Q1 2021 AppHarvest Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the App harbors first quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask the question. During the session you will need to cause the star then the one key on your Touchtone telephone please be advised that.
Today's conference is being recorded.
Operating systems. Please press Star then zone.
I would now like to hand, the conference all the Geo speak of house today, Kevin back to Gary. Please go ahead.
Thank you for joining us for App harvests first quarter of 2021 of earnings call I'm comic backyard is my first day as VP of Investor Relations for Apple harvest of and I look forward to working with all of you. This is app harvests first completed quarters of public company. So we will have the full team available for today's conference call. Joining me in Kentucky are several men.
<unk> of the senior leadership team, including Jonathan Webb, founder and CEO, David Li President and Lorne Egelton Chief Financial Officer will also be joined by Josh Lessing, Chief Technology Officer, and Jackie Roberts, Chief Sustainability Officer.
On today's call will begin with prepared remarks from Jonathan and the rest of the team then we will open the lines to take questions before we start I'd like to remind you. The comments today regarding the company's future business plans prospects and financial performance are forward looking statements that we make pursuant to the safe Harbor provisions of the Securities laws. These statements are made based on net.
The current knowledge and assumptions about future events and they involve risks and uncertainties that could cause actual results to differ materially from our expectations in providing projections and other forward looking statements. The company disclaims any intent or obligation to update them also during the call well present, both GAAP and non-GAAP financial measures a reconciliation of certain of.
Non-GAAP to GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website, along with the replay of this call for additional information on important factors that could affect these expectations. Please see our most recent reports filed with the U S Securities and Exchange Commission with that I'd like to turn the call over to Jonathan.
Less than two years ago, Apple harvest broke ground on our flagship farm in Morehead, Kentucky, That's 50 football fields under glass, we completed construction and assembled of 500 person operating team in the middle of the global pandemic I'd like to make it clear today that App harvest is in the business of delivering on our promises.
For those of you new to the App Harvest story, we're a technology company working to disrupt agriculture, we're here to build of resilient food system.
In reality agriculture has already been disrupted by climate change and our current food system is broken App harvest is committed to being a long term institutional change agent in agriculture, we are acting now and I expect our accomplishments to have impacts for generations to come.
Prior to App harvest I was building some of the largest solar projects in the U S. While supporting the department of defense when I lived in D. C. All of the talk was about energy security, but arguably a more pressing concern his global food security most folks don't realize how fragile our current system is when foodstuffs crossing.
Borders and grocery stores had food shortages COVID-19 started to expose some of the cracks in the system <unk>.
California, just expanded its drought emergency to 41 of 58 counties in the state of California is plagued by wildfires in the southwest of the U S is drought stricken where the U S. Traditionally has grown much of its fruit and vegetables.
In February we had major ice storms, the dipped as far as Texas, stopping imported fruits and vegetables from coming across the border, which is where the U S is outsourced most of our volume crop production.
Those fruits and vegetables gets shipped thousands of miles to make it tour of plates with questionable practices around labor and pesticide use the.
The reality is climate change is going to continue to affect the growing conditions for outdoor agriculture from severe temperature extremes to the amount of water available for crops.
In central Appalachia, we're fortunate because of climate changes, making our region wetter in fact, the past decade has seen the most rainfall in Kentucky history with three of those years being the wettest on record when the UN Security Council visited us in Kentucky for the first time in our state history, we learned of the U N predicts the.
We need 70% more food by 2050 to feed a growing population. If we continue farming as we do now that would mean, we need the second plane at Earth to have enough resources. The world doesn't have the land. It doesn't have the water what we do have an app harvest as the technology and of solution or.
<unk> technology, and our approach can enable us to get 30 times the yield of traditional agriculture, using up to 90% less water and only recycled rainwater with zero chemical pesticides in zero agricultural runoff.
As we've said before we're doing this now with proven technology that is scalable globally and.
And the world needs controlled environment, Agriculture, China, and India of about 40% of the world's population, but only 10% of the world's freshwater we're focused on building a resilient domestic food system in the U S and that solution can be applied globally.
Controlled environment Agriculture is the third wave of sustainable infrastructure that is on the cusp of rapidly achieving global scale 20 years ago, We sold renewable energy take off 10 years ago, Tesla began making electric vehicles popular now is the dawn of an air of controlled environment agriculture.
