Laird Superfood, Inc. (LSF) Earnings Call Transcript & Summary

Thanks, and good afternoon everyone. I'd like to welcome all of you to the Laird Superfood First Quarter 2026 Earnings Conference Call and Webcast. Joining us today are Jason Vieth, who serves as Laird Superfood's President and Chief Executive Officer, along with Anya Hamill, our Chief Financial Officer. At this point, all of you ought to be able to access our earnings release, which we filed today following the close of the market. You can find it in the Investor Relations portion of our site, lairdsuperfood.com. Prior to getting started, I want to remind everyone that management might make forward-looking statements on this call within the context of federal securities laws. Such statements rest on management's present expectations and carry risks and uncertainties that might lead actual results to differ materially from what's described. For a detailed discussion of those risks and uncertainties, please consult today's press release as well as other filings with the SEC. With that said, I'll hand things over to Jason.

Thanks for joining us this afternoon, everyone, as we review the financial results for Laird Superfood's first quarter of 2026. I'm Jason Vieth, and I serve as President and Chief Executive Officer. With me today is Anya Hamill, who holds the role of Chief Financial Officer. After the market closed earlier today, we issued our earnings press release and filed our Form 10-Q; both documents are available on the Investor Relations section of our website. For Laird Superfood, the first quarter of 2026 represented a transformative milestone, as on March 12 we completed our acquisition of Navitas Organics, a name that stands among the most trusted and well-established in the premium organic superfood category. Navitas started up back in 2003 and delivers premium organic superfoods, holding a solid position in natural and conventional grocery, club, and e-commerce. We bought Navitas to grow our lineup of products, extend where we distribute, and speed up our plan to create a large-scale positive nutrition platform. Only a few weeks after the quarter wrapped, on April 21, we finalized our purchase of Terrasoul Superfoods. Terrasoul operates as a vertically integrated branded superfoods business, providing nuts, seeds, dried fruits, powders, baking ingredients, and functional beverage mix-ins; they source from around the world, handle processing and packaging internally, and sell via e-commerce, food service, and retail; picking up this company widens our product range even more, boosts our supply chain strengths, and extends our reach across several channels. Nexus Capital Management's partnership served as the funding source for both of those deals. The Navitas purchase was paid for by the first issuance, a $50 million Series A preferred stock offering completed in March, while the Terrasoul acquisition was covered by the $60 million issuance that came in April. Beyond supplying the money needed to get these deals done, these investments delivered strategic know-how that helps us grow into a bigger, more diversified super food business. As a result of these transactions, on a fully diluted as-converted basis, Nexus currently owns roughly 73.8% of our common stock, which means we now qualify as a controlled company under NYSE American rules. From a strategic standpoint, what these actions accomplish is building a full-scale superfood platform better positioned to compete in a category that is changing quickly. People keep moving toward functional foods that are clean, minimally processed, and made with ingredients they can recognize. By bringing together Laird's functional coffee solutions and performance focus, Navitas' leadership in premium organic superfoods, and Terrasoul's vertically integrated ingredient expertise, we are assembling a portfolio that stands apart and reaches across everyday products, functional beverages, and a wide range of superfood ingredients. As we've said before, these 2 acquisitions are only the start of our roll-up strategy within Superfoods and positive nutrition, and we anticipate completing more acquisitions in the years ahead as we keep scaling the platform. These transactions have given us a far stronger enterprise, one positioned to produce positive EBITDA and cash flow down the road. With these gains in hand, our plan is to draw on the balance sheet for a mix of debt and equity funding that will back the acquisitions we intend to make down the road. Across all 3 businesses, the integration playbook is already being put into action. As for