RIBT - Earnings call transcript Q2 2022

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Operator

Good day, everyone. And welcome to the RiceBran Technologies Second Quarter 2022 Financial Results Call. At this time, all participants have been placed on a listen-only mode. [Operator Instructions] It is now my pleasure to turn today’s program over to Rob Fink, FNK. Please go ahead.

Rob Fink

operator. you, Thank welcome financial and RiceBran second Technologies Good conference to call. XXXX results quarter afternoon the Hosting today Financial RiceBran's Chief the Todd Operating Chairman; call Officer are Peter and Chief Officer. Executive Bradley, Mitchell, that I want may forward-looking uncertainties. that statements today’s and management's subject risks prepared contain to during are to remarks call, participants remind forward-looking make Management response your may additional also questions to in statements today. harbor Reform Therefore, the Securities contained Litigation Act in XXXX. statements Company claims for protection the forward-looking under of safe Private call. conference those results discussed Actual results may today’s differ from on And to in of company’s therefore, you these risks filings SEC. discussion we more detailed refer a the and the uncertainties with

provided any financial GAAP in call with the of available represented relations financial today addition, to I'd future of change. call measures measures conditions is ricebrantech.com like to the to company the and company’s page. as by XXXX XX, on information future reconciliations obligation are and the because Peter. GAAP market In Peter performance the projections webcast over as August assumes This investor estimate to financial time projections at management certain including non- yours. these on This includes no the call comparable turn update

Peter Bradley

Good everyone. Robin. you, Thank afternoon,

and strong now is behind a derivatives us, we in issue quarter generate core-SRB have half to businesses in better our to unmet quickly of that substantially the resulting year. business, second very We at our milling losses. the unexpected otherwise this With and issues by performance SRB marred for production value-added demand in rebound and expect

the Let's core. with start

this expect new we sales business seen businesses years. not customers growth the And addition core-SRB double recent digit of further. growth Our experiencing to accelerate in

which win business. working -- an turn customer. volumes the we segment and drive overall it also over significant for be a equine financial pleased Ridge, second the due strong MGI In increased year we to in see I'm where business can much cylinders, new be resulted the specific, nearly improvements meet month, indicated improved and I disruption. core-SRB a to the in to not hard an these at of production value-add is than past quarter because company's a announce move the in being meeting to higher Having gross important the turn interest in pet significant added high issues and rice margin. our leverage operations forced higher results. towards to have losses assure worked as have which for This food improve domestically quarter to resulting to These to significant support while It on generating grow double organic capacity best the gross more Golden goal. significant allow of year-over-year anything to capacity in in offer us expanded facilities to where allow larger customer That contribution utilization, to companion the Now demand quarter not market business both last report primary And grain, exit that perfecto. stronger ultimately important address in mid generated that to improvement all value into by breakthrough a the made progress entirely our we and occasion sales, should Importantly, the standards in techniques Effort second particular, quality, you be sector. on animal us is digit raw mill production should representing product added MGI in amount second variants for multiple a operating said, executed we're a did material is change To the for came to core should business. completed. With unsuccessful it half, opportunity improve business believed in together derivatives continue capital and our very rose milling larger have challenges specific revenue the should milling a through were feed to I operational even to can base. in while in yet, solid our business adjust I firing that sourced much improvement this SRB quarter revenue growth occasions significantly that was expanded the issues ready stock and attributed

forced six were to weeks’ sales, take worth a quarter. of write-downs we nearly product the As significant and during lost result,

believe and applying when While resolved. process agricultural complex Most production a occasionally unexpected these disappointing, we feedstock. issues importantly, been this a can have to variable happen

now to the organics got this to changes other that change. providing other forced feedstock completed us supply raw we're we have make We and feedstock the were material raw materials our changes we to testing with have --

meet say see fulfilled. now past to standard. are customers are to With episode I'm their the hard our to and organic that to us, working shipping we our is SRB result, delighted up. And team pleased a As producing now derivatives orders catch this finally

improvement and to for business, dilution to customer wins, for and our largely normal strategic half, financial potential for second we challenge return not our for profitable growth in results a of year, and significant and Importantly, have improvement Ridge strong quarter, in the our business XXXX built and this store derivatives the we new value-add supported Golden core-SRB the in operations derivatives the in completed does diminish in in to the our isolated drive and half progressing confidence beyond. growth, value-add by a MGI optimism capacity during business our further expansion, that platform second

turn review Now the let call quarter to to the Todd more over detail. in me

Todd Mitchell

everyone. Thank you, Good afternoon, Peter.

