Edible Garden (EDBL) 13 Nov 232023 Q3 Earnings call transcript

Greetings, and welcome to the Edible Garden Third Quarter 2023 Business Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Ted Ayvas, Investor Relations. Ted, you may begin.

Thanks, Tom. you Conference Edible Call thank June Quarter and XXXX XX, and morning, for Gardens' joining Ended Good Business Update.

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

morning, me. operating for Earlier company's is on The months press the the June or website, announced XXXX the XX, release September -- company www.ediblegarden.com. XX, X its this results ended XXXX, excuse posted

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

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

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

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

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

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

over context that, now evaluate to to by turn Jim in all statements uncertainties. With of the company call and Jim? these made would should You the I the like Kras. risks forward-looking

Thanks, Ted. us everyone you and today. to joining Good thank for morning,

brand of We growth growth continue increase XX.X% channels, our quarter third growing of by reflects our to revenue for well recognition. in XXXX. execute strategy as as the on evidenced our as the the This expansion distribution

excellence setting continue standard the both We terms dependability. leader be a industry, and service, in to of in our

enhancing growing number strengthening Edible network products. The our retailers company retailers, fulfill result, an are new current as with welcoming is by and our Garden requirements a of increasing retailers to organic distribution for As their ties thereby as sustainable reach. choosing well

and we network Garden has Michigan, Grand Heartland in Illinois, Market distribution to Edible in which the registered across Woodman's addition our leverage introducing in in Wisconsin in Woodman's Heartland's Edible facility produce Midwest Garden resulted Rapids, products of Edible to Garden with and stores launched retail our us collaboration and its facility April allows presence our instance, in For XX XXXX.

retailer Additionally, carry Friendly Garden pleased to offering our at the join their major we Friendly to as will to sustainably Top our is Markets our significant high-quality Edible all be distribution markets are The the network and latest brand, welcome growing, range products Tops of of addition available as XXX South Edible produce East, herbs. Vermont. In locations New as well Garden's locations the relationship company and across its of in within our previously region the Walmart's expanded the SKUs broadening additional sustainably retail Walmart provide States. United York, as as in with across to Pennsylvania the growing Central reported, stores Northeast July, at reach now

of and company network additional to organic continued routinely retail as Ozarks. locations pulp network. The averages. locations, order competitors revenue We Carrots expressed company's focused momentum, the also others. Direct on into substantial company fulfillment Williams our our move which distribution sauces. representing in as area all Louis company's brand's network, flavorful, produce the quarter, outlet and market Bold. Building such new a Sauces up from Garden marketplace. the retail plants on customers' leveraging Direct, fermented third our on substantial content also Missouri's X,XXX specifically rollout gourmet sourcing for believe in area both and the EG the Bland launched metropolitan the to to essential Broccoli, and partner to its could by established garden excellent into division potatoes, across our selection alignment We New Deerberg's as time extensive pulp existing prominent pulp XX XX profits its of their its Garden greater Garden pulp company's gardening the as venture an new partners partners edible EG pulp potentially Rapids, have opening by metropolitan exceed streams Edible produce are for distributing infrastructure. Grand and of of with products in the York high-volume their well the retailers These retail supplying and our demand shipped as gourmet distribution across from season. in the Michigan for ornamentals fall of City influential a have among products, distribution shipping brought the this Direct Morton box line, big fall network. location All outlets serves the as that best over Heartland capitalize tagline being St. with in view revenue the strategic introduced began network, rates, just Edible effect EG sustainable We York by now sustainable initial Lake have at industry evidenced has distribution New line Edible on facility the facilities line consistently new introducing outperformed these

Midwest. our Garden's available implementation like at freshest, The and acquisition Patent a and of to revolutionizing management our greatly maintaining across plants innovative retail Meijer waste its and also an in cake these patented These our plant their display, innovative settings. formula These to Garden's out the flavor to maximizing as innovation. line proven proprietary Trademark with disposal. The minimizing delivering of Edible greenhouse Garden's collaboration at supply orange believe advanced company Office retailers to broader enhance complex and protein Initially maker company of started Whey focused to implementing distributing creamsicle at spoilage philosophy and optimal as we flavor supports efficiency, in in all has flavors in offering The self-watering also with all national Edible at chain deployment. product our GreenThumb exceptional of notice be products will Edible the showcase high-performance muscle new steps formulas. technology that and Whey Following price. affordable known value, reinforce recovery our displays were this for overall introduced to supplementation last Meijer The company superior line Whey our Vitamin reducing ice integrated a new acid Vitamin way image the allows stores its superior and cutting-edge is assets Nutricon. cutting-edge year, boost the features a consumer. from changer, led addition continue Heartland partner, our proprietary locations, case. display the while stands technologies to flavors U.S. Vitamin the a flavors our success cream, well-being, cutting-edge received additions, of develop providing self-watering multivitamin freshness techniques. our The rate growing We for allowance recovery benefits extended, our the innovative for dedication of to amino product has these to X game line, advanced life underscoring Whey