Navitas, on board for just the final 19 days of the quarter, we're concentrating hard on aligning supply chain finance with commercial operations, all while protecting the brand's authentic character and the strong relationships it has with consumers. The early lift Navitas delivered in e-commerce as well as wholesale confirms just how strong the strategic fit is. The Navitas organization has already been folded into Laird Superfood, and I'm happy to say we are realizing the synergies we anticipated throughout the combined company. Our team now concentrates on achieving the COGS, distribution and brokerage savings we set out for the back half of this year and afterward; and since Terrasoul is now also part of the family, we're taking that same disciplined tack, drawing on shared strengths in sourcing, co-manufacturing optimization and omnichannel distribution to generate efficiencies and speed up growth. Bringing in Terrasoul carries special significance. Its vertical integration gives us tighter control over quality and cost, while its extensive lineup across nuts, seeds and powders dovetails with what we already sell and creates fresh opportunities in foodservice and ingredient channels. Simultaneously, Terrasoul brings delayered superfood along with stronger online marketplace capability, which we think will substantially serve our whole business going forward. Taken together, these 2 acquisitions substantially expand our overall scale, which we believe will strengthen our capacity to put money into innovation, widen our consumer awareness and distribution footprint and produce improved economics as time goes on. Going ahead, we're certain this platform puts us in position to seize a bigger portion of the expanding positive nutrition market; we'll keep concentrating on generating repeat usage, growing our customer base in both e-commerce and wholesale, streamlining our supply chain and bringing out inventive new products that match consumer appetite for functional clean label solutions. Turning to Q1, I'm glad to say every one of our brands grew far above the industry rate. Anya will provide more specifics shortly, but I can say with pride that our Q1 company growth reached 20% compared with last year, powered by the wholesale channel on our Amazon platform and encompassing over 2 weeks of Navitas Organics post acquisition. Even while we fold 2 businesses together, our supply chain keeps performing exceptionally well. And although we faced some margin pressure in Q1 tied to inventory costed at elevated commodity prices and with tariffs, we anticipate that will ease as we progress through the remainder of the year, given that commodity prices have already declined and tariffs have now been eliminated from our products. And I'd be remiss not to note that we're likewise deploying AI quite aggressively throughout our whole business; we now have AI helping our team with forecasting, planning and execution work across every one of our functions, spanning supply chain, finance and marketing. We're already seeing the advantages of this technology within the organization as we shift the Navitas business over to the Laird team with hardly any added headcount. There's something else I'd like to mention — we're implementing some significant changes to how our commercial operation works. It's my pleasure to tell you that Andy Judd is back with us, and he'll be heading up our marketing. Most recently, Andy worked at Poppi, serving as the leader of its marketing function while the brand expanded quickly, reaching over $500 million in revenue, before ultimately being sold to Pepsi. With Andy at the helm, we'll move a greater portion of our work internally, which should yield improved efficiency, more creativity, and faster speed to market. Some short-term ramp-up spending comes along with this change, yet we have full confidence it will produce both better ROI and stronger brand storytelling and consumer activation throughout our portfolio; when it comes to sales, fresh leadership is joining us to speed up wholesale momentum, especially in conventional grocery and club, areas where we see considerable runway. Further details about that hire will be available on our next call. While there are near-term hurdles tied to merging operations and the associated expenses, we feel excited about where we now stand strategically, as well as the chance to build lasting worth for the people we serve, the colleagues beside us, and those who invest in us. With that, I'll pass things over to Anya, who can walk through the first quarter's financials in greater depth. Anya?

