BHIL - Earnings call transcript Q2 2022

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Operator

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

Ruben Mella

advances and Chief our We earnings morning, earnings and second news our Matt Officer. today well the Jordan, the objectives. section Financial our contain available us Comments targets, me results Chief Officer; annual presentation, current as With results Benson you are documents, expectations during issued the and to we XXXX release exciting are management are our we forward-looking that announced have review quarter Benson and we this achievement website. These remarks referencing Benson good you, performance, Hill's our of guidance industry on of appreciate strategic X-K. Hill's morning. Crisp, joining and Form about will the well Executive Thank Earlier as and Freeman, including year-to-date today as financial as from Hill of future XXXX which statements business outlook. prepared financial investors the the and Dean

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

Matt Crisp

morning, good everyone. and Ruben Thanks,

this note XXXX food long-term As some of about shape seen system itself. We continues want to to up call as first, look announced have for forward may year this licensing how a talking a earlier more the news today. of But exciting during we dramatic with we partnership strategic ADM. our morning, you to change

the about remain we disruptions, sense quo, inflation, talked If turn change of and our intensifying implications we which health the food the to Investor Slide X, are skyrocketing you status of urgency April macro food food-driven supply disruptors chain environmental Day, forces today. impact at see for the

entrants. remains that this capable As we and we as that innovation accessible. by believe demanding shared the important fundamentally consumer established companies, of nutritious, of improvements. this with is to sustainable, sustainability significant food food and evolution a of is we number new paradigm food is exemplified the morning's better who options is by of deflationary, believe and new the at center time well are underway, reiterate as agro more It you At that traceable system supported the growing as well announcement, evolutionary

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X. Slide to turning Now,

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soy-based grow. ESG multiple perspective. enable we strategy, CleanCRUSH scale the will reductions of significant to ingredient our to his that, you better the the understand COX we With impact Dean turn report emissions. which ESG water expect in at further positive Our our I bensonhill.com/impact call and products to and for types report deliver read over and of proprietary of invite I that to highlights as the case ingredients in

Dean Freeman

and remarks everyone. year-to-date. going morning, performance with to Matt good and focus I'm our three milestone Matt shared from Thanks, you strategic my themes on the financial

as long-range we previously licensing targets partnership agreements. include communicated, and First, our contribution the from

contributor We expect achieving ADM a overall to significant objective. be to that

Second, strong expected. growing customer sales demand has Ingredient than led faster to

exceed As revenues a result, year forecast the full Segment Ingredients previous for our guidance. we now to

to in inflationary optimize mitigate this and work In costs taking pressures. higher our operations and further are chain, addition, to supply actions demand meet streams production growing reduce our than logistics, expected further and

sources XX. Benson the results achieve Matt XXXX and cash innovations I'll other to the execution EBITDA adoption capital, market our of strategic in pursue further achieve ADM we'll financial liquidity extend by Slide to and leader, an continue the we're impact only our enabling our plan Third, strategic options mitigating positive we enables it partnership mentioned to to free begin on flow our industry in of in non-dilutive the accessing not of risk runway. accelerate Hill with with also believe plan. and on of partnership comments scale

Benson to ADM Matt objectives farm key through contribute XXXX our will of and always and operations, innovations streams the in the One our utilize its approach, vast revenues XX% starting licensing processing, asset-light frame we partnership, gate. of significant and scale April. platform to innovations has as at XXXX Hill expected Revenue are commercial portion our an been in Investor technology on a targeted time outlined mentioned to annual Day the across proprietary

of a gross our and all across from payments strategic proceeds the and year anticipated profit licensing partnership sources from currently are majority to agreement represent our plan. significant value-sharing Additionally, forecasted three

the in majority revenue in just fiscal to with later of expect contribution the benefits We vast described periods economic minimal XXXX. occur

XXX% the in to outlook year exceeded year to guidance. and Segment this which $XXX XX half and million XX deliver for the our first in positions our Revenues Ingredients Slide range Ingredients revenues provided to full year. performance an the and us $XXX grew for the review to and Segment updated million, full Turning earlier above $XXX million million, $XXX of $XXX between to expectations our million

soy $XX in product are million We million to $XX track still to proprietary revenues. achieve on

as of from The half from year. is will quarter, the which volumes fourth guidance clarity of expectations non-proprietary to sales, crop In harvest as higher in fresh we potential upside ahead complete. a was of terms have sales million greater once XX% result the the expected of Revenues in from $XX first segment largely the increased the than in is well price. the XXXX