that Given at the Vitamin history Meijer, new appeal. will these successful we're enhance Whey's optimistic brand's further flavors

certification near Certification to rollout future. Recently, market, launch grant and Farm to produce. Jersey the local controlled cover crop Our to Service to by flavorful of from program as and most product the quality company in is environment support at organic Agency the USDA Belvidere, the create sustainable we Organic aim expenses to awarded way and was is organic and New continue agriculture managed nationwide facility. the prioritize a and various we appreciated valuable plan a protein lead on the This the industry related highest

Program Edible Garden from complement our to and the Agriculture and not employees also safety, dedication safety Michigan grants specialty Development, leadership West food at but Crop of undergo only Block Department ongoing Heartland training. These will falling collaborations. research and the of Michigan grants Rural Additionally, works our our additional facility demonstrate food

our on York such New the food from of our the commitment as safety standards on of produce, combined in the fresh how to Institute as safety fresh processing listeria. impacts Moreover, University's Auburn quality food produce. These products. USDA food with EPA produce, is maintaining of related our Department focused such food working Technology, reflect currently efforts are the with and of nanobubble safety highest and issues We fresh -- to related and technology Horticulture to produce addressing partnership contamination

dynamic our the In a of upgraded system efficiently. in automation July, real-time our unveiled This major utilize leap to representing management GreenThumb X.X, latest data iteration enhances technology. Garden forecasting forward abilities more greenhouse Edible system, sophisticated

the distribution more requirements adapt to of growing partners and strategies our our is predict accordingly. goal Our accurately

the I'm offering our the careful and our retail management Overall, encouraged of product the business, expenses. network, the of by given of in outlook expansion our growth

positive As before remain our target expect maintain organic to and strong a year-end. we result, cash revenue on laser-focused of flow growth achieving

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

months $X.X increase in floral company morning. Thanks, compared the customer new sold XXXX, compared ended September and for primarily third herbs of the quarter saw business a -- our from XXXX. in existing September in growth from the good was ended reported and orders in million months X $X.X to XX.X%, XX, received a goods net for base $X.X for revenue received to due year-over-year the million Jim, X million orders of of partners. Cost increase, slight XXXX, ended increase $X.X and XX, produce from XXXX. reported XX.X% September the The herbs, with to a million distribution quarter XX,

We goods higher cost Garden grow to customers contract production as Heartland, resulted in which continue in up ramped use herbs for to our growers we Edible of sold.

to well August increase XX, incurred for was September the X the Additional material of and sold in of due general in relates facility, Heartland months ramping facility. million of Edible labor increase X the an to costs compared the to channel Garden expenses an the XXXX, contributed increase. Selling, ended the required to an it months grow retail increase acquisition for September depreciation the ended was into XXXX, the operations up $X.X The which and of to as driven increase also acquired XX, administrative in of products costs $XXX,XXX $X.X XXXX. by costs were as primarily as

September cut for of to loss Belvidere, ended increased of share to million XXXX, loss XX, or compared also the Edible the $X.XX September ended which X equipment $X.X months net we our million facility a per Jersey, of or share X $X.X for our $X.XX per herbs, increase was XXXX. months Heartland, XX, efficiency. We New purchased production and for intended Garden Net

the take a turning $X questions, the back to which to operator discuss would to successful in gross generated over proceeds. completed moment September, call public I in offering we for the Before million like roughly

questions. required raise could would with to capital financing an that? the call company's essential for step the that please I was important enabled open us growth strategy. up to assist The us like expedite to now Operator, you obtain the

Instructions] this morning Anthony from [Operator coming Maxim from is question your first Group. And Vendetti

you if a more wondering could little was I give us just just color.

