Financial Performance - Sales increased 38% to $11.6 million in Q1 2025, compared to $8.4 million in the prior year period, driven by production growth in Georgia and new facilities in Texas and Washington [4]. - Net loss for Q1 2025 was $37.7 million, compared to a net loss of $24.1 million in the prior year, primarily due to increased interest expense [10]. - Adjusted EBITDA loss was $8.8 million in Q1 2025, compared to a loss of $6.9 million in the prior year period [10]. - Total sales for the three months ended March 31, 2025, were $11,605,000, representing a 38.5% increase from $8,383,000 in the same period of 2024 [28]. - Net loss attributable to common stockholders for Q1 2025 was $38,078,000, compared to a net loss of $24,050,000 in Q1 2024, with a basic and diluted loss per share of $4.32 versus $2.89 [28]. - Adjusted EBITDA for Q1 2025 was $(8,782,000), compared to $(6,874,000) in Q1 2024, indicating a worsening operational performance [31]. Operational Highlights - Adjusted gross margin percentage improved to approximately 29% in Q1 2025, up from 24% in the prior year period, with expectations for further increases as the business scales [4]. - The Texas facility is transitioning to produce both head lettuce and cut products, with commercial production expected to begin in Q2 2025 [5]. - Local Bounti aims to achieve positive adjusted EBITDA in Q3 2025, driven by sales growth and cost reduction initiatives [17]. - The company continues to pursue capacity expansion projects and product development to meet growing demand from retailers and consumers [6][9]. Investment and Debt Management - The company secured a $25 million equity investment and restructured its debt, resulting in a new $312 million senior secured debt agreement [12]. - Long-term debt increased to $480,047,000 as of March 31, 2025, compared to $416,577,000 as of December 31, 2024 [27]. Cash Flow and Assets - Cash and cash equivalents rose significantly to $18,008,000 as of March 31, 2025, from $937,000 at the end of 2024 [27]. - Total current assets increased to $40,629,000 as of March 31, 2025, from $18,823,000 as of December 31, 2024 [27]. Expenses - Total operating expenses for Q1 2025 were $17,195,000, up from $11,085,000 in Q1 2024, driven by increased research and development costs [28]. - General and administrative expenses were adjusted to $5,815,000 for Q1 2025, compared to $4,305,000 in Q1 2024, reflecting increased operational costs [30]. Distribution and Partnerships - Local Bounti expanded its distribution with notable wins, including partnerships with Walmart and regional retailers in the Pacific Northwest [7][8]. - The company expects Q2 2025 sales to be approximately $12.0 to $12.5 million, with acceleration anticipated in the second half of 2025 [16].

Core Viewpoint - The market anticipates Local Bounti Corporation (LOCL) to report a year-over-year increase in earnings driven by higher revenues for the quarter ended March 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The consensus estimate indicates a quarterly loss of $1.31 per share, reflecting a year-over-year improvement of +54.7%. Revenues are projected to reach $11.1 million, representing a 32.5% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst assessments during this period [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, indicating no recent differing analyst views [10]. Zacks Rank and Predictive Power - Local Bounti holds a Zacks Rank of 2 (Buy), but this combination with a 0% Earnings ESP makes it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, Local Bounti was expected to post a loss of $3.89 per share but reported a loss of $4.21, resulting in a surprise of -8.23%. Over the past four quarters, the company has only beaten consensus EPS estimates once [12][13]. Conclusion - While the potential for an earnings beat exists, Local Bounti does not appear to be a strong candidate for such an outcome. Investors should consider additional factors when evaluating the stock ahead of the earnings release [16].

Group 1 - Local Bounti Corporation (LOCL) is a notable stock within the Consumer Staples sector, which consists of 177 individual stocks and holds a Zacks Sector Rank of 9 [2] - LOCL currently has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for LOCL's full-year earnings has increased by 30.4% in the past quarter, reflecting improved analyst sentiment and a stronger earnings outlook [4] Group 2 - Year-to-date, LOCL has returned approximately 13.5%, outperforming the Consumer Staples sector's average return of 4.9% [4] - Local Bounti Corporation is part of the Agriculture - Operations industry, which includes 14 stocks and is currently ranked 76 in the Zacks Industry Rank, while this industry has seen an average loss of 1.6% this year [6] - In comparison, Nomad Foods (NOMD), another stock in the Consumer Staples sector, has a year-to-date return of 15.7% and belongs to the Food - Miscellaneous industry, which is ranked 83 and has declined by 4% this year [5][6]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for fast-moving stocks is challenging, and investors may end up with expensive shares that have limited upside [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score helps identify strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen highlights attractively priced fast-moving stocks [2] Group 3: Local Bounti Corporation (LOCL) Analysis - Local Bounti Corporation (LOCL) has seen a significant price increase of 86.8% over the past four weeks, indicating growing investor interest [3] - LOCL's stock gained 55.7% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 2.14, suggesting it moves 114% higher than the market in either direction [4] Group 4: Valuation and Earnings Estimates - LOCL has a Momentum Score of B, indicating a favorable time to invest based on momentum [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - LOCL is trading at a Price-to-Sales ratio of 0.99, suggesting it is reasonably valued at 99 cents for each dollar of sales [6] Group 5: Additional Investment Opportunities - Besides LOCL, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [8]