We must leverage the best nature has to offer sunlight and rainwater and then use technology where needed agriculture is overdue for an overhaul of the last major revolution in agriculture that many people can think of is the tractor integrating AI and robotics and the controlled environment agriculture.
Is forming now youre going to hear from our Chief Technology Officer, who can detail of what our high tech form of the future will look like.
That's what we're doing from the heart of Appalachia, where we can reach about 70% of the U S population within a day's drive improving freshness of our produce this is our first quarterly performance report.
Let me review some of our accomplishments we started our first harvest middle of January. So we're officially revenue generating in fact, we met expectations for Q1 generating $2 3 million of net sales representing 3.8 million pounds sold and that was with the farm only partially playing.
As we ramped up now we are fully planted the 60 acres at our first facility about 720000 tomato plants are now being harvested continuously we began trading on the NASDAQ February one we purchased our flagship Morehead, Kentucky facility in March.
Ruction on our next two sites and Berea in Richmond, Kentucky are on schedule. In addition, we of four more projects in Kentucky slated for development and we will start construction on at least two of those this year, we acquired an artificial intelligence robotics company in April including their talented team with.
<unk> controlled environment agriculture, we ramped up from about 20 employees last summer to about 500 at the end of Q1. This year that establishes our process to scale up quickly as we grow our network of forms.
We are confident we can secure non dilutive attractive financing for our 12 high Tech farms being developed by the end of 2025. For example, we have negotiated terms for a 60% loan to value transaction for more Ed facility, an unexpected rate between four and 5% and we expect the transaction to close.
In Q2, we're also far along in negotiations for approximately $200 million of development financing for two of our projects underway, where farmers and futurists.
And we believe the doing right by people and planet upholding the highest ESG principles soon won't be a nice to have it will be table Stakes. We're proud to be one of the four publicly traded companies. That's both of public benefit Corporation and B Corp. Certified we see it as a competitive advantage I'm.
Relentlessly fighting every day for our team our shareholders and our broader stakeholders as we pursue our mission to redefine the agriculture and feed the future now I'll ask App harvest President and Board member David Lee to explain how we're executing on the business plan. Thanks.
Thanks, Jonathan it's been a pleasure to join the management team as President in Q1.
Before we get into the results I wanted to share a bit of my background.
Just as many of you have considered investing your capital and App harvest I want you to know why I bet my career of it.
My background includes large public company transformations like best buy the Omani and Zynga, but more recently unemployable foods, where I lost the business of C O L and CFO.
Up harvest has the potential to create the global impact and the scale of the larger public company that I've helped transform.
But at the growth rate of the new business that benefits from technology.
Like impossible foods.
We grow at large scale healthy and nutritious produce sustainably using a fraction of the resources required in traditional agriculture.
We do this by leveraging technology infrastructure and our focus on our location in Appalachia, the benefits from climate change and our renewal of the local economy.
Along with being able to access about 70% of of the U S population of within the day drive.
The warrant distribution agreement with Mastercard to produce all of our U S. D. A great number one tomatoes are sold in top of retail grocery outlets growth.
<unk> and consumers increasingly are requesting U S crowd of chemical pesticide free proteins from the companies They trust.
Despite that in 2019 more than two thirds of buying crops for the U S market where imported.
And because we're doing this at scale, we can deliver this produce for about the same price of standard.
Our first Moorhead facility can ramp up to produce more than 40 million pounds of Tomatoes annually. It's the size of the 15th football fields, and we expect to have 12 high Tech farm's operating by the end of 2020 five.
We will go far beyond Tomatoes.
You'll hear about the many other crops will produce.
Because of our long term strategy is to build up harvest into one of the world's most trusted sustainable food companies in the U S, which can be replicated globally.
That provides the opportunity in the future for value added products and international ventures.
But we know to achieve that long term strategy, we need to deliver on our short term of promises.
So let's talk about Q1.
Our Q1 priorities are one achieving operational excellence and financial targets to optimizing our capital structure for capital efficient growth and three building of trusted high tech sustainable through the company with the highest ESG principles.
First of all on our operations.
At Moorhead, our first high Tech farm, our team of expert growers kicked off our first harvest starting in mid January.
And since then we've ramped up production of all of the 60 acres as of the first week of May.
