Core Viewpoint - Local Bounti Corporation is set to release its financial results for the fiscal year ended December 31, 2024, on March 31, 2025, after market close [1] Financial Results Announcement - The financial results will be discussed in a conference call with the executive management team scheduled for 4:30 p.m. ET on March 31, 2025 [2] - The call will be accessible via telephonic participation for North American and international listeners, with specific dial-in numbers provided [2] Webcast and Playback Information - The conference call will be broadcast live on the Company's website and will be archived for later access [3] - A telephonic playback will be available until April 7, 2025, with dedicated numbers for North American and international listeners [3] Company Overview - Local Bounti is innovating indoor farming through its patented Stack & Flow Technology®, enhancing crop turns and improving unit economics [4] - The Company operates advanced indoor growing facilities across the U.S., servicing approximately 13,000 retail doors [4] - Local Bounti employs sustainable growing methods that use 90% less land and 90% less water compared to conventional farming [4] - The mission of Local Bounti is to revolutionize agriculture by ensuring access to fresh, sustainable, locally grown produce [4]

Core Insights - Local Bounti Corporation has secured a two-year contract with a large multinational retailer to supply living butter lettuce to 13 distribution centers, highlighting the company's customer-centric approach and commercial momentum [1][2] - The CEO emphasized the demand for fresh, sustainable, locally grown produce and the company's strategy to align capacity with customer demand, which is expected to drive performance and lead to positive adjusted EBITDA by Q2 2025 [2][3] Company Overview - Local Bounti is innovating indoor farming through its patented Stack & Flow Technology®, which enhances crop turns, output, and unit economics, operating advanced facilities across the U.S. and servicing approximately 13,000 retail doors [3] - The company utilizes sustainable growing methods that consume 90% less land and water compared to traditional farming, aiming to revolutionize agriculture and ensure accessibility to fresh produce [3] Strategic Approach - The award from the retailer is a result of strategic discussions with both new and existing customers, ensuring that facilities are optimized for specific products that align with customer distribution plans [2] - This customer-centric strategy allows Local Bounti to maximize synergies across its growing footprint and customer network, enhancing overall performance [2]

Financial Data and Key Metrics Changes - In Q3 2024, the company reported sales of $10.2 million, a 50% increase year-over-year, but below expectations due to strategic adjustments [6][28] - Adjusted gross margin reached 32%, reflecting a 300 basis point sequential improvement from Q2 2024 [12][30] - The adjusted EBITDA loss improved by $600,000 to $8.4 million compared to the previous year [36] Business Line Data and Key Metrics Changes - The company is shifting its growing plans to focus on high-demand specialty products like Arugula and Spinach, impacting production mix and revenue contributions [7][13] - The Texas facility's production is not yet fully optimized, with expectations for achieving optimized run rates pushed to early Q2 2025 [29][41] Market Data and Key Metrics Changes - The company has expanded its commercial relationships, shipping to over 180 Brookshire Grocery Company locations and fulfilling agreements with Sam's Club [14][15] - The controlled environment agriculture industry is facing challenges, but the company's ability to provide safe, high-quality produce positions it favorably against traditional agriculture [17] Company Strategy and Development Direction - The company is adopting a more measured approach to expansion, aligning production capabilities with verified customer demand to ensure sustainable growth [9][18] - Strategic initiatives include optimizing operations and facility networks to maximize revenue-generating potential in a capital-efficient manner [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA by Q2 2025, emphasizing a customer-driven approach to operational excellence [18][58] - The company is focused on deepening relationships with customers and enhancing operational efficiencies to improve margins [55][57] Other Important Information - The company has cash, cash equivalents, and restricted cash amounting to $6.8 million as of September 30, 2024, with additional funding provided by lenders [36][38] - The company is evaluating financing arrangements to support strategic initiatives while ensuring flexibility for near-term objectives [26][27] Q&A Session Summary Question: What are the drivers of revenue ramp from Q3 to Q4 and into 2025? - Management highlighted the ramp in production and throughput, pricing, and the introduction of new SKUs as key drivers of revenue growth [47][48] Question: What are the corporate