Breaking Down Better Choice Company Inc. (BTTR) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments, especially in the dynamic world of pet health and wellness companies? Better Choice Company Inc. (BTTR) has recently released its 2024 financial results, and there are some significant shifts you should be aware of. While annual net revenues experienced a slight dip of 9% to $35 million, the company has made remarkable strides in key areas. Gross profit margin surged by 650 basis points to 37%, and the adjusted EBITDA loss saw a substantial improvement of 78%, landing at $1.9 million. Furthermore, the net loss dramatically improved to just $168,000 from a staggering $23 million the previous year. With a healthy working capital position of $7.9 million and cash and cash equivalents at $3 million, how will these factors influence your investment strategy?

Better Choice Company Inc. (BTTR) Revenue Analysis

Understanding Better Choice Company Inc. (BTTR)'s revenue streams involves examining its primary revenue sources, year-over-year growth, contributions from different business segments, and any significant changes in these areas.

Primary Revenue Sources:

• Digital Channels: In 2024, digital channels generated approximately $23.2 million in gross sales and $16.5 million in net sales.
• Brick & Mortar: Brick & Mortar sales contributed around $2.8 million in gross sales and $2.3 million in net sales during 2024.
• International: International sales accounted for approximately $16.4 million in gross sales and $16.2 million in net sales in 2024.

Year-over-Year Revenue Growth Rate:

• Annual Net Revenues: For the full year 2024, net revenues were $35 million, a 9% decrease year-over-year.
• Q4 2024 Revenue Growth: BTTR reported a 26% year-over-year revenue growth in the fourth quarter of 2024, reaching $7.2 million. This growth was significantly driven by a 32% increase across Chewy and Amazon platforms.
• Sequential Revenue Growth: In the third quarter of 2024, BTTR experienced sequential revenue growth of 33%, with revenue increasing to $11.4 million from the second quarter of 2024.

Contribution of Different Business Segments to Overall Revenue:

• Halo Brand: The Halo brand experienced a 26% increase in Q4 revenue year-over-year.
• Digital Platforms: Revenue growth in Q4 2024 was notably driven by a 32% increase across key digital platforms like Amazon and Chewy.
• International Growth: International channels, particularly in the Asia-Pacific region, showed strong performance with an 18% growth.

Analysis of Significant Changes in Revenue Streams:

• Shift to Digital-First Strategy: In the fourth quarter of 2023, management shifted from a Brick & Mortar channel focus to a digital-first strategy, reallocating marketing investments to e-commerce platforms to drive growth and brand awareness.
• Gross Margin Improvement: The company has shown four consecutive quarters of improved gross margin, with the full year 2024 gross margin increasing by over 650 basis points year-over-year to 37%.
• Strategic Initiatives: Strategic branding initiatives and product innovation contributed to revenue, though specific figures are not detailed.

Here is a summary of Better Choice Company Inc. (BTTR)'s revenue streams and related financial data for 2024:

For more insights into Better Choice Company Inc. (BTTR), you might find this resource helpful: Mission Statement, Vision, & Core Values of Better Choice Company Inc. (BTTR).

Better Choice Company Inc. (BTTR) Profitability Metrics

When evaluating Better Choice Company Inc. (BTTR), investors should pay close attention to the company's profitability metrics, as these provide insights into its financial health and operational efficiency. Profitability metrics typically include gross profit, operating profit, and net profit margins. These figures reveal how efficiently a company generates profit from its revenue.

Gross profit is the revenue a company retains after deducting the direct costs associated with producing its goods and services. As of the fiscal year 2024, detailed financial figures for Better Choice Company Inc. (BTTR), including gross profit, operating profit, and net profit margins, need to be analyzed to understand the company's profitability. Understanding these values helps in assessing the company's core profitability and cost management strategies.

Operating profit indicates a company's earnings from its core business operations, excluding interest and taxes. Net profit, often referred to as the bottom line, represents the actual profit earned after all expenses, including interest, taxes, and other deductions, have been paid. Analyzing these margins helps determine how well the company manages its operational costs and converts revenue into profit.

Trends in profitability over time are crucial for investors. Examining historical data, ideally up to the fiscal year 2024, can reveal whether Better Choice Company Inc. (BTTR) has consistently improved its profitability or if it has experienced fluctuations. Consistent improvement in these margins often suggests effective management and a strong competitive position.

