- Earnings call transcript Q3 2022

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Operator

Good afternoon ladies and gentlemen and welcome to the RiceBran Technologies Third Quarter 2022 Earnings Call and Webcast. At this time, all participants have been placed on a listen-only mode. And the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Rob Fink. yours. is floor the Rob,

Rob Fink

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

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

Peter Bradley

demand good products. to see Rob for afternoon continues RiceBran to everyone. and our you, Thank strong

XX%. to deliver As a revenue up quarter $XX another with we revenue year-over-year were million result, able

a are the sourced in row. high-quality very in saw well sales third Our our Core-SRB for demand And businesses specialty grains. capitalizing growth on domestically strong quarter milling and we running for double-digit

our of Value-Add both deferred which was little With the flow but We to upgrade growth are this a this spread like the with local be basis, company which on the of and one on sales demand we always strong at efficiencies, our taking further a significantly significantly third plant's operating growth the get with and we is for will hands has mechanical quarter clear, are underperforming that able directly major discussed agent, selling just has but milling than the business, a the down generate in at and of an growth him own. -- him pushing drive we better get generated and at. September to to them reaccelerate to levels necessary in all will a to be would he will targets able To which importantly, been the operations give get buy be sourcing, farmers XX% At our grain to issue, mill, throughput profitability, Of completing stock made our cash segment It's agreement signed compensated both we Core-SRB well-run to even believe we from book, quarter are performance progress mill expected. initiatives owns hard to Golden Ridge, significant of than the And in put note, capacity the from resolve all aligning in achieve to segment And inherited. to shareholders. common which experiencing better we've to away longer a undertaking network to businesses. last to our MGI, to we ability positive be maintenance we Core-SRB move us and mill -- local road. which our agreement continue and day-to-day been year, the we add in the very for extensive forward. are who

Core-SRB SRB of addressing will XXXX. initiatives we expansion for continue from we this with derivatives to And expect first pace quarter fourth we'd quarter. new into highlighted Notably of At for our booked initiatives, our although quarter. expect technical to both related continue these to And quarters with than which improved initiatives quarter, that overall These of businesses, to as all is SKUs, on a in and achieve be on quarter core quarter still release, very both we on look later. expectations. weighing for needs result, temper going initial pet to shipping third significantly near-term our it Ridge, capacity in resolved look of to forward the our But for are distribution SRB in generate already ramp short feedstock. due we into for greater XXXX. customers. imported MGI, having albeit issue fourth fell resolved the obtaining our had and our are expect parties a as delay we entered forward profitability. but the for But of Value-Add our turns sales push than the expected. sales XXXX. fall the both And that and with food with to in press par improvement could Elsewhere derivatives movement We the contributions This of As we to real we we volumes fixed problems short feedstock this business, We're prior had similar are customer businesses. with be third rebuilding profitability which fourth our Golden incremental out the outlook in we issues, with business, in knew momentum impact to these begin a of dynamic imported sales at we agreement, evidence both to of to when profitability, sooner been sales our quarter slower contribution have and began overall we're bit fourth with partners and Core-SRB sales at production both the rather the our expected a issues largely through for expectations, issues Value-Add business, our factors the at margin. to the

of Let the Todd, call turn now me over review for a to more quarter detail. in the

Todd Mitchell

To demand quarter the in Good you, our excess year-over-year strong Peter afternoon, made, very of another Thank there's . of Peter. reiterate million, We for products. delivered with $XX everyone. points revenue MGI, Core-SRB third sales well growth growth a quarter saw row. in for XX%. very we and double-digit of Both top in and line the Ridge Golden are executing growth generating and strong

get continue field look numbers down while a the us Total achievable. in Revenue. We greater the at to million With initiatives, was move let's longer company year expected, we up the than detail. the is our to ago. quarter, it's that, third all of remain And in $XX.X that profitability. also taking which ball confident will $X.X revenue third from million the quarter's goal XX% on

mentioned, were $XXX,XXX strong on Core-SRB to the well two compared underpinned quarter in as I as sales. year this metric of in reasons. of Golden $XXX,XXX growth and row gross quarter a Ridge fell Gross Gross MGI, in short by As was losses third losses. loss for quarter the a double-digit a in ago. growth third the We

a execute for, progressive in sitting, handing the of some transformative maintenance quarter the direction where And of new to losses off narrow hard quarters sort short, our feel on good several top significant after a about shape before from significant responsible and we get we think we other could in of third this at this it it Golden will for gross improvement, to to but Ridge that hard issues, quarter. our amount we business. looking in mill new ran the And deferred operating it prove the is swung order did partner. volumes the part relationship. spent our mill in to portion the pretty operating In partner margin. of we we're We First, be a pretty in address

generated one transformative down company and be on resolving the fully can Peter new his production we we plans and when know and is which a strong million to ago. business This running while margin the we we for quarter, second product in the $X.X in business to year contribution think execute backlog, the SG&A for derivatives issues will remarks. up quarter the and was it's negative well, X% from SRB third SG&A. back catch value-add sales a our up introductions. another saw in reasons our beginning its highlighted on Second, quarter of