We've grown our employment from around the 20 employees a year ago to 500 by the end of the first quarter of 2021.
We've also put in place the infrastructure to help us grow from one to 12 high Tech farms by the end of 2025.
In Q1, we reorganized our executive leadership team at our corporate headquarters and the Moorehead to ensure that we can grow with the rapid pace of demand.
And the scale of effectively and efficiently we've continued to strengthen our construction capabilities.
We expect to announce shortly a relationship with the leading national general contractor that will help us shorten the supply chain reduce overall construction costs and further improve our build times.
But at our core our technology and infrastructure must serve our customers well.
Grocery and foodservice buyers of consumers and media have all been responding very well to the quality of our tomatoes and.
And based on mastering of already strong relationship with retailers and foodservice, we are not fighting for shelf space or volume has ramped up to allow us to include direct shipping of the full truckloads to retail customers, such as kroger, removing excess food miles and reducing costs.
And in the food service category, we are now shipping full truckloads to Wendy's building on their already existing relationship with faster NRT.
With the lessened from season, one will take July and August during our summer of refresh.
From here for Moorehead to point out the operation of which will benefit from the new training that we anticipate will support higher productivity in Q4.
Some of the refresh will be an annual activity for us or we will not produce for about eight weeks in Q3 as we prepare for the next season.
Secondly, on optimizing our capital structure.
We purchased our flagship Moorhead farm, which gives us the ability to leverage the asset at attractive financing rates to fund more development.
As a result, we finalized key terms for a 60% of loan to value transaction for our Moorhead facility.
And as expected rate of 4% to 5%, which we expect to close in Q2.
We are also far along in negotiations for approximately $200 million of development financing for two of our projects underway.
These deals demonstrate the viability of high loan to value non dilutive and low rate financing for our facilities and business.
We're currently evaluating several options and expect to announce a new development facility by the end of Q2.
And we're confident in our ability to secure non diluted funding for all 12 of our farms.
Which we expect to complete by the end of 2025.
This capital allows us to continue our future farm development, which remains on track in fact, we're already underway in constructing two farms at Richmond and Berea, Kentucky.
Richmond is another 60 acre high Tech farm for buying crops that we plan to start with Tomatoes.
Maria is of 15 acre high tech of leafy Green facility.
Importantly, we locked in our steel and glass prices with fixed price contracts to insulate these projects from commodity pricing volatility.
We've successfully reached all of our milestones per site preparation permitting and construction for both facilities.
The Richmond project is 17% complete and the Barilla project is 23% complete based on the number of project weeks for each day.
We are slated to be operational next year.
In addition to these projects we are announcing we expect to move the head on two more projects. This summer for late 2022 delivery, which will put us at five operating farms by the end of 'twenty 'twenty, two and well on track for 12 by the end of 2025.
These projects will also further diversify our crop offerings as we expand into leafy Greens in strawberries.
We're working closely with federal state and local officials to understand how out of harvest can potentially participate in programs focused on Appalachia and the revitalization of form of coal and manufacturing communities in the region.
Thirdly on trust and our ESG principles, we've started up harvest with one of five growing Tomatoes.
But our intention is to grow the company into a trusted high tech sustainable food company holding itself accountable to the highest ESG standards that people feel good about doing business with one of our core values that up harvest is radical transparency too.
That and we recognize that having a robust investor relations function is critical to keep our investors up to date with how we're managing and growing the company.
That's why we've hired car they bought the CRE as our vice President of Investor Relations, who joins us from hillenbrand to revamp our IR.
You should expect to hear from US regularly finally on the technology.
We had always intended to use the best technology to enable our mission.
In Q1, we completed a key step in building a broader high tech sustainable through the company with the acquisition of an artificial intelligence Robotics company Route AI.
This technology and talent will optimize our own operations, especially with the insights derived from artificial intelligence.
But they can also lead to additional revenue streams, such as licensing the technology to other controlled environment AG facilities.
As our CFO Loren Egelton will explain in more detail. We are revising our long term financial model based on the artificial intelligence robotics technology that we plan to introduce on our farm of the future.
Based on this we.
We're increasing our adjusted EBITDA targets for an optimized form.
With the addition of non dilutive capital that I mentioned earlier.
We are also increasing our levered return on invested capital target range.
