Edible Garden (EDBL) 1 Apr 242023 Q4 Earnings call transcript

Greetings, and welcome to the Edible Garden Fourth Quarter Business Update Conference Call. [Operator Instructions] question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Relations. Investor of Ayvas Ted Sir, you begin. may

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

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

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forward-looking our future and reviews future and and words of expressions quarter than contain of a negative to strategy historical Kras including contained call other this for are in financial results Mr. and year and facts and statements update, conference words ended the statements. statements remind we call, company's for this identify results plan, provide The could, are statements expectations terms XX, aim, in other would similar statements. will like All XXXX, that operations forward-looking statements. believe, expect, business and operating the position, operations anticipate, the regarding intended our may, plans conference strategy of of project, such to Before everyone forward-looking December may terms

discussed believes described and of trends projections statements as are largely the financial on based December ended adversely and and company's forward-looking Form forward-looking report several short-term anticipated the assumptions, or year for uncertainties those may these forward-looking actual and to in These risks, uncertainties about it may in of the conference in long-term the needs. and and operations, and statements. operations XX-K company's not strategy, affect risks, differ the XX, call SEC, events including future and results business XXXX. and its materially from annual financial the statements expectations subject with current assumptions the circumstances condition, that on could and Because filings forward-looking are objectives company's implied These results the events occur,

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

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

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

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

network revenue. year the reported extremely the for XX.X% in drive along quarter. are our that revenue the past an order robust We fourth with the in leverage with This more to increase revenue XX.X% in we efforts for pleased growth annual year-over-year to our of impressive increase even underscores our over distribution XXXX, effectiveness

outstanding success achieved service network thanks position, retail two-pronged, expanding to our reliability. is In XXXX, driven to adding our with in and industry partners further by we product distribution significant offerings strategy existing growing areas, both develop partners. market and our Our new our

seeking go-to products. partner for has and organic Edible a result, Garden become sustainable trusted a a for As retailers source

improvement is the margins. of and XXX financials basis margin. gross with We in to Garden points gross to future in reflected Moreover, profit our to years the to company by fourth gross the our additional higher-margin X.X% our in by operations by in in margin revenue to of in opportunities that come. nearly increased points X.X margin increase XXXX identify profit the The further management XXX able to believe in achieved the margin our continually boost to will the we basis our products add XXXX we revenue, to double XXXX strives gross increase operating quarter. line, product of and Additionally, continuing in Edible prudent X.X% our be profit profit profit

of our to sustainable range New Edible enrich our Garden XXX herbs and have Tops broaden recently leveraged Friendly Vermont. platform York, We with and stores to Pennsylvania We products. wider partnered our further introducing Markets, across

making Giuseppe’s successful to Additionally, region. division partnerships produce herbs our now and Produce Northeastern footprint forward consumers carrying in New New locations Garden new step in RBest in a XX more their Edible fresh marking a is These Uncle further significant States, our the in sustainable Marketplace, throughout York of the enhance United Jersey.

assortment, and and In introduces Garden in of innovative shelf. of The agreement a our available the displays February, elevate fresh the diverse prominence to our cut visibility wheatgrass. on including offerings, basil brand's their retailer leading potted a herbs, U.S. Edible our products to cut range retailer This with stores. entered partnership fresh goes fresh we broaden merely product designed selection beyond a into X-year it encompasses increasing food and and expansion

brand expanded simplify affordable our Edible and enhance stores to our satisfy our flavors This our with for experience our belief a Nutracom new at notable flavors vitamin This protein, high-quality for excellent collection, retail These value quarter innovative ongoing is better to price. through from providing with facilitate as In in while amino its flavors. partners to acids fourth nutritional X at these deepening collaboration whey of the reputation bolster whey customers. offerings relationship flavor Whey initiatives maker their success XXXX, Vitamin addition our for requirements expansion. nationwide our underscore with expected that and Garden's blend will supports the commitment the Meijer shopping aiming we our of

