Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Edible Garden Fourth Quarter and Year-End 2022 Business Update Call. [Operator Instructions].

I will now turn the conference over to your host, Mr. Ted Ayvas.

You may begin.

Theodore Ayvas

Ali. Thanks, thank Business Edible Update. and Conference Year-end for and Call you morning, Garden's joining XXXX Good

Mike Officer On Jim Officer and Kras, call Chief Chief the with Executive of us Edible Edible Garden. of today are James, Financial Garden;

operating the December year The release its XXXX. the on for is the Earlier this posted announced company's results morning, press company ended XX, website, www.ediblegardenag.com.

Securities accessed which filed its as the XX-K the United States Form can website, annual with morning, this be on company and report the well Commission addition, SEC's on www.sec.gov. In company's website also Exchange the as at

If call additional contact any you questions have company, Communications Crescendo any after and would please the about the like XXX-XXX-XXXX. at information

we reviews risks, may results than from everyone company's implied Securities future operating events remind filed in company's results of call XX-K of Kras may XXXX that statements uncertainties are financial for results described this about forward-looking occur, Mr. and call, conference and and historical our most forward-looking of the adversely trends this this other forward-looking like business and Commission. statements would conference of and in recent statements. discussed results All These including call to to assumptions year-end Before contained the events update, forward-looking U.S. facts those condition, contain statements on the provide operations a future regarding that financial assumptions, Because may, terms and position, The subject terms operations plan, and materially negative anticipated strive strategy, not largely differ such based expectations the the the project, projections for and long-term the financial words words may other are annual current could, expect, the and and conference statements. uncertainties statements. in forward-looking believe, our needs. filing operations Exchange several and actual are on forward-looking of forward-looking future statements affect believes and would, strategy, potential, are similar risks, in These statements. as should, objectives short-term of mission, seek, to plans could and and expressions statements intended business its and will, strategy expectations and company's circumstances with Form it and these and or operation, identify

as should forward-looking You not future rely upon of statements events. predictions

reflected the expectations in are achievements. the or future statements it level Although cannot reasonable, believes that of activity, company forward-looking results, guarantee performance the

disclaims as person except for statements. attributable In accuracy entirety others made addition, forward-looking law. neither company the required statements other the their by in call. statements, to by cautionary in are as forward-looking of update any these and well these of these statements any The nor expressly any conference qualified as All company the this to assumes responsibility of duty any company completeness forward-looking

evaluate by should statements risks in made these all You and uncertainties. the forward-looking company of the context

I will now Jim? over to that, Jim With call turn the Kras.

James Kras

for investors goals With you, will want for our the Ted. everyone unwavering support, shareholder pave today. our you team, in and I for of we and and achieve your us building Good the our our behalf we On support that belief extend gratitude their sincere to joining Edible way continued are vision. to Thank thank confident morning, value. Garden to

a We success period even inflation. we This challenging for row a unprecedented growth Garden and capital a keeping Edible are economic on year. resilient building our result of continue deliver unwavering focus Despite third Garden stable during our pricing brand. strategic notable climate, our to remained and line while rapid Edible strong exceptional the customer have pleased to a revenue last a report management top year-over-year is IPO achieved that of since in quarter service relatively

of our have many believe we we struggled result, this environment. in a As competitors gained advantage who over have competitive a

we our once operational. Heartland addition, facility Midwest to an is In fully margins see our in increase expect

Garden that milestone of achieve in as believe a continued our With journey dedication Edible significant later the we year, public this team, the flow company. we a will marking cash positive

distribution with the the Mid-Atlantic partners network the addition of rapidly Southeastern in company's expanding of Our retail country. is and Midwest, new regions Northeast,

introducing In ever-evolving addition, the we needs. to expect categories to we Garden are our products new and product higher-margin customers' brand Edible to what be meet

contributing Our to Inspired our environmentally mission demand has with for distribution our commitment and sustainability resonated through consumers products. the our Zero-Waste to conscious strong partners

achievements in salad grown the to feature kits salad. come popular introduced locally kits a we These all make cut to grown sustainable, lettuce product our that necessary complete the complete Among our greenhouse with fourth our quarter, line. ingredients