Group 1 - Local Bounti Corporation (LOCL) is outperforming the Consumer Staples sector with a year-to-date gain of approximately 68.1%, while the sector average is only 0.8% [4] - LOCL is ranked 12 in the Zacks Sector Rank, which includes 177 companies, indicating a relatively strong position within the Consumer Staples group [2] - The Zacks Rank for LOCL is 2 (Buy), reflecting positive analyst sentiment and a favorable earnings outlook, with a 30.4% increase in the consensus estimate for full-year earnings over the past 90 days [3][4] Group 2 - Local Bounti Corporation is part of the Agriculture - Operations industry, which has seen a decline of about 10.4% year-to-date, highlighting LOCL's relative strength in this sector [6] - Another stock in the Consumer Staples sector, Primo Brands (PRMB), has a year-to-date return of 7.2% and a Zacks Rank of 1 (Strong Buy), with a 51.4% increase in the consensus EPS estimate over the past three months [5]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [3] Group 2: Local Bounti Corporation (LOCL) Analysis - LOCL has shown a price increase of 18% over the past four weeks, indicating growing investor interest [4] - The stock gained 31.2% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - LOCL has a beta of 2.14, suggesting it moves 114% higher than the market in either direction, indicating fast-paced momentum [5] - LOCL has a Momentum Score of A, suggesting it is an opportune time to invest in the stock [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - LOCL is trading at a Price-to-Sales ratio of 0.64, indicating it is reasonably valued at 64 cents for each dollar of sales [7] Group 3: Investment Opportunities - LOCL appears to have significant potential for growth at a fast pace, alongside other stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria [8] - There are over 45 Zacks Premium Screens available to help identify winning stock picks based on various investing styles [9]

