Kalera Public Limited Company, a vertical farming company headquartered in Orlando, Florida, provided an update on the steps it has taken and its plans going forward to achieve cash flow break-even by the end of the fiscal year 2023.
“I continue to be very pleased with the commercial side of our business, specifically sales and operations. Demand for our products is stronger than ever across all channels, and our facilities are operating better than ever and very consistently,” said Jim Leighton, President, and CEO of Kalera.
“The cost-cutting measures we’re undertaking should result in total annual cost savings of approximately 74% in 2023 compared to expenses incurred in 2022. With these savings and the improvements in our sales and operations, we expect to achieve cash flow break-even by the end of the fiscal year 2023, which is our #1 priority.”
Closure of Atlanta and Orlando farms
To accelerate profitability at the Houston and Denver farms and to make configuration updates at the Orlando and Atlanta farms for efficiency and increased loose-leaf production capacity, Kalera plans to temporarily halt production at the Orlando and Atlanta farms, which will result in an annual run rate reduction of operating expenses of approximately $4.9 million until such time as the facilities are re-opened.
In the interim, these measures will consolidate all retail volume in the southeast and be serviced by our Houston farm. The Houston and Denver farms will be near capacity with the optimized product mix for retail and food service, accelerating these farms’ path to profitability. We have worked closely with our customers to ensure we continue with strong growth while we reposition the Orlando and Atlanta farms to better serve our customers with the right products in the future.
Our US Foods partnership continues to be a strong driver and an important aspect of Kalera’s commercial strategy. We are working closely with the US Foods marketing and category management team to launch new and innovative products that will drive incremental value and sales to the category for both US Foods and Kalera.
To save costs, Kalera is relocating its corporate offices from Orlando to the Denver farm, reducing corporate General & Administrative (G&A) expenses by approximately $0.8 million annually.
“The macro environment supporting Kalera’s business model has been validated,” Mr. Leighton said. “We continue to gain new customers and new distribution points, and we continue to have the support of major retailers in addition to our agreement with US Foods. Vertical farming can and should play an important role in the future of food production.”