On Monday, U.S. Senate Minority Leader Mitch McConnell traveled to Morehead, Kentucky, to praise the work of Agri-Tech Company AppHarvest calling it the “future of agriculture,” and making a pitch for federal dollars to float the business further into coal country. The visit happened days before the company released 3rd Quarter earning results that broke a slump in sales.
McConnell, R-Kentucky, told workers gathered at the AppHarvest Flagship in Morehead that the business “gives us hope,” after the decline of the coal industry in the region.
“Hopefully with all the federal money we can dump in here not only through the American Rescue Plan but also through the infrastructure proposal I voted for and supported, there’ll be some money in there to make this possible for these guys to take this even further into the heart of Appalachia,” McConnell said, according to the Daily Independent in Ashland, Kentucky.
Jonathan Webb, the jean-short wearing, mullet sporting CEO of AppHarvest aimed to grow high-quality tomatoes using technology, as he’s scaled the business larger and larger as he has appeared alongside and worked with Kentucky politicians like McConnell, Agriculture Commissioner Ryan Quarles, Gov. Andy Beshear, and former United Nations Ambassador Kelly Craft. The company also has ties to former President Donald Trump, which has earned it a nickname of “Trump’s Hot House,” amongst some.
The stock at the company has taken a hit since this fall. In September, a class-action lawsuit was filed in New York against the business. The suit, brought by Gainey Mckenna & Egleston, was brought on behalf of those who bought securities between May 17, 2021, and August 10, 2021. The complaint says AppHarvest made “false and misleading claims” and failed to disclose they lacked skilled training for its recently expanded labor force resulting in the inability to produce grade No. 1 tomatoes.
On August 11, 2021, AppHarvest announced second-quarter financials which revealed a $32 million net loss. At that time, the company lowered its full-year sales guidance to $7 – $9 million, previously the company predicted sales in the $20 – $25 million range. The news led to a dump of the stock, with shares initially falling 29 percent. The 1st and 2nd Quarter earnings for the company were major misses after the news.
AppHarvest surprised the market on Wednesday and beat expectations with net sales totaling $543,000 on 1.5 million pounds of tomatoes sold, beating an estimated $350,000 in net sales this quarter. AppHarvest recorded a net loss of $17.3 million and non-GAAP Adjusted EBITDA loss of $16.5 million in the third quarter of 2021, in line with expectations according to a news release.
The company is in the process of building three more farms. A 15-acre Berea, Kentucky, leafy green facility and 60-acre Richmond, Kentucky, tomato facility are both over 50 percent complete and expected to be fully operational by the end of 2022. A third new facility, a 30-acre Somerset, Kentucky, berry facility, which broke ground in June 2021, is approximately 30 percent complete and is expected to be operational by the end of 2022, according to the company.
McConnell said the company could be among the main agriculture companies in the United States.
“As far as I’m concerned, they could produce a better product than California as well and dominate the eastern part of the United States, all of that right here in Kentucky. I’m proud of these guys. I’m proud of the people that show up to work every day,” McConnell said, according to the Daily Independent.