BHIL - Earnings call transcript Q3 2021

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Ruben Mella

Good morning and welcome to Benson Hill's Third Quarter Earnings Call, our first as a publicly traded company. I am Ruben Mella's Senior Director of Investor Relations.

We are excited to have the opportunity to share with you the progress we made this quarter to execute our strategy. Today you will hear from Matt Crisp, Benson Hill's Chief Executive Officer, and Deann Brunts, our Chief Financial Officer.

The third quarter earnings press release is available on the investor section of our website.

this later and today. post to live also website our will video the presentation Q&A We

Benson future Before know and remarks including that begin, industry the expectations we I prepared contain want outlook. forward-looking and business performance financial you to Hill's conditions of statements,

release, statements. filing discussing not consider to Forward-looking be that, are forward-looking our earnings risk cautionary referenced in could this the presentation, actual our Matt. reconciliation non-GAAP morning I'll results are factors earnings materially those during with to found in turn performance. be from We the and will assumptions a XX-Q risks, that factors statements can certain of and uncertainties caution filings differ in our GAAP those With included other to subject we Also release. note financial this over SEC. and inherently include it the measures, guarantees made Such you to to cause the in

Matt Crisp

vertically Ruben to this opportunity everyone Thanks Hill’s long-term the innovation as we is model have go as we months, is take create are approach before we where we driven by is our our is about required are, we business for am integrated meaning technological few differentiated so start want company, opportunity as which to with for defining This us. and science reiterate and where are a today and last open approach doing going enabling operating excited my described scale. Often, we prospects. for I today. which where by go-to-market the in realize we I strategy our in results combining world value system. have technology a and Q&A/ driven and a with I financial doing food innovation and before and CropOS comments tremendous well the then both Benson joining and enthusiasm category believe are to presentation the of over will it the review to by few are Let We market that me this which cutting-edge unique been business why my us near-term today. you going Deann revisit something at others taking to thank is

involves urgent, change scale. our at is viewed production. and The people typically we production and more food interest to for essentially This is processed time when because directions. their many a plant-based is brands. that time planet and how signals demand to Consumer of loudly better meet proteins The labels continue have from plant-based preferences the are the and and nearly fueling to out to with for to purpose play for a supply growth food consumer cleaner be system. no greater We bring the chains. of commodity cost facilities and look something narrow intensive connection to that working there movement, their and the still used innovative no and are to impact companies major current a and crossroad. on are sustainable at system. more innovation is food food they've They powered not adapt seed. to while its Food and the choices When technology our same the options that pivotal limited how agricultural investments the this move for see role food large-scale years right is food and processors know with We food traditional adapt and take approach increasing to and our built the options quality begins at to is a connect quantity. and and that But consumers. maintaining on to driven working health building with for sustainability human food different the calories largely make struggling traditional system just we and ingredients cheap less determining with system are calories of and starts It coming they of isn’t important its a online. own and with is a it and innovation a want head farm. by for product climate that processes today, demand you beyond consumer also ingredients also we are platform driven increase the It commodity versus commodity affordable advancing as are view capacity by decades rapid margins to driven can improve they within industry need typically Meanwhile, with successfully water believe input And focus energy better made and change food consumer. quality, that bold inertia, eager to many firmly trapped to farmers fundamentally than evolve

For the forward. already a consumers, decades, farmers the proven planet of massive component food resource without ag our through natural food diversity in Genomics is to leader unlocking plants on system for to its opportunities we're had realize in The been focused food of and developed most system largely potential innovation. technology the And commodity the mind. across production with genetic leveraged our is move seeds mind. untapped fundamental consumer greatest

has platform innovation two food components. Our

the product The food of first costs allows data, seed, ingredients. and and technology, us for CropOS development AI timelines and reduce genomics to to power harness

partner commercializing ingredients aspects and and proprietary are with of a better our ingredients Inherent business our and health, the to is offer we we non-GMO all optimize In in have At are sell model. farmers beginning, value we so help seed. soybean sustainability component second scale, doing real this, sustainability. plant-based The working few to pea meet is Through to technology ingredient the starting resources, companies sustainability and name identity products our benefits. ingredients resilience of development we we are with that the soil that in from integrated today business food on-farm traceability will yellow targets. apply preserve chain to the and can believe our vertically make climate across

