BELVIDERE, N.J., Aug. 10, 2023 (GLOBE NEWSWIRE) — Edible Garden AG Incorporated BB #:336701, a leader in controlled environment agriculture (CEA), locally grown, organic and sustainable produce and products, today provided a business update and reported financial results for the three months ended June 30, 2023.
Mr. Jim Kras, Chief Executive Officer of Edible Garden, stated, “We are excited to report record year-over-year revenue growth of 41.4% for the second quarter of 2023. Edible Garden has always stood out for its consistently high level of execution, a feature that sets the Company apart from our competition. During times when other companies in our industry are struggling, often contracting or even going out of business, Edible Garden continues to expand its reach and gain market share. Edible Garden has regularly executed at levels that surpass those of our competitors. Our order-fill rates across all retailers and distribution partners regularly exceed industry averages, illustrating our commitment to outstanding service. By continually exceeding our retail partner’s expectations, we believe this level of performance firmly establishes the Company as a strong, reliable provider of sustainably grown produce. This has enabled the Company to build its distribution to include the largest names in retail across the country. We believe that retailers that are already a part of our distribution network, as well as prospective retail customers, increasingly view Edible Garden as a reliable and trustworthy partner and are seeking out opportunities to strengthen, or initiate, distribution relationships with the Company.”
“During the second quarter of 2023, the Company began implementing a deliberate strategy to focus our efforts and reallocate resources toward more lucrative customer and partner relationships. We saw results from this strategy shift, almost immediately, as our gross profit increased by 168% compared to the same quarter in 2022. Moreover, with the launch of Edible Garden Heartland in April 2023, we anticipate even further positive impacts on our margins. We attribute this improvement to the expanded growing capacity provided by Edible Garden Heartland, enabling us to decrease dependence on third-party providers and shift previously outsourced production in-house, actions that we expect will result in higher margins for the Company. It is our belief that the facility’s potential to support up to $20 million in annualized revenue presents us with the opportunity to vertically integrate our Midwest production capabilities, further enhancing our operational efficiency. In addition, the Company is experiencing growth across all segments of our business including leafy greens, floral, alternative proteins, and Pulp Flavors, which has begun scaling and building inventory for a near-term retail introduction.”
“Furthermore, in the second quarter of 2023, in response to the rising demand for our potted herbs and their suitability for our consumers’ home gardens, Edible Garden broadened the distribution of Garden Starters to all Wakefern/Shoprite retail locations across the Northeast. This move follows the introduction of Garden Starters at Meijer retail locations in the Midwest just before Mother’s Day. With 35% of American households cultivating some of their own food, Edible Garden’s sustainably produced herbs and produce have become favored selections among consumers aiming to enhance the flavor of their meals. By positioning potted herbs in the same supermarket section as the cut herbs and sustainably grown produce that our customers frequently buy, we have increased accessibility and convenience for those interested in adding Edible Garden potted herbs into their home gardens.”
“Additionally, we broadened our relationship with Walmart to offer an expanded selection of Edible Garden’s SKUs at their Northeast locations and began distribution to their East South Central U.S. retail stores. Walmart, the world’s largest retailer of fresh produce, has steadily been one of our most significant customers, and our relationship extends beyond merely supplying produce. Edible Garden is an active participant in Walmart’s Project Gigaton, an initiative launched in 2017 with the goal of engaging suppliers, NGOs, and other stakeholders to reduce or eliminate one billion metric tons of greenhouse gases in the global value chain by 2030. The Company has also been honored as a Project Gigaton ‘Giga Guru,’ reflecting our unwavering dedication to our Zero-Waste Inspired® mission and our leadership in the Controlled Environment Agriculture (CEA) sector. We are confident that this expanded distribution relationship with Walmart will positively impact our revenue and cash flow in 2023 and subsequent years.”
“In July, the Company unveiled GreenThumb 2.0, the latest iteration of our sophisticated greenhouse management system, taking a significant step forward in automation technology. This enhanced system greatly improves our dynamic forecasting abilities, utilizing real-time data with increased efficiency. This more precise predictive capacity is targeted to foresee our distribution partners’ requirements more accurately and adjust our growing strategies accordingly, factoring in year-over-year patterns, sales momentum, and seasonal variations. A noteworthy upgrade in GreenThumb 2.0 is the implementation of a real-time inventory system that carefully monitors all raw materials, work-in-progress, and finished products, allowing us to examine our costs for each component involved in plant growth with a greater level of detail. We believe that this granularity will be instrumental in managing our expenses.”
“The various initiatives undertaken by the Company since early 2023 are beginning to be reflected in our financial results. Our record revenue for the second quarter, along with the increase in gross profit and profit margins, suggests that our strategy is working. We believe that continued execution of our strategic plan will enable us to achieve our target of positive cash flow on a quarterly basis before the year’s end.”
Financial results for the three months ended June 30, 2023
For the quarter ended June 30, 2023, revenue totaled $4.2 million, an increase of 41.4% compared to $3.0 million for the three months ended June 30, 2022. The 41.7% increase in the herbs, produce and floral business was primarily due to the Edible Garden Heartland facility commencing shipping at the beginning of the quarter and the 39.3% increase in alternative plant-based supplements revenue resulted from an additional flavor SKU ordered by a customer for every store in their chain.
Cost of goods sold was $3.7 million for the three months ended June 30, 2023, compared to $2.8 million for the three months ended June 30, 2022. The increase was primarily due to additional labor and materials required to grow the products sold into the retail channel.
Selling, general and administrative expenses were $2.4 million for the three months ended June 30, 2023, a decrease of 12.9% compared to $2.7 million for the three months ended June 30, 2022. The decrease was primarily driven by a decrease in compensation and benefits expense that was partially offset by the costs incurred as it relates to the ramping up and operation of Edible Garden Heartland which was acquired in August 2022.
Net loss was $638,000, or ($0.24) per share, for the three months ended June 30, 2023, compared to a net loss of $4.8 million, or ($20.44) per share, for the three months ended June 30, 2022.
The complete financial results for the quarter ended June 30, 2023, are available in the Company’s Form 10-Q, which will be filed with the Securities and Exchange Commission and is available at: www.sec.gov.
ABOUT EDIBLE GARDEN
Edible Garden AG Incorporated is a leader in locally grown, organic and sustainable produce and products including organic leafy greens and herbs backed by Zero-Waste Inspired® next generation farming. Offered at over 4,000 stores in the US, Edible Garden is disrupting the CEA and sustainability technology movement with its safety-in-farming protocols, use of sustainable packaging, patented GreenThumb software and self-watering in-store displays. The Company currently operates its own state-of-the-art greenhouses and processing facilities in Belvidere, New Jersey and Grand Rapids, Michigan, and has a network of contract growers, all strategically located near major markets in the U.S. Its proprietary GreenThumb 2.0 patented (US No’s.: US 11,158,006 B1 and US 11,410,249 B2) software optimizes growing in vertical and traditional greenhouses while seeking to reduce pollution-generating food miles. Edible Garden is also a developer of ingredients and proteins, providing an accessible line of plant and whey protein powders under the Vitamin Way® and Vitamin Whey® brands. In addition, the Company offers a line of sustainable food flavoring products such as Pulp gourmet sauces and chili-based products. For more information on Edible Garden go to https://ediblegardenag.com/.