Tattooed Chef Inc (TTCF) 2020 Q4 法說會逐字稿

Thank you for standing by. This is the conference Operator. Welcome to the Tattooed Chef fourth-quarter 2020 earnings call. (Operator Instructions)

I would now like to turn the conference over to Rachel Perkins, Investor Relations. Please go ahead.

Thank you. Good afternoon and welcome to Tattooed Chef's fourth-quarter and full-year 2020 earnings conference call. On the call today are Sam Galletti, President and Chief Executive Officer; Sarah Galletti, Chief Creative Officer [and The] Tattooed Chef; Chuck Cargile, Chief Financial Officer; Stephanie Dieckmann, Chief Operating Officer; and Matt Williams, Chief Growth Officer, will also be available for questions.

By now, everyone should have access to the earnings release, which went out at approximately 4:05 PM Eastern Time today, March 10, 2021. If you've not had a chance to review the release, it's available on the Investors portion of our website at www.tattooedchef.com.

Before we begin, I'd like to remind everyone that the prepared remarks contain forward-looking statements. Such statements involve a number of known and unknown uncertainties, many of which are outside the company's control, that could cause future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such forward-looking statements.

Important factors and risks that could cause or contribute to such differences are detailed in the company's filings with the Securities and Exchange Commission, except as required by law, the company undertakes no obligation to update any forward-looking or other statements herein whether as a result of new information, future events, or otherwise.

In addition, within our earnings release and in today's prepared remarks, adjusted EBITDA and adjusted EBITDA margin are referenced. It is important to note that these are non-GAAP financial measures that we believe are useful metrics that better reflect the performance on our business on an ongoing basis. A reconciliation of these non-GAAP financial measures that are most directly comparable GAAP financial measures are included in today's press release, which has also been posted on our website.

And with that, it is my pleasure to turn the call over to Tattooed Chef's President and CEO, Sam Galletti.

Thank you, Rachel, and good afternoon. We appreciate everyone taking the time to join us on today's call. I'll begin today's discussion with key business highlights, including an update on our new distribution wins, Sarah will discuss our marketing and innovation, and then Chuck will provide greater detail on the financials.

First, our fourth-quarter revenue highlights. We are pleased to report revenue increased 48% to a $39.6 million compared to the fourth quarter last year, driven by our Tattooed Chef branded products. Our branded products sales for the quarter were a record $23.9 million, an increase of 172%, compared to $8.8 million in the fourth quarter last year. Branded sales accounted for 60% of the total revenue in the fourth quarter of 2020.

For the full year, revenue was $148.5 million, a 75% increase year over year. Branded sales increased 363% to $84.6 million, or 57% of the total revenue for 2020, compared to 22% in 2019. This is the first year in the company's history that branded exceeded private label sales, and we expect that split to reach as high as 75% to 80% branded within the next two to three years.

We believe we are still in the early innings of the Tattooed Chef growth as a brand and as a company. We formed Tattooed Chef in 2017 after Sarah recognized the lack of readily-available high-quality, clean label, ready-to-cook plant-based products in the market. Fast forward, we ended fiscal 2020 with 38 branded SKUs. Our products are sold in all 50 states and we took the company public. The Tattooed Chef brand is for every lifestyle and we attract consumers of all ages and demographics.

We believe our historic and continued success with club across an array of Tattooed Chef branded products indicates that Tattooed Chef brand resonates with consumers and will be attractive to conventional retail grocery customers. Coupled with the fact that we have spent little money on increasing brand awareness since we were historically focused on private label, we believe there is an untapped potential.

We participate in the $55 billion US frozen food category, a $380 billion market globally and we are aligned with many major food trends. We have the innovative products and the vertically integrated supply chain and manufacturing capabilities to compete across multiple categories within frozen food and little brand recognition or household penetration today. As we announced in December, we hired the national marketing firm, NitroC, to implement a comprehensive brand marketing campaign this year, which Sarah will touch on in a few minutes.

Our growth strategy is focused on expanding and increasing distribution of Tattooed Chef branded products with new and existing customers. We continue to set the foundation for broad market expansion. At the end of 2020, our Tattooed Chef branded products were nearly 4,300 stores and have 23,000 points of distribution. We have made significant progress in gaining new retail distribution at the start of 2021.

Based on our new retailer partners that have committed in Q1, Tattooed Chef will be available in an additional 1,765 chain stores with 8,000 new points of distribution. This is a 41% increase in stores and a 35% increase in points of distribution over where we finished 2020 versus what we expect for the first quarter of 2021. We'll further discuss the positive momentum as we expand our channel performance.

