管理層發言
Good morning, and welcome to the Edible Garden Inc. 2026 First Quarter Business Update Conference Call. Please note, this conference is being recorded. I will now turn the call over to your host, Ted Ayvas, Investor Relations at Crescendo Communications. Ted, the floor is yours.
Thanks, Jenny. Good morning, and thank you for joining Edible Garden's 2026 First Quarter Earnings Conference Call and Business Update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden; and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the 3 months ended March 31, 2026. The press release is posted on the company's website, www.ediblegarden.ag.com. In addition, the company has filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call, would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Kras reviews the company's operating results for the quarter ended March 31, 2026, I'll provide a business update.
We would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will and the negative of such terms and other words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2025.
Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance or achievements. In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements, except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call.
You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden. Jim?
Thanks, Ted, and good morning, everyone. The first quarter of 2026 reflected continued progress across the business as we began seeing stronger traction from many of the investments and strategic initiatives we put in place over the past year. Revenue increased approximately 22.9% year-over-year to approximately $3.3 million, supported by continued retail expansion and growth across multiple categories. One of the strongest contributors during the quarter was our cut herbs business, where sales increased approximately 46% year-over-year, driven by continued growth within existing accounts as well as new account contributions from Kroger and Weis Markets. That momentum also extended beyond our core produce categories. Vitamin and supplement sales increased approximately 27% year-over-year while condiment sales increased approximately 51%. We also continued seeing strong growth internationally with sales increasing approximately 50% year-over-year reflecting continued expansion of our distribution footprint and our growing demand for clean-label, better-for-you products across multiple markets and categories.
As a result, we continued expanding distribution with both existing and new retail partners during the quarter, including Target, Safeway, the Fresh Market, Hannaford, Busch's Fresh Food Market and Woodman's Market. At the same time, we're broadening distribution across our branded consumer product portfolio, including Pickle Party, Pulp, Kick, Sports Nutrition, Vitamin Whey and JEALOUSY GLP-1 support products. We believe this momentum reflects the broader platform we have been building over the past years, leveraging the controlled environment foundation, vertically integrated infrastructure, retail relationships, operational capabilities and product development expertise established through our core business. We continue expanding into adjacent higher-margin and shelf-stable categories. As we continue evolving beyond our traditional greenhouse and fresher business, one of the areas we are most focused on is the ready-to-drink, or the RTD category.
We believe RTDs represent a compelling long-term opportunity with the global market projected to grow from approximately $842.5 billion in 2025 to roughly $1.26 trillion in 2033, according to Phoenix Research. More importantly, through ongoing discussions with both existing and prospective retail partners, we continue seeing increasing demand for scalable domestic production solutions that can deliver clean-label, shelf-stable functional nutrition products with consistency, transparency and operational reliability. We believe this reflects a meaningful unmet need as retailers and brands continue searching for reliable U.S.-based partners across functional beverage and wellness-focused nutrition categories. To support that opportunity, we continue advancing our Iowa Midwest RTD initiative during the quarter, which includes ongoing work related to the integration of Tetra Pak processing and packaging solutions.
Tetra Pak is a globally recognized leader in food processing and aseptic packaging solutions, and we believe this relationship significantly strengthens the operational foundation of our RTD platform. Our retail footprint now exceeds 6,000 locations across the United States, Caribbean and South America. During Q1, we added new retail partners, including Target, Safeway, Busch's Fresh Food Market and The Fresh Market. This expanding distribution network is not only driving current revenue growth but also represents the foundation for our future RTD product placement. These are relationships that are already in place that we will nurture and look to leverage. More broadly, our foundation in controlled environment agriculture has allowed us to build deep expertise and traceability, sustainability, operational discipline, supply chain management and retail execution. We believe those capabilities naturally support a broader farm-to-formula strategy and Zero Waste inspired initiative while supporting our continued expansion into shelf-stable and functional nutrition categories.
While we're in the early stages of this evolution, we believe the foundation is firmly in place through expanding retail network, growing branded product portfolio and continued advancement of our RTD manufacturing initiative. At the same time, we remain focused on improving operational execution, scaling higher-margin categories, strengthening margins over time and positioning the company for long-term scalable growth and value creation. With that, I'll turn the call over to Kostas Dafoulas to review the financials. Kostas?