Now you'll hear more from our Chief Technology Officer, Josh lesson about how we plan to achieve our vision of this farm of the future.
I'm Joshua Lessing and in April I joined the App harvest as Chief Technology Officer previously I co founded and led an AI company focused on controlled environment agriculture in order to build a sustainable and resilient global food system.
Apple harvest shares this mission and together, we will restructure of the world's food supply based on the new model that will support the planet and its people.
Most of all we will do it faster and a greater scale than anyone has ever imagined today. The food industry is front with the complexity inefficiency and of crumbling infrastructure that has been pushed to its very limit.
If we wanted to give customers the products they deserve and protect the planet and the process, we must of abandoned the broken system developed by outmoded industry incumbents.
Now, it's time to build the future and to do so we've established the App harvest Technology Division.
It is the obvious that the world needs a copy and paste solution, one that can be replicated globally of sustainable scalable predictable infrastructure that we can count on to produce the food that we need and is strong enough to survive the challenges to come and I Parvis, we've set out to build it and we call It project tell us.
A digital operating model for farming with AI at its core the can manage the global network of facilities and execute complex supply of strategies intelligently and autonomous Lee put simply App harvest must build performing the technologies that were required for Amazon to transform retail.
Right now we are building and deploying a system that utilizes a vast array of technologies to drive automatic decision, making at individual facilities and across the organization at large this proprietary platform capability will allow us to deliver superior products at lower costs and higher margins.
And we will open the door from new revenue streams, creating previously unrealized synergies across the value chain from seed to table.
To create the form of the future, we're making investments from robotics artificial intelligence tell the operation and proprietary seed genetics with robots rolling through the facility and interacting and caring for every crop we will be able to continuously collect data on planned production and feed it into our AI.
<unk> software tool line facility operations, the sales and logistics, which will make farming is reliable and predictable as the factory press.
Presently we are training, our intelligent robot perrigo to manage crops and informed growing decisions bruegel as the world's premier Universal Harvester and can be configured the harvest multiple crops, ranging from tomatoes, and cucumbers to more delicate fruit such as strawberries.
But it's the insights collected and analyzed by our robot and fed into its AI that is the true game changer. Since every piece of fruit is an outcome that resulted from the many variables of the growing process.
Granular plant level data from each fruit means we can learn exactly how to optimize quality production sales and logistics. This foundation will give us the opportunity to restructure the world's food supply in order to mirror the hyper efficient e-commerce landscape the future of the local supply chain, where food is.
Produced where it's consumed by carefully calibrated facilities, the guarantee consistency and predictability the futures higher quality more nutritious and more affordable produce without the carbon footprint of trans national supply chains, the futures products that people actively seek out in their grocery stores.
Because of their superior on every dimension. This is the future and the future is now.
And now you'll hear from Jackie Roberts about the strides that we've been making in sustainability.
Josh I wanted to start with reiterating what you've already heard of harvest is working to address some of the world's dwelling threats around it and security given the.
Large part of it to lots of natural resources.
As water land and healthy soil and impacts from climate change and severe weather.
Ben in the environmental field as an engineer for 30 years. These problems, they're getting worse, not better and we need solution.
We're working to create solutions to these issues, but we're also working to build the new kind of company one that drives the improvement in environmental and social issues broadly known today as ESG issues.
We are now one of only a handful of companies trade at on any exchange that instead of the public benefit corporation and be quite satisfied we have set ourselves against the highest ESG standards, but also put the governance systems in place to backup those commitments.
And it's not just through the B Corp, Third party certification.
We all kind of a diverse board with ESG experience of sustainability Committee of the board and instead of ESG Kpis that we will measure at the close of our fair share of operations.
<unk> performance is not the tied to compensation for all non exempt employees.
And finally, we've just released a detailed sustainability report in April.
Why is top tier ESG performance and our sense of purpose is important.
I learned during my years why can't the Carlyle group at ESG leadership can drive value.
Sustainability work from the board of Gan aims to ensure that our purpose translate into value in terms of higher revenues.
The brand cost savings more engaged employees and better talent retention.
We're excited to see emerging data verifying the growing recognition of B Corp certification of among consumers and employees.
It's one specific way that we see our ESG performance is translating into value and strengthening marketing and sales.
We believe employees consumers and investors in building their capacity to differentiate between Greenwashing and real ESG commitments. We think we're ahead of the current because we have extensive experience on our sustainability team and our board.