which Additionally, business rewarding allowing we operations dependency flexibility enhanced led production and control potential impacting our us for sector are a advanced which thousands technologies confident while our We our overall greater the gardening tens proprietary, our in Jersey Green company incorporating forwards, Management the significantly on profitability. Garden has some Michigan, Edible to has the anticipate fall that Heartland ornamentals of House effect season. New metal as investment the of at ship have contract increased a positive expanded this been decreased our the System, just margins in Moreover, company's profit of and capabilities the greenhouse and on in operations, efficiency chain, to improves supply of time or in allowing such our from fall will profitability. from line

in projected with follow for shelf chilly milestone category gourmet sector company which based to a from Expanding sustainable by products, $XXX us XXXX. condiments billion company longer $XXX XXXX for it Edible products sauces enter of which major A and Garden billion to was a in the over sector, provides the XXXX is as the collection sauces higher-margin to product the was and of with allowed cutting-edge introduction our -- go pulp, into global life. significant new

already which the additional locations. produce already brand products provides located are that as be to that of are Edible the product carrying our -- it the refrigerated with adjacent visibility in in will Garden section they're addition, sections, In retailers their

December joined carrying pulp which this for available After at in products, as Within introduced locations locations retailers our of Most market in the line many list The Target's that network in Markets, significantly and distribution stores growing across Illinois. Edible expands locations retail of Wisconsin our to to XX are all markets. partners divisions box launch now the Garden the and with retailers Target across expansion now a pricing. Foods XXXX. XXXX, by we Southeastern recently, as new locations Woodman's in and the time, marketing Morton a Garden Whole short rapidly nation, geo-targeting, is Greater several now launch carrying spans retail Mid-Atlantic have out new area big Southeastern rolling Williams, Metropolitan over at Pulp pulp initial X,XXX the adequate we added Louis major Edible and promotional an robust and area; partnerships the will York XX St. retail across well metropolitan pulp retailers. influencer New support including sampling, products. locations XX Dierbergs campaign market,

confident eager customers We Bold to try USDA that are explore to the sustainable product Bland be in organic our will once sauces, offerings they line. more gourmet

and the overall. In both boost Given over KeHE Target's encompasses early across Edible is and Garden announced product independent now anticipate e-commerce visibility chain of distribution grocery specialty product we specialty pulp natural Distributors, network stores, year, XX,XXX America. line brand expansive organic March our of products line. product collaboration carrying other natural that growth significantly retailers of fresh stores, retailers distributor this and we this and KeHE's that premier nationwide and our food will the presence, pulp and North

patents, flavor launched aficionados. In flavors. Trademark that to positive the January distinctive homes. enjoy our Thanks country, has with notable fill patent gourmet first XXXX, rates our of the e-commerce system led the pulp company online Bold Patent pertains system to peppers the The GreenThumb, sauce from enhancing web-based now our chain, we enhance maker to Bland reception and across accessibility new their to access by the unique alongside directly. This Office supply site broadens Edible a can as year, flavors to underscored move greenhouse enables shipping planning X e-commerce awarded significantly pulp demand growth. into Customers pulp or and Earlier management sales improved to purchase sauces the our enabling our we reputation enthusiasts our Garden which turning consumer this to U.S. platform. has overwhelming

This was system. the advanced third for awarded this distinct patent

has life, game patent for extending Self-Watering company, second our highlights commitment dramatically and freshness a retailer proprietary reducing our watering at the to innovation technology ensuring plant This shelf Display been display spoilage outlets. to The technology. technology changer

as retailers their leading with plants company's peak, a we minimizing a and leading-edge role the testament waste and These Zero-Waste mission, agricultural are as displays Aligned industry, to profitability, its enhancing sustainable tech in the to to innovation. efficiency these ad development delivering are mission, operational at waste commitment our advanced deployment self-watering position technology. these Edible unwavering technologies Inspired showcase products driving expected patents customers. all Edible demonstrating superior highlighting in patents, leader Garden's to the to commitment further and Through such X Garden's of inspired

various company Recently, Fund cover awarded training cost Department Michigan Jersey and our Michigan. expenses the Works! several logistics. cost New by overseen supply by training on Belvidere, Michigan, Talent the support Grand facilitated in the greenhouse Michigan, designated granted chain at and was staff crop Rapids, in related Labor management, the facilities to cover the Grand the was at funding Michigan for organic In facility to grants by company PRO and Heartland transportation our of Rapids, like Going Opportunity and to Garden and This skills is Edible focusing essential certification Economic

