LOCL - Earnings call transcript Q1 2024 | Local Bounti Corporation

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Operator

Good morning, and welcome to Local Bounti's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.

At this time, I'd like to turn the conference over to Jeff Sonnek, Investor Relations at ICR. Please go ahead.

Jeff Sonnek

Thank you, and good morning. hosted Chief Bounti's Financial be Craig Executive will and Hurlbert; Officer, presentation by Chief Local Officer, Today's Kathleen Valiasek. during of provisions made within XXXX. Litigation comments today's contain of may The forward-looking Reform the Act meaning the the of harbor safe Private Securities call statements other statements statements. of are considered historical All facts statements forward-looking than

unknown number that are on future events. concerning cause based are and subject statements to from assumptions known current expectations differ uncertainties statements. beliefs the in forward-looking of statements risks as actual results These results management's well could the to and as and a materially Such forward-looking discussed

Some company's uncertainties filings and are the SEC. the discussed in of these with identified risks and

can for financial directly Relations certain refer We'll be today. reconciliations also on which non-GAAP measures website measures. financial GAAP our most of Investor their refer measures to to non-GAAP investor.localbounti.com Please to found comparable the release, press

call With turn to Craig. the that, to now I'd over Craig? like

Craig Hurlbert

and Thank good Jeff, you, morning, everyone.

strong enabled before This recent performance the prior we've result operational prior our call that expected. quarter financial as Our the which to first a for touch of combination year I'll of progress, Kathy business and both made drive quarter us double-digit was briefly line versus her which improvements demonstrated the growth top on of to to the passing remarks.

it efficiency. to and predicated allowed Our quarter is in Stack facility & enhance Flow us It the our underpin ramp to up further on past us production which our technology has continues to the Georgia model, over strategy. capital opportunities our affords

Stack XX% a of towers further for beyond at trial yield least we our achieving. increase recently that of are what demonstrated fact, initiated smaller we In trial use a scale a in at currently a differentiated

those see to the later quarter. results excited in second are We

make facilities. the a utmost impact stack at of extremely can Stack-enabled which the us of all efficiently of across recipes to we maximize our & ability significant and to our individual the implemented and advantages of efficient able can our allows data-driven flexibility our where all design learnings These facilities, Stack flow are of the highlights utilization our our model to is apply and fine-tune and also rapidly. importance be iterations plant The further Flow assets

the at are us incorporated maximizes Stack facilities into that experience our Georgia state-of-the-art capital technology facility Our immense optimized These in productivity. and drives highlights for design facilities armed from new with and have have that our Texas. efficiency & operational we've an ground Washington up the Flow purpose-built and

are a new Texas we of quarter. our in for This for to and recognize facilities to operational contributions efficiency. team amazing and and Local built get speed second these I that and report with out shipping to want Washington entire thrilled individual the is We're huge their milestone Bounti,

is from capacity and extremely new capitalize Washington new hard commercial our the opportunities. With existing to customers pent-up on team working convert Texas, and demand from

On to that longer-lasting point, to and the Texas fresher, consumers thrilled Brookshire servicing and and customers, in Pacific Seattle regions. Albertsons begin nutritious more X are our leafy-green new we bring Northwest products to

distribution new add Texas to relationships in existing our well. upon expanding also as are We

conversion in of As I of comprised phase of This on expansions continuing we last facility a projects facility our noted operation. of capacity new work Montana Midwest are to across add the growth. is and capacity on of our call, existing to our commercially-focused for the future our to network opening a next facilities, the

quarter of have the in XXXX. the determinations final yet expansion, begin for is facility made While to second to slated construction late be

for commercially With for transition current sale facility new of that final to Midwest, is focus, our of to R&D its we're ground breaking currently terms oriented site the facility customers. our more QX ongoing in from in the respect and selection. Montana pending XXXX, growing produce in quarter the of anticipating negotiations And third

While us incremental our of expect be impactful cash terms it to this flow. in revenue provides with we more

ability those R&D at us of As accelerate this afforded has and integrate to the is up, our absorb costs helping sites. scaled efforts each our also facility our throughout is learnings capacity the footprint our which entire

track to implement shift on in when margin adjusted the goal overall And important our accretive will summer. complete, be achieving facility are EBITDA us adjusted reaching We the our XXXX. early this of gross be an and to positive to Montana component

on also new and Our demand. the product meet who customer working been innovation parallel in with R&D retailer offerings operate efforts team, has to hard

