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Laird Superfood turned in modest topline performance in Q1 that was overshadowed by "transformative milestone" of two acquisitions that set it on path to moving from nearly pure play in bevs to rollup of superfood-oriented foods, bevs and ingredients, and one that's once more vertically integrated. On investor call yesterday afternoon, CEO Jason Vieth made it clear the co will be angling to acquire another company or two every year with backing of Nexus Capital Partners, which now controls 73.8% of LSF shares. Among other news on call, Jason said Andy Judd is returning in key marketing role after 2 years helping steward Poppi to its lucrative exit to PepsiCo. "Under Andy&#39;s leadership, we will be pivoting more work in-house to drive greater efficiency, creativity and speed to market," reported Vieth, a former colleague of Judd's at WhiteWave Foods. Another key hire on grocery-sales side is coming in next 2 wks, he promised. As reported, the maker of coffee creamers first acquired Navitas Organics on Mar 12 (early enough to include 19 days of sales in Q1 report) and Terrasoul Superfoods after qtr's conclusion, on Apr 21. Nexus was partner on both to tune of $50 mil Series A preferred stock issuance in Mar and $60 mil issuance in Apr. Among implications of deal, it tilted LSF from mainly a bev player involved in coffee creamers to far more diversified entity. And as Vieth noted, Terrasoul's large plant in Fort Worth, Texas, restored vertical integration to co after he'd had to shut down Laird's original plant in Sisters, Ore, as unsuited to such a sub-scale player.As noted, Q1 didn't tear the doors off. Sales rose nominal 20% to $13.9 mil, but just 5.6% to $12.3 mil excluding Navitas contribution in final 19 days. Wholesale segment that's focus of future growth plans rose 37% to $7.5 mil but ecomm edged up just 4% to $6.5 mil as strength on Amazon and Navitas contribution was offset by weakness on co's DTC platform where it's been rationalizing spend. Gross margin narrowed to 33.3% from 41.9%. About 5.4 pts of that contraction was due to unfavorable channel and product mix, rising commodity costs and tariffs; the other 3.2 pts reflected an inventory move last year that didn't recur, LSF indicated. Vieth noted that key commodities have since come down in price, even as Trump tariffs were removed, to benefit of margin going forward. LSF is pursuing tariff refunds. Operating loss widened to $3 mil from $218K a year earlier. Still, "as we integrate Navitas and Terrasoul and begin to realize procurement and operational synergies, we expect our adjusted EBITDA to improve meaningfully through the balance of the year," promised CFO Anya Hamill. So Q1 "was a transitional quarter by design. We absorbed the cost of building the platform, acquisition fees, working capital investment and integration spending, while continuing to deliver healthy topline growth," she said. With additions of two acquired firms, full-yr sales should come to $138-148 mil, meaningful degree of scale.M&A Targets Outlined Tho Q1 was modest, Vieth urged investors to keep their eye on the longer term. "Through these transactions, we have created a much stronger enterprise that is positioned to generate positive EBITDA and cash flow in the future," he stressed. "Given these improvements, we expect to use our balance sheet to attain some combination of debt and equity financing to support those future acquisitions." Those targets will be domestically focused and "are going to fit into this health and wellness space, as close to the earth as we possibly can get. You know, minimally processed, real food type of brands." Those are likely to be doing sales in $50-70 mil range, tho "I wouldn&#39;t say we wouldn&#39;t look at something larger that can anchor the portfolio."Back to Vertical Integration, at Right Scale This Go-Round By now Navitas has been integrated into LSF ops, apparently with minimal retention of former Navitas employees. For now, Terrasoul is operating as before, tho Laird and Navitas products are a neat fit with Terrasoul's mfg capabilities in Ft Worth and will be migrated there, restoring margin-boosting vertical integration to co. Vieth termed deal a "full-circle moment," recalling, "When I first came here 4 years ago, we were self-manufactured. We had a facility up in Oregon, and we were distributing out of it, and we were just very subscale and not ready to be undertaking those activities. We ultimately had to shut that down, move to a co-pack 3PL outsourced manufacturing and distribution system. Frankly, that&#39;s what saved the company at the time. We were able to flip gross margins from 15% to over 40% and to really take control of our business." (We'll note that remote location in rural Ore and leadership team unseasoned in CPG couldn&#39;t have helped either; Vieth has uprooted co to his own base in Colo.) With twin deals, "we now have the manufacturing scale and size of business that warrants having our own facility." But migration will be deliberate. "We&#39;ll take it in steps . . . We&#39;ve seen others that have made messes of acquisitions." Terrasoul also offers LSF "an enhanced online marketplace capability, which we believe will greatly benefit our entire business in the future," he said. And it adds about 3K foodservice doors in attractive channels like juice shops and coffeehouses.AI Eased Navitas Integration, Albeit at Cost of Most Jobs There Like other corporate leaders, Vieth was effusive about efficiencies AI usage has generated - albeit at cost of most Navitas employees' jobs. "We now have AI supporting our team in forecasting, planning and execution activities across all of our functions, including supply chain, finance and marketing," he reported. "We are already reaping the benefits of this technology in the organization as we transition the Navitas business to the Laird team with very little incremental headcount."

Despite Modest Performance, Q1 Was 'Transformative Milestone' for Laird Superfood That's Been Reconfigured via Navitas & Terrasoul Pickups; Still in M&A Hunt; Judd Makes Post-Poppi Return to Run Marketing

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