SACRAMENTO, California,
May 11, 2017 /PRNewswire/ --
USA segment operating income
improved by 92% leveraged by expense reductions
Company sees further streamlining efforts generating
additional operating leverage throughout 2017
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 first quarter ended
March 31, 2017.
Business Highlights
- USA Segment
delivered 92% Improvement in Operating Income -
USA segment operating income of
$1.5 million compared to $771,000 on revenue growth, stronger gross profit
margin, and expense reductions, including a $355,000 reduction in quarterly SG&A
expenses.
- Liquidity Improved through Completion of
Financing and Debt Restructuring - Company's cash position
improved to $3.4 million on
March 31, 2017, up from $451,000 on December 31,
2016, through the completion of an $8
million financing in February
2017. The financing coupled with the subsequent repayment
and restructuring of debt is expected to reduce annual cash
interest expense by $500,000.
- Balance Sheet Strengthened to Meet Equity
Requirement for Continued Nasdaq Listing - Shareholders'
equity improved to $7.9 million from
a deficit of $(632,000) on
December 31, 2016, as a result of the
termination of rollup rights held by its minority co-investor in
Nutra SA.
- Corporate Headquarters Relocation Will Yield
Additional Cost Savings - The Company completed the
relocation of its corporate headquarters to West Sacramento, and expects this will result
in an annualized savings of approximately $250,000 which will become fully realized
beginning in Q2 2017. Further expense reductions will be realized
from the consolidation of our West
Sacramento facilities into one location in Q2 2017.
- Improvements in Operations and Balance Sheet Provide
Foundation to Pursue Growth - Improved liquidity, strengthened
equity, stronger margins in our USA segment, and ongoing focus on controlling
corporate expenses provides a solid foundation to support growth in
its Food, Animal Nutrition, and Specialty ingredient products.
Robert Smith, CEO commented, "Our
first quarter results demonstrate the substantial progress we have
made in our strategic initiatives to improve operating results,
especially in reducing costs, controlling expenses, and
strengthening our balance sheet. As we further these efforts
and work to generate additional revenue opportunities, we believe
we can create greater value for the benefit of our
stockholders."
Q1 Financial Highlights
Revenues: Consolidated revenues in Q1 2017 were $11.4 million, a 13.8% increase compared to
consolidated revenues of $10.1
million in Q1 2016. USA
segment revenue in Q1 2017 increased by $0.3
million to $8.0 million as a
result of a 1.7% increase in food product revenue and a 4.2%
increase in animal nutrition product revenue. Brazil segment
revenue increased by $1.1 million or
48.1% quarter over quarter to reach $3.4
million. The quarter over quarter increase in
Brazil segment revenues was a
result of a 24% improvement in the average Brazilian real to US
Dollar exchange rate, a 14% increase in raw bran processed and a
more favorable sales mix. The Company continues to be encouraged by
the improved performance in Brazil
but, remains committed to its strategy of providing no additional
capital to support Brazil
operations for the foreseeable future.
Gross Profit: Q1 2017 consolidated gross profit was
$2.5 million, a $0.3 million increase compared to consolidated
gross profit of $2.2 million in Q1
2016. Gross profit percentage remained relatively constant at 22.0%
compared to 22.3% in the prior year quarter. USA segment gross profit percentage in Q1 2017
was 32.2% compared to 31.7% in Q1 2016, aided by an 11% quarter
over quarter decline in raw bran prices. The Brazil segment recorded negative gross profit
of $(72,000) in Q1 2017 compared to
$(223,000) in Q1 2016 with gross
profit percentage improving by 7.6 percentage points to (2.1%).
Operating Expenses: Q1 2017 consolidated operating
expenses were $3.0 million, a
decrease of $0.7 million or 18.8%
compared to consolidated operating expenses of $3.7 in Q1 2016. The decrease in operating
expenses was a result of a corporate-wide strategic effort to
manage costs and expenses. That effort resulted in a
$0.4 million reduction in USA segment
SG&A expenses and a $0.2 million
reduction in Brazil segment
SG&A expenses. Corporate SG&A expenses increased by
$0.1 million primarily due to fees
related to the Nasdaq listing compliance hearing and expenses
accrued for retention program related to the corporate office
relocation.
Operating Income/Loss: Q1 2017 consolidated
operating loss was $(0.5 million), a
$1.0 million improvement compared to
a consolidated operating loss of $(1.5
million) in Q1 2016. The USA segment recorded operating income of
$1.5 million, a 92% quarter over
quarter improvement compared to operating income of $0.8 million in Q1 2016. Brazil segment loss in Q1 2017 narrowed to
$(0.6 million) compared to
$(1.0 million) in the prior year
quarter. Corporate operating loss increased by $0.1 million to $(1.4
million) due to the increase in operating expenses stated
above.
