Edible Garden Reports Significant 27.6% Year-Over-Year Revenue Growth for First Quarter of 2024
Edible Garden reported a 27.6% year-over-year revenue growth for Q1 2024, totaling $3.1 million. This growth is attributed to high customer demand and product line expansion.
Notably, the company’s gross profit surged by 195.8%, driven by a strategic pivot away from third-party growers, resulting in a 171 basis point increase in gross margin. Approximately 95% of Edible Garden’s fresh product line is now produced at company-owned facilities.
Despite these positive trends, the company experienced a net loss of $4.0 million for Q1 2024, compared to a $2.9 million loss in Q1 2023, due to higher SG&A expenses. Edible Garden aims to boost margins and reduce SG&A costs in future quarters.
The company also secured a significant three-year contract with a leading U.S. food retailer, expected to generate $18-$20 million in revenue. Additional distribution partnerships and product line expansions are also underway.
A conference call will be held today at 8:00 AM ET to discuss these results and corporate progress.
- 27.6% year-over-year revenue growth for Q1 2024.
- Gross profit increased by 195.8% in Q1 2024.
- Gross margin grew by 171 basis points compared to Q1 2023.
- Approximately 95% of fresh product line now produced at company-owned facilities.
- Secured a three-year contract with a leading U.S. food retailer, expected to generate $18-$20 million in revenue.
- Expanded distribution partnerships through Uncle Giuseppe’s Marketplace, KeHE Distributors, and UNFI Distributors.
- Launched new product lines, including Pulp sauces and Garden Starters herbs.
- Net loss of $4.0 million for Q1 2024, compared to $2.9 million in Q1 2023.
- SG&A expenses increased to $3.9 million due to one-time severance charges and higher audit, accounting, and legal fees.
- Cost of goods sold increased in line with revenue, maintaining pressure on margins.
Insights
The financial results indicate significant progress and strategic shifts by Edible Garden. The 27.6% year-over-year revenue growth is substantial, especially given that Q1 is typically the slowest quarter for the company. This points to increased customer demand and successful expansion of their product lineup. Additionally, the 195.8% increase in gross profit and the improvement in gross margin by 171 basis points suggest that the company's move towards vertical integration—producing 95% of their product line in company-owned facilities—is paying off.
However, it's essential to note the increased
The strategic partnerships and new product launches indicate growth potential. The
Short-term investors should be cautious of the current net losses, while long-term investors might see potential in the strategic pivots and growth prospects if the company can keep SG&A expenses under control.
Edible Garden's focus on vertical integration and strategic partnerships is a noteworthy pivot. By reducing reliance on third-party growers, the company is increasing control over its supply chain and boosting margins. The partnership with Uncle Giuseppe's Marketplace and the three-year contract with a leading U.S. food retailer expand their market presence in the Northeastern U.S., helping diversify their revenue streams.
Expansion into the global sauces and condiments market with the Pulp product line is a smart move. This market is projected to grow from
The introduction of the Garden Starters product line taps into the growing trend of home gardening, with 35% of American households growing some of their own food. This diversifies their product offerings and meets evolving consumer preferences.
While these expansions are promising, the company must ensure these ventures translate into sustainable profits to offset the current net losses and high SG&A expenses.
The strategic shift towards vertical integration is a significant operational milestone for Edible Garden. Producing 95% of their product line in company-owned facilities should provide better quality control and reduce costs associated with third-party growers. The resultant 195.8% increase in gross profit and the 171 basis points improvement in gross margin are strong indicators that this strategy is working.
Operationally, the expansion into new product categories and markets, like the partnership with Hermann Pickle Company and the distribution of Garden Starters, suggests a robust and diversified approach to scaling the business. This integration should help streamline production processes and improve supply chain efficiencies.
However, the company must remain vigilant in managing the increased SG&A expenses, ensuring that operational efficiencies are not overshadowed by rising administrative costs.
Overall, the operational improvements are likely to yield long-term benefits, but the company must focus on reducing SG&A expenses to enhance overall profitability.
Vertical Integration Expected to Pay Off - Company Plans to Boost Margins in the Coming Quarters
Conference Call to Be Held Today at 8:00 am ET.
BELVIDERE, N.J., May 15, 2024 (GLOBE NEWSWIRE) -- Edible Garden AG Incorporated (“Edible Garden” or the “Company”) (Nasdaq: EDBL), 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 March 31, 2024.
