AppHarvest, Inc. (NASDAQ: APPH, APPHW), 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 that it expects to report achieving
the higher end of its guidance range for full-year 2021 net sales
and non-GAAP Adjusted EBITDA.
AppHarvest now expects to report 2021 net sales in the range of
$8.9 to $9.1 million, versus a previously announced outlook of $7.0
to $9.0 million. AppHarvest also expects to report a net loss in
the range of $170.0 to $172.5 million and now expects an Adjusted
EBITDA loss in the range of $69.3 to 72.5 million, versus a prior
outlook of an Adjusted EBITDA loss of $70.0 to $75.0 million.
“The AppHarvest team has been squarely focused on the core
business, and solid execution in the fourth quarter during the ramp
up of our second growing season positions us to come in at the high
end of our full-year net sales guidance range. We remain on track
to quadruple our number of operating farms this year—adding three
new farms that together will expand tomato capacity and diversify
our growing capabilities into salad greens and berries,” said
AppHarvest President David Lee. “Our first anniversary coincides
with the full vesting of early investor shares that can enter
trading, and we remain confident in our plan to deliver long-term
value to all shareholders based on the operational improvements in
our business and significant scale that we’re adding.”
With the operations team taking a data-driven approach including
real-time performance management to enhance training, to implement
a world-class supply chain planning process and to streamline the
operations organization, the company is seeing significantly
improved results in the percent of premium produce production and
strong week-over-week labor productivity gains.
AppHarvest’s flagship Morehead, Ky. farm has been harvesting
tomatoes since January 2021, and AppHarvest tomatoes have been sold
in more than 1,000 stores and restaurants across six states.
DevelopmentAppHarvest also announced the
15-acre Berea, Ky., salad greens facility and the 60-acre Richmond,
Ky., tomato facility are both approximately 65% complete and
expected to be fully operational by the end of 2022. A 30-acre
Somerset, Ky., berry facility is more than 50% complete and is also
expected to be operational by the end of 2022.
“We believe we are in the prime position to deliver positive
cash flow as we complete our current development phase, adding
three more large-scale farms in 2022,” said Lee. “Beyond the four
farms, we plan to develop additional facilities only after securing
the required capital, and we remain confident in our ability to do
that and to be self-sufficient.”
Goodwill and Intangible ImpairmentFor the
fourth quarter, the company expects to record a non-cash charge of
approximately $59.9 million to impair the carrying value of
goodwill and definite lived intangible assets related to the recent
acquisition of Root AI, Inc. (now AppHarvest Technology, Inc.
(ATI)), an artificial intelligence and robotics company. The
impairment reflects current market valuations and strategic
investment requirements as the company continues to develop
commercial technologies through ATI. The company continues to
believe in the strength of ATI to deliver robotics and software
solutions to optimize its own high-tech farm network and to serve
the broader controlled environment agriculture sector globally.
With the advantage of being deployed in AppHarvest’s Morehead
facility since the acquisition, the company’s universal harvesting
robot has doubled in its picking capability in that period and the
group has developed a farm operations software platform with
multiple applications. Both the robotics and software are expected
to become revenue-generating in 2023.
Conference Call and WebcastThe company will
release its financial results for the fourth quarter and full year
2021 on Thursday, Feb. 24, 2022. The company will host a conference
call and webcast to review its results the same day at 4:30 p.m.
ET. The live conference call and replay are accessible as
follows:
- Live Webcast: The call will be streamed over
the internet and accessible through the “Investors” section of the
AppHarvest website at https://investors.appharvest.com. A replay
will be available following the event.
- Telephone: The call will be accessible by
dialing 1-833-665-0607 (U.S./Canada) or 1-929-517-0397
(International) with the code 2558968. An audio replay will be
available approximately two hours after the end of the conference
call until March 4, 2022, at 1-855-859-2056 (U.S./Canada) or
1-404-537-3406 (International) with the code 2558968.
About AppHarvestAppHarvest 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, chemical pesticide-free 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/.
Financial Disclosure AdvisoryThe company
reports its financial results in accordance with U.S. generally
accepted accounting principles (“GAAP”). The expected financial
results discussed in this press release are preliminary and
represent the most current information available to the company’s
management, as financial closing procedures for the year ended
December 31, 2021 are not yet complete. These estimates are not a
comprehensive statement of the company’s financial results for the
year ended December 31, 2021, and actual results may differ
materially from these estimates as a result of the completion of
normal quarter-end accounting procedures and adjustments, including
the completion of the preparation and review of the company’s
financial statements for the year ended December 31, 2021 and the
subsequent occurrence or identification of events prior to the
formal issuance of such financial results. In addition, Ernst &
Young LLP, our independent registered public accounting firm, has
not audited, reviewed, compiled or performed any procedures with
respect to these preliminary financial results. Accordingly, Ernst
& Young LLP does not express an opinion or any other form of
assurance with respect thereto. Financial results are preliminary
until the company’s audited financial statements included within
its Annual Report on Form 10-K are filed with the SEC.
