Construction on track at Georgia, Texas and Washington facilities
Reaffirms full year 2023 guidance of
$34 to $40
million
HAMILTON, Mont., Aug. 9, 2023
/PRNewswire/ -- Local Bounti Corporation (NYSE: LOCL, LOCL WS)
("Local Bounti" or the "Company"), a breakthrough U.S. indoor
agriculture company combining the best aspects of vertical and
greenhouse growing technologies, today announced its financial
results for the three months ended June 30,
2023 and reaffirmed full year 2023 guidance.
Anna Fabrega, CEO of Local
Bounti, stated, "I'm proud to be part of this organization and I'm
energized by the opportunities we have ahead of us. We are
simultaneously ramping up our growing capacity, establishing
consistent operational protocols, expanding our distribution
network and enhancing penetration by offering new and innovative
products. Individually, each of these represent an
opportunity to materially advance our business – and collectively,
our ability to accomplish these goals in a disciplined fashion
represents a massive opportunity to generate economic value for our
employees and shareholders alike. We look forward to demonstrating
our progress in the quarters and years to come."
Ms. Fabrega continued, "This is a pivotal time in Local Bounti's
journey and it is incumbent upon us to grow and scale the business
in the most efficient way possible. We believe we have the
financial resources in place to achieve breakeven adjusted EBITDA
by the end of 2024 or early 2025 and we have also made some
organizational changes to ensure we have the human capital to
execute our plan. As part of this process, we have taken
immediate steps to optimize our resources and add key talent that
will support our initiatives."
Second Quarter 2023 Financial Summary
- Sales of $7.2 million in the
second quarter of 2023, as compared to $6.3
million in the prior year period.
- Gross profit was $0.9 million in
the second quarter of 2023. Adjusted gross margin
percentage1 was approximately 28%, excluding
depreciation, stock-based compensation, business combination
related integration costs, and other non-recurring items. Second
quarter adjusted gross margin continued to be constrained by
weather-related variables at the Company's California facilities. The extreme weather
created some unique growing challenges that were exacerbated by
facility damage that required repairs and maintenance. This
resulted in lower production, which lead to a temporary decrease in
fixed cost absorption that has since been resolved.
- Net loss was $10.7 million in the
second quarter of 2023 as compared to net loss of $31.7 million for the prior year period. Adjusted
EBITDA1 loss was $8.3
million, which excludes $4.4
million in stock-based compensation, $6.5 million in interest expense, $3.3 million of depreciation and amortization, a
gain on change in fair value of warrant liability of $15.2 million, and other non-recurring items.
Adjusted EBITDA loss in the prior year period was $7.9 million.
1See reconciliation of the non-GAAP measures at
the end of this press release.
Commercial Facility Expansion Update
Byron, Georgia Facility
Progress
Construction of the greenhouse Phase 1-B was completed in early
second quarter and construction of Phase 1-C is well underway with
approximately 90% of that building now enclosed. The remaining
Stack zones that comprise Phase 1-C are expected to be completed
early in the fourth quarter 2023. The Company's Stack & Flow
TechnologyTM is expected to add approximately 40% of
incremental revenue generating capacity to the finished
Georgia facility, which will be
comprised of six acres of greenhouses and multiple climate, water,
and spectral controlled Stack zones.
Mount Pleasant, Texas Facility
Progress
With the greenhouse structure largely complete, the Company will
begin installation of the Stack zones in the third quarter of 2023.
The addition of this new facility in northeast Texas is expected to fortify Local Bounti's
distribution in markets across Texas, Oklahoma, Louisiana, Mississippi, Arkansas, Kansas, and Missouri. Further, the facility is designed to
provide additional capacity to meet existing demand from Local
Bounti's direct relationships with blue-chip retailers and
distributors throughout the region. The facility is still expected
to commence operations in the fourth quarter of 2023.
