MOREHEAD, Ky., May 03, 2022 (GLOBE NEWSWIRE) — AppHarvest, Inc., a leading AgTech company, public benefit corporation and Certified B Corp building some of the world’s largest high-tech indoor farms to grow affordable, nutritious fruits and vegetables at scale while providing good jobs in Appalachia, today announced its operating and financial results for the quarter ending March 31, 2022, achieving its highest net sales quarter to date.
“The AppHarvest team delivered on the top priorities for the quarter of ramping up production of the current facility and successfully meeting farm network expansion milestones,” said AppHarvest Founder & CEO Jonathan Webb.
“Food security issues, inflation and commodity price increases continue to drive strong confidence in controlled environment agriculture (CEA) as a solution to decrease U.S. reliance on imported fruits and vegetables. AppHarvest expects to be well equipped to provide consumers before year-end with a reliable, high-quality supply of increasingly sought-after options that are sustainably grown in the U.S.”
First Quarter 2022 Results
For the first quarter 2022, net sales were $5.2 million on 6.9 million pounds of tomatoes sold with a net sales price of 75 cents per pound versus net sales of $2.3 million on 3.8 million pounds of tomatoes sold with a net sales price of 61 cents in the first quarter of 2021. This approximately 125% improvement in year-over-year Q1 net sales was driven by higher overall production and expanded product variety at the Morehead farm, which was not fully harvesting in the first quarter of last year based on the phased opening of the facility, and continued operational ramp-up, including enhanced training and productivity improvements resulting in a more favorable ratio mix of USDA No. 1 grade (“premium”) and non-premium tomatoes.
In line with expectations, while investing in quadrupling the farm network, the company recorded a net loss of $30.6 million and non-GAAP Adjusted EBITDA loss of $18.0 million in the first quarter of 2022, compared to a prior year net loss of $28.5 million and non-GAAP Adjusted EBITDA loss of $12.4 million. See reconciliation of the non-GAAP measure at the end of this news release.
Development
AppHarvest is on track to quadruple its number of farms by the end of the year and to diversify its produce portfolio to include salad greens and berries. The 15-acre Berea, Ky., salad greens facility is approximately 79% complete. The 60-acre Richmond, Ky., tomato facility is approximately 75% complete. A 30-acre Somerset, Ky., berry facility is approximately 65% complete. Starting with the Berea salad greens facility this summer, we expect to implement a phased approach that brings on additional productive acreage at each farm over time, with all three new farms expected to be fully operational by the end of 2022. Construction of a fifth farm, the Morehead salad greens facility, remains paused contingent upon financing.
Operations
The Morehead farm is making strong operational progress with improvements in yield and premium quality in Q1 2022 compared to Q4 2021. Enhancements to recruiting activities, attendance policies and training increased productivity and efficiency. Improvements in overall gross market prices and quality levels from last year are consistent with internal projections. Additionally, the company kept distribution fees flat despite increased freight costs by reducing transportation miles through more direct shipments to customers. We delivered this progress, despite headwinds that include efforts to mitigate the plant health issue discussed in March.
“We continue to see steady improvements in day-to-day operations,” said AppHarvest Chief Operating Officer Julie Nelson. “Our percentage of premium tomatoes has continued to improve, and we’ve made additional training and productivity enhancements. The team’s focus on continuous improvement is paying off, and I look forward to deploying our key learnings across the larger four-farm network before year-end.”
About AppHarvest
AppHarvest is an applied technology company in Appalachia developing and operating some of the world’s largest high-tech indoor farms, designed to grow non-GMO produce, using up to 90 percent less water than open-field agriculture and only rainwater while producing yields up to 30 times that of traditional agriculture on the same amount of land without agricultural runoff. The company combines conventional agricultural techniques with world-class technology including artificial intelligence and robotics to improve access for all to nutritious food, farming more sustainably, building a domestic food supply, and increasing investment in Appalachia. The company’s 60-acre Morehead, Ky. facility is among the largest indoor farms in the world. For more information, visit https://www.appharvest.com/.
