EDBL - Earnings call transcript Q2 2024 | Edible Garden AG Incorporated

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Operator

Good Morning, everyone, and welcome to the Edible Gardens Second Quarter 2024 Business Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Ted Ayvas, Investor Relations Crescendo Communications. Ted, the floor is yours.

Ted Ayvas

Thanks, Jenny. you Conference Edible Call thank June quarter and XXXX, XX, and morning, for Garden's joining ended Good Business Update.

with at Edible June press on Dafoulas operating results call Executive XX, this morning, of XXXX. The the us the www. announced Jim Earlier company's are the On its company Kras, Edible Officer Garden. of posted Chief X Garden; release Interim Kostas for ediblegardenag.com. is the and website Financial Officer today Chief months ended

quarterly accessed its at U.S. well filed on company's has Form Commission, the company the SEC's www.sec.gov. addition, as with report Securities which XX-Q In website website the as can on Exchange and also be the

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

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

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

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

the company The company addition, being All any for by these other expertly company well In others disclaims their forward-looking except this of law. its completed responsibility qualified after as any person forward-looking attributable to these neither made to of of statements required any as the assumes by entirety in statements, conference forward-looking duty any are as or update the statements call. these in cautionary statements.

said uncertainties. Having made forward-looking of Jim and turn call to You like the by should Executive over the the Chief in these I'd of that, all context statements company risks Jim? Garden. Officer now Edible evaluate to Kras,

James Kras

away focus growth gross a profit growers XX% in a fueled from The outstanding and for on and and increase morning, driving and ] quarter, cutters today. everyone excited [ shift margin Good higher-margin our Ted. to report year-over-year to by businesses are by third-party joining growth profit, gross us you in We're Thanks, thank vitamins improvement. XXX% supplements. another in a highlighted XX% of

from strategic from business quarter XX.X% move XX.X% year. conducted review decision thorough XXXX, Now our with made period away We've up of fresh in same gross of approximately the margin also the produced the to XX% of second in line last a achieve less our near our to and our shift, to with segments. becoming business. in-house, positions product operations cash us flow increased on believe and towards of are profitable, our higher-margin the well Instead, the positive operations combined this we focus goal We of future. in segments our profitable efforts more strategic vertical our directing integration of

sustainable quarter, we distributors. of second our with pulp line expanded distribution of The the sauces products the organic addition and fermented gourmet of UNFI USDA Chile-based

platforms a of options As Foods, a and meeting the locations, Specialty better over retailers leading superstores, UNFI, chains leading inspired North natural of waste -- bold distributors, and line. platform, our and healthier e-commerce KG across service Health the to retailers, own Through across including the product addition the providers with food system which XX,XXX dedicated continent. We Edible have to serves e-commerce now consumer American promoting UNFI for and supermarket food and independent believe perfectly plant wholesaler UNFI our product demand way aligns access continent and product pulp mission. Garden's zero is distributors

the and Edible been its the positive has to profile, and flavor pulp meals billion Markets consumers $XXX Dierberg flavor overwhelmingly reputation According product research Target, product Meier, markets, Foods, condiments XXXX. with expected from to is global bold includes maker. in and roster from $XXX seeking Garden's grow planned Morton growing to to their in XXXX major and Our Whole reinforcing with retailers The pulp response Woodman's. to sauces enhance the category line as billion to of Williams,

developing by region. momentum provide the retailers and improve KE availability confident our program unique consumers retail the expanding reach we designed also the across of Canada. shopping can sales partners across with Edible engaging displaying for through strategy These States racks brand our pulps United expanded increase and a to network accelerating addition are flavors experience distributors, efficient serves. to Seasons this our Garden distribution retail Northeast This our to offer improve than and In the products access and a range commitment method a We to sourcing. celebrated satisfaction. believe customers. Which of integrated We've the pulp ethical products. RAC for distribution with lines visibility enhance and for retail for and our and will supermarket extensive strengthened consumer more efficient partnership of Hemingways, with [indiscernible] ensuring more customer which align Kocher, our integrated serves quality distinguished and all are includes its local that We our initiative more a chain new help July, Kocher XXX overall the we UNFI

high-quality In be addition, for of carrying also Lincoln its and selection will Market, and products pricing conventional fair Garden known Edible products. gain diverse organic

