Local Bounti Corp (LOCL) 2023 Q3 法說會逐字稿

Greetings, and welcome to Local Bounti's third quarter 2023 earnings conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded.

您好，歡迎參加 Local Bounti 2023 年第三季財報電話會議。所有參與者將處於僅聽模式。今天的演講結束後，將有機會提問。另請注意，今天的活動正在錄製中。

At this time, I would like to turn the conference call over to Jeff Sonnek, Investor Relations at ICR. Please go ahead.

現在，我想將電話會議轉給 ICR 投資者關係部門的 Jeff Sonnek。請繼續。

Thank you, and good afternoon. Today's presentation will be hosted by Local Bounti's Chief Executive Officer, Anna Fabrega, and Chief Financial Officer, Kathleen Valiasek.

謝謝你，下午好。今天的演講將由 Local Bounti 執行長 Anna Fabrega 和財務長 Kathleen Valaliasek 主持。

The comments made during today's call contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward looking statements. These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements.

今天電話會議中發表的評論包含 1995 年《私人證券訴訟改革法案》安全港條款含義內的前瞻性陳述。除歷史事實陳述外的所有陳述均被視為前瞻性陳述。這些陳述是基於管理層目前的預期和信念以及有關未來事件的一些假設。此類前瞻性陳述受到已知和未知的風險和不確定性的影響，可能導致實際結果與前瞻性陳述中討論的結果有重大差異。

Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. We'll also refer to certain non-GAAP financial measures today. Please refer to the press release which can be found on our Investor Relations website, investors.localbounti.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures.

其中一些風險和不確定性在該公司向美國證券交易委員會提交的文件中進行了識別和討論。今天我們也將提及某些非公認會計準則財務指標。請參閱我們的投資者關係網站 Investors.localbounti.com 上的新聞稿，以了解非 GAAP 財務指標與其最直接可比較的 GAAP 指標的對帳情況。

And with that, I'd now like to turn the call over to Anna. Go ahead.

就這樣，我現在想把電話轉給安娜。前進。

Thank you, Jeff, and welcome to everyone on the call. I'd like to start today's call by highlighting some of our recent accomplishments and then I'll share some insight on the operational improvements that we are integrating into our business. Kathy will round out the call with her financial discussion before opening the call for your questions.

謝謝你，傑夫，歡迎大家參加電話會議。我想在今天的電話會議開始時強調我們最近取得的一些成就，然後我將分享一些關於我們正在整合到業務中的營運改善的見解。凱西將在電話會議開始回答您的問題之前，透過她的財務討論來結束電話會議。

I continue to see incredible opportunity ahead for Local Bounti. We believe our patent pending Stack & Flow Technology, which combines the best aspects of traditional greenhouse approaches with vertical growing technology is an efficient solution that can help solve food shortages globally.

我仍然看到 Local Bounti 面臨著難以置信的機會。我們相信，我們正在申請專利的 Stack & Flow 技術將傳統溫室方法的最佳方面與垂直種植技術相結合，是一種有效的解決方案，可以幫助解決全球糧食短缺問題。

In early October, we completed the buildout of our Georgia facility with the finalization of Phase 1-C. This represents the final phase of construction and was focused on the integration of our vertical plant incubator, which we call Stack.

10 月初，我們完成了喬治亞州工廠的建設，並完成了 1-C 階段的工作。這是建造的最後階段，重點是整合我們的垂直植物孵化器（我們稱之為 Stack）。

This is a huge milestone for us as it creates, for the first time, a large scaled growing facility that brings together all the technological advancements that our team has developed at our Hamilton, Montana facility. It is also a model for our facilities in Texas and Washington that are expected to open in the coming months.

這對我們來說是一個巨大的里程碑，因為它首次創建了一個大型種植設施，匯集了我們團隊在蒙大拿州漢密爾頓工廠開發的所有技術進步。這也是我們預計在未來幾個月內開業的德州和華盛頓工廠的典範。

And perhaps most importantly, this greater capacity at Georgia will allow us to double our shipment volume to our large club customer under our offtake agreement, and we expect to see increased deliveries in the coming weeks.

也許最重要的是，喬治亞州更大的運力將使我們能夠根據承購協議將向大型俱樂部客戶的發貨量增加一倍，並且我們預計未來幾週的交付量將增加。

Given the significance of the planned increase in shipments, we took the time to thoughtfully calibrate our workflows and optimize our operations of Georgia's Phase 1-C Stack integration process that's underway to account for the larger footprint and 40% greater capacity generated by the Stack system.

考慮到計劃增加的出貨量的重要性，我們花時間仔細校準我們的工作流程並優化正在進行的喬治亞州1-C 階段Stack 整合流程的運營，以解決Stack 系統產生的更大的佔地面積和40% 的更大容量。

This involves taking an intentional look in the mirror and scrutinizing every level of operations to identify points of friction and how best to resolve them. This is the natural next step for Local Bounti following the development and integration of our patent pending Stack Technology. We are now focused on harnessing the opportunity we have with Stack & Flow by implementing a production system which is focused on eliminating waste.

這包括有意識地審視鏡子並仔細檢查每個層面的操作，以找出摩擦點以及如何最好地解決它們。這是 Local Bounti 在開發和整合正在申請專利的 Stack 技術之後自然而然的下一步。我們現在專注於透過實施專注於消除浪費的生產系統來利用 Stack & Flow 所擁有的機會。

Some of the key elements that we have put in place as part of our production system are hiring facility level leadership with operational backgrounds at all levels, hitting benchmark productivity goals, implementing standardized workflows for all processes, providing transparency to all associates so there's a clear view of performance, and advancing our ability to execute just-in-time production.

