Local Bounti (LOCL) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Results Announcement Overview and Highlights 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] - 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][3] - Completed $10 million convertible note financing and reduced $10 million in principal debt[2][3] Management Commentary 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] - 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] - The company is committed to realizing the significant opportunity in sustainable food production through its patented Stack & Flow Technology® and world-class team[3] Second Quarter 2025 Financial Summary Key Financial Metrics 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] - Net loss improvement was mainly due to lower net interest expense resulting from debt restructuring activities completed in Q1 2025[8] Operational Updates Commercial Facilities Update 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] - 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] - 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] - 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] Product Development & Distribution 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] - 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] - 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] Capital Structure Financing and Debt Management 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] - 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] - Expected to recover approximately $2.3 million in cash through equipment lease transactions[11] Shares Outstanding 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 Sales and Profitability Projections 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] - Anticipated continuous improvement in Adjusted EBITDA loss rates for Q3 and Q4 2025[14] - Based on enhanced visibility into customer timelines and commercial rollout plans, the company now expects to achieve positive Adjusted EBITDA by early 2026[3][14] Corporate Information Conference Call Details 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] - North American dial-in: (877) 514-3623; International dial-in: +1 (201) 689-8768; Conference ID: 13754459[15] - The call will be webcast and archived via the 'Investors' section of the company's website, localbounti.com[16] About Local Bounti 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] - The company operates advanced indoor growing facilities across the U.S., serving approximately 13,000 retail stores[17] - 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] Legal and Financial Disclosures Forward-Looking Statements 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] - 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] - The company undertakes no obligation to update or revise any forward-looking statements and cautions readers not to place undue reliance on them[18] Non-GAAP Financial Information 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] - 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] - 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] Financial Statements and Reconciliations Unaudited Condensed Consolidated Balance Sheets 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 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 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) |