Edible Garden AG Incorporated (“Edible Garden” or the
“Company”) (Nasdaq: EDBL), a leader in
controlled environment agriculture (CEA), locally grown, organic
and sustainable produce and products, today provided a business
update and reported financial results for the three months ended
June 30, 2023.
Mr. Jim Kras, Chief Executive Officer of Edible
Garden, stated, "We are excited to report record year-over-year
revenue growth of 41.4% for the second quarter of 2023. Edible
Garden has always stood out for its consistently high level of
execution, a feature that sets the Company apart from our
competition. During times when other companies in our industry are
struggling, often contracting or even going out of business, Edible
Garden continues to expand its reach and gain market share. Edible
Garden has regularly executed at levels that surpass those of our
competitors. Our order-fill rates across all retailers and
distribution partners regularly exceed industry averages,
illustrating our commitment to outstanding service. By continually
exceeding our retail partner's expectations, we believe this level
of performance firmly establishes the Company as a strong, reliable
provider of sustainably grown produce. This has enabled the Company
to build its distribution to include the largest names in retail
across the country. We believe that retailers that are already a
part of our distribution network, as well as prospective retail
customers, increasingly view Edible Garden as a reliable and
trustworthy partner and are seeking out opportunities to
strengthen, or initiate, distribution relationships with the
Company.”
“During the second quarter of 2023, the Company
began implementing a deliberate strategy to focus our efforts and
reallocate resources toward more lucrative customer and partner
relationships. We saw results from this strategy shift, almost
immediately, as our gross profit increased by 168% compared to the
same quarter in 2022. Moreover, with the launch of Edible Garden
Heartland in April 2023, we anticipate even further positive
impacts on our margins. We attribute this improvement to the
expanded growing capacity provided by Edible Garden Heartland,
enabling us to decrease dependence on third-party providers and
shift previously outsourced production in-house, actions that we
expect will result in higher margins for the Company. It is our
belief that the facility's potential to support up to $20 million
in annualized revenue presents us with the opportunity to
vertically integrate our Midwest production capabilities, further
enhancing our operational efficiency. In addition, the Company is
experiencing growth across all segments of our business including
leafy greens, floral, alternative proteins, and Pulp Flavors, which
has begun scaling and building inventory for a near-term retail
introduction.”
"Furthermore, in the second quarter of 2023, in
response to the rising demand for our potted herbs and their
suitability for our consumers' home gardens, Edible Garden
broadened the distribution of Garden Starters to all
Wakefern/Shoprite retail locations across the Northeast. This move
follows the introduction of Garden Starters at Meijer retail
locations in the Midwest just before Mother's Day. With 35% of
American households cultivating some of their own food, Edible
Garden's sustainably produced herbs and produce have become favored
selections among consumers aiming to enhance the flavor of their
meals. By positioning potted herbs in the same supermarket section
as the cut herbs and sustainably grown produce that our customers
frequently buy, we have increased accessibility and convenience for
those interested in adding Edible Garden potted herbs into their
home gardens.”
"Additionally, we broadened our relationship
with Walmart to offer an expanded selection of Edible Garden’s SKUs
at their Northeast locations and began distribution to their East
South Central U.S. retail stores. Walmart, the world's largest
retailer of fresh produce, has steadily been one of our most
significant customers, and our relationship extends beyond merely
supplying produce. Edible Garden is an active participant in
Walmart's Project Gigaton, an initiative launched in 2017 with the
goal of engaging suppliers, NGOs, and other stakeholders to reduce
or eliminate one billion metric tons of greenhouse gases in the
global value chain by 2030. The Company has also been honored as a
Project Gigaton 'Giga Guru,' reflecting our unwavering dedication
to our Zero-Waste Inspired® mission and our leadership in the
Controlled Environment Agriculture (CEA) sector. We are confident
that this expanded distribution relationship with Walmart will
positively impact our revenue and cash flow in 2023 and subsequent
years."
"In July, the Company unveiled GreenThumb 2.0,
the latest iteration of our sophisticated greenhouse management
system, taking a significant step forward in automation technology.
This enhanced system greatly improves our dynamic forecasting
abilities, utilizing real-time data with increased efficiency. This
more precise predictive capacity is targeted to foresee our
distribution partners' requirements more accurately and adjust our
growing strategies accordingly, factoring in year-over-year
patterns, sales momentum, and seasonal variations. A noteworthy
upgrade in GreenThumb 2.0 is the implementation of a real-time
inventory system that carefully monitors all raw materials,
work-in-progress, and finished products, allowing us to examine our
costs for each component involved in plant growth with a greater
level of detail. We believe that this granularity will be
instrumental in managing our expenses."
