和安全產生不利影響。
如果消費者不認爲我們的產品質量高或安全，那麼我們品牌的價值會降低，我們的業務、運營結果和財務狀況都會受到不利影響。一旦消費者對我們的信心喪失，
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消費者對我們產品的質量和安全性的關注，可能難以克服並帶來巨大成本。任何此類不利影響都可能因我們作爲社會負責任高品質產品供應商的市場定位而惡化，並嚴重減少我們的品牌價值。關於任何產品安全問題的討論，不論原因，都可能對我們的品牌、聲譽和運營結果產生不利影響。此外，我們、消費者和第三方日益使用社交和數字媒體，加速信息或誤傳和觀點的傳播速度和範圍。有關我們、我們品牌或產品的任何負面宣發可能嚴重損害我們的品牌和聲譽。如果我們不能保持品牌的良好形象，我們的業務、財務狀況和運營結果可能會受到不利影響。
我們必須投入資源來維護消費者對我們品牌的認知，建立品牌忠誠度，並激發對我們產品的興趣。我們的營銷策略和渠道將不斷髮展，我們的計劃可能成功也可能失敗。
爲了保持競爭力、擴展並保持我們產品的貨架陳列，我們已經增加並可能繼續增加我們的市場營銷和廣告支出，以維持和提高消費意識，保護和擴大我們的市場份額或推廣新產品，這可能會影響我們的經營結果。進一步的廣告和促銷支出可能是必要的，以維持或改善我們品牌的市場地位，或者將新產品推向市場，而我們行業的參與者越來越多地與非傳統媒體接觸，包括通過社交媒體和網絡渠道進行的消費者宣傳，這可能未必會成功。
我們的市場營銷和廣告努力的增加可能無法維持我們當前的聲譽或導致品牌知名度的提高。此外，社交媒體平台經常更改算法，以確定用戶搜索結果的排名和顯示方式，可能會對結果的顯示方式進行其他更改，或者可能增加此類廣告的成本，這可能會對我們鏈接的放置產生負面影響，從而減少用戶訪問我們的網站和社交媒體渠道的次數，或使這種營銷成本過高。社交媒體平台通常要求遵守其政策和程序，這些政策和程序可能會發生變化或新解釋，而我們的談判能力有限，可能會對我們的營銷能力產生負面影響。如果我們無法以具有成本效益的方式維護和促進公衆對我們品牌和產品的有利感知，我們的業務、財務狀況和運營結果可能會受到不利影響。
此外，我們在某些時候曾成爲負面社交媒體活動的對象，未來也可能會成爲此類活動的對象，這些活動超出了我們的控制範圍。即使這些活動不準確或誤導，也可能對我們品牌的認知產生負面影響。我們依賴於消費者對我們產品的安全性、質量、可持續性和有效性的看法。負面的消費認知可能源於媒體報道、社交媒體的帖子或評論、產品責任索賠、監管調查或影響我們產品或行業的召回，這些因素都可能降低需求，損害我們的聲譽，並對我們的業務產生負面影響。
如果我們不能開發和維護我們的品牌，我們的業務可能會受到影響。
我們已經建立了一個強大且值得信賴的品牌，這對我們業務的成功做出了重要貢獻，我們相信我們持續成功取決於我們維護和增強 vital farms 品牌價值的能力。維護、宣發和定位我們的品牌和聲譽將取決於許多因素，其中包括我們產品系列的成功、食品安全、質量保證、營銷和商品努力、我們持續關注動物福利、環境和可持續性，以及我們提供一致且高質量的消費者和客戶體驗的能力。任何負面宣傳，無論準確與否，都可能對我們的業務產生不利影響。品牌價值建立在主觀品質的認知上，任何消減我們消費者、客戶、農民、供應商或合作製造商的忠誠度的事件，包括我們產品或包裝的更改、負面宣傳或政府調查、訴訟或監管執法行動，都可能顯着降低我們品牌的價值並嚴重損害我們的業務。
If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected.
Our success and our ability to increase revenue and operate profitably depend in part on our ability to cost-effectively acquire new consumers, retain existing consumers and keep existing consumers engaged so that they continue to purchase our products. While we intend to continue to invest significantly in sales and marketing to educate consumers about our brand, our values and our products, there is no assurance that these efforts will generate further demand for our products or expand our consumer base. Our ability to attract new consumers and retain our existing consumers depends on the perceived value and quality of our products, consumers’ desire to purchase ethically produced products at a premium, offerings of our competitors, our ability to offer new and relevant products and the effectiveness of our marketing efforts, among other items. For example, because our shell eggs are sold to consumers at a premium price point, when prices for commodity shell eggs fall relative to the price of our shell eggs, we may be unable to entice price-sensitive consumers to try our products. We may also lose loyal consumers to our competitors if we are unable
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to meet consumer demand in a timely manner. If we are unable to cost-effectively acquire new consumers, retain existing consumers and keep existing consumers engaged, our business, financial condition and operating results would be adversely affected.
Our sales and profits are dependent upon our ability to expand existing customer relationships and acquire new customers.
Our business depends on our ability to increase our household penetration, to expand the number of products sold through existing retail customers, to grow within the foodservice channel and to strengthen our product offerings through innovation in both new and existing categories. Any strategies we employ to pursue this growth are subject to numerous factors outside of our control. For example, retailers continue to aggressively market their private-label products, which could reduce demand for our products. The expansion of our business also depends on our ability over the long term to obtain customers in additional distribution channels, such as convenience, drugstore, club, military and international markets. Any growth in distribution channels may also affect our existing customer relationships and present additional challenges, including related to pricing strategies. Additionally, we may need to increase or reallocate spending on marketing and promotional activities, such as rebates, temporary price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities, and these expenditures are subject to risks, including related to consumer acceptance of our efforts. Our failure to obtain new customers, or expand our business with existing customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Demand for shell eggs and butter is subject to seasonal fluctuations, which can adversely impact our results of operations in certain quarters.
Demand for shell eggs and butter fluctuates in response to seasonal factors. Demand tends to increase with the start of the school year and is highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter, and lowest during the summer months. As a result of these seasonal and quarterly fluctuations, comparisons of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful comparisons. If we are not correct in predicting our future shell egg demand, we may experience a supply and demand shell egg imbalance. This imbalance between supply and demand can adversely impact our results of operations at certain times of the year.