Mr. Jim Kras, Chief Executive Officer of Edible Garden, commented, “We are excited to announce a significant
"We continue to utilize our platform to enhance and expand our product range. In the first quarter, we partnered with Uncle Giuseppe's Marketplace, part of RBest Produce, to distribute Edible Garden herbs across their locations in New York and New Jersey, thus broadening our footprint in the Northeastern U.S. Perhaps more significantly, we secured a three-year contract, unprecedented in our history, with a leading U.S. food retailer. This contract, which we anticipate will generate approximately
"In 2023, we introduced Pulp, our fresh and fermented line of sustainable gourmet sauces and chili-based products, venturing into the global sauces and condiments market—a market expected to grow from
“In late April, we began distributing our Garden Starters—a collection of potted herbs and basil bowls designed for home gardens—to Midwest retail locations, starting with Meijer. Introduced in 2023 due to growing interest in home gardening, these sustainably grown herbs cater to the
“Earlier this month, we entered into a product development agreement with Hermann Pickle Company, a leader in refrigerated kosher dill pickles, sauerkraut, and other fermented foods, which have been fixtures at delis and dinner tables nationwide for generations. Our collaboration will focus on leveraging both companies' strengths to research and develop scalable commercial opportunities. This partnership will concentrate on producing, marketing, and distributing fermented plant-based products and non-GMO consumer packaged foods. We are excited to work with the Hermann Pickles team, drawing on their trusted heritage to create a contemporary line of fermented product offerings.”
Financial results for the three months ended March 31, 2024
For the quarter ended March 31, 2024, revenue totaled
Cost of goods sold totaled
Selling, general and administrative (“SG&A”) expenses were
Net loss was
The complete financial results for the three months ended March 31, 2024, are available in the Company’s Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission and available at: www.sec.gov.
Conference Call
Edible Garden will host a conference call today at 8:00 A.M. Eastern Time to discuss the Company’s financial results for the quarter ended March 31, 2024, as well as the Company’s corporate progress and other developments.
The conference call will be available via telephone by dialing toll-free +1 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and entering access code 926030. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2914/50592 or on the investor relations section of the company’s website, https://ediblegardenag.com/presentations/.
A webcast replay will be available on the investor relations section of the Company’s website at https://ediblegardenag.com/presentations/ through May 15, 2025. A telephone replay of the call will be available approximately one hour following the call, through Wednesday, May 29, 2024, and can be accessed by dialing +1 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering access code 50592.
ABOUT EDIBLE GARDEN®
Edible Garden AG Incorporated is a leader in controlled environment agriculture (CEA), locally grown, organic and sustainable produce and products backed by Zero-Waste Inspired® next generation farming. Offered at over 5,000 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 Nos.: US 11,158,006 B1, US 11,410,249 B2 and US 11,830, 088 B2) software optimizes growing in vertical and traditional greenhouses while seeking to reduce pollution-generating food miles. Its proprietary patented (U.S. Patent No. D1,010,365) Self-watering display is designed to increase plant shelf life and provide an enhanced in-store plant display experience. 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/.
Forward-Looking Statements
This press release contains forward-looking statements, including with respect to the Company’s ability to improve its financial results, the Company’s growth strategies, the Company’s ability to expand into new product lines, and its performance as a public company. The words “aim,” “anticipate,” “believe,” “design,” “expect,” “objective,” “plan,” “seek,” “will,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including market and other conditions and the Company’s ability to achieve its growth objectives, and other factors set forth in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2023 and subsequent quarterly reports on Form 10-Q. Actual results might differ materially from those explicit or implicit in the forward-looking statements. The Company undertakes no obligation to update any such forward-looking statements after the date hereof to conform to actual results or changes in expectations, except as required by law.
