Kalera Announces Second Quarter 2022 Financial Results

ORLANDO, Fla., Aug. 19, 2022 (GLOBE NEWSWIRE) -- (Nasdaq: KAL, “Kalera” or the “Company”), a vertical farming company, today reported its financial results for the second quarter ended June 30, 2022.

Second Quarter Financial Overview

• Total revenue of $1.3 million, marking an increase of $0.8 million from the second quarter last year:
  • Foodservice revenue of $0.8 million, an increase of $0.6 million;
  • Retail revenue of $0.5 million, an increase of $0.2 million.
• Net loss of $78.7 million, or a loss of $3.92 per diluted share, which included a one-time non-cash expense for goodwill impairment of $64.3 million, the change in fair value for the contingent value rights earnout of $17.3 million and a one-time expense of $7.5 million related to the closing of the Agrico business combination and Nasdaq listing.
• Adjusted EBITDA of negative $14.1 million.
  
  

Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.

Second Quarter Operational Highlights

• Welcomed Jim Leighton, a food industry veteran, as new President and CEO.
• Commenced operations of large-scale vertical farming facility in Denver.
• Secured strategic partnership with US Foods and began to leverage their network of 70+ distribution centers, 100+ cash and carry stores, and national footprint.
• Completed listing on Nasdaq, making Kalera the first vertical farm with global operations on the exchange.
• Strengthened balance sheet and improved liquidity.
  
  

Management Commentary

“We are pleased to report significant revenue growth on a year-over-year basis for the second quarter, reflecting momentum in our foodservice sales ahead of retail sales driven by our strategic partnership with US Foods,” said Jim Leighton, President and Chief Executive Officer of Kalera. “In addition, we completed our listing on Nasdaq, delivering on our commitment to investors to provide more liquidity and creating opportunity for new investors to benefit from the first pure play vertical farm with leading technology and global operations.”

Kalera also announced the opening of the Denver farm in April to expand its production capacity and geographic footprint, allowing the Company to reach its goal of being the first truly vertical farming company to serve customers both regionally and nationally via foodservice, grocery, resort, hospitality, cruise line, airline and restaurant industries.

Second Quarter 2022 Consolidated Financial Review

Total revenue increased by $0.8 million, from $0.5 million for the second quarter last year to $1.3 million for the second quarter 2022. The revenue increase was reflective of the new farming facilities opened over the past 12 months. Total revenue included credits and promotions to new customers of $0.3 million served under foodservices partnerships.

Selling, general and administrative (SG&A) expenses increased by $18.7 million, from $6.0 million for the second quarter last year to $24.6 million for the second quarter 2022. The increase in SG&A expenses was primarily driven by transaction expenses of $7.5 million related to the Agrico business combination, one-time non-cash stock options expense of $8.0 million mainly due to the cancellation of the previous Kalera stock option program and increases in corporate expenses required to manage three additional farms and the international operations acquired during the fourth quarter of 2021. SG&A expenses in the second quarter of 2021 included one-time expenses of $0.2 million.

Gross operating loss for the second quarter was $96.8 million, which included one-time transaction expenses for the Agrico business combination and Nasdaq listing, one-time non-cash stock option expense of $8.0 million, and one-time non-cash expense of $64.3 million for goodwill impairment compared to a loss of $7.8 million for the same period last year.

Net loss for the second quarter was $78.7 million, or a loss of $3.92 per diluted share, compared to a net loss of $7.7 million, or a loss of $0.51 per diluted share for the same period last year.

Adjusted EBITDA was negative $14.1 million, compared to an adjusted EBITDA of negative $6.4 million for the same period last year.

Balance Sheet and Liquidity

The Company’s cash balance as of June 30, 2022 was $3.3 million. During and subsequent to the second quarter, the Company took important steps to increase its liquidity and strengthen its balance sheet.

During the second quarter of 2022, the Company completed the Agrico business combination, which resulted in $0.3 million in capital proceeds to Kalera. The Company also entered a 10-year, $30 million Senior Secured Credit Facility with Farm Credit of Central Florida to support capital expenditures and working capital needs of the entire Company. The facility provides $20 million in available funds for capital expenditures under a Term Loan, and $10 million to support general corporate and working capital purposes under a Revolving Loan.

Subsequent to the close of the quarter, Kalera executed a private placement in the amount of $10 million to increase its liquidity and strengthen its balance sheet.

Outlook

As a market leader in vertical farming – an industry expected to grow to $19 billion in five years^* – Kalera is uniquely positioned to capitalize on significant growth opportunities. We will do this by optimizing our high-tech production capacity for sustainable lettuce, microgreens and herbs in the United States and internationally and by building out our capabilities. We plan to expand in select markets and communities that do not have accessibility to local and fresh produce, allowing us to capture an increased share of the broader U.S. lettuce and microgreens categories. We believe our growth will be supported by several key macro and micro drivers including: (1) the growing mainstream acceptance of our products, (2) heightened consumer awareness of the role food and nutrition play in long-term health and wellness, (3) growing awareness of the beneficial impact that vertical farming has on the environment relative to traditional agriculture and (4) increasing concern regarding food security on a global scale. Looking ahead, we will balance growth with disciplined capital deployment to create long-term value for our shareholders.

^*according to Global Market Insights

Note Regarding Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are not financial measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations. Net loss is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Conference Call and Webcast

Kalera will host a conference call, today at 9:00 am ET/6:00 am PT to discuss its financial results. The conference call may be accessed by dialing 1-844-763-8274 (domestic) or 1-412-717-9224 (international). A live audio webcast of the call also will be available on the Investor Relations section of Kalera’s website at and will be archived for replay.

About Kalera

As a leader in controlled environmental agriculture, Kalera is driven by our belief that vertical farming can play an important role in securing access to fresh produce for a growing world population facing climate change and concerns about the future of traditional farming. Through our proprietary technology, we sustainably grow local, delicious, nutrient-rich, pesticide-free, non-GMO leafy greens year-round. Our automated, data-driven, hydroponic vertical farms produce higher yields and, use 95% less water, and 99% less land than traditional farming. Sold under the Kalera brand, our leafy greens are “better than organic” and priced competitively, always with the end consumer in mind. Kalera is headquartered in Orlando, Florida with farms in Orlando; Atlanta, Georgia; Houston, Texas; Denver, Colorado; and Kuwait, with additional farms under development. More information is available at .

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,” “design,” “may,” “should,” or similar language are intended to identify forward-looking statements.

It is routine for our internal projections and expectations to change throughout the year, and any forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. Readers of this Quarterly Report are cautioned not to place undue reliance on any such forward-looking statements. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified under “Risk Factors” in Item 1A herein and in our other filings with the Securities and Exchange Commission (the “SEC”). The impact of COVID-19 and its variants may also exacerbate these risks, any of which could have a material effect on us. All forward-looking statements included herein are made only as of the date hereof. Unless otherwise required by law, we do not undertake, and specifically disclaim, any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise after the date of such statement.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes, and our audited consolidated financial statements and related notes for the year ended December 31, 2021, included in our registration statement on Form S-4 (File No. 333-264422). As used in this section, unless the context suggests otherwise, “we,” “us,” “our,” “Company,” “Kalera” refer to Kalera Public Limited Company, Inc. and its consolidated subsidiaries.

KALERA PUBLIC LTD CO. AND SUBSIDIARIES

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KALERA PUBLIC LTD CO. AND SUBSIDIARIES

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