Edible Garden AG rporated(EDBL) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 9% year-over-year to $2.8 million, compared to $2.6 million in Q3 2024, driven by strong performance in the shelf-stable product portfolio [14][15] - Gross profit totaled approximately $0.3 million, down from $0.7 million in the prior year, due to higher labor, freight, and raw material costs [15] - Net loss for the quarter was $4 million, compared to a net loss of $2.1 million in Q3 2024 [15] Business Line Data and Key Metrics Changes - The shelf-stable product portfolio grew by 54% year-over-year in Q3, with notable performance from brands like KICK Sports Nutrition, Vitamin Way, Pulp, and Pickle Party [14][15] - Core herb portfolio saw growth, with Hydrobasil up 21% and Wheatgrass up 59% year-over-year [15] Market Data and Key Metrics Changes - The functional food and beverage market is projected to grow from approximately $400 billion to $610 billion by 2030, indicating a significant opportunity for the company [10] - In the U.S., sales of natural, organic, and functional products are expected to reach $386 billion by 2028, reinforcing the company's strategic alignment with market trends [10] Company Strategy and Development Direction - The company is evolving towards a consumer packaged goods (CPG) model, focusing on non-perishable product expansion and higher-value branded portfolio [7][8] - Strategic partnerships with major retailers like Kroger and Fresh Market are being leveraged to expand the retail footprint and enhance brand visibility [9][13] - The company is pursuing new categories, including nutraceuticals and sustainable proteins, to align with its commitment to health and environmental responsibility [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued growth, emphasizing disciplined execution and product innovation [13][44] - The company is optimistic about the upcoming holiday season, traditionally a strong period for sales, and is focused on expanding its innovative product offerings [25][44] Other Important Information - The company has refinanced its outstanding debt, securing lower interest rates and more favorable terms, which is expected to reduce annual interest expenses [15] - The facility acquired from Natural Shrimp is undergoing a gap analysis for R&D on next-generation products, indicating a focus on innovation and sustainability [21][24] Q&A Session Summary Question: Utilization of the Natural Shrimp facility - Management discussed the facility's impressive capabilities and plans for R&D on nutraceuticals and food products, highlighting strong relationships with major retailers [21][24] Question: Opportunities in grocery stores for 2026 - Management confirmed that grocery chains like ShopRite, Kroger, and Fresh Market represent significant opportunities moving into 2026, driven by demand for clean-label products [27][28] Question: Margin considerations for private label products - Management indicated that while private label products may have lower margins, they provide volume and long-term contracts, which are essential for business stability [31][33]