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Diving overview:
- Meat alternatives company Beyond Meat has terminated the employment of Yi (Jevy) Luo, its corporate controller and principal accounting officer, the company announced in a securities filing Thursday. Luo’s last day of work was Thursday, and his last day of work was Dec. 23, the company said. Also effective Thursday, Beyond Meat’s CFO Lubi Kutua took on the role of chief accounting officer as the company searches for a permanent successor. Koutua will not receive additional compensation related to the added responsibilities, the company said.
- The layoffs come about a month after the beleaguered El Segundo, California-based company identified material weaknesses in its internal controls over financial reporting related to accounting for non-recurring and complex transactions, according to a Nov. 12 filing with the Securities and Exchange Commission.
- According to the filing, management determined that “current technical resources are inadequate to effectively identify and determine the appropriate accounting treatment” for transactions involving compensation, debt, leases and warrant transactions.
Dive Insights:
Beyond Meat announced on Nov. 3 that it plans to report a material weakness in an SEC filing delay notice, in which the company reported delaying its third-quarter earnings report by about a week. This change was intended to quantify the expected non-cash impairment charges for the three months ended September 27 with respect to certain long-lived assets.
The Company is currently reviewing its internal controls and developing a remediation plan to address material weaknesses. To that end, Beyond Meat outlined several changes it needs to implement, including allocating more resources to its accounting department. This includes “hiring additional personnel with strong technical accounting and public company reporting knowledge and expertise to ensure sufficient staffing levels for accurate and timely financial reporting.”
It also pointed to new training efforts for key accounting and finance personnel, engaging external accounting advisors for support, strengthening review and approval procedures for financial reporting, and implementing a “formal review process for all significant and non-routine financial transactions” as part of the changes.
The change in financial leadership marks the latest twist in a rocky year for the industry-beloved supplier of plant-based meats, which has been hit by declining demand for plant-based products and legal and corporate governance issues. The stock price has fallen about 70% to date.
Last August, Food Dive, a sister publication to CFO Dive, reported that Beyond Meat was struggling to pay its bills as sales continued to decline, citing data from CreditSafe showing the company’s “days overdue,” or the average time it takes a business to make a payment, had doubled to 19 days compared to the same period last year.
According to media reports at the time, a company spokesperson told Food Dive that Beyond Meat had no plans to file for bankruptcy in a statement posted on its Company
Beyond Meat, whose second-quarter sales fell 19%, continued to see sales decline in the third quarter, with gross profit nearly halving to $7.2 million from $14.3 million a year ago. Operating expenses included $77.4 million in non-cash impairment charges “related to certain long-term assets of the company,” according to a Nov. 10 press release.
According to Luo’s LinkedIn profile, Luo joined Beyond Meat in May 2024 from Herbalife, where he held the same position, leaving after just over a year as corporate manager for the plant-based meat company. Kutua, an alumnus of Jeffries, KeyBanc Capital Markets and Goldman Sachs, joined the company in 2019 and has held the CFO position since October 2022, according to his LinkedIn page.
Beyond Meat did not immediately respond to a request for comment.
