SCOTTSDALE, Arizona,
March 23, 2017 /PRNewswire/ --
RiceBran Technologies (NASDAQ:
RIBT and RIBTW) (the "Company" or "RBT"), a global leader in the
production and marketing of value added products derived from rice
bran, announced today the Company's financial results for the full
year ended December 31, 2016.
Business Highlights
- Implemented cost cutting initiatives, including employee
headcount reductions and supply chain improvements, targeting a
significant reduction in expenses beginning in Q1 2017.
- Began a shift in sales focus in Q4 2016, targeting larger scale
ingredient opportunities in the food and feed markets.
- Completed reconfiguration of its Board of Directors in the
second half of 2016 to add significant corporate governance and
food industry operations experience.
- Began management transition in the second half of 2016 with the
appointment of Robert Smith as CEO
and culminating with the hiring of Brent
Rystrom as CFO in Q1 2017.
- In February 2017, the Company
completed an $8 million debt and
equity financing, repaid $4.0 million
of high interest debt, and restructured $6.3
million in subordinated debt that is expected to result in
an annual cash interest savings of $500,000, net of OID recognition.
Q4 Financial Highlights
Revenues: Consolidated revenues for Q4 2016 were
$10.0 million compared to
$9.9 million in Q4 2015. During the
Q4 2016 USA segment revenue increased by $1.6 million to $7.9
million, largely offset by a $1.5
million decline in Brazil
segment revenue which totaled $2.1
million. Although Brazil
segment revenue declined on a year over year basis, it increased by
$1.5 million sequentially. This
sequential improvement was a result of the resumption of rice bran
oil production at its Irgovel subsidiary following a capital
contribution of $1.5 million by RBT's
minority partner, enabling Irgovel's management to negotiate
various raw bran supply agreements for its operations. The
Company is encouraged by the improved sequential performance in
Brazil but, remains committed to
its strategy of providing no additional capital to support
Brazil operations for the
foreseeable future.
Gross Profit: Q4 2016 consolidated gross profit was
$1.8 million compared to $2.7 million in Q4 2015, mainly due to a
$725,000 quarter over quarter decline
in gross profit at our Brazil
segment. USA segment gross profit
totaled $2.0 million in Q4 2016
compared to $2.2 million in Q4 2015.
USA segment gross profit was
negatively impacted by reserves for excess inventory of certain
products and higher costs associated with the initial processing of
our new organic derivative products. Brazil segment gross profit was ($202,419) in Q4 2016 compared to $522,625 in Q4 2015. The quarterly decline in
gross profit in Brazil was due to
inefficiencies associated with lower plant utilization rates for
the majority of Q4 2016.
Operating Expenses: Q4 2016 consolidated operating
expenses were $3.7 million compared
to $3.2 million for the prior year.
The increase is primarily attributable to additional legal fees
related to debt renegotiations and severance expense related to the
departure of the Company's former board member and CEO.
Net Loss: Q4 2016 consolidated net loss was ($1.4 million), consistent with a consolidated net
loss of ($1.4 million) recorded in Q4
2015.
Full year Financial Highlights
Revenues: Full year 2016 consolidated revenues were
$39.4 million compared to
$39.9 million in 2015. Full year 2016
USA segment revenues increased by $9.3
million or 40% to reach $32.7
million. The revenue increase was broad based across food
and feed. Improved USA segment
performance was offset by a $9.9
million decline in full year Brazil Segment revenue which
totaled $6.7 million in 2016 compared
to $16.6 million in 2015. The decline
in Brazil segment revenue was due
to insufficient working capital, adverse weather, and competition
for bran resulting in a significant decline in production volume.
Gross Profit: Full year 2016 consolidated gross profit
was $8.0 million compared to
$8.1 million in 2015, with gross
profit margin remaining consistent at 20.2% in both periods.
USA segment gross profit increased
by 30.0%, reaching $9.6 million
compared to $7.4 million in 2015.
USA segment gross profit percentage was 29.5%, a decline of
2.3 percentage points due to a 13 week bran supply disruption in
Louisiana, increased contract
manufacturing costs not yet fully passed on to customers, and
inventory reserves. Full year 2016 Brazil segment gross
profit was ($1.7 million) compared to
$0.7 million in 2015 due to
insufficient working capital to support operations. As previously
mentioned, performance in Brazil
has improved sequentially in Q4 2017, but the outlook remains
uncertain and management remains committed to its strategy of
providing no additional capital to support those operations for the
foreseeable future.
Operating Expenses: Consolidated operating expenses for
the full year 2016 were $19.1 million
compared to $14.3 million in 2015.
