Financial Data and Key Metrics Changes - The second quarter sales increased by 28% to $12.1 million compared to $9.4 million in the prior year period, driven by increased production and sales from the Georgia facility and new facilities in Texas and Washington [14] - Adjusted gross margin percentage improved to approximately 30%, up from 29% in the prior year period, marking the highest quarterly adjusted gross margin in recent quarters [15] - Adjusted EBITDA loss improved to $6.5 million compared to a loss of $8.3 million in the prior year period and $8.8 million in the first quarter [15][16] Business Line Data and Key Metrics Changes - The Texas facility is now operating at full harvestable capacity, allowing for increased revenue generation from both cut and living full head products [37] - Cost reduction initiatives have resulted in approximately $7 million in annualized savings across operating expenses and cost of goods sold, with an additional $2.5 million to $3 million expected in the second half of the year [10][16] Market Data and Key Metrics Changes - The company is experiencing strong momentum in customer discussions, with several significant opportunities progressing that could drive capacity utilization improvements in the Washington and Texas facilities [13] - Retail partners are increasingly recognizing the value proposition of the company's technology, leading to a growing demand for CEA products in the market [13] Company Strategy and Development Direction - The company aims to build a streamlined organization with a focus on sustainable profitability, leveraging its Stack and Flow technology to capture opportunities in sustainable food production [5][6] - The addition of a new Chief Commercial Officer is expected to enhance strategic relationships with existing customers and expand retail presence [12][28] Management's Comments on Operating Environment and Future Outlook - Management expects revenue run rates to ramp up later in 2025, with modest sequential growth anticipated in the third quarter, accelerating into the fourth quarter [19] - Positive adjusted EBITDA is projected to be achieved in early 2026 as the company scales alongside retail deployment schedules [20][21] Other Important Information - The company ended the quarter with cash and cash equivalents of $13.2 million, following a $10 million debt reduction and a $1 million financing through a convertible note [18] - The company is in the planning phases for a Midwest facility, alongside expansions of existing facilities in Georgia, Washington, and Texas [30][31] Q&A Session Summary Question: Can you help us understand how gross margin expands throughout the year? - Management indicated that several factors impact margin, including tower upgrades, pricing, product mix, and cost reductions [25] Question: What are the goals for the new Chief Commercial Officer? - The focus will be on expanding strategic relationships with customers and enhancing the existing commercial team's efforts [28] Question: Is the Midwest facility still in the two-year horizon? - Management confirmed that the Midwest facility is still in planning phases, along with expansions of existing facilities [30] Question: What gives confidence in retailer engagement despite delays in EBITDA targets? - Management highlighted that the Texas facility is largely sold out and that engagement with retailers is at an all-time high, which supports confidence in future growth [41]

[Second Quarter 2025 Financial Results Announcement](index=1&type=section&id=Financial%20Results%20Announcement) [Overview and Highlights](index=1&type=section&id=Overview%20and%20Highlights) Local Bounti reported a 28% Q2 2025 revenue increase, achieved $7 million in H1 annualized cost reductions, and completed a $10 million convertible note financing with debt reduction - Q2 2025 revenue increased by **28%** year-over-year[2](index=2&type=chunk) - Achieved **$7 million** in annualized cost reductions in the first half, with an additional **$2.5 million to $3 million** planned for the second half[2](index=2&type=chunk)[3](index=3&type=chunk) - Completed **$10 million** convertible note financing and reduced **$10 million** in principal debt[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted disciplined cost management, superior unit economics, projected significant H2 2025 revenue growth, and positive Adjusted EBITDA by early 2026, supported by strategic investor confidence and improved capital structure - CEO and CFO Kathleen Valiasek stated the company achieved approximately **$7 million** in annualized cost reductions in H1 2025, with an additional **$2.5 million to $3 million** planned for H2, projecting positive Adjusted EBITDA by early 2026[3](index=3&type=chunk) - Executive Chairman Craig Hurlbert noted that strategic investors recently injected **$10 