Nature's Miracle Announces Agreement with BeGrow to Distribute Stone Wool Substrate Products in the U.S.

Rhea-AI Summary

Nature's Miracle Holdings announced a distribution agreement with BeGrow to bring BeGrow's Stone Wool Substrate products to the U.S. market. This agreement allows Nature's Miracle to be the primary distributor of these hydroponic products for three years, starting immediately. The collaboration is expected to complement Nature's Miracle's existing LED lighting products, potentially boosting sales in the latter half of 2024 and beyond. CEO James Li highlighted the strategic growth this partnership brings, enhancing their market share in indoor farming and expanding their product portfolio.

Positive

• Nature's Miracle secures a three-year distribution agreement with BeGrow.
• Introduction of complementary Stone Wool Substrate products can boost sales.
• The agreement enhances Nature's Miracle's portfolio beyond LED lighting.
• Potential sales increase in the second half of 2024 and beyond.
• Strengthens Nature's Miracle's position in the indoor farming market.
• Continued expansion in product offerings for vertical farming solutions.

Negative

• Potential risks associated with integrating and selling a new product line.
• Dependence on BeGrow's product quality and supply chain reliability.
• Economic factors and market reception in the U.S. could impact sales projections.

Insights

Market Research Analyst

Nature's Miracle's partnership with BeGrow to distribute stone wool substrate products represents a synergistic expansion within the vertical farming sector. This move strategically aligns with Nature's Miracle's existing offerings, particularly their LED lighting products, creating a more comprehensive solution for controlled environment agriculture. The U.S. market for hydroponic substrates is expanding, driven by the increasing demand for efficient and sustainable farming solutions. This agreement positions Nature's Miracle to capitalize on this growth, potentially increasing their revenue streams.

From an industry perspective, stone wool substrates are renowned for their superior water retention and aeration properties, enhancing plant growth efficiency in hydroponic systems. This agreement could attract a broader customer base and drive sales, especially among commercial growers seeking high-performance substrates. By becoming the primary distributor of BeGrow's products, Nature's Miracle may also benefit from the established reputation of BeGrow's brand.

However, it is essential to monitor the integration and sales performance over the next few quarters. The success of this agreement will depend on effective market penetration and customer adoption rates. Retail investors should watch for reported sales figures and any related financial disclosures in upcoming earnings reports to gauge the agreement's impact on Nature's Miracle's overall financial health.

Financial Analyst

The agreement between Nature's Miracle and BeGrow brings immediate revenue potential, given the products are available for distribution right away. This can positively influence the company's financials in the second half of 2024. The addition of stone wool substrates to their portfolio not only diversifies their product line but also leverages their existing distribution channels. This diversification is a smart move, potentially mitigating risks associated with depending solely on LED lighting products.

From a financial perspective, the key metrics to watch would be the gross margins on these new products compared to their existing offerings. If stone wool substrates command higher margins, this could improve overall profitability. Additionally, any incremental sales from this new product line could enhance operating leverage, further boosting net income. Investors should pay close attention to the next earnings calls for detailed segment revenue breakdowns and margin analyses.

It is also worth noting the potential for synergy in marketing and sales, as both product lines cater to a similar customer base. Effective cross-selling strategies could significantly increase customer lifetime value and loyalty. However, the execution risks and initial integration costs cannot be overlooked. Proper cost management and strategic marketing will be important for the long-term success of this agreement.

~ Granted U.S. Distribution Rights of BeGrow's Stone Wool Substrate Product Line ~

~ Benefits Nature's Miracle Customer Base with Complementary Offering to its LED Lighting Products ~

~ BeGrow Products Available for Immediate Distribution ~

ONTARIO, Calif., June 12, 2024 /PRNewswire/ -- Nature's Miracle Holdings Inc. (NASDAQ: NMHI) ("Nature's Miracle" or the "Company"), a leader in vertical farming technology and infrastructure, today announced that it has signed an agreement with BeGrow Sera Limited Sti ("BeGrow") to distribute its Stone Wool Substrate products in the U.S. BeGrow is a production company with 15 years of experience in the field of development, production and distribution of stone wool for hydroponic production of fruits and vegetables with global sales. Today, BeGrow has evolved into a global brand of stone wool substrates for greenhouse production in a controlled environment. With this agreement, Nature's Miracle will be a primary distributor of BeGrow's Stone Wool products within the U.S. for a three (3) year period effective immediately. 

Management Comments

James Li, Chairman and Chief Executive Officer of Nature's Miracle, commented, "Driven by our attendance at GreenTech Amsterdam 2024 where we've engaged with global horticultural technology and industry peers, another major global player, BeGrow, has selected Nature's Miracle as a U.S. based seller of its Stone Wool Substrate products. We are excited to contribute to their growth efforts in the U.S. that will have an equally favorable impact on our sales in the second half of 2024 and beyond. This agreement further enhances our portfolio with a parallel product to our current offerings of LED lighting as the leader in designing and sourcing products for complete controlled environment."

Mr. Li added, "As we approach the second half of 2024, we are encouraged with the growth experienced in Nature's Miracle business through additional agreements we have garnered as we continue to increase our market share of indoor farming and augment to our suite of core offerings. We are honored to be a trusted partner of BeGrow and look forward to providing further updates to the market on our strategic growth plans to create a robust portfolio of solutions that meet the needs of our enterprise customer's development of comprehensive vertical farms."

About Nature's Miracle Holdings Inc.