Starting with the club channel, we launched our first MVM with Costco in March. With this program, Tattooed Chef six pack organic açai bowls will be available in every Costco nationwide for the entire month. This program will continue to allow us to introduce Tattooed Chef to more consumers through the Costco member.

In Sam's Clubs, we continue to demonstrate our leadership position as a plant-based frozen food partner. In addition to our four Tattooed Chef items that are sold on an everyday basis nationally, we have had four limited-time offers in Q1. Three of our limited-time offers were new items cauliflower wings with buffalo and sweet chili sauce, cauliflower white pizza, and our plant-based sausage breakfast bowl. Our fourth LTO was the veggie hemp bowl, which has performed so well that will be brought back on rotation later this year.

We were also able to continue to share the Tattooed Chef brand message with Sam's Club's member in Q1. Tattooed Chef was featured in two Sam's Club in-store booklets on the front page in both January and March. The January ISB focused on plant-based foods and featured the Tattooed Chef portfolio. And on the March ISB featured Sarah Galletti for Women's History Month. With a circulation of 18 million, we were honored to be part of both programs. We continue to see this momentum translate in our business performance. For the 52 weeks ended December 27, 2020, as reported in SPINS, Tattooed Chef is up 376% in Sam's Club, which is significantly outpacing the frozen categories in which we compete.

Tattooed Chef is the number three brand in the combined frozen categories in which we compete, which includes frozen breakfast, entrée, and fruits and vegetables. More specifically, in the frozen foods and vegetables' category, Tattooed Chef is the number one selling brand in both total dollar sales and dollar growth in Sam's Clubs. We are confident that our strong business performance as well pipeline of innovation will allow us to build on the strong foundation in the future. We have achieved this category leadership position in only one year of sales.

Tattooed Chef's momentum in mass channel continues with 33% growth for the 52 weeks ending December 27, 2020. According to SPINS, Tattooed Chef grew three times faster than the category in 2020. Our [ACB and MAP] is 59.8%, which is up 300% year over year. Our TDPs or total distribution points are up 285%. We are also excited to share we've expanded our partnership with Target. As we announced this morning, six new SKUs will be available nationally starting next week. These new SKUs plus our current smoothie bowl line will now give the Target guests the opportunity to enjoy Tattooed Chef breakfast, lunch, and dinner.

In grocery natural, Tattooed Chef is currently offering 38 unique SKUs across five different frozen categories. By the end of Q1, we will have retailers and distributors selling 24 of these SKUs. We are starting to see the results of the work we did in the fourth quarter to develop our retail program to start materialize in the market. Tattooed Chef products will be on shelf by the end of Q1 in key retailers across the country, such as Stop & Shop, Southeastern Grocers, and Ingles. These retailers will feature a variety of product categories, including pizza, entrée bowls, vegetables, and smoothie bowls.

In addition to the retailer commitments that will start selling Tattooed Chef in Q1, we also have additional retailer commitments, including Whole Foods, Myer, Lowes Foods, and United Supermarket, a division of Albertsons. Our new distributor relationships with UNFI, KeHE, and Lipari are showing promise as well. Tattooed Chef products are now available in these distributors' warehouses across the country and we are encouraged by the progress that sales teams are making to introduce the full line of Tattooed Chef to local and regional grocery and natural accounts. Between the new distribution and MAP and the grocery natural commitments, along with other retailer negotiations that are underway, we are now confident that we will achieve our 2021 objective of 10,000 stores and 65,000 distribution points for Tattooed Chef at year end.

Just to recap all the new stores that are expanding their Tattooed Chef line and carrying products for the first time are Target, Stop & Shop, Southeastern Grocers, Ingles, Bristol Farms, Whole Foods, Meijer, Lowes Foods, and United Supermarkets. We have also started working with Thrive Market and we'll have product available on their online marketplace starting next week. We look forward to announcing our second quarter wins to you soon. With our retail expansion well underway, our next sales channel focus will be food service.

With COVID-19 restrictions expecting to mitigate and students and employees returning to campus and the workplace, we think the time is right to introduce Tattooed Chef to the business, industry, and education channel. With our existing entrée and smoothie bowl portfolio, distribution network and a new food service broker partner, we are excited about what the future holds for us in food service. We will share our progress in these channels throughout the year.