have driving already food, apply differentiator. today ingredient We've can supply as growth further which are is loop building revenue increase will to effect we ingredient demonstrated providing that development. us execute anticipate to And our customers sustainability multiplier or their And products. feed a our steps. allow insight unique relationships our a we We we a customers closed to of to ability is product and there's with our chain. believe in view the products processing soy-based that reduce eliminate our This a and

approach leverage our innovations accelerate by our market business. gain to share, allow do expand margins, We will we to us data. underpinned and Everything expect is this growth across

in library we're add data And continue We to CropOS have today. high-quality investing expand our AI a to capabilities. massive to prediction simulation data and

is proposition. science use our Our competitive our across innovations to our long-term the life significant believe simulation drive will is both with differentiator, commercial advantage. core value to which a our science development to bring convergence enable a that and well as We as help data science major food value of ability to plant pipelines, and

our from quarter make our exclude last vision. tremendous execution. XX% a remain sold the on strong third our and as to ingredients performance, realize Operations to continue adjusted we and year-over-year. year. increased to execute strides grew to reminder, quarter the adjusted sales where Barley XX% segment In revenues third revenues Adjusted deliver we now revenues We in year-over-year Turning committed

current produce across of million are in position commercial revenues ingredients, fresh established meeting for we constraints the and year guidance the Our the exceed over we chain time provided we the pea supply challenge during industries. May, to which environment, expect operating $XXX teams we rising many in a a of customers meet companies to that value nearly that in are will Despite the or and impacting yellow strong needs internally year a the finish capacity ago. with are of challenges

excited We our for Harvest are has exceeding a contracting we expression as our as executing farmers year engagement budgeting season, detailed well see nearing following XXXX help and unique as our for we to both our plantings our about beans. crop interest well as is great first XXXX completion a commercial crop. and as XXXX. ultra-high We're sustainability by optimize It's protein last protein into customers farmers our the kicked-off did from move process agronomics. soybean to now with as target we plan the rigorous which financial for we been of acres as complete

plant system. use for our and Hill protein leverages long-term being Services introduced weeks, we protein the third acreage for as take to acres. for seriously acres measurements, for the as pilot ultra-high to already of the non-GMO As initiative in Also nearly and we as relationship we're well XXXX. Carbon EMSC, team share regenerative Credit to third We of we part our large as health the growing or two the grew data and season. for partnership crop have who farmers composition, our group. Ecosystem that already loop commitments of is practices this attracting collecting And the made and to a agriculture Benson to field Market protein year practices. soy a achieved the launched new us and well expand and Program last optimizing with we with Contracting that for protein strategy. soybean this protein many XXXX and of important with well optimizing been near-term effort, expand secured closed next farmers our quarter, has portion pilot advance We're ways few our for protein agriculture look which our our and validation milestones our ultra-high advantages quarter, well we our underway Consortium forward-thinking soil pleased a launched are all farmers in In in

number a facility the opened plant double technology our Accelerator, growth we per that First, of year. Crop state-of-the-art will enabled cycles

is increased outcomes with seed We the capacity, yellow XX-fold efforts targets soy efficiency rethink and our Crop help the While need next to CropOS the traditional generation to those food testing The and breeding have for plant-based both of a and power deliver fuel pea urgency. and accelerates predictive identify development, ingredient be product seed new will genomic to enabling varieties testing. we in greatly to development innovative pet us still and protein through increase life markets. in which Accelerator and brought predictions processes anticipate food the developing

of The part facility access recently our of as second milestone is and this acquired dependable strategy, commercialization cost-effective ingredient We planned Indiana. startup soy in to crush soy our capacity the expect soy crushing, to ingredient to And component model. our we while routine products. is our continue to for upgrade address of an integrated the the soy demand growing Seymour, help important facility business

