Edible Garden 2025 Q3 Earnings Call - Strategic Shift to Scalable CPG and Operational Expansion Drive 9% Revenue Growth

Conference Operator: Good morning and welcome to the Edible Garden 2025 third quarter business update conference call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Ayvas, Investor Relations, Crescendo Communications. Ted, the floor is yours.

Ted Ayvas, Investor Relations, Crescendo Communications, Crescendo Communications: Thanks, Jenny. Good morning, and thank you for joining Edible Garden’s third quarter 2025 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 this morning, the company announced its operating results for the three months ended September 30, 2025. The press release is posted on the company’s website, www.ediblegardenag.com. In addition, the company has filed its quarterly report on Form 10Q 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 but 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 September 30, 2025, and provides 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 this 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 and terms of 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 U.S. Securities and Exchange Commission, including the company’s annual report on Form 10K for the year ended December 31, 2024. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this 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 other 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. Having said that, I’d now like to turn the call over to Mr. Jim Kras, Chief Executive Officer of Edible Garden. Jim.

Jim Kras, Chief Executive Officer, Edible Garden: Thanks, Ted. Good morning, and thank you to everyone for joining us today. Third quarter marked an important step forward for Edible Garden as we continued executing our strategic evolution towards a CEA-informed consumer packaged goods, or CPG, model. In Q3, traditionally our seasonally softest period, we delivered a 9% year-over-year revenue increase, underscoring our strategic growth driven by our product realignment, focus on non-perishable product expansion, and the resilience of our higher-value branded portfolio. This growth was driven by key initiatives, the continued expansion of our retail footprint, strong performance from our shelf-stable portfolio, and the early benefits of our operational realignment following the Natural Shrimp asset acquisition. Together, these actions reinforce our progress in repositioning Edible Garden as a next-generation sustainable food company that combines innovation, brand strength, and operational efficiency.

Building on our heritage in fresh herbs and produce, where sustainability, traceability, and freshness define our brand, we’ve expanded into categories with stronger margins and greater scalability. Our CPG products, including clean label and functional offerings, extend the Edible Garden brand beyond fresh produce into shelf-stable products that meet consumer demand for better-for-you plant-based nutrition. During the quarter, we continued to expand our retail footprint, launching our USDA organic fresh herb line at Kroger and introducing Edible Garden branded herbs at Fresh Market. We also strengthened our Midwest presence through partnerships with Pete’s Fresh Market and Angelo Caputo’s Fresh Markets. Internationally, we expanded our reach through key partners, including Pricemart and Amazon. Collectively, these relationships underscore the growing appeal of the Edible Garden brand and the momentum of our expanding global platform. Demand for better-for-you CPG products continues to accelerate, creating a powerful tailwind for our business.

Globally, the functional food and beverage market is projected to expand from approximately $400 billion to $610 billion by 2030, according to Virtue Market Research. In the U.S., sales of natural, organic, and functional products are expected to reach $386 billion by 2028, according to the Nutrition Business Journal. These trends reinforce the strength of our strategy and highlight the significant opportunity ahead for Edible Garden as we align our product portfolio with these macro trends. Our CPG portfolio continues to be an important driver of growth, anchored by brands such as KICK Sports Nutrition, Pickle Party, Pulp, and Vitamin Way. These brands represent a key pillar of our transformation into a diversified, innovation-driven CPG company and highlight the versatility of Edible Garden’s platform. KICK Sports Nutrition continues to build momentum with a clean, better-for-you performance line designed for athletes and active consumers seeking natural energy and recovery solutions.

The brand is gaining meaningful traction across both online and retail channels, supported by rising consumer interest in plant-forward performance nutrition. Earlier this year, KICK entered a major Midwest big box retailer, expanding its brick-and-mortar presence while growing online footprint to broaden awareness and engagement. By leveraging our expertise in clean, functional ingredients, KICK delivers products that combine taste, convenience, and nutritional value, attributes that resonate strongly with the fast-growing health and wellness segment. Vitamin Way, our protein and supplement line, complements KICK by addressing the broader market for functional nutrition. Pickle Party highlights the engaging, flavor-forward side of our CPG strategy, offering a line of fresh, fermented pickles and sauerkraut crafted with clean label, non-GMO ingredients, and natural fermentation. The brand combines bold, craveable flavors with a focus on gut health and sustainability, striking a balance between indulgence and wellness.

Its distinctive identity as both fun and functional continues to resonate with younger consumers and health-conscious shoppers seeking better-for-you alternatives in the condiment aisle. Finally, Pulp, our line of organic, refrigerated, fermented hot sauces, continues to expand through new retail placements and regional growth. The brand has gained meaningful traction through rollouts at Target, Meijer, and most recently at ShopRite, further broadening its reach and consumer visibility. Pulp brings culinary innovation to the forefront of the Edible Garden portfolio, offering bold, clean-label condiments that reflect our commitment to flavor, sustainability, and the better-for-you principles driving today’s consumer demand. Collectively, these brands showcase how we’re leveraging our expertise in sustainability, flavor, and functional nutrition to build a high-margin, scalable portfolio that extends the Edible Garden brand far beyond fresh produce and positions us to capture a meaningful share in the growing clean-label CPG market.

