AppHarvest is on track to open three new high-tech indoor farms in Kentucky by the end of the year.
In an earnings call with investors on Tuesday, the agtech company's founder and CEO Jonathan Webb shared that the 15-acre salad greens facility in Berea, Kentucky, will be operational by the third quarter of 2022. The 60-acre tomato facility in Richmond, Kentucky, is approximately 75% complete and the 30-acre berry facility in Somerset, Kentucky, is approximately 65% complete, both of which are expected to open in the fourth quarter.
"We expect these farms to one, accelerate our sales growth; two, enable us to become financially self-sufficient; and three, attract new investment that would allow us to continue to grow our high-tech farm network in Central Appalachia and beyond," Webb said.
AppHarvest (Nasdaq: APPH) sold nearly 7 million pounds of tomatoes grown at its flagship farm in Morehead, Kentucky, for net sales of $5.2 million. The company was not fully harvesting from that facility in the first quarter of last year, so it saw a a 125% improvement in net sales year-over-year.
While AppHarvest saw significant sales growth in the first quarter, it's still operating in the red in spite of a restructuring effort in February. The company's net loss was just over $30.6 million in the first three months of the year, compared to a $28.5 million net loss in Q1 2021. It also invested $39 million in properties and equipment in the first quarter.
In total, AppHarvest anticipates it will invest between $140 million and $150 million this year in the construction of the three new Kentucky facilities already in progress, said CFO Loren Eggleton. It also expects to deliver total net sales of $24 million to $32 million in 2022, more than double 2021 net sales.
AppHarvest has a long-term goal of having 12 farms within its network, but that's contingent on securing additional capital. Currently, the construction of a fifth farm, a Morehead salad greens facility, remains paused as the company seeks financing for the project.
"This is a pivotal year at AppHarvest and I'm pleased with our execution in the first quarter," said David Lee, president. "We continue to drive strong operational performance at Morehead and we remain on track with our farm network expansion, all while navigating an economic environment characterized by challenging supply chain and inflationary issues. In the first quarter, we successfully executed both."
Notably, AppHarvest is one of only a few public companies based in Kentucky that has seen an increase in its market capitalization since the start of the year. Market cap, according to Investopedia, refers to the total dollar market value of a company's outstanding shares of stock.
AppHarvest's market cap increased 26% between Jan. 1 and April 1, but slipped in April, according to data from Bloomberg. It's currently $417.2 million, up 6% from $391.9 million on January 1.