As we Mix expansion Baby were remains quarter, be are still Arugula, several we Georgia our Power deliver will Spinach up, able And introducing on product high-velocity the scaling of and our by we previously offerings, third and the Spring although to to track. Blend in first customers Spinach shipment assortment including facility said, expanding in baby This leaf from March. Greens. we

throughout our of We've expansion expansion popular bring approximately doors response national also made excellent the progress The with consumers' been the look partners positive, our U.S. into Southern and Northwest to kits, more to and convenient to bring to homes. our kits Pacific forward our towards salad the XXX very Grab-and-Go total distribution this working has salad which we Grab-and-Go

product step-up XXXX. of guidance, track us in versus to puts in becoming growth doubling a year grow the our and closing, revenue capacity to the incredible our compelling Combined products. are will for the deliver well this we offerings of achieving seeing business achieve our which online of the EBITDA operations our the support near-term positioned of we In are plans full efficiency new our calls on demand and positive we XXXX in and early year revenue are half goal new bringing with for to meet to adjusted second

will for of Kathy her that, With it to review I financials. the turn over

Kathleen Valiasek

reviewing by first update year-to-date structure our progress update an in an start on results, XXXX our I'll with XXXX. Craig. you, provide finishing before Thank then quarter capital on our

million in increased in the $X.X sales to XXXX the fourth as million compared prior $X.X quarter XX% quarter $X.X increased XXXX. to and to compared First year XX% million

our the reflected results Our growth sales from facility. in largely increased and Georgia production

margin, results associated costs adjusted was comp, of depreciation adjusted with First fourth growing optimization consistent the our approximately excluding ongoing margin reflects up gross gross was stock-based performance and our and quarter and facilities. quarter scaling with our XX%, XXXX

our to ramp as expect up this margin adjusted sales We scale coming the parallel quarters year. to in our increase gross capacity with in

we the also initiatives have scale-related other Beyond we support that benefits, expect to improvement. margin

the Once As remarks, Craig a and mentioned other trial we his scaled zones Stack related have results we our have see some down in that an to those compelling we providing opportunity implement to also is drive adjustments, ongoing costs. production data.

seed than to XX%. in area work. all in our implement of program some that more For We'd by done instance, broadly in we Stack-enabled reducing recent costs this an more look XXXX. our optimization And trials, we've seed later were is across facilities successful

$X.X comp. decreased million, we in $X.X cost-saving SG&A the million for well to took driven as fourth quarter to lower the as actions structure first by org stock-based streamline quarter our

cost-saving to from the and lower base expect benefit continue resulting to We cost end the actions through the XXXX. of

a $X.X the and the fourth a XXXX EBITDA the from to million an year Net million. compared first of $XX.X of million to million prior of loss the quarter loss net loss in $XX.X as loss improvement reflects in quarter loss year was $X.X in $X.X Adjusted period as was compared of million prior period.

$XX.X XXXX, March amount had as million. perspective, cash, and structure cash in equivalents cash we restricted XX, of capital a of From the

On our quarter As we including million shares had approximately a and basis, restricted have forma warrants a we share stock outstanding. approximately X.X employees million shares. units fully count pro end, of diluted of first outstanding, XX.X

quarter the a We second finance Letters expect Commitment of XXXX, and close documentation conditions. finalizing from to continue lender commercial customary to on in Conditional subject to X closing

of financing cost new $XXX of to lower provide and financing, CCLs capital. million greenfield in expansion, the total our which for repay to XXXX the our fund approximately construction existing Together, certain will facility Midwest our

pleased We Bounti's Local are for with the very CEA approach. unique support growing

of our been believe We necessary XXXX, the we has important organization adjusted continue and our our working achieve. milestone capital very, complete positive early fund reach hard to to to EBITDA access ongoing that in to projects the a very entire operations, that construction have

from SG&A toward XXXX. our increased are commercial decreased We new get from shifting the of lower facility Montana expect contribution that what facilities, and early in more there combination R&D expense revenue us costs will our activities

and Additionally, our with lender. financing, work construction of pursue we our our continue lower capital USDA to sale-leaseback and opportunities transactions cost licensed a including to replace

our $XX to Georgia, contribution million of our With in we performance, and reflects ramping and This of to year production our from Texas extent, guidance partial California to respect and, facilities. year of are the our expected consideration year-to-date $XX guidance up Montana out providing outlook facilities lesser a sales Washington million. our XXXX at full production and

compared with customers to the revenue and for the production We reflecting the anticipate to half how step-up half of quarterly Texas, quarter Georgia from we up the to terms perspective, In in our full to first think and growth guidance. year full then Washington the cadence revenue expect as significant Washington meet ramps from quarter. the second a Texas and than year growth sequential begins QX which to production shipping back QX, third larger a at about quarter being fourth in

prepared remarks. open please the That for questions. Operator, concludes our call

