BHIL - Earnings call transcript Q1 2022

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Operator

Good morning. Thank you for attending Benson Hill's First Quarter 2022 Earnings Call. My name is Harry, and I will be your operator today. All lines are on mute for the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]. pass Director, over Hill. Investor to Ruben your like Senior Mella, Relations now the to conference host, I'd with Benson please go Ruben, ahead.

Ruben Mella

review XX-Q presentation investor site. our Matt an available as issued and management Crisp, good as well financial as you documents Hill's performance, morning, guidance Chief the Benson earnings and we Web We and Benson These Investors and and Financial the With Hill of Dean will filed Officer. including Officer; current well the this Freeman, of industry future about results. Comments are outlook. are section you release quarter expectations statements X-K. Chief our our our on today Thank me from Form earnings of Executive XXXX Form first Hill's business new as contain morning. annual joining appreciate Benson forward-looking today Earlier results,

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

Matt Crisp

everyone. morning, good and Ruben, Thanks,

line quarter terrific delivering with a and our did first team results which Our executing are in expectations. job

guidance reaffirming are for full we the result, a year. our As

macro of cases we innovative are in continuing products. help and on and been demand have the ingredients drive soy to for further Market portfolio. commercialization proprietary the building We dynamics accelerate in our XXXX, our many tailwinds achieved as momentum scale

benefits, derived ingredients and our and varieties. because able Protein interest environmentally a from with inherent we're soy from the efficiency CleanCRUSH are step. customers These growing pleased eliminate ingredients chain our to We sustainability in processing have Ultra-High intensive supply costly

reliability boxes In and are check the customers supply the through increasing demanding domestic addition, this we supply deliver especially many with can meaning environment. chain, across our of that constrained in we traceability enhanced sourcing frequency,

start their our of Our Northern recently announced objectives, Europe, and the recently with around working plant-based soy oil to made acres cases, examples supply need costs from has right situation imminent the supplying Higher of to product sunflower due producer Ukraine. needs. farmer the foods opportunities a to look inflation their of the protein for to in go-to-market chains them navigate team, value with our protein to time the to in chain increase and chain both the sustainability market. growing partnerships how with the supply same products the in to Partnership while remainder these in of in our at these number shortages the been customers. urgent our across forward Kellogg's underscoring and to We're which We are planting two reduce Denofa, and and position We partners back high the respond second our network help off XXXX agility can enhances on needs to during bean Farms' in beyond the our XXXX In our ingredient challenges. a believe to expanding and efficient will we varieties quarter to focus are vein, model more we're rising MorningStar meet we and Hill innovations our financial turn fuel food the to European disruptions and to for an historically call leading quality partners the the agri-food that, supporting products. the execution value-add primarily review customers oleic opportunities achieve our uniquely more our creates help With plant-based high quarter together over processed to and In increasing for increase season. that Dean concern that I Benson foods customers system. the less and the integrated market, sourced The and soybean geopolitical more continue good approach as of farmer and we of first sustainable reliability decision foods. results. non-GMO, demand

Dean Freeman

release couple Matt, of remarks earnings and first and quarter important presentation and everyone. want results good our focus I takeaways. It's slides, the to my Thanks, morning, a on

strong mentioned, Matt quarter for segment both achieved market nearly operational consolidated momentum nearly revenues growth increase with last with the revenues in products. to ingredients first continue XXX%. year-over-year, The million, $XX demand As led year and proprietary driven and we of the was of by by build $XX ingredients non-proprietary in execution XXX% up segment upon the million, reported strength

continue chain sales. the margins oils, grade to timing products. specialty non-GMO and the impact hedge Consolidated in line adjusting were and benefit with contracts broader for We in losses related food to supply soy, coupled demand [ph] the million aqua corresponding with system for food approximately with gross $X strengthened expectation mark-to-market from meal when constraints, market