Comparing Better Choice Company Inc.'s profitability ratios with industry averages provides valuable context. If the company's margins are higher than the industry average, it may indicate a competitive advantage, superior efficiency, or effective cost management. Conversely, lower margins may signal potential issues or challenges.

Operational efficiency is also important. Metrics like cost management and gross margin trends can provide insights into how well Better Choice Company Inc. (BTTR) controls its expenses and maximizes its profitability. For instance, a rising gross margin suggests the company is becoming more efficient in its production or is commanding higher prices for its products.

Here are key areas to explore when analyzing Better Choice Company Inc.'s profitability:

• Gross Profit Margin: Calculated as (Gross Profit / Revenue) x 100, this ratio shows the percentage of revenue remaining after subtracting the cost of goods sold.
• Operating Profit Margin: Calculated as (Operating Profit / Revenue) x 100, this indicates the percentage of revenue remaining after deducting operating expenses.
• Net Profit Margin: Calculated as (Net Profit / Revenue) x 100, this represents the percentage of revenue that translates into profit after all expenses are paid.

To provide a clearer picture, a sample table illustrating these metrics might look like this:

Note: The values in the 2024 (Projected) column are hypothetical and should be replaced with actual data when available. These metrics are crucial for investors to assess the company's financial health and potential for growth.

For more insights into who is investing in Better Choice Company Inc. (BTTR) and why, check out: Exploring Better Choice Company Inc. (BTTR) Investor Profile: Who’s Buying and Why?

Better Choice Company Inc. (BTTR) Debt vs. Equity Structure

Understanding how Better Choice Company Inc. (BTTR) finances its growth through debt and equity is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and any recent financing activities.

As of the fiscal year 2024, a detailed breakdown of Better Choice Company Inc.'s (BTTR) debt structure is essential to gauge its financial leverage. This includes both short-term and long-term debt obligations.

Here’s what to consider regarding Better Choice Company Inc.'s (BTTR) debt levels:

• Short-Term Debt: This encompasses obligations due within one year, such as accounts payable, short-term loans, and the current portion of long-term debt.
• Long-Term Debt: This includes debts extending beyond one year, like bonds, long-term loans, and other financing agreements.

Analyzing the composition and maturity schedule of Better Choice Company Inc.'s (BTTR) debt provides insights into its liquidity and solvency. The debt-to-equity ratio is a key metric in assessing the balance between debt and equity financing. It is calculated by dividing total liabilities by shareholders' equity. A higher ratio indicates greater financial leverage, which can amplify both profits and losses.

Industry standards for debt-to-equity ratios vary, but comparing Better Choice Company Inc.'s (BTTR) ratio to its peers offers a benchmark for evaluation. Recent activities such as debt issuances, credit ratings, or refinancing provide additional context. For instance, a new debt issuance might fund expansion, while a credit rating upgrade can lower borrowing costs. Refinancing activities could extend debt maturities or reduce interest rates.

Balancing debt and equity is vital for sustainable growth. Debt financing can provide capital without diluting ownership, but excessive debt increases financial risk. Equity funding, on the other hand, strengthens the balance sheet but can dilute existing shareholders' stake. Monitoring how Better Choice Company Inc. (BTTR) manages this balance is critical for assessing its financial health and long-term prospects.

For further insights into Better Choice Company Inc.'s (BTTR) financial health, you can explore Breaking Down Better Choice Company Inc. (BTTR) Financial Health: Key Insights for Investors.

Better Choice Company Inc. (BTTR) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities. For Better Choice Company Inc. (BTTR), assessing these metrics provides valuable insights into its operational stability and financial risk. Here’s an overview of BTTR's liquidity position, working capital trends, and cash flow dynamics.

Current and Quick Ratios: These ratios are essential for understanding Better Choice Company Inc.'s (BTTR) short-term liquidity. The current ratio measures a company's ability to pay off its current liabilities with its current assets. The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative view of liquidity, focusing on the most liquid assets. As of the fiscal year 2024, specific figures for BTTR's current and quick ratios need to be derived from the latest financial statements to provide an accurate assessment of its liquidity position.

Analysis of Working Capital Trends: Working capital, the difference between a company's current assets and current liabilities, is a fundamental measure of its short-term financial health. Monitoring trends in working capital helps to identify whether a company is efficiently managing its resources. For Better Choice Company Inc. (BTTR), analyzing the changes in working capital over the past few years can reveal important insights. For example, a decreasing working capital balance might indicate difficulties in managing short-term obligations or inefficient use of current assets. Conversely, an increasing balance could suggest improved efficiency or excessive accumulation of liquid assets. As of the fiscal year 2024, specific figures for BTTR's working capital trends need to be derived from the latest financial statements to provide an accurate assessment.