with first were The first Ranch more Kit which to trends baby to X Crisp lettuce were romaine Midwest. crispy and kits, green Balsamic our even with with development. lettuce, Salad Vinaigrette salad Kit in Caesar the made and include lettuce, spring kit a in lineup with locations a a Meijer mix at kits leaf current convenience available created The retail consumers, align provide maximum with in consumption

non-GMO the food into the sustainable According sauces and Expo global the elevate and initial of chili-based gourmet market, billion Natural sauces, were condiments company's bold, fermented billion sauces markets, preservative-free to acquired from is research from products. entree this all-natural $XXX.X also line which Products We month. grow to to and earlier to which Pulp XXXX XXXX. XXXX and projected in This flavors $XXX.X at bland West introduced by marks these

line will to leverage category is retail products which at a enable Pulp our options. section, launch Expanding a provides extended summer network. Edible Edible Southeastern into Markets will The Garden Whole and higher-margin to be positions supermarket demand this a expansion be Garden what further its us Foods significant robust into Foods product a the sustainable healthier Whole will and us and we locations for with line the shelf adjacent Pulp new The refrigerated on capitalize of located produce the will Markets typically the distribution the of retail recognition launch as growing brand section Mid-Atlantic products already step for product and XXXX. also brand forward locations to Mid-Atlantic starting initially The it is where believe life. with of sauces Southeastern

Additionally, locations Supermarkets of began our all we added the product which New York Garden in its Northeast distribution line area. network, in the carrying to Morton Williams Edible metropolitan

These our We Brooklyn also ideally expanded Manhattan, and an markets populated to these retail Moreover, us and locations our sell enabled located this that Westchester, of in placement locations. products D'Agostino of optimized metropolitan Garden locations New foot areas area. York high to product volumes their City distribution combined within XX densely in expansion with are our penetration Edible Gristedes urban improve New receive of in assortment the York. retail and traffic in deepen

in all the most retail the industry distribution This strengthening relationship past to partners. proved key rate of we a one averages season and of country's Notably, existing order XXX% this fulfillment an fill largest fill surpassed our the one as supercenter history be operators, we rate our a with company's exceeded holiday across rate with of of successful partner. or in

able yields ourselves customers, our supply be execution excellence. to Despite grown our company grown significant produce. was partner's challenges, of continues reliable and the advance commitment consistently the The as chain to to latest and leveraging locally to outstanding have expectations, supplier value trusted our service exceeding deliver demonstrating produce. maximizing established to further we By committed to of and a Edible Garden to our technology sustainably nutritional increasing strategy

in Edible forged environment of nanobubbles of plant primary Garden and agriculture effects energy potential goal of Institute Jersey a explore indoor health, this research impact and with nutrient the research USDA is funded EPA benefits partnership their for controlled usage, utilization validate recently and to investigate Technology, agriculture New water the technology nanobubble the at to The the the settings. of EPA efficiency. on

as with This and more the us particularly potential plant to research it shelf revolutionize is exciting longer plants to provide nutritious has nutrition lives.

which and with aligned sustainable prioritize well company to implications options. Garden's have just Edible conserve Garden's promote is reduce Edible food research that but product seeks not the missions also line health partnership significant successful, the for could the addition, resources. who sustainable and consumers Zero-Waste practices waste If benefiting agricultural project Inspired In

Our this practices. efficient for significant commitment quest innovation and agriculture more to makes sustainable a in partnership the step forward sustainability and

as food companies rankings. XXX in Edible of tech globally this FoodTech Garden Earlier recognized final agro one month, this the top year's was

Our Zero-Waste success. force the our mission driving behind has Inspired been

team's our patented tech and continuing take most Our agro companies as to displays worldwide, have and yield, our hard software reduce industry. GreenThumb costs. such on work X of pride in dedication, the the promising by implementation patent along technologies achievements innovative of lead this to food building the and strive waste optimize position and We self-watering way to maintain us acknowledged in being as pending the improve and with enabled

the financial XXXX. James, Mike to will I to of X-month would year call Garden, the ending Officer over Mike? periods now for Edible and review XX, December who the turn full Financial like Chief results

Michael James

good and morning. Jim, Thanks,

Looking financial XX%, reported at XXXX. increase the quarter, first, in compared an million company of to quarter the the quarter revenues $X.X fourth of fourth of $X.X the results for million

represents the IPO growth earlier, said from and Jim growth the quarter consecutive last this year third As revenue our of since base. existing represents customer

