APPH posted a $190,000 beat on consensus estimates. Negative EPS also came in better than expected at -$0.17, a $0.12 beat. The company ended the quarter with cash and equivalents around $221.5 million. APPH posted a net loss of $17.2 million.
APPH had a nightmare of a second quarter with a failed tomato harvest and significant operational challenges. It appears the company has addressed these operational issues with increased staff and increase training that seems to have improved operational performance. APPH continues to invest in improved labor productivity and should see some benefits on the balance sheet once the three new facilities come on line in 2022.
The company has made steps to diversify with a line of salsa sold via its new e commerce initiative. While this is a step in the right direction, we are not counting on much revenue from the company's online channel. Improvement in wholesale tomato prices will have a much more direct impact on the balance sheet. The main buy side investment thesis for AppHarvest is really all about scale. Once APPH can sell large volumes of produce while improving operational performance, it will gain market share and share price
We will keep a close eye on cash burn during upcoming quarters to help determine the success of operational improvements. Valuation with new earnings from new facilities will also be an important indicator of expansion success
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