In the We Bennett. differentiated ingredients, bolstered in alone the TRUVAIL believe multiple last team value. quarter keen including products they need beginning with segment ingredients model grain companies some during These colleagues protein and and as years and it understanding our like business we our is in and protein are meet to of cumulative XXX and have that by strong are today food ultra-high ways product ingredients particular the offer through ADM, deploy additions, new can over customers a Bunge with integrated our added expertise well our as a positioned to of them where brand. processing of the Bruce soybeans bring a bring protein well months formulation which have have few experience companies We we IAFF. and led key from portfolio

licensing again, growth are In that what about and excited truly of partnerships our we're the progress come. are pleased said, fuel outlook we want this we Like to XXXX. I lasting believe to the doing feel to our I is We also with year the we and emphasize agreements good about innovative. for in closing, prospects years forming

have technology mode. We built a substantial

soy for We as and yellow ripe have strategically innovation. pea crops targeted

in category a pipeline stop in of plant-based evolution time. that believe we're to going what but take the we're potential of we achieving huge have not We growth will an and innings early product there. our has food We're robust exploding the system

exciting challenges today solving of an most momentum food. significant team talented and and We in tremendous most the on focused incredibly have some

be Benson and values from Hill, be fuel to us be our core with made build to along better bold, enabled continue beginning. passion to the Our inspired create to values real and our these food mission

tailwinds. are to advantage this rare market a is of incredible We convinced moment these take

as stakeholders it's our are better extends join with into of to market the We We higher plant-based growth for movement quickly I our addressed system. to now, a farmer, are whether aggressive turn this or in in boxes. our domestic traceability, of all who platform conversations the the a all or consumer discuss believe customers content, over active our products with pace whether will source a be food, this you customer, sustainability, consumer, to led food affordability, our the on We of choices. mission meet now innovation to to supply, us food to check This owe we fits alternatives financial to you're markets. protein it I'll set investor. need the food our to leverage hope an advance it journey Deann results. innovation moving

Deann Brunts

Thanks, good on is Matt, an following as September We the merger trading Benson Star Peak day. Corp and began This everyone. completed for exciting BHIL, morning, the time XX, II Hill. and with

of start with the many. going I'm the strategy. question how believe working question reducing deployment bring impact the the We're mind food production and merger team close better important technology, choices rate of do top the an and our property the we of through improve planet high transaction of talented water to plan and Benson by intellectual transaction, redemption I'm plans. and and referring to steps one of Hill's milestone does to usage. consumers a our With our is we to this completed carbon members go-to-market for many to in relatively our

take Of does resolve disappointment, XXX our the product communicated desire execute To expected funds our possible. portfolio. $XXX they rate to funding was commercialization shared our course, we plan, level execute million does we with may the further combined the of our June but of to analyst not million meeting to to only powder experienced share nor redemption we diminish full the also a our with pipe, strategic accelerate the redemption accelerate it as at to arise we've the you plan not plan of diminish dry opportunities approximately in where XX% have on from as have trust with to advantage to consistently

sheet. in As this than fund the private into previously net its XXXX cash you to know, Benson to infusion all organic more we balance brought represents million capital believe combined. in We in had XXXX. gross events sufficient and business proceeds Hill our cash and million XXX or XXX is This fundraising through raised major

to communicated, after pay-off cost shortly the higher private As our previously we planned days. and some elected company debt closing transaction, we from

to to commercialization if it We opportunities advance will to may products our evaluate that debt and end the continue of to consider value. the plan shareholder organic financing and deliver sense accelerate makes

nine months ended operating XX September Our for XX.X cash million. the was usage

for Seymour, addition, we In and spent expenditures Crush XX.X million Soy Indiana capital the the acquisition Facility. of

September XX Our at cash ending was XXX balance million.

QX year-over-year, Matt more the turn year-over-year basis. resulted average as ingredients an a sold business about quarterly combination a The and prices and selling growth on higher sales yellow Barley in of the Let's GAAP volume adjusted XX% product for in last XX% And pea to our results. U.S. mentioned proprietary for earlier growth segment year. soybean revenue when

by impacting impacted continues and As prices and be is This to both negatively imported. than last average for quarter volumes. case selling market the was higher yields produce domestically fresh the expected

fresh have last segment unusual conditions conditions. of year. revenues to the as despite in into quarter the market These quarter continued As these declined impact fourth result, the compared a fresh macro XX% third