Nature's Miracle (www.Nature-Miracle.com) is a growing agriculture technology company providing equipment and services to growers in the Controlled Environment Agriculture ("CEA") industry which also include vertical farming in North America. Nature's Miracle offers hardware to design, build and operate various indoor growing settings including greenhouse and indoor-growing spaces. Nature's Miracle, through its two wholly-owned subsidiaries (Visiontech Group, Inc. and Hydroman, Inc.), provides grow lights as well as other hydroponic products to hundreds of indoor growers in North America. Nature's Miracle has also developed a robust pipeline to build commercial-scale greenhouse in the U.S. and Canada to meet the growing needs of fresh and local vegetable products. Nature's Miracle has established its first manufacturing footprint in North America with its grow-light assembly plant in Manitoba, Canada and is expected to set up additional manufacturing/assembly facilities in North America.  

Forward-looking Statements

Except for historical information contained herein, this press release contains certain "forward-looking statements" within the meaning of the federal U.S. securities laws with respect to the proposed business combination between Lakeshore and Nature's Miracle, the benefits of the transaction, the amount of cash the transaction will provide Nature's Miracle, the anticipated timing of the transaction, the services and markets of Nature's Miracle, our expectations regarding future growth, results of operations, performance, future capital and other expenditures, competitive advantages, business prospects and opportunities, future plans and intentions, results, level of activities, performance, goals or achievements or other future events. These forward-looking statements generally are identified by words such as "anticipate," "believe," "expect," "may," "could," "will," "potential," "intend," "estimate," "should," "plan," "predict," or the negative or other variations of such statements, reflect our management's current beliefs and assumptions and are based on the information currently available to our management. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual results or developments to differ materially from those expressed or implied by such forward-looking statements, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of Lakeshore's securities; (ii) the risk that the transaction may not be completed by Lakeshore's business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by Lakeshore; (iii) the failure to satisfy the conditions to the consummation of the transaction, including the approval of the business combination agreement by the stockholders of Lakeshore, the satisfaction of the minimum cash amount following any redemptions by Lakeshore's public stockholders and the receipt of certain governmental and regulatory approvals; (iv) the lack of a third-party valuation in determining whether or not to pursue the proposed transaction; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement; (vi) the effect of the announcement or pendency of the transaction on Nature's Miracle's business relationships, operating results and business generally; (vii) risks that the proposed transaction disrupts current plans and operations of Nature's Miracle; (viii) the outcome of any legal proceedings that may be instituted against Nature's Miracle or Lakeshore related to the business combination agreement or the proposed transaction; (ix) the ability to maintain the listing of Lakeshore's securities on a national securities exchange; (x) changes in the competitive industries in which Nature's Miracle operates, variations in operating performance across competitors, changes in laws and regulations affecting Nature's Miracle's business and changes in the combined capital structure; (xi) the ability to implement business plans, forecasts and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities; (xii) the risk of downturns in the market and Nature's Miracle's industry including, but not limited to, as a result of the COVID-19 pandemic; (xiii) costs related to the transaction and the failure to realize anticipated benefits of the transaction or to realize estimated pro forma results and underlying assumptions, including with respect to estimated stockholder redemptions; (xiv) risks and uncertainties related to Nature's Miracle's business, including, but not limited to risks relating to the uncertainty of the projected financial information with respect to Nature's Miracle; risks related to Nature's Miracle's limited operating history, the roll-out of Nature's Miracle's business and the timing of expected business milestones; Nature's Miracle's ability to implement its business plan and scale its business; Nature's Miracle's ability to develop products and technologies that are more effective or commercially attractive than competitors' products;; risks relating to Nature's Miracle's being unable to renew the leases of their facilities and warehouses; Nature's Miracle's ability to grow the size of its organization and management in response of the increase of sales and marketing infrastructure; risks relating to potential tariffs or a global trade war that could increase the cost of Nature's Miracle's products; risks relating to product liability lawsuits that could be brought against Nature's Miracle;; Nature's Miracle's ability to formulate, implement and modify as necessary effective sales, marketing, and strategic initiatives to drive revenue growth; Nature's Miracle's ability to expand internationally; acceptance by the marketplace of the products and services that Nature's Miracle markets; and government regulations and Nature's Miracle's ability to obtain applicable regulatory approvals and comply with government regulations. The foregoing list of factors is not exclusive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of proxy statement, when available, and other documents filed by Lakeshore from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and neither Nature's Miracle nor Lakeshore assume any obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements. Neither Lakeshore nor Nature's Miracle gives any assurance that either Lakeshore or Nature's Miracle, or the combined company, will achieve its expectations.

Contacts
George Yutuc
Chief Financial Officer
George.Yutuc@nature-miracle.com

MZ North America
Shannon Devine / Rory Rumore
Main: 203-741-8811
NMHI@mzgroup.us

 

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SOURCE Nature's Miracle Holding Inc.

FAQ

What is Nature's Miracle's new distribution agreement?

Nature's Miracle has signed a three-year agreement to distribute BeGrow's Stone Wool Substrate products in the U.S.

How will the new agreement with BeGrow benefit Nature's Miracle?

The agreement is expected to complement their LED lighting products and boost sales in the latter half of 2024 and beyond.

When will BeGrow's Stone Wool Substrate products be available?

BeGrow's Stone Wool Substrate products are available for immediate distribution by Nature's Miracle.

What impact is the BeGrow agreement expected to have on Nature's Miracle?

The agreement is anticipated to enhance Nature's Miracle's product portfolio and increase their market share in indoor farming.

What is the duration of Nature's Miracle's distribution agreement with BeGrow?

The distribution agreement between Nature's Miracle and BeGrow is set for three years.