Pasco, Washington Facility
Progress
The structural steel work for the greenhouses is now complete and
glass installation is progressing. When complete, the facility will
be comprised of three acres of greenhouse that will be supported by
multiple Stack zones. The facility will help bolster the Company's
distribution capabilities in the Pacific Northwest and is still
expected to commence operations early in the first quarter 2024,
which reflects the Company's decision to stagger construction to
accommodate the commissioning of its Texas facility in the fourth quarter of
2023.
Capital Structure
The Company ended the quarter with cash and cash equivalents and
restricted cash of $40.4 million and
approximately $66.6 million of
availability under its credit agreement with Cargill Financial
Services International, Inc. ("Cargill"). On June 15, 2023, the Company gave effect to its
1:13 reverse common stock split, and as of June 30, 2023, Local Bounti had approximately 8.2
million shares outstanding, 6.3 million common shares under
warrants outstanding, and approximately 1.0 million restricted
stock units outstanding. As of June 30,
2023, including these warrants and restricted stock units,
the Company had a fully diluted share count of approximately 15.5
million shares outstanding.
On April 27, 2023 the Company
completed its sale-leaseback transaction with a managed net-lease
real estate investment trust and received approximately
$35 million of net cash proceeds
during the quarter. This cash, combined with proceeds available
from its credit agreement with Cargill, which was expanded by up to
$110 million to a total of up to
$280 million on March 28, 2023, provides the Company with capital
to fund its operations and complete the construction of its ongoing
projects. Additionally, the Company continues to pursue
opportunities to lower its cost of capital and replace its
construction financing, including its work with a licensed United
States Department of Agriculture (USDA) lender. Combined,
management believes that it has sufficient capital available under
the terms of its agreements to reach breakeven adjusted EBITDA by
the end of 2024 or early 2025.
Financial Outlook
The Company reaffirmed its full year 2023 sales guidance of
$34 to $40
million.
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
Wednesday August 9, 2023. To participate on the live call,
listeners in North America may
dial (877) 514-3623 and international listeners may dial (201)
689-8768.
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 proprietary Stack & Flow Technology™ – that
significantly improves crop turns, increases output and improves
unit economics. Local Bounti operates advanced indoor growing
facilities across the United
States, servicing approximately 13,000 retail doors with its
two brands: Local Bounti® and Pete's®. Local Bounti grows healthy
food utilizing a hybrid approach that integrates the best
attributes of controlled environment agriculture with natural
elements. Local Bounti's sustainable growing methods are better for
the planet, using 90% less land and 90% less water than
conventional farming methods. With a mission to 'bring our farm to
your kitchen in the fewest food miles possible,' Local Bounti's
food is fresher, more nutritious, and lasts longer than traditional
agriculture. To find out more, visit localbounti.com or follow
Local Bounti on LinkedIn for the latest news and
developments.
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 the
existence of sources of committed financing, development of
technology, goals and anticipated timing toward achieving positive
adjusted EBITDA, projected financial information, estimates and
forecasts of other financial and performance metrics, projected
costs of building or acquiring facilities, projections of market
opportunity and market share, and the Company's ability to access
additional capital when needed and on terms acceptable to the
Company. These statements are subject to known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to differ
materially from results expressed or implied in this press release.
