Laird Superfood, Inc.

Thank you for standing by, and welcome to the fourth quarter 2021 earnings conference call and webcast for Laird Superfood, Inc. I will now turn the call over to Mr. Reed Anderson of ICR. Please go ahead.

Thank you. Good afternoon, and welcome to Laird Superfood's fourth quarter 2021 earnings conference call and webcast. On today's call are Jason Deeth, Chief Executive Officer, Valerie Elves, Chief Financial Officer, and Scott McGuire, Chief Operating Officer. By now, everyone should have access to the company's fourth quarter earnings press release filed today after market close. This is available on the investor relations section of Laird Superfood's website at www.lairdsuperfood.com. Before we begin, please note that all financial information presented on today's call is unaudited. During the course of this call, management may make forward-looking statements within the meaning of the federal securities lost. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. And now, I'd like to turn the call over to Jason Veith, Chief Executive Officer of Laird Superfood.

Thank you, Reed. Welcome, everyone, and thank you for joining us today. I'm going to begin with a brief summary of our overall positioning, key growth drivers, and highlights from the quarter. Scott McGuire, our Chief Operating Officer, and Valerie Els, our Chief Financial Officer, will follow with additional detail, and we will briefly discuss our 2022 outlook before opening up the call for your questions. Let me start by saying that after spending the last five weeks diving into the business, I can attest that we are making real progress against our long-term vision to become one of the leading players in the natural food and beverage space. Our brand is strong, and the products resonate with consumers on every major purchase driver, including quality, taste, functionality, sustainability, and price. Our customers feel deeply connected to our brand and want to engage with us as evidenced by our strong repeat rate and 76% net promoter score. And perhaps most importantly, the Laird Superfood brand is incredibly unique among food brands in that it has proven that it can span multiple day parts and usage occasions, providing consumers with a portfolio of products to activate and power their morning, hydrate and nourish their day, and wind down their evenings. Strategically, we have already begun to make two major pivots in our business. First, we are moving from an organization that was built to grow at all costs to one that will be fundamentally more strategic and measured and analytically driven. This will become apparent in our marketing investments during 2022. Like other businesses that rely heavily on the internet and social media for promoting and selling their products, our digital marketing costs to acquire new customers have increased over the past year, in part reflecting structural changes to the largest digital and social platforms, but also due to our over-reliance on the same tactics. While we remain deeply committed to our online platform, this challenge will require us to make a more thorough assessment of our marketplace dynamics to help us optimize our marketing spend to drive high ROI. And I am pleased to report that we are already underway in this effort At the same time, we have initiated work streams to gain stronger consumer insights so that we can build a better segmentation and more efficiently target our marketing spend. We have also kicked off work to redesign and align our packaging across all of our products so that we can enhance both the first and second moment of truth with our consumers. We are also shifting from an entrepreneurial, founder-driven organization to a more traditional consumer packaged goods business model. As such, you can expect to see us bring in more CPG talent to grow and operationalize our business. Last month, I mentioned that the wholesale channel will be critical to realizing our vision at scale and that we will continue to broaden our portfolio while expanding our overall store count. To that end, I am pleased to announce that we have hired a leader for our wholesale business. Next week, Sarah Moore will be joining us as our Senior Vice President of Sales across all physical retail channels. Daryl joins us with decades of experience in the natural food industry, most recently as the COO and Head of Sales for Performance Kitchen. Formerly as the VP of Sales at Bulletproof, Daryl was instrumental in the growth of that brand from around 20 million to more than 100 million in sales across many categories, channels, and retailers. With Daryl on board, we will be able to drive strategic focus and activity with key sales agencies and retailers, and we'll begin building our go-to-market strategy in food service and other alternative channels. Operationally, I'm very pleased to report that we continue to punch well above our weight despite all the challenges that our industry has faced related to inflation, labor, material availability, overall supply chain, and more. Our 98% fill rate during the fourth quarter is a great example of our team's success and illustrates the strength of our operations as well as the acumen of the team that runs it every day. And we are identifying numerous opportunities for cost reduction across various factors, including ingredients, packaging, and distribution. As we look to 2022 and beyond, the future for Laird's Superfood remains exciting and expansive. We have quickly built a trusted and respected brand with a portfolio of health and wellness-oriented foods and remain confident in our ability to grow distribution in bricks and mortar stores as well as in our native online environment. Given the recent challenges I mentioned with the value proposition for digital advertising, we do expect that our growth will slow in the near term as we assess various marketing tactics to acquire new customers online. Nevertheless, we recognize that we have built something special within the CPG industry and remain deeply committed to the digital channel. we will focus on converting our database of existing Laird Superboot customers into repeat purchasers and into subscriptions by executing a new white glove customer experience. And while we will aggressively sell into the wholesale channel, that startup takes time due to retailer reset timing. And so we expect our net sales to come in between $41 to $44 million in 2022. We anticipate that our gross margin percentage will be lower in the first half of the year but will improve steadily through the year as we implement several operational improvements and update our free shipping policy. These initiatives will take time to implement and drive benefits, which we should start to see in Q2 and then accelerating for the balance of the year. In summary, although we do expect some modest headwinds in the near term as we reset our customer acquisition model and continue to operationalize our manufacturing facility, The growth opportunity for our brand has never been stronger. As consumers continue to seek out great-tasting, plant-based, nutritious foods, Laird Superfood is poised to capitalize on this opportunity by expanding our portfolio into wholesale, improving our positioning and packaging, and adapting our marketing model. We remain deeply committed to building a premier health and wellness plant-based food brand and will continue to drive the business behind our commitments to our planet and our people. With that, I will hand it over to our Chief Operating Officer, Scott McGuire, to discuss our fourth quarter and annual operations in a bit more detail.