December increase was sold charged tight market to XXXX million for due quarter. rates increases labor higher compared goods X XXXX due was inflation, The in months $X.X packaging to ended to contract due labor higher of farmers. for the XX, $X costs the Cost million by fourth costs to a and

expense, were $X.X million for The incurred that XXXX X higher December December public compared months million XXXX. primarily company driven months XX, expenses Selling, XX, and by expenses compensation ended for the general as administrative XXXX. to was X the and other were ended $X.X in not payroll well as increase

the $XX.XX Net ended December X or compared share for loss XX, $X.XX ended $X.X to XXXX. December loss XXXX was of share million net a months for million the or months per XX, $X per X

the results. Turning to

XX% the due existing compared ended increase million $XX.X of costs December inflation, labor higher increase due revenues costs to for increase million the ended and to ended XX, For market December XX, XX, year to sold XX, higher by The due a higher for $XX.X $XX.X farmers. XXXX. to ended packaging the the for growth December costs $X.X December customer labor the goods The year base. from XXXX. was million, compared tight the contract year represents year XXXX charged was to XXXX, an of totaled Cost million

December public by related not ended XXXX. and for million million payroll completion as included Selling, year XX, XX, in was company compensation as primarily $X.X year onetime the XXXX that were general for of and expenses IPO, expenses expenses other the expense $X.X to increase the well XXXX. compared which The ended incurred to administrative higher December were driven our

Per XXXX. for $XX.XX for been loss ended splits. the $X.X net December loss a to Net share compared all million to the have year million XXXX per amounts or $XX.X year reflect stock per ended XX, was XX, share of $XX.XX share December or adjusted

turning important to the operator back February over in million business. completed the With offering our to gross as business us would was the long-term accelerate successful generated like this funding, I discuss in our $XX.X our which confident the to take to Before a of we of proceeds. achieve call roughly growth. execute XXXX, to the in it to ability for secure The questions, offering necessary sustainable plan are expansion allowed and funding moment we

Operator, now assist would the up open to us call with can I that? you questions. for please like

Operator

[Operator Instructions].

from Anthony coming Maxim Vendetti is question first Group. with Our

Jeremy Pearlman

line. Jeremy actually the on is This

How currently a many the U.S. our you bit I then to mean, talk distribution just that, those from located? little XXXX So maybe to first, store more increase your count? network? a of And are in your primarily could end. the is increase for are we stores where your about what stores in, are couple distribution plans questions

James Kras

Currently, This north stores. Kras. you, is we're of Jeremy. Thank Jim X,XXX

plan Midwest, call inroads We to of we making -- with move the store continue vis-a-vis Northeast, over next with strengthen major the in distribution of looking primarily the boxes are happen the we're counts that as is are the Southeast we Foods. might larger looking Whole The adding Midwest in into as see Northeast, our of of Mississippi, regional expand kind few retailers, well to months. the and concentrated, to it, forward, be big that of region and with smaller some you'll some chains. outside We'll more local as additional East

Jeremy Pearlman

then greenhouse. Rapids, Great. that, piggybacking know Okay. Grand you just you your that I off And Michigan have mentioned

phase first I and are second think process the had that? the phase. Where of completed in You of you commenced you the that,

James Kras

good in are very We very, shape.

bringing if see that would of would We are that in final the stages in And think I online. online not next the XX you [indiscernible]. that days,

Jeremy Pearlman

that a put And does I that to that mentioned you a certification. you something get Is request -- that expect... include USDA know you organic in

James Kras

It's days. all good completed, and within sort all with actually, of good in should kind very so XX dovetail and next of nicely final our shape shape, in -- our we that just we're launch We're go-ahead. the a pretty

Jeremy Pearlman

about us, know you of said that the times offset to then allow this or this you greenhouse capacity remind costs were some up how have the Okay. is for increasing call of some annualized in going that Great. million And capacity? And section greenhouse the just I $XX at I the growers -- to full maybe is about of contract you mentioned growers you the just in of those contract once think is on sort a couple and revenue. financial running about replace were

James Kras

offset. It let will us

place, nice in our job and we'll us much integrated. since to business margin growers vertically some grower us margin be us, will for our in -- higher bring of since higher allow a have will at on a of this contract then we They will stay much agreements some for be fully very place. So additional do