作為生產系統的一部分，我們實施的一些關鍵要素包括聘請具有各級營運背景的工廠級領導、達到基準生產力目標、為所有流程實施標準化工作流程、為所有員工提供透明度，以便有明確的資訊。績效觀，並提升我們執行準時生產的能力。

I'd like to emphasize the focus that we are bringing to the organization with respect to operational execution. We have made large commitments with these buildouts to support retail partners that are key to lean into this category of fresh, local, and sustainably grown produce.

我想強調我們在營運執行方面為組織帶來的關注。我們對這些擴建做出了巨大的承諾，以支持零售合作夥伴，這些合作夥伴對於進軍此類新鮮、本地和可持續種植的農產品至關重要。

It is absolutely imperative that we identify and implement replicable operating standards across our growing facilities to create the efficiency that underpins our long-term goals. After all, it is because of our unique ability to combine sustainability, efficiency, and quality at scale that we are able to attract leading global retailers like Sam's Club to Local Bounti.

我們絕對有必要在不斷增長的設施中確定並實施可複製的營運標準，以創造支撐我們長期目標的效率。畢竟，正是由於我們將永續發展、效率和品質大規模結合的獨特能力，我們才能夠吸引山姆會員店等全球領先零售商來到 Local Bounti。

In order to achieve our goals of scaling the business and delivering the financial returns we believe are inherent in our model, we need to adapt to ensure that we have the right infrastructure and people in place to position Local Bounti for success. As part of this process, we have optimized our organizational structure and continue to add key talent to help accelerate our strategy.

為了實現我們認為是我們的模式所固有的業務擴展和財務回報的目標，我們需要進行調整，以確保我們擁有合適的基礎設施和人員，以幫助 Local Bounti 取得成功。作為這個過程的一部分，我們優化了組織結構，並繼續增加關鍵人才，以幫助加速我們的策略。

Most recently, we have appointed Bimal Patel as our Chief Operating Officer. Bimal brings to our team over 30 years of progressive experience in operational leadership at several global blue-chip companies, including Amazon, Whirlpool, Ford, and UPS. Prior to joining us, Bimal worked at Amazon for 11 years as its Regional Director of Operations and most recently served as the Worldwide Director at Amazon Logistics, Planning and Engineering.

最近，我們任命 Bimal Patel 為我們的營運長。 Bimal 為我們的團隊帶來了 30 多年在亞馬遜、惠而浦、福特和 UPS 等多家全球藍籌公司營運領導方面累積的豐富經驗。在加入我們之前，Bimal 在亞馬遜工作了 11 年，擔任區域營運總監，最近擔任亞馬遜物流、規劃和工程全球總監。

We are leveraging Bimal's deep expertise across operations, process engineering, and logistics to ensure that our organization is optimized to drive efficiencies across all facets of our business, providing us with an opportunity to demonstrate how Local Bounti is redefining agriculture.

我們正在利用 Bimal 在營運、工藝工程和物流方面的深厚專業知識，確保我們的組織得到優化，以提高我們業務各個方面的效率，為我們提供了一個機會來展示 Local Bounti 如何重新定義農業。

The third quarter marked a transition period for Local Bounti. We continue to work hard to perfect the art and science of our technology, and the result is a standardized and hyper-efficient manufacturing process which we can replicate across our growing footprint.

第三季是 Local Bounti 的過渡期。我們繼續努力完善我們技術的藝術和科學，其結果是標準化和超高效的製造流程，我們可以在我們不斷增長的足跡中複製該流程。

Beginning in the fourth quarter, we enter a new upward trajectory. And with the focus we are putting on our operations, I am confident that we have an organization that is up to the task of generating financial returns in the quickest and most efficient way possible. I look forward to demonstrating our progress in the quarters and years to come.

從第四季開始，我們進入了新的上升軌道。由於我們將重點放在營運上，我相信我們的組織能夠勝任以盡可能最快、最有效的方式產生財務回報的任務。我期待在未來幾個季度和幾年裡展示我們的進步。

With that, I will turn the call over to Kathy.

這樣，我會將電話轉給凱西。

Thank you, Anna. I'll begin by providing an update on our facility scale up before covering our third quarter financial results and full year 2023 guidance. At our Georgia facility, we successfully completed the integration of the Stack zones that comprised Phase 1-C in early October and immediately commenced operations with the seeding of the vertical nursery. This is a significant milestone for Local Bounti and is a model that we are working to replicate at our Texas and Washington facilities.

謝謝你，安娜。首先，我將介紹我們設施規模擴大的最新情況，然後介紹我們的第三季財務業績和 2023 年全年指引。在我們的喬治亞州工廠，我們在 10 月初成功完成了包括 1-C 階段在內的 Stack 區域的整合，並立即開始垂直苗圃播種的運作。這是 Local Bounti 的一個重要里程碑，也是我們正在德克薩斯州和華盛頓州工廠複製的模式。

We continue to make great progress on our six-acre facility in Texas. In the third quarter, we shifted our focus to installation of the Stack zones and greenhouse growing systems. We continue to expect operations at Texas to commence in the fourth quarter of this year. The similar design of this facility to that at Georgia will allow for synergistic operations and management of the two facilities.

我們在德州佔地六英畝的工廠繼續取得巨大進展。第三季度，我們將重點轉向安裝堆疊區和溫室種植系統。我們仍然預計德克薩斯州的營運將於今年第四季開始。該設施的設計與喬治亞州的設施類似，將有助於兩個設施的協同運作和管理。

Texas will support production of our packaged leafy green varieties as well as locally grown living lettuces, and fortify our national distribution network with localized facilities spanning coast-to-coast across the southern US.

