Edible Garden AG Incorporated Q1 FY2025 earnings call

Strategic Shift

• Realigned towards higher-margin, shelf-stable products such as Kick. Sport Nutrition, Pickle Party, etc.

Retail Expansion

• Launched or strengthened relationships with major retailers like Walmart, Stop & Shop, etc.

Product Progress

• Cut herbs sales up 13% seasonally
• Non-perishable revenue up 15% year-over-year
• Kick. Sport Nutrition had new brick-and-mortar placement at a Midwest big-box retailer
• Pickle Party launched across Berkot's Super Foods stores and secured pre-orders
• Squeezables moved into full-scale production
• Pulp gaining momentum in premium condiments
• Vitamin Way launched dedicated e-commerce platform

Acquisition

• Acquired $15.5 million from NaturalShrimp Farms, including an aquaculture facility and patented water treatment technologies

Sustainability

• Helped avoid nearly 11,800 metric tons of virgin plastic in 2024, conserved over 28,000 gallons of diesel, and diverted 103 tons of food through donation programs

Total revenue for the first quarter of 2025 was $2.7 million, a decrease of $414,000 compared to the prior year. This decline was mainly due to the strategic exit from lower-margin floral and lettuce categories. Non-perishable revenue grew 15% year-over-year. Gross profit increased 283% year-over-year to $88,000, and gross margin improved to 3.2% from 0.7%. Cut herbs sales rose 13% seasonally. The non-perishable shelf-stable brands like Kick. Sport Nutrition, Pickle Party, Squeezables, Pulp, and Vitamin Way contributed to the performance.

Forward-Looking

• Believes well-positioned to deliver long-term value based on focused strategy, brand momentum, and operational foundation
• Confident in path forward with expanded retail relationships and growing e-commerce reach

Risks

• Forward-looking statements subject to risks, uncertainties, and assumptions as described in SEC filings
• Actual results could differ materially from forward-looking statements

Q: I was just wondering, this acquisition of Natural Shrimp, it was completed. Can you talk about what your initial plans are for Natural Shrimp and talk about what synergies are available to you immediately? And then down the road, what the cross-selling synergies could be?

A: A couple of quick things here to answer your question. It's like basically 3 driving sort of initiatives that will happen immediately at the facility. First of all, the facility is a key place for us as we're expanding our relationships with the big retailers out there...

Q: Congrats on the solid results and the positive shift in the product mix. You touched on this a bit but I was just hoping if you could elaborate some more on the drivers behind the sustained improvement in gross margin, particularly as you transition towards these higher-margin, shelf-stable products. But also specifically, what strategic initiatives are you pursuing to accelerate the growth of these product lines? And how do you see this part of the business developing going forward?

A: Thank you. Great question. Welcome, Nick. Look, it gets boiled down to kind of a few things. And for us, it's the continued investment in the company...