LIMA - BranchOut Food Inc. (NASDAQ: BOF), a food technology company specializing in dehydrated fruits and vegetables, has announced the signing of a long-term lease for a new 50,000-square-foot production facility in Peru. This strategic move is aimed at enhancing the company's vertical integration and production capacity to meet growing demand from major U.S. retailers.
The lease agreement grants BranchOut Food the option to purchase the facility at a predetermined price within the next 10 years. The company plans to relocate its existing dehydration machine to the new site and expects to install a second machine within the coming months. The new facility, fully owned and operated by BranchOut, is projected to have a production capacity worth $40 million, with room for future expansion.
CEO Eric Healy expressed pride in the company's substantial growth over the past year, highlighted by repeated orders from prominent warehouse clubs and retailers nationwide.
By establishing a production base in Peru, known for its abundant fruit and vegetable produce, BranchOut aims to manage every aspect of production, from quality control to cost management. The company anticipates that this expansion could increase gross margins to between 40-50%.
BranchOut's presence in Peru has been bolstered by forming strong partnerships with local farmers, ensuring access to fresh produce at competitive prices. The location also offers a plentiful workforce and benefits from direct trade routes with the U.S.
The company's proprietary GentleDry Technology, protected by over 17 patents, is touted to retain up to 95% of the nutritional value of fresh produce. BranchOut Food's commitment to quality and innovation has established it as a key player in the dehydrated food market.
This announcement is based on a press release statement from BranchOut Food Inc.
InvestingPro Insights
BranchOut Food Inc. (NASDAQ: BOF) has shown a remarkable revenue growth of 275.69% over the last twelve months as of Q4 2023, an indicator of the company's expanding operations and market reach. Despite this impressive increase, it's important to note that the company has also experienced a gross profit margin of -3.41%, reflecting challenges in maintaining profitability amidst its expansion efforts.
The company's stock has experienced significant volatility, with a 14.35% decline over the last week, but it has also seen a strong return of 45.25% over the past month. Investors interested in the dynamic performance of BranchOut Food may find these fluctuations indicative of the high-risk, high-reward nature of the stock, which generally trades with high price volatility, as noted in one of the InvestingPro Tips.
For prospective investors, it's worth considering that BranchOut Food holds more cash than debt on its balance sheet, a positive sign of financial stability in the face of operational expansions like the new facility in Peru. This financial cushion could be crucial as the company aims to scale production and improve gross margins.
For a deeper dive into BranchOut Food's financial health and stock performance, including additional InvestingPro Tips, check out their profile on InvestingPro. Currently, there are 13 more tips available that can provide further insights into the company's financials and market position. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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