德克薩斯州將支持我們的包裝綠葉蔬菜品種以及當地種植的活生菜的生產，並透過橫跨美國南部海岸到海岸的本地化設施來加強我們的國家分銷網絡。

Construction at our Pasco, Washington facility remains on track, and we continue to expect operations to commence early in the first quarter of 2024. When complete, the facility will be comprised of three acres of greenhouse, which will be supported by multiple Stack zones. This location will help bolster the company's distribution capabilities in the Pacific Northwest. As a reminder, we've been consciously staggering construction to accommodate the commissioning of our Texas facility in the fourth quarter of 2023 to maximize the efficiency of our team.

我們華盛頓州帕斯科工廠的建設仍在按計劃進行，我們仍然預計將於 2024 年第一季初開始運營。竣工後，該工廠將由 3 英畝的溫室組成，並由多個 Stack 區域提供支援。該地點將有助於增強公司在太平洋西北地區的分銷能力。謹此提醒，我們一直在有意識地錯開施工，以適應德州工廠在 2023 年第四季的調試，從而最大限度地提高我們團隊的效率。

I'll now cover our third quarter results. Third quarter 2023 sales were $6.8 million as compared to $6.3 million in the prior year period. Our third quarter results largely reflected production from our California facilities and to a lesser extent, our Georgia and Montana facilities.

我現在將介紹我們第三季的業績。 2023 年第三季銷售額為 680 萬美元，而去年同期為 630 萬美元。我們第三季的業績主要反映了我們加州工廠的產量，以及較小程度反映了我們喬治亞州和蒙大拿州工廠的產量。

Our sales growth in the quarter was limited by two primary factors. First, the temporary closure of a section of one of our California facilities in order to make necessary repairs following weather-related damage from Q1, which impacted sales by $500,000 and has since been repaired and resumed normal operations in early October.

我們本季的銷售成長受到兩個主要因素的限制。首先，我們在第一季因天氣造成的損壞而暫時關閉了加州工廠的一部分，以便進行必要的維修，該損壞影響了銷售額 50 萬美元，此後已於 10 月初修復並恢復正常運作。

And second, our operations in Georgia experienced some periods of lower utilization during the Phase 1C integration as we took the opportunity to thoughtfully redesign our workflows and optimize our operations to account for the larger footprint and 40% greater capacity generated by the Stack system.

其次，我們在喬治亞州的業務在1C 階段整合期間經歷了一段利用率較低的時期，因為我們藉此機會仔細地重新設計了我們的工作流程並優化了我們的運營，以適應Stack 系統產生的更大的佔地面積和40% 的更大容量。

This shifted revenue from Georgia into the fourth quarter as we work with our key customer accounts on preparing for a ramp and expanded distribution ahead of the holidays. With the Phase 1-C Stack integration complete and the facility fully functioning in October, we expect to increase the revenue run rate out of the Georgia facility in the fourth quarter of 2023.

這將收入從喬治亞州轉移到了第四季度，因為我們與主要客戶客戶合作，為假期前的成長和擴大分銷做準備。隨著 1-C 階段堆疊整合的完成以及該設施於 10 月全面投入運行，我們預計將在 2023 年第四季度提高喬治亞州設施的收入運行率。

Third quarter 2023 adjusted gross margin, excluding depreciation, stock-based comp, and other non-reoccurring items, was approximately 25%. Our adjusted gross margin was constrained in the quarter, primarily by the lower utilization that I mentioned at both California and Georgia facilities. SG&A was $14.4 million in the third quarter, which was down $5.8 million from the prior year period with the difference largely due to lower stock-based comp. Adjusted SG&A was $7.5 million versus $7.1 million in the prior year period.

2023 年第三季調整後毛利率（不包括折舊、股票補償和其他非經常性項目）約為 25%。我們調整後的毛利率在本季受到限制，主要是由於我提到的加州和喬治亞州工廠的使用率較低。第三季的 SG&A 為 1,440 萬美元，比去年同期減少 580 萬美元，差異主要是由於基於股票的比較較低。調整後的 SG&A 為 750 萬美元，去年同期為 710 萬美元。

Third Quarter 2023 net loss was $24.3 million as compared to a net loss of $27.1 million in the prior year period, and includes $7.1 million in interest expense, $3.3 million in stock-based compensation, $3.4 million of depreciation and amortization, and a gain on a change of fair value of a warrant liability of $1.8 million. Adjusting for these and other nonrecurring items, adjusted EBITDA loss was $9 million.

2023 年第三季淨虧損為 2,430 萬美元，而去年同期淨虧損為 2,710 萬美元，其中包括 710 萬美元的利息支出、330 萬美元的股票薪酬、340 萬美元的折舊和攤提以及收益股權證負債的公允價值變動為180 萬美元。調整這些和其他非經常性項目後，調整後的 EBITDA 損失為 900 萬美元。

From a capital structure perspective, for the third quarter ended September 30, 2023, we had cash, cash equivalents, and restricted cash in the amount of $18.3 million and approximately $38 million of undrawn capacity on our credit facility with Cargill. Additionally, Cargill has agreed to provide Local Bounti $10 million in additional working capital, subject to certain terms and conditions precedent. We anticipate closing on this transaction in November.

從資本結構的角度來看，截至2023 年9 月30 日的第三季度，我們與嘉吉的信貸安排中擁有金額為1830 萬美元的現金、現金等價物和限制性現金以及約3800 萬美元的未提取能力。此外，嘉吉還同意向 Local Bounti 提供 1000 萬美元的額外營運資金，但須遵守某些先決條款和條件。我們預計交易將於 11 月完成。

I also wanted to provide some further context around how we are using our various capital facilities and the timing impact it has on our cash. For example, as we spend cash on CapEx, traditionally, there was a 30-day period before we got reimbursed through our Cargill line. We were successful and accelerated this reimbursement rolling forward to 15 days, which will improve the cash level to operate the business.