Thanks, Jim, and good morning, everyone. Revenue for the 3 months ended March 31, 2026, increased approximately 22.9% year-over-year to approximately $3.3 million compared to approximately $2.7 million in the prior year period. The increase was primarily driven by continued growth across the company's cut herb portfolio, which increased approximately 45.9% year-over-year. That growth was supported by expansion within existing customer accounts along with new account contributions from Kroger and Weis Markets. We also saw broad-based growth across hydroponic basil, wheat grass, vitamins and supplements and condiments. International sales increased approximately 50% year-over-year and condiment sales grew 51%, reflecting expanding demand for our branded product portfolio across the retail footprint that now exceeds 6,000 locations. Operating expenses were $10 million for the 3 months ended March 31, 2026, compared to $5.6 million for the 3 months ended March 31, 2025.
The increase of $4.4 million was primarily driven by two factors: First, cost of goods sold increased as we scaled cut herb distribution through third-party sourcing. The dynamic we view as transitional as we work to renegotiate supplier terms. Second, depreciation and amortization increased approximately $2.5 million primarily reflecting accelerated depreciation of certain fixed assets in connection with the company's pivot to RTD, clean nutrition manufacturing at our Prairie Hills facility. The company recorded an income tax benefit of approximately $3.4 million for the 3 months ended March 31, primarily related to a valuation allowance release in connection with the sale of certain tax benefits under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program. This benefit is a discrete nonrecurring item. Net loss for the quarter was approximately $3.7 million, compared to approximately $3.3 million in the prior year period.
Turning to the balance sheet and cash flow. Cash increased to approximately $2 million at the end of March 31 from $1.1 million at year-end for a sequential increase in five quarters. That improvement was driven by positive operating cash flow of approximately $251,000 which reflected favorable working capital, including collections on receivables and inventory reductions as well as net financing inflows. We continue to manage our working capital deficit and are focused on improving the company's capital position as we execute on our growth strategy. Looking ahead, our priorities for 2026 are clear. Continue scaling revenue through our expanding retail network, improve our cost structure by transitioning cut herb sourcing and scaling higher-margin branded categories, advance the RTD manufacturing platform with Tetra Pak and maintain disciplined capital management. We're encouraged by the top line momentum and the cash flow improvement this quarter, and we are focused on translating that momentum into margin improvement over the balance of the year. With that, operator, please open the line for questions.
分析師問答
Our first question is coming from Nick Sherwood of the Maxim Group. We are growing revenue through our expanding retail network, improving our cost structure by transitioning cut herb sourcing and scaling higher-margin branded categories, advancing the RTD manufacturing platform with Tetra Pak and maintaining disciplined capital management. We're encouraged by the top-line momentum and the cash flow improvement this quarter, and we are focused on translating that momentum into margin improvement over the balance of the year. With that, operator, please open the line for questions.
My first question is across the 6,000 retail locations your products are found in, how many of those stores are carrying the cut herb products? How many of them are carrying vitamin supplements? How should we conceptualize what's being held across the stores?
It's a combination and a mix, obviously. We're seeing growth come out of cut herbs as that's the preferred form that consumers like based on convenience, and that continues to accelerate. We have Target which is going to be coming online in the next week or so. That will be significant for us as a business — a blend with the largest percentage being cut herbs with some potted herbs as well. As we start to evolve as a business and get into higher, more shelf-stable opportunities and products, you'll see that mix start to even out where I think you're going to see, especially with the ready-to-drink down the road, that becoming a larger part of our business and at a much higher velocity as well as margin. But near term, let's say the next 6 to 12 months as we bring on the RTDs, it's going to be, I think, driven primarily by the vitamin supplements, which currently right now, I would say, is 20% of our business with cut herbs being probably 40% to 50% and then the rest is kind of everything else — potted, wheat grass, hydroponic basil, which is also a big player for us at a nice margin.
So I think a lot of top line growth coming out of cut herbs, even I think more coming out of vitamins and supplements, knowing that the ring for a lot of these products is much higher than the clamshell cut herbs. And then the rest of it is going to be some of the other products that are in the mix that have better margins that will offset some of the top line growth that's coming out of the cut herbs. Once again, the vitamins and supplements, I think, will become a bigger and bigger part of our business.
Understood. I appreciate the detail on that answer. And then kind of looking at this new ready-to-drink platform, have you been able to provide some of your retail partners with prototypes? Can you kind of talk about the reception from your retail partners? How should we think about...