Operator

question of comes Owen Your first the from Oppenheimer. Kristen line of

Kristen Owen

outlook. wanted Congratulations your about gross to quarter. this ask the on progress margin I all

You of there. needle that the highlighted to move some things the going are

making productive. Montana and I think of bringing out sort R&D of that

early of the Just margin thinking of cadence through go about help that the said support actually understand -- gross XXXX EBITDA think breakeven. outlook you're you how I we us as to year

Craig Hurlbert

great want Kristen, to from Kathy, you to just one? that you. hear tackle

Kathleen Valiasek

your morning, the thanks for voice, Yes. Good to Great question. Kristen. and hear

as rest going up, Texas they're by to about is we are the probably think going -- we when not Washington So be gross when to continue the to ramping quarter, for of be going it, quarter improve, XXXX think whereas Georgia right? about and to each margin

is to right also. R&D But the can even be going we yield, significant impact the and improvement we significant which implement when -- into especially that's said also away, of I just half going that optimization, and we on second would significant is a about the that we what trial each as to say place seed And which So also, think like Texas into we'll a rollout the year. have in sequential again, bring put Yes. can we're improving see quarter. Washington the

Kristen Owen

Okay. That's helpful.

in question that the remarks prepared additional was the that in on quarter. wanted you you signed updates to the one the provided that customers So of other I the ask,

of much much how is as your those you able be how Just new ramp doors? already facilities to add are those versus committed keeping to capacity available wondering,

Craig Hurlbert

good Yes. Kristen, great question, question. really

awards retailers in new which you have of different if time they know, you As award for different partners, periods will.

lot say. So different which group did There obviously, ready is with prepared many we palpable. is the or to in But of really momentum of top over of name a customers, momentum about of name the either everything a remarks. that's I'm in of our kind commercial lot couldn't

excited tracking. we're And -- our way inside the that our platform across about expanding customer it number I a of around a lot that's new quarters we're of what is will couple you kind can play to I over And of there's out. the the excitement its customers say regions. would say, all I But you, would with the existing what of base. So next tell enthusiasm

a Like good Brookshire example. is

and would Mount we're Pleasant in I came allow in think stores and were grocery and consumers there by what They XXX and excited the in enjoy in to what roughly to Texas, putting more Louisiana product. and that some super Oklahoma. in primarily visit just local-based blown it's their away we Texas, a site

customers X well. that's expand our then But existing to mention. example did is So as we looking

which positive of is lot business a momentum and momentum, of just of the retail some works. way lot a the So

Kathleen Valiasek

all the customers just customers our And I'll to Craig builds, and about our the is builds, And so schedules, this capacity we that have the do the we it, what have shelf customers. earmark our right? completing we quarter that our and alluded also XXXX talk for reset going for and think the the like through even we're think all -- of then to we're Yes. to add, builds when XXXX capacity

Kristen Owen

for sort It's it to is related to capacity too learnings may the given sense. question generation able and that Montana. very a are revenue some The soon -- ask I'll makes be quantify That of of that, and that be that both Georgia Texas, and us. particularly here had built-to-purpose and for to in Washington Okay. this, it qualifying maybe the last you've but these

capacity the how revenue leave relative there. what it think expectations, facilities? generation to I'll those even Just for about the maybe prior your And to is --

Craig Hurlbert

Kathy?