我還想提供一些有關我們如何使用各種資本融資及其對我們現金的時間影響的進一步背景資訊。例如，當我們在資本支出上花費現金時，傳統上，我們需要 30 天的時間才能透過嘉吉公司獲得報銷。我們取得了成功，並將報銷期限提前至 15 天，這將提高營運業務的現金水準。

We continue to believe that we have the necessary capital to reach breakeven adjusted EBITDA by the end of 2024 or early 2025, which is a very important milestone that our entire organization has been working hard to achieve.

我們仍然相信，我們擁有必要的資本，可以在 2024 年底或 2025 年初實現盈虧平衡調整後 EBITDA，這是我們整個組織一直在努力實現的一個非常重要的里程碑。

As previously announced, at the end of the first quarter we expanded our construction financing agreement with Cargill by up to $110 million for a total of up to $280 million. Then, in April, we executed a sale leaseback transaction for $35 million. We continue to advance our work with a licensed USDA lender to reduce our use of construction financing and replace it with lower-cost debt.

正如先前所宣布的，第一季末，我們將與嘉吉的建築融資協議擴大了 1.1 億美元，總計達 2.8 億美元。然後，在 4 月份，我們執行了一項價值 3500 萬美元的售後回租交易。我們繼續推動與美國農業部許可貸款機構的合作，以減少對建築融資的使用，並以成本較低的債務取代。

Local Bounti has executed a Conditional Commitment Letter and expects to enter into additional Commitment Letters from a commercial finance lender for a total financing of up to approximately $228 million to fund its 2024 greenfield build and facility expansions. We expect to close on the financings within 60 to 75 days.

Local Bounti 已簽署了一份有條件承諾函，並預計將與一家商業金融貸款機構簽訂額外的承諾函，融資總額高達約 2.28 億美元，為其 2024 年綠地建設和設施擴建提供資金。我們預計將在 60 至 75 天內完成融資。

With all of these pieces taking shape, we believe we are on track to have the resources and agreements in place to execute our near-term plan. However, I also want to emphasize that we are continuing to work on additional strategies to lower our cost of capital while preserving the flexibility that our current agreements allow for. While we remain cognizant of our near-term capital requirements, our strategic philosophy is longer term in nature, and we are constantly preparing for future growth opportunities.

隨著所有這些部分的形成，我們相信我們有望獲得資源和協議來執行我們的近期計劃。然而，我還想強調，我們正在繼續制定其他策略，以降低我們的資本成本，同時保留我們目前協議允許的靈活性。雖然我們仍然認識到我們的近期資本需求，但我們的策略理念本質上是長期的，我們不斷為未來的成長機會做準備。

As of September 30, 2023, we have approximately 8.3 million shares outstanding. On a pro forma basis, including warrants and our employees' restricted stock units outstanding, we have a fully diluted share count of approximately 15.6 million shares.

截至 2023 年 9 月 30 日，我們擁有約 830 萬股已發行股票。根據備考基礎，包括認股權證和員工已發行的限制性股票單位，我們的完全稀釋後股份數量約為 1,560 萬股。

With respect to our outlook and in consideration of our year-to-date performance, we are revising our full year 2023 revenue guidance to a range of $30 million to $34 million. As we've mentioned previously, we continue to anticipate a more significant revenue acceleration in the fourth quarter of this year, which will benefit from the improved underlying production and the positive impact from Phase 1-C's Stack implementation, which is expected to increase production by 40%, as well as our Texas facility coming online in the fourth quarter.

就我們的前景而言，並考慮到我們今年迄今的業績，我們正在將 2023 年全年收入指導修訂為 3000 萬美元至 3400 萬美元。正如我們之前提到的，我們繼續預計今年第四季度收入將出現更顯著的加速，這將受益於基礎產量的改善以及 Phase 1-C 的 Stack 實施的積極影響，預計將增加產量增長了40 %，我們德州的工廠也將於第四季上線。

With respect to our Georgia production, we are preparing to double our shipment volume to our large club customer under our off-take agreement and expect to see increased deliveries in the coming weeks. The timing of this ramp, coupled with our decision to implement some operational improvements during our Stack implementation accounts for the change in our guidance.

關於我們喬治亞州的生產，我們準備根據承購協議將向大型俱樂部客戶的發貨量增加一倍，並預計在未來幾週內交付量將增加。這次升級的時機，加上我們在 Stack 實施期間實施一些營運改善的決定，導致了我們的指導方針發生了變化。

In summary, we are working hard to scale the business and have reached a significant milestone with the completion of the Georgia facility. So despite our ability to secure the funding for our currently planned projects, which we believe will take us to breakeven cash flow, the market is now currently trading on the fundamentals of the business as we work on our operational execution, and we believe that our market cap is now reflective of the value of our company.

總之，我們正在努力擴大業務規模，並隨著喬治亞州工廠的竣工而達到了一個重要的里程碑。因此，儘管我們有能力為當前計劃的項目獲得資金，我們相信這將使我們實現盈虧平衡現金流，但在我們致力於運營執行時，市場目前正在根據業務基本面進行交易，我們相信我們的市值現在反映了我們公司的價值。

As such, a number of executives intend to look at making open-market purchases in the near term to demonstrate our belief in the company's long-term strategy and future success. Further, we are also implementing a measured stock repurchase authorization of up to 1 million to support shares and take advantage of the market dislocation. That concludes our prepared remarks.