Packaging costs are volatile, have recently increased and may continue to increase, which may negatively impact our profitability, and reduced availability of packaging supplies may otherwise impact our business.
Costs of packaging are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, weather conditions, consumer demand and changes in governmental trade. We saw higher packaging costs in fiscal 2023, and these elevated costs have continued into fiscal 2024. Volatility in the prices of supplies we and our co-manufacturers purchase could increase our cost of sales and reduce our profitability. Moreover, although we have not seen significant decreases in volume due to previous price increases, we may not be able to implement further price increases for our products to cover any increased costs, and any price increases we do implement may result in lower consumer demand, decreased ability to attract new customers and lower sales volumes.
Additionally, if the availability of certain packaging supplies is limited due to factors beyond our control (including as a result of the public health pandemics or disruptions to global supply chains), or if packaging supplies do not meet our standards, we may make changes to our product packaging, which could negatively impact the perception of our brand. For example, in connection with increased demand for shell eggs in relation to the COVID-19 pandemic in 2020, the supplier of substantially all of our shell egg cartons began to prioritize packaging for core egg products (such as 12-count packages), and we separately experienced certain quality issues with our 18-count egg cartons. As a result of these events, and in order to otherwise meet demand for our products, we began using recycled plastic packaging for certain of our shell egg products. If we are not successful in managing our packaging costs or the supply of packaging that meets our standards to use for our products, if we are unable to increase our prices to cover increased costs or if such price increases reduce our sales volumes, any of these factors could adversely affect our business, financial condition, and results of operations.
Our net revenue and earnings may fluctuate as a result of price actions, promotional activities and chargebacks.
Retailers may require price concessions that would negatively impact our margins and our profitability. Alternatively, we may increase our prices to offset commodity inflation and potentially impact our margins and volume. In addition, we periodically offer sales incentives through various programs to customers and consumers, including rebates, temporary price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities.
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Additionally, while we continue to work to optimize supply chain logistics, we are occasionally charged fees and/or fines by retailers for various delivery and order discrepancies. While we challenge and vet these charges, we may be subject to such charges that could be detrimental to our performance, particularly when combined with the effects of increased freight costs or the other risks outlined in this section. The cost associated with promotions and chargebacks is estimated and recorded as a reduction in net revenue. These price concessions, promotional activities and chargebacks could adversely impact our net revenue and changes in such activities could adversely impact period-over-period results. If we are not correct in predicting the performance of promotions, or if we are not correct in estimating chargebacks, our business, financial condition and results of operations would be adversely affected.
If we fail to retain and motivate members of our management team or other key crew members or fail to attract, train, develop and retain additional qualified crew members to support our operations, our business and future growth prospects may be harmed.
Our success and future growth depend largely upon the continued services of our executive officers as well as our other key crew members. These executives and key crew members are primarily responsible for determining the strategic direction of our business and for executing our growth strategy and are integral to our brand, culture and the reputation we enjoy with farmers, suppliers, co-manufacturers, distributors, customers and consumers. From time to time, there may be changes in our executive management team or other key crew members resulting from the hiring or departure of these personnel. The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our crew members and lead our company, could harm our business.
In addition, our success depends in part upon our ability to attract, train, develop and retain a sufficient number of crew members who understand and appreciate our culture and can represent our brand effectively and establish credibility with our business partners and consumers. If we are unable to win in a competitive market for top talent capable of meeting our business needs and expectations, our business and brand image may be impaired. For example, in Springfield, Missouri, where our existing Egg Central Station processing facility is located, there is a tight labor market. As a result of this tight labor market, we may be unable to attract and retain crew members with the skills we require. Additionally, substantially all of our crew members outside of our Egg Central Station facility are working remotely on a permanent basis. Although we believe we manage our operations to handle remote working conditions efficiently, it is possible that such remote work arrangements could adversely impact crew member cohesiveness, efficiency, professional development, operational agility and retention. Any failure to meet our staffing needs or any material increase in turnover rates of our crew members may adversely affect our business, financial condition and results of operations.
If we cannot maintain our company culture or focus on our purpose as we grow, our business and competitive position may be harmed.
We believe our culture and our purpose have been key contributors to our success to date and that the critical nature of the platform that we provide promotes a sense of greater purpose and fulfillment in our crew members. Any failure to preserve our culture or focus on our purpose could negatively affect our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As we continue to grow and develop the infrastructure of a public company, we may find it difficult to maintain these important values. We may also have difficulty maintaining our company culture as substantially all of our crew members outside of our Egg Central Station facility are working remotely on a permanent basis. If we fail to maintain our company culture or focus on our purpose, our business and competitive position may be harmed.
Our operations are geographically consolidated. A major tornado or other natural disaster within the regions in which we operate could seriously disrupt our entire business.
Our existing Egg Central Station shell egg processing facility is located in Springfield, Missouri. This facility and our network of family farms supporting our shell egg business are concentrated in the midwestern portion of the Pasture Belt. Our planned second shell egg processing facility is in Seymour, Indiana, which is also located in the Pasture Belt. The majority of cream for our butter is sourced from farms in Ireland. The impact of natural disasters such as tornadoes, drought or flood within these areas is difficult to predict, particularly given the potential of climate change to increase the frequency and intensity of such natural disasters, but a natural disaster could seriously disrupt our entire business. Our insurance may not adequately cover our losses and expenses in the event of a natural disaster. As a result, natural disasters within these areas could lead to substantial losses.
Our inability to maintain our GFSI and SQF Select Site certifications may negatively affect our reputation.
The Safe Quality Food Institute administers the SQF Program, which is a third-party auditing program that examines and certifies food producers with respect to certain aspects of the producer’s business, including food safety, quality control and social, environmental and occupational health and safety management systems. The SQF Select Site certification is one of a number of
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available SQF certifications and involves both auditing for food safety issues and unannounced inspections by SQF personnel on an annual basis.
The Global Food Safety Initiative, or GFSI, is a private organization established and managed by The Consumer Goods Forum, an international trade association. GFSI operates a benchmarking scheme whereby certification bodies, such as the SQF Program, are “recognized” as meeting certain criteria maintained by GFSI. GFSI itself does not certify or accredit entities in the food industry.