Let a that. about explain bit me little more

product million total sales the in price during remainder settlement contracts corresponding $X was assets. approximately higher of higher with third periods soybean oil commodity we and or loss reported the purchase rise, prices as for sales to These be just The quarters. prices, the mark-to-market losses in continue prices covers mentioned realized losses we anticipated the futures quarter. million, sales contracts. can second the I sales higher on these price for meal timing When risk in markets. policy on risks mark-to-market take by future as price current to soybean The well later then the hedge quarter in $XX differences primarily the on hedging and in offset Our and physical or

proprietary revenue demand and Overall with to meal $XX the ramp I our segment prior were million, of guidance of segment oil in in million a losses by proprietary revenues our gross the loss products. includes ingredients expectation the sales ingredient This for performance, which specialty year. Looking as we the approximately anticipate million, further segment full remainder in of for up $XX $X XXX% for the line is increased $XX million derivative million, strong which year product over year, driven mentioned earlier. was at $X sales

price year-over-year closed with fresh than the expectations. well and the Our in teams line loop contribution segment, favorable million performed $XX a digit supply double increases strong margins. conditions. margins to led in volume price model increases constraints proprietary and gross In saw result in better that improved to expected non-proprietary revenue chain executing weather and with to we growth of due and was This

approach could are While quarter, a current we're temporary. pleased cautious to in as with the trends we taking the be prove the performance

cash $XX Lastly, during on in a for mark-to-market fund included the million of the the temporary million, effect operations margin use of to calls $XX approximately our timing quarter was which the quarter. losses

first year. as high any is in annual our use seasonally our Our expectations quarter and typically the cash of in in line given XX% cash and approximately of the QX occurs was in with quarters fourth used

impact also the for includes operating quarter. cash expectations CapEx, the and Our our both are which expenses in with of used line

have commitments start. and we we in solid off Finally, we're to with in we to and We're quarter, good market ourselves high the I'll faced. our in position how the like for execution pleased with how demand, guidance performed light strength market a close And our our year. given we of ability the dynamics saying we of the meet confidence

will take We your now questions.

Operator

And you. now Adam open. Thank Sachs. Please proceed. Samuelson is first [Operator your Goldman line Adam, of our question from line Instructions]. the is of

Adam Samuelson

morning, everyone. Good Thanks. Yes.

Matt Crisp

Good morning, Adam.

Dean Freeman

morning. Good

Adam Samuelson

risk big in about incremental of potential work a as remarks, the ground? I I update And the any talked late in into terms the opportunity and about just the your an field one, XXXX of be? guess non- you sales located, we it's plantings, to areas your acreage GMO, So do first start would get know then you to are the being of that them How progress. question in high-oleic. XXXX prepared of not where see think in growers Matt, any expanding revenue been able

Matt Crisp

to underway in that lot trying challenge obviously that this address responding little for was everybody's XX,XXX that product. urgency for aware right probably actually but this to make that won't decision really cycle then plantings would it's help talk a high-oleic, spring in And respect we're average beans In year. corn meaningful, impact to of in stuff. asked the And bit concern. of the material Thanks late that too by the see wheat. contracting Yes, some in acres been trailing wet. of but planting, We talked the cause over It's numbers, the it acres seek acreage you additional a any us little have has and tell about cool did it was oil response, anything respect And and we question. exact we high-oleic about low-linolenic about of a some customers delaying early But crop. a the for big additional is don't to out going some increase we is obviously now pretty just to but signal Planting of to this if Sure. been year, last it's regions. have.

a way, the are prospective year forward. the Verified of really to before, who we used a sun never part is oil, Project soy that's oil, have latter Non-GMO by customers, soy strongly which going is marketing and customers these to this and of shortages used low-linolenic Hill Benson Some the see never soy significant some believe in alternative great high-oleic,

Adam Samuelson

Got it.

the on And smaller just and very on about be a soybean cash time then in [ph] helpful. Midwest a Indiana. very it mark-to-market. crush now. there's margins, that flowing to owning remain how relates very, to trying through in calibrated that's to a or ingredients I'm seems It basis in obviously trying in Okay, business, just I'm which to make to results. facility, the the be really I'm And is, should the as noise think right one plant thinking crush just Creston be a your good soy healthy sure Iowa about

Matt Crisp

Sure.

incredibly crushing large the not help in steps. they healthy, it. I'd types and soy where to mind, really, say -- Seymour crush right facilities certainly that They're we're respects, are processing You're other margins the the that support scale we're in however, facilities. in other are that intermediating of in supply but more just appropriate products designed high value many bringing market Keep for

product. of And a than time, as over whole while it lot legacy the proprietary And then to may know, of businesses slightly on the the us. certainly proportion will traditionally, take move intent have the now. it primary larger you capacity driver that's right so enjoyed some our with focused and doesn't better larger those And of we're be dial a margins which for plants

not So certainly it's are larger helpful, in macro way significant certainly might for these super they're -- much folks dial a much, moving the as with operations. but they processing effects

Adam Samuelson

That's Okay, it on. all all pass helpful. Thanks. right. I'll

Matt Crisp

Thanks, Adam.