因此，許多高階主管打算考慮在短期內進行公開市場購買，以顯示我們對公司長期策略和未來成功的信心。此外，我們還實施了最多 100 萬股的有控制的股票回購授權，以支持股票並利用市場混亂。我們準備好的演講到此結束。

Operator, please open the call for questions.

接線員，請打開電話提問。

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions) Kristen Owen, Oppenheimer.

謝謝。女士們、先生們，我們現在將進行問答環節。 （操作員說明）克里斯汀歐文，奧本海默。

Great. Thank you for taking the question. I wanted to ask about some of the learnings in the Georgia facility. You mentioned this in the prepared remarks, and it seems as though you took some opportunity in the quarter to implement some of those learnings. Can you walk us through or just expand on some examples there? And particularly with Texas being more of a greenfield facility versus Georgia, which was more of an existing facility, just how we should think about the ramp of Texas as compared with Georgia?

偉大的。感謝您提出問題。我想問喬治亞工廠的一些經驗教訓。您在準備好的發言中提到了這一點，看來您在本季度抓住了一些機會來實施其中的一些經驗教訓。您能否向我們介紹一下或只是擴展一些範例？特別是德克薩斯州更像是一個新建設施，而喬治亞州則更像是一個現有設施，與喬治亞州相比，我們應該如何考慮德克薩斯州的坡道？

Hey, Kristen. Thanks for the question. So recall that Georgia initially started with a three-acre facility, and we later added 1-B as an expansion. And so as we have ramped up, grow capacity, and now with Stack as well, we've had to really take a hard look at the process flow throughout the facility. Looking at everything from how do you move product through equipment like the harvester and the pack layer more efficiently, how do you make sure that you have minimal downtime, how do you reduce complexity? So even looking at how much conveyor does product go down before it gets put into a package to how to minimize change over time when we're changing pack size, for example.

嘿，克里斯汀。謝謝你的提問。因此，請回想一下，喬治亞州最初建有佔地三英畝的設施，後來我們擴建了 1-B。因此，當我們增加產能、擴大產能，現在也有了 Stack，我們必須認真審視整個設施的流程。著眼於方方面面，從如何更有效地透過收割機和包裝層等設備移動產品，如何確保最大限度地減少停機時間，如何降低複雜性？因此，例如，即使要考慮產品在放入包裝之前要下降多少傳送帶，以盡量減少隨著時間的推移而發生的變化，例如當我們改變包裝尺寸時。

So each one of those points has been evaluated and we have created what is typical manufacturing industry standard work so that it's really -- people can be super fungible within the operation. We can operate with minimal shift but still support that 40% increase in yield.

因此，這些要點中的每一點都經過了評估，我們創建了典型的製造業標準工作，這樣人們就可以在操作中實現超級可替代。我們可以以最小的班次進行運營，但仍支援產量增加 40%。

And you asked about Texas, Texas will ramp up significantly faster because, one, we have the standardized processes in place, but two, we also designed for the Stack & Flow process from the get-go. And so there's not as much retrofitting and redesign that we have to be thinking about as we're trying to optimize that flow for the greatest amount of efficiency.

你問過德州的情況，德州的成長速度會顯著加快，因為，第一，我們已經制定了標準化流程，第二，我們從一開始就為堆疊和流程流程進行了設計。因此，我們不必考慮太多的改造和重新設計，因為我們正在努力優化流程以獲得最大的效率。

Okay, that makes sense. Thank you, Anna. So when I think about the guidance then, 4Q sales implied about $11 million, how should we think about that in terms of the run rate going into 2024, understanding that Texas will be commissioning, and so probably not a big contributor in 4Q?

好吧，這是有道理的。謝謝你，安娜。因此，當我考慮指導時，第四季度銷售額約為1100 萬美元，我們應該如何考慮進入2024 年的運行率，以了解德克薩斯州將進行調試，因此可能不會在第四季度做出重大貢獻？

Yeah. So I think we talked about Georgia, and as we ramp up once the increasing -- doubling our shipments to our club customer and increasing production by about 40%, Texas will be ramping up in December. And typically, it takes some time just to get the operation fully running, but we expect to be ceding by the beginning of the year.

是的。所以我想我們談論了喬治亞州，當我們增加產量時——將我們向俱樂部客戶的發貨量增加一倍，產量增加約 40%，德克薩斯州將在 12 月增加產量。通常情況下，需要一些時間才能讓營運全面運行，但我們預計會在今年年初放棄。

And then one (multiple speakers) me. Sorry. Go ahead, Kathy.

然後是我（多個發言者）。對不起。來吧，凱西。

Yeah. I was just going to throw in, in terms of revenue perspective, Texas is less than we might have thought earlier in the year.

是的。我只是想補充一下，從收入角度來看，德州的收入比我們今年稍早想像的要少。

Okay. That's helpful. And then, Kathy, actually a follow-up. Last one for me. To the extent that you're able, just anything you can say about the USDA backed construction facility, any early indications from those discussions. Impact to total cost of capital, just how to think about that over the next 60 to 75 days?

好的。這很有幫助。然後，凱西，實際上是後續行動。最後一張給我。在您力所能及的範圍內，您可以對美國農業部支持的建設設施說任何話，從這些討論中得到任何早期跡象。對總資本成本的影響，在未來 60 到 75 天內如何考慮？

Yeah. Sure. So as we've said earlier, a couple of quarters ago we restructured our agreement with Cargill such that they are allowing lower cost of capital to come into the cap stack. And we are considering and looking at term sheets actually on each of the facilities for long term takeout of Cargill for long term -- much lower USDA rates.

是的。當然。正如我們之前所說，幾個季度前，我們重組了與嘉吉的協議，以便他們允許較低的資本成本進入上限。我們正在考慮並查看實際上嘉吉長期收購每個設施的條款清單——美國農業部的利率要低得多。

Ben Klieve, Lake Street Capital Markets.

