Laird Superfood, Inc.

Tamea Jackson- Good afternoon, thank you for attending today's layer superfood Inc fourth quarter 2024 financial results conference call. Tamea Jackson- My name is tanya and I will be your moderator for today's call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. Tamea Jackson- If you would like to ask a question, please press star one on your telephone keypad I would not to pass the conference over to your host Trevor with layer superfood you may proceed.

Trevor Freeman- Thank you and good afternoon. Welcome to Laird Superfood's fourth quarter and fiscal year 2024 earnings conference call and webcast. On today's call are Jason Beek, Laird Superfood's President and Chief Executive Officer, and Anya Hamel, our Chief Financial Officer. By now, everyone should have access to the company's earnings release, which was filed today after Merck was closed. It is available on the Investor Relations section of Laird Superfood's website at www.lairdsuperfood.com. Before we begin, please note that during this call, management may make forward-looking statements within the context of federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those described. These refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. And with that, I'll turn it over to Jason.

Thank you, Trevor, and hello to everyone on the call. I'm thrilled to share with you today what has been an exceptional close to 2024 for Laird Superfood, a year that truly underscores our transformation into a high growth premium brand with strong margins and unlimited potential. For the full year 2024, we achieved a remarkable 27% top line growth with net sales reaching 43.3 million, up from 34.2 million in 2023. In the fourth quarter alone, Net sales grew to 11.6 million, a 26% increase over Q4 2023. This growth rate isn't just impressive in isolation. It significantly outpaces the consumer goods and food industry averages, where top-line growth typically hovers around 3 to 5% annually, according to industry benchmarks. We're not just keeping up. We're leading the pack. Equally exciting is our improvement in profitability metrics. For the full year, we maintained gross margins at nearly 41 percent. This is a roughly 11-point leap from the 30.1 percent that we reported for 2023, driven by strategic sourcing, a shift to a variable cost manufacturing model, and disciplined trade spend management. To put this in perspective, the average gross margin for food companies often sits in the mid-20s to low-30s, and at 25 to 35 percent, from any of our most premium peers. Our ability to sustain these margins while growing at nearly 30% demonstrates the strength of our business model and our strategic focus on operational efficiency and premium positioning. This success has been driven by two key strategic pillars that we outlined in previous calls, rapid growth in e-commerce, particularly on Amazon, and significant strides in expanding our wholesale distribution. Let's start with e-commerce. In 2024, our e-commerce channel grew by 32% year over year, led by our Amazon platform that not only recovered lost ground from our 2022 quality event, but exceeded our internal expectations by a significant margin. Q4 was no exception, with Amazon delivering its strongest quarter ever for Laird Superfood, fueled by improved inventory management, targeted marketing, and growing consumer demand for our plant-based creamers, coffee, and hydration products. The Amazon hub makes up more than 40% of our e-commerce channel, and we expect that share to continue to grow in 2025 and beyond. Our direct-to-consumer business also saw a healthy increase for the year, bolstered by a shift toward a subscription model, which now accounts for nearly half of our DTC sales and serves as a testament to the loyalty and trust that our consumers place in our brand. On the wholesale front, we've made tremendous progress expanding our retail footprint. In Q4, we secured new distribution with major retailers like Kroger and Safeway Albertsons, building on earlier and ongoing wins with partners like Whole Foods and Sprouts. Full year wholesale net sales grew 19% year over year, contributing 41% of our total company revenue. This expansion reflects not just broader reach but also improve dollar sales velocity at existing accounts driven by existing promotional strategies and strong consumer pull for our products. During the 12 weeks ending December 29th, we grew our retail sales across the MULO universe by approximately 35%, which included strong growth in both distribution points, as well as dollar sales velocity. During Q4, We were also able to initiate the upsizing of our liquid creamer to a 750 milliliter package, which is aligned with the category norm and represents a 50% volume upsizing for our product. At the same time, we were able to improve the nutritional benefits and taste profile of our formula. I am pleased to report that this transition is being completed now and it's seemingly gone well with a minimal amount of out of stocks and very little excess inventory of the discontinued size. In the past, I've seen these types of product transitions go off the rails at much larger companies with far more resources, and so I'm extremely proud of the Laird Superfood team for its execution of this important initiative. Taking a look at supply chain, I am pleased to report the strong quarter and a very solid year for the operation of our business. Despite persistent commodity pressure in coffee, cacao, and coconut milk powder, Our team has been extremely resourceful in establishing and cultivating supplier relationships across our ingredients, manufacturing, and distribution partners, and we were able to largely mitigate the cost impact during this period. We have repeatedly stated that our goal is to achieve a gross margin in the upper 30s, and we finished 2024 at nearly 41%, with Q4 coming in at nearly 39% despite the aforementioned cost pressures. Speaking of which, By now it is no secret that there continues to be persistent inflation in the food industry. It is our belief that many of the recent commodity increases have been opportunistic and trader driven, and we believe there could be a correction in some, if not many, of these costs over the course of 2025 and beyond. We have managed the procurement of our ingredients very carefully and are also finding efficiencies in our operation to offset a portion of the cost increases. As a result, We intend to take price only when and if necessary, preferring to maintain our strong volume growth whenever possible. That means that we may choose to temporarily trade away gross margin points for gross margin dollars so that when some of these costs again normalize to lower levels, we can have a bigger business with a strong gross margin profile. In this way, we believe that we can optimize the future size and profitability of our business in order to maximize long-term shareholder value. When you have a business growing as rapidly as ours, it can be challenging for the supply chain to keep pace. This has been the case for us over the last months as the sales of our creamers and instant latte products have repeatedly outrun the sales forecasts and thereby created out-of-stock situations for some of our most popular SKUs. If not for these out-of-stock issues, we estimate that we would have captured more than $1 million of additional net sales during Q4. As we've worked to resolve these issues, our team has successfully identified additional raw material supply and supplemental suppliers, which should help us to mitigate future product shortages and to control input costs. We have already begun bringing these products back in stock over the past weeks and expect to have outrun these shortages very soon after Q1 is complete. These out-of-stock products will have an impact on our sales during Q1, that we remain on pace for strong growth during 2025 and have confidence in the overall trajectory of our business. Now, let me hand it over to Anya to dive into the financial details for the quarter and for the full year.