SQF Select Site certification and the GFSI recognition of the SQF Program do not themselves have any independent legal significance and do not necessarily signal regulatory compliance. As a practice matter, however, certain retailers, including some of our largest customers, require SQF certification or certification by another GFSI-recognized program as a condition for doing business. Loss of SQF Select Site certification could impair our ability to do business with these customers, which could materially and adversely affect our business, financial condition and operating results.
Risks Related to Socioeconomic, Political and Environmental Factors
Disruptions in the worldwide economy may adversely affect our business, results of operations and financial condition.
Adverse and uncertain economic conditions, including uncertainty related to inflation, market volatility, outbreaks of contagious disease or pandemics, domestic or geopolitical tensions and wars, including the Russia-Ukraine war and ongoing conflicts in the Middle East, or disruption in global financial and credit markets due to uncertainty in the banking system or bank failures may impact distributor, retailer, foodservice and consumer demand for our products. In addition, our ability to manage normal commercial relationships with our farmers, suppliers, co-manufacturers, distributors, retailers, foodservice consumers and creditors may suffer. Consumers may shift purchases to lower-priced or other perceived value offerings, including private-label products, during economic downturns, and an economic downturn may cause customers to be less receptive to price increases on our products.
Adverse economic conditions may also affect our farmers. For example, recent inflationary pressures have resulted in increased costs for our farmers to build, equip and operate their farms. If our relationship with our existing farmers, or our ability to attract new farmers, is disrupted due to economic conditions or otherwise, our operating results may be adversely affected. Further, our foodservice product sales will be reduced if consumers reduce the amount of food they consume away from home at our foodservice customers, including as a result of inflationary concerns or other economic uncertainty. Distributors and customers may become more conservative in response to these conditions and seek to reduce their inventories. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors, retailer and foodservice customers, our ability to attract new consumers, the financial condition of our consumers and our ability to provide products that appeal to consumers at the right price. Prolonged unfavorable economic conditions may have an adverse effect on our sales and profitability.
In addition, historically, our deposit accounts have held deposits in excess of the amounts insured by the Federal Deposit Insurance Corporation, or FDIC. In the event of a bank failure at any of the institutions where we maintain deposits, there can be no assurance that regulators will agree to guarantee such deposits above and beyond amounts insured by the FDIC.
Disruptions in international trade, including disruptions due to global health pandemics, third-party labor disputes or geopolitical tensions, may have a material adverse impact on us, our suppliers and our network of farms, including our ability to expand our operations as planned.
Global health pandemics such as COVID-19, labor disputes or work stoppages, the Russia-Ukraine war, conflicts in the Middle East and other geopolitical tensions have disrupted international trade, resulting in increased shipping costs and delays in the import and export of goods to and from the United States and other countries. Specifically, the increased demand for international shipping has resulted in shortages of shipping containers and delays at international ports. Currently, we import cream for our butter from a supplier in Ireland, which may result in increased costs or shipment delays due to the recent disruptions in the international trade markets and may result in increased exposure to potential import restrictions, increased duties or tariffs or other factors described below. Additionally, we, our suppliers and our network of family farms are dependent on equipment and other supplies imported from Europe and other locations. To the extent that disruptions to global shipping, including disruptions due to global health pandemics, third-party labor disputes or geopolitical tensions or wars, negatively impact our, our suppliers’ or our network of family farms’ ability to access necessary goods, we may not be able to expand our operations as planned, and our business, financial condition and results of operations would be materially and adversely affected.
We and certain of our vendors use overseas sourcing to varying degrees to produce certain of the products we sell. Any event causing a sudden disruption of manufacturing or imports from such foreign countries, including changes in the Unites States’ foreign trade policies resulting in the imposition of additional import restrictions, withdrawal from or material modifications to, international trade agreements, unanticipated political changes, increased customs duties or tariffs, labor disputes, health epidemics, adverse weather conditions, crop failure, acts of war or terrorism, legal or economic restrictions on overseas suppliers’ ability to produce and
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deliver products and natural disasters, could increase our costs and materially harm our business, financial condition and results of operations. Our business is also subject to a variety of other risks generally associated with indirectly sourcing goods from abroad, such as political instability, disruption of imports by labor disputes, currency fluctuations and local business practices. In addition, requirements imposed by the FDA compel importers to verify that food products and ingredients produced by a foreign supplier comply with all applicable legal and regulatory requirements enforced by the FDA, which could result in certain products being deemed ineligible for import. In addition, the Department of Homeland Security may at times prevent the importation or customs clearance of certain products and ingredients for reasons unrelated to food safety.
A U.S. federal government shutdown could have a material adverse impact on our results of operations and financial condition.
The partial shutdown of the U.S. federal government that began in late 2018 and continued into 2019 adversely impacted many of our family farmers’ ability to access capital, as these farmers receive funding through farm loan programs of the USDA Farm Service Agency. The partial shutdown also impacted our ability to receive governmental approvals for products and labeling of new products. Another U.S. federal government shutdown of similar or greater duration could similarly impact our business, which could have a material adverse effect on our results of operations and financial condition.
Climate change, or legal, regulatory or market efforts to address climate change, may negatively affect our business and operations.
There is scientific consensus that carbon dioxide and other greenhouse gases emissions have had, and will continue to have, an adverse impact on global temperatures, weather conditions, and the frequency and severity of natural disasters. If climate change has a negative effect on agricultural productivity, we may be subject to decreased availability or less favorable pricing for certain raw materials that are necessary for our products, including corn, soybean meal and other feed ingredients. We may further be subject to unpredictable water availability due to the impact of climate change, and the lack of available water may adversely affect our business and operations.
Additionally, extreme weather and natural disasters exacerbated by climate change may impact our business. The egg farms in our network are all geographically located in a region that provides an environment conducive to year-round raising of chickens. However, if climate change negatively impacts the year-round habitability of this region for chickens, we may be subject to decreased availability or less favorable pricing for our eggs. Adverse weather conditions and natural disasters, including those caused by climate change, can adversely impact pasture conditions, leading to reduced yields and quality. For example, elevated summer temperatures in the Pasture Belt have at times contributed to lower-than-normal shell egg yield at certain of our farms. Adverse weather conditions and natural disasters may also impact the habitability and pasture conditions of the farms where we source the cream for our butter products. Further, we may incur increased transportation, storage and processing costs if we are unable to source products within a certain distance from our processing and co-manufacturing facilities due to the effects of climate change.