Appreciate that, Jason, and hello everyone this afternoon. I'd like to walk you through a few more details on how we performed financially in Q1 2026. Jason already noted that the first quarter served as a building-block period for our platform. Now I'll cover the drivers behind those Q1 numbers, and then spend a bit of time on our outlook for the entire year across the combined three-brand business. First-quarter 2026 net sales reached $13.9 million, up 20% compared with $11.7 million during the same period in 2025. Navitas Organics contributed $1.6 million in net sales for the quarter, marking its initial partial-period addition following the March 12 closing. Wholesale was the main growth driver again, up 37% from a year ago to $7.5 million, which made up 54% of total net sales. That came from adding Navitas wholesale revenues plus ongoing distribution expansion, product assortment wins in grocery and club, and strong velocities at shelf. Our e-commerce channel increased 4% to $6.5 million, or 46% of total net sales, driven by the addition of Navitas e-commerce revenues and continued strength on Amazon.com, partly offset by softness in Laird's direct-to-consumer channel. Gross margin for the first quarter came in at 33.3% compared with 41.9% in the prior year period, a contraction of 8.6 percentage points. I want to give you a clear breakdown of what caused this. Roughly 3.2 percentage points of that decline stemmed from an inventory cost and benefit tied to timing in Q1 2025 that showed up only once and was absent from '26. That item belonged to the earlier year and says nothing about how we performed in the current period. The other approximately 5.4 percentage points comes from a blend of unfavorable channel and product mix, inflationary commodity costs — coffee especially — plus import tariffs affecting certain input costs; these pressures are genuine, and we are managing them actively. Operating expenses totaled $7.7 million in Q1 of 2026, compared with $5.1 million a year earlier — a 50% increase — which, as I'll explain, was mostly the result of a onetime acquisition cost. On the G&A side, we saw a 73% jump, bringing those expenses to $3.9 million. Most of that came from $1.3 million in professional fees tied to the Navitas acquisition and integration — those are one-time costs — plus the personnel investments we planned as we scale up our team for a multibrand platform. Sales and marketing climbed 33% to $3.8 million, reflecting more spending on media, higher agency fees, and greater selling costs that come with larger sales volume. For the first quarter of 2026, GAAP net income came in at $1.8 million, or $0.12 per basic share, compared with a $0.2 million net loss a year earlier. I'd like to be upfront about the reasons behind that. Within GAAP net income, there's a $4.7 million discrete nonrecurring income tax benefit. That comes from releasing a deferred tax valuation allowance that was acquired through the Navitas transaction. What you're looking at is a onetime accounting gain connected to deferred tax liabilities that arrived with an acquisition — it says nothing about how the business actually performed. So if we exclude that nonrecurring item and turn to adjusted EBITDA, which we believe gives a clearer view of the underlying business, adjusted EBITDA for Q1 2026 was a loss of $1.1 million. That compares with a positive $0.4 million in the same period a year earlier. That year-over-year drop stems from the gross margin pressures I mentioned before — things like commodity cost, tariffs and an unfavorable mix of products and channels — plus greater spending on marketing and selling to back our growth strategy. As Navitas and Terrasoul get integrated and we start capturing procurement and operational synergies, we anticipate adjusted EBITDA will improve substantially over the remainder of the year. Now on to the balance sheet. At March 31, 2026, cash, cash equivalents and restricted cash totaled $10.5 million, with no debt outstanding. Net working capital stood at $25.7 million, an increase from $11.1 million at the close of 2025, which mirrors the addition of Navitas working capital picked up in a transaction. We ended 2025 with inventory at $7.8 million, and that figure climbed to $17.3 million, with the Navitas stock we brought on board accounting for the increase. Cash used by operating activities totaled $3.8 million in Q1 2026, compared with $1.3 million during the same stretch a year earlier. The main drivers of that increase were the costs we paid out related to the Navitas acquisition, plus movements in net working capital connected to when receivables were collected and when payables came due. There's one more liquidity item I want to flag that happened after the quarter ended. On April 21, we completed the Terrasoul acquisition, paying $48 million, and the funding for it came from the $60 million Series A preferred stock issuance we did afterward with our partners at Nexus Capital Management. After the deal was paid for, whatever money is left over can go toward settling some obligations tied to the transaction and toward the working capital requirements of the merged business. As of April 30, 2026, the combined entity had about $24 million in cash and restricted cash on hand. In our view, that gives us a strong liquidity cushion as we execute on integration. Turning now to the 2026 outlook, I'll walk you through the guidance for the combined platform for 2026. For fiscal year 2026, the company expects consolidated net sales of $138 million to $148 million, a range that assumes a full year of Laird Superfood plus the contributions Navitas and Terrasoul will make after the acquisition closes. Adjusted EBITDA for fiscal 2026 is projected to land between $8 million and $12 million, again reflecting a full year of Laird Superfood plus the post-acquisition contributions from the Navitas and Terrasoul businesses, powered by top line growth and early synergy realization. Transaction and integration costs, being onetime in nature, are excluded from adjusted EBITDA. Let me emphasize once more that this guidance leaves out the portions of 2026 during which we did not own either the Navitas or Terrasoul businesses. We'll give you refreshed guidance once integration milestones are hit and our visibility gets better; we'd also like to help you see how the whole business is expanding in 2026, yet that's hard since Terrasoul hasn't been audited under GAAP principles so far. Thus, purely for illustration, on a pro forma full year basis, as if Navitas and Terrasoul had been acquired on January 1, 2026, combining all 3 businesses and comparing 2026 against 2025 with the same account and methodology each company used in 2025, we'd anticipate full year 2026 net sales to rise in the range of 8% to 12%; in closing, the first quarter was a transitional quarter by design. We absorbed expenses tied to platform construction, acquisition-related charges, investments in working capital, and integration outlays, all while maintaining solid revenue expansion. For the remainder of the year, our priorities are straightforward: complete integration successfully, realize synergies in procurement and operations, sustain revenue gains across all three brands, and convert that expansion into substantial adjusted EBITDA gains. With that said, I'll now return the call to Jason.