The increase in operating expenses in 2016 was primarily
related to a $3.0 million impairment
charge to goodwill related to the Company's Irgovel operations, a
$1.1 million expense related to the
2016 proxy contest, and $0.7 million
in severance expense.
Net Loss: The Company recorded a net loss
attributable to common shareholders of $9.1
million for the full year 2016 compared to a loss
attributable to common stockholders of $8.3
million in 2015. The Company's operations resulted in a loss
of ($.97) per share in 2016 on 9.3
million weighted average shares outstanding compared to a loss of
($.90) per share on 9.2 million
weighted average shares outstanding in 2015.
Adjusted EBITDA: For the full year 2016, the
Company recorded a Consolidated Adjusted EBITDA loss of
($2.0 million) compared to an
Adjusted EBITDA loss of ($1.2
million) in 2015. USA and
Corporate segment Adjusted EBITDA improved to $789,000 compared to a loss of ($67,000) in 2015. The Company's Brazil segment recorded a 2016 Adjusted EBITDA
loss of ($2.8 million) compared to a
loss of ($1.1 million) in 2015.
Adjusted EBITDA is a non-GAAP measure management believes provides
important insight into the Company's operating results (see
reconciliation of non-GAAP measures below).
Additional information can be found in the Company's Form 10-K
filed with the United States Securities and Exchange Commission
(SEC) on March 23, 2017.
Robert Smith, CEO commented, "Our
full year results reflect a strengthening performance in our core
USA segment.. The results
are also beginning to reflect the significant corporate evolution
that has taken place at our Company in the second half of 2016 that
continues to gain momentum as we move into 2017. With a
significantly strengthened corporate leadership team now fully in
place and a much improved balance sheet resulting from our recent
debt and equity refinancing in February
2017, we are now poised to fully unlock the vast potential
of our proprietary technology and products. We have
implemented strategic initiatives to reduce costs while we build on
a growing USA segment revenue base
and look to expand into larger more profitable market
opportunities. We are confident that this will enhance our
operating leverage in the coming years to improve operating
results. As industry trends for products that are non-GMO,
organic, gluten free and organic continue to move in our favor, we
are positioning our company for large scale opportunities with CPG
and specialty animal nutrition companies to accelerate future sales
growth. We believe the measures we have taken in 2016 and
early in 2017, place our Company on the right track for success and
will enable us to build significant future value for the benefit of
our stockholders."
Conference Call
The Company will hold a conference call to discuss its 2016 full
year results and financial guidance on March
23, 2017 at 4:30 PM EDT.
Call-in information is as follows:
- Date: March 23, 2017
- Time: 4:30 p.m. Eastern Daylight Savings Time
- Direct Dial-in number for US/Canada: (201) 493-6780
- Toll Free Dial-in number for US/Canada: (877) 407-3982
- Dial-In number for international callers: (201) 493-6780
- Participants will ask for the RiceBran Technologies 2016 Full
Year Financial Results Call
This call is being webcast by ViaVid and can be accessed at
http://public.viavid.com/index.php?id=123463.
The call will also be available for replay by accessing
http://public.viavid.com/index.php?id=123463.
About RiceBran Technologies
RiceBran Technologies is a food and animal feed ingredient
company focused on the procurement, bio-refining and marketing of
numerous products derived from rice bran. RiceBran Technologies has
proprietary and patented intellectual property that allows us to
convert rice bran, one of the world's most underutilized food
sources, into a number of highly nutritious food and feed
ingredient products. Our global target markets are food and
feed manufacturers and retailers, as well as specialty food,
functional food and nutritional supplement manufacturers and
retailers. More information can be found in the Company's filings
with the SEC and by visiting our website at
http://www.ricebrantech.com .
Forward-Looking Statements
This release contains forward-looking statements, including, but
not limited to, statements about RiceBran Technologies'
expectations regarding financial performance, financial support of
Brazil operations, cost
reductions, product demand and future growth. These
statements are made based upon current expectations that are
subject to known and unknown risks and uncertainties.
RiceBran Technologies does not undertake to update
forward-looking statements in this news release to reflect actual
results, changes in assumptions or changes in other factors
affecting such forward-looking information. Assumptions and
other information that could cause results to differ from those set
forth in the forward-looking information can be found in this press
release and in RiceBran Technologies' filings with the
Securities and Exchange Commission, including its most recent
periodic reports.