Ben Klieve，湖街資本市場。

All right. Thanks for taking my questions. First, I want to ask a question about the Conditional Commitment Letters that you noted in your prepared remarks. I want to make sure I understand this correctly. So the $228 million of capital that you're referring to here, is this -- this is incremental capital above and beyond the existing facilities through Cargill, and this is for 2024 greenfield build and expansion beyond what we already know is in the works in Texas, Georgia, and Washington. Are those both correct statements?

好的。感謝您回答我的問題。首先，我想問一個關於你在準備好的發言中提到的有條件承諾函的問題。我想確保我正確理解這一點。因此，您在這裡指的2.28 億美元資本是這樣的——這是嘉吉現有設施之外的增量資本，這是用於2024 年綠地建設和擴建，超出了我們已知的正在進行的工作。德克薩斯州、喬治亞州和華盛頓州。這些都是正確的說法嗎？

Yeah.

是的。

Exactly. Yeah.

確切地。是的。

Okay. Great. Andis the USDA backed loan a part of that $228 million or is that separate as well?

好的。偉大的。美國農業部支持的貸款是這 2.28 億美元的一部分還是單獨的？

It is separate. It's above and beyond.

它是分開的。它是超越的。

Okay. All right. Very good. Thank you. With the fourth quarter outlook on -- I would think at this point you've got a pretty good sense of where you're going to come in on the quarter, so can you talk about the big drivers between the high and the low end of your range, what you're not sure is going to come through on the period?

好的。好的。非常好。謝謝。考慮到第四季度的前景——我認為此時您已經對本季度的情況有了很好的了解，所以您能談談高端和低端之間的主要驅動因素嗎？在您的範圍內，您不確定在此期間會發生什麼？

You want to take that, Kathy?

你想接受這個嗎，凱西？

Yeah. Sure. You mean in terms of our -- the reset, $30 million to $34 million?

是的。當然。你的意思是我們的重置，3000 萬至 3400 萬美元？

Well, yeah. What needs to happen to hit $34 million versus $30 million?

嗯，是的。與 3000 萬美元相比，需要做什麼才能達到 3400 萬美元？

Yeah. So great question. Just the speed with which we get Stack up and running is a piece of it. We did say that we seeded early in October, but it's a large number of Stacks, right, in the facility. And so it's just the ramp and the speed with which we can get that up and running, so to speak.

是的。很好的問題。 Stack 的啟動和運作速度就是其中的一部分。我們確實說過我們在 10 月初播種，但設施中有大量堆棧，對吧。可以這麼說，這只是我們啟動和運行的坡道和速度。

And as -- we did mention that California, we had an issue in Q3, but that one section is back up and running. So we should be great there. And then also, just any timing for Texas coming online.

正如我們確實提到的那樣，加州在第三季度遇到了問題，但該部分已經恢復並運行。所以我們應該在那裡表現出色。然後，德克薩斯州上線的任何時間。

Okay. Great. And then last one for me. I'll get back in line. It's regarding California. For several periods in a row now there's been some challenge that you guys have fought through there, can you talk about your view on the long-term outlook for those facilities? Are these two facilities ones that you think are going to be -- be in your business for the foreseeable future or are you considering any strategic initiatives around these, given the challenges that you've had here for, now, several periods in a row?

好的。偉大的。然後是我的最後一張。我會回去排隊。這是關於加州的事情。你們連續幾個時期都遇到了一些挑戰，你們能談談你們對這些設施的長期前景的看法嗎？您是否認為這兩個設施將在可預見的未來成為您的業務，或者考慮到您現在連續幾個時期在這裡遇到的挑戰，您是否正在考慮圍繞這兩個設施採取任何戰略舉措？

Yeah, I think -- Go ahead, Kathy. Go ahead.

是的，我想——繼續吧，凱西。前進。

Sure. So it is still so much about this -- the crazy weather that we saw in Q1 in California. And one of the things that I'll say, right next to the facility for literally 20 years was a dry lake bed. Okay. And the rains were so strong in Q1 that there's now actually a lake there. And I'm just saying that the level of rain was so significant that it was -- it just had all sorts of implications to the facility, both facilities actually.

當然。所以，這仍然是一個很大的問題——我們在加州第一季看到的瘋狂天氣。我要說的一件事是，在該設施旁邊有一個乾涸的湖床，實際上已經 20 年了。好的。第一季的降雨量非常大，以至於現在那裡實際上有一個湖。我只是說降雨量非常大，它對設施產生了各種各樣的影響，實際上是兩個設施。

But we definitely feel that both of those facilities are coming, still, right along, and we consider them very, very important facilities in our outlook rolling forward. But of course, also we are looking to expand at some point possibly on the land of one or other or one of the other or even both of the facilities. So although we have had issues this year, it's really just temporary issues. Yeah. Anna.

但我們確實認為這兩項設施仍在繼續，我們認為它們在我們未來的展望中非常非常重要。當然，我們也希望在某個時候可能在一個或另一個或另一個甚至兩個設施的土地上擴張。因此，儘管今年我們遇到了問題，但這實際上只是暫時的問題。是的。安娜.

Yeah. I'll just add in regards to the section that we closed for repairs. We've been investing quite a bit in the infrastructure of these facilities, and we made the decision that rather try to make repairs and operate in that particular section, it would be better for our employees and better from a safety standpoint to close it down so that we could really get in there and make the repairs as quickly as possible.

是的。我只是補充一下我們關閉維修的部分。我們在這些設施的基礎設施上投入了大量資金，我們決定關閉該設施，而不是嘗試在該特定區域進行維修和運營，這對我們的員工更好，從安全角度來看也更好。這樣我們才能真正進入那裡並儘快進行修復。

So as Kathy said, there's still really important facilities for us and we're evaluating right now how can we make sure that we are fortified against other events like that going forward.

