Orlando, Fla, Jan. 13, 2023 (GLOBE NEWSWIRE) — Kalera Public Limited Company (“Kalera” or the “Company”) (Nasdaq: KAL), a vertical farming company headquartered in Orlando, Florida, provided an update on the steps it has taken and its plans going forward to achieve cash flow break-even by the end of fiscal year 2023.
“I continue to be very pleased with the commercial side of our business, specifically sales and operations. Demand for our products is stronger than ever across all channels, and our facilities are operating better than ever and very consistently,” said Jim Leighton, President and Chief Executive Officer of Kalera. “The cost cutting measures we’re undertaking should result in total annual cost savings of approximately 74% in 2023 compared to expenses incurred in 2022. With these savings and the improvements in our sales and operations, we expect to achieve cash flow break-even by the end of fiscal year 2023, which is our #1 priority.”
To accelerate profitability at the Houston and Denver farms and to make configuration updates at the Orlando and Atlanta farms for efficiency and increased loose-leaf production capacity, Kalera plans to temporarily halt production at the Orlando and Atlanta farms, which will result in an annual run rate reduction of operating expenses of approximately $4.9 million until such time as the facilities are re-opened. In the interim, these measures will consolidate all retail volume in the southeast and be serviced by our Houston farm. The Houston and Denver farms will be near capacity with the optimized product mix for retail and foodservice accelerating these farms’ path to profitability. We have worked closely with our customers to ensure we continue with strong growth while we reposition the Orlando and Atlanta farms to better serve our customers with the right products in the future.
Our US Foods partnership continues to be a strong driver and an important aspect of Kalera’s commercial strategy. We are working closely with the US Foods marketing and category management team to launch new and innovative products that will drive incremental value and sales to the category for both US Foods and Kalera.
To save costs, Kalera is relocating its corporate offices from Orlando to the Denver farm, reducing corporate General & Administrative (G&A) expenses by approximately $0.8 million annually.
The previously announced divestiture of Kalera’s international assets in Kuwait and Singapore and the Vindara seed genetics business is underway. Operations at Kalera’s international businesses, including in Germany, Kuwait, and Singapore, have been shut down, which will reduce Kalera’s annual G&A expenses by approximately 50% annually. In addition, while Kalera has not yet received any definitive offers for the purchase of Vindara, the due diligence process with a number of interested parties is currently ongoing. By entering these processes and assuming a successful sale of Vindara by February 2023, Kalera expects to reduce its G&A expenses and operating losses in 2023 by approximately 65% compared to 2022. Expenses related to the business combination with Agrico Acquisition Corp. in June 2022 were one-time in nature, which will mean approximately $7.5 million less in expenses in 2023 compared to 2022.
“The macro environment supporting Kalera’s business model has been validated,” Mr. Leighton said. “We continue to gain new customers and new distribution points, and we continue to have the support of major retailers in addition to our agreement with US Foods. Vertical farming can and should play an important role in the future of food production.”
As a leader in controlled environment agriculture, Kalera is driven by our belief that vertical farming can play an important role in securing access to fresh produce for a growing world population facing climate change and concerns about the future of traditional farming. Through our proprietary technology, we sustainably grow local, delicious, nutrient-rich, pesticide-free, non-GMO leafy greens year-round. Our automated, data-driven, hydroponic vertical farms produce higher yields and, use approximately 95% less water, and 99% less land than traditional farming. Sold under the Kalera brand, our leafy greens are “better than organic” and priced competitively, always with the end consumer in mind. Kalera is headquartered in Orlando, Florida with farms in Orlando; Atlanta, Georgia; Houston, Texas; and Denver, Colorado, with additional farms under development. More information is available at www.kalera.com.