Local Bounti Announces First Quarter 2024 Financial Results
Local Bounti (NYSE: LOCL) announced its Q1 2024 financial results and full-year guidance, showcasing growth in sales, expansion plans, and positive operational progress. Sales increased 25% to $8.4 million in Q1 2024, with gross income at $0.8 million. The company expects to close on $228 million of financing in Q2 2024 for expansion projects. They provided full-year 2024 sales guidance of $50 to $60 million, representing a doubling of revenue versus 2023.
Sales increased by 25% to $8.4 million in Q1 2024, showcasing growth in revenue.
The company expects to close on $228 million of financing commitments in Q2 2024 to support expansion projects, signaling confidence in future growth and development.
Local Bounti provided full-year 2024 sales guidance of $50 to $60 million, indicating a doubling of revenue compared to 2023, reflecting strong growth expectations.
The company's Stack & Flow Technology patent issuance by the United States Patent and Trademark Office in February 2024 highlights their commitment to innovation and efficiency, potentially driving long-term value.
Adjusted EBITDA1 loss was $6.9 million in Q1 2024, indicating ongoing financial challenges despite revenue growth.
Net loss was $24.1 million in Q1 2024, reflecting significant losses that may concern investors despite revenue growth.
The company's adjusted gross margin percentage of approximately 24% in Q1 2024 may signal challenges in profitability and cost management.
Insights
The sales growth of 25% to
The financial commitments expected to close in Q2 will be important to fund the company’s expansion projects and may impact the capital structure positively. Yet, the report mentions a substantial net loss and investors should watch for the company's ability to reach positive adjusted EBITDA in early 2025 with caution, considering the ongoing losses. The guidance for doubling the revenue for FY 2024 is ambitious and suggests confidence in their expansion strategy and product line growth, particularly the Grab-and-Go Salad Kits.
The addition of new retail customers like Albertsons Seattle and Brookshire's, along with the introduction of new product lines such as the Grab-and-Go Salad Kits, indicates a strategic market penetration and product diversification. This could potentially create new revenue streams for Local Bounti and increase brand presence in targeted regions. The intent to expand capacity and the Midwest facility's construction points towards a bullish approach to capturing market share and increasing production capabilities.
However, as the company is still in the process of ramping up production across new and existing facilities, the actual impact on sales and market share would need to be evaluated over the coming quarters. In the competitive space of indoor agriculture, their patented Stack & Flow Technology could provide a unique selling proposition, impacting their market positioning positively if the technology demonstrates clear advantages over competitors' offerings.
First customer deliveries from
Expands penetration in Pacific Northwest and
Expected to close on
Grab-and-Go Salad Kits gaining distribution momentum
Provides full year 2024 sales guidance of
"Our first quarter results were consistent with our expectations and demonstrated strong operational progress from a combination of recent improvements we've made to our business, keeping us on track to achieve positive adjusted EBITDA1 generation in early 2025," stated Craig Hurlbert, CEO of Local Bounti. "Since December, we've significantly increased packed volumes at our
Mr. Hurlbert continued, "Looking to the second quarter, shipments from these facilities are commencing and we expect them to provide critical capacity to support the expansion of our product assortment this year. On that note, we are excited about our progress expanding the distribution of our Grab-and-Go Salad Kits in the second quarter. We're also thrilled to have attracted new customers, including Albertsons Seattle and
First Quarter 2024 Financial Summary
- Sales increased
25% to in the first quarter of 2024, as compared to$8.4 million in the prior year period. The increase was primarily due to increased production and growth in sales from the Company's facility in$6.7 million Georgia . - Gross income was
in the first quarter of 2024. Adjusted gross margin percentage1 was approximately$0.8 million 24% , excluding depreciation, stock-based compensation, business combination related integration costs, and other nonrecurring items. Adjusted gross margin performance was driven by costs associated with the ongoing optimization and scaling up of the Company's facilities. The Company expects that, over time, its adjusted gross margin will increase as a percentage of sales, as a result of the continued scaling of the business and initiatives to optimize production costs. - Selling, general, and administrative expenses decreased by
to$8.4 million in the first quarter of 2024, as compared to$7.6 million in the prior year period, driven by cost savings actions the Company took in the fourth quarter of 2023 to streamline its organizational structure, as well as lower stock-based compensation expense. The Company expects to continue to benefit from its lower cost base through the end of 2024.$16.0 million - Net loss was
in the first quarter of 2024 as compared to net loss of$24.1 million for the prior year period.$23.5 million - Adjusted EBITDA1 loss was
, which excludes a net benefit of$6.9 million in stock-based compensation,$0.9 million in interest expense,$9.6 million of depreciation and amortization,$3.2 million loss on change in fair value of warrant liability, and$4.2 million of business combination and integration costs. Adjusted EBITDA loss for the first quarter of 2024 compares to a loss of$0.8 million in the prior year period and a loss of$7.4 million in the fourth quarter of 2023.$9.4 million
1See reconciliation of the non-GAAP measures at the end of this press release.