Kathleen Valiasek

Yes, sure.

facility, when but of the typically give estimate So that Texas facilities, is by the we different each X think absolutely about acres. will -- revenue we don't we they

those and the estimate which, has the Georgia significantly, acres, were we be facilities inherited whereas and exceed the that kind So both because we we all will productivity higher purpose-built of assume Pasco out the because purpose-built. yields and very, Georgia, they're and of build it But anticipate we're Georgia very build, revenue Washington we know, of Georgia than the again, out is but whereas simply doing they X of facilities the standout be well Texas as both facilities, improved there. will will

Operator

the Your Lake from next Capital comes Markets. of line Klieve of question Street Ben

Benjamin Klieve

And the here. A OpEx. a year congratulations, about little It's start good. to nice question

a had the the a in You here to of immediate 'XX, rightsize I first lot work guys pronounced anticipating impact than did quarter. much business was more late in and

should Or consider you and on kind we especially online. balance R&D any coming appropriate as which to there's comment of and are and And the new for extent year, can quarter as I'm if SG&A can the puts facilities of if first this for use major QX benchmarks we beyond? wondering takes the

Craig Hurlbert

to you that also? Kathy X want take

Kathleen Valiasek

that Yes, of quarter-over-quarter March. And I even continue our we because to that through [indiscernible] SG&A, I the XXXX. mean, call annual terms end in then of would I sure. it's And about on to it love I back anticipate question, think talked going honestly, boy, decrease

changes, in a and greatest SG&A SG&A what were QX, And to we But decline, I that the say, than is much we're continue going okay? actually right? fantastic. reduce did see I to say would the edits you'll we before found quarter-over-quarter. efficient to the more it's made So We decline want you'll see QX, QX, decline but is we and

decline. is R&D, going to likewise to continue then And

think costs and Washington, some you the Hopefully, Texas related. about scaling there that's will of year, be it, will that the half when be R&D second However, helpful.

Craig Hurlbert

and Ben, that. follow I'll Go then Go on up ahead.

Benjamin Klieve

on if So you Craig, a let that any was that, have very couple Otherwise, questions. comments have me helpful. other mean of know. I please I do

Craig Hurlbert

is organization inherent and the platform when comment Kathy that there's and has get multiple Texas, Pasco that I and all whole our of we're organization, across efficiencies And focused lessons a that Montana sit come I facilities. on is calls Georgia, California learned these really I different in -- really that Yes, just the sit quickly and the facilities We think efficiency really applying seeing actually. transitioning think on with my and them. facilities, taking GMs on across whole you And and the board.

costs. Getting case, out. cost we're this about In talking

just happen, to to until And something continue that left that's point to get that to to the a over out. knew So Ben. maybe extent. was we're Thank I to not think question. going that's Appreciate see going But time to we you continue to going get there's where the but nothing you, to happen. some degree,

Benjamin Klieve

Craig. big couple from other of One picture. A me.

your EBITDA and elsewhere? in you from footprint that your from guys in positive coming contributions You line EBITDA adjusted or have profitability the number 'XX. noted sight of achieving with new early Midwest expectation this any imply that to of ramp they facilities existing Does as facility not

Kathleen Valiasek

It's Craig. our take I'll one, existing That's question. that a with great footprint.

Benjamin Klieve

for have and a so. kind in source facilities of the been I'll get last year Perfect. last X issue of queue. or The And back California for then persistent me

Any You X last of didn't just kind updates lingering to out there's from the you of us those be state kind issues those of give today. to here X of mention year? facilities? here they state a around work fix Are would facilities California anything operating Can done be great. still expected, the as of out

Kathleen Valiasek

sure. Yes,

which nowhere XXXX. said in again were in think We did near meet QX is of terms budget that it have was what did for call revenue significant I I which So rains we it of QX in XXXX, of the California, fantastic. in year-end to our going we on QX,

say going the impact would through to continue And it lot a and to the of it's is of going said, better, decline maintenance to like QX to but decline of we've I spend will is XXXX, year. We not repairs spend a and facility continue large performing a the was CapEx better just rest decline. and But QX, that. okay? or perform like in the But saw there anything

Operator

hand management. further are I'd to time. at questions to There like back this no

Craig Hurlbert

we so hard was in to Bounti I dinner you, And a entire -- Great. inspiration. grow you Thank Kathy thank the We everybody team we further much. forward I their thank progress Gavin. dedication Thank just And I work. doing and as in joining And progress had quarters. with we Local you personal just know everything would and and like and like I us with working the and tell you're Pasco. updating can would all is note, today, much, for great on people that, a absolute scale Local these upcoming It an on you to appreciate the we're to Bounti's making. look so business for our

Kathleen Valiasek

Thanks, everyone.

Operator

That you conclude does for participating. Thank today. conference our for

now disconnect. all may You

Local Bounti (LOCL) 9 May 242024 Q1 Earnings call transcript