正如凱西所說，這裡仍然有非常重要的設施，我們現在正在評估如何確保我們能夠抵禦未來類似的其他事件。

Got it. Okay. Great. Appreciate you taking my questions. I'll get back in queue.

知道了。好的。偉大的。感謝您回答我的問題。我會回到隊列中。

Brian Wright, ROTH MKM.

布萊恩·賴特 (Brian Wright)，羅斯 MKM。

Thanks. Good afternoon. I just wanted to follow up on the Georgia facility with 1-C being completed and the impact to the yields that occurred. So there was more than just typical seeding at the 1-A and 1-B that could have occurred whether the Stack was up or not. But for planning purposes, it was a function of this Stack starting that -- I'm just like, I'm logistically struggling with -- and I'm sure there's a simple answer, but just not being there I'm having a trouble like visualizing it.

謝謝。午安.我只是想跟進喬治亞州工廠 1-C 的完工情況以及對產量的影響。因此，無論籌碼是否成立，在 1-A 和 1-B 處可能發生的不僅僅是典型的播種。但出於規劃的目的，這是這個堆疊的一個功能，一開始我就想，我在邏輯上遇到了困難，我確信有一個簡單的答案，但只是不在那裡，我有一個想像它的麻煩。

Visualizing the -- so one is --

想像——所以一個是——

They -- on what happened with the lack of ramp in the Georgia?

他們——關於喬治亞州缺少坡道發生了什麼？

Yeah. So we operationalized 1-B and we had to adapt and adjust to having those six acres and production plan to incremental volume than what we had out of the three acres. 1-C was originally planned to go up earlier in the year and it was delayed. And as part of bringing up 1-C and starting the seeding process, we also took a step back and -- from a production standpoint, so that we could make sure that we had the workflow in place to support that incremental volume that would now be coming through as Stack was brought onboard.

是的。因此，我們實施了 1-B，我們必須適應和調整這六英畝土地和生產計劃，使其產量比我們三英畝土地的增量。 1-C原計劃於今年早些時候上線，但後來被推遲了。作為提出 1-C 並開始播種過程的一部分，我們還後退了一步——從生產的角度來看，這樣我們就可以確保我們有適當的工作流程來支持現在的增量量當Stack 加入時，這個問題就會解決。

So as Kathy mentioned, we started seeding in the beginning of October. We are now kind of working that product through the system and feel really good about the process and the workflow and the efficiency that we have going through there, but that's not reflected in Q3 clearly.

正如凱西所提到的，我們在十月初開始播種。我們現在正在透過系統來使用該產品，並對我們在那裡經歷的流程、工作流程和效率感到非常滿意，但這並沒有在第三季度清楚地反映出來。

Sorry. I just wanted to follow up, the seeding beginning in October, are you referring to seeding at the Stack --?

對不起。我只是想跟進一下，10 月開始的播種，你指的是 Stack 上的播種嗎？

Correct.

正確的。

Okay. Correct.

好的。正確的。

Yeah. It was honestly -- with the advent of our COO, Bimal Patel coming on, Brian, it was a very, very conscious effort and decision on the processes that he put in place. Workflows, optimization of the operations, we realized -- we made a conscious decision here to go slow to go fast is what I would say. And it --

是的。老實說，隨著我們的營運長 Bimal Patel 的上任，Brian，這是對他所實施的流程做出的非常非常有意識的努力和決定。我們意識到，工作流程、營運優化——我們有意識地做出了決定，我想說的是，要慢速發展，要快速發展。還有它——

Yeah. I'll give an example. We have -- in that facility, we have one harvester. So in order to make sure that you can operate that harvester at its maximum speed to run all of those (technical difficulty) through plus the incremental, requires some process engineering work that we've had our engineering team engaged in, for example.

是的。我舉個例子。我們在那個設施裡有一台收割機。因此，為了確保您可以以最大速度操作收割機來運行所有這些（技術難度）加上增量，需要我們的工程團隊參與的一些流程工程工作。

Again, if we're mixing salad greens, those salad greens go to a mixing belt, how can we reduce the amount of time that it takes to get those greens from harvester to the packaging machine and potentially is there a different way we can mix it that doesn't require it to go to the belt? So it's every single point in the process, we're looking at minutes and seconds and trying to optimize that flow so that at 40% greater capacity we're not really having any bottlenecks at the end of the process that get in the way.

再說一遍，如果我們要混合沙拉蔬菜，這些沙拉蔬菜會進入混合帶，我們如何才能減少將這些蔬菜從收割機運送到包裝機所需的時間，以及是否有其他方法可以混合不需要它去皮帶嗎？因此，對於流程中的每一個點，我們都會分秒必爭，並嘗試優化流程，以便在容量提高 40% 的情況下，我們在流程結束時不會真正遇到任何瓶頸。

Okay. And then just wanted to confirm -- yeah, I think you said last quarter you're selling everything you're making, is that still the case?

好的。然後我想確認一下——是的，我想你上個季度說過要賣掉你正在生產的所有東西，現在還是這樣嗎？

Yeah.

是的。

Great. Thank you so much. Thank you.

偉大的。太感謝了。謝謝。

Chris Barnes, Deutsche Bank.

克里斯‧巴恩斯，德意志銀行。

Hi, good afternoon. I guess I just wanted to ask on gross margins. The 25% this quarter was -- it's like noticeably weaker than what -- like 2Q last quarter. And I know you cited the weather challenges in California and start-up costs in Georgia, but I guess I'm just trying to understand last quarter you said the weather -- the weather issues were resolved and this quarter they came back.