million** in capital and reduced debt, strengthening the company's balance sheet at a critical inflection point[3](index=3&type=chunk) - The company is committed to realizing the significant opportunity in sustainable food production through its patented Stack & Flow Technology® and world-class team[3](index=3&type=chunk) [Second Quarter 2025 Financial Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Summary) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Q2 2025 saw sales grow 28% to $12.1 million, gross profit at $1.5 million, adjusted gross margin at 30%, and improved net loss and Adjusted EBITDA loss | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Sales | $12.1 Million | $9.4 Million | +28% | | Gross Profit | $1.5 Million | $1.4 Million | +7.1% | | Adjusted Gross Margin | 30% | 29% | +1 pp | | General and Administrative Expenses | $8.0 Million | $8.6 Million | -7.0% | | Adjusted General and Administrative Expenses | $4.3 Million | $6.0 Million | -28.3% | | Net Loss | $(21.6) Million | $(25.3) Million | Improved $3.7 Million | | Adjusted EBITDA Loss | $(6.5) Million | $(8.3) Million | Improved $1.8 Million | - Sales growth was primarily driven by increased production at the Georgia facility and sales contributions from new facilities in Texas and Washington[4](index=4&type=chunk) - Net loss improvement was mainly due to lower net interest expense resulting from debt restructuring activities completed in Q1 2025[8](index=8&type=chunk) [Operational Updates](index=2&type=section&id=Operational%20Updates) [Commercial Facilities Update](index=2&type=section&id=Commercial%20Facilities%20Update) The company completed Texas facility reconfiguration, installed automated harvesting, and is advancing yield and cost reduction initiatives across facilities, with future capacity expansion under review - The Texas facility reconfiguration was completed in late July, fully operational in early August, with automated harvesting equipment installed and running, expected to enhance operational efficiency and profitability by the end of Q3[5](index=5&type=chunk) - Tower upgrades at the Georgia facility are expected to be completed in late August, with similar upgrades planned for Texas and Washington facilities in late August and early September, aiming to improve production efficiency and yield[6](index=6&type=chunk) - Seed cost reduction initiatives at the Texas and Washington facilities are projected for Q3 and Q4 2025, targeting an additional **$2.5 million to $3 million** in annualized cost reductions[6](index=6&type=chunk) - The scope and timing of capacity expansion projects, including Midwest expansion, remain under review to align with retailer discussions and optimize facilities for specific product needs[7](index=7&type=chunk) [Product Development & Distribution](index=3&type=section&id=Product%20Development%20%26%20Distribution) Local Bounti launched new salad kits, expanded partnerships with a major retailer and a home delivery service, and continued growing its distribution with Walmart, including new product launches and increased store presence - Successfully launched a line of salad kits in April 2025, with plans to introduce a family-sized Caesar salad kit with a major multinational retailer in the Pacific Northwest by early Q4[9](index=9&type=chunk) - Expanded partnership with a leading home delivery service partner, launching four new private label salad kits in mid-September, increasing total products with this customer to six[9](index=9&type=chunk) - Partnership with Walmart continues to grow, currently supplying products to **191 stores** and committed to supplying traditional living butter lettuce to **13 Walmart distribution centers**[10](index=10&type=chunk) [Capital Structure](index=3&type=section&id=Capital%20Structure) [Financing and Debt Management](index=3&type=section&id=Financing%20and%20Debt%20Management) As of June 30, 2025, the company held $13.2 million in cash, completed a $10 million convertible note financing, reduced $10 million in principal debt, and restructured $312 million in senior secured debt with favorable terms Cash and Restricted Cash (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $5,286 Thousand | $937 Thousand | | Restricted Cash | $7,885 Thousand | $6,529 Thousand | | **Total Cash and Restricted Cash** | **$13,171 Thousand** | **$7,466 Thousand** | - On August 4, 2025, the company completed **$10 million** in convertible note financing and amended its credit agreement, reducing **$10 million** in principal debt[11](index=11&type=chunk) - In March 2025, completed a **$25 million** equity investment and restructured credit agreements, forming a **$312 million** senior secured debt agreement with no cash interest or principal payments until April 2027, and canceling approximately **$197 million** in debt principal and accrued