Operator

from of is of line And Ben Please our open. is the question Theurer proceed. your now Ben, line next Barclays.

Benjamin Theurer

you Thank and may. very questions, much Perfect. if the I on results. Two congrats

should we How the think you it but us is with within Thank here? XX first quarter, business, to you've the basically a a That going the that's about proprietary so from the talked sense dynamics you we're little from, contributions the of over in more would first recovery Can but a evolve you how my year, of be value coming So bit just to about some question. dynamics you. a proprietary here one evolve? high understand little just obviously throughout to driving how million mark-to-market, more beans where that revenue And bit your just give just just understand expect about. and understand follow going the around to the given the got up ingredients the to in quarters? little

Matt Crisp

in you we think from move that seeing, in one them, portfolio, And real obviously, anything ways side I for. we're of realize just spike flowers proprietary to that may oil, high-oleic even to to utilized multiple a beans the ingredients then whole the There's can products of that facilities. protein mentioned demand that's one be Yes. others texturized as revenue streams.

that portfolio comments, the board. that full as pretty that some commercial the quarter on Ultra-High is this that first given across his online, revenue represented the and particularly -- will side. Dean the we'll pickup duration in So sales first material the over of protein expect soy the the Protein year the cycles mentioned year, we But see is

Dean Freeman

XXXX to about being the to proprietary full that, Yes, total anticipate and I a year deviation We on that. Ben, significant add we just from revenue. talked about think XX% of don't

Benjamin Theurer

look that doubled? were obviously the release pipe the appreciated if very to an more understand the the And relatively a on better you different to Okay. what little in happened behind then you clear. high. number detail was, real digest impact press would And help the bit very a gave the different little little You OpEx it just just But segments. be that? bit much, into because that almost of what the Can Perfect. just if us understand Thank SG&A transaction. it we we explanation basically side, and within of a could some much the what drivers breakdown between that -- was

Matt Crisp

was year best the I probably Ben, think broad comp it, the expense. operating not prior QX think way to Yes, for about is

we ingredients administrative know, at we organization a built out didn't didn't full have organization, have a of that build quite commercial out our general you fully point. As

of I out is increases driven say, much commercial build of about is or that non-cash X.X items. administrative teams that of the associated a So one-time differential by million the would also full point I'd the and year-over-year teams. related increase out and with

that well We as biggest the the fees of compensation is pipe there as piece. stock in driver have particular

Benjamin Theurer

Okay.

think So of more X we come, in adjust a be we're there correct? we out, about run basically should rate if will as quarters going the to

Matt Crisp

Sure.

Benjamin Theurer

you. Thank Okay.

Operator

is now our Kristen the you'd of And of coming to Oppenheimer. line you. if Thank next from proceed. your question line like Kristen, is open Owen

Kristen Owen

congratulations quarter. nice on for you and a taking the Thank question Great.

those that their to Investor having wanted of talked brought a what about crush some I the ask the but improvements of some you facilities there's Understand through the think up follow Day, that favorable those margins, to running backdrop facilities on for best you're talk Just at soy themselves. in-house? about wanted performance. the seeing specifically at operational

you're talk can little facilities? bit you of if a about wondering efficiency internally those just further So the to what doing improve

Matt Crisp

question, Kristen. Yes, thanks the Matt. for This is

on respects again in We this frankly, and seen to facilities does operational non-proprietary And to run side. oversee professionals year-to-date seasoned very out and the that. is just in the margin our helping and but these testament upgrade proprietary that of are businesses the say some quarter excellence a with team. have got very, these first nice to performance contribute suit for needs, portfolio, really not ultimately operational profile I'd group the the that We've indeed really, to a leaders of