Governmental and market concern about climate change and its effects may result in additional legal or regulatory requirements to reduce or mitigate the effects of greenhouse gases or water usage. Such laws or regulations, to the extent applicable to us or our farmers, suppliers, co-manufacturers or service providers, may result in significant increases to our costs of operation, particularly the supply chain and distribution costs associated with our products.
Failure to adequately respond to stakeholder scrutiny related to environmental, social and governance issues or failure to achieve our stated impact goals could adversely impact our reputation and brand.
Our business faces scrutiny related to environmental, social and governance (ESG) issues, including sustainable development, product packaging, renewable resources, environmental stewardship, supply chain management, climate change, diversity and inclusion, workplace conduct, human rights, philanthropy and support for local communities. In December 2022, we announced a series of impact-related goals relating to, among other things, ecological impacts, diversity and inclusion, governance accountability and climate change, which we refer to as our Impact Goals. There is no assurance that we will be able to achieve these goals. Failure to achieve our Impact Goals could damage our reputation and brand image, and our business, financial condition and results of operations could be adversely impacted. Furthermore, there exists negative sentiment toward ESG measures among certain individuals and government institutions, and several states have enacted or proposed “anti-ESG” legislation. While these policies and legislation are generally targeted to investment advisory firms and mutual funds, as we continue to pursue our Impact Goals and related initiatives, we could face a negative reaction that adversely impacts our business.
Implementation of our environmental and sustainability initiatives, including in connection with our Impact Goals and annual Impact Report, may require certain financial expenditures and crew member resources, and if we are unable to meet our goals or otherwise fail to meet stakeholder standards or expectations with respect to ESG issues or our Impact Goals, this could have a material adverse effect on our reputation and brand and negatively impact our relationship with our investors, crew members, farmers, suppliers, customers and consumers. There has also been a recent increase in litigation surrounding ESG practices and related
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disclosures. For example, there is increased focus by regulators, investors and other stakeholders on greenwashing and sustainability-related claims. There can be no assurance that we will not be subject to allegations or claims with respect to ESG issues or our Impact Goals.
Risks Related to Legal and Government Regulation
Food safety and food-borne illness incidents or advertising or product mislabeling may materially and adversely affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.
Selling food for human consumption involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding food safety. Illness, injury or death related to allergens, food-borne illnesses, foreign material contamination or other food safety incidents caused by our products, or involving our farmers or other suppliers, could result in the disruption or discontinuance of sales of these products or our relationships with such farmers or suppliers, or otherwise result in increased operating costs, regulatory enforcement actions or harm to our reputation. For example, in December 2019, our co-manufacturer for hard-boiled eggs conducted a voluntary Class I recall of all hard-boiled eggs produced at its facility, including ours, due to a potential listeria contamination at the production facility. Our co-manufacturer elected to permanently close the affected production facility and move all production to a different facility, which did not have sufficient capacity to meet product demand. As a result, we were unable to supply customers with hard-boiled eggs for a period of time in the first quarter of fiscal 2020.
Shipment of adulterated or misbranded products, even if inadvertent, can result in criminal or civil liability. Such incidents could also expose us to product liability, negligence or other lawsuits, including consumer class action lawsuits. Any claims brought against us may exceed or be outside the scope of our existing or future insurance policy coverage or limits. Any judgment against us that is more than our policy limits or not covered by our insurance policies would have to be paid from our cash reserves, which would reduce our capital resources.
The occurrence of food-borne illnesses or other food safety incidents could also adversely affect the price and availability of affected raw materials, resulting in higher costs, disruptions in supply and a reduction in our sales. Furthermore, any instances of food contamination or regulatory noncompliance, whether or not caused by our actions, could compel us, our farms or suppliers, our distributors or our customers, depending on the circumstances, to conduct a recall in accordance with FDA or USDA regulations and policies, and comparable state laws. Food recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing distributors or customers and a potential negative impact on our ability to attract new customers due to negative consumer experiences or because of an adverse impact on our brand and reputation. The costs of a recall could be outside the scope of our existing or future insurance policy coverage or limits.
In addition, food companies have been subject to targeted, large-scale tampering as well as to opportunistic, individual product tampering, and we, like any food company, could be a target for product tampering. Forms of tampering could include the introduction of foreign material, chemical contaminants and pathological organisms into food products, as well as product substitution. Governmental regulations require companies like us to analyze, prepare and implement mitigation strategies specifically to address tampering designed to inflict widespread public health harm. If we do not adequately address the possibility, or any actual instance, of product tampering, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions, which could adversely affect our business, financial condition and operating results.
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Our operations are subject to FDA and USDA federal regulations, as well as other state and local regulations, and there is no assurance that we will be in compliance with all applicable regulations.
Our operations are subject to extensive regulation by the FDA, the USDA and other federal, state and local authorities. With respect to eggs in particular, the FDA and the USDA split jurisdiction depending on the type of product involved. While the FDA has primary responsibility for the regulation of shell eggs, the USDA has primary responsibility for the regulation of dried, frozen or liquid eggs and other “egg products,” subject to certain exceptions. Specifically, our shell eggs, butter and hard-boiled egg products are subject to the requirements of the Federal Food, Drug, and Cosmetic Act, as amended, including by the Food Safety Modernization Act of 2011, or FSMA, and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging, labeling and safety of most food products. The FDA requires that facilities that manufacture food products comply with a range of requirements, including but not limited to hazard analysis and preventive controls regulations, cGMPs and supplier verification requirements. Our shell egg operations are further subject to FDA regulatory requirements governing the production, storage and transportation of shell eggs for the control of salmonella. FDA-inspected processing facilities are subject to periodic and “for cause” inspection by federal, state and local authorities. We are subject to requirements under FSMA’s foreign supplier verification program and import tariffs, bond and other requirements imposed by U.S. Customs and Border Protection for our butter products, which are imported from Ireland.