in supply facility costs the the volumes yellow and the for Seymour we and costs. overall pricing Our for from performance to in offset flat production segment which The in the quarter. prior of the the decline Though of of the We're additional for was as the higher in fourth barley year. not pea for gross XXX,XXX the sale market to chain quarter quarter. Cost immune of compared the the segment in it planted Favorable higher non-core XXX,XXX, costs anticipate fresh challenges sales. sales dynamics adjusted XX,XXX to from startup helped driven business. XXXX by U.S. for higher XXX,XXX cost in crop approximately in was when was our XXX,XXX ingredients profit soy costs resulted the essentially the relatively revenue included profit Consolidated the a favorable acres gross to plan of

impacted for were freight, produce. and costs Our mostly fuel, which fresh storage higher

supply to to into will any the challenges we're business our plan. impact mitigate expect chain XXXX. potential working to And continue We persist

which in to million want some share XX SG&A, the I was quarter. Lastly, thoughts on

million. For XX.X readiness to cost merger, contributing compensation our company the included XX.X experienced We're they resource higher that expense, higher were as for related resources million. the After quarter our non-recurring products were expenses costs. investing execute totaled these and costs we high stock public to in and unusually acquisition in adjusting human costs SG&A both of to addition, items, commercialization non-cash soy

to operational achieve and market the resources and sales share. product, investments scale needed include Our win

also of We million expenses fall the we Accelerator operational, customers several time launch and of harvest G&A technological Adjusted Crop continue intellectual and proprietary sell far with of our grain products a expanding season XX.X and getting to milestones capabilities, the property products. in of ingredients loss was so other execution in as continue soybean including achieved to with XXXX. a The by expand Matt and our of invest protect soybean and margins, our is availability predominantly to development are our advance driven the to soybean of and investing EBITDA proprietary other our ingredients the our strategy. we facility. outlined research busy engaging availability and processing

focus We and fiscal for opportunities of working XXXX resources. balancing through are the currently a with details plan on our

to concluding will for turn our more I we now it We will QX on share see back his Matt XXXX comments. about the call. optimism for

Matt Crisp

Deann. Thanks,

nutritious are preferences shifting was change we use in natural in system. better is and are diversity produced, especially domestically great now create affordable. for and to that are already Hill XXXX, need the more and as Benson food Our still plants those started is sourced than sustainably ingredient the consumer greater And promise traceable, options, yet genetic ever, for when food demand recognized. to a tasting that this

set to in pace time doing and innovation of not in the the the picks you. your as ingredient serve our food. We without movement, better And are we this our recognize place of to at right all customers we offer ongoing about stakeholders are for you, We and at be plant-based near could passionate right of the support. shovels mission the term, to Thank protein this choices. that

Q&A. move now Let's the live to

Ruben Mella

session with the the to Good Q&A some morning, live here Deann and welcome Matt and go questions. of to through

reminder, please raise webinars, hand your a so use feature. we're Zoom As the using

Before we to to do with questions participated received thoughtful we we some questions Q&A the audience, get from really And Say the Technologies form. actually investors. from retail a

So through a Foods first the now. if their Impossible for the plan demand And revenue we go have will question, right want of What Beyond you Benson Matt does for reduced be few and ingredients Hill's to those Meat flatten? forecast.

Matt Crisp

Thanks, Ruben. person who asked question. Sure. thanks for And the the

won't we a commercializing on companies there's as financial report Good of alternatives. what and or policy, plant-based estimated about Food in food So now comment GFI will is right that say companies Institute, a I issued other their matter XXX developing performance. that and the But XXXX,

be billion. Some to market are to growth going to these expected of decade end the of going these is some expected And be are north the of winners, the $XXX and losers. be by of

for And in especially So it's plant-based in a the plant-based opportunity meat particular substitute and market. massive protein. total,

like to ultra-high about terrific. that wide with bet a but soy. finding picks more a sustainable contact from affordable variety lot the particularly several protein we're of sell, more presents, the sustainable, has And opportunity portfolio TRUVAIL about, more And in part to well support Benson as furthermore across processing, energy TRUVAIL for other namely which the of in affordable already brand. been in face. it providing bottleneck companies interest Beyond actually growth excited we're a because TRUVAIL. not a non-GMO, for product. that its the As is for traceable, we of relieve and thing constraints we've companies that the market opportunity specific chain. reducing which are Hill so expensive of and reception value we're and comes really Impossible intensive large domestically the And supply The the customers as behind our products the And water fully been any our shovels, This about the We've sourced, props on we're dozens and really thing and might reduces able is talked processing we movement.