So that. team's we're continuing encouraged to really I'm see the by performance.

area about, to single continuing talked on the we we're As that that execution is the high number important factor investing in. do is one to talent we're most and that focus caliber

Kristen Owen

year. of linolenic that. of demand some high just I and we're backdrop Thank your about tightness If your booked wanted up the on oil events for for oil geopolitical the this follow because the already correctly, you seeing the throughout comments to largely recall of the for vegetable remainder going that I on. capacity was And

in you some of just you should conversations be how sticky prepared and Are already back if that How and into to having the supply? your remarks mentioned half in of your going you the lock see we with contribution pricing Thank about talk to about And you. XXXX? thinking thinking acreage. can some XXXX? of You expanding customers about dynamics year your the

Matt Crisp

Sure.

the through from crop 'XX your correct booked is the accurate. crop you're or in comment having business first about So coming

this unlikely XXXX. adding indicated, earliest part 'XX that's why to season, year. not -- that material into would exactly late would impact we channels when as about the the very you talk very commercial you're And it's a moving to see be And so we acreage see that the for of

expect of happening Non-GMO 'XX. positions I increasing that would for a having this a really of help amount to quite challenges for major [indiscernible] well to events. inventory And Hill to demand reflected the is we on gets we market. and worse some Verified of to But Benson oil geopolitical high-oleic bit imminent, materially before some it of interest already. see shortfalls high-oleic the there due in additional obviously the some it's Europe oil get some likely And the significant been those think of has of We're a pricing oil. are meet Project However, pretty gaps, the us a better. driver think of is seeing

are interest we so we as term and seeing And possible contracting, longer which well. be favorable think could

Kristen Owen

Thank you it pass so much. I'll on.

Operator

Thank you.

Our Brian, you'd to Partners. now the next is line question from of if open Wright Capital of ROTH Brian is proceed. like line your

Brian Wright

Thanks. Good morning.

on big quarter early the to wanted of the the you year thinking moment. this because you're think kind or Really look as and quarter revenue of the in the Is typical Just about run and of it side all the kind kind just planting step think and robust kind just same about quarter, is kind how the season, a take it's guidance back that it just and of at things. of risks things? during of late about kind picture

Matt Crisp

from by expectations. in has the Well, duration this I an both revenue there an adjusting very executed. I'm the team products of continuing activity, your pleased. and how are year earlier think when and the at met level with mark-to-market that would proprietary going what the traction be over question, to for ingredients very pleased high say perspective, innovations the we We and the of revenue space. or a to is I'm some seeing noise just to margin created importantly, exceeded indicator the -- how our gain of number I proprietary we're growth

down slowing meet done target markets. anything customers' again of market market to certainly really strong nice But needs. And either. -- business team the all the in Dean, has a of helping the our want you helps job tailwinds that continue, see confluence we demand of having think seeing add? don't relevant a I and tailwinds we're

Dean Freeman

No.

I think right. exactly that's

strong. I think of the equation demand be the side big the to is picture continues

We about talked execution just Matt that the plain meeting we facilities need continue -- business. and the a lot to, those to running has to grow continue I the demand think of points

commitments we with achieving And confidence with where are positioned year. be. so can say think we're how I the pleased And that we our to we're for obviously exactly expected we for

Brian Wright

when diverse having that you fair be And present comment? a allows Is a portfolio nimble themselves. to product opportunities

Dean Freeman

Exactly.

Brian Wright

Thank you so much.

Operator

you. Thank

We further have no today. questions

Ruben, remarks. for to would like host, to our I So further hand any back

Ruben Mella

take to some going We're Harry. investor received go Thanks, few we the retail audience. from the over questions to of a minutes

and Matt question is, headwind this first is year? the So Benson Hill Dean, what biggest the for

Matt Crisp

that who I'm Well, we group our from continue one challenge, innovations taking biggest way dedicated that address having most who the proprietary really risk. are risk. are to the got of pleased a of I of an single commercializing mentioned And to believe believe that we've excellent can to and the biggest is seed earlier, on execution the that in on excellence comments operational focused portfolio is And we leaders we're and terrific promise team it's that really important the delivering plate. as

the short, headwind in us which on we're that's one and biggest for execution-execution, So focused. relentlessly

