Local Bounti Corporation

Hello, and welcome to the Local Bounty conference call and webcast to discuss the strategic acquisition of PEATS and full year 2021 earnings. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jeff Sonic with ICR. Jeff, please go ahead.

Thank you and good morning. Today's presentation will be hosted by Local Bounties co-CEOs Craig Hurlburt and Travis Joyner, Chief Financial Officer Kathleen Valasek, and Brian Cook, President and CEO of PEATS. The comments made during today's call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC, We'll also refer to certain non-GAAP financial measures today. Please refer to the press release, which can be found on our investor relations website, investors.localbounty.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. With that, I'd now like to turn the call over to Craig Hilbert, co-CEO.

Thank you, Jeff, and good morning, everyone. I'll start by sharing some summary remarks about the transaction. Then have Brian Cook, President and CEO of Pete's, give some perspectives on their business and brand. And then ask our co-CEO, Travis Joyner, to provide some commentary around the operational synergies that we are so excited about. Kathy Valasek will round out our call with a 2021 financial summary and some select updates on our operational progress. This morning, we announced our definitive agreement to acquire Pete's for $122.5 million. PEATS marks our first acquisition since the closing of our business combination in November of 2021. This transformational acquisition is immediately accretive and de-risks near-term operational execution while instantly creating a coast-to-coast footprint covering existing relationships at approximately 10,000 retail grocery stores. We are funding the purchase price in a manner that preserves liquidity, expecting to utilize our existing credit facility with Cargill for the cash consideration and including approximately $30 million of stock consideration. This transaction also enhances Local Bounty's financial leadership within the controlled environment agriculture industry. Our leading unit level economics, which are enabled by our efficient and cost-effective stack and flow system, supports our pathway to cash flow breakeven. This is further bolstered by Pete's own unit level economics and operating performance, which are similarly strong and generated an estimated 22.7 million of revenue in 2021, consistent historical gross margins of greater than 45% and consistent positive EBITDA. As you'll hear today, there are numerous operating synergies between our two businesses. Pete's growing model is an ideal fit for the implementation of our patent pending high yield stack and flow technology. This technology can easily retrofit into Pete's system, expanding yield per square foot productivity and further enhancing their unit economics. We are thrilled to leverage our combined strengths through this transaction, which brings significant opportunity to implement best practices across sales, procurement, and operation, while creating operational efficiencies at scale to further improve unit economics at the company's facilities. We see this as a unique opportunity to combine a highly complementary and profitable CEA market leader in PEATS with Local Bounty's technological solution to significantly accelerate market access of our fresh and local loose-leaf and living lettuce varietals, creating one of the largest CEA companies in the United States. With that, I'll pass the call to Brian Cook, President and CEO of PEATS, for some of his thoughts. Brian?