part a it's value multi So proposition. got

Ruben Mella

Hill was we conventional greenhouse budget emissions have of third-party these question gas second proteins. against The got plant-based to audits Benson GHE environmentalists protein rank requested assessments? for Has

Matt Crisp

clear, feed. we're food used to and ingredients So be supplying in

We greenhouse analyses ingredients and third-party with on we're products also have do our are the we And for farmers. GHE, of which to others fresh that contract use mostly baseline lifecycle emissions, continuing LCAs the resources the and with produce grow conduct our establishes to independent compared yes, to or available. engage also water gas

processors Our processing that approach really by reduction that sustainability and and includes Ag products across and our companies the Again, and their data realize really level. energy -- sustainability we We can innovations intensive and food can companies the help farm sustainability practices realize processing. the really the their these food both LCAs to goals. help and food and water believe supply independent through of farmers

Ruben Mella

Terrific. can XXXX? And new or what And your anywhere we about for plans you there was do third plan? got are see product is we how five-year roadmap development, the question think a

Matt Crisp

Right.

currently tirelessly million to starting and across professionals to the we'll have really value pipeline. But to with market, more the a in Investor And we've science, information lot product host generations April, is bring discussed the and we So innovation The the derisked, already breadth a which to today is on the publicly. term soy plan seed published focus not pipeline to our is believe they're begin the been innovation upside that where also research come. and and talked invest of XXX with but provide to not plant immediate than And not better year just about really about science, significant products we we've in food to and pea. data about development $XX got message, we've working an our we early activities, pipeline, in science more our in that start admittedly, going sharing that yellow materials. that plans for Day detailed conveying

Ruben Mella

for when expect you profitable? the is Deann, be And you, do next question to

Deann Brunts

the about are and Thanks, products plans seems this to We're with to Ruben. sharing opportunity in available, can is talked we the products time. potential has massive our discussions TRUVAIL, QX. consumer continue We're see companies to for our and is it market. addressing QX grow. about the and that longer-term -- updating platform sufficient have at about for share We the of into that forward that for process you just the numerous seeing our on this which that talked about the more more we're our products. demanded for sharing We in portfolio, in I already market the about XXXX, script, products fact see you talked and we're portfolio potential here that And website, and look the still also call that our for about in more we'll Matt plan XXXX. already we're with in rigorous we planning toward is in cash be capturing with to you, excited a our get us hard consumer working

Ruben Mella

times those for our from promising outside more plant-based Benson markets? Hill development question Okay, lead retail protein consider do markets of what -- great. and what's audience, for one the And

Matt Crisp

sure. Sure,

early And to well CropOS its space. both movement, there's vertical can in health” in and we days. really of farming large crops, is opportunity. So which consumer-led is “food broadly small, emerging apply the categories tremendous its lot speaking the as like a as and believe capabilities

broader market we're, the will fresh health” come longer And to So prop the the life research to to innovations that to in for food beginning It's is invested instance, value and of we're this in term already CropOS though. movement. a future. produce for purpose there use develop “food

category, particularly that too area. about the really So the yellow in and mentioned as to really early specifics in talk are with coming near-term, in share with the online focused soy the innovations plant-based pea. on and capturing we it's in in But this medium-term are portfolio

Ruben Mella

of and Say use we Reddit we'll some in are our go with retail investors. from that of answer the to Technologies to move in others And the gives received hear several the those the and So them. from But live essence there questions that back are of Benson the and forum and time, audience, audience. we retail opportunity appreciate interest the questions to those get Hill us to investor partnership we'll

move feature So Theurer to the And question. your Again, to Q&A hand like raise from Barclays. question now is session. first live ask our we'll from you'd over if a Ben use the

Deann Brunts

Hey, Ben.

Ben Theurer

it Hey there, does work?

Matt Crisp

Hey, there you you, are. How are Ben?

Ben Theurer

I'm very good.