Turning to our produce business, we remain a trusted provider of sustainably grown herbs and leafy greens. Our new organic program with Kroger is gaining traction, while our presence at The Fresh Market and established retail partners, including Pete’s Fresh Market and Angelo Caputo’s Fresh Markets, continues to broaden retail penetration and increase brand visibility across key markets. Operationally, we’ve strengthened our platform for growth through enhanced efficiency and scalability. Innovation and sustainability remain central to our strategy, guided by our zero-waste-inspired approach. We’re pursuing new categories, including nutraceuticals, sustainable proteins, and functional foods that align with our commitment to health, flavor, and environmental responsibility. As we move into the fourth quarter and beyond, we believe that Edible Garden is positioned for continued growth. Our focus remains on disciplined execution, expanding retail partnerships, and advancing product innovation to build long-term shareholder value. I’m extremely proud of our team.

Their dedication and commitment to quality, sustainability, and innovation have been instrumental in driving our progress and momentum heading into year-end. With that, I’ll turn the call over to Kostas Dafoulas, our Interim CFO, who will review the financial results for the quarter ended September 30, 2025. Kostas?

Kostas Dafoulas, Interim Chief Financial Officer, Edible Garden: Thanks, Jim. Good morning, everyone. Revenue for the quarter increased 9% to $2.8 million, compared to $2.6 million in the third quarter of 2024. With our strategic exit from the floral and lettuce categories now complete, this quarter reflects the strength and resilience of our repositioned portfolio. The growth of $0.2 million, or 9%, was primarily driven by strong performance across our shelf-stable product portfolio, including KICK Sports Nutrition, Vitamin Way, Pulp, and Pickle Party. Specifically, this portfolio grew 54% year-over-year in Q3. In our core herb portfolio, we saw strength in Hydrobasil, up 21% year-over-year, and Wheatgrass, up 59% year-over-year. Gross profit totaled approximately $0.3 million, compared to $0.7 million in the prior year quarter, reflecting higher labor, freight, and raw material costs, as well as inflationary pressures within the nutraceutical supply chain.

Selling, general and administrative expenses were $3.8 million, compared to $2.2 million in the same period last year, primarily due to expenses related to the assets purchased from Natural Shrimp and the associated depreciation, legal, audit, and accounting expenses. Net loss was $4 million, compared to a net loss of $2.1 million in the third quarter of 2024. We ended the quarter with $0.8 million in cash and equivalents, compared to $3.5 million at year-end 2024. Furthermore, the company refinanced its outstanding debt, securing a lower interest rate and more favorable terms. This refinancing is expected to reduce annual interest expense and reduce financing cash outflows, providing greater flexibility to support the company’s strategic initiatives and growth objectives. We continue to manage working capital with discipline, optimizing inventory turnover through improved production planning and distribution efficiency.

At the same time, we are diversifying our sources of liquidity at a lower cost of capital to ensure that we have the flexibility to act decisively on strategic opportunities as they arise. With that, I’ll open the call for any questions.

Conference Operator: Thank you very much. We are now opening the floor for questions. If you would like to ask a question, please press Star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press Star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it may be necessary to pick up your handset before you press the keys. Please wait a moment while we poll for questions. Thank you. Our first question is coming from Anthony Vendetti of Maxim Group. Anthony, your line is live.

Anthony Vendetti, Analyst, Maxim Group: Thank you. Just in terms of the Natural Shrimp facility that you acquired, can you talk about the build-out of that, how you intend to utilize that initially and then over the next 6 to 12 months? What specific product lines will be going in there? Any color on that would be helpful. Thanks.

Jim Kras, Chief Executive Officer, Edible Garden: Sure, Anthony. Good morning. How are you? Thanks for being on the call.

Anthony Vendetti, Analyst, Maxim Group: Thanks, Jim.

Jim Kras, Chief Executive Officer, Edible Garden: First of all, it’s an impressive facility. In 6.2 acres, it’s about an hour from Des Moines Airport. It’s right there in the center of the country and gives us access to all types of different raw materials and whatnot to do all types of products, some of which we’ve already started. Our near-term plan is actually the facility is going through a gap analysis right now with a third party. We will be doing some R&D for next-generation products, whether they’re nutraceuticals or food, is sort of in the works right now. We have some major opportunities with our retailers. One of the great things about Edible Garden, and there are many, is that we have significant relationships with major retailers.

