- Second quarter revenue of $6.3 million, compared to $0.1 million in the prior year period
- Georgia facility commenced commercial operations in July 2022
- Announces Texas as the location of next facility
- Reaffirms full-year 2022 guidance
Local Bounti Corporation (NYSE: LOCL, LOCL WS) today announced its second quarter 2022 results for the three months ended June 30, 2022, and reaffirmed full-year 2022 guidance.
“We produced solid results and made important progress on our commercial facility expansion during the second quarter. The integration of Local Bounti and Pete’s is progressing extremely well — we’ve had great engagement across the organization and I have been very impressed by our team and our expanded set of capabilities,” stated Craig Hurlbert, Co-CEO of Local Bounti. “Looking ahead, we are especially excited about the recent opening of our Georgia facility and the commercial benefits it entails as we expand our footprint. We continue to bring fresh thinking and solutions to the industry and are implementing new elements in real-time that accelerate our build-out schedules and drive higher crop turns — the combination of which support our unwavering focus on capital efficiency.”
- Sales of $6.3 million in the second quarter 2022, as compared to $108 thousand in the prior year period. Revenue from the Company’s Hamilton, MT facility increased by 52% on a sequential basis in second quarter reflecting the pivot from R&D to commercial production, and the Company’s California facilities increased revenue by 9% on a similar basis.
- Gross profit was negative $12 thousand in the second quarter of 2022. Adjusted gross margin percentage1 was approximately 38%, excluding depreciation, stock-based compensation, business combination related integration costs, and business combination fair value basis adjustment to inventory. The reduction in reported gross profit reflects temporary supply chain challenges with suppliers that have since been resolved, but impacted second quarter yields in its California facilities, resulting in higher costs to fill orders. In response to realized cost inflation, the Company expects to realize the benefit from price increases during the third or fourth quarter of 2022.
- Net loss of $31.7 million in the second quarter 2022. Adjusted EBITDA1 loss was $7.9 million excluding $11.7 million in stock-based compensation, $5.5 million in interest expense, $1.3 million of depreciation, $2.1 million of amortization, the fair value inventory adjustment mentioned above of $1.0 million, business combination and integration costs of $1.6 million and restructuring costs of $500 thousand. Net loss was $7.6 million in the prior year period and adjusted EBITDA loss was $3.5 million in the prior year period.
1See reconciliation of the non-GAAP measures at the end of this press release.
Next facility to be located in Texas
Local Bounti is currently in site diligence for its next facility to be located in eastern Texas. This location was selected based on customer demand and prospective off-take agreements.
Georgia facility commenced operations in July
As previously announced, the Company completed Phase 1-A construction of its Georgia facility in July 2022 — commencing commercial operations of three acres of the 24-acre plan. In parallel with Phase 1-A’s completion, the Company began construction on Phase 1-B in June 2022, which will mirror Phase 1-A in terms of size and capabilities — doubling the capacity of the Georgia facility.
As a component of Phase 1-B’s construction, the Company also began construction on the integration of its Stack & Flow Technology™ (“Stack & Flow”). Stack & Flow TechnologyTM will be integrated across both Phase 1-A and 1-B, which is expected to add approximately 40% of incremental revenue generating capacity to the finished Georgia facility. The Phase 1-B construction is expected to be completed in the second quarter of 2023 and commence operations in the third quarter 2023.
The Company continues to expect to achieve initial run-rate revenue of at least $30 million at full production from its California and Georgia (Phase 1-A) facilities, excluding the expected future positive impact from additional capacity due to incorporating Stack & Flow TechnologyTM at all three facilities.
California facility upgrades
The Company’s two California facilities in Carpinteria and Oxnard are currently undergoing targeted and phased upgrades to existing infrastructure. The first phase, which is currently planned, will complete necessary infrastructure upgrades and increase near-term yields of select SKUs by an estimated 10%. The second phase, which is under consideration, will provide additional yield increases and create opportunities to grow new products, further expanding the Company’s SKU diversity. The last phase will be to complete preparations for Stack & Flow TechnologyTM integration, which is expected to commence in 2023 given coordination and other planning measures with local utilities.
Pasco, Washington facility progress
The future Pasco, Washington facility continues to progress toward construction, which is expected to recommence in September. The site has been redesigned to further optimize operational synergies, to drive best in class unit economics, and to account for synergies with Pete’s growing systems to meet demand across the combined product portfolio.
Hamilton, Montana update
The Company continues to advance its growing systems at its Hamilton, Montana facility. Year-to-date ended July 22, 2022, annualized yields from this facility have improved by approximately 20% versus the comparable prior year period. This direct and progressive improvement in yield is an apples-to-apples comparison highlighting the Company’s ability to drive higher yields for current and future facilities. Importantly, these improvements do not reflect the impact of existing and future R&D enhancements and innovations that are expected to further accelerate performance at each of our facilities.
Addressing new growth verticals in high-value crop varieties
Beyond advancements to yield, the Company has identified additional opportunities and applications of its Stack & Flow TechnologyTM to reduce costs and increase yields across a variety of crops and growing environments. The Company is in the early trial stages of longer-term projects for high-value crops such as berries, and it continues to believe that its Stack & Flow TechnologyTM has a very important place in the future of agriculture.
Launching tests for new salad kit innovations in third quarter
Complementing the Company’s existing product assortment is a new category of product innovation — premium salad kits. The SKUs will launch as tests with retailers in the Northwest through the end of 2022 in anticipation of a broader launch in 2023.
The Company ended the quarter with cash, cash equivalents and restricted cash of $41.3 million and approximately $41.8 million of undrawn capacity on its credit facility with Cargill. It had approximately 94.2 million basic and diluted shares outstanding as of June 30, 2022 and had an additional 11.5 million warrants outstanding and approximately 10.3 million restricted stock units outstanding.
Management is reaffirming its full year 2022 sales guidance of at least $20 million, including partial year contribution from its acquisition of Pete’s which closed on April 4, 2022.