Item 2.02. Results of Operations and Financial Condition.
On October 14, 2022, Beyond Meat, Inc. (the "Company") issued a press release
providing an update on prior guidance for full year 2022. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information
contained or incorporated in this Item 2.02, including the press release
furnished herewith as Exhibit 99.1, shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall it be
deemed to be incorporated by reference into any filing under the Securities Act
of 1933, as amended (the "Securities Act"), or the Exchange Act, regardless of
any general incorporation language in such filing, except as shall be expressly
set forth by specific reference in such a filing.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On October 11, 2022, the Board of Directors of the Company approved a plan to
reduce the Company's current workforce by approximately 200 employees,
representing approximately 19% of the Company's total global workforce. This
decision was based on cost-reduction initiatives intended to reduce operating
expenses, sharpen the Company's focus on a set of key growth priorities, and
target cash flow positive operations within the second half of 2023.
The Company currently estimates that it will incur one-time cash charges of
approximately $4 million in connection with the reduction in force, primarily
consisting of notice period and severance payments, employee benefits and
related costs. The Company expects that the majority of these charges will be
incurred in the fourth quarter of 2022, and that the reduction in force will be
substantially complete by the end of 2022, subject to local law and consultation
requirements, which may extend the process beyond the end of 2022 in certain
countries. The charges the Company expects to incur are subject to assumptions,
including local law requirements, and actual charges may differ from the
estimate disclosed above.
In aggregate, over the next twelve months, the reduction in force, combined with
the elimination of certain open positions and changes to the executive
leadership team, including as described in Item 5.02 of this Current Report on
Form 8-K, is expected to result in approximately $27 million in cash operating
expense savings, and an additional approximately $12 million in non-cash savings
related to previously granted, unvested stock-based compensation which would
have vested over the next twelve months. In addition, as a result of these
actions, the Company expects to recognize approximately $3 million of one-time
non-cash savings related to the reversal of previously expensed, unvested
stock-based compensation in the third and fourth quarters of 2022.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Operating Officer
As previously disclosed on Form 8-K filed with the Securities and Exchange
Commission ("SEC") on September 20, 2022 (the "First September 8-K"), the
Company announced the suspension of Douglas W. Ramsey, the Company's Chief
Operating Officer. Mr. Ramsey's last day of employment with the Company is
October 14, 2022.
As previously disclosed in the First September 8-K and the Form 8-K filed with
the SEC on September 23, 2022, Jonathan Nelson will lead operations and supply
chain, now on a permanent basis, as Senior Vice President, Operations.
Mr. Nelson's annual base salary will increase to $355,000 effective October 13,
2022 and Mr. Nelson will continue to have the opportunity to earn an annual
bonus at a target amount of 40% of his base salary. Subject to the approval of
the Human Capital Management and Compensation Committee of the Company's Board
of Directors
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(the "Compensation Committee"), Mr. Nelson will be granted a restricted stock
unit award ("RSUs") under the Company's 2018 Equity Incentive Plan (the "Plan")
covering shares of the Company's common stock valued at $250,000. The RSUs will
vest in quarterly installments over one year from the date of grant, subject to
Mr. Nelson's continuous service through each vesting date. The total shares
subject to the RSU will equal the RSU value divided by the closing price of the
Company's common stock on the date of grant, rounded up to the nearest whole
number of shares.
Global Chief Growth Officer and President, North America
As part of the reduction in force described above in Item 2.05, Deanna Jurgens,
the Company's Global Chief Growth Officer and President, North America, will
leave the business. Her last day working was October 12, 2022 and her last day
of employment will be October 17, 2022. The role of Global Chief Growth Officer
and President, North America has been eliminated.