“The various initiatives undertaken by the
Company since early 2023 are beginning to be reflected in our
financial results. Our record revenue for the second quarter, along
with the increase in gross profit and profit margins, suggests that
our strategy is working. We believe that continued execution of our
strategic plan will enable us to achieve our target of positive
cash flow on a quarterly basis before the year's end."
Financial results for the three months
ended June 30, 2023
For the quarter ended June 30, 2023, revenue
totaled $4.2 million, an increase of 41.4% compared to $3.0 million
for the three months ended June 30, 2022. The 41.7% increase in the
herbs, produce and floral business was primarily due to the Edible
Garden Heartland facility commencing shipping at the beginning of
the quarter and the 39.3% increase in alternative plant-based
supplements revenue resulted from an additional flavor SKU ordered
by a customer for every store in their chain.
Cost of goods sold was $3.7 million for the
three months ended June 30, 2023, compared to $2.8 million for the
three months ended June 30, 2022. The increase was primarily due to
additional labor and materials required to grow the products sold
into the retail channel.
Selling, general and administrative expenses
were $2.4 million for the three months ended June 30, 2023, a
decrease of 12.9% compared to $2.7 million for the three months
ended June 30, 2022. The decrease was primarily driven by a
decrease in compensation and benefits expense that was partially
offset by the costs incurred as it relates to the ramping up and
operation of Edible Garden Heartland which was acquired in August
2022.
Net loss was $638,000, or ($0.24) per share, for
the three months ended June 30, 2023, compared to a net loss of
$4.8 million, or ($20.44) per share, for the three months ended
June 30, 2022.
The complete financial results for the quarter
ended June 30, 2023, are available in the Company’s Form 10-Q,
which will be filed with the Securities and Exchange Commission and
is available at: www.sec.gov.
Conference Call
Edible Garden will host a conference call today
at 8:00 A.M. Eastern Time to discuss the Company’s financial
results for the quarter ended June 30, 2023, as well as the
Company’s corporate progress and other developments.
The conference call will be available via
telephone by dialing toll-free 877-545-0523 for U.S. callers or +1
973-528-0016 for international callers and using entry code:
155937. A webcast of the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2914/48869 or on the
investor relations section of the Company’s website at
https://ediblegardenag.com/presentations.
A webcast replay will also be available on the
Company’s Investors section of the website at
https://ediblegardenag.com/presentations/. A telephone replay of
the call will be available approximately one hour following the
call, through Thursday, August 24, 2023, and can be accessed by
dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for
international callers and entering conference ID: 48869.
ABOUT EDIBLE GARDEN®
Edible Garden AG Incorporated is a leader in
locally grown, organic and sustainable produce and products
including organic leafy greens and herbs backed by Zero-Waste
Inspired® next generation farming. Offered at over 4,000 stores in
the US, Edible Garden is disrupting the CEA and sustainability
technology movement with its safety-in-farming protocols, use of
sustainable packaging, patented GreenThumb software and
self-watering in-store displays. The Company currently operates its
own state-of-the-art greenhouses and processing facilities in
Belvidere, New Jersey and Grand Rapids, Michigan, and has a network
of contract growers, all strategically located near major markets
in the U.S. Its proprietary GreenThumb 2.0 patented (US No’s.: US
11,158,006 B1 and US 11,410,249 B2) software optimizes growing in
vertical and traditional greenhouses while seeking to reduce
pollution-generating food miles. Edible Garden is also a developer
of ingredients and proteins, providing an accessible line of plant
and whey protein powders under the Vitamin Way® and Vitamin Whey®
brands. In addition, the Company offers a line of sustainable food
flavoring products such as Pulp gourmet sauces and chili-based
products. For more information on Edible Garden go to
https://ediblegardenag.com/.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks, uncertainties and
assumptions that are difficult to predict including with respect to
the Company’s growth strategies, the Company’s financial
performance, the Company’s expansion into new distribution
networks, the Company’s dependence on growers, and performance as a
public company. The words “anticipate,” “believe,” “continue,”
“expect,” “foresee,” "opportunity," “prospective,” “potential,”
“seeking,” “strategy,” “will,” and similar expressions are intended
to identify forward-looking statements. These forward-looking
statements are subject to a number of risks, uncertainties, and
assumptions, including market and other conditions, the Company’s
ability to achieve its growth objectives, and other factors set
forth in the Company’s filings with the Securities and Exchange Act
Commission, including the Company’s annual report on Form 10-K for
the year ended December 31, 2022. Actual results might differ
materially from those explicit or implicit in the forward-looking
statements. You should not rely upon forward-looking statements as
predictions of future events. The Company undertakes no obligation
to update any such forward-looking statements after the date hereof
to conform to actual results or changes in expectations, except as
required by law.