Commercial Facility Expansion Update
In the first quarter, the Company increased production by an additional
Commissioning Progressing at
The Company commenced operations and seeding at both its
Announces Intent to Expand Capacity at Existing Facilities in 2024
Plans remain underway to build additional capacity across the Company's network of facilities enabled with its Stack & Flow Technology. The locations and degree of expansion will be announced at a future date, but construction is currently anticipated to begin late in the second quarter of 2024. The planned expansions are designed to provide additional capacity and allow for the Company's growing product assortment to meet existing demand from Local Bounti's direct relationships with blue-chip retailers and distributors.
Next Facility to be Opened in the Midwest
Local Bounti is planning its next high-tech Stack & Flow facility to be built in the Midwestern
The transition of the Company's
Product Development & Distribution
Starting in the second quarter of 2024, Local Bounti expects to expand distribution of its Grab-and-Go Salad Kits to customers throughout the Pacific Northwest and
The Company is set to expand its baby leaf assortment in the third quarter of 2024 by introducing several high-velocity offerings including Arugula, Baby Spinach & Spring Mix Blend, and Power Greens. While the Company is still scaling up these products, it is pleased to have delivered its first shipment of Spinach to customers in March out of the
Stack & Flow Technology Patent
In February 2024, the United States Patent and Trademark Office issued a patent to Local Bounti for its proprietary Stack & Flow Technology. Stack & Flow Technology, which combines the best of vertical and greenhouse growing technologies, enables superior unit economics and efficiencies across the production cycle. Plants spend early development in a stacked nursery design, reducing facility square footage. When the plants reach targeted maturity, they are transported to hydroponic greenhouses, which are arranged on horizontal planes with natural sunlight and other controlled environment variables, resulting in optimal growth conditions specified for each type of plant as well as space and energy efficiency. With less land requirement and fewer days in the greenhouse, Stack & Flow Technology enables lower capital expenditure, lower operating expenses, higher labor efficiency and higher yield compared to results published by greenhouse farms and other CEA operations.
Capital Structure
The Company ended with cash and cash equivalents and restricted cash of
As of March 31, 2024, Local Bounti had approximately 8.4 million shares outstanding, 6.2 million common shares under warrants outstanding, and approximately 0.5 million restricted stock units outstanding. As of March 31, 2024, including these warrants and restricted stock units, the Company had a fully diluted share count of approximately 15.1 million shares outstanding.
The Company believes that it has access to capital to fund its operations, complete the construction of its ongoing projects, and reach positive adjusted EBITDA in early 2025. This includes cash on the balance sheet and construction financing arrangements.
The Company continues to pursue opportunities to lower its cost of capital and replace its construction financing, including sale leaseback transactions and its work with a licensed United States Department of Agriculture (USDA) lender.
Financial Outlook
Management is providing its full year 2024 sales guidance of
Conference Call
The Company will host a conference call with members of the Local Bounti executive management team. The conference call is scheduled to begin at 8:00 a.m. ET on Thursday, May 9, 2024. To participate on the live call, listeners in
In addition, the call will be broadcast live via webcast, hosted at the "Investors" section of the Company's website at localbounti.com and will be archived online.
About Local Bounti
Local Bounti is redefining indoor farming with an innovative method – its patented Stack & Flow Technology® – that significantly improves crop turns, increases output and improves unit economics. Local Bounti operates advanced indoor growing facilities across
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "will," "continue," "believe," expect," "estimate," "project," "intend," "should," "is to be," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to statements regarding funding pursuant to the CCLs; shipments at the
Non-GAAP Financial Information
This press release contains references to adjusted EBITDA, adjusted gross profit, adjusted gross margin percentage and adjusted selling, general and administrative expense, which are adjusted from results based on generally accepted accounting principles in
These non-GAAP financial measures are provided to enhance the user's understanding of the Company's prospects for the future and the historical performance for the context of the investor. The Company's management team uses these non-GAAP financial measures in assessing performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP and the methods the Company uses to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for, or superior to, financial information presented in accordance with GAAP and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
Refer to the attached financial supplement for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures for the three months ended March 31, 2024.