Administration, a company safer to received grant we research creating reducing the Safety help of Additionally, certification a grant we've organic will expenses producers and handlers, Michigan Heartland, Agriculture risk certification obtaining among States and Edible the financial reimbursement collaborations. healthier to secured In underscore related Occupational in safety our handling and the Garden by the to grant our issues to organic This and processing Farm managed program Department agency. which thereby addition to offering of a and health Jersey, valuable Organic by workplace was assistance United from environment, Hackettstown The awarded commitment and Service the are provides assist certifications. accidents grants food cover employees. Health New work and

a in processing USDA We are technology in New explore of produce. the Technology, EPA the the project on fresh Institute safety also and impact engaged of to nanobubbles York and

tackle of product to highest upholding Department financial quality Officer, and of highlight who December lines. collaboration call fresh joined associated with the months Garden safety across the challenges our food our year These University's Auburn dedication food our I our Dafoulas to standards Kostas review produce. Interim who the for Chief like ended turn Additionally, with collaborations Horticulture and XXXX, the aims X results will Kostas? over to Financial as recently would safety XX, now to Edible

December expanded an good $X.X revenue million Thanks, Starting the everyone. for customer the of higher XXXX of Heartland our reported to existing million result and was facility, compared XXXX. the million, product sold fourth increase XX, the XXXX. XX, from product of the fourth driven and Despite XXXX, COGS, labor The $X.X the and ended higher quarter. XX.X% quarter rates lines the for costs same demand Selling, stores. for and compared million XXXX increase staffing Cost of suppliers, $X.X XXXX general was months margin of the increases in our for base, expansion footprint retail key charged in by costs. the due by for comparable build-out costs year-over-year. of months $X.X results. expansion This of company X in increase higher we partner was to administrative with Jim, and inflation morning, ended by in to were of packaging to compared The X.X% quarter increase million quarter December million the related X expenses $X our our goods to $X.X the

of was XXXX. the loss impairment compared of ended for legacy build-out our for ended professional X $X.X net to million services of or $X.XX was ended loss our expenses the acquired a IPO, $XXX,XXX $X the The $X.XX X with December charge related facility. to a the XX, loss months share with costs per million related Heartland along XX, decrease assets included months the primarily to reduction December net Net December share company. predecessor XXXX, associated of for a or by onetime our from XX noncash a write-down The also driven quarter in

a results. herb products, turning $XX.X of was growth of $X.X million, million million increase million increase by floral $XX XXXX driven compared and to Now $X.X revenue XXXX. of The organic the or attributed new totaled mix full and Revenue in to customers. our year sales produce XX.X% to an

was for These supplies profit less profit year $X.X XXXX during of ended facility, $X.X transitioned materials our million XXXX. in a increased versus were in XXXX. consumer $XXX,XXX December of decrease shipping by revenue million Garden year in to XX, reliance the XXXX, XX, points sales growing due $XXX,XXX XXX ended our year XXXX December flagship XX, general the of supplements the XX, costs ended higher to and X.XX% and increased primarily freight XXXX, decline goods Edible Additionally, increase Selling, driven which of herbs Gross products for on December to facility. XXXX. to Cost year was and increases XXX% to sold for to revenue Heartland X.XX% was administrative and The basis $XXX,XXX offset raw costs to year. compared contractors improvement were in lettuce by Edible margins margin December our the vitamins Gross million operating XXXX. attributed primarily of Garden for ended during million and December the XX, of compared a year compared for compared in demand. in for expenses costs The $XX.X and by $XX.X $XX the last ended million XXX,XXX to year $XXX,XXX for or increased for XXXX, XXXX. to the $XXX,XXX

