Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to Arcadia Biosciences' Second Quarter 2023 Financial Results and Business Highlights Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

And I would now like to hand the conference over to T.J. at Officer Financial Chief Arcadia. Schaefer, Please go ahead.

T.J. Schaefer

and you, good afternoon. Thank

the today Jacot, This Arcadia's Joining refer is me and Stan call the to can you Officer. on President at is Chief webcast, and press company's release being arcadiabio.com. call Executive

we and start, remind to currently be available like Biosciences call based you on forward-looking information. statements would this Arcadia on will we Before that making current expectations

may actual differ that these from involve on risks performance statements and the uncertainties, since or results However, described factors company's materially those implied are and based today.

filed language You can safe company's review the in harbor our most recently XX-Q.

I'll the that, over to With Stan. now turn call

Stan Jacot

everyone, and afternoon, for call. joining us our XXXX Good you quarter conference thank second for

three-year provide Arcadia added consecutive company's to Body am that sequential in Care, top strategic to a report a managed to our I revenues excluding of continues potential experienced stores of profitability. of unlock QX, Zola path the second and growth. progress and Both quarter GoodWheat the would've and to and make distribution pleased of plan hundreds executing Greenfield, line Project decline

aggressively time as plans scale Importantly, satisfied, to being and expenses we initiatives more the I Project while these not have total spend of XXXX. managed, since potential our accelerate are evidenced But are lowest by milestones. and to simultaneously reducing want operating today costs sharing expenses the our QX quickly to complexity. Together, Greenfield

revenues quickly. scale Let's to start with we how more plan

lower than Last better-for-you in pasta I two pricing. in GoodWheat are many second discussed there pasta, which velocities XXXX. that newer expected accounts brands experiencing drive GoodWheat programs quarter, higher competitive is have our the For everyday are to half of key growth that

at reduction to and prices actions in to impact shelf completed to price in price be our reduction more This more In up will activity. higher to these competitive, have be all took volumes. be variety expect accounts through we in the from a ranging by mechanisms of showing prices we deeper QX. total, place cuts So, or lower remaining of the promotional new order frequent offset

a to and second into like brand Many message marketing is changing is of fiber sneak that their foods, people the without the program taste The GoodWheat can shift only family's favorite great our pasta. do high not GoodWheat the of in taste highlight foods taste. health

The are fact, stack our to want new our will have so programs will that media and of that social guarantee, larger see message in In amplify feedback love they retailers, the are your we impact more a in or and also rolling two brand reach. September, combination will our across these market. unlock product, but taste we that beginning taste new loved delivered through texture it out we our back. confident marketing money influencers including distribution loved in you'll This at be received as they

Arcadia's The pancake proprietary announced flour. and second in we well wheat of protein breakfast the scale July fiber back-to-school, for Launching than texture taste category just waffle that the same non-GMO sneaks and and more new XXth single-serve Quikcakes. and as the time on launching as mixes, announced is better-for-you with initiative into where was GoodWheat wheat but ingredients made pancakes, with which are new flour, mixes in simple traditional pancake delivers regular

mix. testing, and be available of for whole times the versus mix classic cinnamon. GoodWheat one of multi-serve delivering product family, in apple They'll chip, and buttermilk, will five pouches the varieties serving leading three and each sold be pancake including protein. traditional eight chocolate, of and two taste the In prefer to fiber mixes grams chocolate consumers mix pancake resealable waffle GoodWheat the with pancake pancake better-for-you

Simply are a pour the also cleanup, one Quikcakes instant for busy half mornings. the launching is pancake to an cups. XX hot, water for a burn, pancake. option of and roughly GoodWheat innovative no seconds fresh mixes, single-serve pancake, into multi-serve and prices a pancake freezer single-serve existing addition packet easy bowl, Quikcakes add In for and microwave waffle great retail

Quikcakes chip, and Quikcakes times and fiber of five grams flavors; single-serve have buttermilk, packets available contain chocolate, traditional also per two sold pancake confetti. cups be protein per will of seven ounce individual the XX three be with serving. will carton in chocolate and

day forward a perfect adding is existing compliment options believe category and another We with million mixes are in a rates pasta household, an highest the lineup. $XXX and every seem with to growth. of nutrition and mixes beloved pancake that protein our waffle classic part represent Pancakes better-for-you

Quikcakes available and Xst to month interest the innovative launching currently are Waffle has our and Pancake Quikcakes recognize nationwide and August by in Mixes stores end after gain Retailers of and strong. customers we been more distribution to this both Our Multi-Serve shipping on than expect Amazon, proposition, XXX began QX.