In addition, certain of our products, such as our liquid whole egg products, are subject to regulation by the USDA, including facility registration, inspection, manufacturing and labeling requirements. We do not control the manufacturing processes of, and rely upon, our co-manufacturers for compliance with cGMPs and other regulatory requirements for the manufacturing of our products that is conducted by our co-manufacturers. If we or our co-manufacturers cannot successfully manufacture products that conform to our specifications and the strict regulatory requirements of the FDA, the USDA or others, we or they may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products, result in our co-manufacturers’ inability to continue manufacturing for us, result in a recall of our products that have already been distributed and result in damage to our brand and reputation. For example, in December 2019, our co-manufacturer for hard-boiled eggs conducted a voluntary Class I recall of all hard-boiled eggs produced at its facility, including ours, due to a potential listeria contamination at the production facility. We rely upon our co-manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA, the USDA or another regulatory authority determines that we or these co-manufacturers have not complied with the applicable regulatory requirements, our business may be adversely impacted.
Our liquid whole eggs are subject to the requirements of the Egg Products Inspection Act, or EPIA, and regulations promulgated thereunder by the USDA. The USDA has comprehensive regulations in place that apply to establishments that break, dry and process shell eggs into liquid egg products. This regulatory scheme governs the manufacturing, processing, pasteurizations, packaging, labeling and safety of egg products. Under the EPIA and USDA regulations, establishments that manufacture egg products must comply with the USDA’s requirements for sanitation, temperature control, pasteurization and labeling. In addition, in September 2020, the USDA announced that it had finalized its Egg Products Inspection Rule. Pursuant to the regulatory requirements established by this rule, we anticipate that our co-manufacturers’ liquid whole egg establishment will be required to implement Hazard Analysis and Critical Control Point plans within two years after publication of the final rule in the Federal Register and will further be required to implement Sanitary Standard Operating Procedures within one year after publication in the Federal Register. We do not control the manufacturing processes of, and rely upon, our co-manufacturers for compliance with USDA regulations for the manufacturing of our liquid whole egg products, which is conducted by our co-manufacturers. If we or our co-manufacturers cannot successfully manufacture products that conform to our specifications and the strict regulatory requirements of the USDA or others, we or they may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products, could result in our co-manufacturers’ inability to continue manufacturing for us, or could result in a recall of our product that has already been distributed. In addition, we rely upon our co-manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the USDA or a comparable foreign regulatory authority determines that we or these co-manufacturers have not complied with the applicable regulatory requirements, our business may be materially impacted.
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Our products that are labeled as “organic” are subject to the requirements of the Organic Foods Production Act, or OFPA, and the USDA’s National Organic Program, or NOP, regulations. The OFPA is a comprehensive regulatory scheme that mandates certain practices and prohibits other practices pertaining to the raising of animals and handling and processing of food products. We, and our network of family farms and co-manufacturers, contract with NOP-accredited certifying agents to ensure that our organic products are produced in compliance with the OFPA and NOP regulations. We do not control the farms where our products are raised and rely on the farms for compliance with the on-farm requirements of the OFPA and NOP regulations. Similarly, we do not control the manufacturing processes of, and we rely upon, our co-manufacturers for compliance with requirements of the OFPA and NOP regulations with respect to organic products handled and manufactured by our co-manufacturers. If we, the farms or the co-manufacturers cannot successfully raise and manufacture products that meet the strict regulatory requirements of the OFPA and the NOP, we or they may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products as “organic,” could result in the farms or co-manufacturers’ inability to continue to raise farm products or manufacture food for us, or we, the farms, or the co-manufacturer could lose the right to market products as “organic,” and subject us, the farms, or co-manufacturers to civil monetary penalties. If the USDA or a comparable foreign regulatory authority determines that we or these co-manufacturers have not complied with the applicable regulatory requirements, our business may be materially impacted.
We are also subject to state and local regulations, including product requirements, labeling requirements and import restrictions. If our products fail to meet such individual state standards or are restricted from being imported into a state by regulatory requirements, our business, financial condition or results of operations could be materially and adversely affected.
We seek to comply with applicable regulations through a combination of employing internal experience and expert personnel to ensure quality assurance compliance (i.e., assuring that our products are not adulterated or misbranded) and contracting with third-party laboratories that conduct analyses of products to ensure compliance with nutrition labeling requirements and to identify any potential contaminants before distribution. Failure by us, the farms or the co-manufacturers to comply with applicable laws and regulations, pay any applicable fees or assessments or maintain permits, licenses or registrations relating to our or our co-manufacturers’ operations could subject us to civil remedies or penalties, including fines, injunctions, recalls or seizures, warning letters, restrictions on the marketing or manufacturing of products, or refusals to permit the import or export of products, as well as potential criminal sanctions, which could result in increased operating costs resulting in a material effect on our operating results and business. See the section titled “—Government Regulation” in Part I, Item 1, “Business,” of our latest Annual Report for further information on the regulations to which we are subject.
Changes in existing laws or regulations, or the adoption of new laws or regulations may increase our costs and otherwise adversely affect our business, results of operations and financial condition.
The manufacture and marketing of food products is highly regulated. We, our farmers, our suppliers and our co-manufacturers are subject to a variety of laws and regulations. These laws and regulations apply to many aspects of our business, including the manufacture, packaging, labeling, distribution, advertising, sale, quality and safety of our products, as well as the health and safety of our crew members and the protection of the environment.
In the United States, we are subject to regulation by various government agencies, including the FDA, the USDA, the Federal Trade Commission, or FTC, the Occupational Safety and Health Administration, and the Environmental Protection Agency, as well as various state and local agencies. We are also regulated outside the United States by various international regulatory bodies. In addition, we are subject to certain standards, such as GFSI standards and review by voluntary organizations, such as the Council of Better Business Bureaus’ National Advertising Division. We could incur costs, including fines, penalties, assessments and third-party claims, because of any violations of, or liabilities under, such requirements, including any competitor or consumer challenges relating to compliance with such requirements. For example, in connection with the marketing and advertisement of our products, we could be the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and the consumer protection statutes of some states.