Net Loss: The Company recorded a Q1 2017 consolidated net
loss attributable to shareholders of $(3.1
million) or $(0.32) on 9.6
million shares versus a consolidated net loss of ($0.3 million) recorded in Q1 2016 or $(0.03) on 9.2 million shares. The quarter
over quarter increase in net loss was largely attributable to
$2.1 million of other expense in Q1
2017 related to the extinguishment and replacement of debt compared
to $1.6 of other income in Q1
2016 resulting from a gain on the favorable resolution of Irgovel
purchase litigation.
Adjusted EBITDA: For Q1 2017, the Company recorded
Consolidated Adjusted EBITDA $405,000
compared to an Adjusted EBITDA loss of $(218,000) in Q1 2016. USA and Corporate segment Adjusted EBITDA
improved to $731,000, a 94% increase
compared to $376,000 in Q1 2016. The
Company's Brazil segment recorded
a Q1 2017 Adjusted EBITDA loss of $(326,000) compared to a loss of $(594,000) in Q1 2016. 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).
Balance Sheet and Liquidity: As of March 31, 2017, cash and cash equivalents was
$3.4 million and shareholders' equity
was $7.9 million. This compares to
cash and cash equivalents of $451,000
and shareholders' equity of $(632,000) on December 31,
2016. The significant improvement in liquidity was a result
of the completion of an $8.0 million
financing in February 2017,
consisting of debt, preferred stock, and warrants. The
completion of this financing enabled the Company to pay off certain
high interest debt and restructure other existing debt. The
net effect of these transactions is expected to reduce annual cash
interest expense by $500,000.
The substantial improvement in equity resulted from the removal of
a condition of a contract with the Company's minority co-investor
in Nutra SA that enabled the reclassification of certain warrants
as equity rather than a liability. As a result of this
improvement in shareholders' equity, the Company now exceeds
Nasdaq's minimum shareholders' equity requirement of $2.5 million for continued listing. The
Company remains focused on making further improvements to liquidity
and balance sheet in 2017.
Brent Rystrom, CFO commented,
"The first quarter delivered many favorable improvements across all
aspects of our business. We saw significant progress in reducing
costs in our USA segment, and
expect that further corporate cost reduction efforts will visibly
improve results starting in the second quarter of 2017.
Finally, we sharply improved our liquidity and shareholders' equity
during the first quarter, placing our Company on more sound
financial footing to achieve our long term growth plans."
Additional information will be set forth in the Company's Form
10-Q for the quarter ended March 31,
2017.
Conference Call
The Company will hold a conference call to discuss its Q1 2017
results on May 11, 2017 at
4:30 PM EDT. Call-in
information is as follows:
- Date: May 11, 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 Q1 2017
Financial Results Call
This call is being webcast by ViaVid and can be accessed at
http://public.viavid.com/index.php?id=124401.
The call will also be available for replay by accessing
http://public.viavid.com/index.php?id=124401.
About RiceBran Technologies
RiceBran Technologies is a food, animal nutrition, and specialty
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, animal nutrition and specialty ingredient products. Our
global target markets are food and animal nutrition 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 interest expense, savings from relocating to
West Sacramento, 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 RiceBran Technologies' filings with the
Securities and Exchange Commission, including its most recent
periodic reports.