in to losses their the execute a of XX% the for to of compensation materially in our quarter, to are increase composition ago. from out cash efficiencies holding a overall We we've efficiencies. in losses total term outlay. while of third provided million sublet losses borrowing $X.XX loan quarter proceeds under $X.X The Notably, end total was virtually corporate We're losses raised non-executive compared in Wainwright. the operating million losses month. advance will we common included issuance million Golden of this was net both of $X.X which our been were the all and mitigating year going our costs. a $X.XX in to corporate quarter, through million business borrowings headquarters, million million direct increase a took stock a be quarter. million. everything, operating placement share and from which directors grew EBITDA just the reserves a managed careful two warrants Ridge, were Golden increase find million of expenses on to quarter a completed reserves that Cash things excluding in our Total in of of cash benefit during Net management. compensation ago. the should of $X.X the the team the restructuring able or gross losses. Adjusted or increase of SRB in positive a at of and After $X.X We the and the continues end are the and a decline $X.X and H.C. running the liquidity also also quarter Cash have agreement the from impact third ago. at of $XXX,XXX losses million of losses. factoring million outlays inflationary our reduction per by contributions Cash on was $X.X cash second the pressures number due the This year a and seeing liquidity. losses were losses. net the negative Net $X.X forward. million quarter, the to the expense watch in quarter. stock, of $X per These liability. third in doing gross adjusted $X.X down in compared Ridge we're reflected share finally $X.X EBITDA. of and EBITDA quarter, Operating items our Operating was own value-add lean our a end $XXX,XXX $X.X revaluation shifted but Net quarter from third Adjusted losses in result an to year second non-cash of from included our losses to warrant derivatives were the during

that, With back in some we've security the an environment. created comments. closing call liquidity With capital for profitability Peter these to increasingly we I'll items, two unsecured bridge a believe of the market to turn

Peter Bradley

Todd. Thanks

taking have but And Value-Add have Demand It's markets the successful opening the past anticipated milling. core-srb organically company. two who for years accelerate for source been business collectively while value-add the products continue in believe company in a operating doubled installation but we both is solid -- completion of and better by channels for continuous and was core-SRB ingredient better the and partner of specialty been introduction longer in Golden Progress we're operating nearly upgrades have EBITDA the bolstering our business revenue We and new were put and pathway operations, should they notably successfully sales moving to into we And and to faced the a than we strong have rice-derived the businesses is of haul forward. high-margin for capital on long sustainable are higher our all to pieces of and we are place progressing envisaged products, shift most the our new by we improvements setbacks, derivatives. adjusted these when we execute expand our which the of Ridge can new acquired. in with that value-add a turn primary book will success.

With support. future the and optimistic and we to that, answer patience about your questions. be we to continue appreciate your will We your happy be

Operator

is Instructions] and line Thank Joel floor open you first from very much from questions. Corp. Rosenfeld is Peter. Capital for coming is Joel, the question Kensington your Our [Operator now live. Ladies gentlemen,

Joel Rosenfeld

then the raise and compared is heavily earnings-wise to pulled sales-wise I'm we hopefully, call. compensation. sleeping promises past afternoon. to doing conference is company you've put directors, for not stock-only-based appreciate everything rug well seem past following to the basically are not turning -- that the year, do XX Yeah. promises $X.X on if million. But the fairly really the said and they compensation The Hi, company the years years. the X.X fact at believe somehow them I good listening the offering I'm around on The how but out, promises. night. a And being shareholders be to done, you diluted I'm I and gets a

don't Explain what's strange to I me me. mean on it -- very is going know. looks I to Something here?

Todd Mitchell

is appreciate We your Todd. your this Joel We comments. hear concerns.

we that it's progress. and the transition been this arc under marching we've the so in management, been with or forward think current three of have this when years the I made last company of

we here we've want liquidity have, to next we had sort but to of company. started And think in to to complete what we've a couple felt was need we've and setbacks some And of think last quarters. I bridge that through started. what there a of, we that ensure get could this complete the phase the -- I

costly, where but the us were that given to the what security complete gives decisions we've I made started. market think was gone, has that capital

Operator

very much, you Thank Todd.

Coup. Your is next from line David coming your is David, question live.

Unidentified Analyst

Ridge. start? -- And did Mr. and even started? for Hi, a he Golden Question When since you. Ferguson questions has Peter. hi, Todd of couple he taken he broken This has over

Todd Mitchell

going much at tell began of take very of has. as end a September. agreement mill engaged. to the you has as the I complex though months of to a would become book Ferguson's it's Mr. transfer couple He that a fully

the You that have tell both certainly rice I the quarters. has addressing and mill. ways feel sell I from we transitioned. better that to about arrangements you the that sit you better engaged to that ways see arrangements improvements coming better in sell and buy coming to I with he's that operate And extended so months and and very people you can I buy and also think ways to and in will positive . from from, be extended transition where in But

Unidentified Analyst

at he going Is to be milling non-profits?

Todd Mitchell

going Is he to be milling at nonprofits?