goals for 2025? - Goals include increasing utilization of existing facilities, operational efficiencies, and aligning expansions with customer feedback [52][53] Question: Where does the Texas facility stand compared to Georgia and Washington facilities? - Georgia and Washington facilities are at full capacity, while Texas is expected to reach optimized run rates by early Q2 2025 [61] Question: What is the status of conversations with potential capital providers? - Management is actively engaged with multiple capital providers and is optimistic about securing capital once customer feedback is solidified [62][64] Question: What is the status of the Midwest expansion? - The site for the Midwest expansion is confirmed, but the size and internal configuration are under consideration based on customer demand [68][69]

Sales Performance - Sales for the three months ended September 30, 2024, increased by $3.4 million (50%) to $10.2 million compared to $6.8 million for the same period in 2023[70] - Sales for the nine months ended September 30, 2024, increased by $7.4 million (36%) to $28.1 million compared to $20.7 million for the same period in 2023[70] Gross Profit - Gross profit for the three months ended September 30, 2024, was $1.4 million, a 249% increase from $405,000 in the same period in 2023[70] - Gross profit for the nine months ended September 30, 2024, was $3.6 million, a 131% increase from $1.5 million in the same period in 2023[70] Cost of Goods Sold - Cost of goods sold for the three months ended September 30, 2024, increased by $2.4 million (38%) to $8.8 million compared to $6.4 million for the same period in 2023[70] - Cost of goods sold for the nine months ended September 30, 2024, increased by $5.4 million (28%) to $24.5 million compared to $19.2 million for the same period in 2023[70] Production and Expansion Plans - The company completed the transition of its Montana facility to commercial production in Q3 2024, aiming for positive adjusted EBITDA by Q2 2025[64] - The company plans to expand its production capacity and product offerings, including new varieties of fresh greens and herbs, through new facilities and acquisitions[63] - The company signed an offtake agreement with Sam's Club in October 2022 for leafy greens production, which runs through September 2028[62] - The company introduced new Grab & Go Salad Kits and expanded its product assortment with several high-velocity offerings in Q3 2024[66] Research and Development Expenses - Research and development expenses increased by $2.1 million for the three months ended September 30, 2024, compared to the same period in 2023, and by $3.0 million for the nine months ended September 30, 2024[80] Selling, General, and Administrative Expenses - Selling, general, and administrative expenses decreased by $2.1 million for the three months ended September 30, 2024, primarily due to a $1.6 million decrease in stock-based compensation expense[82] - Selling, general, and administrative expenses decreased by $16.4 million for the nine months ended September 30, 2024, mainly due to a $10.1 million decrease in stock-based compensation expense[83] Interest Expense - Interest expense, net increased by $11.2 million for the three months ended September 30, 2024, primarily due to a significant increase in the principal amount outstanding on the Senior Facility[86] - Interest expense, net increased by $22.5 million for the nine months ended September 30, 2024, mainly due to a $21.0 million increase in the principal amount outstanding on the Senior Facility[87] Financial Position - As of September 30, 2024, the company had an accumulated deficit of $387.0 million and cash and cash equivalents of $6.8 million[88] - Outstanding debt principal totaled $431.7 million as of September 30, 2024, with required quarterly principal payments beginning April 1, 2025[89] Cash Flow - Net cash used in operating activities was $28.3 million for the nine months ended September 30, 2024, primarily due to a net loss of $83.6 million[100] - Net cash used in investing activities was $72.6 million for the nine months ended September 30, 2024, due primarily to purchases for the Washington, Texas, and Georgia facilities[102] - The company plans to renegotiate credit facility terms to provide additional working capital and defer principal payments through November 30, 2025[92] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $90.8 million, primarily from $90.9 million of net proceeds from debt issuance[103] - In comparison, net cash provided by financing activities for the nine months ended September 30, 2023, was $136.6 million, which included $101.9 million from debt issuance and $35.0 million from a sale and leaseback transaction[103]