Being on-trend with the type of products that we’re offering, clean-labeled, fermented, all those products that we are currently pushing out are only growing in demand as people are focusing on having less processed product. Walmart, for example, just came out and said within the last month that they’re mandating their suppliers of their private label to remove all artificial colors and dyes and sweeteners from their products. Something Edible Garden’s been doing for the last year and then some. The fact that we are growers and we grow the actual raw ingredients, plants that go into many of these products and can harvest some of the therapeutics without additives and without artificial dyes or colors or things that just aren’t really needed. That trend, we’re at the forefront, and we’re doing in line with sustainability.

To answer your question, we’re getting asked by major companies to come in, work on their private label products, many of which I think will go into Harland, which I think will be an incredible nutritional hub and sustainability hub in that part of the country. We couldn’t be more excited. Timing and happenstance sometimes work to your advantage. I think we’re just at that intersection of having the ability, the right products at the right time. Now we’re going to have the right vertical integration to deliver on it. I couldn’t be more excited. It’s all come together quite well. I think a lot of it’s really the team as well.

I want to give the people that work with us quite a bit of credit because it’s been a big effort here to not only tool up with the facilities that we currently have, but to get focused, get efficient, let some of the business that we knew that was a drag on the business kind of go and kind of bite the bullet, the previous quarters a little bit. We’re back on track. Q4 is always a strong season for us, and we’re excited about that. It looks great. We’re in the heat of the battle right now with Thanksgiving, which is our Super Bowl. Once again, Kroger, Fresh Market, ShopRite, they’re all coming to us not only for our branded products, but some of these other innovative things that we’re doing.

I think Edible Garden Prairie Hills, which is what we named Iowa, will, I think, be at the forefront of driving that innovation and volume for us, frankly.

Anthony Vendetti, Analyst, Maxim Group: Okay. Just to follow up, it sounds like the big grocery stores in particular are where the largest opportunity is. Would you say that’s also the largest opportunity moving into 2026? It’s the ShopRite, the Kroger, the Fresh Market, these bigger grocery chains where you see the most opportunity in 2026?

Jim Kras, Chief Executive Officer, Edible Garden: Yes. Look, I see our core business is that we’re a business that has excelled in produce where many have failed, whether established companies that have been around for quite some time or upstarts that came in sort of kind of drafting us and kind of spinning a similar story. I mean, we’re one of the last standing, and we’re accelerating the business. Yes, what’s happening is not only is it our produce business, it’s the existing branded business that we have in there, whether it’s KICK Sports Nutrition or Pickle Party. Then there’s private label. We have a substantial private label business currently with key players like Meijer. We’re getting asked to do more of the next-generation products from the likes of the big box retailers coming to us and saying, "All right, we love what you’re doing. You’re on-trend.

The current political environment is pushing for less processed foods. Research is coming back and saying as such. What can you do for us under our label? We like what you’re doing. We can do some in your label. A lot of it’s being driven by these big box retailers saying, "Hey, private label is such a powerhouse now. What can you do to sort of allow us to be in step with you with these innovations and have those offerings out on our shelves as quickly as possible?" 2026 is going to be a great year. Yeah, it’s going to be driven by retailers kind of coming to us and saying, "Hey, what can you do for us? Because we like what you’re doing, and we want more of what you have." It’s a great place to be, and it doesn’t always happen.

I think timing is just on our side, and a lot of it’s just driven by who we are and what we’ve been doing for the last decade. It might end up looking like overnight success, but ultimately, it’s been 10 years in the works to get to this place.

Anthony Vendetti, Analyst, Maxim Group: On the margin side, Jim, obviously, if sometimes private label is tougher to get a larger margin on, but if they’re asking for the natural products, the ones with less additives that, like you said, that’s right in your wheelhouse, are you able to push back and say, "Look, yeah, we can do that for you, but those are higher-priced products"? Maybe talk about the margin related to that as well as your Kick. Sports Nutrition program, the protein. How’s that doing, and what do you see the outlook for that in 2026?

Jim Kras, Chief Executive Officer, Edible Garden: I think on the private label piece, yes, to a certain extent, I think you can—I think some of it’s also sort of like modulating the words that we use, right? I think command’s a strong word. I don’t think you—I think when you’re Edible Garden, we’re a smaller company that’s nimble and can move quickly. I’ve always told my crew that we’re a customer service company that makes things. I think that’s boded well for us because we are quick to respond. I would tell you that I think that the margin, there’s opportunity to have a fair margin, but what you’re getting is volume. You’re going to get contracts. You’re going to get consistent volume.

You’re going to have a relationship with major retailers that, like we have currently with, like I said, some key retailers now that we’re doing private label where you build on that. Yes, there’s the margin play, but there’s the additional products. There’s a deeper relationship, and it’s long-term. I mean, most private label relationships—I mean, all private label relationships come with a contract and contract to business and commitments to take a certain base amount of product. You can call it an off-take agreement. It’s key, and it’s key to the business. It gives us security that we can support the facilities.

