• Annual Net Revenues: $35 million, down 9% year-over-year.
• Fourth Quarter Revenue Growth: 26% year-over-year to $7.2 million.
• Gross Profit Margin: 37% for the full year, an increase of over 600 basis points.
• Adjusted EBITDA Loss: Improved 78% year-over-year to $1.9 million.
• SG&A Reduction: 22% year-over-year.
• Net Loss: Improved to $168,000 from $23 million in 2023.
• EPS: Loss of $0.11 per share, improved from a loss of $32 per share in 2023.
• Cash and Cash Equivalents: $3 million as of December 31, 2024.
• Net Working Capital Position: Increased over 200% to $7.9 million.
• Fourth Quarter Adjusted EBITDA Loss: Improved 80% year-over-year to approximately $700,000.
• International Revenue Growth: 18% year-over-year.
• Digital Platform Revenue Growth: 32% growth in the fourth quarter.
• Gain from Extinguishing Debt: $6.2 million.

• Warning! GuruFocus has detected 5 Warning Signs with BTTR.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Better Choice Co Inc (BTTR) reported a significant improvement in gross profit margin, increasing by over 600 basis points to 37% for the full year.
• The company achieved a 78% year-over-year improvement in adjusted EBITDA loss, reducing it to approximately $1.9 million.
• Fourth quarter revenue growth was impressive at 26% year-over-year, driven by a 32% increase across key digital platforms like Amazon and Chewy.
• Better Choice Co Inc (BTTR) successfully reduced SG&A expenses by 22% year-over-year, contributing to improved profitability.
• The company strengthened its balance sheet by extinguishing debt and accounts payable, resulting in a $6.2 million gain and a healthier working capital position of $7.9 million.

Negative Points

• Annual net revenues decreased by 9% as the company strategically exited non-core sales channels, impacting overall revenue.
• Despite improvements, the company still reported an adjusted EBITDA loss of $1.9 million for the full year.
• The company faced a net cash outflow from operations totaling $4.4 million, driven by paydowns of supplier obligations.
• Better Choice Co Inc (BTTR) had to rely on a $4.7 million equity offering in the third quarter to improve liquidity.
• The company reported a net loss of $168,000 for the year, although this was an improvement from the previous year's loss.

Q & A Highlights

Q: Can you elaborate on the strategic shifts that led to the 26% revenue growth in Q4? A: Kent Cunningham, CEO: The growth was driven by a 32% increase in sales across Amazon and Chewy, supported by our participation in Black Friday promotions. This strategy helped us attract new-to-brand consumers, contributing to our best quarter with Amazon since Q1 2023. We also launched Halo on Chewy Canada, which further boosted our sales.

Q: How did Better Choice manage to improve its gross profit margin by over 600 basis points in 2024? A: Nina Martinez, CFO: The improvement was due to operational efficiencies, including a 40% reduction in inventory and a 4% decrease in direct cost per pound. These were achieved through better demand forecasting and favorable supply terms with manufacturing partners.

Q: What are the expected benefits of the transactions signed for Halo's Asian operations? A: Kent Cunningham, CEO: We signed a definitive agreement to sell Halo's Asian operations for $6.5 million in cash and a 3% royalty on sales over the next five years. This will provide consistent returns to shareholders and allow us to focus on North American and ex-Asia operations.

Q: Can you discuss the financial health and liquidity position of Better Choice as of the end of 2024? A: Nina Martinez, CFO: We ended 2024 with $3 million in cash and $2.4 million in borrowing capacity. Our net working capital position increased over 200% to $7.9 million, reflecting our efforts to stabilize the business and improve our balance sheet.

Q: What are the anticipated outcomes of the SRX Health acquisition? A: Kent Cunningham, CEO: The acquisition, expected to close in April, will position Better Choice as a leading global health and wellness company. It is anticipated to yield operational efficiencies and synergies, providing both near- and long-term growth opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.