Last Shifting turnaround. we in headwinds velocity in beginning count. to water quarter, initiative, decline the now grew distribution and distribution the the our is Zola to third accelerating that Zola category, QX, store I'm which pleased discussed multi-quarter a water. of a of report growth in coconut marked and coconut QX scaling reversing

XXXX. in grow is seen we have expect produce brand for time continues be in ramping the a first and in up new launches accounts, focus high success for in adding with traffic also distribution driving QX to velocity and for We to us, great the Zola in the on planned these category. programs category, racks velocity years innovation the and

could strategic the acquisition, sale, transaction. range The announced last options, Finally, explore or I on review which address to July strategic sale, other that asset strategic stated merger scaling XXth, an which a want would include initiative. of Arcadia

There broad for the we bring that previously, the existing an us acquisition value an significant established and tremendous category. to a distribution. existing many allow our had wheat-based purchasing that has new our proprietary believe by in different where are shelf to provide categories our scale in a an aisle placement and brand would faster differentiation, plan wheat mentioned can category As to is we in strategic grocery there already calls GoodWheat is a proposition opportunity brand business

inquiries acquisitions, a feel especially an XXXX target larger the to this the objective banking have time from explore with narrowed closing partner, in of have excellent myriad that we several in right received we also an of options second position. of of is so merger, cash after the interested we field quarter parties the While

entering strategic of point and any alternatives this must no set we strategic no completing the However, the conclusion transaction, timetable or that for be has out review. there result assurance that can will company of in been exploration the

as occur. updated you events keep will We material

to costs now transition reducing Let's and complexity.

unable Care and find order in remaining resources Zola. opportunities to and Body most decision focus SoulSpring, depressed an have to promising operations for on brands, We the buyer ProVault given exit made our We the CBD market our to our interested and severely our streamline products. GoodWheat were on

year our QX to of plan inventory through first the the retailers As a in continued the result, during officially that we existing we half and notified sell to exit business.

closeout running additional on expect minimal. are we to to websites and any be write-downs sales purchases, drive future our We

Project necessary decision As the reduce part Greenfield XX%. of by the Care, path achieving extending our combine the in exiting a efficiencies changes the to $X and organizational Body on headcount will $X These of been reduced operating we keep additional million and milestones us our right to savings were in of annually. organization, to workload and functions by to There $X the remainder of combined our sizing result expense and million as cost million runway. XXXX have made result financial changes

detail With over additional as our around will to our initiatives. well results, savings as QX provide that, turn financial T.J.? the I call discuss T.J. to cost

T.J. Schaefer

Thank you, afternoon, good and Stan, everyone.

$XXX,XXX or by Our driven QX the Body down revenues Care X% were businesses. quarter-over-quarter, million of of our wind-down $X.X primarily

these our customers orders. Stan we that QX we brands, slowed As which mentioned, notified in to plan retail exit

our compared of to Care, Body been QX Excluding QX. would've XX% the revenues impact up

we lowering can to competitive, beverage to our sequential GoodWheat launching believe in While a where steps provide new taste trial, prices more guarantee be taking significant business are differentiation. food scale implementing categories we experience to by incentivize and we our growth businesses, and

quality we impact a QX. nearly sales more $X year profit is $XXX,XXX year-to-date already last hemp area already gross million of includes write-down demonstrated the basis, have XXXX. in have seed generated compared in improvement our revenue. higher much On despite One where This we a year, business of our in to of this