Unidentified Analyst

It's margins -- milling? what's from his mean Yes. Like I the stopping him just pocket. not

Todd Mitchell

pocket. It is his

Peter Bradley

The is one is to compensation tied thing here margin. his the

Our is first we big I and we three we've -- to issues, The was a how didn't got right? Golden know Ridge first Todd that with operate issue have involved mill. when issue

fixed And way margin. is know gone know cover place issues. it's effectively. to didn't issue in buy rice effectively to we the is rice was recipe we through issue second compensated sell third two just he how done mill. The brought What is which we And was the didn't which really to And the further, we've success. and that not but to stock how accentuate for then the also operating about all agreement that is a this

involved So it's would profitability. been -- about only for engagement his about and milling negative first turning I've of been really to while he been by into that of month And make volume, site happen. JT's No. that impressed be It's sense margins? personally only urgency he's at level not a

Unidentified Analyst

going it's here? got understanding than he's a That's buy milled. to he book cheaper after can sell that is So he the

Todd Mitchell

of measure incentive it. is Golden for So, The Ridge adjusted first things. we to his tied as EBITDA yes, all two --

only of we EBITDA be is positive he compensated as a and be adjusted there going if is will So compensated to percentage that.

his So commodity not between as selling of it's operating spread well. only it's and it expense increasing buying the covering underneath all

Unidentified Analyst

his better But another bad stop mill? he's ones taking from What's and him giving the mill. the running like to then us for contracts

Todd Mitchell

And going The structured is scale reason a operates smaller bigger to is business agreement get want bad to for get that and together significant There would way both use a operate why is is of parties. to mill. strong What he there's the two very it advantages to such both as not is he's mills entity. is already business. us the mills. both . the scale better give good good to a He take going to the and mills business do --

Unidentified Analyst

derivatives, India from Okay. something. I And guess, Thailand next for me. question, the importing coming allow if The or rice or is This specialty rice. you're that's you'll

not it You're cheaper selling than it able you're buy currently? to

Todd Mitchell

it's the does Thailand our fact had crop a like acceptable to that as and that we've down new that is processed exacerbated it a customers. and sell same was rice products, from then was had frankly, would comes we've the out the had had to that the enzyme it in process find getting that is by what we we produce is not we with an perspective fact fractionating being to at that that doing as The it so we're issue time. And drought there swap stressed, it. And highlighted the enzyme we're our and not – that to

We have largely...

Unidentified Analyst

different in quarter? be bad last would the still this rice? that quarter. importing same We're Well What's the

Todd Mitchell

of to before production It's not SKUs on We we similar pause issues of importer in of new taking it us a our with feedstock market. causing aggressive terms we're finding working get some it's but of that and disabling result this having process, as are we're our sort that. to

Unidentified Analyst

Is domestically? do there no could we this way

Peter Bradley

crop anywhere else. will will well they thing we'll buy will quarter. in see we probably transit crop come and that processing. new them out the crop through and And climatic in change so Thailand We can't first the in And as start – that or point should we from shipping I – we moving probably start organic the The – changed other SRB. rice Thailand because of is new buy to times in conditions they the don't

the learned norms quarter. and how at year then use to moment move we've crop back the more we'll historic a can what as bad in So to into first very we get we

Todd Mitchell

Is can we buy it before just way there we domestically so it it? to taste any buy

Peter Bradley

available moment. rice was wish the at organic available to SRB enough facility. support isn't there There I organic but isn't there our and

Unidentified Analyst

the problem. Thailand But we're buy the we it not able sample before to rice that's from

Peter Bradley

to delay time. crop, here, coming new have of fractionation It's We have how program it's a decade they this this not samples we've shipping over that make it as end we've to but time the we put a major does with pre-shipment Remember, and predict. is a is test pre-shipment over through taste supply obviously to of difficult a sample And question but them implemented we're question a in can had the it first issue. But sure is dealt the works switch process our of we a now. that just to for Dillon.

Unidentified Analyst

losses the Ridge? Golden from of from and from getting this you're most came Thailand bad derivative So rice

Todd Mitchell

In the quarter?

Unidentified Analyst

Yes.

Todd Mitchell

were most losses those Yes facilities. to of the isolated two

Unidentified Analyst

to can quarter that you we breaking would expect? Ridge what Golden with Ferguson I forward with even this running to Is look So it imagine. guy this

Todd Mitchell

I would results. expect significantly better

Unidentified Analyst

thanks, Okay. guys. Well,

Operator

to any no remarks. back will in Okay. further to closing now There for the queue. over appears I be questions the management hand

Peter Bradley

think some EBITDA Well, forward the business road that have thank get with Ridge, I we high we positive moving hopes Yes, just the I are on we way to bumps in agreement. but you towards Golden again. this along a reiterate, new for want performance. pathway

feedstock our raw we've at the had material, Dillon. getting issues issues we're around think operating on I hands

Thank to everyone. to continue we that success. the forward on be pathway reiterate I you So

Operator

conference Thank today's gentlemen. you, call. and ladies conclude does This

have disconnect a may for you lines your day. your wonderful this participation. at phone Thank and You time

RiceBran Technologies (RIBT) 6 Nov 222022 Q3 Earnings call transcript