Financial Performance - Local Bounti Corporation reported a quarterly loss of $4.01 per share, which was worse than the Zacks Consensus Estimate of a loss of $2.78, and compared to a loss of $3.02 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $10.24 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 21.22%, and this represents an increase from year-ago revenues of $6.81 million [2] - Over the last four quarters, Local Bounti has surpassed consensus EPS estimates only once, indicating challenges in meeting market expectations [2] Stock Performance and Outlook - Local Bounti shares have increased by approximately 12.9% since the beginning of the year, underperforming compared to the S&P 500's gain of 25.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$2.57 on revenues of $21.2 million, and for the current fiscal year, it is -$11.24 on revenues of $52 million [7] Industry Context - The Agriculture - Operations industry, to which Local Bounti belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a relatively strong position within the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Local Bounti's stock performance [5]

Financial Performance - Sales increased by 50% to $10.2 million in Q3 2024, compared to $6.8 million in the prior year period, driven by increased production and sales growth from facilities in Georgia, Texas, and Washington[3]. - Net loss for Q3 2024 was $34.3 million, compared to a net loss of $24.3 million in the prior year period[7]. - Adjusted EBITDA loss improved to $8.4 million, compared to a loss of $9.0 million in the prior year period[8]. - Total sales for Q3 2024 reached $10,242,000, a 50.5% increase from $6,810,000 in Q3 2023[25]. - Basic and diluted net loss per share for Q3 2024 was $(4.01), compared to $(3.02) in Q3 2023, reflecting increased losses per share[25]. - Net loss for September 2024 was $34,327,000 compared to a loss of $24,258,000 in September 2023, representing a 41.5% increase in losses year-over-year[30]. - Adjusted EBITDA for September 2024 was $(8,355,000), slightly improved from $(8,982,000) in September 2023[30]. Revenue and Growth Projections - The company anticipates Q4 2024 revenues of approximately $11 million, reflecting year-over-year growth of about 67%[16]. - Adjusted gross margin percentage improved to approximately 32%, up by about 300 basis points sequentially, with gross profit reported at $1.4 million[3][4]. - Adjusted gross profit for Q3 2024 was $3,253,000, with an adjusted gross margin of 32%, compared to 25% in Q3 2023[28]. Research and Development - Research and development expenses rose to $7.1 million in Q3 2024, compared to $5.0 million in the prior year, with expectations for future decreases as production thresholds for new product lines are reached[6]. - Research and development expenses for Q3 2024 were $7,096,000, up from $5,001,000 in Q3 2023, highlighting increased investment in innovation[25]. Assets and Liabilities - Total current assets decreased to $17,303,000 in 2024 from $26,988,000 in 2023, primarily due to a reduction in cash and cash equivalents[24]. - Total liabilities increased to $496,427,000 in 2024 from $366,479,000 in 2023, reflecting higher accounts payable and long-term debt[24]. - Total stockholders' equity showed a deficit of $(65,613,000) in 2024, down from a positive equity of $15,273,000 in 2023, indicating financial distress[24]. Inventory and Production - The transition of the Hamilton, Montana facility to commercial production was completed in Q3 2024, supporting the goal of achieving positive adjusted EBITDA by Q2 2025[9]. - The company reported a significant increase in inventory, rising to $6,547,000 in 2024 from $4,210,000 in 2023, indicating potential overstock issues[24]. - The company expanded its product assortment in Q3 2024, introducing several high-velocity offerings, including Arugula and Spinach[11]. Financing and Strategic Initiatives - The company is evaluating financing arrangements to support strategic initiatives while maintaining a focus on achieving positive adjusted EBITDA[2]. - As of September 30, 2024, the company had cash and cash equivalents of $6.8 million, with an additional $6 million received from a lender for working capital[13]. Expenses and Cost Management - Stock-based compensation expense decreased to $1,387,000 in September 2024 from $3,265,000 in September 2023, a reduction of 57.5%[30]. - Interest expense, net increased significantly to $18,312,000 in September 2024 from $7,105,000 in September 2023, marking a 157.5% rise[30]. - Depreciation and amortization expenses rose to $5,868,000 in September 2024 from $3,405,000 in September 2023, an increase of 72.3%[30]. - Business acquisition and strategic transaction costs amounted to $614,000 in September 2024, down from $1,975,000 in September 2023, a decrease of 68.9%[30]. - Loss on disposal of fixed assets was $1,610,000 in September 2024, consistent with the same amount in September 2023[30]. - Utilities price spike and inclement weather related costs were recorded at $727,000 in the previous year, with no current costs reported[30]. - Change in fair value of warrant liability showed a loss of $(1,921,000) in September 2024 compared to $(1,766,000) in September 2023[30]. - Restructuring and business realignment costs were $152,000 in September 2023, with no current costs reported for September 2024[30].