related three, payment, $XXX,XXX more losses. nearly of are revenue These licensing the milestone. they number not million meet longer in did our with accounted the for from As the generated no the and than sales items, first reminder, XXXX that million more $X.X sales businesses Naturals quality Two, half a non-recurring including of standards. three exception one, portfolio. HBX included a our and items grain sales, nearly of in Body than copacking China in to Savvy in million Care that $X.X $X our milestone all And part

pancakes were year. the Research we remainder to year-to-date and trend flat on QX. second compared first quarter in basis development expect a our a $XXX,XXX than we the of expenses for year, quarter GoodWheat this to R&D are the higher in as expenses last of to prepared slightly continue launch

lowest million, previous of administrative level they years. similar quarter, the three XX% the $X.X expenses level are despite and general in at to of Selling, or $XXX,XXX declined now a marketing compared and spend,

to minutes quarters XXth, can our expense as earlier, On Body few as July talking from cost over several Care well operating a spend me the the an exit the announced we brands. Let mentioned next that about Stan intention what expect perspective. savings we

included they number margins, for a cash, tied a of and due to market inputs depressed large gross up to scale good generated businesses these limited was our While that ability CBD.

our and so first Body that currently hopeful our and Body and write-downs half will $XXX,XXX, the In of produce potential through both by Hemp to we any exposure did expectation sell products, our than Care We inventory, not QX. minimal. be XXXX, we are existing is be new of of end to less Care be estimate we to out any continue the

majority implemented, identified reduction we operations are with initiatives our to streamlining to $X also expect of of including million XX% exit, savings $X connection a impact be been our in The In savings cost this total have million. annualized and headcount. the already the and

result We half million estimate the occurring of this in the savings year already QX. that in second expense taken, these majority operating others actions, of along will with $X with savings the in in

as as in employee QX a launch, spend as result as So, to expect expenses pancake QX we look our well and higher higher of SG&A for costs pasta separation both compared we QX, at per forward, level marketing headcount with spend reductions. rate of the we quarter a million across of around improvements SG&A to $X XXXX. run depending decline to $X.X expect modest in to Starting to due on marketing million going

stockholders income the recognized was common of our $XXX,XXX of a stock from quarter, of common as In higher in the end result interest million $XXX,XXX per $X.X liabilities. fair well $X.XX as warrant rate result value income second environment, share. or benefit as a interest in we the attributable change net to The

now March. the June decline short-term the investments balance compared and sheet. to end end at Moving of million, $X.X of the a Cash $XX.X to of were million

As discussed $X.X for QX, cash we exactly compared our by with use increase of what to seed both excluding and quarter, increasing our in inventory the last build write-off QX Zola, GoodWheat inventory. happened and inventory expected of primarily an that's we to driven million hemp

payment. primarily Our declined $XXX,XXX, to $XXX,XXX milestone accounts balance the due receivable HBX soy

the now We in received cash $X have to Bioceres China from entire the related milestone. million

we in good progress initiatives. non-recurring streams, high-quality low scaling and So, launched we quality, ongoing additional have have made summary, revenues turning revenue into

with sized right Greenfield. track to our maintain against Project remain to any have order cash balance and in in potential order also strategy long-term We our shortfalls on protect our expenses

With will for now over that, questions. operator to the I turn call the

Operator

Instructions] you. Thank [Operator

from Our Capital Street will first Klieve Ben of Markets. come Lake question

Your open. line is

Ben Klieve

for coming. half quarter. in second the sounds of results lot All distribution. good like It emerging year my A questions of A congratulations. Thanks taking couple on questions right. here the and an

the that uptick of Stan, the kind wondering to you ago So, first, relative increase, the frame remarks second prepared in turn Zola quarter. if was few can your to you particularly a talked before downwards. the of in what help about I'm quarters distribution watermark high began scale that

Stan Jacot

Yeah.

the we're and starting XX% results about of produce good our to increase high we're and that below the velocities accounts. distribution, newer saw our still racks encouraged XX% put of in again, our by But we've we're see a in we some watermark. about in So,

Ben Klieve

expected GoodWheat. the expecting that I'm your store of more Okay. of prior Great. any count ago? And about on count changed by that expectations in material continue Do curious three then, similar to your of store prior kind of of as question kind really this end Or GoodWheat you're months the year. for expectations has way? track a

Stan Jacot

Yeah.

less little but Maybe retailers some gave maybe the moved I year. planograms out them around think range X,XXX a we XXXX on is a of you target we'll for that our keep kind of of to stores a XXXX, the depending of have more, of little fall, some and still where updated.