Sales will report into Mike Sharman, who will join the Company as Senior Vice
President, Global Sales effective as of October 17, 2022. Mr. Sharman has spent
the past 30 years building brands and teams in both large corporate and start-up
environments. His experience includes developing and implementing
route-to-market and channel strategies designed to accelerate distribution and
availability. Most recently, Mr. Sharman served as Senior Vice President of
Sales at NutraDried Food Company, LLC, a snack food manufacturer, from May 2022
to October 2022. Prior to that, Mr. Sharman served as Executive Vice President
of Sales at Hippeas, LLC, a snack food manufacturer, from February 2021 to
February 2022; Chief Sales Officer at Recess, Inc., a beverage manufacturer,
from January 2020 to September 2020; and Senior Vice President of Sales at
Essentia Water, LLC, a premium bottled water company, from April 2015 to January
2020. Mr. Sharman's prior experience also includes various sales leadership
roles with ZICO Beverages, KIND, Glaceau, Cadbury and the Pepsi Bottling Group.
Mr. Sharman received his Bachelor of Business Administration in Management from
the College of William & Mary.
Chief Financial Officer and Treasurer
On October 10, 2022, Philip E. Hardin notified the Company that he is stepping
down as the Company's Chief Financial Officer and Treasurer effective October
12, 2022 to pursue another opportunity. He will continue as an employee through
October 28, 2022 to support a transition of the role. His decision did not
involve any disagreement on any matter related to the Company's operations,
financial reporting, internal controls, policies or practices.
The Board of Directors of the Company appointed Lubi Kutua, the Company's
current Vice President, Financial Planning & Analysis and Investor Relations, as
Chief Financial Officer and Treasurer effective as of October 13, 2022. Mr.
Kutua will serve as the Company's principal financial officer.
Mr. Kutua, age 42, joined Beyond Meat as Vice President, FP&A and Investor
Relations in January 2019. Before joining Beyond Meat, Mr. Kutua served as Vice
President, Equity Research, with a focus on the packaged foods and agribusiness
sectors, at Jefferies, LLC from August 2015 to January 2019. Prior to that, Mr.
Kutua served as Associate-Analyst, Equity Research, also focusing on packaged
foods and agribusiness, and at KeyBanc Capital Markets. He began his career in
financial services at Goldman Sachs, most recently serving as Associate,
Divisional Management Reporting. Mr. Kutua received his BA in Mathematics and
Physics from Hamilton College, and his MBA from The New York University Leonard
N. Stern School of Business.
Mr. Kutua's annual base salary will increase to $375,000 effective October 13,
2022, and Mr. Kutua will have the opportunity to earn an increased annual bonus
at a target amount of 50% of his base salary.
In connection with his promotion to Chief Financial Officer and Treasurer,
subject to the approval of the Compensation Committee, Mr. Kutua will be granted
an option under the Plan to purchase shares of the Company's common stock valued
at $300,000. The exercise price per share applicable to the option will be no
less than the per share fair market value of the Company's common stock on the
grant date. The shares subject to the option will vest 25% on the 12-month
anniversary of the promotion date and 1/48th monthly thereafter, subject to Mr.
Kutua's continuous service through each vesting date. In addition, subject to
the approval of the Compensation Committee, Mr. Kutua will be granted RSUs under
the Plan covering shares of the Company's
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common stock valued at $300,000. The RSUs will vest 25% on the 12-month
anniversary of the promotion date and 1/16th quarterly thereafter, subject to
Mr. Kutua's continuous service through each vesting date. The shares subject to
the option will equal the option value divided by the closing price of the
Company's common stock on the date of grant, multiplied by two and rounded up to
the nearest whole number of shares. The shares subject to the RSU will equal the
RSU value divided by the closing price of the Company's common stock on the date
of grant, rounded up to the nearest whole number of shares.
In addition, subject to the approval of the Compensation Committee, Mr. Kutua
will be granted RSUs under the Plan covering shares of the Company's common
stock valued at $200,000. The RSUs will vest in quarterly installments over one
year from the date of grant, subject to Mr. Kutua's continuous service through
each vesting date. The shares subject to the RSU will equal the RSU value
divided by the closing price of the Company's common stock on the date of grant,
rounded up to the nearest whole number of shares.