Investor Contacts:Crescendo
Communications, LLC212-671-1020EDBL@crescendo-ir.com
(tables follow)
|
EDIBLE
GARDEN AG, INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(in
thousands, except shares) |
|
|
|
|
|
|
|
|
|
June
30, |
|
December
31, |
|
|
|
2023 (unaudited) |
|
2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash |
|
$ |
1,368 |
|
|
$ |
110 |
|
|
Accounts receivable, net |
|
|
2,672 |
|
|
|
1,105 |
|
|
Inventory |
|
|
482 |
|
|
|
586 |
|
|
Prepaid expenses and other current assets |
|
|
177 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
4,699 |
|
|
|
1,863 |
|
|
|
|
|
|
|
|
|
|
Property,
equipment and leasehold improvements, net |
|
|
4,929 |
|
|
|
4,891 |
|
|
Intangible
assets, net |
|
|
48 |
|
|
|
50 |
|
|
Other
assets |
|
|
117 |
|
|
|
161 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
9,793 |
|
|
$ |
6,965 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
LIABILITIES: |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable and other accrued expenses |
|
$ |
1,528 |
|
|
$ |
2,787 |
|
|
Short-term debt, net of discounts |
|
|
374 |
|
|
|
2,042 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
1,902 |
|
|
|
4,829 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
Long-term debt, net of discounts |
|
|
4,231 |
|
|
|
4,282 |
|
|
Long-term lease liabilities |
|
|
- |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities |
|
|
4,231 |
|
|
|
4,316 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
6,133 |
|
|
|
9,145 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT): |
|
|
|
|
|
|
|
Common stock ($0.0001 par value, 10,000,000 shares authorized,
2,827,082 and 362,716 shares outstanding as of June 30, 2023 and
December 31, 2022, respectively |
|
|
- |
|
|
|
- |
|
|
Series A Convertible Preferred stock ($0.0001 par value, 10,000,000
shares authorized; nil shares outstanding as of June 30, 2023 and
December 31, 2022) |
|
|
- |
|
|
|
- |
|
|
Additional paid-in capital |
|
|
27,249 |
|
|
|
17,892 |
|
|
Accumulated deficit |
|
|
(23,589 |
) |
|
|
(20,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity (deficit) |
|
|
3,660 |
|
|
|
(2,180 |
) |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) |
|
$ |
9,793 |
|
|
$ |
6,965 |
|
|
|
|
|
|
|
|
|
EDIBLE GARDEN AG, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except share and per-share
information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
4,221 |
|
|
$ |
2,985 |
|
|
$ |
6,676 |
|
|
$ |
5,722 |
|
Cost of goods sold |
|
|
3,668 |
|
|
|
2,779 |
|
|
|
6,148 |
|
|
|
5,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
553 |
|
|
|
206 |
|
|
|
528 |
|
|
|
111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
2,380 |
|
|
|
2,733 |
|
|
|
5,071 |
|
|
|
4,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(1,827 |
) |
|
|
(2,527 |
) |
|
|
(4,543 |
) |
|
|
(4,229 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(44 |
) |
|
|
(1,234 |
) |
|
|
(277 |
) |
|
|
(1,737 |
) |
Gain (Loss) from extinguishment of debt |
|
|
- |
|
|
|
(826 |
) |
|
|
70 |
|
|
|
(826 |
) |
Employee retention credit |
|
|
1,233 |
|
|
|
- |
|
|
|
1,233 |
|
|
|
- |
|
Other income / (loss) |
|
|
- |
|
|
|
(189 |
) |
|
|
- |
|
|
|
(590 |
) |
Total other income (expenses) |
|
|
1,189 |
|
|
|
(2,249 |
) |
|
|
1,026 |
|
|
|
(3,153 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(638 |
) |
|
$ |
(4,776 |
) |
|
$ |
(3,517 |
) |
|
$ |
(7,382 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income / (Loss) per common
share - basic and diluted |
|
$ |
(0.24 |
) |
|
$ |
(20.44 |
) |
|
$ |
(1.78 |
) |
|
$ |
(36.64 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common
Shares Outstanding – Basic and Diluted |
|
|
2,641,485 |
|
|
|
233,617 |
|
|
|
1,975,907 |
|
|
|
201,461 |
|
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