Facility Expansion and Operations - Local Bounti completed construction on two new facilities in Texas and Washington in 2024, increasing its total facility count to six[124]. - The company expects to incur significant expenses and continuing losses for the foreseeable future as it expands its facilities and commercial sales[118]. - Local Bounti anticipates that its existing cash, projected cash from product sales, and PIPE Financing will be sufficient to fund operations for at least the next 12 months[121]. - The company relies on a limited number of facilities, and any adverse changes could impair its ability to produce products[124]. - Local Bounti's ability to scale operations and reduce costs of goods sold is critical for future profitability, but it faces risks from inflation and supply chain interruptions[130]. - The company may face unexpected delays in facility construction due to various factors, which could negatively impact its operations[132]. - Local Bounti's growth strategy involves building additional Controlled Environment Agriculture (CEA) facilities and expanding its product line[172]. Financial Risks and Capital Management - The company may need additional financing sooner than planned, which could lead to dilution of stockholders' equity[123]. - Local Bounti's operating plan may change due to unforeseen factors, necessitating additional capital that may not be available on favorable terms[123]. - Local Bounti's financial condition may be adversely impacted if the cost of maintaining necessary equipment exceeds expectations[159]. - The company relies on estimates and assumptions for financial reporting, and incorrect judgments could negatively affect its operations and market expectations[160]. - Local Bounti's internal control over financial reporting is crucial; any material weaknesses could lead to misstatements and loss of investor confidence[161]. - The company has a term loan facility with Cargill Financial, secured by all assets, which could limit financial flexibility if conditions are not met[174][175]. - Local Bounti's after-tax profitability could be adversely affected by changes in tax laws, rates, and regulations, potentially with retroactive effects[224]. - The company is dependent on distributions from its subsidiaries to cover taxes and corporate expenses, which could materially affect its liquidity and financial condition[227]. Market and Competitive Environment - Local Bounti operates in a highly competitive natural food market, facing competition from large-scale operations and traditional field farms[167][169]. - The ability to secure product placement with customers is critical for Local Bounti's success, especially when entering new markets[168]. - Local Bounti's growth strategy includes expanding into new markets and product categories, such as salad kits, but success is not guaranteed[148]. - The company may face challenges in securing new customers for its products in new geographies, which could adversely affect its financial condition[154]. - A significant portion of Local Bounti's revenue comes from a small number of top retail customers, and any loss or reduction in orders from these customers could materially impact the business[193]. Regulatory and Compliance Issues - Local Bounti is subject to food safety standards set by regulatory authorities, which could impact its ability to operate reliably if widespread food safety issues arise[136]. - The regulatory environment for food products is highly complex, and changes in regulations could lead to increased costs or operational interruptions for Local Bounti[200]. - Local Bounti's operations are subject to extensive regulation by the USDA and FDA, and non-compliance could result in enforcement actions and recalls[210]. - The company employs internal and third-party resources to ensure compliance with food safety regulations, but failures could lead to civil penalties and increased operating costs[211]. - Disruptions in the supply chain due to supplier non-compliance could adversely affect Local Bounti's business and financial condition[212]. Operational Challenges and Risks - Local Bounti's ability to maintain its brand value is critical, as negative publicity could impair its business and financial condition[140]. - The company may encounter difficulties in integrating acquired businesses, which could disrupt operations and divert resources[142]. - Local Bounti's estimates of market opportunity and growth forecasts are subject to significant uncertainty, and actual growth may not meet expectations[143]. - The company may struggle to maintain its culture and focus on its vision as it grows, which could harm its competitive position[144]. - Local Bounti faces significant risks related to product contamination, which could lead to lawsuits, recalls, and increased operating costs[203]. Economic and Environmental Factors - Public health crises, such as COVID-19, could adversely affect Local Bounti's operations and demand for its products[162]. - The company faces risks related to seed supply and other inputs; increased costs could negatively impact financial results[163]. - Climate change and related regulations may increase operational costs and impact productivity[213]. - Political issues, including potential tariffs and changes in trade agreements, could significantly affect Local Bounti's business and financial performance[201]. - The elimination of government incentives could diminish Local Bounti's competitiveness and adversely affect its financial condition[214]. Stock and Market Performance - Local Bounti has never paid cash dividends and intends to retain earnings for business growth, affecting shareholder returns[216]. - The trading price of Local Bounti's common stock is subject to volatility influenced by various market factors, which may not reflect actual operating performance[215]. - Local Bounti's common stock is at risk of delisting from the NYSE due to non-compliance with the Minimum Market Capitalization Standard, as its average market capitalization was below $50 million[233]. - If the company fails to maintain a minimum average closing price of $1.00 per share, it risks immediate delisting from the NYSE[234]. - Future sales of shares by existing stockholders could adversely affect the market price of Local Bounti's common stock[236]. Intellectual Property and Technology Risks - Local Bounti's intellectual property rights are vital for its competitive position; any loss could enable competitors to gain an advantage[179]. - The company relies on information technology systems poses risks, as failures or security breaches could lead to decreased yield or quality, resulting in additional labor expenses and potential crop loss[181]. - The company faces cybersecurity risks that could result in significant operational disruptions, loss of sensitive information, and reputational harm, which may adversely affect its financial condition[183]. Consumer Preferences and Demand - Local Bounti's product offerings, including loose leaf and living lettuce, are subject to changing consumer preferences, which could negatively impact demand and financial performance[190]. - Seasonal fluctuations in demand for leafy greens may affect Local Bounti's sales and operating results, leading to potential supply-demand imbalances[192].

Financial Data and Key Metrics Changes - Sales for the full year increased by 38% to $38.1 million compared to $27.6 million in 2023 [26] - Adjusted gross margin for the full year remained consistent at approximately 27%, excluding depreciation and stock-based compensation [28] - Fourth quarter adjusted gross margin improved by 200 basis points year-over-year, impacted by increased labor costs associated with production ramp-ups [30] Business Line Data and Key Metrics Changes - The company opened two new facilities in Washington and Texas, completed the Georgia build-out, and transitioned Montana to commercial operations [14] - The Texas facility is undergoing reconfiguration to produce both living head products and cut products, which temporarily impacted full utilization [27][40] - The company expanded its distribution network, including partnerships with Walmart and other retailers, enhancing its product offerings [24][25] Market Data and Key Metrics Changes - The company is experiencing strong demand for controlled environment agriculture (CEA) products, with retailers increasingly interested in these offerings [46] - The ongoing challenges in traditional outdoor agriculture, such as food safety issues, are reinforcing the value proposition of the company's CEA approach [25] Company Strategy and Development Direction - The company is focused on achieving positive adjusted EBITDA and has implemented a strategy to optimize its product mix with high-value specialty greens [19][32] - The company is considering acquisitions to accelerate market entry and customer reach while evaluating existing infrastructure for potential repurposing [21] - A disciplined capital allocation philosophy is being prioritized, with investments aimed at delivering the fastest path to positive returns [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strengthened financial position and operational improvements, positioning it well for future growth [18][34] - The company anticipates achieving positive adjusted EBITDA in the third quarter of 2025, supported by operational efficiencies and a new capital structure [32][33] - Management emphasized the importance of adaptability and customer-centric operations in response to evolving market demands [27] Other Important Information - The company secured $27.5 million in new funding, including $25 million in equity, and restructured its existing credit agreement, resulting in a nearly 40% reduction in debt [15][16] - The restructured agreement allows for no cash payments until April 2027 and a significantly reduced interest rate of approximately 6% [17] Q&A Session Summary Question: Changes in Georgia and Texas production and impact on unit economics - Management indicated that changes primarily occurred in Texas, where half of the facility ships cut products under a long-term agreement, while the other half is being converted for dual production [38][39] Question: Pricing power and volume benefits - Management noted that as customers become more familiar with their products, it enhances their ability to negotiate better pricing, with a price increase set to take effect in April [42] Question: Relationship with Walmart and shelf space dynamics - Management highlighted that major retailers are increasingly interested in CEA products, and the company's restructuring positions it favorably compared to other providers [47] Question: Variable cost structure in Georgia facility - Management reported that the Georgia facility has successfully reduced seed and labor costs, contributing to improved variable cost management [54] Question: Update on Midwest expansion initiative - Management confirmed that the Midwest expansion is still a priority, with ongoing discussions with retailers to ensure alignment with their product needs [57] Question: Build versus buy dynamic in expansion strategy - Management expressed a preference for acquiring existing greenhouses that can be quickly utilized, as demonstrated by their approach in Georgia [60][61]

