MOREHEAD, Ky., March 9, 2023 - AppHarvest, Inc. (NASDAQ: APPH, APPHW), a sustainable food 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, announced its fourth quarter and full-year 2022 operating and financial results, achieving its previous revised guidance, quadrupling the AppHarvest farm network in 2022 and diversifying its crop portfolio. With the significant infrastructure now in place to deliver fresh fruits and vegetables to top grocery chains and restaurants, the company expects to nearly triple its net sales year-over-year in 2023.
“Even with headwinds from the pandemic and supply chain disruption, AppHarvest met its commitment in 2022 to open three new farms and is now shipping commercially from each of the four farms,” said AppHarvest Founder & CEO Jonathan Webb. “We are now at an inflection point in our business transitioning from construction to an intense focus on operations with our new Chief Operating Officer (COO) Tony Martin, leveraging his deep experience in the sector to help accelerate our path to profitability through the consistent delivery of high-quality produce.
Fourth quarter 2022 results
Fourth quarter net sales were $4.5 million compared to net sales of $3.1 million in the fourth quarter of 2021. For net sales reporting purposes, the company plans to move from a metric of pounds sold to overall net sales by produce type. This anticipated change in reporting is driven by the new diversified crop portfolio that is expected to include tomatoes, salad greens, strawberries, and cucumbers.
The company recorded a net loss of $93.3 million and a non-GAAP Adjusted EBITDA loss of $24.1 million in the fourth quarter as the company was working to rapidly expand its farm network, compared to a prior year net loss of $88.4 million and non-GAAP Adjusted EBITDA loss of $18.3 million. See the reconciliation of the non-GAAP measure at the end of this news release. Following a third-party recoverability assessment, the company recorded a non-cash impairment charge of $50.1 million, which reduced the carrying value of certain long-lived assets.
Full-year 2022 results
AppHarvest achieved our revised guidance range for the full-year 2022, as previously announced in the third quarter of 2022. The company delivered net sales of $14.6 million compared to $9.1 million for the prior year, an increase of 60% year-over-year. This increase in net sales was driven by a combination of higher market prices for tomatoes and the addition of new sales of higher-priced tomato varietals, strawberries, and salad greens in the fourth quarter. Supply-chain-related construction delays at both AppHarvest Berea and AppHarvest Somerset affected the timing of commercial shipments from these farms and affected net sales, which were at the lower end of the previously forecasted range of $14.0 to $17.0 million.
The company reported a net loss of $176.6 million compared to a net loss of $166.2 million for the prior year. This increase in net loss was driven by production ramp-up at the three new farms.
AppHarvest achieved non-GAAP Adjusted EBITDA loss within its revised guidance range for the full year 2022, as previously announced in the third quarter of 2022, with a non-GAAP Adjusted EBITDA loss of $72.0 million versus a prior outlook of non-GAAP Adjusted EBITDA loss in the range of $67.0 million to $72.0 million. See the reconciliation of the non-GAAP measure at the end of this news release.
Financial Outlook
AppHarvest remains confident in its ability to be self-sufficient and generate positive operating cash flow over the long term with its four-farm network. The company still plans to expand capacity only after securing the required capital.
With the first quarter of 2023 marking the first time that all four facilities in the AppHarvest farm network will be shipping commercially to top national grocery store chains, restaurants, and food service outlets under a variety of brands for Mastronardi Produce, the company expects to see significant year-over-year sales increases throughout 2023 and even more so in 2024. AppHarvest anticipates full-year 2023 guidance of net sales to be in the range of $40 million to $50 million and non-GAAP Adjusted EBITDA loss to be in the range of $67 million to $76 million.
With the benefit of experience from three harvesting seasons now at its flagship farm in Morehead, Ky., the company is applying lessons learned in an effort to accelerate its journey to operational excellence at each of the three farms added to its network in 2022 with the potential to see the enterprise achieve positive Adjusted gross profit in 2024. In 2025, the company expects to achieve positive Adjusted EBITDA status for farm operations. With this trajectory, AppHarvest believes it may be able to achieve positive Adjusted EBITDA status on a consolidated basis in 2026.
Find the full press release here.
For more information:
AppHarvest
info@appharvest.com
www.appharvest.com/agtech