are Also, business, growth. and temporarily are strong shipping actions we in to to logistics as overheads. While the is faster expected upside Ingredients segment which guidance throughput chain. portfolio. Adjusted logistics are pace additional has costs The year-to-date maintaining the the acute more proprietary freight, $XX supply of higher have the growth throughput continue quarter. in these revenue pleased the to putting EBITDA a to value to write-down pressures with lagging as we've X% and seen full processing with stress year and $X contribution for this is which mentioned in the $XX infrastructure we're cost Gross fresh volume on X% the of not range anticipate as in of high-single and line optimize inflationary the we've is for Ingredients of inclusive current become million. our of we margins year-to-date throughout and for second million year, volumes profit the margins to loss the pressures cover factory production quarter digits, in chain for were our million was inventory to take and logistics consolidated Therefore, guidance gross we immune

within cash and million previously to of adjusted million year, $XXX million full flow be million expect free guided we range respectively. $XX EBITDA $XXX $XX and For to the losses our to

$XX million to remains expenditures guidance Our capital million the for $XX of same.

reversed $X.X still have $X.X losses in first the results We earnings million the release, to second the part related quarter. in outlined differences sizable losses As of reported million we in mark-to-market of the quarters. to timing in our quarter a in we unwind that coming expect in the

liquidity to turn XX. Slide Let's on

we month. XX, filing June X-K facility securities, remaining our $XX of million have available for $XXX from marketable last cash million $XXX and credit of As million the includes which

continued alliance opportunities our to non-dilutive our with milestones improve his discipline the with required in mentioned expect liquidity for over have with While we on and coupled now payment as cash our reaffirms By well cash. also the XX. achieved Fresh That further operating assessment funding we from technologies to XXXX. of disciplined our near-term an performance few and believe strategic taken prepared achieve as is concludes these our focus into objectives cash Matt we'll will look remarks. other management our the Anticipated financial Denofa priority the of end of raise, will update sources of potential initiatives in on forward as contributed funding. activating outcome milestone Kellogg's, access this to including remarks, to We business ADM, further questions. [indiscernible] position together, and remain and ADM revenues use the the the our to past shown our and to of All-in the the XXXX months, take your commercial important the we'll agreements sources PIPE Slide liquidity, year,

Operator

comes open. your Theurer Instructions] from first line Our of Barclays. [Operator Ben, question Ben is

Benjamin Theurer

is on feels come like that customer on much. like very -- it Good the with the So, purpose, Matt, the right? every Perfect. Dean. guess, Thank partnership. up Almost Speakers] you feels I guys [Multiple bring like quarter, first and something right? you something guys you morning, results Congrats

Matt Crisp

Of course, right.

Benjamin Theurer

Good.

on the with But there How you're be on things partner? think said, this So obviously few why Because a your with put aside lot certain about the little different I let's of products there Is that potentially it guess, remarks, maybe How are share is be this you're think you what's on comments now to be we this part discussed what's on with included? will elaborate exclusive included. you what Matt, follow-ups, not you've certain what think first question, this. licensing a there kind can it How And which get piece cetera. included deal where my agreement versus you is and during on et wanted exclusivity, about you what included, I think to not additional ADM also is broader, on a the and and guess. ADM? around we potentially not you've but as not should basically what on a focus of should highlighted So of do go? off could struck better level would out?

Matt Crisp

we the adjacencies. concentrates the functional that North to protein we're as a Sure. this more, it and obviously ingredients ADM is America texturized particularly distinct a that leader Yeah, in capabilities well way and market as category business think has concentrates in, leading specifically relates concentrates, is, the about and and even more as other marrying market

making what here we've ultra-high is significant and areas in the with an frankly its that And a that record developing investments continues partnership a very protein leadership has organization track position we've portfolio very, so, those to done marries do so. of built in

leadership behind I we've very dedication the were as ADM we encouraged we we're it, others business step-three paradigm with which licensing extensively. spoke the call various that us team to in and evaluating when think that you go-to-market, options discussed nutrition of its a by

portfolio around really, has -- factors material those soybean to we've high-value continues made protein geographically, areas that our North centered with designated to perspective, ingredient as from a make the really can the that market. and so which differentiating investments it's bring ADM really And align America in genetics

Benjamin Theurer

this is in Any for much. it's or this someone talked Thank how it around hasn't what's we because like we the this but is just something with very the press haven't going is Fresh you one better think business else? the going about should about consider Fresh about happen think you feels -- XXXX? then, And okay. still to you the strategic Okay. business. the can still at line, should off much So -- beginning, on management this give talked do by always in you very there's it Fresh commentary of been alternatives kind business is you've years for that assessing That's it, three release, there something with out