Heartland acquired for to company. net XXXX. to providing incurred year and costs customers also additional from by $XX.X the on in driven loss conclusion, improving for what's growth, XXXX, improving was share and included the that to We've adjusted Net of operate focused XXXX XX, come year. I'm continue XXXX, facility. products excited December $XX.XX the of In primarily per $X.XX share our while the financial of to loss XX the to we focus ended while amounts million loss a our to compared or company. XX, in a expense Please was share we're performance per on increase have assets profitability, last or demonstrated $XXX,XXX note, impairment related Net months The ended all onetime Edible to value split. Garden million stock per been reflect $XX.X legacy noncash for December predecessor outstanding

open please questions. Operator, the call for

we time, session. from is will Sherwood first a Group. with At this [Operator question Our Maxim question-and-answer conducting coming be Nick Instructions]

us an Heartland year. the integration you Can facility? and on the build-out quarter the the of and on provide Congrats the update

significant in volume. largest now our run Crow. new of product help while already operating XX facility, the Jim currently that grown not we've operations, Meijer, put to greenhouse. our that's to being is significant status the we in one some cost GreenThumb we'll XX the customers, fully a be us it's shipping The which only our increasing which units. the [Indiscernible] right have investment. made the pack help technology in last amount Nick, deployed machinery is to state-of-the-art We've days just April, a our house, higher-margin manpower It's more ship in bringing we to lower a ability of currently considerable In

acres vertically May. April, start there. to X being of the into in that will we'll benefits have see That We and some convert of integrated in

be handling that's facilities. our product operational in we'll flowing our So all weeks through us with coming next fully the XXX% Midwest in of the few

So full as our deployed. GreenThumb well as once again, processing X operational, software acres fully being overlay XXX% deployed

then And kind switching Awesome. of gears.

is the mentioned first being this and in is of these plan? an the a the Or -- near-term more Are more What working this other retail been times. to substantial of of your at partners? is recently. one during protein the You where with your you're of It's SKUs? and kind this just releases increasing maybe medium-term rollout locations, kind you is accelerated of Meijer Meijer sold beginning opportunistic powder the mentioned earnings you're

a into high Vitamin other to we those time. there these then the at product started of brand that vitamin and process. a performer more new value had that And partners through which to cleaner in some on national will line working Heartland legacy the stores, with at we in that go of augment labeled for see Meijer kind We're and with the now is Meijer. we of audience. looking in ourselves quite on retail wider push already are really been price more product. to and Well, out has business being allows presentation our whatnot opportunity well performance platform, as that and a push contemporary accelerating Target something of some that's We're have. leveraging doors. Walmart X,XXX-plus We've looking of this from focus Whey, We've leveraging likes facility, the and business whey sort completion a that rollout distribution [Indiscernible] being It's and potentially us

we strong as benefits state-of-the-art well as have one very are in We've experts of They developing these got the here with products flavoring a has Nutracom. -- formulas. relationship

drive them better-for-you as well is something us more partnering the as with better So contemporary going second the a that's assortment leveraging relationships in the order to and initiative big margin, higher of in year to products with going this into be half margins.

final can us provide on the then And is, you Understood. extensive supplier... introduction and sourcing my more question and EG of the details Direct any

to Yes, that leverage EG Direct to really EG again, be we to thrust Direct once The start have. of the continues developed. is relationships

the that margin, higher ideally opportunities. to potentially don't that an We based with as into really we third-party only have performance. necessarily end and things want sort up use We retailers on arm products, platform. bring national, not that things relationships We're of that our but really source manufacturing that good the of our for international business helps we looking or at grow

We've a work higher continue at some relationships overseas already started the utilizing from there to margin. start on product to that. bring we So in to

queue. answering all quarter, of on Congrats return to again the you Understood. I'll questions. Well, the for my thank and

is from Our [Nicole is who coming next [Operator an investor. question Kaufman], Instructions]

Congrats quarter results results. fourth XXXX on the and

what and flow positive? past, company drive Can doing company guys talked there you flow cash you're the to discuss efficiencies you getting positive. So get have in about the the guys cash