In Q1, we can report that we're hitting our environmental targets with the of first of a range of advanced technology Charles.
Our integrated pest management, none of the IPM work extremely well in the first quarter, enabling us to deliver on our goal of shipping Tomatoes free of chemical pesticide residues all.
All of the techniques. Josh has described such a state of the art computer vision to Scott Hudson disease early.
<unk> learning to take data from 300 sensors and use it to decide on appropriate amounts of water and nutrients without wasting those inputs as well as biological controls. The good paths are assets that enable us to hit the skol.
We're performing great honor of water efficiency target, it's still early but we're already using only 1.8 gallons per pound of tomato, which is 92% less than the global average fixed Nato's, which is 25 gallons per day.
And even with these early results, we're all sort of doing 80% better than what we believe is best in class the growing tomatoes, with drip irrigation and lots of plastic milk.
An open field intended to reduce water use.
On the irrigation system is using 100 per cent rainwater as planned and me speculating on water. So we have no discharges.
We did have a pump break and we had the discharge to the backup peanuts provider system for a few days, while we waited for a new patent that.
What we learned is we always need to have the spare pumps on site. So we don't have of repeat in the tissue.
Well rainwater is pretty efficient of delivering nutrients.
Use of technology to enhance the ability of the plants to absorb these nutrients available on the water by elevating the irrigation system to create nano bubbles, which increases the oxygen level under the water.
That in turn makes the transfer of nutrients from the water to the plants more seamless.
Our high efficiency led lighting is also working very well for what the growers need.
<unk> glass with serves as the passive solar array of two 7 million square feet of glass equal to over 50 football fields and this helps us be more energy efficient every day, particularly when the son of the house.
Resiliency is also part of our story in terms of the building of food system that is future proof.
We had of real world tasked with the major eight storm hitting Kentucky in February we successfully operated through the storm because of the type of severe weather events predicted the increase with climate change.
We hired and on boarded over 100 employees during the two week event, ensuring that our ability to ramp up production didn't suffer.
I want to close the talking a bit about our social impact.
The harvest is founded to also create the right kind of job we.
We completed the third party living wage assessment this quarter and had been verified as the living wage company.
In addition to our wages we offer a comprehensive benefits package that includes the portfolio of medical dental vision and life insurance options to all our employees and their families.
Regardless of title of rank App harvest pays 100 per cent of all premiums on the coverage.
We also offer a competitive 401k match for everyone in the company.
Half of harvest makes every full time employee of stakeholder all employees receive equity incentives when they're hired from the entry level up to the C suite.
My team has now ground of 500 employees at the end of the first quarter.
We believe our work force is our biggest asset.
And we believe that engaged employees will drive improved performance.
The draft results. This week of our first employee engagement survey, which had an 83% participation rate.
Include 93 per cent of employee, saying I am proud to work for a part of it 91%, saying I know how of my work contributes to the goals of that part of it and 87%, saying I would recommend at harvest is a great place to work.
I'd like to now introduce the Chief Financial Officer line.
Thanks, Jackie none of them.
To discuss a few of the operational highlights and what they mean for the business this year and over the long term.
We achieved first quarter net sales of $2 $3 million, which was in line with our outlook of two 1% to $2 $6 million.
As compared to no sales in the first quarter of 2020 before our Moorhead facility was operational.
In terms of actual yield for the first quarter. We were pleased that our mooring facility generated a total of $3 8 million pounds of tomato sold the.
This includes the mix of both of these take anti Avi Tomatoes, as well as varying levels of quality for each.
As you know we started planting our moored facility in phases, beginning of the fall of 2020.
This first quarter of 2021 was the company's first quarter of harvesting and therefore, our first quarter of net sales.
We started harvesting the first 15 acres of beef steaks in mid January.
By the second 15 acres of beef steaks at the beginning of February.
And then the first 15 acres of T O V at the very end of March.
By the end of the first quarter, we were harvesting 45 of 60 acres at Moorhead.
In terms of pricing per our agreement with the massive already produce Madison already pays us a market price less of marketing fee and their costs incurred in the sale and distribution of our produce the.
The sales that we reported on the face of our income statement is net of these items the.