Matt Crisp

on strength I the say need we Well, Ingredients mean we really Segment, that frames. to is an the terrific for us can area we is decided organization, discussion, management capital to business. the this had us opportunity and have strong execute and a time where provide the significant for allocate have that can't for best area I and that the for hand to an for we and play which distinct to that and we in there of to relentlessly is What us to as in now alignment options focus Board We've competitive advantage. have speculate explore

also I Fresh on news well, of the little as earlier here discontinued and development year. the would was as business recall bit you focused a think research old of but that we've that this it's

is already the team the been on innovation and Ingredients and our focused opportunities. prospective So, for has bulk XXXX current of

Dean may and that extension this explored, manifests alternatives to and commentary, that would other think occur. might at as itself additional further that looking in on if just to of some is of that speculate benefit, be a logical be it's alluded soon when but if too in liquidity, I his

Benjamin Theurer

Perfect. Okay.

can I'll Now, thank questions. ask very it here leave again. congrats so Well, you much. others

Matt Crisp

Thank Ben. you,

Operator

Our Adam, of Samuelson ahead. from please Goldman next Adam question comes go Sachs.

Adam Samuelson

morning, everyone. Thank you. Yes. Good Hi.

Matt Crisp

Adam. Good morning,

Dean Freeman

Good morning, Adam.

Adam Samuelson

the economics versus presentation of this agreements of kind last of of of the you you would on into unit as frame and deeper frame licensing ahead to can. going way so how is the relative of the question been of agreement licensing first have and guess, the there [indiscernible] at the going year, the theoretical to I time far you about how Any agreement of with economics as public some ADM maybe, frame, morning. kind investor of the future would kind some economics kind thinking ADM that? Good agreements

Matt Crisp

And it qualitatively. and comment the incremental can to licensing unit talked much supplied economics the at we achieved level, regards. mean last and fact need there year about evolution model partners. of that maintain three at little with our that the fees our for adjacent it goals to move partnership were the talked as economic business we to partnerships in more technology looked these I these opportunity, would so on licensing a in and perspective, us a come an scope high opportunity or about step talked this that what licensing depending bit When about in the an also interest we strong from that we we on Sure, may, very in

We have a criteria we evaluated we -- of had set and number a a options. target partnership as different of

those we're, course, in nature. Some of and economic quantitative of

nutrition interest, think seed win-win speaks to organizations. next of to position partner scenario very alignment I'm been come much has of pleased that much Some on the to that development, link the between progressive achieve what's is business Benson nature synergistic the two go of specifically, to is this were consumer organization really an generation very and I spectrum a value scope partnership want to And Hill and of conditions market of just and that me that create I in that, through they the and think our were a objectives that all and of in there way nature around organized. let that together on table investing terms to report if strong qualitative to them leadership their with ADM's in to how meet and and really of to I establish exclusivity, ends to the going as we willingness going understanding and we're think, some able just to say, to with that it speaks farmer both

year we just related achieve our of of I qualitative to it all what the process Adam, listing, there, answer -- want and to long do So want I say but able were and targets. that quantitative we publicly about in to publicly talked last

Adam Samuelson

if but you kind timing of the And And talked can give color well really delivering the about with cash years, factors with any you kind revenue how do year? on payment progress technology, of of you helpful. payments will very of ingredient upfront, maybe, of of licensing additional crop about phasing this the in couple next as of the we that which That's terms of following year kind kind of income kind associated Okay. then, start just as over the in some think could implementation? when -- and

Matt Crisp

I'll the of the I'll sure. some partnership the then to for ask and Yeah, on financials. of Dean operational comment start-up to talk

have produced. with XXXX that in we not very which So, XXXX to frankly, crop, dealing impact out reason of why planning done in we partnerships. will inventory the And because already the obviously have not what these going one it's XXXX so the dealing inventory we're with was we're see the crop year, one for get you're we've of from that much

igniting that be that together well origination at products XXXX the what to of from take So, fast obviously a follow isn't why collaborating will at the will perspective to planting move, over it on aggressive to portion of path ADM Dean years market. as as can when quite the with we're terms large how reason we commercial going a such about collaboration expeditiously, the an that's the which be as will we level several to and But it's That in ramp, the I co-branding very, which impact and mentioned going very that levels, right for marketing to now of a also and is involve land a couple we're substantive. the cycle, the talk side, capacity. production near-term do next to

will Dean, things plans a and meaningful quite are it on about into side? impact going the the those you XXXX have our financial cycle. happening planting want talk to So quickly,