The following factors, among others, could cause actual results to
differ materially from those described in these forward-looking
statements: the risk that Local Bounti will fail to obtain
additional necessary capital when needed on acceptable terms, or at
all; Local Bounti's ability to effectively integrate the acquired
operations of any CEA or similar operations which it acquires into
its existing operations; the ability of Local Bounti to retain and
hire key personnel; the uncertainty of projected financial
information; Local Bounti's increased leverage as a result of
additional indebtedness incurred in connection with the acquisition
of Pete's or as the result of the incurrence of additional future
indebtedness; restrictions contained in Local Bounti's debt
facility agreements with Cargill; Local Bounti's ability to repay,
refinance, restructure and/or extend its indebtedness as it comes
due; and unknown liabilities that may be assumed in the
transaction; Local Bounti's ability to generate revenue; the risk
that Local Bounti may never achieve or sustain profitability; the
risk that Local Bounti could fail to effectively manage its future
growth; Local Bounti's ability to build out additional facilities;
reliance on third parties for construction, delays relating to
material delivery and supply chains, and fluctuating material
prices; Local Bounti's ability to decrease its cost of goods sold
over time; potential for damage to or problems with Local Bounti's
CEA facilities; Local Bounti's ability to attract and retain
qualified employees; Local Bounti's ability to develop and maintain
its brand or brands it may acquire; Local Bounti's ability to
maintain its company culture or focus on its vision as it grows;
Local Bounti's ability to execute on its growth strategy; the risks
of diseases and pests destroying crops; Local Bounti's ability to
compete successfully in the highly competitive natural food market;
Local Bounti's ability to defend itself against intellectual
property infringement claims; changes in consumer preferences,
perception and spending habits in the food industry; seasonality;
Local Bounti's ability to achieve its sustainability goals; and
other risks and uncertainties indicated from time to time,
including those under "Risk Factors" and "Forward-Looking
Statements" in Local Bounti's Annual Report on Form 10-K for the
year ended December 31, 2022, filed
with the SEC on March 31, 2023, as
supplemented by other reports and documents Local Bounti files from
time to time with the SEC. Local Bounti cautions that the foregoing
list of factors is not exclusive and cautions readers not to place
undue reliance upon any forward-looking statements, which speak
only as of the date hereof. Local Bounti does not undertake or
accept any obligation or undertaking to update or revise any
forward-looking statements to reflect any change in its
expectations or any change in events, conditions, or circumstances
on which any such statement is based.
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 the United States
("GAAP") and exclude certain expenses, gains and losses. The
Company defines and calculates adjusted EBITDA as net loss
attributable to Local Bounti before the impact of interest expense,
depreciation, amortization, and adjusted to exclude stock-based
compensation expense, change in fair value of warrant liability,
business acquisition and strategic transaction due diligence and
integration related costs, utilities price spike and inclement
weather related costs, loss on disposal of fixed assets, and
certain other non-core items. The Company defines and calculates
adjusted gross profit as gross profit excluding depreciation,
stock-based compensation, acquisition related integration costs,
and certain other non-core items. The Company defines and
calculates adjusted gross margin percentage as adjusted gross
profit as a percent of sales. The Company defines and calculates
adjusted selling, general and administrative expense as selling,
general and administrative expense excluding stock-based
compensation, depreciation, amortization, business acquisition and
strategic transaction due diligence and integration related costs,
and certain other non-core items.
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 and six months ended
June 30, 2023 and 2022.
|
LOCAL BOUNTI CORPORATION
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(in thousands,
except share and per share data)
|
|
|
June 30,
|
|
December 31,
|
|
2023
|
|
2022
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
33,946
|
|
$
13,666
|
|
Restricted
cash
|
6,480
|
|
11,272
|
|
Accounts receivable,
net
|
2,793
|
|
2,691
|
|
Inventory,
net
|
4,254
|
|
3,594
|
|
Prepaid expenses and
other current assets
|
3,046
|
|
2,881
|
|
Total current
assets
|
50,519
|
|
34,104
|
|
Property and
equipment, net
|
230,849
|
|
157,844
|
|
Operating lease
right-of-use assets
|
211
|
|
137
|
|
Goodwill
|
38,481
|
|
38,481
|
|
Intangible assets,
net
|
43,921
|
|
47,273
|
|
Other
assets
|
25
|
|
901
|
|
Total
assets
|
$
364,006
|
|
$
278,740
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
9,045
|
|
$
13,757
|
|
Accrued
liabilities
|
17,372
|
|
9,426
|
|
Operating lease
liabilities
|
62
|
|
84
|
|
Total current
liabilities
|
26,479
|
|
23,267
|
|
Long-term debt, net of
debt issuance costs
|
179,403
|
|
119,814
|
|
Financing
obligation
|
49,146
|
|
14,139
|
|
Operating lease
liabilities, noncurrent
|
152
|
|
187
|
|
Warrant
liability
|
10,546
|
|
—
|
|
Total
liabilities
|
265,726
|
|
157,407
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $0.0001
par value, 400,000,000 shares authorized, 8,188,981 and 7,997,858
issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively(1)
|
1
|
|
10
|
|
Additional paid-in capital
|
311,795
|
|
300,636
|
|
Accumulated
deficit
|
(213,516)
|
|
(179,313)
|
|
Total stockholders'
equity
|
98,280
|
|
121,333
|
|
Total liabilities and
stockholders' equity
|
$
364,006
|
|
$
278,740
|
|
|
(1) Prior
comparative period share amounts issued and outstanding have been
retroactively adjusted to reflect the 1-for-13 Reverse Stock Split
effective June 15, 2023.