Mr. Kutua will be eligible for certain change in control severance benefits
pursuant to the Company's form of Executive Change in Control Severance
Agreement, including salary and benefits continuation and accelerated equity
award vesting in certain circumstances. Mr. Kutua previously entered into the
Company's standard form of indemnification agreement, a copy of which is filed
as Exhibit 10.11 to the Company's Registration Statement on Form S-1/A filed
with the SEC on January 9, 2019 ("Indemnification Agreement"). Pursuant to the
terms of the Indemnification Agreement, the Company may be required, among other
things, to indemnify Mr. Kutua for certain expenses, including attorneys' fees,
judgments, fines and settlement amounts incurred by him in any action or
proceeding arising out of his service as an officer of the Company.
There is no arrangement pursuant to which Mr. Kutua was selected as an officer,
no family relationships between him and any director or other executive officer
of the Company, and no transactions involving him or a member of his immediate
family, that would require disclosure by the Company under Item 404(a) of SEC
Regulation S-K.
Principal Accounting Officer
In connection with Mr. Hardin's departure, the Board of Directors of the Company
appointed Henry Dieu, the Company's current Vice President, Corporate
Controller, as principal accounting officer effective as of October 13, 2022.
Mr. Dieu, age 37, joined Beyond Meat as Vice President, Corporate Controller in
April 2022. Before joining Beyond Meat, Mr. Dieu served as Vice President of
Finance and Director, Finance Operation & Revenue Recognition at Tutor Perini
Corporation (NYSE: TPC) from June 2017 to March 2022, Head of Corporate
Accounting at Hulu from February 2016 to June 2017, and in various roles at
. . .
Item 7.01. Regulation FD Disclosure.
On October 14, 2022, the Company issued a press release announcing a reduction
in force and an updated full year 2022 revenue outlook. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2. of Form 8-K, the information
contained or incorporated in this Item 7.01, including the press release
furnished herewith as Exhibit 99.1, shall not be deemed "filed" for the purposes
of Section 18 of the Exchange Act, or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference into any filing
under the Securities Act or the Exchange Act, regardless of any general
incorporation language in such filing, except as shall be expressly set forth by
specific reference in such filing.
Note Regarding Forward-Looking Statements
Certain statements in this Current Report on Form 8-K and in the accompanying
press release constitute "forward-looking statements" within the meaning of the
federal securities laws, including statements related to the Company's
expectations with respect to its third quarter and full year 2022 revenue
outlook, cost-reduction initiatives, expected charges and savings related to its
workforce reduction and executive leadership changes, and the timing and success
of achieving its cash flow positive targets. The charges associated with the
reduction in force and executive leadership changes may be greater than
anticipated, completion of the reduction in force may take longer than
anticipated, the Company may be unable to realize the contemplated benefits in
connection with the workforce reduction, executive leadership changes and other
potential cost-reduction initiatives, and the workforce reduction, executive
leadership changes and cost-reduction initiatives may have an adverse impact on
the Company's performance. Additionally, the Company's ability to meet its cash
flow positive targets is subject to a number of assumptions and uncertainties,
including, without limitation, the Company's ability to reduce costs and achieve
positive gross margins; the Company's ability to meet certain revenue and
operating expense targets, which may be subject to factors beyond the Company's
control; and the Company's ability to monetize inventory and manage working
capital.
