Local Bounti Corporation

Good morning and welcome to Local Bounty's first quarter 2024 earnings conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, today's event is being recorded. At this time, I'd like to turn the conference over to Jeff Sonick, Investor Relations at ICR. Please go ahead.

Thank you and good morning. Today's presentation will be hosted by Local Bounty's Chief Executive Officer, Craig Hurlburt, and Chief Financial Officer, Kathleen Balasek. The comments made during today's call may 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. Craig?

Thank you, Jeff, and good morning, everyone. Our first quarter demonstrated strong operational progress, which enabled us to drive double-digit top-line growth versus both the prior quarter and the prior year as expected. This performance was the result of a combination of recent improvements that we've made to our business, of which I'll touch on briefly before passing the call to Kathy for her financial remarks. Our stack and flow technology continues to underpin our strategy. It has allowed us to ramp up production in our Georgia facility over the past quarter, and it afford us the opportunities to further enhance our model. which is predicated on capital efficiency. In fact, we recently initiated a trial at scale for a differentiated use of our stack towers that in a smaller trial demonstrated a further yield increase of at least 10% beyond what we were currently achieving. We are excited to see those results later in the second quarter. The flexibility of our design is of the utmost importance and allows us the ability to fine tune individual plant recipes to maximize the utilization of our assets at all of our stack enabled facilities. These iterations can make a significant impact and can also be implemented extremely efficiently across all our stack and flow facilities, which further highlights the advantages of our efficient and data-driven stack and flow model where we are able to apply our learnings rapidly. Our experience at the Georgia facility have armed us with immense highlights that we've incorporated into our new purpose-built facilities in Washington and Texas. These state-of-the-art facilities are optimized for our stack and flow technology from the ground up and have an operational design that maximizes capital efficiency and drives productivity. We're thrilled to report that we are shipping out of Washington and Texas in the second quarter. This is a huge milestone for Local Bounty, and I want to recognize our entire team for their individual contributions to get these new facilities built and operational with amazing speed and efficiency. With the new capacity from Washington and Texas, our commercial team is working extremely hard to capitalize on pent-up demand from existing customers and convert new opportunities. On that point, we are thrilled to begin servicing two new customers, Albertson Seattle and Brookshires, to bring our fresher, more nutritious, and longer-lasting leafy green products to consumers in the Pacific Northwest and Texas regions. We are also expanding upon our existing relationships to add new distribution in Texas as well. As I noted on our last call, we are continuing to work on our next phase of projects to add future capacity for growth. This is comprised of capacity expansions across our existing network of facilities, the opening of a new facility in the Midwest, and the conversion of our Montana facility to a commercially focused operation. While final determinations have yet to be made for the facility expansion, construction is slated to begin late in the second quarter of 2024. And in terms of our new facility in the Midwest, we currently anticipating breaking ground in the third quarter of 2024, pending ongoing negotiations for final site selection. With respect to the transition of our Montana facility from its current R&D focus, to one that is more commercially oriented and growing produce for sale to customers. While this provides us with incremental revenue, we expect it to be more impactful in terms of our cash flow. As our capacity is scaled up, this has afforded us the ability to integrate our R&D efforts throughout our entire facility footprint, which is helping absorb those costs and also accelerate the learnings at each of our sites. We are on track to implement the shift this summer. And when complete, the Montana facility will be accretive to our overall adjusted gross margin and be an important component to us reaching our goal of achieving positive adjusted EBITDA in early 2025. Our R&D efforts also operate in parallel with the product innovation team, who has been working hard on new offerings to meet customer and retailer demand. As we previously said, in the third quarter, we will be expanding our baby leaf product assortment by introducing several high-velocity offerings, including arugula, baby spinach, and spring mix blend, and power greens. This expansion remains on track, And although we are still scaling up, we were able to deliver our first shipment of spinach to customers from the Georgia facility in March. We've also made excellent progress towards the national expansion of our popular grab-and-go salad kits, which bring our total distribution to approximately 700 doors throughout the Pacific Northwest and the southern U.S. The response to this expansion has been very positive and we look forward to working with our partners to bring our convenient grab-and-go salad kits into more consumers' homes. In closing, the efficiency of our operations and the new capacity we are bringing online will support our plans to grow the business and meet the incredible demand we are seeing for our products. Combined with new compelling product offerings, We are well positioned to deliver a step up in revenue growth in the second half of this year to achieve our full year guidance, which calls for doubling of revenue versus 2023 and puts us on track to achieving our near-term goal of becoming adjusted EBITDA positive in early 2025. With that, I will turn it over to Kathy for her review of the financials.