sophisticated our them including available Pulp dedication Brooklyn growth excited New with City. expertise the at comes York Brooklyn the involvement launched for fair life. [ Hudson flavor natural its Yards and product is fit to seamlessly principles edge, potted Chevetable also designed at to Fair, retailers, location Brooklyn cutting gardening operate both and satisfy Our strategy. products they entire We our customers' every sustainability retailers. Garden line, location, creativity community [indiscernible] renowned offering now these were to that we culinary are making that a a ] for and home aligns fair herbs of preferences. At their starters, in Furthermore, restaurant for

with options. some introduced the flavor eco-friendly American home the that popularity at of them of of least own of their XXXX meet providing needs growing First to diverse households food, to XX% herbs gardening, grow these in cater

foods. next Our a aim convenience customers. and sustainably we Herman to supermarkets, Garden manage development pickles, and [indiscernible] and other brand in our BowerCrowd fermented Edible sourced product and entered coaster Garden In to we facilities refrigerated Pickle integrated their packaging offer maximum production, a partnership distribution. vertically Company, produce starters, with May, By deal placing leading

strength their presence for and producing marketing in consumer combine explore packaged the Now nationwide on and will delis collaboration dinner to plant-based family non-GMO goods. tables. both and fermented commercial develop focusing scalable of This companies continue. distributing opportunities, We'll and products on

excited with their leveraging line create the team, fermented are to work We to of legacy products. esteemed a pickles contemporary Herman

on solutions proprietary packaging partners. other extend have to innovations reducing implemented competitive is of shipping, spoilage retail as cost shelf addition, our driving and differentiator expected Garden new build savings unique the serve In an Edible significantly and for several products, our solutions. These on which important we our focus for life and innovations

fresh example, products admission, to with our the for buildings with innovations our these peak, their watering inspired at and customers. showcase our has nonprofit retail plans waste waste Jersey. data self in ensuring patented a program minimize displayed, individuals at plants superior In services providing providing For to Northwest The transformed disabilities. longer retailers and greatly July, they minimizing display training waste New we comprehensive launched zero employment outlets. Aligned for already how allow remain in-store are and with

Garden Our decade-long we workers, hard that integrating with benefits incredibly Northwest have these has and and to exceptional in been empowers partnership with demonstrate work, environment rewarding. Edible New dedication disabilities By individuals. it consistently an Jersey created abilities

diverse our development opportunities, professional prospects offer Our and talent. skills and enriching these training and with career while employability programs valuable enhancing workers workforce

and ended we ESG in Garden initiatives for turn would review this results to the remains XX, Kostas? X leadership and [indiscernible] Edible for. I to investment Officer, committed over financial June our are sustainability the expand interim like that known As partnership, call Financial Chief who we will involvement, community local XXXX. the months

Kostas Dafoulas

morning, good and Jim, Thanks, everyone.

XXXX. relatively Turning was compared QX [indiscernible] to core driven portfolio, by $X.X supplement The to business. for slight primarily in revenue in Total quarter million, vitamin increase our our our second was flat product revenue the quarter second results.

by Floral million company's specifically in shift by third-party from $X.X to our XX% $X.X the the XXXX lower-margin the million XX, the revenue months strategic decrease largely quarter. The away away decreased increase from the largest segment. was of X Our products, products ended for shift to sold Cost compared offset XXXX, our June growers. strategic comparable goods driven core for from

in gross As earlier, by of profit Jim XXXX as the to XXX% comparable quarter stated period. compared the increased company's the XXXX, second

June XXXX, audit, of The for compared accounting quarter and $XXX,XXX. Net and quarter impressive our legal record million the XX, on activities primarily period administrative the to to of margins, per June and from debt the the X for X loss ended million compared of $X.XX X our $X.X In of the Both in QX increase shift onetime last an months XXXX, we've of share capital credit away $X.XX $X.XX per were loss to was we on the by expenses $X.XX in share related related interest XXXX, $XXX,XXX expense compared ended $X.X loss months a pleased while our higher with totaled the extinguishment of million the and way year. was ended by to working team from months $X.X dependence the onetime loss third-party XX, XX.X% XXXX. the June our results net growers. Selling, same million led in operations hard of to loss of this for to raising from in June been improved ended QX increased onetime the gross general driven XXXX, to improve retention year-over-year margin our a XXXX these quarter. X year. In QX second to expense addition, a of fees XXXX XX, to in increase QX executed XX.X% XXXX credit months driven net XX, in a along and for higher closing, a a by of million for XXXX, this are the with employee loss

made results committed that, we disciplined growers our approach. And results, line in the shift Our open operator, remain questions. deliver on for to QX we third-party reliance mix starting with strategic product is and show please the to that a financial in

