RIBT - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the RiceBran Technologies’ 2017 Yearend Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder, a is being As I'd to introduce Mr. our host, now like Ascendant Galterio Partners. Richard of ahead, go Please Mr. Galterio.

Richard Galterio

With Dr. operator. of Goose, to and Operating Yearend Call. and RiceBran you, President U.S.A. Technologies’ today Thank Good Brent Officer; XXXX Ingredient. Financial afternoon, of RiceBran Chief Results Rystrom, Executive Financial Smith, President Chief Robert listeners. Technologies; Welcome us Officer are Chief Conference Michael and

management’s that prepared Litigation over to may Robert, the want uncertainties of during differ company’s more Before the that turn Reform protection listeners call, results may the make statements may under risk the to call discussed forward-looking refer in these additional I results to forward-looking Actual risks today. Act and questions in company contained and remarks Safe Therefore, your Management the for to contain Securities claims forward-looking I subject XXXX. statements from Harbor remind and discussion are of to a statements the SEC. you the response uncertainties. therefore today detailed we with Private in filings the

RiceBran non-GAAP on of to Technologies. of over go measures to this comparable Smith, XXXX projections In the obligation Dr. call measures market CEO addition, to the XX, management reconciliations like financial Relations including this the webcast information assumes company’s I company as please conditions in these Smith, Investor and and to estimates the as This www.ricebrantech.com any including future to in today, page. change. available the March performance update represented no of call, ahead. turn financial GAAP would provided at Dr. future projections by and as certain time, financial are President Robert At

Robert Smith

sell future Thank to some Thank contract call. for quarter you, RiceBran get to Rich We financial house blending from XXXX in in balances This early provided accomplished Healthy Technologies welcome And for strength and RBC any then packaging our in completed pay-off last Grain, an U.S. balance time Natural, fourth RBT year to order. that in We in adding the XXXX position financing replenish year, We the equity. much our conference to investment using RBC all. success. to our XXXX was a eliminating business further late in were losses you for in us to and able joining Brazil; based followed investment our our and Continental and operation. debt this by cash exited shareholder’s further proceeds we the our sheet.

fixed the XXXX, focused balance we start our growing have in and our we sheet set business. operation As stage to the

lifestyle, We're and our sales companion to efforts give a Michael win making. the key of team efforts. Michael the categories now functionally that feed shortly about seeing opportunities we we are sales is on and Goose excited detail On pet, as you progress will like; result are a these protein. some focused and side, on the and equine and has starting of marketing

sure We are our growth. working for are operations also make ready to

SQF Certification. attaining updating to and meet FSMA are facilities We Standards our

leasing the of unfolds. in starting ensure mills include; have food those XXXX XXXX on that best we and expect ability also production projects year increase of our to year, facility our to in West combined We as Major investment. operational in us late distribution and important a the Sacramento CapEx making this progress significant products. into efforts improvements with a will new substantially started grade certification, quality series To provide

improvements Dillon equipment and and capabilities Louisiana. CapEx enhancements in Montana facility logistics facility have we to our warehousing Additionally, to and our and

bulk rice cycle have XXXX new to add and Delta office believe to will wins is the Louisiana fairly of U.S. U.S. corporate deliver Despite new XX% will open several quarter our long our the produced. second putting also production. to in quarter, R&D in Houston, that supply. progress. during to of brand Arkansas we focusing near with portfolio. this We translate region the a plan new customers, meaningful and a start the Especially, And rice growth initiated are headquarters We've products office improved we of project also working meaningful into sale We XXXX these second on nearly expanding the where customer already growth year. as our on the efforts in new of

Goose we customers over progresses that on call his sales as Michael marketing. rate. confident year like to additional are for turn accelerate the will Michael? growth We major our the which should update and now add I'd to

Michael Goose

Thanks equine Robert half and existing strengthening our starting some to and augmenting strength good additions the with key result of companion team pet sales at successes help initiatives us and the to see today areas second XXXX and We sales you feed. our in sales and a protein, with share afternoon, like as lifestyle, Technologies. are cereal excited to all. to bakery, of breading I RiceBran spent in am we

X adding have sales Now a plan to place, team in that we people XXXX. strong in additional only X we sales on