of giving of think up from the is partnership new terms signed materialize products, Any see in margins then highlights that the start in contracts? And you partners. partnerships of of do as new you we gross You've following higher margins, you signed higher-margin quarters? that recent some the up? or these the get to in What lots -- Walmart that the roll ability to any you out other should

our new distribution, as category. and performance that build to the has our flat partners. that at to show partners themselves regards as top With success share out there company for that the like in-stock fill Anthony. the continue the key there Walmart, with them, think, shipper -- of as rates, momentum help lot Obviously, Thanks, of Meijer. a obviously, this in drive rates the is data we picker/packer, to has I the share which well market seen continued great a is the gate syndicated

that centers, see I as this to noted type their Word the our commitment partner, supply I hopefully, gets considering script us So -- look business, and at people from bringing turn continue distribution as in Walmart by of we'll at performance. in today, we herb awarded to more they think, out trusted us a to needs. were in industry additional as

long-standing I that, think you of that's evident supplier an and always relationships. the tops. someone challenge There's with having existing see

they talking when do is about businesses and evaluated Garden, Edible to, of say, to let's to -- you're move they before they looking an size process out are So that the thought so. well that

company real and pick we not when to moves it's the buyers usually, accounts. dislodging So you're a up quickly. credit do just new a make Because the competitor that do

rates, all performance, think, I and continue and in why growth bringing customer continue. in I the execute. of commitment, you that see I in-stock I cylinders service we And on So retailers, that think that and fire that's fill to type the partnerships think think you just rates, will see support, from we're the additional

to far products -- continue sustainable pulp more you'll offerings. As like and sustainable as the sauces that, products higher-margin see

the goods are products of always company. packaged consumer lifeblood New a

shipper, think I some of see have and Garden to products, provider company, for through next-generation EA of this grower vision can think strides help quality, can sustainability ingredients on of we only you and this the or forward, I with not evolution grow picker/packer, all an company I informed more the we're products shelf-stable this notion which just high go more a, from the integrated CPG idea towards is already living eye making moving big Edible of but grower -- think that that. of

that -- just then Or that fresh herbs? the some space hot Okay. you're and sauce, when into Great. on with produce? that -- base, when And mentioned you're the your than of selling hot versus how your so shelf negotiation you is Jim, sauce go customer produce does the a dealing different

to inventory assets that And call and product continue and Sure. most and Mike we have I quarter in is Great that investment example great buyer -- focus question. this we we that where really that we last buyer focus to produce. leveraging here strategy is -- that, to calls, on We of was a same The sales the that existing the on that. buys it sauces, the of of get always up. out the made developed this line scaled this but

And have that's our strategy so refrigerated part the of in is the to herbs. section, same produce this usually the salad buying buyer and this with is the the already buyer dressings

peppers Obviously, produce. are It's we're So an sold where it's from at. product. new extension a in

natural it's fit. So a

of kind And of away so entry -- we're the already shipping are to to because wiped for barriers us that in. buyer

may produce, opener be the areas only likes of and Berg's proven picked these not Deer it's totally country to up of Mississippi it and taking some able Metro be Eastern new, are the not with So -- entry where eliminated. a York a only and they but go to barriers door where of we're we New other said, in with and there have necessarily has pretty the I we're like our present much powerhouse, And of not it.

pretty good item new gotten a that's So it's -- unique some and traction.

we're on great pretty activity. future, already strides So and about some the new excited some we're making pretty

lastly, or Okay. Mike, answer free to Jim question. Great. feel And this

taken in terms Are pricing, the that? wait planning does Have terms this work that obviously do reset? our in increases of of you doing you to increases? of price at a inflationary in do you this point? have Or of able been companies you to until have that price number for So sort environment. How on taking

want you you Do me and can want, free chime to Mike, answer to that? do Or feel in. Mike? answer I that,

Sure.

We've to the our the through to that well price prices of hold worked at being to then our started of some worked to we prior as year help providing we've and think pandemic hard We partner I kind increases. prices increases were Look, this and take as because go really past you integration the take I we our year great prices of to company we hard back I this retailers. a accepted our price you value releases, was and held think IPO, retailers. through public to that know a look

obviously out put So to and grow. they were help willing in position, a to continue to us us

more a the -- what to strategically, that down can we bit brand, as inflation. bit, think think, do prominent part. few a I try become where and little price but suffers think on we we from increase It's I with I still warranted, the quite come

should provide profits to for I think exceptional think we share our what some in that. provide we sell I -- the retailers service we should do and we -- help of I know that the product,

items get performance that? Mike, on do to to fair try the that have market continue want pricing get in our we share anything bit push you basis we what an and shoulder. place discounts on we But certain bigger for account-by-account add know a think little to relationship the more where volume to our obviously, players. we I can power, So can can to -- based

No, sums increases no, QX continued that the kind of and mean into I it at effect -- the think started up. to I of in price into go some QX.