Cash Flow Statements Overview: A cash flow statement provides a detailed look at how a company generates and uses cash through its operating, investing, and financing activities. By examining these cash flow trends, investors can gain a better understanding of a company's financial stability and its ability to fund future growth. Here’s a breakdown of what each section reveals about Better Choice Company Inc. (BTTR):

• Operating Cash Flow: This section reflects the cash generated from the company's core business activities. A positive and consistent operating cash flow indicates that the company is effectively generating cash from its sales and operations.
• Investing Cash Flow: This section includes cash flow from the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). Negative investing cash flow typically indicates that the company is investing in its future growth.
• Financing Cash Flow: This section involves cash flow from activities related to debt, equity, and dividends. It shows how the company is funding its operations and returning value to shareholders.

Analyzing these components helps in understanding BTTR's overall cash management strategy and its implications for long-term sustainability. As of the fiscal year 2024, specific figures for BTTR's cash flow statements need to be derived from the latest financial statements to provide an accurate assessment.

Potential liquidity concerns or strengths can be identified by analyzing the aforementioned metrics. For instance, consistently positive operating cash flow coupled with healthy current and quick ratios would indicate a strong liquidity position. Conversely, declining cash reserves, negative working capital trends, or reliance on financing activities to cover operational expenses could signal potential liquidity risks for Better Choice Company Inc. (BTTR). Continuous monitoring of these financial indicators is crucial for assessing the company’s ongoing financial health and stability.

Better Choice Company Inc. (BTTR) Valuation Analysis

Determining whether Better Choice Company Inc. (BTTR) is overvalued or undervalued requires a comprehensive look at several key financial metrics and market indicators. These include relative valuation ratios, stock performance, and analyst opinions.

To assess Better Choice Company Inc.'s valuation, consider the following:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company’s stock price to its earnings per share. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. It can help investors determine whether they are paying too much for what would be left if the company went bankrupt immediately.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company's enterprise value (total market value plus debt minus cash) to its earnings before interest, taxes, depreciation, and amortization. It's often used to assess valuation because it provides a more comprehensive view of a company's financial performance than the P/E ratio.

Analyzing these ratios in isolation is not enough. They should be compared against industry averages and Better Choice Company Inc.'s historical ratios to provide a more meaningful perspective.

Reviewing Better Choice Company Inc.'s stock price trends over the past year or longer provides context on market sentiment and investor confidence. For instance, a consistently upward trend might reflect positive market perception, while a downward trend could indicate concerns about the company's performance or industry outlook.

Other important factors include:

• Dividend Yield and Payout Ratios: If Better Choice Company Inc. pays dividends, the dividend yield (annual dividend per share divided by the stock price) indicates the return on investment from dividends alone. The payout ratio (percentage of earnings paid out as dividends) shows the sustainability of the dividend payments.
• Analyst Consensus: Major financial analysis firms offer ratings (buy, hold, or sell) and price targets for stocks. The consensus rating reflects the overall sentiment of analysts covering Better Choice Company Inc., providing an external validation of the company's valuation.

For additional insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Better Choice Company Inc. (BTTR).

Better Choice Company Inc. (BTTR) Risk Factors

Better Choice Company Inc. (BTTR) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges.

Here's an overview of key risk areas:

• Industry Competition: The pet food industry is highly competitive.
• Regulatory Changes: Changes in regulations regarding pet food safety and labeling can create compliance costs.
• Market Conditions: Economic downturns can reduce consumer spending on pet products.

Operational, financial, and strategic risks are frequently highlighted in Better Choice Company Inc.'s earnings reports and filings. These include:

• Supply Chain Disruptions: Disruptions can increase costs and reduce product availability.
• Financial Performance: The company's ability to achieve and maintain profitability is subject to various risks.
• Strategic Execution: Successful execution of strategic initiatives is critical for growth.

Mitigation strategies and plans are essential for managing these risks. These may include:

• Diversifying Supply Chains: Reduces reliance on single suppliers.
• Improving Financial Controls: Enhances accuracy and reliability of financial reporting.
• Adapting to Market Trends: Ensures product offerings remain competitive and relevant.

To further understand Better Choice Company Inc.'s strategic direction, refer to: Mission Statement, Vision, & Core Values of Better Choice Company Inc. (BTTR).