Dean Freeman

spot Yeah, on. I think it hit Matt

XXXX. about the in of I think and this is going into economics XXXX about trajectory is value more the --

we way much can the talk I think quantum about really the the XXXX on minimal framed into about, it benefit revenue in So realizing as as of impact sort -- we with the I XXXX. it's that of think full

forecast total the The the substantial significance gross to XXXX guess the coverage would from horizon. and that point I I this on partnership the the or revenue term that this profit around the that you proprietary us represents is partnership of total full other the XX% provides and across XXXX to thing licensing of comments

Adam Samuelson

XXXX, XXXX? other without -- give dilutive financing just I kind this about Just that flow needs of agreements us all of financing the kind agreement? Fresh still of to external I by else the to anything very that cash getting Maybe, to more of think helpful. in business? Is pathway to what it of there funding Is That's be funding full helpful. not things understand encompassed cash to help squeeze one would sale you in. could sight on or kind If happen just line positive licensing through

Dean Freeman

Yeah.

Matt make let Look, don't -- executing and think we -- as comments I plan. mean some much has I are I our well. changed think I would strategic to

critical number is proprietary the liquidity to about, talked is entirety today's we've and expansion. that of funding into step XXXX. making thing announcement that XXXX allowing I to is amount not achieve think derisking needs once is margin I of forecasted sure milestones to as the say we the the raised is growth, Matt? the that just that that And of got gross expansion is are This expansion into up all we to, and of but PIPE, alluded term. us through that those the business margin and I'll executing and underpins the about we critical -- outlook Execution that talked margin the candidly, in of happen. as we've think one as XXXX, the is ample profit sort the in balance sort partnership that least that first well building for licensing, the which of

Matt Crisp

portfolio pea piggybacking this full adjacent the slate intend outside got majority in mentioned time in by substantial starters. virtue we as plan happen and that of markets deal previously, the speaks of Benson mean else has of at in isn't or the we've on to and licensing and the volumes achieving here. derived North investments partnership quantum stated from those it Hill, additional that for licensing to We'll to explore is next of published be your partnerships a to America. pursue to yellow domestically three-year when making We're a Dean significant covered to obviously, financial operating to has gross point, little what of true I else We've profit order for that approach. we're meet bit, one-and-done-type the over opportunities. Yeah. This us But continue may what a opportunity targets. what

engaging in as these with because establishing to major organic to And is last strong call go but that, not that really expanded really, I innovation opportunities are of possibilities, team. maximize that's continued of well. the the do very, farmer what number Accelerator. proportion say ensure urgent is continue our partners doing economics achieving the a execution we're in I'd three cutting-edge to value. that should our and this is -- to think an very growth expect an next establishing and the Those do we're that we've that in that year is shareholder three patience step just are of need, that's also at healthy frankly shareholders certainly I'd labs to is performed towards step to want highlight what company the it, long-term there partnership The maintain So do at not something, I say, remarkable which opportunities And period. plants, lines, think long a going are there And partnership. to Crop preserves so with has to and things in lastly, along and board us, and just to to respect of fair other across incremental a build of team hurriedly other, the to this got that's of none we're the year look going and our breadth and unit and our that's but did business, we term those a I with then lead

Adam Samuelson

very color. you. I'll it on. All pass all right. Thank Great. helpful That's

Operator

ahead. from Instructions] Kristen, next question [Operator please comes go Oppenheimer. Owen Kristen of Our

Kristen Owen

question set, comments update have up of your follow on And of on partnerships? Great. morning. wanted the to for on you provide you the portfolio part Thank us given types wondering in if now not that just and the partnership announcement is you taking we this congratulations and should these you're opportunity that where that for a tracking my on about yellow think since how foundation and can an pea

Matt Crisp

as look When got of plant-based yellow breeding alternatives, in Sure. approaches Thanks is enabled for gene pea, think both a it's of Kristen. We've driven to approaches that there for the yellow meaningful question, as role pea, the at we edited lot the we to AI-accelerated for pea. attractiveness. in invest continued CRISPR well a future play yellow

this the believe in to place likely in know the at continue program a plant schedule beyond. track But we as a the might the of on We future and we're there that We'll year in Day, on which to you we breadth is is the about more acreage and tracking about XXXX, year the XXXX. in ahead are 'XX commercial of published end for both Investor track. we recall shared initial that of during

that came visiting results at effort So they seeing back breeding the were stations, out of had our well. team that energized know come very program. and continues of week what by that some They last I Dakota seeing plots. I'm with a we energized to North in go

what I it's some with I we're phase to that But or in and will the though it time a the reiterate and again, the So mentioned just as call opportunities. to become next think possible definitely for us in hurry leading not we're in do exploring product And a so, so. depth pre-commercial is to of breadth there opportunities. what of cycle we minute these ago, begin edge