We expect our growth to continue giving the different channels for growth, including grocery club MAP as well as our innovation pipeline. As we outlined in our Analyst Day in December, we believe that given the white space within the frozen food aisle, we can achieve $300 million of revenue primarily from product expansion in current and existing retailers, new platforms like desserts and family meals and increasing our SKU count to over 200 through innovation.

We see a path to $500 million in sales as we look to expand beyond the frozen food section and into the grocery aisle with shelf stable products, and we will consider strategic M&A to accelerate our growth in certain areas. We have approximately $200 million in cash and we'll invest in the business and capitalize opportunities that we think will create long-term shareholder value.

One of our key competitive advantages is that we are vertically integrated by being the manufacturers of our own product, we can take a new idea from concept to production to shelf as well as three months. We have two facilities today, one in the US and one in Italy. In the US facility, we have doubled our capacity in 2020 and added additional production square footage. For example, on one of the lines we're able to manufacture around 15,000 bowls per shift and today through investment in equipment, we're able to manufacture over 35,000 bowls per shift on the same line using the same number of people.

The Italian facility also increased production of riced cauliflower from 110,000 pounds per day to 200,000 pounds per day. And in August, we expect this increase to 400,000 pounds per day will continue to increase capacity during 2021 to keep up with the expanded growth in demand of Tattooed Chef products.

And now I'd like to turn the call over to Sarah to discuss our innovation and our marketing efforts.

Thank you and good afternoon, everyone. I'm excited to be here to provide a little more insight on our innovation and marketing initiatives. We are disrupting the frozen aisle and retailers nationwide with our plant-based foods. Our ability to spot trends quickly and constantly innovate is what resonates with consumers and retailers alike. We were the first to go to the mass market was cauliflower crust pizza and açai bowl and have a pipeline of over 150 additional plant-based ideas. We need food that we want to eat and we make it easy for consumers to enjoy with little to no prep.

2020 was a big innovation year for Tattooed Chef. We released 17 new branded SKUs during the year bringing our total to 38 SKUs as of December 31, 2020. We've been happy with the performance of these new items and it has prompted more discussion with retailers around future innovation. We have 24 new SKUs planned for 2021, 13 of which we'll be launching in the first half of 2021 at club and conventional retailers nationally. We are especially excited about the launch of our 100% certified plant-based pizzas. We have five SKUs, two-cheese, vegetable, meat lovers, pepperoni, and a white pizza. Meat lovers and pepperoni have meat alternatives using the clean ingredient deck. And we believe our vegan cheese is superior to any others in the market today.

These new pizzas are one of the -- only to have a plant-based certified stamp, which was important for us to have on our packaging. The meat alternative space continues to be attractive to enhance our value-added meal. We are developing more products, not only in the meat alternative space, but also things alternative whether that be rice, pasta, and desserts. We continue to push the limits of what is possible in creating new food concept and are making a stamp in multiple spaces and doors. We are continually bringing new ideas to the marketplace. Given what Sam spoke about earlier with new retail distribution, there is excitement bringing Tattooed Chef into the food aisles.

Our food resonates with consumers and we're encouraged to see the retailer reception to our product portfolio has been so positive. We provide delicious, approachable, and innovative products not only to the growing group of consumers who seek a plant-based lifestyle, but also to the mainstream market. Our broad portfolio of products can satisfy all occasions, whether that be a meal, snack, or side dish making us a go-to supplier for retailers seeking to offer a complete plant-based portfolio.

As we discussed at our Analyst Day, we have hired the national marketing firm NitroC to help increase our brand awareness as we grow our distribution. We'll be investing $15 million across digital video, connected TV, digital display, social media, and search engine marketing. Since bringing them on board at the start of the year, we have successfully deployed an initial test campaign with banner ads in the Los Angeles and Atlanta market.

Starting mid-March, we will be moving into Phase 2 with innovative 6- and 15-second video campaign commercials and expanding into additional market across the country. We will prioritize investment in markets and zip codes with the highest density and distribution and concentration of our target plant-based [intenders] and will dynamically adjust to drive demand with each new retailer, SKU, and door.

In key areas, we will explore a how high is high approach with broad-based media including TV to understand the dynamics of demand beyond the core plant-based intender consumer. Through our investment approach, we are building a system that will grow as we grow and plant the seed for inclusive national movement to revolutionize plant-based eating. We are still in the early days collecting marketing data points, but we are confident in our strategy. I can't wait to share more with you in a month to come.

Now, I'll turn it over to Chuck, to walk through our financials.