trend. production results We our in second by highlighted, But continue marred to see derivative encouraging highlights strong for as top Specific line the Peter for quarter the include. overall business. quarter, were issues an SRB growth

revenue in million row. over generated the a in for $XX second quarter we First,

SRB XX% decline at a was sales. derivative revenue quarter Second year-over-year in significant despite

business, and all SRB the profits quarter. revenues improved gross in other our second for year-over-year derivative excluding Second, businesses

And in $X.X million look MGI a drop significant in in stronger normal for second Strong Revenue our cash detail. quarter $XX.X we're greater half let's results the SRB quarters and with get a ago. at quarter, liquidity was driven up we for the the numbers by in commodity digit and year quarter XX% million and our Revenue. double Ridge. to the steps second growth second Third, year. was even that derivatives million Total with both growth end the reduce able payables. businesses we've to to preserve in sales core-SRB from back business Golden $X.X the and of new costs that ramp as taken even With in

$XXX,XXX are XX% value-add While and milling second was SG&A EBITDA decline with XX% issues derivative, business, of operating higher from total, in to gross volumes price in declined this sales losses. derivative and due higher for the quarter. saw ago. SRB Virtually adjusted a $XXX,XXX the our SRB leverage declining decline second to profit SG&A, $X Gross was compared quarter, last and a year production our of most seen drop losses versus the to increases year-over-year. were margin providing product gross offset all business Gross ago. core-SRB plus costs. Across in the the input of year, quarter derivatives million a a year-to-date this write-downs million year-over-year in has second year $X.X business. In

in back director’s operating Lake and business. Cash to the at including loss -- support $X a revalue our in to net business. increase share working net that, gross and was losses. compensation, upward turn a negative compared million and losses $X.XX This liability. capital our due and of continue cash But compensation million results. a was million a the contracts. the by final increases was corporate EBITDA. several quarter, $X.X $XXX,XXX charge in the on $X.XX an short-term expanding per loss $X.X and down also second the quarter's a and warrant year Charles, operating gain the it $X.X We million non-cash and was year-over-year With increase $XXX,XXX liquidity been quarter, cutting underperformance in Net the with quarter. of steps in the of million to negative liquidity companion in quarter reflected year to fronts. expenses, The comments. second ago. share, margin, increase a from see by now ago. liquidity. quarter to to lower offset modestly a quarter gross margins timing losses higher settlement to losses operating of by able EBITDA to Peter? grain a the reconfigured of net $X.X a better to We've back loss due million or result for operating the loss loss, outstripped Overall, first the second quarter, positive The swing pressure includes to which Adjusted capacity, Total borrowing insurance This I'll increase losses, ago. is of $X.X curtailing derivative of the million certain Adjusted second to payments for to Operating $XXX,XXX second on in closing Peter offset net end end to have cash due SRB compared in second on in light online loss preserve animal headquarters. offset subletting SG&A the grew $X.X or we productivity. impacted our in from losses was drop at decline year million these XX% $X.X successfully a taken in Operating for

Peter Bradley

Thanks, Todd.

and has to on organically tremendous company. decided for it experience and mills the two And our new difficult volume during derivatives strategic as better, facility success. profitability Demand that by I we channels remove and high change company added we to for ingredients about the categories are that a believe that nearly did. sales we our And said said said for rapidly our the two been Sorry we company It needed would new the learning the We have have past has market. get so years for value we put have issues work in successfully that core-SRB opening doubled we it We for profitability our the there. becoming been the everyone. into through growing operations. did. breaking high us, -- direction. few was would is a will emphasis bolstering better that path revenue time, the sustainable years, by specialty high ingredients months We business since and to shift And systemic we've as made we elusive our staff a RiceBran margin in operating past

quarter’s trend disappointing, is results this bottom while line are overall So the add encouraging. would I

were support. we I ago. will than fact, much you in today optimistic about In I one that quarter, and believe we're a year happy off we were this to With thank ago, rapidly for future. of than your fairly the years we just two questions. now that, will be any your position stronger certainly and results answer rebound

Operator

Capital Jensen [Operator Connor from take our of question Lake Instructions] We'll first Street Market.