The regulatory environment in which we operate could change significantly and adversely in the future. Any change in manufacturing, labeling or packaging requirements for our products may lead to an increase in costs or interruptions in production, either of which could adversely affect our operations and financial condition. Changes in marketing or labeling requirements or standards related to our products could require us to revise or discontinue making certain claims or utilizing certain branding elements, which may make our products less appealing to consumers. New or revised government laws and regulations could result in additional compliance costs and, in the event of non-compliance, civil remedies, including fines, injunctions, withdrawals, recalls or seizures and confiscations, as well as potential criminal sanctions, any of which may adversely affect our business, financial condition and results of operations.
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Failure by our network of family farms, suppliers of raw materials or co-manufacturers to comply with food safety, environmental or other laws and regulations, or with the specifications and requirements of our products, may disrupt our supply of products and adversely affect our business.
If any member of our network of family farms, suppliers or co-manufacturers fail to comply with food safety, environmental, health and safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted and our reputation could be harmed. Additionally, the farms and co-manufacturers are required to maintain the quality of our products and to comply with our standards and specifications. In the event of actual or alleged non-compliance, we might be forced to find alternative farms, suppliers or co-manufacturers and we may be subject to lawsuits and/or regulatory enforcement actions related to such non-compliance by the farms, suppliers and co-manufacturers. As a result, our supply of eggs and other raw materials or finished inventory could be disrupted or our costs could increase, which would adversely affect our business, results of operations and financial condition. The failure of any contracted farmer or co-manufacturer to produce products that conform to our standards could adversely affect our reputation in the marketplace and result in product recalls, product liability claims, government or third-party actions and economic loss. For example, in December 2019, our co-manufacturer for hard-boiled eggs conducted a voluntary Class I recall of all hard-boiled eggs produced at its facility, including ours, due to a potential listeria contamination at the production facility. Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of eggs and other raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial condition and results of operations.
We are subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings and investigations.
Our business operations and ownership and past and present operation of real property are subject to stringent federal, state, and local environmental laws and regulations pertaining to the discharge of materials into the environment and natural resources. Violation of these laws and regulations could lead to substantial liabilities, fines and penalties or to capital expenditures related to pollution control equipment that could have a material adverse effect on our business. We could also experience in the future significant opposition from third parties with respect to our business, including environmental non-governmental organizations, neighborhood groups and municipalities. Additionally, new matters or sites may be identified in the future, including in connection with the potential expansion of our processing capacity, that will require additional environmental investigation, assessment, or expenditures, which could cause additional capital expenditures. Future discovery of contamination of property underlying or in the vicinity of our present or future properties, facilities or waste disposal sites could require us to incur additional expenses, delays to our business and to our proposed construction. The occurrence of any of these events, the implementation of new laws and regulations, or stricter interpretation of existing laws or regulations could adversely affect our business, financial condition and results of operations.
Legal claims, government investigations or other regulatory enforcement actions could subject us to civil and criminal penalties.
We operate in a highly regulated environment with constantly evolving legal and regulatory frameworks. Consequently, we are subject to a heightened risk of legal claims, government investigations or other regulatory enforcement actions. Although we have implemented policies and procedures designed to ensure compliance with existing laws and regulations, there can be no assurance that our crew members, consultants, independent contractors, farmers, suppliers, co-manufacturers or distributors will not violate our policies and procedures. Moreover, a failure to maintain effective control processes could lead to violations, unintentional or otherwise, of laws and regulations. Legal claims, government investigations or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations could subject us to civil and criminal penalties that could materially and adversely affect our product sales, reputation, financial condition and operating results. In addition, the costs and other effects of defending potential and pending litigation and administrative actions against us may be difficult to determine and could adversely affect our financial condition and operating results.
Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business.
We are not currently party to any material litigation. However, from time to time, we may be party to various claims and litigation proceedings. We evaluate these claims and litigation proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from any assessments and estimates we may make.
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Even when not merited, the defense of claims and litigation proceedings may divert our management’s attention, and we may incur significant expenses in defending these lawsuits. For example, we have expended both management time and monetary resources in defending the above-referenced lawsuit. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in any of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial position, cash flows or results of operations. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.
Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions and caps on amounts recoverable. Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery.
We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation (including class claims) and mass arbitration demands, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits and other adverse consequences.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions and financial information, which we collectively refer to as “sensitive data.”
Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to data privacy and security.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our crew members or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar actions), litigation (including class-action claims) and mass arbitration demands, additional reporting requirements and/or oversight, bans on processing personal data and orders to destroy or not use personal data. In particular, plaintiffs have become increasingly active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for significant statutory damages depending on the volume of data and the number of violations. Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to loss of customers, inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or inquiry, adverse publicity or substantial changes to our business model or operations.
Risks Related to Our Status as a Certified B Corporation and Public Benefit Corporation
Our status as a public benefit corporation and a Certified B Corporation may not result in the benefits that we anticipate, and we may be unable to maintain our Certified B Corporation status.
We have elected to be classified as a public benefit corporation under Delaware law. As a public benefit corporation, we are required to balance the financial interests of our stockholders with the best interests of those stakeholders materially affected by our conduct, including particularly those affected by the specific benefit purposes set forth in our amended and restated certificate of incorporation. There is no assurance that the expected positive impact from being a public benefit corporation will be realized and our status as a public benefit corporation and compliance with our related obligations could negatively impact our ability to provide the highest possible return to our stockholders.
As a public benefit corporation, we are required to publicly disclose a report at least biennially on our overall public benefit performance and on our assessment of our success in achieving our specific public benefit purpose. If we are not timely or are unable to provide this report, or if the report is not viewed favorably by parties doing business with us or regulators or others reviewing our credentials, our reputation and status as a public benefit corporation may be harmed.
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While not required by Delaware law or the terms of our certificate of incorporation, we have elected to have our social and environmental performance, accountability and transparency assessed against the proprietary criteria established by B Lab, an independent non-profit organization. As a result of this assessment, we have been designated as a “Certified B Corporation,” which refers to companies that are certified as meeting certain levels of social and environmental performance, accountability and transparency. The standards for Certified B Corporation certification are B Lab and may change over time, and our continued certification is at the sole discretion of B Lab. To maintain our certification, we are required to update our assessment and verify our updated score with B Lab every three years. We were most recently recertified as a Certified B Corporation in January 2022. We are in the process of seeking recertification as a Certified B Corporation. Our reputation could be harmed if we lose our status as a Certified B Corporation, whether by our choice or by our failure to continue to meet the certification requirements, particularly if that failure or change were to create a perception that we are more focused on financial performance and are no longer as committed to the values shared by Certified B Corporations, or if our publicly reported Certified B Corporation score declines.