Thank you, Sarah, and good afternoon, everyone. In the fourth quarter of 2020, we continued on our growth trajectory. Revenue increased by almost 50% to $39.6 million compared to $26.8 million for the prior year fourth quarter. As Sam mentioned, the revenue increase was driven by a $15.1 million increase in revenue of Tattooed Chef branded products, which now account for almost 60% of our total revenue.

Our gross profit was $6.9 million or 17.4% of revenue compared to $3.9 million or 14.4% for the comparable quarter of 2019. The improvement in gross profit and gross margin was primarily due to production efficiencies and the cost of goods sold being spread over greater revenue. We anticipate continued gross margin expansion as we increased our volume.

Operating expenses increased to $7.9 million for the three months ended December 31, 2020, compared to $1.9 million for the three months ended December 31, 2019. The increase in operating expenses was primarily due to $3.4 million of stock compensation, resulting from equity grants made subsequent to the merger with FMCI in October of 2020, also increases in spending to support the growth of the Tattooed Chef branded products and to support the costs of being a public company since October 15, 2020. We expect operating expenses to increase in 2021 to accommodate the growth, invest in the brand, and incur a full year of public company costs.

Net income was $41.5 million in the three months ended December 31, 2020, compared to $2.2 million in the prior year period. We reported a tax benefit of $41.9 million in the fourth quarter compared to a benefit of $0.2 million in the prior year period. In October 2020, the restructuring in anticipation of the merger with FMCI caused a step-up in the tax basis of intangible assets of approximately $140.5 million, and the tax status of the company to change from an S-corp to a C-corp. The tax effect of these changes created a deferred tax asset and income tax benefit of $39.3 million.

For the full year, revenue increased by $63.6 million or 74.9% to $148.5 million. The increase was driven by the exceptional growth of Tattooed Chef branded products. In 2020, our branded product growth resulted from expansion in the number of US distribution points as well as increased volume and existing club channel customers of our current portfolio of products and new product introductions, including smoothie bowls, vegetable blends, buffalo cauliflower, and other value-added riced cauliflower meals.

Gross profit increased $10 million to $23.7 million for the year ended December 31, 2020, compared to $13.7 million for the year ended December 31, 2019. Gross margin for the full-year 2020 was 15.9%, slightly lower than 16.1% in the year ended December 31, 2019. The gross profit increase was primarily due to the higher revenue levels for the current year. The gross margin declined slightly due to higher costs for raw materials and other variable manufacturing costs in the current year.

Operating expenses increased $12 million to $19.5 million for 2020 compared to $7.5 million for 2019, primarily due to increases in costs resulting from higher headcount and wages to manage the increase in revenue and public company costs, which did not exist in the prior year. We also had $3.4 million of stock compensation expense, and a $0.6 million in non-recurring bonus payments for the merger with FMCI.

Net income was $45.4 million in the full year of 2020 compared to $5.6 million in the prior year. The net income for the year ended December 31 includes the same $39.3 million income tax benefit I described a minute ago. Adjusted EBITDA was $9.6 million or 6.4% of revenue for the year ended December 31, 2020, compared to $6.9 million or 8.1% of revenue for 2019. The improvement in adjusted EBITDA was primarily the result of the increase in revenues and gross profit compared to the prior year period.

Our quarterly split of adjusted EBITDA was impacted by transaction costs, which were expensed prior to the merger closing in the fourth quarter. Once the transaction closed in accordance with the accounting rules, these costs were credited to income in the fourth quarter and no longer an addback for adjusted EBITDA.

I recognize there's a lot of unusual activity in our fourth quarter financial statements due to the complex accounting for the reverse merger, the non-recurring transaction costs, and the large tax benefit. But irrespective of the one-time activities, we're pleased to post strong profit while managing through significant growth and dramatic organization changes during 2020.

As of December 31, we had cash and cash equivalents of $131.6 million as previously announced, including the cash proceeds from the exercising of public warrants as of February 22, the company's total cash balance was approximately $200 million.

Lastly, I'll mention that we've been fortunate that the COVID-19 pandemic had a minimal impact to our business in 2020. As a food manufacturer, our operations are deemed essential and all of our facilities are currently open and operating, both in the US and Italy. Since the start of the year, we've had -- we have experienced some shipping delays, particularly in ports that are continuing to closely monitor the situation. At this time, we don't expect the delays to materially impact our first-quarter results.