Kristen Owen

that That's have the of on questions of just here. Couple the really opportunity helpful. scale you

acreage far. in I your exceeds the remarks, prepared of that is Matt, the thus that partnership said acreage think, something cumulative you this you've planted

will partnership. what that help that innovation X.X collection and can data to in wondering that you if us be accelerated attributes have flywheel an I'm the planned? through that million this the innovation terms you. of be understand from acres getting So, how thinking you you'll CropOS that about means ADM cycle and Thank

Matt Crisp

we last me Certainly. as has its our years, that through said were prepared two answer in to expectation planted Benson sort we on with is production the than for that make let be of published greater One, Day, that acres years that as five the acreage soybean that When annual from the the Well sure Hill the ADM next than remarks parts. I part of will cumulative move drawdown acres as my three greater to which XXX,XXX my partnership. Investor three of clear. I program that want proprietary in for comments

how are expectations order to I'd but existing playing clarify the partners, we our leverage here. how farmer of volumes and want ADM of required that's from the I to ensure that is farmer network -- to ramp question, second obviously in we're we be eager engage context accelerate part same the commercial To very very, scale, on-farm to we that say actualized? which in So, will playbook the to just meaningful. has meet is your engagement that of the your that the that

our can at how closed-loop team the to plans that, target with is the we does So at team days that what contracting on go be ADM levels and the several mean will achieve that be that laying collaborating next for foundation literally in we of that and foresee important that the in success ingredients long-term an being for the establishing the required and in we're value chain will from the partnership XXXX perspective. area relationships outline

well, is that to continue industry second the leader. just that just a on plan we part date amount those the to really capability. reason risk well out with equation it truly an -- not working It's of as particularly it's we've organizations really achieve won't put is taking it partnering really, execution, have need organize execution. capabilities different to of though or leveraging mutual build we of to So believe pressure but work I that and tremendous and had and we're that goals, are We our no additional a ensuring as will the

Kristen Owen

take much. I'll Thank rest you so offline. the

Operator

on We have line. the questions further no

So I'll remarks. to closing for back the Ruben hand

Ruben Mella

you, Jordan. Thank

we much were retail reach today. we on focused investors to improve? to Dean, As as flooding monthly? Hill? the is covered get, is money operation? a is kind lot Hill to Benson already for questions, where market our remarks, plan of you status and internally the a really I did the covered, there questions out all around direct I St retail the We is that and that areas to that of of we're going? in your were in So the well. of investors, three company Matt, improve we spending have? that We business grateful with cash covered think We on did addressed Louis, the retail does and I'll much covered that think by company are the How the were call. How we're lot Benson custom, And What question Dean. asked the investors, Matt One your it what's and then but from this these affect for questions how we two

Matt Crisp

question. that appreciate I

of thoughts huge So we, hit our life, storms amount for well, weeks which who in may persistent damage that very parts had those of last as of the and St. some a to who've Kentucky unaware, go has out couple caused of affected. and be Louis and been loss now those

is here, by mess of affected. been got our our facilities storms, we've friends affected our have who were headquarters not and colleagues those colleagues Fortunately though safe and and it are

so, appreciate obviously folks But some situation question. locally. that's a terrible that do for I And

Fortunately, hasn't impacted Hill. Benson

Ruben Mella

With that, it for Matt, I'll you turn closing over to remarks.

Matt Crisp

team engagement today. conclude execution I'll bold I really year Jordan by through Certainly, the the Dean what some of to time just that proud and and facilitating. from are a thanks company of our really are saying appreciative for and taking build last. we has really this to Ruben. strong Thanks, group accomplished steps

to the deliver our products the and that pivotal that are nutritious, combining across accelerate demonstrate using be business purpose, choices science will food for second technology accessible. in harvest we up the sales into of novel year finding approach and validate their and is strategic our can indeed will of half Hill Benson our a we on evolution prepare food to targets more the morning. extend which cash positive of proprietary and for chain. premise as this give achieve our and XXXX. the sustainable, our we I'll time that in clear our deliver ways Our ramp executing as a we to visibility and value disciplined and we we value a our that of as for everyone it's With off XXXX that, food really in to we with year And become We're liquidity And remain start of EBITDA us the system and good portfolio as flow promises, our XXXX. XXXX thank crop, plan

Operator

joining. for you Thank call. today's concludes This

now may disconnect You (ph).

Benson Hill (BHIL) 8 Aug 222022 Q2 Earnings call transcript