LOCAL BOUNTI CORPORATION | |||
March 31, | December 31, | ||
2024 | 2023 | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 8,242 | $ 10,326 | |
Restricted cash | 6,489 | 6,569 | |
Accounts receivable, net | 3,360 | 3,078 | |
Inventory, net | 4,960 | 4,210 | |
Prepaid expenses and other current assets | 2,620 | 2,805 | |
Total current assets | 25,671 | 26,988 | |
Property and equipment, net | 344,112 | 313,166 | |
Operating lease right-of-use assets | 155 | 172 | |
Intangible assets, net | 40,461 | 41,353 | |
Other assets | 3,008 | 73 | |
Total assets | $ 413,407 | $ 381,752 | |
Liabilities and stockholders' equity | |||
Current liabilities | |||
Accounts payable | $ 12,778 | $ 14,640 | |
Accrued liabilities | 19,314 | 17,204 | |
Financing obligation | 25 | — | |
Operating lease liabilities | 76 | 97 | |
Total current liabilities | 32,193 | 31,941 | |
Long-term debt, net of debt issuance costs | 329,775 | 277,985 | |
Financing obligation, noncurrent | 49,397 | 49,225 | |
Operating lease liabilities, noncurrent | 95 | 114 | |
Warrant liability | 11,394 | 7,214 | |
Total liabilities | 422,854 | 366,479 | |
Commitments and contingencies | |||
Stockholders' (deficit) equity | |||
Common stock, 0.0001 par value, 400,000,000 shares authorized, 8,437,542 and 8,311,229 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 1 | 1 | |
Additional paid-in capital | 317,930 | 318,600 | |
Accumulated deficit | (327,378) | (303,328) | |
Total stockholders' (deficit) equity | (9,447) | 15,273 | |
Total liabilities and stockholders' equity | $ 413,407 | $ 381,752 |
LOCAL BOUNTI CORPORATION | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Sales | $ 8,383 | $ 6,698 | |
Cost of goods sold(1)(2) | 7,597 | 6,419 | |
Gross profit | 786 | 279 | |
Operating expenses: | |||
Research and development(1)(2) | 3,487 | 3,576 | |
Selling, general and administrative(1)(2) | 7,598 | 15,981 | |
Total operating expenses | 11,085 | 19,557 | |
Loss from operations | (10,299) | (19,278) | |
Other income (expense): | |||
Change in fair value of warrant liability | (4,180) | — | |
Interest expense, net | (9,608) | (4,299) | |
Other income | 37 | 50 | |
Net loss | $ (24,050) | $ (23,527) | |
Net loss applicable to common stockholders per basic common share: | |||
Basic and diluted | $ (2.89) | $ (3.04) | |
Weighted average common shares outstanding: | |||
Basic and diluted | 8,325,944 | 7,727,866 |
(1) | Amounts include stock-based compensation as follows: |
Three Months Ended March 31, | |||
2024 | 2023 | ||
Cost of goods sold | $ 21 | $ 87 | |
Research and development | 93 | 738 | |
Selling, general and administrative | (1,048) | 5,134 | |
Total stock-based compensation expense, net of amounts capitalized | $ (934) | $ 5,959 |
(2) | Amounts include depreciation and amortization as follows: |
Three Months Ended March 31, | |||
2024 | 2023 | ||
Cost of goods sold | $ 1,203 | $ 936 | |
Research and development | 797 | 566 | |
Selling, general and administrative | 1,228 | 1,956 | |
Total depreciation and amortization | $ 3,228 | $ 3,458 |
LOCAL BOUNTI CORPORATION | |||
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Sales | $ 8,383 | $ 6,698 | |
Cost of goods sold | 7,597 | 6,419 | |
Gross profit | 786 | 279 | |
Depreciation | 1,203 | 936 | |
Stock-based compensation | 21 | 87 | |
Utilities price spike and inclement weather related costs | — | 727 | |
Acquisition related integration costs | — | 157 | |
Adjusted gross profit | $ 2,010 | $ 2,186 | |
Adjusted gross margin % | 24 % | 33 % |
RECONCILIATION OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SELLING, GENERAL | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Selling, general and administrative | $ 7,598 | $ 15,981 | |
Stock-based compensation | 1,048 | (5,134) | |
Depreciation and amortization | (1,228) | (1,956) | |
Business acquisition and strategic transaction due diligence and integration | (842) | (1,552) | |
Restructuring and business realignment costs | (289) | — | |
Adjusted selling, general and administrative | $ 6,287 | $ 7,339 |
LOCAL BOUNTI CORPORATION | |||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Net loss | $ (24,050) | $ (23,527) | |
Stock-based compensation expense | (934) | 5,959 | |
Interest expense, net | 9,608 | 4,299 | |
Depreciation and amortization | 3,228 | 3,458 | |
Utilities price spike and inclement weather related costs | — | 727 | |
Business acquisition and strategic transaction due diligence and integration | 842 | 1,709 | |
Restructuring and business realignment costs | 289 | — | |
Change in fair value of warrant liability | 4,180 | — | |
Other income | (37) | (50) | |
Adjusted EBITDA | $ (6,874) | $ (7,425) |
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SOURCE Local Bounti
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