Now turning to our outlook, we are reaffirming our 2021 annual guidance provided at our Analyst Day in December, which includes continued growth in revenue. We anticipate following up on this year's 75% revenue growth with an addition of 50% growth in 2021 or approximately $222 million of revenue. The growth will yet again come from Tattooed Chef products. We expect expansion of our gross margin into the range of 20% to 25% of revenue. And we expect adjusted EBITDA for the year to be in the range of $8 million to $10 million as we continue to invest in driving the growth, invest in our brand, and add the cost required to be a public company. And we expect net income to be in the range of $2.5 million to $5 million.

With that we're now available to take your questions. Operator?

Thank you. (Operator Instructions) George Kelly, ROTH Capital Partners.

Hey, everybody. Thanks for taking my question.

Thank you.

I just have a couple -- and then I'll -- I have a couple and then I'll hop back in the queue, but maybe if you could start, Sam, you listed a lot of new partners that you're launching with new groceries in the first quarter, I think first half of the year. So I guess the question is, are you surprised how quickly you're bringing on additional distribution points? And is there one or two things that as you're sort of pitching these folks, are there one or two things that they're most focused on and attracted to your brand? Like how is it happening so quickly?

Thanks, George. I don't think that -- we've been on such a aggressive path the past few years. It's just when we started offering products to Sam's and Costco, the brand is connected right away with them. And so we'd been on just this great momentum. And so I really did feel that when our team started going to retail, that we were going to continue this momentum that we had and it is happening and it's very exciting.

And so, am I surprised at it? I'm not surprised, I'm very pleasantly pleased though because I know that there was a lot of people questioning about the conversion from club to retail, and I was never concerned with it and obviously it's proving out that the retail consumer is just as hungry for plant-based Tattooed Chef brand and product. So I'm really excited about what I see happening right now.

Okay, great. And then there was a discussion in the prepared remarks. I may have missed part of it. But I think you talked about the advertising strategy. And I was wondering if you turn that on much so far in 2021. And what has been the response? What are the learnings with what you've seen thus far?

I'm going to turn that over to Sarah.

Hello. So with Tattooed Chef, we've had no marketing until 2021 of January. And in our first phase, we are really focusing on banner ads and just gathering the data that we need to pivot and be strategic with where we allocate our dollars for marketing. We're going to be pitching and launching in March our commercials, which we'll be going digitally and connected to Connected TV, but right now we're just still gathering data because we want to really be specific and strategic in where we allocate our dollars.

Okay. Got you. And then maybe last couple of questions just related to 2021 guidance. Can you -- I guess first, just Chuck, you mentioned there were some shipping delays and some port issues, what will growth -- can you help at all with kind of the sequential growth just throughout the year? Will we see the fastest growth towards the back half and anything we should think about quarterly?

I'm actually going to take that one, George. This is Stephanie. When we start to look at what the growth in revenue is going to do throughout the year, we brought up the port delays and things like that, so that the information is out there. We have not experienced any delays in our shipments and our product at this time, but we want to be completely transparent. As far as revenue goes, we have some great promotions for first quarter, as you guys heard Sam say in which we have the Costco MVM. We have some great promotions next quarter. We have some great product rotations and we're building up the retail chain. And so we expect Tattooed Chef to continue to grow. But have not released the guidance for each quarter, but Tattooed Chef is where it's going. And we are going to continue to open up distribution points and new retailers across the country.

Okay, great. Thank you, all. I'll hop back in the queue. Congrats on the nice quarter.

Thank you.

Rob Dickerson, Jefferies.

Okay, great. Thank you so much. So I guess just to go back to the guidance for a minute. There is a decent part of the call, right, is highlighting the tremendous amount of positives, right? I mean, it sounds like things, frankly, are going great or even ahead of plan or maybe expected right in the conversion into grocery. You call it out success in Costco, doing very well in Sam's. I know there's a press release this morning about the six SKUs nationally in Target and then you call it out like what (inaudible) then there are others may be getting to thrive.

To kind of put all that together and then I see that the guidance was reiterated kind of my knee jerk reaction is to think, well, there's got to be upside to that guidance if this is all coming through because I thought the guide originally was based upon visibility maybe from some of the prior increased distribution gains at Walmart but maybe not including some the new business. So I'm just trying to right-size, essentially the held guidance for the year kind of in relation to what seems to be new business wins, if that makes sense. That's my first question.