We like in help reports. to are planning have launched to CRM the and team. been through recently planning better effort addition an use things improved sales working our on drive going sales funnel We’ve to we improving our growing CRM sales support company-wide

new marketing Sales also and updating more consistent team issued be recently we help and Chief optimizing and efforts ourselves and to inline. are volume website and pricing We to opportunities have our soon been

in mentioned results. As are produce efforts starting to these I

customer. quarters pet one, ago of half we returning on an important are; from several discussed we bringing and this regain as the past initiative March back had - lifestyle pressures of of them financial year part still back of were the examples XXXX, the we an Some to In customers. despite companion able

with the start second to of We have segment. and our customers opportunity we'll secured in one shipping the quarter an bakery expansion in

with a added our some all ship And participated new Fourth, customer partners new product we lifestyle tasting some to we innovation customer opportunities. customer to days us major new leading June. recently fifth, in have specialty food companies, that a most we have to starts towards Third, inspecting – an gluten-free many our leading at been important in ingredient.

revenue growth expect for cycle visibility unfold as yearlong is growth. as us sequentially XXXX starting our selling We accelerate this to typical provide to

We further progress exploratory year, pilot. into to wins throughout many and new opportunities are making stage the customer numerous add have the initiatives from expect of including on that gone

decision with Expo In expertise activity. a require addition, Anaheim pleased the just we develop and traffic. shows natural industry animal We in personal saw Expo capabilities. at came key one away strong some disruptive and learns located world and West spaces XX,XXX food, area and new to new companion, different the We and in are in locations beyond change innovation and with attendees. supplement, experts largest of business care location to makers food food strategy areas trends company fabricated year that working our with in a exciting our go-to-market attendant is technical in and this West for Key over our the the show. the

with over Brent? provide potential We many in of customers we increasing of call have like Rystrom and a would turn Brent traction seeing are our the them. financial to now to to major update meetings dozens I efforts with

Brent Rystrom

group sales six excitement months. challenges over from Michael. the ways some The of like Technology. I been and these mushrooming is past efforts scope the expressing in the the progress at has in by would you, are This activity we for RiceBran start Thank my company. causing to good Michael’s seeing opportunity for

in visibility several have We several increases products that and customers require will of for new substantial production our in locations.

sale more growing favorable due much until too customers $XX.X the started profit million. at finances get planning some impact simply for was work healthy from risky improve year revenue improved were stressed combined Gross fell. Continental versus with were brand was near-term a of to of gross of believe bran to in condition in by and to carefully X% demand condition customer quarter our the performance for Raw We supply inventory million to limited production running compared more We prices ground also in balance efforts, $X.X Grain rate bottlenecks new We in margin sheet, investment of million be we possible and the natural in financial repaired in to project, we posted with. certification the business. growth a gross efficient growth for million sheet difficult we both and We other cost us. profit to much $XX Technologies adding because products. we while our the the year. our We obsolete for XXXX us through profit our for something successfully XX.XX% while rate it's highly our busy third reflected negatively When CapEx the balance impacted financial as $X.X believe most the year and avoid XXXX, July XXXX by for September. XX.XX%. production was RiceBran year a in few are going modest opportunities with dollars

SG&A. We our reduced also spending substantially on

XXXX Our total $X.X compared million in XXXX. $XX.X spend SG&A to in million with

are is and travel mostly our when on the to that that to payroll, reflect contest marketing. close forward additions, level with compensation lower the will on drove costs compared maintained SG&A a meeting annual in were had think going proxy we will lower now we Our we focused and XXXX We sales growth and spending that be entertainment few expecting.

net in XXXX was from narrowed million Our three loss $X.X XXXX respectively. million to loss our $X.X million operations million $X.X from versus and $X.X in

Our million XXXX adjusted million to improved EBITDA the compared in $X.X of XXXX. for was $X.X

during helped sales, decrease. expenses quarter. raw cost, office $X.X in $XXX,XXX Gross the XXX quarter expenses fourth fee versus with SG&A fourth modestly were quarter XXXX stock over option, bonus, million flat improved XXXX impacted by lower basis inventory bran and driving expecting cost profit training was Our both the last most provided downtime offset of lower revenue by to million unplanned $X.X XX.XX%, which higher and nearly margins the year. the quarter. of We customer obsolete decreased points

quarter fourth to we For million $X.X $X.X quarter. EBITDA fourth XXXX reported the the XXXX million in adjusted compared