Nick, well one, this in mentioned our production more invest I -- fishing it as herbs. with lines speed, -- continued take to to higher Kostas. I'll and our as on Sure. We've technology

considerable I that think will the well the right grower drive a in will as that benefit be us in the margin contract of as help part our don't business dramatically we the business towards Midwest of integration cash help flow now coming that's contribution from that. of out profitability. that That's

and the just we've said, to continuing to with, to of we because more better well. just like iron reduction that last think issues running made was up think and the out more manpower some of lot I trying invest the saw the you And better business, tweaks things lines, year with I in a of lines us and efficient in automated. to get with run I had what being to continue scale

towards some think you'll at flow see across overall I just cash future? I the supply chain, whole which us in an lead optimization the being point will think positive

gross gross you moving And that's attribute almost margin, do what in And how profit doubled Jim, which that your profit further your forward, helpful. regarding then would margin? success you XXXX, increase to?

to want take you do that one? Kostas,

can Nicole, question. I add on and for you that, can thanks start to it. the

the the continue and our facility. mentioned call Heartland of beyond less manifest this on One the is reliance things that's to year of itself contract we in growers, and with going earlier and onlining

growers So we to our of those seeds, structure much profitability the that cost that's going essentially. cetera more reduce the our of and et and kind contract supplies over and cost less on us reliance and business control purchase materials gives raw for

we grow facilities and continue to mix I the more Jim higher to with products profit. those than Furthermore, continue continue And sort our we're product on results, gross we'll to stable, themselves Jim, less reliant kind manifest financial free of we're in to and that they more add those X the on expect our our things saying, drive so to think through plants that growers, business issues what feel general. rely that. product somewhat. seasonality to looking as add shelf margin drive of through potential to continue rather to and of internal kind as contract we to through should was So product online drive are margin to

factors, these a but which nice have our with assortment which -- higher you of great but margin, that see the you more base so the products, shelf-stable we sums you'll pulp, mix, that It's better mean, deepen margin. that the relationships that floral it's base business, move impact and with bring widen margins at, combination with in was No, And as in produce the we widening and and is we're only I products I up. also that more not dramatically vitamins. forward we the that a it items have what as will see think the see of

sense. makes That

to a on minute, category, for new categories pulp into the be to so product enter? would touch entry are with any new And this other product you exploring that looking you

we so Once I what products looking more known prominent big with in Zero-Waste with with permission that products of many in their to category thing that, so be as to promise our known of fit that doing that less, us and a to we're that brand sort have. with mean for. relationships fresh retailers of condiment again, this and link produce we're introducing Inspired of and lead And being Yes. I mean, section, that sticking brand we at we're persona. purveyor are this gives looking of drive the new products develop are going these kind within being box that to year

you're to bottled, of good type for that self-stable, type see going being And and products. more fresh more as we're -- a kind innovation for of go and into more you introduction known product that more of from sustainable company

the some I over you'll we part So as business. on up of underway, think the answer. is see of and quarter the the yes that stuff next would that get exciting be And ramped

forward my of additional on any pulp is, sales provide And that. last how can color you are Thanks, looking the Jim. question going? I'm to

I Obviously, I and specifics, is the can't you well this is that what mentioned. as get can into tell as release but in script press our -- I

to on drive see just retailers XX,XXX notable KeHE a coming days the penetration response the continue that positive one We're access to We to with line. relationship. drive last very we in doors. continuing XX the with a product to continue is to board. XX And to

And think product we've got is think so it's how this line bullish we're -- on do going going to to where go. I and we

the again And great. Well, congratulations results. on

very much. you Thank

time. at questions will back further for no remarks. it have I we line the management hand this any As to closing on

about Thank for believe to revenue growing you our We again us growth. line product joining continue our our control. these and strict and sustained are I paving retail thanks the future, elements optimistic to for diverse today. continued are network, success way be expense key to business'

providing Our focus to to our months. progress and we updates on as coming discipline Thank on positive. financial cash efficiency look strategy in aim flow We the you. operational become crucial our is to forward

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

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