Better Choice Company Inc. (BTTR) Growth Opportunities

Better Choice Company Inc. (BTTR) is strategically positioned for future growth, driven by product innovations, market expansions, acquisitions, and inherent competitive advantages. The company's focus on the pet health and wellness sector, aligning with trends in pet humanization and health-conscious consumerism, creates a solid foundation for expansion.

Key growth drivers for Better Choice Company Inc. include:

• Product Innovations: BTTR consistently develops high-quality, nutrition-focused products, reflecting the latest industry standards in pet nutrition and health. This rigorous approach helps maintain a competitive edge in the evolving pet wellness market. The company offers a diversified portfolio of well-recognized brands, including Halo, TruDog, TruGold, RawGo!, and OraPup, catering to varied customer preferences and nutritional needs.
• Market Expansions: Better Choice Co Inc operates not only in the United States but also in significant international markets including Canada and Asia. This global footprint enables the company to tap into diverse consumer bases and adapt its offerings to meet regional tastes and nutritional requirements.
• Acquisitions: Better Choice Company is expanding its U.S. presence by acquiring Choice Specialty Pharmacy Group, a licensed provider of specialized pharmacy services. The purchase price is based on 6X of Seller's FY2024 Adjusted EBITDA of approximately USD $4.68 million, with consideration involving stock and cash at closing.

Strategic initiatives and partnerships that may drive future growth:

• SRx Health Solutions Acquisition: Better Choice Company (NYSE American: BTTR) shareholders have approved key proposals, including the issuance of up to 30 million shares of common stock for the acquisition of SRx Health Solutions. The acquisition is positioned as a strategic move to transform Better Choice into a leading global health and wellness company, with closing expected in the coming weeks.
• Alphia Partnership: Alphia, Inc., the largest custom manufacturer of super-premium pet food in the U.S., has announced a long term strategic manufacturing partnership with Better Choice Company (NYSE: BTTR). Along with a $5M investment made by Alphia into Better Choice, Alphia will become the manufacturer for its premier brand, Halo.
• Halo Asia Sale and Royalty Agreement: Better Choice Company (NYSE American: BTTR) has signed a definitive agreement with its existing partner in Asia, CZC Company LTD (the “Buyer”), to sell its Halo business in Asia for total gross proceeds of $8.1 million including $6.5 million in cash at closing, along with a 3% royalty on sales over the next five years, guaranteed by a minimum royalty payment of $330,000 per year or $1.65 million in total.
• Stock Repurchase Program: Better Choice Company (NYSE: BTTR) has announced the reinstatement and expansion of its stock repurchase program, increasing the authorization to $6.5 million of outstanding common shares through December 31, 2025.

Better Choice Company identifies international pet health markets as a critical Question Mark segment. As of Q4 2023, the global veterinary healthcare market is projected to reach $USD 139.6 billion by 2028, with a CAGR of 7.2%.

The company's competitive advantages include:

• Brand Recognition: Direct-to-consumer digital marketing efforts resulted in a 47.8% increase in brand recognition and drove a 33.5% increase in online sales during 2023.
• Veterinary Supplement Market: The emerging veterinary supplement market segment reported gross margins of 52.4%, with product offerings achieving $5.2 million in revenue during 2023.
• Commitment to Quality: Better Choice differentiates itself through a commitment to natural, high-quality pet nutrition and wellness solutions, targeting pet owners seeking premium, health-conscious products.

Better Choice Company Inc. (BTTR) reported strong Q4 2024 financial results with revenue growth of 26% year-over-year to $7.2 million, driven by a 32% increase across Chewy and Amazon platforms. The company demonstrated significant improvements with gross margin expanding to 36%, representing a 2,705 basis point increase year-over-year. Q4 2024 highlights include a 90% improvement in net loss to $(1.6) million, and loss per share improving 97% to $(0.50). The adjusted EBITDA loss improved 80% to $(0.7) million.

The company's revenue for the quarter ending December 31, 2024, was $7.16M, with 25.53% growth. In the year 2024, Better Choice Company had annual revenue of $34.98M, down -9.37%.

On a pro forma basis, Better Choice projects 2025 combined revenue and EBITDA to be over USD$270 million and over USD$10 million, respectively.

Better Choice Company Inc. has also entered into an Arrangement Agreement to acquire SRx Health Solutions, Inc. in an all-stock transaction.

See Mission Statement, Vision, & Core Values of Better Choice Company Inc. (BTTR).