Operator

first from Group. Maxim the Anthony Your Instructions] is question Vendetti coming of [Operator

Anthony Vendetti

supplements profitable product to gross items do been the this that year? How that more to contract the talk line you've high to this know Talk expectations margin. of I of Jim, quarter. outlook for grew that us for it's about this for just as great improve Can reduce for to the well? So and the trying that quarter we're rest see the and then you year and rest did then vitamins moving also the about And growers. towards that

James Kras

it. Obviously, combination company be that that than so are extremely addition a that flexibility. more numbers Thanks, driven and reach. realm, allow i.e., expand ring we are opportunity goods, have reflection we Anthony. finished we new line our pleased us the show relationship us we formula to to diversity announcements big of be have September. continuing and we going really a and supplements sales the the of to with in greenhouse to our expand trade drive and expand vitamin the I to for the near-term not introducing far Way quarter we're farms is in some using and supplements. To will We're existing only the new form business in let's in There'll a answer think our by we us our assortment have efforts plant, going products line We'll need That's as Obviously, to moving with which approach up and shortly, be question, expanding to the the CEA we so vitamins your to we in coming the vitamin have. everything do, the supplements, products, a and a then to that that as that some positioning is allow higher but have, vitamins stores much say. the e-commerce the

part out business produce for us, at top the business, that been as the not supplements, in the retailers a into would that fresh our acceptance we supplement in also the really start that products And that greenhouses CEA goods segment. got currently allows the fresh also launch dig the marketplace. That's we of Michigan see of is cash bottom but fall. have drive online in of able business, only flow box and a gotten shelf-stable show So to -- some we're to of drive and really margin line that really check shortly to launching the part but to something And already be think our line business XXXX, of new will of us of more good, the in at other XX% happen working item us and fully only will once into the that big healthy we the with that is drive not vitamin positive, allowing here I the significantly the segment get have be this kind I have now pickles, the X on. kind will which functional of totally that we've growing

of to be we're So our starting on marks. right more come hit bullish really It's business together, starting the and all I kind couldn't now. to

the Walmart, continue own a and facility to of their with by our able we very have backhauls smooth, so cut we cost it's make the ways. many with that where tight down efficiency, and distribution close goods consistency, also relates we're and quality, that specifically, centers, to margin bringing down our very outside, lot it have in to in transportation what and it, expansion on control over different the it not to So piece, continuing using since helps at been and our helps taking the we'll continue sharing, just an is to on control shrink. fresh of vertical road, but Yes, chain, clockwork. so to the answer from shifting but lot environment it's proficiency with goods likes supply cuts We pick away just by but there's which drives, wait a question also it up facilities, that from of the us to integration by the as also off both only your second everything runs really investment now of the Myer especially [indiscernible] kind a retailers a product for ride -- trucks

excited. improved bit time us over we just the months, So get little of operations taken of jump by really, really really It's the a of -- having in-house we've ability with a X the everything it. to more controlling last and we've huge really

Anthony Vendetti

the to all And expansion retailers you the well-known within rest that's those year? of expectation obviously, as of the customers products. this Can of and which the about your No, quality have top, not talk if the SKUs the for retailers speaks you top quarter great. many of of

James Kras

you focus to and once even house I at I people really to think investment the order better this a machinery see has the is again, in that increase great of in because important GP like have better that's And getting do impact look said, made to been and on getting that's just Yes, all the quarter we've question. the oil. in

us, moving really For forward. it's

is a going quarter This as strong quarter existing be relationships. our with to usual good

allows an from that mile to a what to the a want need because always items on Myer have do they we headquarters, miles rapid. that with it's contract ongoing new from their a have conversation in. couple to to get a we're We their ringside seat of herbs -- we us do That's

on the help in for spent private a shift focusing private a label round their So a with really steam, these been we continues considerable up pick the buyers, all marketplace, lot there they're innovation. assortment. to of to retailers, to there's of opportunities time us big out amount especially inflation, with There's label coming and

we've look, the on doors plus and and which growing Shoprite, on. got Walmart, So Hannaford, for [indiscernible], goes us, Wait X,XXX for list is Meyer,