So and and we accept pass where to I on and increases the wages. grocery insurance, it had fuel in mean, plastic see it. consumer. to corrugated Obviously, want will chain it the and we've health

suffered everybody they to And well we've else out us increase. the does the as price give realize in So that retailer as industry. a have

So it's...

negotiate... an going It's

get focused we're ongoing that on is an look, the think I pretty And it think what's towards nice we're It's as is a we on our important competitors an negotiation. it's profitability fantastic in Mike for sure us is good with and making retailers Mike, we partner, think staying have i earned I industry. -- negotiation what company, have to relationships probably ongoing the stating on

continue And conversations constant And the that. But I obviously, understands to -- fair. negotiation, what to retailer those a go they should so And it's that be we push on. but always once get have to environment always priced, -- be dialogue, for I want them. good think, which kind is But again, best a and open it's think rare. of I competitive they we a think

[Operator question Forest your Capital. coming Pincus Nick Instructions] And [ ] from today next from is

I any or you've but on either clearly robust to you built channel? distribution own introduce very network, started a product. and you've another through touched other pulp, quarter. be new Congrats high strong the distribution products products, to this, introducing appears your very third-party on shelf-stable planning very you know margin, Are now which have

you for Nick. Thank question, the Yes.

platform. the business used it's to -- distribution drive produce continue now, to we've really right the So

been only or door We existing we count have we've that new over been growing. and we to opening accounts, our continue expanding currently store within Not count accounts have. increase X,XXX

So an new introduction you'll see of see is products. you'll what

which grown for with better we grower to of are pipeline, else an environment. as i'm next-gen we Whether really leader this, or this good on my something living shipper. being And sort a or kind on to better packaged, products who course, space do edible picker/packer, than We really the a in is have compelling opinion, that of pipeline, we're sustainably of you company. garden in of a there's eye a back bias since focused one are no humble this tied it's is very

We are USDA organic certified.

CEA a We the are space. in leader

interesting new called Direct, something items. see EG to to relationships. We've only again, also an not up be relationships going with you're going set the leveraging slate, commodity is which So sourcing current

rates rates So type all us in to field some with a us of those come software when to to you're buyers of products. supply the the these industry's a time company your and commodities your help relationships want and I perishable of and relationship eye to growers have since who some resources like industry, patented order continue in in them with leverage who deploy other Edible very fill on an to work you that bring may have highest you tough to with the some develop you you achieve of have work not the commodity Garden, growers and these fill to

based some really it's trust So this and performance product. of on move to

will we've just down been our that the of stock leverage and to finishing touches facility. facility asphalt its started laying processing in storage cross allow just we've on Having Belvidere, And so to pack on working Jersey. XX,XXX-square-foot fullest. New -- part and -- that that house us type We some of finishing

thrilled order I we customers I'm can we the take relationships a so the have think and do because on business to bit and our And appetite so. of in from really that about quite

to a full spectrum. products. recap not I'm going So of see just -- a new slate whole say whole the you'll to

good But think well platform and some the platform. Mike that and and what lot have. sticking they through name really I to you're we're leveraging big deployed, of is with going Garden to be items the always as moving pretty think a us see at strategy is from at we're coming can which we know forward it what with the that we will as the quickly that, and on that working distribution have relates commodity -- we the I to relationships, going as I distribution Edible asset the focused the move

to on specifically definitely how expand That's to up helpful. on And relationship, you follow the and can intend that? Walmart you that, elaborate on

significant Cut grow facilities to to we relationship them. more processing. quarter it We in our to we July. in an additional award capacity herbs order started was to believe both Walmart for And quite past ship The in a this nicely, -- increase based continues from DC on in got we investment that I put Yes. started

very to that its of drive the could The They've already fill we're with orders rate more. always they some account mean the We produce started nice -- to considering and from target. a talking for relationship as There, business hard frankly. they've increase their a have hit times. good a relationship, they're forecast. that at active it's and them we how continue treat their multi-SKU such, to to a that been we be has Walmart the partner, on for can XX% continue challenges about company laser-focused over we potential buyer. fickle a just turn holidays been game But and changer work business, forward. their I servicing us and in a perishable to knowing has

if they continue about We're with numbers onward the performance. we're And as execute doing will always favor that we and and excited because return expect what and have focused we're on. I so And work upward. on that's to what them. only they they

in we're should think with season. So figures our and now relationship crossed, we good heat But out in come nice the battle the shape. I of once a and right pretty again, peak

to for queue remarks. management are I floor time. closing there further the no at questions like would this to back And in now turn

for us again today. you joining Thank

about to you, updates have prospects Edible by and and We accelerating our for enthusiastic coming We the are at maintaining are the to revenue have as Garden the flow. the forward We look Thank and we as in turning encouraged day. organic our months. great a remain the progress on growth providing well to made committed corner progress positive cash business.

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

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