It also gives us visibility down the road for a long period of time that we know that as long as we don’t do anything that’s catastrophic to the business or there’s a black swan event, we are in business with a major retailer making something that has their label on it that’s got upside. Yeah, there is that pushback that will allow you to say, "Hey, you guys are getting this first. We’re putting the focus of the company on this." The other—and the idea is you’re going to get all this—this is how you grow the business, frankly. I mean, ideally, you have a blend, right?

You have a blend of retailers, private label, and then you have obviously your branded products, and then maybe you even make stuff for other brands that have—that can command a higher margin, and that kind of gives you a blended margin on the manufacturing. That is where we’re going with Iowa with some of the new products that I can’t disclose, but that we’re going to be putting in there that are going to offer significant upside. I think you had another question regarding Kick. I don’t know if I answered that or not. I don’t think I did.

Anthony Vendetti, Analyst, Maxim Group: Yeah. Let’s say maybe it’s, "Okay, you know what? You want guaranteed product availability of certain products that are private label that maybe aren’t as high margin, but we’ll provide that to you." Alongside that, yeah, you have to take our higher margin protein product even if you’re using somebody else’s, or you have to take some of our branded products as well.

Jim Kras, Chief Executive Officer, Edible Garden: There’s some of that.

Anthony Vendetti, Analyst, Maxim Group: Okay.

Jim Kras, Chief Executive Officer, Edible Garden: Yeah. Yeah, there’s some of that. I mean, look, it’s business, right? And it’s not an exact science. It’s in everybody’s best interest to support, especially if you’re a major retailer. I mean, pick one, whoever it is, it could be CVS. I don’t know. Somebody who, let’s say, we’re doing a nutraceutical product, for example, for them, you know that it’s usually a two- or three-year sort of contract, sometimes longer. We’re going to push for the longest ones possible. Yeah, I mean, they realize it’s in their best interest to support the company because it takes time to tool up. I think when you look at a facility like Iowa and the things that we’re looking to do, that takes—I mean, we’ve already started spending money on getting the place up and running last quarter, and we’ll continue to get the place ready for prime time.

These retailers, they understand it’s in their best interest to put other products in, maybe your branded product or a higher margin private label that they know will help, I guess, underwrite maybe the higher volume, lower margin business that they want to compete in. Those are the type of strategic conversations that we’re having at multiple major retailers. You’re already starting to see some of that come to fruition, and you will see more as we move forward into 2026. Yeah, there is that type of relationship. It’s like anything else. You got to have—you got to have something that they want, and you got to work hard with them. There’s a whole certification process, and their people come in and inspect everything. We’ve gotten pretty good at it, and we got a great crew. I couldn’t be more excited.

Yeah, that’s definitely the way that it should go. Not everybody does that, but they should work with you, understanding it’s in their best interest to help give you some fuel to build out the business. You can’t just rely on us to bring in our own capital. I mean, they got to—some of that’s got to be kind of cushioned with products that they know that are established that they give to us that allow us to offset. Sorry, that was so long-winded, but yeah. Yes. Yes. There is that opportunity. Did I answer your Kick question, Anthony? I don’t know if I did or not.

Anthony Vendetti, Analyst, Maxim Group: Yeah. No, that’s exactly what I was going to—yep. That was good. Thanks so much. I’ll hop back in with you. Appreciate it.

Jim Kras, Chief Executive Officer, Edible Garden: All right. Thank you, Anthony.

Conference Operator: Thank you very much. Just a reminder there, if there are any further questions, you can still join the queue by pressing star one on your phone keypad now. Wait to see if anybody else jumps into the queue. Okay. I’m not seeing any further questions in the queue, so I will now hand back over to the management team for any closing comments.

Jim Kras, Chief Executive Officer, Edible Garden: Thanks again to everyone for joining us today. Third quarter was another important step forward for Edible Garden. We’re executing our strategy with focus, expanding our retail reach, growing our higher margin CPG brands, and strengthening our operations to support scalable, profitable growth. Momentum continues across Kick Sports Nutrition, Pickle Party, Pulp, and Vitamin Way. These brands show that our approach is working and that consumers are responding to clean label, better-for-you products. At the same time, our core produce business remains strong, grounded in freshness, sustainability, and quality. As we approach year-end, our priorities are clear: continue executing at a high level, advance our innovation pipeline, and deliver lasting value for our shareholders. We’re excited about where we’re heading and look forward to sharing more of our progress in the months ahead. Thank you.

Conference Operator: Thank you very much. This does conclude today’s conference. You may disconnect your phone lines at this time and have a wonderful day and a wonderful weekend. We thank you for your participation.