Edible Garden (EDBL) Q3 2024 earnings summary

Executive summary

• Gross profit for the first nine months of 2024 increased 324% year-over-year, driven by a strategic shift away from lower-margin products.

• Q3 2024 revenue was $2.6 million, down from $3.3 million in Q3 2023, due to phasing out low-margin products and shipment delays from a hurricane.

• Net loss for Q3 2024 was $2.1 million ($0.65/share), improved from $2.4 million ($13.83/share) in Q3 2023, with SG&A expenses down to $2.2 million.

• Strategic partnerships expanded, including Walmart, and USDA grants supported organic certification and R&D.

• Substantial doubt exists about the ability to continue as a going concern due to recurring losses and limited liquidity.

Financial highlights

• Gross profit margin for Q3 2024 was 27%, with gross profit of $699,000 versus $12,000 in Q3 2023.

• Cost of goods sold dropped to $1.9 million from $3.3 million year-over-year, reflecting reduced reliance on third-party growers.

• SG&A expenses for Q3 2024 were $2.2 million, down from $2.4 million in Q3 2023.

• Interest expense rose to $409,000 in Q3 2024 from $57,000 in Q3 2023 due to new merchant cash advance agreements.

• Cash at September 30, 2024 was $2.2 million, up from $0.5 million at year-end 2023.

Outlook and guidance

• Q4 2024 is expected to be one of the strongest quarters, with significant growth in margin and revenue anticipated.

• Management expects continued net losses and is evaluating options to reduce cash requirements and raise funds.

• Sports nutrition and new product launches are expected to drive growth in 2025, with major retail and e-commerce partnerships planned.