So, morning, and congrats on the results. good

just and a what the I maybe meat. the are into with two two there on lot towards. saying not for is one actually very was plant-based I'm very system, answered by coming and trending consideration industry the ultimately, you of and And questions, So an asked that, audience. with that newcomers is and what already is right pleased thank you're for retail much companies think outlook the indicative clarification the revenue

what there's decline pea Is to it can That -- it's a already have be How because bigger soy do a you you able of pea of potential? growth do using you in would versus between outlook first you growth do protein using aside, really question. obviously a -- what is which vast industry on think in to have but worldwide, there's is available about pea within acreage protein? deliver majority think just put I -- the between the and industry versus decline that mean, you the where we protein Now between soy and two feel in my protein. in the actually the be

Matt Crisp

crop both the think in soy, in about choice. benefit Well, crop it's choice of we not certain markets, Sure, ingredient of When other obviously it's other choice, the of sure. predominant the markets, and or supply but value.

I innovators will productivity the respects, high. so Benson healthy the basis, enabled innovation focused a is of food input the efficient in large it market say now. versus quite is And that an high soy doing producer CPGs the off base to yellow to unit a from to And per what that on has is soy it's output stakeholder a protein. a many the choice pea protein it's manner wide of want standpoint, options. and quality, really very to that number Hill very multiple investing On of really lift in of in provide

On the alternative substitute the for protein yellow pea alternative of meat side, fastest growing source plant-based category. the it's

great smaller no acres I soy, soy and say, while pea And like a and It require deal crop the millions will XXs this acres a of acreage exception. well to a Hill sometimes in base, to acreage ramping a there's that not certainly both continues as of so across from it's starting yellow that's hamburger, satiate make a of that is lot of versus demands to hope category. are I the reflected in few Benson areas. these show doesn't of that as And of

Ben Theurer

much, here some costs forecast you Deann, closing, of one-time out you significantly. for Thank during Yes, your the your have perfect. Matt, prepared during then obviously very remarks laid that. impacting And you've of kind

stock else consider assumption in rate quarters, So going or accruals in forward somewhere think if well that the as a the you've million is we be part? anything $XX which the for coming talked would to we that plus SG&A there about a and SG&A, fair forward run minus the need going components

Deann Brunts

in the I that's think ballpark. Ben,

need we are I the the I of though, resources to say our deliver would on think commercialization products. we building ultimately

we kind that we're XXXX, the the the at looking planning to with process for we're very through investments critically going so need balancing have make we and available. that resources of And as

a in the they're TBD, think little So bit ballpark. but I think I probably

Ben Theurer

squeeze if one, one And for is, in, last may I that guess it Okay. I Matt one again. then

the current you the down talk segment? what exceed help segment or or does guidance, supply and the the Fresh it just to it either ultimately because hence when exceed, meet Fresh about weakness million $XXX it meet below in the strong and is of the to to come So to do you going price

Matt Crisp

I'm answer. Deann Deann? actually to ask going to

Ben Theurer

To ask Deann back.

Deann Brunts

really dynamics great on focus. a are results focus, major bit of where uncertainty big challenge, Fresh And into that our you're right, is part that already right know, fourth Ingredients seeing the of side. mean, is as is quarter those I And a you little we're a the an now macro our

in revenue With see happening the in the in but bigger third way do very Seymour from the a fourth of the that minimal that startup quarter. we plant, quarter,

talked about will but talked just we haven't into and I'll communicating as we at question, revenue, of we more we've the way we've that. So that seasonality, be Ingredients that relooking historically, around the seasonality jump -- about had much that grow in

Ben Theurer

leave Yes, you perfect. very it Thank there. much. I'll

Matt Crisp

Yes.

Ruben Mella

your now right raise any please if So the is feature, hand only the Ben use has anyone one. other questions,

they give people to have a the moment us. other any if So see questions for

Deann Brunts

You always got give to enough time.

Ruben Mella

Okay, no questions. other

Deann Brunts

Okay. questions. No other

Ruben Mella

quarter call, you and thank in we we'll just third and with happy take very be today So, questions offline, our guys future. participating will reach the communicate out earnings for in your to Thank much you you.

Matt Crisp

Okay.

Deann Brunts

a Have great day. Thanks.

Benson Hill (BHIL) 15 Nov 212021 Q3 Earnings call transcript