RiceBran
Technologies
Condensed Consolidated Statements
of Operations
Three Months Ended March 31, 2017 and 2016
(Unaudited) (in thousands, except
share and per share amounts)
Three Months Ended
2017 2016
Revenues $ 11,435 $ 10,051
Cost of goods sold 8,924 7,814
Gross profit 2,511 2,237
Operating expenses:
Selling, general and administrative 2,913 3,379
Depreciation and amortization 114 348
Total operating expenses 3,027 3,727
Loss from operations (516) (1,490)
Other income (expense):
Interest income 3 33
Interest expense - accreted on debt (542) (292)
Interest expense - other (864) (799)
Change in fair value of derivative warrant liabilities 1,099 811
Gain on resolution of Irgovel purchase litigation - 1,598
Foreign currency exchange, net 19 66
Loss on extinguishment of debt (1,680) -
Other expense, net (120) (65)
Total other income (expense) (2,085) 1,352
Loss before income taxes (2,601) (138)
Income tax benefit - -
Net loss (2,601) (138)
Net loss attributable to noncontrolling interest in Nutra SA 319 438
Net loss attributable to RiceBran Technologies shareholders (2,282) 300
Dividends on preferred stock--beneficial conversion feature (778) (551)
Net loss attributable to RiceBran Technologies
common shareholders $ (3,060) $ (251)
Loss per share attributable to RiceBran Technologies common shareholders
Basic $ (0.32) $ (0.03)
Diluted $ (0.32) $ (0.03)
Weighted average number of shares outstanding
Basic 9,594,295 9,215,684
Diluted 9,594,295 9,215,684
RiceBran
Technologies
Condensed Consolidated Balance
Sheets
March 31,
2017 (Unaudited) and December 31,
2016
(in thousands, except share
amounts)
March 31, December 31,
2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ 3,366 $ 451
Accounts receivable, net of allowance for doubtful accounts
of $497 and $491, respectively (variable interest entity
restricted $618 and $398, respectively) 2,944 2,085
Inventories 4,028 3,773
Operating taxes recoverable 8 6
Deposits and other current assets 896 1,213
Total current assets 11,242 7,528
Property and equipment, net (variable interest
entity restricted $2,599 and $2,481, respectively) 18,881 18,933
Goodwill 790 790
Intangible assets, net 206 242
Operating taxes recoverable 1,203 1,241
Other long-term assets 141 111
Total assets $ 32,463 $ 28,845
LIABILITIES, TEMPORARY EQUITY AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 3,341 $ 3,710
Accrued salary, wages and benefits 3,824 3,828
Accrued expenses 3,921 3,945
Current maturities of long-term debt
(variable interest entity nonrecourse
$7,399 and $6,816, respectively) 7,435 9,878
Total current liabilities 18,521 21,361
Long-term debt, less current portion
(variable interest entity nonrecourse
$0 and $0, respectively) 5,568 6,009
Derivative warrant liabilities 494 1,527
Deferred tax liability 29 29
Total liabilities 24,612 28,926
Commitments and contingencies
Temporary equity
Preferred stock, Series F, convertible,
20,000,000 shares authorized, 3,000
convertible shares issued and outstanding - 551
Total temporary equity - 551
Equity (Deficit):
Equity (Deficit) attributable to RiceBran Technologies shareholders:
Preferred stock, 20,000,0000 shares authorized:
Series F, convertible, 3,000 shares issued and outstanding 551 -
Series G, convertible, 3,000 shares authorized and 2,000 issued and
outstanding 994 -
Common stock, no par value, 50,000,000 and 25,000,000 shares authorized,
10,927,204 and 10,790,351 shares issued and outstanding 273,853 264,232
Accumulated deficit (262,879) (259,819)
Accumulated deficit attributable to
noncontrolling interest in Nutra SA (416) (699)
Accumulated other comprehensive loss (4,252) (4,346)
Total equity (deficit) attributable to
RiceBran Technologies shareholders 7,851 (632)
Total liabilities, temporary equity and equity (deficit) $ 32,463 $ 28,845
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
March 31, 2017 and 2016. 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
March 31, 2017 (in
thousands)
Corp. & USA Brazil Consolidated
Net income (loss) $ (1,643) $ (958) $ (2,601)
Interest expense 1,057 349 1,406
Interest income - (3) (3)
Depreciation & amortization 302 281 583
Unadjusted EBITDA $ (284) $ (331) $ (615)
Add Back Other Items:
Change in fair value of derivative liabilities (1,099) - (1,099)
Gain on resolution of Irgovel purchase litigation - - -
Loss on extinguishment of debt 1,680 - 1,680
Foreign currency exchange, net - (19) (19)
Other income/expense 96 24 120
Severance payments - - -
Share-based compensation 293 - 293
Corporate relocation associated expenses 45 - 45
Other - - -
Adjusted EBITDA $ 731 $ (326) $ 405
RiceBran
Technologies
Adjusted EBITDA
Reconciliation
For the three months ended
March 31, 2016 (in
thousands)
Corp. & USA Brazil Consolidated
Net income (loss) $ 1,205 $ (1,343) $ (138)
Interest expense 679 412 1,091
Interest income - (33) (33)
Depreciation & amortization 517 205 722
Unadjusted EBITDA $ 2,401 $ (759) $ 1,642
Add Back Other Items:
Change in fair value of derivative liabilities (811) - (811)
Gain on resolution of Irgovel
purchase litigation (1,598) - (1,598)
Loss on extinguishment of debt - - -
Foreign currency exchange, net - (66) (66)
Other income/expense - 65 65
Severance payments - 153 153
Share-based compensation 217 13 230
Corporate relocation associated expenses - - -
Other 167 - 167
Adjusted EBITDA $ 376 $ (594) $ (218)
Investor Contact:
Ascendant Partners, LLC
Fred Sommer
+1(732)410-9810
fred@ascendantpartnersllc.com
SOURCE RiceBran Technologies