THE WOODLANDS, Texas,
Nov. 6, 2018 /PRNewswire/
-- RiceBran Technologies (NASDAQ:
RIBT) (NASDAQ: 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 third quarter ended September 30, 2018.
"Our third quarter saw progress on many fronts, including
acquiring an option to purchase the assets of Golden Ridge Rice Mills and our successful
support of customers despite supply disruptions from a key mill
partner," said Brent Rystrom,
President and Chief Executive Officer. "We are well
positioned and excited by our growth prospects as we are starting
to realize important new customer wins, expect to soon acquire and
integrate Golden Ridge into our operations, which should improve
the reliability of our rice bran supply, continue to see an
improved balance sheet, and successfully complete our certification
efforts."
Business Highlights:
- Revenue in the third quarter totaled $3.5 million, up slightly from revenue of
$3.4 million in the comparable period
in 2017, and consistent with guidance of a modest sequential
improvement from second quarter 2018 revenue of $3.2 million. Net loss of $(1.6) million and adjusted EBITDA of
$(1.3) million in the third quarter
of 2018 compared to net loss of $(8.3)
million from continuing operations and adjusted EBITDA of
$(0.9) million in the same period in
the prior year. Also consistent with guidance, third quarter
adjusted EBITDA showed improvement compared to second quarter 2018,
as our Mermentau, LA facility
restarted production during the quarter, helping to reduce the
higher freight costs associated with shipping from our California facilities. Gross margins continued
to be negatively impacted by higher freight costs, reduced
production at our Dillon, MT
facility due to a large capital expenditures project related to
attaining plant certification that is expected to be completed late
in the fourth quarter of this year, as well as an approximately 18%
increase in raw bran prices.
- Our balance sheet continued to strengthen during the third
quarter of 2018. We received $5.3
million in proceeds from warrant exercises during the
quarter, which more than offset the cash burn from operations and
helped to significantly increase shareholders' equity. We
ended the quarter with cash and cash equivalents of $10.3 million, up from $7.7 million in the second quarter of 2018, with
debt of $13,000, and shareholders'
equity of $20.7 million.
- On November 5, 2018, we exercised
our purchase option with Golden Ridge Rice
Mills and entered into a definitive agreement to purchase
the assets and operations of its milling facility in Wynne,
AR. We expect to complete the closing of this transaction in
the next 30 days. Total consideration for the Golden Ridge
transaction is expected to be approximately $7 million to $8
million, comprised of newly issued shares of RiceBran
Technologies for slightly more than half of the transaction value
and the assumption of debt for the remainder, most of which we plan
to pay off at the time of closing, subject to customary closing
considerations and risks. We believe we are paying a
mid-single digit multiple of Enterprise Value to EBITDA based on
our current expectations for Golden Ridge's operations. We
estimate that Golden Ridge's operations will add approximately
$20 million in sales as well as
meaningful EBITDA in 2019 with significant room for expansion of
Stabilized Rice Bran ("SRB") production. We expect this mill to be
an important component of our SRB supply in the Arkansas region while providing us with a
platform to develop new products derived from SRB to expand our
growth opportunities.
- We have strengthened our sales team with the addition of two
seasoned sales professionals and remain excited about the
anticipated growth of our sales pipeline in 2019. In addition to
securing supply of SRB from Golden Ridge, we continue to work to
mitigate future supply chain disruptions through broadening our
sourcing capabilities and increasing geographic inventory levels to
meet that anticipated growth.
- Our certification efforts are moving forward in earnest
including the recent addition of a highly respected professional to
head up our ongoing compliance, regulatory, and external affairs
team. In October, our operations in West Sacramento were certified, and our
operations in Mermentau, Louisiana
went through a favorable certification audit last week.
Highlights for the 2018 third quarter include:
- Revenue of $3.5 million increased
marginally from $3.4 million in the
comparable period in 2017. Growth was constrained by the
lingering effects of supply chain disruptions we experienced in
Mermentau during part of the
quarter.
- Gross profit margin declined 1,130 basis points to 21.8%,
primarily due to the issues at our Mermentau plant for part of the quarter,
reduced production at Dillon due
to a large capital expenditures project related to certification,
higher raw rice bran costs, and increased freight costs related to
supplying Mermentau customers from
California.
- SG&A decreased by 3% mainly due to a decrease in the
corporate portion of SG&A, partially offset by increases in
payroll costs related to strengthening our sales team, an increase
in operations and quality assurance staff to meet SQF
certification, and an increase in distribution center rent.
- Our financial condition improved during the quarter as a result
of $5.3 million of cash received from
warrant exercises more than offsetting our net losses. Our
cash and cash equivalents and shareholders' equity increased to
$10.3 million and $20.7 million at September
30, 2018 compared to $7.7
million and $16.9 million,
respectively, for those items at June 30,
2018.
"Our balance sheet has strengthened considerably thus far in
2018, with warrant exercises significantly increasing our cash
position as well as shareholders' equity," said Dennis Dykes, Chief Financial Officer.
"With a majority of our certification capital expenditures
behind us and the expected addition of Golden Ridge's operations in
the fourth quarter, we believe we are in a solid financial position
to execute our growth plan to build value for stockholders as we
head into 2019."
