Laird Superfood, Inc.

Hello and welcome to the LSF first quarter 2023 financial results. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, please press star followed by one on your telephone keypad. I'd now like to hand over to Steve Ritchie. The floor is yours. Please go ahead.

Thank you and good afternoon. Welcome to Laird Superfoods first quarter 2023 earnings conference call and webcast. On today's call are Jason Beat, Laird Superfoods president and chief executive officer, Anya Hamel, our chief financial officer, and Annie Judd, our chief commercial officer. By now, everyone should have access to the company's first quarter 2023 earnings press release filed today after market close. It is available on the investor relations section of Laird Superfood's website at www.lairdsuperfood.com. Before we begin, please note that 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'll turn the call over to Jason.

Thanks, Steve. Hello and welcome, everyone. Thank you for joining us today. Our results in the first quarter demonstrate that we have built the right strategic plan for our business and that the team is capable of executing it. Though it remains a challenging operating environment to be growing a mid-sized food brand, I am pleased to report that we are nevertheless making strong progress against our key strategic goals of improving our cost structure, growing our brand in wholesale, and improving our portfolio behind taste and packaging innovation. In just a few short weeks at the beginning of the year, we were able to transition our supply chain to an asset like manufacturing and third-party distribution model that is already operating with far greater efficiencies than what we were able to achieve when we operated our own facilities in Oregon. We are not only up and running in those facilities, but we are already producing greater volumes at lower costs with increased flexibility and responsiveness across a wider range of packaging sizes and formats. our new partners have proven to be highly supportive and adaptive, and true partners in every sense of the word. As Anya will detail shortly, excluding one-time costs associated with our product withdrawal, we have already increased our Q1 gross margin by more than eight points year over year. At the same time, we have continued to make dramatic progress in reducing our marketing spend in the DTC channel, and as a result, continue to see a significantly higher return on our ad spend, a lower consumer acquisition costs, and a vastly improved margin structure. We have now largely worked our way out of the inefficient marketing contracts that were set up over the last years and have finally been able to shift our investment to the strategies and tactics that we believe will have more meaningful impact in the marketplace. A great example of this is in our retargeting against our existing customer database, where we were able to restore subscription growth for the first time in over a year during Q1. Within the conventional and natural grocery channel, We are seeing strong growth in same store sales where our dollar sales velocity growth remains positive for both our liquid and powder creamers in the conventional and natural channels. This growth is being fueled by our new branding and packaging that largely rolled out during the first quarter and by the continued progress in improving our pricing and availability at the shelf. As mentioned on our fourth quarter call, we experienced a quality issue due to a poor tasting raw material received from one of our suppliers and decided to withdraw multiple creamer products from the market. While we identified the issue relatively soon after production and were able to retrieve the majority of the products before they reached consumers, this withdrawal did have an outsized impact on our Amazon business as we had to clear all inventory from their distribution warehouses before we could begin to sell on the platform again. As a result, we fell behind our goals for the Amazon business this quarter. Thankfully, we are now back to full speed at Amazon and are already seeing our metrics return to pre-withdrawal levels. Despite this quality setback, our net promoter score remains at an extremely healthy 69 points and our customer satisfaction score is a 4.9 on a five point scale. Financially, we continue to strengthen our business versus prior year metrics. As Anya will share during today's call, We have increased our go-forward gross margin while significantly reducing our operating expenses and marketing costs. And we continue to make strides toward achieving a cash flow positive position. And I am pleased to be able to report that a key ingredient supplier of our business is working with us to help to recoup the Q1 loss from our quality events. At this point, we project that we will have cash to operate into at least the second quarter of 2024 and that we will be in a much improved financial position from which to raise capital when that time comes. There is no doubt that this team has made tremendous progress in turning around our company, and I want to thank our talented and dedicated Laird Superfood employees for their ingenuity and persistence in delivering these improvements. Our journey is far from complete, but each quarter has demonstrated steady progress against our goal of breakeven profitability, and we expect more of the same as we go forward from here. With that, I will hand it over to Andy.