interest[11](index=11&type=chunk) - Expected to recover approximately **$2.3 million** in cash through equipment lease transactions[11](index=11&type=chunk) [Shares Outstanding](index=3&type=section&id=Shares%20Outstanding) As of June 30, 2025, Local Bounti had approximately 21.8 million common shares, 10.7 million preferred shares, 6.2 million warrant shares, and 3.4 million restricted stock units, totaling 31.4 million fully diluted shares Shares Outstanding (as of June 30, 2025) | Share Type | Quantity (as of June 30, 2025) | | :--- | :--- | | Common Stock | 21.8 Million | | Preferred Stock | 10.7 Million | | Common Stock Underlying Warrants | 6.2 Million | | Restricted Stock Units | 3.4 Million | | **Total Fully Diluted Shares** | **31.4 Million** | [Financial Outlook](index=3&type=section&id=Financial%20Outlook) [Sales and Profitability Projections](index=3&type=section&id=Sales%20and%20Profitability%20Projections) The company projects moderate Q3 sales growth accelerating in Q4, driven by facility contributions and new products, with continued Adjusted EBITDA loss improvement and positive Adjusted EBITDA by early 2026 - Projected moderate quarter-over-quarter sales growth in Q3 2025, accelerating in Q4, driven by Texas facility contributions, Georgia yield enhancements, new product launches, and customer expansion[13](index=13&type=chunk) - Anticipated continuous improvement in Adjusted EBITDA loss rates for Q3 and Q4 2025[14](index=14&type=chunk) - Based on enhanced visibility into customer timelines and commercial rollout plans, the company now expects to achieve positive Adjusted EBITDA by early 2026[3](index=3&type=chunk)[14](index=14&type=chunk) [Corporate Information](index=4&type=section&id=Corporate%20Information) [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) Local Bounti will host a conference call on August 13, 2025, at 8:00 AM ET to discuss financial results, accessible via dial-in and webcast on its investor relations website - Conference call scheduled for **Wednesday, August 13, 2025, at 8:00 AM ET**[15](index=15&type=chunk) - North American dial-in: **(877) 514-3623**; International dial-in: **+1 (201) 689-8768**; Conference ID: **13754459**[15](index=15&type=chunk) - The call will be webcast and archived via the 'Investors' section of the company's website, localbounti.com[16](index=16&type=chunk) [About Local Bounti](index=4&type=section&id=About%20Local%20Bounti) Local Bounti is a pioneering U.S. indoor agriculture company utilizing patented Stack & Flow Technology® to enhance crop efficiency and sustainability, serving approximately 13,000 retail stores nationwide - Local Bounti is a groundbreaking U.S. indoor agriculture company leveraging its patented **Stack & Flow Technology®** to enhance crop turns, yield, and unit economics[17](index=17&type=chunk) - The company operates advanced indoor growing facilities across the U.S., serving approximately **13,000 retail stores**[17](index=17&type=chunk) - Its sustainable growing methods save **90% of land** and **90% of water** compared to traditional agriculture, aiming to provide healthier, more nutritious, and longer-lasting products[17](index=17&type=chunk) [Legal and Financial Disclosures](index=5&type=section&id=Legal%20and%20Financial%20Disclosures) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding financial performance and operations, subject to risks and uncertainties that may cause actual results to differ, with no obligation for the company to update them - Forward-looking statements cover revenue, sales, costs, profits, product expansion, facility operations, 2025 financial guidance, timing of positive Adjusted EBITDA, and capital costs[18](index=18&type=chunk) - These statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, including but not limited to going concern ability, obtaining additional capital, generating significant revenue, debt covenant compliance, profitability, growth management, facility construction, supply chain risks, competition, and intellectual property litigation[18](index=18&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements and cautions readers not to place undue reliance on them[18](index=18&type=chunk) [Non-GAAP Financial Information](index=6&type=section&id=Non-GAAP%20Financial%20Information) This press release includes non-GAAP financial measures like Adjusted EBITDA and Adjusted Gross Profit, used by management for performance assessment, but not as GAAP substitutes - Non-GAAP financial measures include Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted General and Administrative Expenses[19](index=19&type=chunk) - Adjusted EBITDA is defined as net loss plus interest expense, depreciation and amortization, adjusted for stock-based compensation, change in fair value of warrant liability, business acquisition and strategic transaction-related