Forward-looking statements are based on management's current opinions,
expectations, beliefs, plans, objectives, assumptions and projections regarding
financial performance, prospects, future events and future results, including
ongoing uncertainty related to the COVID-19 pandemic, including the ultimate
duration, magnitude and effects of the pandemic and, in particular, the impact
to the foodservice channel, operations and supply chains, growth trends, our
international expansion plans, market share, new and existing customers and
expense trends, among other matters, and involve known and unknown risks that
are difficult to predict. In some cases, you can identify forward-looking
statements by the use of words such as "may," "could," "expect," "intend,"
"plan," "seek," "anticipate," "believe," "estimate," "project," "predict,"
"outlook," "potential," "continue," "likely," "will," "would" and variations of
these terms and similar expressions, or the negative of these terms or similar
expressions. These forward-looking statements are only predictions, not
historical fact, and involve certain risks and uncertainties, as well as
assumptions. Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate indications
of the times at, or by which or whether, such performance or results will be
achieved. Actual results, levels of activity, performance, achievements and
events could differ materially from those stated, anticipated or implied by such
forward-looking statements. While Beyond Meat believes that its assumptions are
reasonable, it is very difficult to predict the impact of known factors and, in
particular, the COVID-19 pandemic, and, of course, it is impossible to
anticipate all factors that could affect actual results. There are many risks
and uncertainties that could cause actual results to differ materially from
forward-looking statements made herein including, but not limited to, the
effects of global outbreaks of pandemics or contagious diseases or fear of such
outbreaks (such as COVID-19), including on our business, financial condition,
cash flows and results of operations, including on our supply chain, the demand
for our products, our product and channel mix, labor needs at the Company as
well as in the supply chain and at customers, the timing and level of retail
purchasing, the timing and level of foodservice purchasing, our manufacturing
and co-manufacturing facilities and operations, our inventory levels, our
ability to expand and
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produce in new geographic markets or the timing of such expansion efforts, the
pace and success of new product introductions, the timing of new foodservice
launches, and on overall economic conditions and consumer confidence and
spending levels; the impact of uncertainty in our domestic and international
supply chain, including labor shortages and disruption and shipping delays and
disruption; a resurgence of COVID-19 and the impact of variants of the virus
that causes COVID-19 which could slow, halt or reverse the reopening process, or
result in the reinstatement of social distancing measures, business closures,
restrictions on operations, quarantines, lockdowns and travel bans; the impact
of uncertainty as a result of doing business in China and Europe; government or
employer mandates requiring certain behaviors from employees due to COVID-19,
including COVID-19 vaccine mandates, which could result in employee attrition at
the Company, suppliers and customers as well as difficulty securing future labor
and supply needs; the impact of adverse and uncertain economic and political
conditions in the U.S. and international markets; the volatility of capital
markets and other macroeconomic factors, including due to geopolitical tensions
or the outbreak of hostilities or war; our ability to effectively manage our
growth in the U.S. and abroad; our ability to streamline operations and improve
cost efficiencies, which could result in the contraction of our business and the
implementation of significant cost cutting measures; our ability to identify and
execute cost-down initiatives intended to achieve price parity with animal
protein; the success of operations conducted by joint ventures, such as the
Planet Partnership, LLC with PepsiCo, Inc., where we share ownership and
management of a company with one or more parties who may not have the same
goals, strategies or priorities as we do and where we do not receive all of the
financial benefit; the effects of increased competition from our market
competitors and new market entrants; changes in the retail landscape, including
the timing and level of trade and promotion discounts, our ability to grow
market share and increase household penetration, repeat purchases, buying rates
(amount spent per buyer) and purchase frequency, and our ability to maintain and
increase sales velocity of our products; changes in the foodservice landscape,
including the timing and level of marketing and other financial incentives to
assist in the promotion of our products, our ability to grow market share and
attract and retain new foodservice customers or retain existing foodservice
customers, and our ability to introduce and sustain offering of our products on
menus; the timing and success of distribution expansion and new product
introductions in increasing revenues and market share; the timing and success of
strategic partnership launches and limited time offerings resulting in permanent
menu items; our estimates of the size of market opportunities and ability to
accurately forecast market growth; our ability to effectively expand or optimize
our manufacturing and production capacity, including effectively managing
capacity for specific products with shifts in demand; risks associated with
underutilization of capacity which could give rise to termination fees to exit
certain supply chain arrangements and/or the write-off of certain equipment; our
ability to sell our inventory in a timely manner requiring us to sell our
products through liquidation channels at lower prices, write-down or write off
obsolete inventory, or increase inventory reserves; our ability to accurately
forecast our future results of operations, including fluctuations in demand for
our products and any increased competition; our ability to accurately forecast
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
Number
99.1 Press release of Beyond Meat, Inc. dated October 14, 2022
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