Thanks, Anya. For Laird Superfood, 2026 is going to be remembered as yet another key year of change. Now that we've closed both the Navitas Organics deal and the Terrasoul Superfoods deal successfully, our scale is much bigger, our portfolio is more diversified, and our standing has gotten stronger within the rapidly expanding positive nutrition segment; we've united three solid, complementary brands that hold leading spots in functional beverage and in premium organic superfoods, made from ingredients that are close to the earth and minimally processed, which forms a potent platform whose whole is well beyond the sum of its components. Though the short run brings integration expenses along with some margin pressure tied to that, the opportunity over the long haul is obvious and persuasive. What we're constructing is a superfood company that is scaled and diversified, with better economics, stronger capacity for innovation, and several levers allowing for sustainable growth; our confidence stays high that we can produce positive EBITDA along with cash flow as we carry out our roll-up strategy and keep chasing further strategic acquisitions. I'd like to express thanks to our whole team for the enormous effort and commitment they've shown through this period of transformation, to our new partners over at Nexus Capital for the strategic backing they've provided, and to every one of you for your ongoing interest in Laird Superfood. We're eager to bring you updates on how we're doing across the rest of 2026. Thanks once more for being with us today. That wraps up our call. Operator, we're ready to take questions now.

Congratulations on this latest acquisition and how well the integration has gone so far. First off, I wanted to ask about Terrasoul. Could you go into more detail about the vertical integration capabilities in particular? You brought up tighter control over quality and cost, plus the chance to open new channels in foodservice and ingredients. Could you tell us a bit more about that?

Eric, that's a terrific question. Thanks; good to hear from you. Absolutely, we're very enthusiastic about buying Terrasoul; for those of us at Laird Superfood, this really brings things full circle, since when I arrived here 4 years ago, we did our own manufacturing. There was a facility we had in Oregon, and distribution came out of that location. We were simply too small in scale and not prepared to take on those operations. In the end we had to close it, shifting to a co-pack 3PL outsourced manufacturing and distribution system. And honestly, that's what kept the company alive back then; we managed to flip gross margins from 15% to over 40% and truly gain control of our business. That was a step we took only about 3 years ago, and now, as I said, things have come full circle to where we stand with Terrasoul; we're genuinely excited, because from where we sit, what this really shows is that our manufacturing scale and the size of our business now justify having a facility of our own. The people who were operating Terrasoul, the owner, Dennis Botts, along with his team, were doing a wonderful job at the size they had already reached; they were running pretty much, I believe — in fact, everything was being made within Terrasoul, and at various points they were even producing for other brands in order to gain scale and cost advantages. So now, with Navitas and Laird added and the chance to move those brands into Terrasoul to capture the vertical integration capability that has been built there, I think that's genuinely exciting for us. Right now, the Terrasoul facility is performing very well, but it isn't fully utilized; at present it runs just 1 shift during the week. Over time there's room to bring on more shifts, and also to add more lines to the shift that exists. So at Terrasoul, we have a team of highly efficient and skilled operators who truly understand how to run these specific products, which, as you know, are quite similar to the Navitas and Laird products. So we won't rush into that too fast. There's a great deal on our plate at the moment simply integrating the Navitas business. Our approach to integration is basically to integrate Navitas while allowing Terrasoul to run independently — within its own facility. So once Navitas is on board and we've got it fully integrated over the coming two months, we'll have a plan ready to begin folding Navitas and Laird into Terrasoul too, so we'll move in stages. We'll approach it very deliberately; other companies have botched acquisitions, we've watched that happen. Over my career I've completed quite a few deals, WhiteWave, Sovos, and so on. I've witnessed the successes and the failures, so we'll proceed with real care and thought, and the team we have down there is genuinely strong, and I believe they can manage things once we make that shift. So — apologies, let me expand on that a bit further. They're manufacturing out of that plant, like I said, and they're also handling distribution from there. On the distribution side, they're shipping to Amazon, to other online marketplaces, to foodservice operators and to a smaller retail business as well. And so we — at Terrasoul, we've got operators who truly know how to run omnichannel manufacturing and distribution. So we're genuinely thrilled and optimistic about how that will shape up as we merge the businesses, not just on the cost side, but in unlocking new capabilities too. On the channels, since you raised the question about channels, I'll address it. Terrasoul is a genuinely interesting business and highly complementary to the other 2 brands already sitting in our portfolio. Terrasoul carries a far bigger food service component than either of the other 2 businesses; because of that, we gain over 3,000 distribution points that get drop shipped from the facility and currently serve Terrasoul at those product sites or consumer sites. Looking ahead, we clearly have 2 additional brands with products that complement and intrigue for that same channel. So we're genuinely thrilled about the potential there. Those are facilities we can't reach today, retail facilities, so we don't serve them today with the other 2 brands. So it's entirely additive to the footprint we already have. We also — through the Terrasoul acquisition, we also gain a highly skilled Amazon and marketplace operator that I believe will help us lift our other 2 business, other 2 brands to even greater height in those channels as well. So we'd say it aligns extremely well with the other 2 businesses. There's a bit of overlap in products, less than you'd anticipate, but quite similar products made the same way using the same kind of equipment in the same kind of facility that move on the same trucks, though to different locations and with an added online capability that we're truly going to harness as well.