|
|
LOCAL BOUNTI CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(in thousands,
except per share data)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Sales
|
$
7,183
|
|
$
6,269
|
|
$
13,881
|
|
$
6,551
|
|
Cost of goods
sold(2)(3)(4)
|
6,331
|
|
6,281
|
|
12,750
|
|
6,520
|
|
Gross profit
|
852
|
|
(12)
|
|
1,131
|
|
31
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development(3)(4)
|
3,526
|
|
3,073
|
|
7,102
|
|
5,914
|
|
Selling, general and
administrative(3)(4)
|
16,704
|
|
23,141
|
|
32,685
|
|
44,502
|
|
Total operating
expenses
|
20,230
|
|
26,214
|
|
39,787
|
|
50,416
|
|
Loss from
operations
|
(19,378)
|
|
(26,226)
|
|
(38,656)
|
|
(50,385)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Change in fair value
of warrant liability
|
15,151
|
|
—
|
|
15,151
|
|
—
|
|
Interest expense,
net
|
(6,472)
|
|
(5,465)
|
|
(10,771)
|
|
(7,108)
|
|
Other
income
|
23
|
|
28
|
|
73
|
|
58
|
|
Net loss
|
$
(10,676)
|
|
$
(31,663)
|
|
$
(34,203)
|
|
$
(57,435)
|
|
|
|
|
|
|
|
|
|
Net loss applicable to
common stockholders per basic common share:
|
|
|
|
|
|
|
|
|
Basic and diluted(1)
|
$
(1.35)
|
|
$
(4.65)
|
|
$
(4.37)
|
|
$
(8.80)
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted(1)
|
7,930,371
|
|
6,815,947
|
|
7,829,673
|
|
6,525,453
|
|
|
(1) Prior
comparative period share and per share amounts have been
retroactively adjusted to reflect the 1-for-13 Reverse Stock Split
effective June 15, 2023.