Connor Jensen

Hey that walk through caused again, Smith question guys, those Jensen first Markets. you kind Connor my giving of production business? derivative Thanks this My to with what's are Capital for issues guy’s was what Mark today. you. of exactly confidence Street issue with of Lake is just that questions in from kind the And taking behind kind

Peter Bradley

I on our feedstock. One, variability getting things. really two were we there organic were think

those yes, then aware, And quarter, using changes that week second that's And think is, were and its are around change. in I change, there an together. big it And using so the issues. to a a coming crop there but the So what we is lost disappointing secondly, fixed were to achievement. we X treated, and enzyme caused within probably make we we were quite two changes to certification got organic and had enzyme X products the get period, these you

changed We We've now are we've in right the processes. producing materials got and place. back our raw other

back in through to normal rest to be year. expect of to back the production and the So be continue we

Connor Jensen

to Glad nice. behind hear guys. that you Okay,

about talked that what to quantify customer, you wondering could release, a maybe I new the large if you in business. having as far As was the means

Peter Bradley

take Todd, do you that want one? to

Todd Mitchell

our we for bet, plantent on this sure. food. to We've will be in this the using been of of core-SRB as working You sort product new space, time. pet alluded They part yes, added pet a dry food long this customer the

our potentially that that to think business. will this largest potentially our, alluded I as itself, scale to, eclipse become customer Peter could of the the And customer. equine one category

Connor Jensen

you Okay, or though great. guys could any of this have EBITDA goals And obviously, like, you then probably your being maybe turn for sick even kind But it lastly, really outlook? positive you that question. do are wasn't when thoughts asked getting of on

Todd Mitchell

we've don't a going Yes, business but year-over-year, $X reference you our guide cost at a to we're think way I mean, comments, as SRB about before, derivatives I if us EBITDA. setback I about the think adjusted million two has would said in the

from that, of remove see we're pretty around, a you if little year-to-date the just you So results, much did breakeven. bit bouncing can

half the operating will SRB leverage, volume to had business I of the of the adding that. us think additive being be in in business into the would enhanced significant in back addressing that the structural challenges we've going give primary rice some year,

these So far saying I I'm we're think revenue at levels. off don't what is

Operator

a Gary from comes question Next Goetschel from Investor. Private

Unidentified Analyst

it a I'm your is made call on XXth Hello. that I've about spent as This is what change delinquent to above once are because finally, and from from disappointed delisted NASDAQ again currently, $X? somewhat haven't what being And confused you you price having doing your you're seem every you even business currently time you the year. prevent now dime. the to now stock to in

Todd Mitchell

can your Gary, appreciate Well, comments. I

we've we higher of The goal from ingredients move direction. And had we company the our the SRB think that to in the SRB last move that value quarter. think challenges in towards been day. two derived derivative core- pretty that I I to over continue years, clear the is

them, I losses nature. associated they're in largely think one and and the time isolated with largely

listing, our that and it the to product. will that think I the and operating proposals all at think the approved our the regards shareholder meeting, listening. continue were preserve I core-SRB that board disclosed With you'll to annual us the steps leverage see was value to higher emphasize business of take in the appropriate

Operator

Charles from comes question from Dawson next James. Our Robinson

Charles Robinson

and Hi, of my Mermentau How's on progress the Green facilities expansion? guys, that Louisiana Can expansion thanks for comment of taking the the question. going? you MGI

Todd Mitchell

Mermentau, two primary At we've thing. done Very well.

mill fifth format to First if or Laura, able downtime. to customers insurance want, service the buffer, animal in and also output was of we decrease Hurricane correctly, were certain can they us specs they testing the use increase our proceeds added partner maintaining of we a new was an fully it, during which, Lake will and Charles, take that for that it. reconfigure better having now from we reconfigure there damaged allow terms disruptions inventory our remember, we companion which extruder, wanted deliver us to so significantly and what to the And met, you

At So which has milling what same online had capacity hauler, able place, all call of have MGI, that side is we to the we of main mill now device, in that we and cut latent the and leverage. the device core able and not sides the ready the is With now mill, this will to soup that to ramp. at the replaced were run they time. new be side both always

capacity need There's will at of a I couple But there we So items out load we the you plenty to meet plenty of facility. it think to do. that growth we could more storage, support continued virtually have double capacity, that have that.