Guidance Updates:
- Inclusive of Golden Ridge, RBT now sees 2018 annual revenue
ranging from $14.5 million to
$15.5 million, up from previous
guidance of $14 million to
$15 million, with fourth quarter
adjusted EBITDA losses improving, compared to third quarter
levels.
- RBT expects full year 2019 revenues from our combined
operations to exceed $40.0 million
with the Company achieving positive adjusted EBITDA by
mid-2019.
- We continue to believe our balance sheet is sufficient to
support our current growth plan through 2019.
Conference Call Information
RiceBran Technologies will host a conference call today,
Tuesday, November 6, at 4:30 p.m. Eastern Time to discuss these
results. The conference call information is as follows:
- 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 Q3 2018
Financial Results Call
This call is being webcast by ViaVid and can be accessed at
http://public.viavid.com/index.php?id=131889.
The call will also be available for replay by accessing
http://public.viavid.com/index.php?id=131889.
About RiceBran Technologies
RiceBran Technologies is a specialty ingredient company
servicing the food, animal nutrition and specialty ingredient
products markets. We utilize our proprietary and patented
intellectual property to convert rice bran, one of the world's most
underutilized food sources, into a number of highly nutritious and
clean label ingredient products. The global target markets for our
products include 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.
Forward-Looking Statements
This release contains forward-looking statements, including, but
not limited to, statements about RiceBran Technologies'
expectations regarding the sufficiency of its cash position to
pursue its plans through 2019, the completion of its purchase of
Golden Ridge's milling operations and any resulting benefits to RBT
of acquiring Golden Ridge, the rice production volumes in
California, Louisiana and Arkansas, the price of rice bran, the rice
milling volumes in the Delta region and the impact of these volumes
on its financial performance, and its business plans, future
growth, revenue and adjusted EBITDA. These statements are
made based upon current expectations that are subject to known and
unknown risks and uncertainties, including the risks that RBT does
not complete the acquisition of Golden
Ridge Rice Mills or receive the resulting benefit from this
acquisition. 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 and Nine
Months Ended September 30, 2018 and 2017
|
(Unaudited) (in
thousands, except share and per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Revenues,
net
|
|
$
3,463
|
|
$
3,445
|
|
$
10,213
|
|
$
10,206
|
Cost of goods
sold
|
|
2,709
|
|
2,305
|
|
7,842
|
|
7,081
|
Gross
profit
|
|
754
|
|
1,140
|
|
2,371
|
|
3,125
|
Selling, general
and administrative expenses
|
|
2,419
|
|
2,495
|
|
8,102
|
|
7,428
|
Loss from
continuing operations before other income
(expense)
|
|
(1,665)
|
|
(1,355)
|
|
(5,731)
|
|
(4,303)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2)
|
|
(86)
|
|
(5)
|
|
(1,616)
|
|
Change in fair value
of derivative warrant liabilities
|
|
-
|
|
(313)
|
|
-
|
|
808
|
|
Loss on
extinguishment of debt
|
|
-
|
|
(6,610)
|
|
-
|
|
(8,290)
|
|
Other
income
|
|
52
|
|
157
|
|
61
|
|
194
|
|
Other
expense
|
|
(12)
|
|
(113)
|
|
(25)
|
|
(213)
|
|
|
Total other income
(expense)
|
|
38
|
|
(6,965)
|
|
31
|
|
(9,117)
|
Loss from
continuing operations before income taxes
|
|
(1,627)
|
|
(8,320)
|
|
(5,700)
|
|
(13,420)
|
Income tax
benefit
|
|
-
|
|
4,121
|
|
-
|
|
5,033
|
Loss from
continuing operations
|
|
(1,627)
|
|
(4,199)
|
|
(5,700)
|
|
(8,387)
|
Income from
discontinued operations, net of tax
|
|
-
|
|
6,706
|
|
-
|
|
6,823
|
Net income
(loss)
|
|
(1,627)
|
|
2,507
|
|
(5,700)
|
|
(1,564)
|
Less - Net loss
attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
in discontinued
operations
|
|
-
|
|
(792)
|
|
-
|
|
(1,359)
|
Net income (loss)
attributable to RiceBran Technologies
shareholders
|
|
(1,627)
|
|
3,299
|
|
(5,700)
|
|
(205)
|
Less - Dividends
on preferred stock, beneficial
conversion feature
|
|
-
|
|
-
|
|
-
|
|
778
|
Net income (loss)
attributable to RiceBran Technologies
common shareholders
|
|
$
(1,627)
|
|
$
3,299
|
|
$
(5,700)
|
|
$
(983)