Blended price per pound, we realized during the first quarter would you can generally calculate from our financials by dividing net sales by the pounds sold reflects the mix of varying grades of Tomatoes with grade number one selling at a premium and the price fluctuating by season and over time due to market conditions.
It also reflects product mix, though in Q1 substantially all of our pounds sold were beefsteak Tomatoes.
Being our first harvest of the new facility, we expect our grade mix to migrate upward over the coming quarters as we fine tune, our farm operations and implement additional technology and data analytics into our processes.
Gross loss was $4 $5 million, which reflects the phased launch of commercial operations and sales that are more of an facility and the demands required of training of our labor force of our newly started operations.
We expect gross margin to improve over the coming quarters as we seek to increase our utilization and yield leading to greater labor productivity and overhead leverage over a larger number of pounds sold adjusted EBITDA loss came in at $12 $4 million for the quarter significantly better than our previous outlook range of the loss of $14 million to $16 million.
This loss is primarily reflective of the organization. We are building to support the growth that we anticipate as we build and operate additional facilities as well as now being a public company.
On January 29th we completed our business combination with Novus capital, which resulted in net cash from our balance sheet of approximately $435 million.
On March 1st we purchased the more of a facility for approximately $125 million and we now own the facility equipment and land outright.
During the quarter, we also used $11 million of cash and development and construction costs on or two in development facilities located in Richmond, and Berea, Kentucky.
Those are both scheduled for completion in mid 2022.
We ended the first quarter with cash and cash equivalents with $297 $7 million.
As was mentioned earlier, we are close to finalizing of $75 million credit facility that is solely secured by or more of an facility of 60% loan to value.
The credit facility will provide the company with growth capital for the continued development of our high Tech CE a facilities in central Appalachia.
Borrowings under the facility, which we expect to have a 10 year maturity and a 20 year amortization will likely bear interest between 4% and 5% annually net.
Next I'd like to provide additional financial context on the acquisition of root AI, the agricultural robotics company of which we purchased subsequent to the end of the quarter.
We paid a total consideration of $60 million, consisting of $10 million in cash and approximately $2 3 million shares of App harvests common stock.
As David and Josh articulated earlier, we believe strongly in the ability of our new technology division to improve our operating metrics and therefore profitability as well as the open up new Tech first business models for the company.
Towards this goal, we intend to invest an incremental $5 million to $7 million during 2021 on developing technology for the farm of the future.
There is an administrative items that I want to cover of weighted to the spec warrant accounting developments. The many companies have been working through over the past several weeks in light of the recently issued statements made by the staff of the SEC on April 12 for all of US back related companies regarding the classification of the warrants for accounting and reporting purposes, we have re.
Evaluated our historical accounting for the warrants assumed from Novus capital and the business combination of on January 29th and.
And determined that the private warrants should of been accounted for as a liability and mark to market.
Further we determined that the public warrants were appropriately accounted for as equity.
Previously we had accounted for the Novus private warrants as equity similar to many other spacs and recently of Dis backed companies. We have worked with our current auditor as well as the previous auditor from Novus and our audit committee to restate the Novus 2020 financial statements.
Accordingly, we will soon file an amended form 10-K.
This restatement will result in additional non current liabilities of $16 $9 million and of noncash expense of $13 7 million and the newest financial statements for the year ended December 31 2020.
As of March 31 of the private warrant liability was $29 $9 million and resulted in a noncash income of $9 $8 million, which is reflected in the app harvests quarterly financial statements. This restatement will not impact our previously reported operating expenses or cash flows the change in accounting treatment has no effect on <unk>.
Harvest cash position on.
Ongoing operations plans going forward or what we have shared with you today now.
Now I'd like to turn to our outlook for the full year 2021.
Today, we are reiterating our full year 2021 outlook on net sales of $20 million to $25 million further because of the inclusion of the planned incremental investment and the recently acquired technology Division, formerly known as root AI. We are updating the full year outlook for adjusted EBITDA loss to 48 million the fifth.
The $2 million from our prior range of the loss of $43 million to $45 million.
With this investment in technology, along with our latest view on our operational performance. We are raising our long term illustrative performance on adjusted EBITDA for 60 acre farm in the future producing tomatoes from $15 $8 million as previously presented at our Analyst day event last December to $23 3 million result.
And the potential 17% to 23% return on invested capital on an unlevered.