adding only herbs carry that leader other the caters produce more margin get of we the help there's time to maybe us, the And and we leverage not give let function shelf-stable they by fronts. sustainability the business that kind less may SKUs especially make need us it not a stuff inform that set since pressure the shelf existing allow to get or on opportunity better being that out this so all also quickly driving stable put as doors for are just of in us that want, a of to really and products of products and a they the on kind that but it's to can to and it acceptable formulate to us

sustainable, able for going it line don't said, we got I a more do in big I Everything fantastic. that's be if So coming said, fall, I into more a the and and more show with know to but for which out, better vitamin you. go lot I we say ringside you us, like is for wins, of and positioning, seat that way, think, is better And out coming you you. fight I trade a great. which is that a supplement to there get better new is be we're could to in like give to said always continues --

about It's the we expected in you're us the is. really we in helped I innovations out with the cost we Otherwise, have that short I has of with and been some high a a we to coming have only we retailers, it, somebody we dramatic shift. think us and nothing new brought from our of technology who we how And now manage find that's that I exciting. else. brand excellence. supports been January came at mean the elevating -- are grow that what who like cash that from manage be conduct think, have couldn't a dealing are and the So just members like such when is we relationships, perspective that's like operate said, but think business, I for, how I and we're that the board in finance business on we and as it's products really more the that not team we where [indiscernible] expectation excited how and I'd our we'll where done retailers large level stand

Operator

is Capital. Forest next of Your Instructions] [Operator coming Pinkus from Nick question

Unknown Analyst

quarter, the product amazing you've pushing on loyal improvement seems very margin margins. that a all it especially through distribution in Congrats with it's caller this strong now got about the me funnel. really more retailers And just and network mentioned, to these as last

items a see So in bit touched question, if as you you year? of playing shift and the benefits my out this well there the as second expand in this your shelf-stable on a the specifically last but last of to little can the the first -- on half question, that bit kind how in you product

James Kras

handling And the of do of have Garden that's Wakefern couple understands only to of a an sell And a stores guys it sell team XX% the the these what or we're I again these a our times at know a work the as promote. running we're from platform. trusted right X with that it get store, to Nick. function execute. it's last as as our a say, come not to got the work but with makes seen, funnel, in, order not that trucks XX% crown advertising the product retailers, Dave to coming especially products our Walmart the Myer, smart been of can eye only right Dwight, and through. "Well, running a the matter our -- marketing and and to the consider to what it who not you what really people & And some at -- level distribution promotional retailers know at to only if name right company, I right the fill to they're jewels stores the our XXs, are we on it's dealing and trucks. and want just many once has that from total he population product, up from Look, of saying the -- Edible to mean, we when it's through again, takes when to It's X exceptional what say, you the also into look team Shoprite. kind into push perspective, and marketing -- with you live innovative which Thanks, heads not putting you've buying communicate not in the off in a trucks that sell week have exceptional U.S. And Anthony, retailers department. margin standpoint. the having but goods, in I'm -- Hannaford We've offering pricing members you're sales Ross of high in but trade you to of it comes at these going their who I'll always execute, and just a ability down rates, running been mid- one reinforce had relationships our really decades. to and would to we're we're and These is the the Jim, When these Yes. in partner. them into or us just are that to Church

good with got we're excited. coming more couldn't new and So of guns up out like with said, product shows be, all coming blaze and lines I I we've

become We have have co-man, products. think vitamin been next the more a great help push excited week We've major September line set some XXXX, of And about I us already what trusted more a pretty eCRM. unheard just first which supplement at of. of going and of relationship with got they're there. generation meetings commitments they to in partner Nutracom to new is up who's very the our for the see We've much out got people on

since line. Since to continue So once of the products rate again, sight leverage wherewithal is the an of the hopefully the to the margin higher only not bottom hope self more the speaks a should ring but would help And early I these of X,XXX some get of are stable to down of Nick. a doors and -- from stuff also going for help more to us business kind really teams some that then our relationships. products accelerated grow even versus retailers items, on higher we at this charge those that function comes The really be intact so goods. at unseen. pressures to we these to that fresh margin, helps, as commit of a topline products what that this all lot

Unknown Analyst

start that the as -- retailers woken it it's to put will really the another that hasn't kind Street But And big does. to retailers you hopefully, they you've channel. of pushing the more and through trust it seems relationships yet. like with and this built definitely way, these through products up the It

luck good that. So with

also The on a a little touched expand second could bit, on this my part bit it question, but more. of you if little you

is season more that? What and in peak there head Thanksgiving thoughts margin into As vertical you integration for the your holidays, forward around the gross XXXX? going room improvement in are on