Jeremy Pearlman

Okay. be go have going Great. -- supply -- add online, greenhouse. or to from you'll have And throughout once right with think distribution something buyers ready to that XXXX, know you be to able then or going that that is new those customers stores your that that to in you're it's with able new away have Hopefully something something could is is that to increases? that capacity, to output you you'll to this to you're

Michael James

as but be a will in the there'll new -- the business as on to position business, very somewhat thing ramp-up, fluidly. be take very existing good of definitely a think, well will I integrating some It

Jeremy Pearlman

moving think the of right, -- Okay. to All products. I just then more helpful. great, that's really And over the

been on stores introduced this months more expanding It's new plan if salad any You the product plan other what with now. have X Is and you give what them? then in been velocity can in that's you that type there -- where about you fourth seeing of you're received, about quarter see kits. talks information you the how to to been

James Kras

well to they've into look, nice a varieties They're distribution will where add-on, been probably out We'll that starting doing as as some accounts that other in other we extend into and Meijer well. we East push again, the it the look then Midwest probably have into probably look the as from to ranging as once obviously, a in that's the and leverage accounts in then and Wakefern/Shoprite where, expand West with the large the production to our Northeast Midwest, supplier from, Hannaford. currently

and to So in we're sell the the locality and product we many, those that X crude leverage miles are those to sure there calls freshest just are and freshness, to the where make obviously well. doing continue of that produced have continues the sales out reduction of

Jeremy Pearlman

out? it with pipeline And see then in that us share be else right. there the that pipeline, Great. or All comes we'll more you as could something -- Okay. is anything product the that's might

James Kras

the of new how Inspired, constant our grow not our goods. doing such within and finished what also also from the to only of an of competitors. here. assortment and a It And alternate manner, we working on from that our diversity on focus That's And working growing ethical, some yields, company. as continues adds from to us a we're ranges help separate Zero-Waste to proteins that it our innovations what And but to Pulp increase lot continue sustainable being of We're innovations, that we things lot we drive to on. as finished a goods we're some ways. other

will next like of be out lifeblood new the are. you'll the XX months. are over And sooner think even company company, products to see CPG/CEA as real a of coming XX especially host product I any it nice we

Operator

Our next Cooney from Gunnar question Paul & Joseph is with coming Company.

Paul Cooney

the Just wondering be Grand with significant an of opening ramp-up revenue? that in facility, Rapids should immediate the

James Kras

this It will impact profitability year. and be immediate an flow we're positive cash eyeing margin on as

a be it. that's big So to piece going of

to will and gives bottom to in more be it in business is hit a bring got twofold. the then way, immediate more be line, which great teed capabilities that So will obviously up. us an it positive we've It

Paul Cooney

current And will raise do believe profit? has that company the the there with to you the the capital you latest get

James Kras

yes. Yes,

Paul Cooney

All last right. And question.

as of that what you you for nonperishable that business 'XX? what far your you acquired, revenue are impact As that the type think as as of modeling part far do in have will

James Kras

got we're box on this with in-house how exceptional. Well, We're bring online. but see working going speak already to can that, I them big to Whole we've come that which retailers major online. know Foods, that I don't from that much POs to call, is

from things great team being that's our a got brought about have X greenhouse of person grower these company. We've we've the CEA retailers, that authenticity really people some the in Garden geared to market. of of wherewithal finished major grower, bringing that the onboard from, and Edible actually recent a the we've mindset to a goods X One is a towards great and got

of this into Our what the retail we have out goal. be there. should trying expectation platform as pretty and chain get year was "light we half able our the second We up I that's quickly," distribution and to this at, is entree which every major to into our is leveraging push stuff

items We're the of we are exceptional sort at which for an Product type and new excited of it. about Natural products West, Expo thrilled. had products. partners, we're we Super getting to of the and show tonight So I'm leaving big is these Bowl road. the on And presenting

So nice pun, We're our be excuse I revenue line. think to assortment complement, our to excited. and the to going a that's

Paul Cooney

online is on we're another that, start the West and we to looking new to -- maybe to with a building like guys facility, you houses? facility When out acquire Or more location plan going then to and existing Rapids expand? done it maybe are you the are more be with done try when get Grand grow