As a public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value.
As a public benefit corporation, our Board of Directors, has a duty to balance (i) the pecuniary interest of our stockholders, (ii) the best interests of those materially affected by our conduct and (iii) the specific public benefits identified in our amended and restated certificate of incorporation. While we believe our public benefit designation and associated obligations will benefit our stockholders, in balancing these interests our Board of Directors may take actions that do not maximize stockholder value. Any benefits to stockholders resulting from our public benefit purposes may not materialize within the timeframe we expect or at all and may have negative effects. For example:
We may be unable to fully realize the benefits we expect from actions taken to benefit our stakeholders, including farmers, suppliers, crew members and local communities, which could adversely affect our business, financial condition and results of operations, which in turn could cause our stock price to decline.
As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on our financial condition and results of operations.
As a Delaware public benefit corporation, our stockholders (if they, individually or collectively, own the lesser of at least 2% of our outstanding capital stock or shares having at least $2 million in market value) are entitled to file a derivative lawsuit claiming that our directors failed to balance stockholder and public benefit interests. This potential liability does not exist for traditional corporations. Therefore, we may be subject to the possibility of increased derivative litigation, which would require the attention of management and, as a result, may adversely impact management’s ability to effectively execute our strategy. Any such derivative litigation may be costly and have an adverse impact on our financial condition and results of operations.
Risks Related to Being a Public Company
If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls over financial reporting, disclosure controls and procedures. We are required, under Section 404 of the Sarbanes-Oxley Act, or Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. When we lose our status as
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an “emerging growth company” after the end of our fiscal year ending December 29, 2024, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting. This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
Our compliance with Section 404 will require that we continue to incur substantial expense and expend significant management efforts to ensure ongoing compliance. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm conducts its Section 404 reviews, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by The Nasdaq Stock Market LLC, or Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
We are currently an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We will remain an “emerging growth company,” as defined in the JOBS Act, until December 29, 2024, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors.
We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be comparable to the results of operations of certain other companies in our industry that have adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
Effective as of December 29, 2024, we will be a large accelerated filer, which will increase our costs and demands on management.
As a result of the market value of our common stock held by non-affiliates as of June 30, 2024, we will be a large accelerated filer as of December 29, 2024, and we will therefore no longer qualify as an emerging growth company. As a large accelerated filer, we will be subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us due to our status as an emerging growth company. These requirements include, but are not limited to:
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We expect that compliance with the additional requirements of being a large accelerated filer will increase our legal and financial compliance costs and may cause management and other personnel to divert attention from operational and other business matters to devote increased time to public company reporting requirements. Due to the complexity and logistical difficulty of implementing the standards, rules and regulations that apply to a large accelerated filer, there is an increased risk that we may be found to be in non-compliance with such standards, rules and regulations or to have significant deficiencies or material weaknesses in our internal controls over financial reporting. Any failure to maintain effective disclosure controls and internal control over financial reporting could materially and adversely affect our business, results of operations, and financial condition and could cause a decline in the trading price of our common stock.
Risks Related to Information Technology and Intellectual Property
If our data or information technology systems, or the data or information technology systems of third parties upon which we rely, were compromised, we could experience adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruption of our business operations, reputational harm and loss of revenue or profits.
In the ordinary course of our business, we and the third parties upon which we rely process sensitive data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats that could cause security incidents. We also use mobile devices, social networking and other online activities and third parties to connect with our crew members, farmers, suppliers, co-manufacturers, distributors, customers and consumers. Cyber-attacks, malicious internet-based activity, online and offline fraud and other similar activities may threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states and nation-state-supported actors. Further, as we pursue new initiatives that improve our operations and cost structure, we also intend to expand and improve our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and could lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
In addition, our reliance on third-party service providers could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation. We also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business. Our ability to monitor these third
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parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
While we have implemented security measures designed to protect against cybersecurity incidents, there can be no assurance that these incident response measures will be effective. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely). We may not, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.
The theft, destruction, loss, misappropriation or release of sensitive information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers and distributors, potential liability and competitive disadvantage all of which could have an adverse effect on our business, financial condition or results of operations.
Such risks may be increased by the fact that substantially all of our crew members outside of our Egg Central Station facility are working remotely on a permanent basis. Technologies and security systems in place at our crew members’ homes may be less secure than those used in a physical office, and while we have implemented controls and safeguards to help protect our systems as our crew members work from home, there can be no assurance that these measures will be effective.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely. A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our services.
We may expend significant resources or modify our business activities to try to protect against security incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
If we or a third party upon whom we rely experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); competitive disadvantage; financial loss; and other similar harms. Security incidents and attendant consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Further, use of artificial intelligence platforms by our crew members, whether authorized or unauthorized, may increase the risk that our intellectual property and other proprietary information will be unintentionally disclosed. If we fail to identify and address cybersecurity risks associated with new initiatives, we may become increasingly vulnerable to such risks.
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The implementation of a new enterprise resource planning system could cause disruption to our business, and we may not be able to effectively realize the benefits of this new system.
We are in the process of transitioning to a new enterprise resource planning, or ERP, system, in order to support our future growth and more fully optimize our existing processes. The implementation of a new ERP system may prove to be more difficult, costly or time-consuming than expected, and it is possible that the system will not yield the benefits we anticipate. Any disruptions, delays or deficiencies related to the new ERP system could materially impact our operations and adversely affect our ability to process orders, manage our inventory, fulfill obligations to customers or otherwise operate our business. In addition, implementation of a new ERP system will require significant resources, including the time and attention of our management and key crew members, in order to fully realize the anticipated benefits.
The loss of any registered trademark or other intellectual property could enable other companies to compete more effectively with us.
We utilize intellectual property in our business. Our trademarks are valuable assets that reinforce our brand and consumers’ favorable perception of our products. We have invested a significant amount of money in establishing and promoting our trademarked brands. We also rely on unpatented proprietary expertise and copyright protection to develop and maintain our competitive position. Our continued success depends, to a significant degree, upon our ability to protect and preserve our intellectual property, including our trademarks and copyrights.