Group 1 - Local Bounti Corporation reported a quarterly loss of $3 per share, which was better than the Zacks Consensus Estimate of a loss of $3.19, but worse than the loss of $1.35 per share a year ago, indicating an earnings surprise of 5.96% [1] - The company posted revenues of $9.44 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 16.43%, compared to revenues of $7.18 million a year ago [2] - Local Bounti shares have increased approximately 30.4% since the beginning of the year, outperforming the S&P 500's gain of 12.1% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$3.11 on revenues of $16.1 million, and for the current fiscal year, it is -$12.08 on revenues of $55.4 million [7] - The Agriculture - Operations industry, to which Local Bounti belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Sales for Q2 2024 reached $9.443 million, a 31% increase from $7.183 million in Q2 2023, while sales for the first half of 2024 totaled $17.826 million, up 28% from $13.881 million in the same period last year[60]. - Gross profit for Q2 2024 was $1.351 million, representing a 59% increase compared to $0.852 million in Q2 2023, and for the first half of 2024, gross profit was $2.137 million, an 89% increase from $1.131 million in the prior year[60]. - The company reported a net loss of $25.267 million for Q2 2024, a 137% increase from a net loss of $10.676 million in Q2 2023, and a net loss of $49.317 million for the first half of 2024, up 44% from $34.203 million in the same period last year[60]. Operational Expansion - The company has expanded its distribution network to approximately 13,000 retail locations across 35 U.S. states, with a leading 80% market share in living butter lettuce within the Western U.S.[54]. - Local Bounti has completed construction on two new facilities in Washington and Texas in 2024, bringing the total facility count to six, enhancing production capacity and distribution capabilities[53][56]. - The transition of the Montana Facility to commercial production is nearly complete, expected to support goals of achieving positive adjusted EBITDA by early 2025[56]. Product Development and Innovation - The company plans to introduce new product offerings, including high-velocity items like spinach, arugula, and basil in Q3 2024, and aims to expand its Grab & Go Salad Kits to approximately 700 doors by the end of 2024[58]. - Research and development expenses for Q2 2024 were $4.519 million, a 28% increase from $3.526 million in Q2 2023, reflecting ongoing investment in product innovation[60]. - Research and development costs rose by $1.0 million for the three months ended June 30, 2024, focusing on production methods and new product development[66]. Financial Obligations and Cash Flow - The company reported an accumulated deficit of $352.6 million and cash and cash equivalents of $16.2 million as of June 30, 2024[77]. - Total financing obligation payments amount to $144.9 million, with significant payments due starting in 2025[87]. - The company expects to close on financing of approximately $228 million from commercial finance lenders in Q3 2024, with potential additional financing of up to $175 million[80]. Cost Management - Selling, general, and administrative expenses decreased by $6.0 million for the three months ended June 30, 2024, attributed to reductions in stock-based compensation and other operational costs[70]. - The company anticipates significant salary cost savings of approximately $5.0 million on an annualized basis due to organizational restructuring[70]. Cash Flow Analysis - Cash used in operating activities was $11.1 million for the six months ended June 30, 2024, an improvement from $16.1 million in the same period of 2023[88]. - Net cash used in operating activities was $11.1 million for the six months ended June 30, 2024, compared to $16.1 million for the same period in 2023, reflecting a net loss of $49.3 million in 2024 versus $34.2 million in 2023[89][90]. - Net cash used in investing activities decreased to $59.8 million for the six months ended June 30, 2024, from $76.2 million in the same period of 2023, primarily due to purchases for facilities[91]. - Net cash provided by financing activities was $70.2 million for the six months ended June 30, 2024, compared to $107.8 million in 2023, with the 2024 amount consisting entirely of net proceeds from debt issuance[91]. Non-Cash Activities - The company incurred a non-cash loss of $3.1 million related to the change in fair value of warrant liability for the six months ended June 30, 2024[89]. - Non-cash activities included $21.7 million in paid-in-kind interest and $5.3 million in depreciation expense for the six months ended June 30, 2024[89]. - The net loss for the six months ended June 30, 2023, included a non-cash gain in fair value of warrant liability of $15.2 million[90]. Accounting and Reporting - The company has not made any changes to its critical accounting policies and estimates as of the latest reporting period[92]. - The company is classified as a smaller reporting company and is not required to provide certain disclosures under the Exchange Act[94].