James Kras

the I through crushed we've and That for to home they time a value, us Look, restaurant. flavor cooking since more us you herbs, continues for us, -- product, because people holiday. We case such goods all add prominence and come in more so data said, are of Thanksgiving. to with a spending this maker, the there's really herbs holidays. continued creativity, and of be I and and November the to that's the like around wanting of as from helped second just to a seems the we've I because Look, season the the I said in -- business that because the leases, some first to be more buying cooking especially a the have been money the demand in beginning to it's gain more equates trending expect at just in mean of that QX. facing, a items they only consumer people and an just whether continue we points great week your do out that that And and herbs and allow company are always volumes. and to of herbs to Bowl things at products. last the nutrition that fresher January. of -- always it grow holiday flavor nutritious Super people Thanksgiving. displays the people all we expert shortage people nutritional of drive -- some function mean would nothing turns to inflation, that's that's, less of reason it's are all game there's people old inflation at continued to people cooking like that the said always want people, And I -- home, come or for down -- no

us, efficiency margin dedicated. got is outside can production to that continue line our consultant So We're in improve. even an volume. She a our so lines. us help another to improve who for [ the Michigan in brought in putting will Cargill We're more bringing in Heartland, we actually in increase ] on

couple we've game on got to everything displays expect grow cut, that core improve some holidays. but the a these of put next starting to on. season expect that business it vitamin business. sales now that well, business in be of lot really through continue on lines. vitamin get in but resolution weeks for effort some coming some products for it's we supplement up the living got us, of as the a got about January lines we the us to I the and and during that much scale business, herbs commitment. now the that focus said, start meetings some even that continue the drive opportunities the really new new in and retailers has incremental to I the for to can I towards QX year, we're and New to always And core we'll place get know So like the been load-in really we've other more the will we're just to and Year's we'll We've and innovation of also We've pushing margins going with have in. to got don't not that's major holidays. for talk this can only how supplement

continue there's the do opportunity again, better to year So us, for I think to a than huge before. once here

in either great looking consumer right play on going that's of the are already to are but relationships, of and long. Teams pushing to that us kind and expanding a function continents, the pushing. strides list and and to only relationship and space and that's that's Myer in you a and able last wanting product the at people organic, they're because for pick think is a sustainable our all year. our which very you're do that the for incredibly with that's the to in at spot for I tired continue and some some or going Whole to have come better, a more, other for better And didn't from not to gain the product product truck opportunities unique up pulp, do I it in more As that these industry lines look of of but negative trusting sauces all now to i.e., white taste that old just pulp just that you going us there has our you, mention, say, that great better industry. catch-ups are products. have been development to as have, guys of And the announcing Foods And company a look the where you've mean, is that out of doesn't year new fresher, ERPs, sort fresh I category distribution, shortly of you is think we'll us for more buying bright and the see kind Target relates than as being that's because got only people have And company preservatives there unique not that mustards of unique to same great the commitments. which I grows was with been we to products whatnot pretty years, of something other condiment produce the be and [indiscernible]. to there we're just us a

these grow so about it's items of that me, products I'm it, rooted up pretty better-for-you product, excited in the we going to us that me or frankly. be that is rooted a I of And for are excuse and in a lot to -- the differentiator, fact actually think, end provider huge they on in being next-generation

Unknown Analyst

excited That's hard the awesome. and And like we very progress appreciate your and seems future luck. tremendous team. work Good on -- updates quarters. in we're making It to really get entire

Operator

question-and-answer much. over now appear management of hand will very session. you I our remarks. back we have Thank reached to closing for to end team the Well, the

James Kras

joining for us you Thank today.

and the effort and impressive Our team. dedication testament years entire in is Garden half of a performance from XXXX quarter the the of the first to second Edible

We in fill dependable a as supplier. consistently reputation trusted a high delivered built the and have strong rates industry

highlight benefit significant integration operations. added results vertical Our to that the is our also

the extremely and lies is being you for believe Thank you thank future about ahead what We promising. again, the and on optimistic call. are

Operator

you conclude Thank very today's much. This does conference call.

may wonderful day. Thank phone disconnect at your You a this your time, you for participation. and lines have

Edible Garden (EDBL) 14 Aug 242024 Q2 Earnings call transcript