USE OF NON-GAAP FINANCIAL
INFORMATION
We utilize "Adjusted EBITDA" as a supplemental measure in
our ongoing analysis of short term and long term cash requirement
and liquidity needs. Adjusted EBITDA does not represent cash flows
from operations as defined by generally accepted accounting
principles ("GAAP"), is not a measure derived in accordance with
GAAP and should not be considered as an alternative to net income
(the most comparable GAAP financial measure to EBITDA). Management
uses Adjusted EBITDA as an indicator of our current financial
performance. By eliminating the impact of all material non-cash
charges as well as items that do not regularly occur, we believe
that Adjusted EBITDA provides a more accurate and informative
indicator of our cash requirements.
The table below contains a reconciliation of net income (GAAP)
and Adjusted EBITDA (Non-GAAP) for the three months ended
December 31, 2016 and 2015 and the
twelve months ended December 31, 2016
and 2015. We do not provide a reconciliation of
forward-looking net income (GAAP) to Adjusted EBITDA (non-GAAP).
Due to the nature of certain reconciling items, it is not
possible to predict with any reliability what future outcomes may
be with regard to the expense or income that may ultimately be
recognized in future periods. Any forward-looking Adjusted
EBITDA information that we may provide from time to time
consistently excludes the same items from projected net income that
are excluded from actual net income in the table below.
RiceBran
Technologies
Adjusted EBITDA
Reconciliation
For the three months ended
December 31, 2016 (in
thousands)
Corp. & USA Brazil Consolidated
Net loss $ (549) $ (897) $(1,446)
Interest expense 998 456 1,454
Interest income - (6) (6)
Income tax expense 41 - 41
Depreciation & amortization 506 275 781
Unadjusted EBITDA $ 996 $ (172) $ 824
Add Back Other Items:
Change in fair value of
derivative liabilities (1,311) - (1,311)
Gain on resolution of Irgovel
purchase litigation - - -
Loss on extinguishment of debt - - -
Foreign currency exchange, net - 26 26
Other income/expense (430) (143) (573)
Goodwill impairment - - -
Severance payments - - -
Proxy contest expense (390) - (390)
Share-based compensation 656 - 656
CEO Employment Agreement Settlement 47 - 47
Other 95 - 95
Adjusted EBITDA $ (337) $ (289) $ (626)
RiceBran
Technologies
Adjusted EBITDA
Reconciliation
For the three months ended
December 31, 2015 (in
thousands)
Corp. & USA Brazil Consolidated
Net loss $ (823) $ (579) $ (1,402)
Interest expense 405 262 667
Interest income - (16) (16)
Income tax benefit (157) - (157)
Depreciation & amortization 658 209 867
Unadjusted EBITDA $ 83 $ (124) $ (41)
Add Back Other Items:
Change in fair value of derivative
liabilities 210 - 210
Loss on extinguishment of debt - - -
Foreign currency exchange, net - 89 89
Other income/expense 1 161 162
Severance payments - - -
Share-based compensation 217 13 230
Adjusted EBITDA $ 511 $ 139 $ 650
RiceBran
Technologies
Adjusted EBITDA
Reconciliation
For the twelve months ended
December 31, 2016 (in
thousands)
Corp. & USA Brazil Consolidated
Net loss $ (2,915) $ (8,335) $ (11,250)
Interest expense 2,484 1,548 4,032
Interest income - (100) (100)
Income tax expense 41 - 41
Depreciation & amortization 2,048 989 3,037
Unadjusted EBITDA $ 1,658 $ (5,898) $ (4,240)
Add Back Other Items:
Change in fair value of derivative
liabilities (1,625) - (1,625)
Gain on resolution of Irgovel
purchase litigation (1,598) - (1,598)
Loss on extinguishment of debt - - -
Foreign currency exchange, net - (85) (85)
Other income/expense (562) 16 (546)
Goodwill impairment - 3,024 3,024
Severance payments - 153 153
Proxy contest expense 667 - 667
Share-based compensation 1,240 35 1,275
CEO Employment Agreement Settlement 747 - 747
Other 262 - 262
Adjusted EBITDA $ 789 $ (2,755) $ (1,966)
RiceBran
Technologies
Adjusted EBITDA
Reconciliation
For the twelve
months ended December 31, 2015 (in
thousands)
Corp. & USA Brazil Consolidated
Net loss $ (5,387) $ (5,189) $ (10,576)
Interest expense 1,404 1,697 3,101
Interest income - (107) (107)
Income tax benefit (176) - (176)