Sales Performance - Sales increased by 31% to $9.4 million in Q2 2024, compared to $7.2 million in the prior year period, driven by increased production and growth from the Georgia facility[3]. - Full year 2024 sales guidance is reiterated at $50 to $60 million, representing a doubling of revenue compared to 2023[1][14]. - Sales for the three months ended June 30, 2024, were $9,443,000, an increase of 31.6% compared to $7,183,000 for the same period in 2023[23]. Financial Performance - Operating loss improved by $5.5 million to $13.9 million in Q2 2024, compared to a loss of $19.4 million in Q2 2023[4]. - Net loss was $25.3 million in Q2 2024, compared to a net loss of $10.7 million in the prior year period[4]. - The net loss for the three months ended June 30, 2024, was $25,267,000, compared to a net loss of $10,676,000 for the same period in 2023[23]. - The company reported a basic and diluted net loss per share of $3.00 for the three months ended June 30, 2024, compared to a loss of $1.35 for the same period in 2023[23]. - Adjusted EBITDA for June 2024 was $(7,535) thousand, compared to $(8,274) thousand in June 2023, showing a slight improvement[28]. Cost Management - Total operating expenses for the three months ended June 30, 2024, were $15,215,000, a decrease of 24.9% from $20,230,000 in the same period of 2023[23]. - Adjusted selling, general and administrative expenses for the three months ended June 2024 were $7,211 thousand, down from $7,810 thousand in the same period last year[27]. - Business acquisition and strategic transaction costs for the three months ended June 2024 were $783 thousand, down from $2,630 thousand in the same period last year[28]. - Stock-based compensation expense for June 2024 was $1,648 thousand, compared to $4,434 thousand in June 2023, reflecting a reduction in equity compensation costs[28]. - Restructuring and business realignment costs for June 2024 were $9 thousand, significantly lower than $724 thousand in June 2023, suggesting improved operational efficiency[28]. Cash and Liquidity - The company ended Q2 2024 with cash and cash equivalents of $16.2 million, positioning it to fund ongoing projects and operations[12]. - Cash and cash equivalents as of June 30, 2024, were $9,685,000, a decrease from $10,326,000 as of December 31, 2023[22]. Asset and Liability Management - Total assets increased to $438,099,000 as of June 30, 2024, from $381,752,000 as of December 31, 2023[22]. - Total liabilities increased to $470,938,000 as of June 30, 2024, compared to $366,479,000 as of December 31, 2023[22]. Production and Expansion - The company began shipping products from its new Texas and Washington facilities, enhancing distribution capabilities[6][9]. - Local Bounti is expanding its product assortment, including new Grab-and-Go Salad Kits, with expectations to reach approximately 700 doors by the end of 2024[10][11]. - The transition of the Montana facility to commercial production is nearly complete, supporting the goal of achieving positive adjusted EBITDA in early 2025[8]. Research and Development - Research and development expenses for the three months ended June 30, 2024, were $4,519,000, up from $3,526,000 in the same period of 2023[23]. Interest and External Costs - Interest expense, net for June 2024 was $12,500 thousand, up from $6,472 thousand in June 2023, indicating increased borrowing costs[28]. - Utilities price spike and inclement weather related costs were recorded as $727 thousand for the six months ended June 2024, indicating external cost pressures[28].

Core Viewpoint - Local Bounti Corporation has promoted Kathleen Valiasek to President and Chief Financial Officer, reflecting her significant contributions to the company's operational efficiency and growth strategy [1][2]. Company Overview - Local Bounti is an innovative indoor agriculture company utilizing patented Stack & Flow Technology® to enhance crop yields and improve unit economics, operating advanced facilities across the U.S. and servicing approximately 13,000 retail doors [5]. - The company aims to revolutionize agriculture by ensuring access to fresh, sustainable, locally grown produce while using 90% less land and water compared to conventional farming methods [5]. Leadership Changes - Kathleen Valiasek has been with Local Bounti as CFO since April 2021 and has previously held significant roles in other companies, including Amyris and Lenox Group, showcasing her extensive experience in finance and strategic consulting [3]. - In her new role, Valiasek will oversee operations, innovation, commercial, and marketing activities while continuing to lead the financial organization [2]. Strategic Goals - The company aims to achieve positive adjusted EBITDA by early 2025, indicating a focus on financial performance and operational efficiency [2][4].