larger than much is that think to facility now. the convention I business be much have it's than larger when bought have a business we frankly, it it. And a

Charles Robinson

Fantastic. multiyear customer. one I of questions, a a the contract? just the that appreciate to the up new Is answer. significant And previous follow

Todd Mitchell

multiple to they're deal. years. into business locked to I for specifics steady of service get looking of down the the a customer flow and Our intention what is to is the don't volumes do want capacity. But

that capacity that in uniquely industrial positioned are scale. we at We have

very needs. working together another's close to are we So one fulfill

at would the equine expect this of with business, sort five, are relationship And if six those look constructive think I of core some customer. same years. customers so our I you

Charles Robinson

business Good enough, your was largest portion previously and correct? your of the equine business,

Peter Bradley

Yes.

Charles Robinson

Okay. we if And be expect the closer could that to if you to positive you be, this this is that into could going then number? EBITDA get to read larger,

Peter Bradley

Yes.

this the done you to to provides been us growth. in change. preparing see for And happen. Charles. to what down think is delta somebody customer we've volume SLB the previous replacing formula I else. is This use Lake not back with We've with in question, Mermentau just And is, real for this your opportunity of reference and this a a

changes an are a to quick to and switch be I out formula formula back, going expect done carefully. so that in it's not And very And SRB. wouldn't be for

So had food well. the had who as I one see the while we well, very And quarter one of mention the we seems that that issues that suffered operational of was thing even it well, call as our business, on operational performed we issues didn't it ‘XX throughout industry. second the is quarter customer the equine

Operator

Last Martin Mac, question Investor. comes from

Unidentified Analyst

don't months, always [Tech the listened company for guidance difficult The tends at to positive, company XX he or listened wait And four progress the all results some very for give Yes. gentleman very you to with XX every Is been to while and there almost to conference this it's seem as calls, to of next who find comes the is? conference every chance well, what several will callers. out I during three carefully I've call, that the from previous management, of Gentleman, months, any Difficulty]. years. to the temporary call the to time listen, be what said what's

Todd Mitchell

to report hesitant intra I'm quarter results.

company. quarter the financial to I that, go social your as offer far do communicating that have we proactive on so. improvements what's so things our intra we've be news into I making. think would went about that period, releasing in of been is performance more capital we've some our I think communication we to one don't we before been started And proactive active now in media. be of an to trying do the point, under quiet the strategy more presence will on going we to about We think

Unidentified Analyst

Well, time have and give statement I I had mean, I've or to a business to you report a we time, been of guidance. that don't $X.XX haven't XX share. out. well, out to that. don't very a hear going it. I a earn still $X come years is good say expect simply we're that comes to I expect like kind is a waiting that share to like for I make, going from expect What

make As intend split carefully give the far indication sure our heard lose we any as you fact will will be? that don't reverse as means you split split there Is goes, have said you reverse what I that to we in shortly. the that the reverse what listing, it to now you number on can

Peter Bradley

No, not as yet.

Todd Mitchell

No.

Peter Bradley

We haven't got agreements board’s yet. it on as

Unidentified Analyst

fingers. I I the loss in last fruition never has which guys, know making. turn really done. But for much. I'm I it years been listening. been be And product to understand must But can It's we to just all of of would you're I Like investment in later, the for have you it a that have XXX. will it's one, I say crossed believe when exorbitant. my is done. as have my thing into necessary. still goes It's so this company pleasant and the I This, tell or the sooner on. you one thank that live XX in I understand believe hoping I you That's is just to I the it. belief it

Peter Bradley

yes. comments, your appreciate much very appreciate, We

play propel increasing will involved than that an direction. forward. I why in on of think I the the being ingredients The milling role rice think can the right food with ingredients focusing supply rather help the company chain. the in in is business ingredients we're I'm that And headed

Operator

program any we this Peter the remarks. to questions There have additional or further Bradley I no at closing for turn not back time. over appears will

Peter Bradley

But support. rest And see attention. the Yes, quarter, your tough to them. didn't results we year. to your for of for Thanks the think forward Thanks issues I we've everyone resolved better we look coming. in again

Operator

Thank you, today's concludes ladies conference. and gentlemen. This

may You disconnect. now

RiceBran Technologies (RIBT) 12 Aug 222022 Q2 Earnings call transcript