Fantastic. That's really helpful detail, and it's genuinely good to hear. Excited to see what you all are able to accomplish with that across the quarters ahead. Then, more broadly on M&A. You said you all remain active and aren't halting here. Naturally, there will be some integration time. I'm just curious whether you could offer us a big-picture view here. What's the right way for us to think about the general cadence of acquisitions? Is it roughly 1 or 2 each year? Or any kind of framing around either the timing or the size of deals would be useful.

Yes, Eric. This is — what I'd say is that this strategy isn't fully locked in and finalized at this moment. We're still figuring that out and truly evaluating not just how much appetite we have, but how much aptitude we have to integrate and keep moving, clearly while keeping an eye on the businesses we already have. So we'll find out more as we progress through Navitas and afterward Terrasoul. That said, I think it's fairly safe to state 1 to 2 per year; but again, as I said previously when we closed Navitas and I was asking them, would you do another 1 during this year. We would. So if the right property came open during the 2026 calendar year or at any point in the following year. Would we pursue a third? I believe we would definitely consider it. We would need — clearly, we would need to be able to buy it right — acquire it at the right price. And believe there's a strong synergy opportunity or an accretive opportunity for the business we have today. But we — I'd say we possess a solid muscle in this area that we are building and demonstrating here with Navitas at present. And we have truly excellent partners at Nexus who assist in supporting that acquisition strategy of ours. So this will be a roll-up. We will keep adding more brands, but we will be extremely deliberate about which brands we bring in. They will slot into this health and wellness space as near to the earth as we can possibly get. Minimally processed, real food style brands. And those — don't — when they become available, we want to be sure we're prepared to take a hard look at them. So I think 1 to 2 is a fairly safe assumption, but in this specific situation where we've already completed 2. Perhaps you could kick off — begin that year fresh right now and say 1 to 2 within the next year might be a target for us.

That's really useful. Looking forward to seeing what you all do next, and congratulations once more.

I've been wondering about this — what's your approach going to be for managing and enabling best practices across your 3 organizations? How do you share the e-commerce and logistics know-how from Terrasoul against, say, the wholesale strengths over at Navitas, while also ensuring communication channels stay clear?

Yes, good question. The truth is, when you look at it through the lens of organizational science, we remain a very small and nimble outfit. AI is something we lean on extremely heavily. You heard me mention that in the prerecord. AI is something we lean on extremely heavily, and it's genuinely impressive how we can bolt on and truly double our business while needing so few extra resources. And my belief is that will remain true going forward. Terrasoul is a different situation for us, since it has its own manufacturing plant, and we must have an organization there that runs that plant; so that capability isn't the same — the same opportunity, rather, that Navitas gives us when it comes to truly consolidating. But as we move ahead, as we complete more acquisitions, as we slot additional manufacturing into Terrasoul, and as we slot more brands into the overall holdco, my expectation is that you'll see us stay very nimble, very small. Because of that, communication barriers between the companies are few; so what we've done so far is integrate the Navitas people who ultimately will remain with the business; they work side by side with our team; it's — we don't enjoy all the same geographical advantage; our teams are split among California — really California, Oregon and Colorado right now. There are a few others, but we definitely can leverage the online tools that emerged during the COVID period quite effectively; and so I'd say the teams are already integrated really well. They get the swim lanes, the responsibilities that have been established very clearly. As I said, we've brought in a new wholesale leader who will arrive in the next couple of weeks and more of the sales leader who will arrive in the next couple of weeks and who we'll be able to discuss. And we brought in Andy Judd to run marketing. And each 1 of those 2 leaders is clearly going to establish the right processes and controls throughout the whole system to ensure that, from a commercial standpoint, we bring all 3 brands to market. Jared Larkin, who heads our supply chain, is doing the same thing across the whole supply chain. So it was an outsourced. At this point in supply chain, we've got one really big facility, and by a wide margin it's our top site, turning out more than 50% of total unit volume. That means he has to remain extremely close to that group and ensure they're completely integrated. Honestly, though, this isn't difficult for us. Given that we already run a couple of sites, I'd say we were designed to handle exactly this. We also don't operate in silos. Ours is a very flat organization. So my expectation is that this won't pose any issue whatsoever.