We rely on confidentiality agreements and trademark and copyright law to protect our intellectual property rights. Our confidentiality agreements with our crew members and certain of our consultants, contract employees, suppliers and independent contractors, including some of our co-manufacturers who use our formulations to manufacture our products, generally require that all information made known to them be kept strictly confidential. Further, some of our formulations have been developed by or with our suppliers and co-manufacturers. As a result, we may not be able to prevent others from using similar formulations.
We cannot be certain that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights. In addition, our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brand and products. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether we are successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual property or force us to enter into licenses with others. Any one of these occurrences may have an adverse effect on our business, financial condition and results of operations.
Risks Related to Ownership of Our Common Stock and Other General Risks
Our stock price may be volatile, and the value of our common stock may decline.
The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including those described elsewhere in this “Risk Factors” section.
Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of our common stock, particularly in light of uncertainties surrounding inflation, geopolitical tensions, disruption in global financial and credit markets, public health pandemics and related impacts.
Sales of our common stock in the public market could cause the market price of our common stock to decline.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing equity holders have substantial unrecognized gains on the value of the equity they hold, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our common stock.
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In addition, as of September 29, 2024, there were 2,931,854 shares of common stock issuable upon the exercise of outstanding stock options or subject to vesting of outstanding restricted stock awards. We have registered all of the shares of common stock issuable upon exercise of outstanding stock options, vesting of outstanding restricted stock awards or other equity incentives we may grant in the future, for public resale under the Securities Act of 1933, as amended, or the Securities Act. The shares of common stock will become eligible for sale in the public market to the extent such options are exercised, subject to compliance with applicable securities laws.
We may be subject to significant liability that is not covered by insurance.
Although we believe that the extent of our insurance coverage is consistent with industry practice, any claim under our insurance policies may be subject to certain exceptions, may not be honored fully, in a timely manner, or at all, and we may not have purchased sufficient insurance to cover all losses incurred. If we were to incur substantial liabilities or if our business operations were interrupted for a substantial period of time, we could incur costs and suffer losses. Such inventory and business interruption losses may not be covered by our insurance policies. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations. Additionally, in the future, insurance coverage may not be available to us at commercially acceptable premiums, or at all.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, and provisions of Delaware law applicable to us as a public benefit corporation, may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, or DGCL, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
Also, as a public benefit corporation, our Board of Directors is required by the DCGL to manage or direct our business and affairs in a manner that balances the pecuniary interests of our stockholders, the best interests of those materially affected by our conduct, and the specific public benefits identified in our certificate of incorporation. Additionally, pursuant to our amended and restated certificate of incorporation, a vote of at least 66 2/3% of our outstanding shares of voting stock is required for matters directly or indirectly amending or removing our public benefit purpose, or to effect a merger or consolidation involving stock consideration with an entity that is not a public benefit corporation with an identical public benefit to ours. Such provisions could also limit the price
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that our investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our common stock would receive a premium for your shares of our common stock in an acquisition.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and, with respect to certain matters, the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which could restrict our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) is the exclusive forum for certain actions or proceedings under Delaware law, statutory or common law, including: any derivative action or proceeding brought on our behalf; any action asserting a breach of a fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws; any action as to which the DCGL confers jurisdiction to the court of Chancery of the State of Delaware; or any action asserting a claim against us that is governed by the internal affairs doctrine. The provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act of 1934, as amended, or the Exchange Act, or any other claim for which federal courts have exclusive jurisdiction. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations our amended and restated certificate of incorporation provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. While Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us and our directors, officers or other employees in a venue other than in the federal district courts of the United States of America. In such instance, we would expect our efforts to defend the validity and enforceability of such provisions may require further significant additional costs associated with resolving the dispute in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions, any of which could seriously harm our business.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Use of Proceeds
Use of Proceeds from the Initial Public Offering (IPO)
On August 4, 2020, we completed our IPO, from which we received net proceeds of approximately $99.7 million, after deducting underwriting discounts and commissions of $7.8 million and offering expenses of $3.4 million. The offer and sale of the shares in our IPO were registered under the Securities Act on Registration Statement on Form S-1 (Registration No. 333-239772), which was declared effective on July 30, 2020.
There has been no material change in the planned use of proceeds from our IPO as described in the prospectus that formed a part of the Registration Statement. We invested the funds received in cash equivalents, other marketable securities and investments in accordance with our investment policy. As of September 29, 2024, we have used an aggregate of $35.2 million of the IPO proceeds, including $7.3 million to pay off our term loan, $1.9 million to pay off our equipment loan in 2020 and $26.0 million for the expansion of our Egg Central Station facility in Springfield, Missouri.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Director and Officer Trading Arrangements
During the 13-week period ended September 29, 2024, certain of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, as set forth in the table below:
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Type of Trading Arrangement |
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Name and Position |
Action |
Adoption/ Termination Date |
Rule 10b5-1* |
Non-Rule 10b5-1** |
Total Shares of Common Stock to be Sold |
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Total Shares of Common Stock to be Purchased |
Expiration Date |
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X |
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* Contract, instructions, or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
** “Non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K under the Exchange Act.
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Item 6. Exhibits
Exhibit Number |
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Description |
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3.1 |
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3.2 |
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10.1+ |
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Amended and Restated Non-Employee Director Compensation Policy. |
10.2+ |
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Offer Letter between the Registrant and Joseph Holland, dated as of August 15, 2024. |
10.3+ |
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Offer Letter between the Registrant and Reena Van Hoven, dated as of August 15, 2024. |
31.1 |
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31.2 |
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32.1* |
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101.INS |
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Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
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104 |
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Cover page formatted as Inline XBRL and contained in Exhibit 101 |
+ Indicates a management contract or compensatory plan.
* Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Vital Farms, Inc. |
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Dated: November 7, 2024 |
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By: |
/s/ Russell Diez-Canseco |
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Russell Diez-Canseco |
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President and Chief Executive Officer (Principal Executive Officer) |
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Dated: November 7, 2024 |
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By: |
/s/ Thilo Wrede |
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Thilo Wrede |
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Chief Financial Officer (Principal Financial and Accounting Officer) |