Ben Klieve

the Very within kind products Can you're this working good. here? those kind you the that right. understand help pricing volume of expecting Can All And I on forward the about model. -- initiatives pricing margin structure that Okay. GoodWheat, you're there. dynamic appreciate -- the us of lower you on you through talk on about offsetting talked going

Stan Jacot

Yeah.

do our see expect erode on margins we to slightly GoodWheat. So,

this Some because is factor, still the is expect we of the see XXs. margins the but obviously, to pricing driving in

to So, like of mid versus kind be we of -- to mid going to more it just is low-XXs high-XXs.

Ben Klieve

you anymore you the business here to the coming and organic that both product Can have the Zola me all pass are comment Body pretty are Very the given taken one on business, core. more right. you quarters? next and of change at With today, point have the if have few Or exiting comfortable like now good. Care the And that then, decidedly seems business that GoodWheat for with lines on. All Okay. you you expect place it last I'll over and it changes in this that quarters? your

Stan Jacot

Yeah. it in add portfolio, our going we're to We're and here. only confident to from

Ben Klieve

good. to good Okay. hear to what back I'll on Very talk There's line. my good. you good for thought. more about, way. I Well, feel All get Very that right. And thanks in calls Congratulations taking That's but quarter. the again.

Stan Jacot

Ben. you, Thank

T.J. Schaefer

you. Thank

Operator

moment One you. for next Thank question. our please

Wainwright. from Patel come of will H.C. Dipesh question next Our

line is open. Your

Dipesh Patel

T.J. is Hi, This in Dipesh standing Selvaraju. for Ram Stan. Hi,

Just exploring -- add questions, of for two guys you it Are of additional questions. a strategic is or to three you color on couple color or status possible any opportunities? as the

Stan Jacot

Yeah.

point but we're of a this myriad end, at kind have don't a options process. themselves. there think to that press in comments the release We're I for and of So, early our our We date exploring. are speak

Dipesh Patel

new Great. any -- additional that then, there like Okay. as GoodWheat, are for And any you look product? at channels

Stan Jacot

Yeah.

that actively brand exploring something as that we that into well. So is grocery, are expanding channels beyond other

to come distribution. when part more of that secure plan. So, our is we But yes,

Dipesh Patel

adjusting optimized, question, right. you last pairing All the the And product future? current or in will be further say or there would then the is

Stan Jacot

meet opportunities. mix have Yeah. No, that with consumer -- we any But to have. even I we product don't we're SKUs needs. feel satisfied We think still our like see we we the SKUs can that grow better pairing more

Dipesh Patel

All right. much you the very for Gentlemen, update. thank

Stan Jacot

Thank you.

T.J. Schaefer

Thank you.

Operator

to I seeing the further And remarks. in Jacot would no to am for turn queue. I you. like Thank questions now the Stan conference closing back

Stan Jacot

is Arcadia So, summarize, to the for future. well-positioned

significant runway We actions revenue to position managing multiple improved have our in are reduce into a have low to turning paths losses. to quality, non-recurring while These made revenues cash pursuing order progress expenses plan. and actively And streams. we solid to high-quality scale, execute led ongoing operating

and you joining We a look us day. in have for Thanks forward rest updating to again great of your future. the

Operator

participating. Thank conference concludes for This call. all today's you

a have day. and now disconnect may pleasant You

Arcadia Biosciences (RKDA) 10 Aug 232023 Q2 Earnings call transcript