Net Sales Increase 45% Year Over Year to $10.9 Million

Direct-To-Consumer Sales Up 108% Year Over Year

Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood,” “we” and “our”), today reported financial results for its third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

• Net Sales increased 45% year over year to $10.9 million.
• Online sales contributed 58% of net sales, increasing 70% year over year with direct-to-consumer up 108%.
• Wholesale sales contributed 41% of net sales, increasing 21% year over year, with continued traction in coffee creamers.
• Gross profit was $3.2 million and gross margin was 29.4% compared to gross profit of $1.8 million and gross margin of 23.4% in the prior year period.
• Net loss attributable to common stockholders was $5.4 million, or $0.59 per diluted share, compared to a net loss of $4.0 million, or $0.86 per diluted share, in the prior year period.

“In the third quarter, we delivered solid growth across our portfolio,” said Paul Hodge Jr., Co-Founder, President and Chief Executive Officer of Laird Superfood. “The power of our digitally native brand continued to be reflected in our direct-to-consumer sales, which rose 108%, fueled by our expanding product offerings and the ongoing strength of customer metrics around conversion and retention, including leading performance from the newest cohorts. Our new products in hydration and beverage supplements continue to grow at a strong pace, and we remain highly encouraged by results from the recently acquired Picky portfolio,” continued Hodge. “Operationally, we are hyper focused on efficiency and have made solid progress on several initiatives to move towards profitability as we continue rapidly scaling our powerful omnichannel platform. We remain steadfast in our vision of delivering better for you, plant-based alternatives for every moment of consumers’ daily ritual.”

For the Three Months Ended September 30, 2021

Net sales increased 45% to $10.9 million in the third quarter of 2021 compared to $7.5 million in the third quarter of 2020, primarily driven by strong gains in direct-to-consumer (“DTC”) sales. Growth was broad based, including solid increases in Coffee creamers and Hydration and beverage enhancing supplements from both legacy offerings as well as recent product launches, plus the addition of Harvest Snacks.

Gross profit was $3.2 million, an 82% increase compared to the prior year period of $1.8 million. Gross margin was 29.4% of net sales in the third quarter of 2021, compared to 23.4% of net sales in the prior year period. The year over year increase in gross margin reflected several factors, including optimization of inventory cost and DTC parcel cost, as well as improvement in liquid creamer disposals, partially offset by elevated wholesale fulfilment related expenses.

Operating expenses were $8.5 million compared to $5.1 million in the year ago period and reflect General and Administrative expense increases of $2.0 million, with $0.8 million attributable to increased non-cash expenses, such as stock-based compensation and amortization of intangibles, as well as increased insurance expense, professional fees and personnel costs. Sales and Marketing expense further contributed with increases of $1.2 million, primarily due to advertising and marketing fees.

Loss from operations was $5.3 million in the third quarter of 2021, compared to a loss of $3.4 million in the prior year period.

Net loss attributable to common stockholders was $5.4 million, or $0.59 per diluted share, in the third quarter of 2021, compared to net loss attributable to common stockholders of $4.0 million, or $0.86 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “Our continued focus on optimization helped drive favorable trends in margins and expense levels during the third quarter, along with robust sales growth. We are very pleased with the direction and progress towards our long-term targets. Our balance sheet remains strong with nearly $40 million of cash and investments and effectively zero debt, and we remain focused on maximizing the leverage across our business to continue driving forward toward profitability, while maintaining strong growth rates.”

For the Nine Months Ended September 30, 2021

Net sales increased 48% to $27.4 million in the first nine months of 2021 compared to $18.5 million in the first nine months of 2020. Year-to-date growth in net sales was due to growth in both online and wholesale channels, and broad based with all categories showing strong double-digit increases.

Gross profit was $7.2 million, an increase of 41% compared to the prior year period of $5.1 million. Gross margin was 26.3% of net sales in the first nine months of 2021, compared to 27.6% of net sales in the prior year period. The year over year decrease in gross margin was primarily due to the full period impact from the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com combined with increased co-packing and distribution expenses associated with our liquid creamer product line, partially offset by optimization of DTC shipping costs.

Operating expenses were $24.2 million compared to $13.5 million in the first nine months of 2020 and reflect General and Administrative expense increases of $6.4 million, with $2.4 million attributable to increased non-cash expenses, such as stock-based compensation and amortization of intangibles, as well as increased personnel costs, insurance expense, professional fees, and reserves against prepaid assets. Sales and Marketing expense further contributed with increases of $3.7 million, primarily due to advertising and marketing fees.

Loss from operations was $16.9 million in the first nine months of 2021, compared to a loss of $8.4 million in the prior year period.

Net loss attributable to common stockholders was $17.0 million, or $1.90 per diluted share, in the first nine months of 2021, compared to net loss attributable to common stockholders of $10.0 million, or $2.26 per diluted share, in the prior year period.

Balance Sheet and Cash Flow Highlights

The Company had $39.7 million of cash, cash equivalents, and investment securities as of September 30, 2021 and total outstanding debt was $51,000. Net cash used in operating activities was $14.2 million for the nine months ended September 30, 2021, compared to $7.1 million in the comparative prior year period.

Capital expenditures totaled $1.0 million for the nine months ended September 30, 2021, compared to $0.9 million in the prior year period.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally. The conference I.D. code is 3562448. Alternatively, participants may access the live webcast on the Laird Superfood Investor Relations website at https://investors.lairdsuperfood.com under “Events.”

About Laird Superfood

Laird Superfood, Inc. creates award-winning, plant-based superfood products that are both delicious and functional. The Company's products are designed to enhance your daily ritual and keep consumers fueled naturally throughout the day. The Company was co-founded in 2015 by the world's most prolific big-wave surfer, Laird Hamilton. Laird Superfood's offerings are environmentally conscientious, responsibly tested, and made with real ingredients. Shop all products online at lairdsuperfood.com and join the Laird Superfood community on social media for the latest news and daily doses of inspiration.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Laird Superfood’s future financial performance, including our outlook for fiscal year 2021. These forward-looking statements are based on Laird Superfood’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Laird Superfood’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. We expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The risks and uncertainties referred to above include, but are not limited to:(1) our limited operating history and ability to become profitable; (2) our reliance on third parties for raw materials and production of some of our products; (3) our ability to manage our growth and scale our manufacturing and processing capabilities effectively, including our human resource requirements; (4) our future capital needs; (5) our ability to retain and grow our customer base; (6) our reliance on independent distributors for a substantial portion of our sales; (7) our ability to evaluate and measure our business, prospects and performance metrics; (8) our ability to compete and succeed in a highly competitive and evolving industry; (9) the health of the premium organic and natural food industry as a whole; (10) risks related to our intellectual property rights and developing a strong brand; (11) our reliance on key personnel, including Laird Hamilton and Gabrielle Reece; (12) regulatory risks; (13) risks associated with the COVID-19 pandemic, including those related to any variant strains of the virus that may emerge; (14) risks related to our international operations; (15) the risk of substantial dilution from future issuances of our equity securities; and (16) the other risks described in our most recent Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission.

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