costs, loss on disposal of property and equipment, and other non-core items[19](index=19&type=chunk) - These non-GAAP measures are intended to enhance understanding of the company's future prospects and historical performance but are not substitutes for GAAP and should be read in conjunction with GAAP financial statements[20](index=20&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $426.8 million, total liabilities increased to $559.5 million, and stockholders' deficit expanded to $132.7 million, reflecting changes in debt and cash Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 5,286 | 937 | | Restricted Cash | 7,885 | 6,529 | | Total Current Assets | 24,947 | 18,823 | | Property and Equipment, Net | 365,262 | 370,978 | | Total Assets | 426,774 | 428,035 | | **Liabilities and Stockholders' Deficit** | | | | Total Current Liabilities | 19,381 | 55,436 | | Long-Term Debt, Net | 478,330 | 416,577 | | Warrant Liability | 11,412 | 6,403 | | Total Liabilities | 559,496 | 528,535 | | Total Stockholders' Deficit | (132,722) | (100,500) | | Total Liabilities and Stockholders' Deficit | 426,774 | 428,035 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 sales increased 28% to $12.1 million, gross profit rose 8.9%, and net loss narrowed to $21.577 million, with improved basic and diluted net loss per share Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | 12,103 | 9,443 | 23,708 | 17,826 | | Cost of Sales | 10,631 | 8,092 | 20,775 | 15,689 | | Gross Profit | 1,472 | 1,351 | 2,933 | 2,137 | | Total Operating Expenses | 16,922 | 15,215 | 34,117 | 26,300 | | Operating Loss | (15,450) | (13,864) | (31,184) | (24,163) | | Net Loss | (21,577) | (25,267) | (59,252) | (49,317) | | Basic and Diluted Net Loss Per Share | (1.63) | (3.00) | (5.40) | (5.89) | | Weighted Average Common Shares Outstanding | 13,270,197 | 8,411,226 | 11,051,720 | 8,368,596 | Stock-Based Compensation Expense (in thousands) | Expense Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 75 | 39 | 86 | 60 | | Research and Development | 145 | 71 | 161 | 164 | | Sales and Marketing | 245 | 75 | 282 | (125) | | General and Administrative | 1,795 | 1,463 | 2,321 | 615 | | **Total Stock-Based Compensation Expense** | **2,260** | **1,648** | **2,850** | **714** | Depreciation and Amortization Expense (in thousands) | Expense Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 2,050 | 1,352 | 3,963 | 2,555 | | Research and Development | 2,529 | 1,382 | 5,215 | 2,179 | | General and Administrative | 1,277 | 1,155 | 2,558 | 2,383 | | **Total Depreciation and Amortization** | **5,856** | **3,889** | **11,736** | **7,117** | [Reconciliation of GAAP to Non-GAAP Financial Information](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) The company provided GAAP to non-GAAP reconciliations for gross profit, G&A expenses, and net loss to Adjusted EBITDA, illustrating the impact of non-core items for clearer operational performance Reconciliation of Gross Profit to Adjusted Gross Profit (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 1,472 | 1,351 | 2,933 | 2,137 | | Add: Depreciation | 2,050 | 1,352 | 3,963 | 2,555 | | Add: Stock-Based Compensation | 75 | 39 | 86 | 60 | | Add: Restructuring and Business Realignment Costs | 56 | — | 56 | — | | **Adjusted Gross Profit** | **3,653** | **2,742** | **7,038** | **4,752** | | **Adjusted Gross Margin %** | **30 %** | **29 %** | **30 %** | **27 %** | Reconciliation of General and Administrative Expenses to Adjusted General and Administrative Expenses (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | General and Administrative | 8,045 | 8,597 | 16,149 | 14,413 | | Less: Stock-Based Compensation | (1,795) | (1,463) | (2,321) | (615) | | Less: Depreciation and Amortization | (1,277) | (1,155) | (2,558) | (2,383) | | Less: Business Acquisition and Strategic Transaction Costs | (16) | — | (112) | (842) | | Less: Intellectual Property and Other Litigation | (254) | — | (565) | — | | Less: Restructuring and Business Realignment Costs | (405) | — | (480) | (289) | | **Adjusted General and Administrative** | **4,298** | **5,979** | **10,113** | **10,284** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | (21,577) | (25,267) | (59,252) | (49,317) | | Add: Stock-Based Compensation Expense | 2,260 | 1,648 | 2,850 | 714 | | Add: Interest Expense, Net | 4,602 | 12,500 | 23,440 | 22,108 | | Add: Depreciation and Amortization | 5,856 | 3,889 | 11,736 | 7,117 | | Add: Business Acquisition and Strategic Transaction Costs | 16 | — | 112 | 842 | | Add: Debt Restructuring Transaction Costs | 101 | — | 750 | — | | Add: Intellectual Property and Other Litigation | 254 | — | 565 | — | | Add: Restructuring and Business Realignment Costs | 584 | — | 659 | 289 | | Add: Change in Fair Value of Warrant Liability | 1,499 | (1,096) | 5,009 | 3,084 | | Less: Other Income | (75) | (1) | (1,131) | (38) | | **Adjusted EBITDA** | **(6,480)** | **(8,327)** | **(15,262)** | **(15,201)** |

