Laird Superfood, Inc.

Thank you for standing by, and welcome to the first quarter 2022 earnings conference call and webcast for Laird Superfood, Inc. I would now like to turn the call over to Mr. Reed Anderson of ICR to begin. Please go ahead.

Thank you. Good afternoon, and welcome to Laird Superfood's first quarter 2022 earnings conference call and webcast. On today's call are Jason V, Chief Executive Officer, Valerie Els, Chief Financial Officer, and Andy Judd, Chief Commercial Officer. By now, everyone should have access to the company's first 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 the financial information presented on today's call is unaudited, and during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. 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 Vieth, Chief Executive Officer of Laird Superfood.

Thank you, Reid. Welcome, everyone, and thank you for joining us today. On the call with me today are Valerie Els, our Chief Financial Officer, and Andy Judd, our recently appointed Chief Commercial Officer. My comments today will primarily focus on the strategic actions that we've taken to further strengthen the company's position as well as our upcoming steps and milestones to give you a roadmap for our continued progress. I'll then turn it over to Andy for additional commentary on products, marketing, and business development efforts. Val will close our prepared remarks with an overview of the Q1 financials and our outlook for the balance of 2022. We'll then take your questions. I'm pleased to report that our first quarter results were solid, with top line growth of 26% to $9.3 million. These results included solid gains in both online and wholesale channels. As expected, gross margin is proving to be challenged in the first half of the year, as we work our way through known constraints in our operations structure and make the necessary adjustments that will set us up for future success. During Q1, we did make significant progress in right-sizing our cost structure, which helped to offset much of the impact on quarterly profitability, and we will continue to make moves to identify and address supply chain efficiencies in our operation. From an organizational perspective, we've made some key hires over the past month that speak to the power of the Laird Superfood brand and its tremendous growth potential. As mentioned on our fourth quarter call, Daryl Moore joined us as the Senior Vice President of Sales in March with responsibility for all physical retail channels. Daryl was most recently COO and Head of Sales for Performance Kitchen and has decades of experience in the natural food industry. Daryl has a proven track record of omnichannel excellence, having led sales at Bulletproof as it increased 5X to around $100 million in revenue. We also recently added Andy Judd as our Chief Commercial Officer. Andy will be responsible for Laird Superfoods' commercial strategy, overseeing marketing, sales, product development, and customer experience to further leverage our platform to drive business growth and aggressively expand our market share across the online and wholesale channels. As with Daryl, Andy has extensive experience in consumer goods and the natural products industry, most recently as the Chief Marketing Officer of Yasso. Before that, Andy served as CMO of One Brands and VP of Marketing for the Boulder Brands Business Unit of Pinnacle Foods, and previously held various leadership positions at several other major companies, including White Wave, Saputo, and Campbell's. Andy will introduce himself to you in a few minutes. Last week, we completed a review of our new three-year strategic plan with our board of directors and our goals and strategies are aligned and clear. We will continue to build a true omnichannel business that focuses on the daily ritual online while leveraging our strength in functional creamers, coffee, and hydration in broader retail outlets across the country. Our commercial team has a clear set of sales and marketing objectives and measures and is already executing against them with renewed vigor and excellence, as Andy will share in a few moments. Moving forward, we will be laser focused on improving our gross margin with a long-term focus on again exceeding 35%. We have already begun to streamline our manufacturing and distribution operations, and we'll continue to do so behind investments that we've recently made in automation, software, and more. In March, we eliminated free shipping on orders below $30 and did not see a meaningful impact to our volume. In addition, we have identified more than 10% of our portfolio for SKU reduction and recently initiated work to assess and optimize our products across taste, health credentials, and cost. And finally, we will soon be announcing a list price increase across the bulk of our portfolio, which will address the cost inflation that we've incurred during the past two years. Last month, we took the difficult action of reducing our operations headcount costs by approximately 20% or $1 million per year on an annualized basis. While this is always a difficult decision, it was a necessary move given the progress that we have made in the last year to automate and improve our manufacturing processes and efficiency. Despite this move, I am pleased to report that we continue to service our business without any significant supply shortfalls. We also expect to free up cash across our balance sheet through targeted inventory reduction and the sale of non-productive assets, and believe that we can increase our cash balance by more than $5 million from such activities during 2022. As we go forward, we will continue to make moves that simplify our operation and allow us to focus on commercializing our portfolio of great tasting, better for you products. As you can see, it's been a very busy couple of months for the team, and we are rapidly making progress against our stated goals of shoring up our sales and improving our long-term profitability and cash position. Looking forward, we will remain focused on three key areas. First, our commercial team will continue to overhaul our approach to targeting and retaining customers on our own site and the Amazon platform while we meet with retailers to expand our distribution across our core product lines. Second, We will continue to work tirelessly to overcome the cost challenges that are plaguing supply chains worldwide, and we'll take the necessary actions to maintain and expand our gross margin back to pre-pandemic levels. And finally, we will continue to build the company's capabilities in areas that are core to our ongoing success, including on our commercial and operation teams, but also across our entire G&A structure. In summary, the next phase of our Laird Superfood journey is well underway, and we are making significant progress to create a substantial and profitable company. And while the market and U.S. economy remain extremely challenging, I am optimistic about our trajectory. With a leading net promoter score and a portfolio of great tasting, better for you, plant-based products, we are right on trend and poised to capture additional market share and achieve our long-term vision to become one of the leading players in the natural food and beverage space. With that, I will hand it over to our Chief Commercial Officer, Andy Judd, to discuss our first quarter and annual operations in a bit more detail. Andy.