Scottsdale, Arizona –November 10, 2016– 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, today announced its financial results for its fiscal third quarter ended September 30, 2016.
Additions to the Board of Directors. The Company strengthened its board with the addition of Brent Rosenthal, Beth Bronner, and Ari Gunderson. The new board members bring significant food industry, business management, and corporate governance experience to help guide the Company's future growth.
Realignment of Executive Team. The Company named Michael Goose to the newly created position of President of Ingredient Sales and Marketing. Mr. Goose brings to the Company over 13 years of consumer package goods experience as a new product innovator for companies including the Hain Celestial Group and Kosher Valley Poultry. Additionally, the Board of Directors elevated Dr. Robert Smith to the position of Interim CEO. Dr. Smith has been with the Company for over four years and has over 20 years experience managing product and business opportunities in the agricultural, nutrition, and nutraceutical industries for companies including Herbal Sciences Group and Monsanto. He also served as Research Assistant Professor at the AgBiotech Center at Rutgers University.
Capital Infusion into Irgovel Operations. In October 2016, the Company's minority partner in its Irgovel operations in Brazil, contributed $1.2 million in equity to be used for working capital in the Brazil segment. Additionally, Irgovel’s management has negotiated various raw bran supply agreements that will allow Irgovel to obtain rice bran on a consistent basis with set pricing. As a result of these events, the Company anticipates significant sequential quarterly improvement in operating results from its Brazil segment as Irgovel returns to more normalized operations in the fourth quarter of 2016.
Implementation of Strategic Growth Plan During the quarter, management and the board conducted an extensive review of the business resulting in the development of a new and focused strategic plan intended to grow the Company and build shareholder value. As part of that plan, the Company intends to relocate its corporate offices and certain aspects of its business to a centralized location in California to better service its current and future customers.
Q3 Operating Results
Consolidated revenues for Q3 2016 were $8.8 million compared to consolidated revenues of $8.9 million in Q3 2015. USA segment revenue rose to $8.3 million in Q3 2016, an increase of 64% compared to Q3 2015 revenues of $5.0 million. The increase in USA segment revenue was led by a 75% increase in sales of human nutrition products and a 44% increase in animal feed product sales. The USA segment's strong performance was offset by an 86% year over year decline in Brazil segment revenue. Brazil segment revenue totaled $563,000 in Q3 2016 due to the Irgovel facility operating in an economically feasible manner due to insufficient working capital.
Consolidated gross profit for Q3 2016 was $1.9 million compared to $2.1 million in Q3 2015 with consolidated gross profit percentage declining by 1.5 percentage points to 22%. USA segment gross profit increased by 90% to reach $2.5 million compared to $1.3 million in Q3 2015. USA segment gross profit percentage increased by 4 percentage points to 30% in Q3 2016 due to increased revenue coupled with a 6% decline in raw bran prices. Consolidated gross profit and gross profit percentage were negatively impacted by the Company's Brazil segment where a shortage of working capital resulted in a severe decline in production volume leading to a significant increase in negative gross profit.
Consolidated Q3 2016 operating expenses totaled $4.0 million compared to $3.4 million in Q3 2015. The rise in operating expenses was attributable to a $700,000 increase in corporate selling, general and administrative expenses partially offset by a $100,000 decrease in depreciation expense.
Consolidated Adjusted EBITDA in Q3 2016 resulted in a loss of $506,000 compared to an Adjusted EBITDA loss of $269,000 recorded in Q3 2015. USA and Corporate segment Adjusted EBITDA in Q3 2016 was $325,000 compared to prior year Adjusted EBITDA loss of $474,000. The Company's Brazil segment recorded an Adjusted EBITDA loss of $831,000 in Q3 2016, compared to an Adjusted EBITDA gain of $205,000 in Q3 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).
For the third quarter of 2016 the Company recorded a net loss attributable to shareholders of $1.0 million or a loss of $0.11 per diluted share on 9.4 million weighted average shares outstanding. This compares to a loss of $0.5 million or $0.06 per diluted share on 9.2 million weighted average shares outstanding in the third quarter of 2015.
“We continue to generate positive results from our USA segment where revenue and margins have increased significantly on a year over year basis. Additionally, with the new capital infusion and supply agreements now in place in Brazil, we anticipate seeing improving results from those operations in the coming quarters,” said Dr. Robert Smith, Interim CEO of RiceBran Technologies. “As we move through the remainder of 2016 and into 2017 we intend to begin the implementation of a comprehensive strategic plan, formulated by management and the board, designed improve efficiencies, expand our market opportunities, and build lasting shareholder value. This plan will include consolidating our corporate offices, extrusion operations and warehousing to one location in California, and gearing that new location to meet the standards of the Food Safety Modernization Act. This will enable us to service the needs of large CPG customers seeking ingredients that are high in nutrition, gluten free, non allergenic, and non-GMO. Our entire team is dedicated to building our RiceBran Technologies into the leading supplier of rice bran ingredients to the human and animal nutrition markets. We look forward to working diligently to achieve that goal in the coming quarters and years in order to increase the value of our Company for the benefit of our stockholders."
Additional information can be found in the Company’s Quarterly Report on Form 10-Q filed with the United States Securities and Exchange Commission on November 10, 2016.
The Company will hold a conference call to discuss its Q3 2016 results and business strategy on November 10, 2016 at 4:30 PM EDT. Call-in information is as follows:
- Date: November 10, 2016
- Time: 4:30 p.m. Eastern Daylight 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 Third Quarter 2016 Financial Results Call
This call is being webcast by ViaVid and can be accessed at https://public.viavid.com/index.php?id=121930.
The call will also be available for replay by accessing https://public.viavid.com/index.php?id=121930.
About RiceBran Technologies
RiceBran Technologies is a human food ingredient and animal nutrition 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 human food ingredient and animal nutrition products. Our target markets are human food ingredients and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutritional supplement manufacturers and retailers, both domestically and internationally. More information can be found in the Company's filings with the SEC and by visiting our website at https://www.ricebrantech.com.,
This release contains forward-looking statements, including, but not limited to, statements about RiceBran Technologies' expectations regarding the supply of rice bran, financial performance, the implementation of strategic plans 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.
Investor Relations Contact:
Ascendant Partners, LLC
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 September 30th 2016 and 2015 and the nine months ended September 30th 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.
Adjusted EBITDA Reconciliation
For the three months ended September, 2016 (in thousands)
Adjusted EBITDA Reconciliation
For the three months ended September, 2015 (in thousands)
Adjusted EBITDA Reconciliation
For the nine months ended September, 2016 (in thousands)
Adjusted EBITDA Reconciliation
For the nine months ended September, 2015 (in thousands)