Core Insights - Local Bounti Corporation reported a 28% year-over-year revenue growth, reaching $12.1 million in the second quarter of 2025, driven by expanded facility operations and strengthened retail relationships [9][10] - The company achieved $7 million in annualized expense reductions in the first half of 2025, with an additional $2.5 to $3 million in cost optimization initiatives planned for the second half of 2025 [2][6] - Local Bounti closed a $10 million convertible note and amended its credit facility, resulting in a $10 million principal debt reduction, enhancing its capital structure [12] Financial Performance - Sales increased to $12.1 million in Q2 2025 from $9.4 million in the prior year, attributed to increased production and sales from new facilities in Texas and Washington [9] - Gross profit for Q2 2025 was $1.5 million, with an adjusted gross margin of approximately 30%, up from 29% in the prior year [9][28] - The net loss narrowed to $21.6 million in Q2 2025 from $25.3 million in the same period last year, primarily due to lower net interest expenses [9] Cost Management and Efficiency - The company has implemented significant cost reduction initiatives, including tower upgrades and seed cost reduction programs, expected to enhance production efficiency and yield capacity [6][7] - General and administrative expenses decreased to $8.0 million in Q2 2025 from $8.6 million in the prior year, with adjusted general and administrative expenses down to $4.3 million [9][30] Strategic Developments - Local Bounti is expanding its product offerings, including a new salad kit line launched in April 2025 and plans for a family-sized Caesar salad kit in Q4 2025 [8] - The company is building additional capacity across its facilities to meet growing demand from retail partners, with ongoing discussions to optimize these expansions [7] Future Outlook - The company anticipates modest sequential sales growth in Q3 2025, followed by acceleration in Q4 2025, supported by improved operational efficiencies and new product introductions [14][15] - Local Bounti expects to achieve positive adjusted EBITDA in early 2026, as it scales alongside retail deployment schedules [15]

Core Insights - Local Bounti Corporation has appointed Dane Almassy as Chief Commercial Officer, effective August 25, 2025, to enhance its leadership team and drive growth [1][2][3] Company Overview - Local Bounti is an innovative indoor agriculture company utilizing patented Stack & Flow Technology® to improve crop yields and unit economics, operating advanced facilities across the U.S. and servicing approximately 13,000 retail locations [5] - The company emphasizes sustainable practices, using 90% less land and water compared to conventional farming, with a mission to provide fresh, locally grown produce [5] Leadership and Experience - Dane Almassy brings over 20 years of experience in the fresh produce and controlled environment agriculture (CEA) sectors, having held senior roles at PepsiCo, WhiteWave Foods, and AeroFarms [2][3] - His expertise includes strategic growth, operational efficiency, and brand development, which will be instrumental in expanding Local Bounti's distribution and customer relationships [2][3] Strategic Goals - Almassy aims to leverage his experience to deepen relationships with strategic retail customers and drive long-term growth, aligning with Local Bounti's commitment to quality and innovation [2][3]

Core Viewpoint - Local Bounti Corporation is set to release its financial results for the fiscal second quarter on August 13, 2025, indicating ongoing developments in the indoor agriculture sector [1]. Financial Results Announcement - The financial results will be announced before the market opens on August 13, 2025 [1]. - A conference call will be held at 8:00 a.m. ET on the same day to discuss the results and business updates [2]. Conference Call Details - The conference call will be accessible to North American listeners at (877) 514-3623 and international listeners at +1 (201) 689-8768 [2]. - The call will also be available via live webcast on the Company's website and archived for later access [3]. - Telephonic playback will be available until August 20, 2025, with specific dial-in numbers provided for North American and international listeners [3]. Company Overview - Local Bounti is innovating indoor farming through its patented Stack & Flow Technology®, which enhances crop turns and improves unit economics [4]. - The company operates advanced indoor growing facilities across the U.S., servicing approximately 13,000 retail doors [4]. - Local Bounti's sustainable methods use 90% less land and water compared to conventional farming, aligning with its mission to provide fresh, sustainable produce [4].