Investor Contacts:
Crescendo Communications, LLC
212-671-1020
EDBL@crescendo-ir.com
(tables follow)
EDIBLE GARDEN AG INCORPORATED | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(unaudited, in thousands, except shares) | |||||||||
March 31, | December 31, | ||||||||
2024 | 2023 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash | $ | 388 | $ | 510 | |||||
Accounts receivable, net | 1,139 | 1,249 | |||||||
Inventory | 814 | 678 | |||||||
Prepaid expenses and other current assets | 276 | 210 | |||||||
Total current assets | 2,617 | 2,647 | |||||||
Property, equipment and leasehold improvements, net | 3,646 | 3,893 | |||||||
Intangible assets, net | 46 | 47 | |||||||
Other assets | 38 | 69 | |||||||
TOTAL ASSETS | $ | 6,347 | $ | 6,656 | |||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||
LIABILITIES: | |||||||||
Current liabilities: | |||||||||
Accounts payable and other accrued expenses | $ | 5,145 | $ | 2,517 | |||||
Short-term debt, net of discounts | 4,438 | 387 | |||||||
Total current liabilities | 9,583 | 2,904 | |||||||
Long-term liabilities: | |||||||||
Long-term debt, net of discounts | 852 | 4,040 | |||||||
Long-term lease liabilities | - | - | |||||||
Long-term liabilities of discontinued operations | - | ||||||||
Total long-term liabilities | 852 | 4,040 | |||||||
Total liabilities | 10,435 | 6,944 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
STOCKHOLDERS' DEFICIT: | |||||||||
Common stock ( | 1 | 1 | |||||||
Series A Convertible Preferred stock ( | - | - | |||||||
Additional paid-in capital | 30,148 | 29,971 | |||||||
Accumulated deficit | (34,237 | ) | (30,260 | ) | |||||
Total stockholders' deficit | (4,088 | ) | (288 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 6,347 | $ | 6,656 | |||||
(1) Adjusted to reflect all stock splits |
EDIBLE GARDEN AG INCORPORATED | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(unaudited, in thousands, except share and per-share information) | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Revenue | $ | 3,132 | $ | 2,455 | ||||
Cost of goods sold | 3,109 | 2,479 | ||||||
Gross profit (loss) | 23 | (24 | ) | |||||
Selling, general and administrative expenses | 3,884 | 2,691 | ||||||
(Gain) / Loss on sale of assets | - | - | ||||||
Loss from operations | (3,861 | ) | (2,715 | ) | ||||
Other expenses | ||||||||
Interest expense, net | (117 | ) | (234 | ) | ||||
Gain from extinguishment of debt | - | 70 | ||||||
Other income / (loss) | 1 | - | ||||||
Total other expenses | (116 | ) | (164 | ) | ||||
NET LOSS | $ | (3,977 | ) | $ | (2,879 | ) | ||
Net Income / (Loss) per common share - basic and diluted (1) | $ | (13.65 | ) | $ | (44.19 | ) | ||
Weighted-Average Number of Common Shares Outstanding — Basic and Diluted (1) | 291,372 | 65,147 | ||||||
(1) Adjusted to reflect all stock splits | ||||||||
EDIBLE GARDEN AG INCORPORATED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income (Loss) | $ | (3,977 | ) | $ | (2,879 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Bad debt expense | 9 | - | ||||||
Depreciation and amortization | 302 | 334 | ||||||
Amortization of operating lease right of use asset | 26 | 22 | ||||||
Amortization of debt discount | 3 | - | ||||||
Gain from extinguishment of debt | - | (70 | ) | |||||
Stock-based compensation | 38 | 30 | ||||||
Stock issued to Directors | - | 70 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 100 | 215 | ||||||
Inventory | (136 | ) | (436 | ) | ||||
Prepaid expenses and other current assets | (66 | ) | (97 | ) | ||||
Other assets | 5 | - | ||||||
Accounts payable and accrued expenses | 2,660 | (497 | ) | |||||
Operating lease liabilities | (26 | ) | (11 | ) | ||||
NET CASH USED FOR OPERATING ACTIVITIES | (1,062 | ) | (3,319 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, equipment and leasehold improvements | (55 | ) | (361 | ) | ||||
Purchase of intangible assets | - | - | ||||||
NET CASH USED FOR INVESTING ACTIVITIES | (55 | ) | (361 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from debt, including related parties | 1,050 | 175 | ||||||
Payment of debt issuance costs | (50 | ) | - | |||||
Payments of debt principal, including related parties | (139 | ) | (1,911 | ) | ||||
Proceeds from sales of common stock from Equity Distribution Agreement | 139 | - | ||||||
Payment of commissions related to sale of common stock | (5 | ) | - | |||||
Proceeds from common stock and warrants issued in public offering | - | 9,398 | ||||||
Payment of costs related to public offering | - | (140 | ) | |||||
Payment of preferred stock dividends | - | (4 | ) | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 995 | 7,518 | ||||||
NET CHANGE IN CASH | (122 | ) | 3,838 | |||||
Cash at beginning of period | 510 | 110 | ||||||
CASH AT END OF PERIOD | $ | 388 | $ | 3,948 | ||||
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||||||||
Cash paid for interest | $ | 35 | $ | 247 | ||||
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Trucks acquired with debt | $ | - | $ | 152 | ||||
FAQ
What is the revenue growth reported by Edible Garden for Q1 2024?
How did Edible Garden’s gross profit perform in Q1 2024?
What percentage of Edible Garden’s fresh product line is produced at company-owned facilities in 2024?
What was Edible Garden’s net loss for Q1 2024?
What is the expected revenue from Edible Garden's new three-year contract with a leading U.S. food retailer?