嗨，下午好。我想我只是想問一下毛利率。本季的 25% 明顯低於上季第二季的水準。我知道您提到了加州的天氣挑戰和喬治亞州的啟動成本，但我想我只是想了解上個季度您所說的天氣 - 天氣問題得到了解決，本季度又回來了。

So what really is driving the weaker margin and then just going forward as the revenue scales up at Georgia and in Texas and in Washington, do you have line of sight to getting back to like a mid 30s gross margin or is it going to be structurally lower than -- year to date, it's come in quite a bit and just continues to do so. Just so I'd love your thoughts there. Thanks.

那麼，真正導致利潤率下降的因素是什麼，隨著喬治亞州、德克薩斯州和華盛頓州收入規模的擴大，你是否有能力恢復到30 多歲左右的毛利率，或者是結構性的變化？低於今年迄今為止，它已經出現了相當多的情況，並且還在繼續這樣做。只是為了讓我喜歡你的想法。謝謝。

Yeah, Chris, thanks so much for the question. And I hear you, it is very frustrating for us. But yeah, we absolutely have line of sight to get back to where we were. And California, it was so much of getting through the food safety audit, the shutting down this -- the one section of the facility, and we had the surge headcount. And it was basically a one-off, and we -- even this quarter we will be back up and running at our normal gross margins. And I know it was definitely disappointing for us also, but we will be back on track this quarter.

是的，克里斯，非常感謝你的提問。我聽到你的聲音，這對我們來說非常令人沮喪。但是，是的，我們絕對有能力回到原來的位置。而加州，我們需要通過食品安全審核，關閉該設施的一個部分，而我們的員工人數激增。這基本上是一次性的，我們 - 即使這個季度我們也會恢復正常的毛利率並運行。我知道這對我們來說肯定也令人失望，但我們將在本季重回正軌。

I guess just what's your confidence level around that? Like, obviously there are things that have come in out of your control, so I would just -- would really just love a little bit more color around it.

我想你對此的信心程度是多少？就像，顯然有些事情是你無法控制的，所以我真的會喜歡它周圍多一點顏色。

Yeah. I hear you. So my confidence level is very, very high. We had to bring in a bunch of temp labor actually at both of the facilities. Just -- in Georgia, we were surging headcount to be sure that we could get Stack up and running, and then in California to get through the food safety audit, and certain repairs and maintenance around shutting down this one section and because just the -- utilization was lower. But for both facilities, the headcount is already back to where -- back to normal.

是的。我聽到了。所以我的信心非常非常高。事實上，我們不得不在這兩個工廠引進一批臨時工。只是 - 在喬治亞州，我們增加了人員數量，以確保我們能夠讓 Stack 啟動並運行，然後在加利福尼亞州通過食品安全審核，以及圍繞關閉這一部分進行的某些維修和維護，因為只是 - - 利用率較低。但對這兩個設施來說，員工人數已經恢復到原來的水準——恢復正常。

Got it. Okay. That's helpful. And then I had just a follow-up on capital allocation. I know you noted management is selectively repurchasing shares and you also announced this -- the $1 million repurchase program. But I guess, given the level of debt on the balance sheet and indications to fund more of the growth aspiration with new debt, is repurchasing shares really the best use of capital? Your points about the dislocation and the valuation are well taken, but I just -- and I understand the repurchase program is negligible in size, but is that $1 million going through a repurchase really the best use of your capital at this rate?

知道了。好的。這很有幫助。然後我對資本配置進行了跟進。我知道您注意到管理層正在選擇性地回購股票，而您也宣布了 100 萬美元的回購計劃。但我想，考慮到資產負債表上的債務水平以及透過新債務為更多增長願望提供資金的跡象，回購股票真的是資本的最佳利用嗎？你關於錯置和估值的觀點得到了很好的理解，但我只是——而且我知道回購計劃的規模可以忽略不計，但是以這個速度，100 萬美元的回購真的是你資本的最佳用途嗎？

Sure. I'll go ahead and take that one, Anna, and then you can add any comments. And Chris, I hear you. So there's two things going on, right? We sped up the earnings release so that we could get information out into the market and also, there's certain executives that want to buy shares. And so there's executives that are buying share and then there's the share repurchase program.

當然。安娜，我將繼續接受這個，然後您可以添加任何評論。克里斯，我聽到了。所以有兩件事正在發生，對嗎？我們加快了收益發布的速度，以便我們可以將訊息傳遞到市場，而且，有些高階主管想要購買股票。因此，高層正在購買股票，然後還有股票回購計畫。

Part of it is, as you see, the trading every day, the volume is only 20,000 shares, right? And it's obviously not any institutional activity or insider activity. And I hear you on the $1 million, it is over a 12-month period, and it's something that we will use if we feel that it's needed.

有一部分是，你看，每天的交易量，只有兩萬股吧？這顯然不是任何機構活動或內部活動。我聽到你提到 100 萬美元，它的期限超過 12 個月，如果我們認為有需要，我們就會使用它。

Got it. Okay. Thank you very much.

知道了。好的。非常感謝。

Thank you. Ladies and gentlemen, there are no further questions at this time. I would like to hand the call back over to management for any closing remarks.

謝謝。女士們、先生們，目前沒有其他問題了。我想將電話轉回管理階層以供結束發言。

I'd like to thank everyone for joining us this afternoon, and we look forward to updating you on our progress as we further scale and grow Local Bounti's business in the coming quarters. Thank you.

我要感謝大家今天下午加入我們，隨著我們在未來幾季進一步擴大和發展 Local Bounti 的業務，我們期待向您通報我們的最新進展。謝謝。

This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。