PARAMOUNT, CALIF. — Plant-based prepared foods manufacturer Tattooed Chef, Inc. informed the US Securities and Exchange Commission (SEC) on March 17 it would not be filing its 10-K annual report for the year ended Dec. 31, 2022, on time. Additionally, the company notified the SEC it did not expect to file the report within the 15-day extension period that is permitted. The company did not indicate when it planned to file the annual report.
The delay follows a weak third quarter. For the period ended Sept. 30, Tattooed Chef recorded a loss of $38.5 million, much wider than for the same period of the previous year when the company lost $8.2 million.
Quarterly sales fell to $54.1 million from $58 million the year before.
Cost increases related to labor, freight, facility-related charges, energy costs, equipment and supply-related expenses all weighed on the company’s quarterly performance, said Stephanie Dieckmann, chief financial officer.
During a Nov. 15, 2022, conference call to discuss third-quarter results, Sam Galletti, president and chief executive officer, said the company would reduce its cash burn by cutting spending and emphasizing the allocation of resources to areas that elevate the company’s advantages.
“By year end 2023, we believe that we can capture approximately $30 million of cost savings, primarily through a combination of the following: a $15 million reduction in marketing related expenses, Mr. Galletti said in November. “In order to support our retail expansion over the last two years, we focused on building brand awareness through targeted advertising campaigns, which allowed us to increase our household awareness to 23% in less than two years.
“During this period, we have learned about our consumer, where they shop, what they value, and where they learned about Tattooed Chef brands. Our strategy moving forward will focus on more economical marketing tactics that are closer to the point of purchase to include retail specific trade marketing programs, targeted social campaigns, and retailer-specific influencer campaigns.”
The company also planned to achieve savings through the adoption of automation, bringing cold-storage operations in house, and reducing promotional programs.
The same day it said it would miss its SEC deadlines, the company said it expected to save up to $40 million or more in 2023. Additional efforts contributing to the savings included workforce reduction, realignment of company resources and rationalization of the product portfolio.
As a result, management expected Tattooed Chef to become cash flow neutral by the fourth quarter of 2023, approximately six months ahead of its original plan.
“We continue to execute a plan that we believe will reduce cash burn, reduce our annual losses, and strengthen our brand profile and retail presence,” Mr. Galletti said. “Tattooed Chef holds a distinct position in our industry as a vertically integrated, value-added plant-based food company, and we remain focused on producing the highest quality products, pursuing innovation, and optimizing both the efficiency and utilization of our operations to unlock their inherent profitability.
“Although we still have much work ahead of us, we are seeing early indications of our progress on a sequential quarterly basis, with material improvements expected to manifest beginning in Q1 2023 and continuing throughout the year.”