So Rob, this is Matt. Good afternoon. So, obviously, the new distribution is we're super excited about it. Again, we are building traction and we have a great story. But again, as you know, we're distributing our product across a lot of different categories. We've got 38 SKUs that we're selling. We sell different categories obviously that are under different reset timing throughout the year. And so because of that, when the customers actually come on and when we start realizing revenue this year, you're going to see that some of that revenue growth is obviously going to be factored into Q2.

And then obviously mid-Q3 and Q4, but the real impact is obviously on our 2022 guidance which we're obviously enforcing. And that's where we see the full-year benefit come in. So it just staggers in. It comes in in a staggered way, and we're super encouraged by it, and we think it's obviously a great demonstration of the health of the brand. Does that make sense?

Yeah. I mean, I hate to push on it. It kind of makes sense. Because I do feel like if you get the new business wins, so what you're coming in Q1, maybe in Q2, like that or is that more trial basis or it doesn't sound like you're able to -- you're not booking that revenue or maybe you are, right? You're just kind of leaving yourself some leeway because obviously you're still in early innings and high growth mode. I'm just -- again I'm just trying to figure out like if there are new business wins, that's awesome. I'm just trying to figure out how are you supposed to be modeling that in terms of revenue, right? The new doors, new distribution points, new SKUs, et cetera.

Hey, Rob. This is Sam. How are you doing? I think that -- hey, when we came out with the $222 million budget for '21, we were building in 10% to 15% of business that we projected just based on conversations. We have to wait so long before these customers will allow us to say to communicate that we win this business. So it's like, we did put, we do project 10% to 15% of that '21 budget was on assumptions that we make based on the conversations of that we already had with these retailers. So I'm pretty -- again, to have a 49%, 50%, growth organically year over year with our frozen product line is we're just super excited about it.

Yeah, no, that's -- I really appreciate the clarification. That makes complete sense. Right, so that's just trying to always figure it out, but great answer. And then I guess just in terms of the vertical integration being a benefit, we've heard from almost every food company, not always kind of produce-related areas on frozen. But yeah, we've heard a lot about cost inflation. Is that cost inflation impacting you or potentially could impact you or because of kind of the contracts you have with the farmers and some sourcing coming from Italy, maybe it doesn't impact you as much? Maybe that could actually be a benefit. Just trying to figure out again kind of costs -- the cost environment overall relative to the price.

So as we strategically source our raw materials and you're correct. With a lot of our produce coming from Italy, we're not as concerned about some of that pricing and costs that are coming into play for other manufacturers, but also being vertically integrated helps us reduce that additional costs that other companies can't see and experience. But we also work hard to source from around the world to ensure that we are protected from some of these cost increases that come through added with the vertical integration and the ability to manufacture more products and take up some of those things within our own manufacturing, it allows us to be better protected.

Okay. That's good to know. And then I guess just lastly, just a question on the warrants. Sometimes you're confiscated, it sounds like you said cash balance at the end of the year around $200 million, which is partially driven, I guess, by some of the cash coming in from the warrants. So I just kind of -- just to clarify again, it sounds like if that cash comes in, you can actually keep that cash and redeploy into other strategic value creating opportunities versus necessarily having to go back out into the market and buy back stock, right? It's almost -- it's a nice kind of cash generating vehicle kind of as long as they exist. So I just wanted to understand that cash comes in on the warrants, is that something you then can redeploy and whether it's CapEx, supply chain, what have you maybe acquisitions versus having to buy back stock? That's all I have. Thank you.

You're welcome. Yeah, I think two points, Rob, to answer your question. One is just a clarification. We had $131 million on the books at the end of the year, that's what you'll see in the published financial statements. Subsequent to that, there was another $70 million that came in from the warrants that's what got us to $200 million. And there's no restrictions on that. That $200 million is in (inaudible), it's ours to spend strategically. And the other important point is that the $20 million warrants are now fully exercised, so there's no more dilution coming from those warrants. So we have the cash, we can use the cash, and there's no more pending dilution.

Okay, great. Thank you so much. Great job. Appreciate it.

Thank you, Rob.

Thank you.

Thank you.

This concludes the question-and-answer session. I would like to turn the conference back over to Sam Galletti for any closing remarks.

Thank you for join us today from Italy to California. I'd like to thank my dedicated team that has worked so hard to be able to make these strong results possible. We believe there is a significant growth opportunity for the Tattooed Chef brand with new and existing customers in food retail as well as other areas like food service. We are off to a strong start in 2021, increasing distribution, launching exciting innovative products, and increasing our brand awareness. We look forward to speaking to you again at upcoming investor conferences on our first-quarter earnings call in early May. Have a great day.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.