|
|
(2) Amounts
include the impact for non-cash increase in cost of goods sold
attributable to the fair value basis adjustment to inventory in
connection with the acquisition of Pete's as follows:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of goods
sold
|
$
—
|
|
$
1,042
|
|
$
—
|
|
$
1,042
|
|
Total business combination fair value basis
adjustment to inventory
|
$
—
|
|
$
1,042
|
|
$
—
|
|
$
1,042
|
|
|
(3) Amounts
include stock-based compensation as follows:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of goods
sold
|
$
(11)
|
|
$
47
|
|
$
76
|
|
$
52
|
|
Research and
development
|
595
|
|
485
|
|
1,333
|
|
970
|
|
Selling, general and
administrative
|
3,850
|
|
11,164
|
|
8,984
|
|
21,687
|
|
Total stock-based compensation expense, net of
amounts capitalized
|
$
4,434
|
|
$
11,696
|
|
$
10,393
|
|
$
22,709
|
|
|
(4) Amounts
include depreciation and amortization as follows:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of goods
sold
|
$
894
|
|
$
891
|
|
$
1,830
|
|
$
953
|
|
Research and
development
|
466
|
|
218
|
|
1,032
|
|
531
|
|
Selling, general and
administrative
|
1,956
|
|
2,272
|
|
3,912
|
|
2,438
|
|
Total depreciation and
amortization
|
$
3,316
|
|
$
3,381
|
|
$
6,774
|
|
$
3,922
|
|
LOCAL BOUNTI CORPORATION
|
|
UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION
|
|
(in
thousands)
|
|
RECONCILIATION OF
GROSS PROFIT TO ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN
PERCENTAGE
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Sales
|
$
7,183
|
|
$
6,269
|
|
$
13,881
|
|
$
6,551
|
|
Cost of goods
sold
|
6,331
|
|
6,281
|
|
12,750
|
|
6,520
|
|
Gross profit
|
852
|
|
(12)
|
|
1,131
|
|
31
|
|
Depreciation
|
894
|
|
891
|
|
1,830
|
|
953
|
|
Stock-based
compensation
|
(11)
|
|
47
|
|
76
|
|
52
|
|
Utilities price spike
and inclement weather related costs
|
—
|
|
—
|
|
727
|
|
—
|
|
Business combination
fair value adjustment to inventory
|
—
|
|
1,042
|
|
—
|
|
1,042
|
|
Acquisition related
integration costs
|
266
|
|
428
|
|
423
|
|
428
|
|
Adjusted gross
profit
|
$
2,001
|
|
$
2,396
|
|
$
4,187
|
|
$
2,506
|
|
Adjusted gross margin
%
|
28 %
|
|
38 %
|
|
30 %
|
|
38 %
|
|
RECONCILIATION OF
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SELLING,
GENERAL
AND ADMINISTRATIVE EXPENSE
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Selling, general and
administrative
|
16,704
|
|
23,141
|
|
32,685
|
|
44,502
|
|
Stock-based
compensation
|
(3,850)
|
|
(11,164)
|
|
(8,984)
|
|
(21,687)
|
|
Depreciation and
amortization
|
(1,956)
|
|
(2,272)
|
|
(3,912)
|
|
(2,438)
|
|
Business acquisition
and strategic transaction due diligence and integration related
costs
|
(2,364)
|
|
(1,213)
|
|
(3,916)
|
|
(5,719)
|
|
Restructuring and
business realignment costs
|
(724)
|
|
(501)
|
|
(724)
|
|
(621)
|
|
Adjusted selling,
general and administrative
|
$
7,810
|
|
$
7,991
|
|
$
15,149
|
|
$
14,037
|
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net loss
|
$
(10,676)
|
|
$
(31,663)
|
|
$
(34,203)
|
|
$
(57,435)
|
|
Stock-based
compensation expense
|
4,434
|
|
11,696
|
|
10,393
|
|
22,709
|
|
Interest expense,
net
|
6,472
|
|
5,465
|
|
10,771
|
|
7,108
|
|
Depreciation and
amortization
|
3,316
|
|
3,381
|
|
6,774
|
|
3,922
|
|
Business combination
fair value basis adjustment to inventory
|
—
|
|
1,042
|
|
—
|
|
1,042
|
|
Utilities price spike
and inclement weather related costs
|
—
|
|
—
|
|
727
|
|
—
|
|
Business acquisition
and strategic transaction due diligence and integration related
costs
|
2,630
|
|
1,641
|
|
4,339
|
|
6,147
|
|
Restructuring and
business realignment costs
|
724
|
|
501
|
|
724
|
|
621
|
|
Loss on disposal of
fixed assets
|
—
|
|
84
|
|
—
|
|
280
|
|
Change in fair value
of warrant liability
|
(15,151)
|
|
—
|
|
(15,151)
|
|
—
|
|
Other
income
|
(23)
|
|
(28)
|
|
(73)
|
|
(58)
|
|
Adjusted
EBITDA
|
$
(8,274)
|
|
$
(7,881)
|
|
$
(15,699)
|
|
$
(15,664)
|
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SOURCE Local Bounti