The reception has been overwhelming. Being in the food business, people have to eat, and ready-to-drink is in a segment which is just incredibly compelling with the growth in protein consumption. You can't turn the television on and not see it come up, whether in advertisements or people speaking about the growing need — whether you're looking to be an active individual and put on muscle mass, to recover with a healthier lifestyle, or if you're older and looking to maintain weight, or if someone is sick, protein needs continue to grow across the full spectrum of consumers. For us, the retailers, many of which we've already gotten significant commitments from, are excited about the factory that's going up. I think we're going to be at a point where it's going to become more and more of a negotiation to figure out who we're going to start to bring in post launch. We are working with a co-manufacturer to start driving the business and servicing the overwhelming demand, and I think we're probably going to be close to capacity with them in the next few weeks.
So it's been incredibly exciting. We are focused on the core business. The greenhouse has got us here. But the RTD business is a monster with the product lines that we have, both a performance high-protein drink and an adult nutrition drink that will be launching in the tail end of 2027, early 2028 in our own factory. We'll be launching prior and servicing business out of a co-manufacturer. We've probably got more orders than we can handle. We'll be running our prototype to get more specific in mid-July with product beginning to manufacture at a co-man in September while we build out the factory in Iowa. We're already in the final stages of finalizing the product. We teamed up with McCormick to develop the products. One is a sports nutrition, dairy-based premix that then gets turned into an RTD in a Tetra Pak and the other one is an adult product, not unlike Boost or Ensure. It's been fantastic.
A joke I made to people: I've always wanted to be in the hot cakes business, and now we're in the hot cakes business because everything is selling like hot cakes. So it's been pretty cool and, all honestly, exciting for the team, the company, and investors.
Yes. It sounds like there's a lot of momentum there and something we look forward to. And then my last question is how do you make customers loyal to your brand across product categories so that someone recognizes that you're the people behind the cut herbs they buy, the vitamin supplements they buy, or the condiments they buy, ensuring they're buying across your product categories rather than just one?
Sure. It comes down to an exercise in marketing, distribution, and customer service, both for our retailers and our end users. It comes down to quality and consistency. The art of this is communicating and training consumers to know that when they want the best, they buy Edible Garden. Putting forth marketing initiatives that communicate that is something we do through advertising, in-store promotions, reinforcement, and social media. If you've got the quality, the consistency, and the availability, and you're shipping at a high on-time rate like we have, it drives loyalty because people know when they go in our product will be there and look for Edible Garden for safe, high-quality, fresh produce. If we deliver that experience and the product tastes great and enhances what the consumer cooks, people will continue to be loyal. We see that through a very stable revenue line, a reputation with consumers and retailers, and our Farm-to-Formula concept.
We harness greenhouse R&D and partnerships with universities, EPA, and USDA to drive quality and consistency, elevating us beyond competitors. Not many have made the investment we have. I think the shareholders backed us to allow us to get here. All of that builds brand loyalty because people know if they want the best in herbs, condiments, and better-for-you products from a company mindful of the environment, they usually buy Edible Garden. We've seen retailers come to us asking if we can solve problems in the marketplace with cleaner, domestic solutions. We've invested for years in managing costs and suppliers; now we have such a huge opportunity. When everyone's aligned to win, people come to the table with resources. It's an exciting time and I'm very bullish on the business.
Our next question is coming from Ellen of Forest Capital.
You discussed the growing RTD opportunity and increasing retailer interest in domestic clean-label functional nutrition products. As you look ahead, how are you balancing investment between the company's core produce business and the larger RTD opportunity? And what do you think positions Edible Garden to compete effectively in that market?
Welcome, and thanks for joining the call. We're allocating resources where we see the growth. The core business remains important — we've made significant investments in operations, adding greenhouses and tying them to contracts — and the distribution platform of 6,000 stores holds steady and keeps growing. But you're going to see a shift toward investment in the RTD and nutrition platform because that's the future and the larger opportunity given shelf stability and overwhelming demand. It may be once in a career you catch a craze; I was fortunate to see it a few times. Harking back to my days in nutritional supplements with a previous company, you catch a craze. Right now, there's a protein craze. People want convenience, liquids, and nutrition on the go. Everyone from kids to seniors has nutritional and protein needs. We're just starting — there are many other segments like hydration where we can play.
We'll be investing a significant portion of our resources in that platform, backed by our greenhouses, reputation, and the ability to supply difficult, highly perishable products with a high ship rate. That capability has driven the retailers to us. This RTD opportunity came from a major retailer asking for help, and when we started working with them we partnered with Tetra Pak and McCormick. When you think about Edible Garden and the partners we're working with, it's a credit to the team who ensures shipments leave on time and in full because availability is everything to retailers. If you don't have a product on the shelf, you're missing a sale. We're going to put more resources toward RTD and our nutrition platform, and I hope that answers your question.