We're in earlier on in adjusted to of spending in had $XXXXX million the $X maintain equity in at area equivalents cash meaningful quarter and to cash of EBITDA same the year since to the warrant negative. and that $X.X This with our higher fourth quarter XXXX debt realize the higher will our we reflect execute compared sales RiceBran ended from XXXX and in our cash over compensation we increased ended. expect end reduced reflected the Our this XXX,XXX position $XX.X reflects Michael starting a that better to XXXX now revenue. marketing, our sales to period, XXXX. million adding We to shareholders and strategy. to to capital enterprise and million $XXX,XXX our also exercises, spending is headcount mentioned and much a and overall Technologies in both growth larger

We guidance XXXX are Technologies. for issuing RiceBran

our Some will we $XX of we key revenue include; of generate least at million. believe thoughts first,

revenue some million, Second, and quarter, year year in expect the second to of the $XX quarterly on in we between up unfolds. revenue million be XX% third quarter to EBITDA XX% the loss and of XX% the in we X% adjusted revenue up least X% $X.X to year loss first as for expect in over in the fourth would at and with up $X though, first quarter. decreasing the sequentially to year Three, quarter, an quarter, XX% down the largest the million flat

RBT’s high to this least convinced in make revenues generating business finally the achieve to from long-term question-and-answer the term, our are plan position are into a transform for employees Technologies to earn our like shareholder potential thanking they which positive and formal portion mid-XXXX. to grow for major to production by with while costs in should We Fourth, of us. making we for of close also returns further now strong control to our like we Long net RBT EBITDA our session. We to margins, one expenses us successful we increasingly plan efforts to by adjusted the positive RiceBran our importance at that We'd has ready XXXX. also Hector, on sustainable. in increasing that company. additional and capital shareholders more comments EBITDA thank would adjusted XXXX, their are mill continuing recognize to the value. investment We of

Operator

from comes Street question Chris first your with Krueger with Markets. question. proceed Please Lake Our Instruction] [Operator of you. line the Capital Thank

Chris Krueger

guys. afternoon, Good

Robert Smith

Chris. Hi

Chris Krueger

Hi.

or of versus what about new on, coming a you of not? but on ago detail was growing or pipeline is if months or customers, either the six can give or XX even talked a potential more percentage lot that ago, your now little like months wondering the the I the growth of number size customers You of business pipeline maybe

Robert Smith

Sure.

would As I've a I team relatively new say considerably. here in But I going dozens funnel There lot been customers. would say has pipeline out chime I've now, and have for to that opportunities a be visibility to and have pipeline in I second. for Michael here am his for say it many are Michael seen and what now. would year. the of company, person Michael starting to times caliber a what of Right the people right would grown that there a convert we that of call about are the high I call would developing would his these many, I and

Michael we're you good tell would feel give would I from I going, color? So, but and about where very little you it's my a perspective, at where

Michael Goose

past a the year pipeline and Yes, over substantially our and half. has increased

doing on, targeting away. is do filter to opportunities as target distracting of is leads and with successful on key they convert we And they really accounts know then just working they can funnel we as focusing of be what we've to our to where we've been And out outside convert before is, we've that goals to getting basically doing had right really to revenue. convert with them stock. One and been that and what

in of as So basically, also that the and our into it a the we of quality also than pipeline with has falling the more seeing increased had funnel We've dramatically. conversion pipeline some we're throughout funnel And past. increased into well. revenue much

Chris Krueger

related talked baking to Any you customers in a segment. earlier, couple anything comments your equine? In Okay. about

Robert Smith

identified say much in not to customer going pretty specific think, has talk be customers facing we fair are positive the customers will But about it's I that new all would we're to expansion I Michael likely it'd Chris. with about that customer category be feel We categories every existing an in. earlier. say,

Chris Krueger

Arkansas? region you yet in growing in new found partner a Have the rice

Robert Smith

Yeah, of to talking we're number actively a people.

but have exploratory - identified that a We we're in mill just intrigued now. we're by, right we're very stages

Chris Krueger

mill Rice there is minutes that or mentioned The another ago, few mill? yet

Robert Smith

mill have We now. talking we're that right one to

Chris Krueger

any get - get stage? you are like last, certifications that through anything like there or have the then like regulations next to And regulations or government that, to

Robert Smith

next your that we What the growth to part was question last the of need get of stage as... to

Chris Krueger

of When are the getting or case these mill may a whatever approved customers be?