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.07)
|
|
$
(0.38)
|
|
$
(0.28)
|
|
$
(0.86)
|
|
Discontinued
operations
|
|
-
|
|
0.68
|
|
-
|
|
0.77
|
|
|
Basic loss per
common share - RiceBran
Technologies
|
|
$
(0.07)
|
|
$
0.30
|
|
$
(0.28)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.07)
|
|
$
(0.38)
|
|
$
(0.28)
|
|
$
(0.86)
|
|
Discontinued
operations
|
|
-
|
|
0.68
|
|
-
|
|
0.77
|
|
|
Diluted loss per
common share - RiceBran
Technologies
|
|
$
(0.07)
|
|
$
0.30
|
|
$
(0.28)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
24,092,172
|
|
11,129,781
|
|
20,538,309
|
|
10,644,372
|
|
Diluted
|
|
24,092,172
|
|
11,129,781
|
|
20,538,309
|
|
10,644,372
|
|
|
|
|
|
|
|
|
|
|
|
RiceBran
Technologies
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
September 30, 2018
and December 31, 2017
|
|
|
(Unaudited) (in
thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
September
30
|
|
December
31
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
10,299
|
|
$
6,203
|
|
|
|
Restricted
cash
|
|
225
|
|
775
|
|
|
|
Accounts
receivable, net of allowance for doubtful accounts of $14 and
$8
|
|
1,509
|
|
1,273
|
|
|
|
Notes
receivable
|
|
565
|
|
-
|
|
|
|
Inventories -
Finished goods
|
|
524
|
|
564
|
|
|
|
Inventories -
Packaging
|
|
113
|
|
114
|
|
|
|
Deposits and
other current assets
|
|
475
|
|
519
|
|
|
|
|
|
Total current
assets
|
|
13,710
|
|
9,448
|
|
|
Property and
equipment, net
|
|
9,300
|
|
7,850
|
|
|
Other long-term
assets, net
|
|
18
|
|
63
|
|
|
|
|
|
Total
assets
|
|
$
23,028
|
|
$
17,361
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
276
|
|
$
765
|
|
|
|
Accrued salary, wages
and benefits
|
|
698
|
|
773
|
|
|
|
Accrued
expenses
|
|
1,044
|
|
741
|
|
|
|
Unearned
revenue
|
|
25
|
|
75
|
|
|
|
Escrow
liability
|
|
259
|
|
258
|
|
|
|
Current maturities of
long-term debt
|
|
4
|
|
4
|
|
|
|
|
|
Total current
liabilities
|
|
2,306
|
|
2,616
|
|
|
Long-term debt, less
current portion
|
|
9
|
|
12
|
|
|
|
|
|
Total
liabilities
|
|
2,315
|
|
2,628
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
Equity
attributable to RiceBran Technologies shareholders:
|
|
|
|
|
|
|
|
|
Preferred stock,
20,000,000 shares authorized:
|
|
|
|
|
|
|
|
|
|
Series G,
convertible, 3,000 shares authorized, 630 shares issued and
outstanding
|
|
313
|
|
313
|
|
|
|
|
Common stock, no par
value, 50,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
|
27,093,093 and
18,046,731 shares issued and outstanding
|
|
291,228
|
|
279,548
|
|
|
|
|
Accumulated
deficit
|
|
(270,828)
|
|
(265,128)
|
|
|
|
|
|
Total
shareholders' equity attributable to RiceBran Technologies
shareholders
|
|
20,713
|
|
14,733
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
23,028
|
|
$
17,361
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and nine months ended
September 30, 2018 and September 30, 2017. 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 September 30 (in thousands)
|
|
|
|
|
2018
|
2017
|
Net income
(loss)
|
$
(1,627)
|
$
(8,320)
|
|
Interest
expense
|
2
|
86
|
|
Depreciation &
amortization
|
173
|
157
|
|
|
Unadjusted
EBITDA
|
$
(1,452)
|
$
(8,077)
|
Add Back Other
Items:
|
|
|
|
Change in fair value
of derivative liabilities
|
-
|
313
|
|
Loss on
extinguishment of debt
|
-
|
6,610
|
|
Other
income/expense
|
(43)
|
(129)
|
|
Share-based
compensation
|
186
|
250
|
|
Corporate relocation
associated expenses
|
-
|
26
|
|
Other
|
-
|
85
|
|
|
Adjusted
EBITDA
|
$
(1,309)
|
$
(922)
|
RiceBran
Technologies
|
Adjusted EBITDA
Reconciliation
|
For the nine
months ended September 30 (in thousands)
|
|
|
|
|
2018
|
2017
|
Net income
(loss)
|
$
(5,700)
|
$
(13,420)
|
|
Interest
expense
|
5
|
1,616
|
|
Depreciation &
amortization
|
544
|
571
|
|
|
Unadjusted
EBITDA
|
$
(5,151)
|
$
(11,233)
|
Add Back Other
Items:
|
|
|
|
Change in fair value
of derivative liabilities
|
-
|
(808)
|
|
Loss on
extinguishment of debt
|
-
|
8,290
|
|
Other
income/expense
|
(36)
|
(66)
|
|
Share-based
compensation
|
617
|
904
|
|
Corporate relocation
associated expenses
|
-
|
101
|
|
Other
|
-
|
92
|
|
|
Adjusted
EBITDA
|
$
(4,570)
|
$
(2,720)
|
Investor Contact:
Ascendant Partners, LLC
Richard Galterio
(732) 410-9810
rich@ascendantpartnersllc.com
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SOURCE RiceBran Technologies