Depreciation & amortization 2,538 1,525 4,063
Unadjusted EBITDA $ (1,621) $ (2,074) $ (3,695)
Add Back Other Items:
Change in fair value of
derivative liabilities (1,001) - (1,001)
Loss on extinguishment of debt 1,904 - 1,904
Foreign currency exchange, net - 370 370
Other income/expense (154) 363 209
Severance payments - 180 180
Share-based compensation 805 53 858
Adjusted EBITDA $ (67) $ (1,108) $ (1,175)
RiceBran
Technologies
Consolidated Balance
Sheets
December
31, 2016 and 2015
(in thousands, except share
amounts)
2016 2015
ASSETS
Current assets:
Cash and cash equivalents $ 451 $ 1,070
Restricted cash - 1,921
Accounts receivable, net of allowance
for doubtful accounts of $491 and $512
(variable interest entity restricted $398 and $1,003) 2,085 2,169
Inventories 3,773 3,857
Operating taxes recoverab 6 809
Deposits and other current assets 1,213 895
Total current assets 7,528 10,721
Property and equipment, net (variable
interest entity restricted $2,481 and $2,102) 18,933 18,328
Goodwill 790 3,258
Intangible assets, net 242 1,225
Operating taxes recoverable 1,241 -
Other long-term assets 111 103
Total assets 28,845 33,635
LIABILITIES, TEMPORARY EQUITY AND (DEFICIT) EQUITY
Current liabilities:
Accounts payable 3,710 2,514
Accrued salary, wages and benefits 3,828 2,325
Accrued expenses 3,945 4,789
Current maturities of debt (variable interest
entity nonrecourse $6,816 and $2,750) 9,878 5,050
Total current liabilities 21,361 14,678
Long-term debt, less current portion (variable
interest entity nonrecourse $0 and $3,553) 6,009 10,908
Derivative warrant liabilities 1,527 678
Deferred tax liability 29 34
Total liabilities 28,926 26,298
Commitments and contingencies
Temporary Equity
Preferred stock, Series F, convertible,
20,000,000 shares authorized,
3,000 convertible shares issued and
outstanding at December 31, 2016 551 -
Redeemable noncontrolling interest in Nutra SA - 69
Total temporary equity 551 69
(Deficit) Equity:
(Deficit) Equity attributable to RiceBran
Technologies shareholders:
Common stock, no par value, 25,000,000
shares authorized, 10,790,351 and
9,537,415 shares issued and outstanding at
December 31, 2016 and 2015, respectively 264,232 262,895
Accumulated deficit (259,819) (250,738)
Accumulated deficit attributable to
noncontrolling interest in Nutra SA (699) -
Accumulated other comprehensive loss (4,346) (4,889)
Total (deficit) equity attributable to
RiceBran Technologies shareholders (632) 7,268
Total liabilities, temporary equity and
(deficit) equity $ 28,845 $ 33,635
RiceBran
Technologies
Consolidated Statements of
Operations
Years Ended December 31, 2016 and 2015
(in thousands, except share and
per share amounts)
2016 2015
Revenues $ 39,405 $ 39,896
Cost of goods sold 31,436 31,826
Gross profit 7,969 8,070
Operating expenses:
Selling, general and administrative 14,808 12,567
Depreciation and amortization 1,268 1,779
Goodwill impairment 3,024 -
Total operating expenses 19,100 14,346
Loss from operations (11,131) (6,276)
Other income (expense):
Interest income 100 107
Interest expense - accreted (639) (455)
Interest expense - other (3,393) (2,646)
Change in fair value of derivative
warrant liabilities 1,625 1,001
Gain on resolution of Irgovel purchase
litigation 1,598 -
Foreign currency translation gain (loss) 85 (370)
Loss on extinguishment of debt - (1,904)
Other income (expense) 546 (209)
Total other expense (78) (4,476)
Loss before income taxes (11,209) (10,752)
Income tax (expense) benefit (41) 176
Net loss (11,250) (10,576)
Net loss attributable to noncontrolling
interest in Nutra SA 2,720 2,308
Net loss attributable to RiceBran Technologies
shareholders (8,530) (8,268)
Dividends on preferred stock--beneficial
conversion feature (551) -
Net loss attributable to RiceBran Technologies
common shareholders $ (9,081) $ (8,268)
Loss per share attributable to RiceBran
Technologies common shareholders
Basic $ (0.97) $ (0.90)
Diluted $ (0.97) $ (0.90)
Weighted average number of shares outstanding
Basic 9,338,370 9,187,983
Diluted 9,338,370 9,187,983
Investor Contact:
Ascendant Partners, LLC
Fred Sommer
+1-(732)-410-9810
fred@ascendantpartnersllc.com
SOURCE RiceBran Technologies