Edible Garden AG Incorporated (NASDAQ:EDBL) recently held their Q2 2024 Earnings Conference Call on August 14, 2024, at 8:00 AM ET. The call featured key company personnel including Ted Ayvas, Investor Relations, James Kras, Chief Executive Officer, and Kostas Dafoulas, Interim Chief Financial Officer. The conference call participants included Anthony Vendetti of Maxim Group.
During the call, Ted Ayvas, the Investor Relations representative from Crescendo Communications, provided an overview of Edible Garden’s operating results for the quarter ended June 30, 2024. The company had announced its quarterly results earlier in the day, posting a press release on their website and filing the quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission.
James Kras, the Chief Executive Officer, highlighted the company’s impressive performance in the second quarter, showcasing a 157% increase in gross profit. This growth was driven by a 61% increase in cut herbs and a 30% increase in vitamins and supplements. Kras emphasized the strategic decision to focus on higher-margin businesses and move away from less profitable segments. The company’s gross margin increased to 36.7% in Q2 2024, up from 13.1% in the same period last year.
Edible Garden expanded the distribution of its pulp line of sustainable USDA organic fermented gourmet sauces and chili-based products by partnering with UNFI distributors, a leading North American wholesaler of health and specialty foods. The addition of UNFI aligns perfectly with Edible Garden’s zero waste inspired mission and allows retailers across the continent to access the Bland to Bold product pulp product line. The company’s pulp products have received positive feedback from consumers seeking unique flavors to enhance their meals.
Additionally, Edible Garden strengthened its distribution network by partnering with Hemingway’s, serving over 350 retailers across the Northeast region. The company launched Garden Starters, potted herbs and basil bowls designed for home gardening, catering to the growing trend of home gardening and providing customers with diverse flavor options. The partnership with Hermann Pickle Company aims to explore scalable commercial opportunities in producing, marketing, and distributing fermented plant-based products and non-GMO consumer packaged goods.
Innovations in packaging and shipping have been implemented to extend the shelf life of products, reduce spoilage, and drive cost savings for retail partners. Edible Garden’s patented self-watering in-store display has transformed how plants are showcased, minimizing waste and providing superior products to customers. The company also launched a training program with Abilities in Northwest New Jersey, a non-profit organization providing employment and data services for individuals with disabilities, highlighting Edible Garden’s commitment to community involvement and sustainability initiatives.
Kostas Dafoulas, the Interim Chief Financial Officer, reviewed the financial results for the three months ended June 30, 2024. Total revenue for the second quarter was $4.2 million, with a slight increase driven by core product portfolios such as cut herbs and vitamin supplements. Cost of goods sold decreased by 37%, resulting in a 157% increase in gross profit and a record gross margin of 34.4%. Selling, general, and administrative expenses totaled $2.7 million, primarily driven by higher audit, accounting, and legal fees related to capital raising activities.
As the company heads into the peak season around Thanksgiving and the holidays, there is room for more vertical integration and gross margin improvement in 2025. The focus on shelf-stable items and the expansion of product lines, including fresh condiments and functional pickles, positions Edible Garden for continued growth and success in the market. The company’s strong relationships with top retailers and commitment to sustainability and innovation set the stage for a promising future.