Ruben Mella

question affected has Another business? audience how environment inflationary retail our from was the this

Dean Freeman

that I'll Ruben. one, take

So look, impact wage costs, fuel to pressures, the rising broader we're inflationary the of the not immune inflation.

through think food system we to manage -- lot are inflationary the the that challenges. of a There's least innovation. those it certainly speaks to to of is everyone of that opportunity And we we've in And of the that is in So there's trying we cost challenges you to. think inflationary right the best driving to number as now food work fact can have But dynamics deflationary think effect that able think them, pressures, also effects. bring result solutions I some now a I to far, the been at as right those system the effects. we're the a positioned have

Ruben Mella

question are returns? is And your increase plans what shareholder what Another to increase are to plans revenue? your

Dean Freeman

Day. come of of the So an Investor off just good we have fortune having

pursuing material are ample of aggressively think kind there's growth. amount I that of suggests that we

to think I on the million obviously. guided by to XXXX. first $XXX quarter business our We ingredient that results side proprietary speak our

have aggressive we So plans.

I think But innovate plans I in targets We have value setting we're really more that in appropriately for for plans shareholders. around terms of portfolio margin continuing creation the setting those are across to ourselves, anything targets the for know, don't specific? the ourselves, portfolio. of terms Matt, we're balanced the

Matt Crisp

the far innovations No, other commercialized to thus momentum, CleanCRUSH I I of mentioned, really particularly, We based And to that ingredients significant completely gain with our market. and progress the as the the Ultra-High we're bringing being portfolio drive commercialization agree. that we're continues some as Protein returns expect shareholder under brand. and to pleased now

Ruben Mella

Hill of some of What's Benson participate in the to aid better in environment the the et in cetera? higher firms potential and for agriculture space that with to controlled major crops, partner yields, development

Matt Crisp

Sure.

significant the their to solve continue the and fairly got CEA like category. we be to will well. CEA in lifecycle their help that companies there. important many soy And we focused we are well. making Benson our is that in accessible food in a plants innovation need But be applied [ph]. in bear innovations that is to food. like yellow this in can technology coming our in believe We've this have which in markets to major know and portfolio investments healthy, feel and focus. do our to going space, tremendous a the as of platform this that online, in proprietary respects that we're more on And at of mags some Hill, crops, us. potential food to that more opportunities in bring point needs front portfolio, will And namely, while importantly it's that lot pea products sustainable, So space role -- Bringing biology we space play the a significant genetic of to

adjacent on an long and term, spaces. will focus soy we'll the medium yellow so In And and keep always in pea. our the remain opportunities mind other in term, open near to

Ruben Mella

catalyst of a conversations farmers grow related. provide question term? long to the product the lineup crops is And last any the to the for are potential the But as there expanding bit business you on a

Matt Crisp

answer similar a Well, here.

current the development the for I oil the There's that platform pea solve medium that We're order think to utilize is has Our that's out for, focal years. our soy capabilities really to the focus opportunity opportunities to but And But unique and category protein-driven long really term. I like technology in product to on in points. helping next organization on also a are obviously crops there the remarkable in the us solutions. will the and to said, the we're two yellow term, online. going built near to in other focus unlikely two three happen bring current portfolio in be

Ruben Mella

audience those the retail were letting the and questions you. with Technologies investors. Safe from So appreciate top from participating us We we got hear retail

have time. further We this questions at no

some comments. to So, turn Matt, for over you final I'll it back

Matt Crisp

appreciate This for I to really solid to position well on to is or their and are pleased needs. Sure. requiring expectations and to track with agile. integrated we're for nature we is technology as margins, quarter, food our partners solutions just deliver very and be that conclude in I'll revenue meet us global a our the that. the the customers 'XX. positioning exceeded innovative system continue agri-food saying company dynamic performance help and Hill's companies an Benson by which And met of our

and attention time appreciate I everybody's great morning. Have a week. this So

Operator

This call. earnings concludes the Hill Benson

now may your disconnect the line webcast. You exit and

Benson Hill (BHIL) 16 May 222022 Q1 Earnings call transcript