Yes. No, you definitely did. It looks like you run a very tight ship. I have another question. As you continue to evolve toward higher-margin and shelf-stable categories, what specific initiatives are underway with the core produce business to improve operational efficiencies and strengthen margins over time?
A lot of it is redeployment of existing resources — people in regulatory, food safety, and other functions that can be deployed across the whole platform, including RTD. It's not always hiring more people; it's shifting and blending the business with our suppliers and negotiating harder with suppliers based on growing demand, which puts us in a more advantageous position to get better pricing on what we're bringing in-house. We'll focus on accounts where we make money and remove businesses that are too far from the greenhouse given rising diesel costs. We've already impacted labor reduction this quarter due to investments in automation and additional lines, especially in preparation for anticipated growth. The overall business is up 22% with growth from core produce, and I don't see that stopping. It's going to be a margin play: reduce costs in operations, negotiate better with suppliers, and focus on where we can drive margin and profit. That investment has paid off. This is a refinement and focus on what is traditionally a low-margin business. Once we shift to higher-margin products and pick up velocity, that will start to improve overall margins. We will continue to refine costs so we can focus energy where we can drive margin and top-line growth.
That definitely makes sense. It looks like you guys are on your way. You also mentioned that international sales increased approximately 50% year-over-year. Can you discuss what's driving that growth and how important international markets could become within the broader business over time?
A lot of it is driven by PriceSmart. They are the major player in big box for the Caribbean and parts of South America — think of them like a Costco equivalent in those markets. They continue to grow, opening stores in Chile and operating in Colombia and other South American markets as well as throughout the Caribbean. We've been in business with them for almost a decade and have benefited from their growth. It's been a phenomenal relationship. They continue to expand into our Kick Sports Nutrition line, and I think you'll see more growth out of that next year. Your earlier question about product mix is relevant: you'll see vitamin supplements, sports nutrition lines, and clean-label products even before RTDs start to contribute meaningfully. Existing protein powders and plant protein powders, all clean-labeled, will start to come online toward the tail end of this year in significant numbers at attractive margins. As that mix shifts, the lower-margin cut herb business will be less of a drag on overall margin. We're getting requests from retailers to take on more of these higher-margin items because we have the capability and reliability to deliver.
That's fantastic. I just got one more question. You highlighted expansion with several major retail partners during the quarter. As an investor, how should I think about the opportunity to continue increasing distribution within your existing retail relationships going forward?
We're in an advantageous position being in over 6,000 stores with stable relationships based on performance. We're servicing Walmart, Target, Meijer, Wakefern and ShopRite, Hannaford, the Ahold Delhaize family of banners, Safeway — these are the who’s who of food retailers in the country. We'll continue to go deep within existing customers to sell more products across our total portfolio rather than just pursuing new accounts everywhere. We'll add new accounts where it makes sense, but the focus is on rationalizing the portfolio, going deeper with existing relationships, and driving higher-margin product placement. We will work to get retailers to take more of our branded products, like Pickle Party and fermented hot sauces, and expand vitamin supplements and sports nutrition. Retailers have an initiative to remove artificial colors and sweeteners, and timing is good for our clean-label, better-for-you approach. We're positioned with the right product at the right time and will continue leveraging long-standing retailer relationships to increase distribution and margin.
Well, we appear to have reached the end of our question-and-answer session. I will now hand back over to the management team for any closing comments.
Thank you, operator, and thanks again to everyone for joining us today and for your continued interest in Edible Garden. We believe the first quarter reflected meaningful progress across the business and continued validation of the broader strategy we have been executing against over the past several years. We're seeing encouraging momentum across our retail footprint, branded product portfolio and operational initiatives while continuing to build the foundation for future growth and opportunities in higher-margin shelf-stable nutrition categories. As we move through 2026 and beyond, our focus remains on disciplined execution. That includes continuing to expand distribution, improve operational efficiencies, strengthen margins over time, advance our RTD initiative and further leverage the infrastructure and retail relationships we have already established across the business. While we are still in the early stages of this evolution, we believe Edible Garden is becoming increasingly well positioned as a diversified clean-label nutrition company with expanding capabilities across fresh, functional and shelf-stable categories and a stronger foundation for long-term growth. We appreciate everyone's continued support and look forward to updating you on our progress in the quarters ahead. Thanks again, and have a great day.
Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.