Beyond Meat is struggling for its life today, and the next three years could determine whether it survives or not.

"We continue to work to position 2024 as a pivotal year as we strive to achieve sustainable and profitable operations." That was how Beyond Meat's (BYND -1.90%) CEO Ethan Brown ended his commentary on first-quarter 2024 earnings in the company's earnings news release. Although it is good that the food maker is working on its problems, it is not good that it has to work on any problems. Sadly, those problems are big.

Before looking at what the next three years might hold for Beyond Meat, it makes sense to look at both the past and present situation. The food maker has yet to figure out a way to generate a consistent profit. It has achieved break-even, or slightly better, results on a quarterly basis a couple of times, but it has never posted positive earnings for a full year.

It's not unusual for a small company that is building out its business to bleed red ink, often for a long time. But with Beyond Meat, you also have to consider the revenue trends. If you look at trailing 12-month revenues, up until 2022 the top line of the income statement appeared to be going in the right direction, with steadily rising numbers. Investors are often willing to overlook losses if those losses are driven by spending that increases sales. But since peaking in 2022, the trend has been for lower trailing sales. Losses aren't nearly as agreeable if the top line is also shrinking.

Notably, the company's volume numbers were terrible in Q1 2024. Beyond Meat breaks its business down into U.S. retail and foodservice and international retail and foodservice. Each business line saw volume declines year over year. Overall volume dropped a huge 16%. Revenue in the quarter was lower by 18%, with, as you might expect, drops in each of the company's business lines. Beyond Meat is struggling even as it has to spend on innovation so that it doesn't get left behind in the consumer staples sector, where customers tend to favor products that are "new" and "improved."

To be fair, as the CEO's comment highlights, Beyond Meat isn't sitting around and doing nothing. It has been cutting costs, continuing to invest in innovation, and working to strengthen its balance sheet. That last one is probably going to be the most important factor for the company over the next three years.

For starters, it highlighted in the risks section of its 10-K that:

As of December 31, 2023, we had approximately $1.3 billion of consolidated indebtedness and other liabilities. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition.

For a money-losing company with falling revenues, $1.3 billion is a lot of debt to carry. But the really important part of that debt pile is the $1.15 billion in zero coupon convertible debt the company issued with a due date in 2027. That's roughly three years away. In fairness, the zero coupon means there are no interest payments to be made right now. That's good given the earnings picture.

But $1.15 billion is a very large debt cliff to address for a company that isn't doing very well. If it is able to get new financing to roll over that debt, it will likely come with much higher rates, which would make it even harder to turn a profit. Converting that note to stock seems unlikely given that the convertible security was issued when Beyond Meat's share price was much higher. There's no good answer here, which suggests that this food maker could be in deep trouble if 2024 doesn't turn out to be the "pivot" year management hopes.

Beyond Meat is struggling, and the problems seem to be getting worse, not better, right now. Only the most aggressive investors should be looking at this stock, and even then, buying shares would be questionable from a risk/reward standpoint. The company needs to prove that it can get its business moving in the right direction again, and it isn't achieving that result just yet. It only has about three years before struggling along and barely getting by just won't be enough anymore.