James Kras

question, think why. the that in. I because, company on I'll it. the look, mean, key to a great strategy is amount us moving doesn't tell a one going the of now, you It's forward. considerable M&A of The we're I differentiators an of Well, as right But be is part position and have that's look, of about debt

to and right to these a how the is have world. -- cash on ourselves, positive management future feed the going this in now and this flow striking that cash being positive businesses because work We focus And category right get is distance. everybody flow with this to the plan, team within prove we're our country, to is of

And someone and needs to show out get also viable. it that be can commercially

me, be it's like X, identify. get looking frank. then be I on to in or retrofits, And Paul, more next flow let's to quarter the let's cash through think to back positive. get And the So we'll, to

understand is. and make sure us, and money to that build of The -- lot I out the team then knowledge prime have we're And very IPO ready in years. part step did And goal this has for is we a getting our that of fabulous a of had together that we organic food A almost this and And knowledgeable that Rapids understand committed, that Grand just with bank short it. the thing how what period is we workforce look, that people think time first been for this leveraging well value. We've we was past win performed who in for can of team for shareholder time from on management year. that a the to safety. job in inspections our obviously, thing make team team XX the

because some greenhouses really well. and plays that with that, reuse, Let's think bring it us less. in, Inspired I let's being reimagine And doing these serves more into old repurpose, Zero-Waste of

in Rapids it and that. out excited And well really about worked Grand we're

I you're strength, want leveraging on market. make going see to days the of but considering get economy So some next we're position from out especially moves XXX think XX, sure going through what's to in us make the in I a the and

smart to we're So background, we'll really thing. something to vest. in how little we and to bring play this the going about the be close grow it looking in a very be But

Operator

Instructions]. [Operator

next Our from question VKC Friedman with coming Elon Fund. is

Elon Friedman

the on Congratulations growth. revenue

later You please you that said year. achieve in Can will get elaborate expect remarks positive that cash your believe company there? to on you you how this flow the

James Kras

our to in will That next days. how on facility, considerable bringing be a on a is and Heartland. on be XX factor Garden there Grand -- going the online With based it how plan margins. business We impacts be Rapids Edible coming much that be will our that in will

So that margin. be the allow a products into for us shelf-stable driver as key more well that higher higher-margin, at of as existing addition to our go this, network distribution a will

going growing up assortment allow kind we're on for us. the facility that will will margin help bit as that to which that we're flow a us for things right of for So drive little that should clean have piece expansion, that vertically right integrated the cash with

Elon Friedman

One more with USDA New the Technology, question. the EPA? Can you of please Institute and provide us Jersey about the partnership

James Kras

growing ingredient, they cool. you impact conditions nanobubbles yield. a in high and of plant And that, would want but impacts growth, pretty allow impact more then or improve are if those much growth really ways to us, when plant, it you not you growth. you and and they than for some environmentally do growth sell it's for you And take more you yield. into with way plant do [indiscernible], friendly obviously what produce, types what oxygenated plant plants plant less, other They're are. essentially the which Yes, that obviously, doing growth. we're quality that obviously, them can it's of and stimulate to the and can better plant is say sort of turn will only a that you -- which It's plants Obviously, how do take bubbles nanobubbles, around small and you're kind

I for is cool which the is funded, it EPA very believe, So by us.

well a allow to from and able a this a more of facilities knowledge it. then as as them test we lot our testing really are do our we that's benefit are We lab. of partner And to to exchanging are

being USDA, company. in FDA a about are Institute the the excited course, of partnership the Technology with we EPA we're of and and the New and Jersey because So New Jersey-based

and So it, these excited it's that promising offer important it's type of studies. company the very can about

Elon Friedman

Congratulations again. on the revenue once

Operator

you. Thank

We session. question-and-answer the reached end have of our

now back over for the will I management turn call So remarks. closing to

James Kras

Thank you again joining for us today.

progress and past We about Edible are the Garden year, in the excited over opportunities lie our are pleased that ahead. with

will on We to look updating the months. and execute continue in our Thank forward day. strategy, to very you progress good have our and a you coming much,

Operator

and Thank We you. may today's does you This thank conclude you conference, disconnect your for lines time. at this participation. your

Edible Garden (EDBL) 22 Mar 232022 Q4 Earnings call transcript