Robert Smith

safety. from I FDA in mean of as FSMA you new terms know regulations there's food

with make We're our SQF operating regulations. we're certification, definitely looking sure guidelines to are and those We under get certification. updating facilities to compliant fully FSMA

facilities. so, those we and all place. all ingredients that at to in of food we’re with guidelines animal those as And mills updating looking are for partner and of look are they're we the sector also, when regulations make our well, regulations sure to there all And other are

happen So, to our year a lot to this of be needs. customer’s will able meet that

Chris Krueger

all That's good. got. very Thanks. right All I

Robert Smith

Thanks Chris.

Operator

Please comes question Stoltenberg your Edward from the proceed Geneva line next Our question. the of Group. with with

Unidentified Analyst

out a year? hole the or reason of hole. it the a the My ask congratulate positive getting one most, is Afternoon decision. Brazil. to of question people great, I want was calling people dark by just -- I the you EBITDA I'm black was question, of the you gentlemen, see or the conceivable before great question to of end becoming this That That

Brent Rystrom

right positive think, I that EBITDA prefer ideally achieving the is but early love Management become by XXXX. our that saying, focused plan to answer we now to that, by of positive lately I'd we the year. on would end be EBITDA is in

Unidentified Analyst

Okay. right. you. All Thank

Robert Smith

welcome. You're

Operator

question Please from Vendetti with Maxim question. proceed the next line Anthony Our comes with your of Group.

Anthony Vendetti

absolute of a were the SG&A revenues? When questions. Sure. or a percent be couple about I maintained you talking you should in just as dollars have said,

Robert Smith

in team success I variance, basically Where to they paid obsolete going simplistic will dollars. be a people sales, SG&A will is Goose's perspective, Anthony of Michael results. the be some the we're of have think flat most From deliver for as

have will will that business of we be model, the out. flat related So, compensation rest but drive and sales the some should the

Anthony Vendetti

sales force, two one in then can that of terms or that you makes is that sense. right people. about What say add And that the Okay you did now?

Robert Smith

about team myself. including four sales current Our is people,

categories could to some strategically We’re we people they'll X expertise, key help use penetrate. possibly in where looking expand

Anthony Vendetti

And some facility quarter then and little of on bit there that? cleared some downtime there fourth elaborate was a was delayed a rectified then the terms a is Okay. and deliveries. Have that? Can or more revenues facility– those in you at still with dealing been

Robert Smith

Nothing major, we're number. six-digit talking you low know a

do things So, hundreds things. The pains or to that of the responses thousands are have just sort certain sort of number. growing of just things certain learning

We have operations a good very team.

I So, in think good we're there. shape

improvements for had and speak. growth we customers some growth customer we as making facilities coming have related and are were when delivery things some of is We issues, some to we few for timing the literally a here related wanted some their of

We to managing to these facilities periodically have We're that, some to things get caused better. have And process we're that but to of our close put us some done. in. of think we things going still some

Anthony Vendetti

Okay. Great. Thanks That's guys. helpful.

Robert Smith

Anthony. Thanks

Operator

proceed [Operator line Instruction] Johnston, comes of Private George Investor. question with Please question. from the your Our next

George Johnston

really very you, Thank call, guys the sounds for this promising.

One the far it? Michael looks. as section the at you innovation, was of best the as ever future our that Food what disruptive mentioned was Show calls

Michael Goose

in were we up of hot spot and brands an or Yes, items. coming more

George Johnston

Okay.

End] of which one powerful last a a [indiscernible] Meatless major He the of had we Meat. Paul Board has said, Milken at at used mentioned disruptive be new the out very out Food food. innovation He going Fribourg notice Institute There [Abrupt Grain, largest to big a CEO trying ones a in the term Forum, companies he YouTube is cattle Continental of statement June. it. changes I spoke of know feeding the now on is book And I As out. in couple is there our in members is one

Operator

question-and-answer back call of the would remarks. session we like I turn Ladies closing reached to to have and the and gentlemen, management for the end

Robert Smith

We'd to everybody the for thank call. like attending

in look people We to you. shortly be we quarter on updating first results that We'll will our reporting forward year. May. this our date early Thank sometime and publish progress

Operator

concludes This conference. today's

You may you participation. disconnect your this lines time. your for Thank at

RiceBran Technologies (RIBT) 16 Mar 182017 Q4 Earnings call transcript