Edible Garden (EDBL) Q2 2024 earnings summary

Executive summary

• Achieved a 157% increase in gross profit for Q2 2024, driven by 61% year-over-year growth in cut herbs and 30% growth in vitamins and supplements.

• Shifted focus to higher-margin, in-house produced products, now accounting for 95% of the fresh product line, and reduced reliance on third-party growers.

• Expanded distribution of Pulp organic sauces and condiments through major distributors and retailers, and launched Garden Starters potted herbs in the Midwest.

• Launched new product lines and expanded partnerships, including with Hermann Pickle Company and Hemingway's.

• Continued commitment to sustainability, innovation, and community involvement, including workforce training initiatives.

Financial highlights

• Q2 2024 revenue was $4.3 million, up 1.1% year-over-year, with core growth offset by exit from lower-margin segments.

• Cost of goods sold decreased to $2.7 million, reflecting reduced reliance on third-party growers.

• Gross margin rose to 36.7% in Q2 2024 from 13.1% in Q2 2023.

• Net loss for Q2 2024 was $1.93 million ($1.21/share), compared to $0.64 million ($4.83/share) in Q2 2023, impacted by higher SG&A and absence of prior year one-time ERC income.

• SG&A expenses increased due to higher audit, accounting, legal fees, and one-time bonus.

Outlook and guidance

• Management expects continued margin improvement and growth in vitamins, supplements, and shelf-stable products, with new product launches and expanded e-commerce planned for late 2024 and 2025.

• Anticipate strong Q4 performance, especially in herbs and holiday-related products.

• Additional production capacity and efficiency initiatives underway to support growth.

• Substantial doubt exists about the ability to continue as a going concern without additional capital.