Core Viewpoint - Local Bounti Corporation has secured $10 million through a convertible note and amended its credit facility, reducing its principal debt by the same amount, which strengthens its financial position for future operations [1][2]. Financial Summary - The company issued a convertible note with a 5-year maturity and a 6.0% annual interest rate, payable in kind [2]. - As part of the transaction, Local Bounti will issue a warrant to purchase up to 550,000 shares of common stock at an exercise price of $0.125 per share [2]. Company Overview - Local Bounti is innovating indoor farming with its patented Stack & Flow Technology®, which enhances crop turns and improves unit economics [3]. - The company operates advanced indoor growing facilities across the U.S., servicing approximately 13,000 retail doors [3]. - Local Bounti's sustainable methods use 90% less land and 90% less water compared to conventional farming, aiming to revolutionize agriculture and ensure access to fresh, sustainable produce [3].

Financial Performance - Sales increased by $3.2 million to $11.6 million for the three months ended March 31, 2025, representing a 38% increase compared to the same period in 2024[78] - Gross profit rose to $1.5 million, an 86% increase from $786,000 in the prior year[78] - The net loss for the three months ended March 31, 2025, was $37.7 million, a 57% increase from the net loss of $24.1 million in the same period in 2024[78] - Interest expense increased by $9.2 million for the three months ended March 31, 2025, primarily due to a $3.4 million increase in the principal amount outstanding on the Senior Facility and a $5.6 million decrease in capitalized interest compared to the prior year[90] - As of March 31, 2025, the company had an accumulated deficit of $460.9 million and cash and cash equivalents of $28.4 million[91] - Net cash used in operating activities was $9.6 million for the three months ended March 31, 2025, due to a net loss of $37.7 million[102] - Net cash provided by financing activities was $35.5 million for the three months ended March 31, 2025, including $21.5 million from the issuance of Series A Preferred Stock[105] - Net cash used in investing activities was $5.0 million for the three months ended March 31, 2025, primarily for purchases related to the Washington and Texas facilities[104] - The company has incurred losses and generated negative cash flows from operations since inception, indicating ongoing financial challenges[91] Operational Developments - The company operates six facilities, with significant production increases from the Georgia, Texas, and Washington facilities[79] - The Texas facility is undergoing a reconfiguration to produce both head lettuce and cut products, expected to begin commercial production in Q2 2025[72] - The company plans to expand its product offerings to include new varieties of fresh greens, herbs, and berries[71] - The company has secured an offtake agreement with Sam's Club for leafy greens production through September 2028[70] Sustainability Initiatives - The company utilizes 90% less water and land compared to traditional agriculture, enhancing sustainability[69] Financial Obligations - The principal amount due under the credit facility with Cargill Financial totaled $312.0 million, with various financial covenants that could risk default if not complied with[92] - Future aggregate financing obligation payments total $141.2 million, with significant payments due in the years following 2025[100] - The maturity date of the Senior Facility is December 31, 2035, with specific repayment terms starting from 2027[98] - The company expects interest expense to decrease by at least 50% following the Eleventh Amendment to the Senior Facility with Cargill Financial, which resulted in a lower principal balance and reduced interest rate[95] Expense Trends - Research and development expenses surged by $3.5 million to $7.0 million, a 100% increase year-over-year[78] - General and administrative expenses increased by $2.3 million to $8.1 million, a 39% rise compared to the previous year[78]

Core Insights - Local Bounti Corporation reported a quarterly loss of $4.32 per share, significantly worse than the Zacks Consensus Estimate of a loss of $1.31, marking an earnings surprise of -229.77% [1] - The company generated revenues of $11.61 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 4.55% and showing an increase from $8.38 million year-over-year [2] - Local Bounti shares have increased by approximately 25.1% since the beginning of the year, outperforming the S&P 500's gain of 0.1% [3] Financial Performance - Over the last four quarters, Local Bounti has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is -$1.22 on revenues of $12.3 million, and for the current fiscal year, it is -$4.35 on revenues of $59.2 million [7] Market Outlook - The estimate revisions trend for Local Bounti is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The Agriculture - Operations industry, to which Local Bounti belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - First quarter sales were $11.6 million, representing a 38% increase compared to Q1 2024 and a 15% sequential increase compared to Q4 2024 [11] - Adjusted gross margin improved approximately 500 basis points year-over-year and approximately 400 basis points sequentially [12] - Net loss for the quarter was $37.7 million, compared to a net loss of $24.1 million in the prior year period, largely due to higher interest expense [12] - Adjusted EBITDA loss for the quarter was $8.8 million, an improvement from $9.3 million in Q4 2024 [13] Business Line Data and Key Metrics Changes - Yield in the Georgia facility increased by 20% in Q1 compared to Q4, attributed to the refinement of the growing system [8] - The Texas facility is undergoing product mix recalibration, which has temporarily decreased capacity but is expected to improve operational efficiencies [7][12] Market Data and Key Metrics Changes - The company is actively engaged in discussions with retailers in the Midwest region to include them in sourcing plans, indicating potential market expansion [9] - The relationship with Walmart has strengthened, with additional commitments to serve more distribution centers [10] Company Strategy and Development Direction - The company aims to achieve positive adjusted EBITDA in Q3 2025, with a focus on operational efficiencies and cost management [6][14] - Plans to implement successful yield improvement programs from Georgia to Texas and Washington facilities [8][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA by Q3 2025, driven by cost reductions and anticipated revenue growth [14][17] - The company is optimistic about the market opportunity for Controlled Environment Agriculture (CEA) products, as customer demand continues to rise [4][10] Other Important Information - The company ended the quarter with cash and cash equivalents of $28.4 million, indicating a strengthened financial position [14] - The debt restructuring resulted in the elimination of approximately $197 million of debt, although accounting rules require the original carrying value to remain on the balance sheet [14][15] Q&A Session Summary Question: What is driving the material lift in the back half of the year? - Management highlighted the Texas transition, Georgia yield improvement, and new products as key drivers for growth [19][20] Question: Can you elaborate on the Georgia yield improvement? - The yield increase is due to a research and development program that has been successfully implemented, with plans to expand this to other facilities [21][22] Question: How will the debt restructuring impact interest expense? - The restructuring will reduce interest expense over time, with the amortization of the premium leading to lower reported interest expenses on the income statement [25][26] Question: What are the financing plans for the Midwest facility? - The company is exploring project-specific financing and bringing in non-dilutive partners into the capital stack [37]

Financial Data and Key Metrics Changes - First quarter sales were $11.6 million, representing a 38% increase compared to the first quarter of 2024 and a 15% sequential increase compared to the fourth quarter of 2024 [12] - Adjusted gross margin improved approximately 500 basis points year-over-year and approximately 400 basis points sequentially [13] - Net loss for the quarter was $37.7 million compared to a net loss of $24.1 million in the prior year period, largely reflecting higher interest expense [13] - Adjusted EBITDA loss for the quarter was $8.8 million compared to $6.9 million in the prior year period, but improved by $500,000 from the fourth quarter of 2024 [14] Business Line Data and Key Metrics Changes - Yields in the Georgia facility increased by 20% in the first quarter compared to the fourth quarter, attributed to the refinement of the growing system with the STACK phase [9] - The product mix recalibration at the Texas facility is expected to begin full commercial production this month, which is anticipated to drive operational efficiencies and margin improvement [8] Market Data and Key Metrics Changes - The company is actively engaged in discussions with multinational and national retailers to include the Midwest region in their sourcing plans, indicating strong market interest [10] - The relationship with Walmart has strengthened, with additional commitments to serve 13 Walmart distribution centers [11] Company Strategy and Development Direction - The company aims to achieve positive adjusted EBITDA in the third quarter of 2025, with a focus on operational efficiencies, product diversification, and cost management [7] - Plans to enter the Midwest with a new facility are progressing, with promising discussions with retailers [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA in the near term, driven by operational improvements and increased retail demand for CEA products [6][7] - The company expects revenue in the second quarter to be in the range of $12 million to $12.5 million, reflecting the impact of the Texas facility transition [17] Other Important Information - The company ended the quarter with cash and cash equivalents of $28.4 million, and a significant debt restructuring was completed, eliminating approximately $197 million of debt [16] - The restructuring will reduce interest expense over time, with no cash interest or amortization payments required for two years [28] Q&A Session Summary Question: What is driving the material lift coming into the back half of the year? - Management highlighted the Texas transition, Georgia yield improvement, and new products as key drivers for growth [21][22] Question: Can you elaborate on the Georgia yield improvement? - The yield increase is due to an R&D program focused on light optimization, which has exceeded expectations [22][23][34] Question: How will the debt restructuring impact interest expense? - The restructuring will allow for a gradual reduction in interest expense over ten years, with no cash interest payments for two years [27][28]