Non-GAAP Financial MeasuresTo supplement the
company’s consolidated financial statements, which are prepared and
presented in accordance GAAP, the company uses certain non-GAAP
measures, such as Adjusted EBITDA, to understand and evaluate the
company’s core operating performance The company defines and
calculates Adjusted EBITDA as net loss before the impact of
interest income or expense, income tax expense or benefit,
depreciation and amortization, adjusted to exclude: goodwill and
intangible impairment expenses, stock-based compensation, business
combination transaction-related costs, remeasurement of warrant
liabilities, Root AI transaction-related costs and certain other
non-core items. The company believes this non-GAAP measure of
financial results provides useful information to management and
investors regarding certain financial and business trends relating
to the company’s financial condition and results of operations. The
company’s management uses this non-GAAP measure for trend analyses
and for budgeting and planning purposes.
The company believes that the use of this non-GAAP financial
measure provides an additional tool for investors to use in
evaluating the company’s operating results and trends. For
investors to be better able to compare the company’s current
results with those of previous periods, the company has shown a
reconciliation of GAAP to non-GAAP financial measures. Other
similar companies may present different non-GAAP measures or
calculate similar non-GAAP measures differently. Management does
not consider this non-GAAP measure in isolation or as an
alternative to financial measures determined in accordance with
GAAP. The principal limitation of this non-GAAP financial measure
is that it excludes significant expenses that are required to be
presented in the company’s GAAP financial statements. Because of
this limitation, you should consider Adjusted EBITDA alongside
other financial performance measures, including net loss and the
company’s other financial results presented in accordance with
GAAP.
Forward-Looking StatementsCertain statements
included in this press release that are not historical facts are
forward-looking statements for purposes of the safe harbor
provisions under the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” “can,” “goal,” “target” and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. All statements, other than
statements of present or historical fact included in this press
release, regarding AppHarvest’s expected full year 2021 net sales,
net loss and Adjusted EBITDA, intention to build high-tech CEA
farms, the anticipated benefits of and production at such
facilities, timing and availability of tomatoes at top national
grocery stores and restaurants, anticipated benefits of the second
season harvest, AppHarvest’s future financial performance, as well
as AppHarvest’s growth and evolving business plans and strategy,
ability to capitalize on commercial opportunities, future
operations, estimated financial position, projected costs,
prospects, plans and objectives of management are forward-looking
statements. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of AppHarvest’s management and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as,
and must not be relied on as, a guarantee, an assurance, a
prediction, or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and
circumstances are beyond the control of AppHarvest. These
forward-looking statements are subject to a number of risks and
uncertainties, including those discussed in the company’s Quarterly
Report on Form 10-Q filed with the SEC by AppHarvest on November
10, 2021, under the heading “Risk Factors,” and other documents
AppHarvest has filed, or that AppHarvest will file, with the SEC.
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. In addition,
forward-looking statements reflect AppHarvest’s expectations,
plans, or forecasts of future events and views as of the date of
this press release. AppHarvest anticipates that subsequent events
and developments will cause its assessments to change. However,
while AppHarvest may elect to update these forward-looking
statements at some point in the future, AppHarvest specifically
disclaims any obligation to do so. These forward-looking statements
should not be relied upon as representing AppHarvest’s assessments
of any date subsequent to the date of this news release.
Accordingly, undue reliance should not be placed upon the
forward-looking statements.
APPHARVEST, INC. AND
SUBSIDIARIES
Reconciliation of Expected GAAP Measures
to Expected Non-GAAP Measures(In millions)
(Preliminary and Unaudited)
|
|
Year Ended December 31, |
(Dollars in millions) |
|
2021 |
|
|
|
2020 |
|
Net loss |
|
$(172.5) - $(170.5 |
) |
|
$ |
(17.4 |
) |
Interest expense from related parties |
|
0.7 |
|
|
|
1.4 |
|
Interest expense |
|
1.7 |
|
|
|
— |
|
Interest income |
|
(0.3 |
) |
|
|
— |
|
Income tax expense |
|
3.3 - 3.7 |
|
|
|
— |
|
Depreciation and amortization expense |
|
10.6 - 11.0 |
|
|
|
0.2 |
|
EBITDA |
|
(156.5) - (153.7 |
) |
|
|
(15.8 |
) |
Goodwill impairment |
|
50.9 |
|
|
|
— |
|
Intangible impairment |
|
9.0 |
|
|
|
— |
|
Change in fair value of Private Warrants |
|
(33.9 |
) |
|
|
— |
|
Stock-based compensation expense |
|
40.7 - 41.1 |
|
|
|
0.2 |
|
Transaction success bonus on completion of Business
Combination |
|
1.5 |
|
|
|
— |
|
Reorganization costs |
|
0.9 |
|
|
|
— |
|
Reverse recapitalization and business combination transaction
costs |
|
13.9 |
|
|
|
— |
|
Root AI acquisition costs |
|
1.0 |
|
|
|
— |
|
Adjusted EBITDA |
|
$(72.5) - $(69.3) |
|
|
$ |
(15.6 |
) |
*Due to rounding, totals may not foot
Media Contact: Travis Parman,
Travis.Parman@appharvest.com
Investor Contact: Kaveh Bakhtiari,
appharvestIR@appharvest.com
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