Financial Data and Key Metrics Changes - Sales for the full year increased by 38% to $38.1 million compared to $27.6 million in 2023, driven by increased production from the Georgia facility and contributions from new facilities in Texas and Washington [26][27] - Adjusted gross margin for the full year remained consistent at approximately 27%, excluding depreciation and stock-based compensation [28] - Fourth quarter adjusted gross margin improved by 200 basis points year-over-year, impacted by increased labor costs associated with production ramp-ups [30] Business Line Data and Key Metrics Changes - The company opened two new facilities in Washington and Texas, completed the Georgia build-out, and transitioned Montana to commercial operations [14] - The Texas facility is undergoing reconfiguration to produce both living head products and cut products, which temporarily impacted full utilization [27][40] - Distribution of high-value specialty greens expanded, including partnerships with Walmart and other retailers [24][25] Market Data and Key Metrics Changes - The company is experiencing strong demand for controlled environment agriculture (CEA) products, with retailers increasingly interested in these offerings [46] - The restructuring of the balance sheet positions the company favorably compared to other CEA providers, enhancing relationships with customers [47] Company Strategy and Development Direction - The company aims to achieve positive adjusted EBITDA by the third quarter of 2025, focusing on operational efficiency and an optimized product mix [32][34] - A strategic approach to expansion is being adopted, balancing build versus buy considerations, with a focus on advantageous acquisition opportunities [21][20] - The company is prioritizing investments that deliver the fastest path to positive returns, aligning production capabilities with specific customer needs [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to innovate and optimize operations under new leadership [8][9] - The company is committed to meeting growing customer demand for sustainable, locally grown produce, emphasizing the importance of operational excellence [34] - Management anticipates a sequential revenue lift beginning in Q2 2025 as the Texas facility completes its reconfiguration [31] Other Important Information - The company secured $27.5 million in new funding, including $25 million in equity, and restructured its existing credit agreement, resulting in a nearly 40% reduction in debt [15][16] - The restructured agreement allows for no cash payments until April 2027 and a significantly reduced interest rate of approximately 6% [17][18] Q&A Session Summary Question: Changes in Georgia and Texas production and impact on unit economics - Management indicated that changes primarily occurred in Texas, where half of the facility ships cut products under a long-term agreement, while the other half is being converted to produce both living head and cut products [37][39] Question: Pricing power and volume benefits - Management noted that as customers become more familiar with their products, it provides leverage to negotiate better pricing, with a price increase set to take effect in April [41][42] Question: Relationship with Walmart and shelf space dynamics - Management highlighted that major retailers are increasingly interested in CEA products, and the company's restructuring positions it favorably to solidify relationships with customers [44][47] Question: Variable cost structure of the Georgia facility - Management reported that the Georgia facility has successfully reduced seed and labor costs, contributing to improved variable cost management [52][54] Question: Update on Midwest expansion initiative - Management confirmed that the Midwest expansion is still an intention, with ongoing discussions with retailers to ensure the facility design meets their needs [56][57] Question: Build versus buy dynamic in expansion strategy - Management expressed a preference for acquiring existing greenhouses that can be quickly utilized, as demonstrated with the Georgia facility, which increased productivity significantly [58][60]

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