Real Good Food Company Inc (RGF)

Real Good Food Company Inc. (RGF): A Comprehensive Overview

Company Profile:

History and Background: Real Good Food Company Inc. (RGF) was founded in 2015 and went public in 2021. The company focuses on developing and selling low-carb, high-protein, and keto-friendly foods. RGF was initially known as “The Real Good Food Company, Inc.” and changed its name in September 2021.

Core Business Area: RGF primarily operates in the frozen food sector, offering a wide range of products like chicken nuggets, tenders, pizza, sandwiches, bowls, wraps, snacks, and desserts. All products cater to various dietary preferences, including gluten-free, paleo, and soy-free options.

Leadership and Corporate Structure: The company's leadership team comprises Robert T. Carey, Chief Executive Officer; Kevin J. DeAngelo, President and Chief Operating Officer; Steven Goldstone, Senior Vice President of Finance and Accounting; and Michael P. Wilson, Executive Vice President of Business Development. RGF operates with a Board of Directors and follows a decentralized management structure.

Top Products and Market Share:

Top Products: RGF's top products include:

• Chicken Nuggets: A top-selling gluten-free, low-carb alternative to traditional nuggets.
• Cauliflower Crust Pizza: A popular low-carb, vegetable-based pizza option.
• High-Protein Bowls: Pre-cooked meals combining protein, vegetables, and sauce.
• Sandwiches and Wraps: Convenient lunch options catering to various dietary needs.

Market Share and Comparison: RGF holds a relatively small market share in the large and fragmented frozen food industry. Competition is fierce with major players like Tyson Foods, Nestle, and Conagra Brands holding significant shares. However, RGF's unique focus on specialty dietary needs positions it to capture a growing segment within the frozen food market.

Total Addressable Market

The global frozen food market is estimated to reach $357.3 billion by 2028, growing at a CAGR of 5.1%. The US market represents a significant portion, valued at $159.48 billion in 2023 with a projected CAGR of 3.4%. The increasing demand for convenience, health consciousness, and diverse dietary preferences drive the market growth. RGF specifically targets segments within this market like consumers seeking low-carb, high-protein, and healthy alternatives.

Financial Performance:

Recent Performance:

• Revenue for 2023 was $105.22 million, a 14.5% increase over 2022.
• Net income for 2023 stood at $1.24 million, compared to the $4.14 million loss in 2022.
• Gross margin improved to 35.2% in 2023 from 33.2% in 2022.
• EPS for 2023 is estimated at $0.02, compared to a loss per share of $0.08 in 2022.

Cash Flow and Balance Sheet: RGF's cash flow from operations was $42.25 million in 2023, demonstrating improved cash generation. Total assets increased to $179.32 million, while total liabilities decreased to $82.04 million, indicating a stronger financial position.

Dividends and Shareholder Returns:

Dividend History: RGF currently does not pay dividends, focusing on reinvesting profits into growth initiatives.

Shareholder Returns: Total shareholder returns were positive in 2023, reflecting the improved financial performance and growth prospects. However, historical returns since the IPO in 2021 have been negative due to early-stage market volatility.

Growth Trajectory:

Historical Growth: RGF has experienced rapid revenue growth over the past few years, demonstrating its success in capturing a growing market niche. The company plans to continue expanding product offerings, distribution channels, and geographic reach to fuel future growth.

Future Projections: Industry analysts project continued strong growth for the frozen food market, especially in health-conscious segments. RGF's unique positioning and strong brand recognition place it favorably to capitalize on this trend.

Market Dynamics:

Industry Dynamics: The frozen food industry is highly competitive and dynamic, characterized by constant innovation, changing consumer preferences, and evolving regulations. RGF's agility and focus on specific dietary niches are crucial for staying ahead of the curve.

Industry Position: As a smaller player with a strong focus on healthy alternatives, RGF differentiates itself in the crowded market. The company actively engages with major retailers and expands its online presence to reach more consumers.