BHIL - Earnings call transcript Q4 2023

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Operator

Good morning. Thank you for attending Benson Hill's Fourth Quarter and Full Year 2023 Earnings Call. My name is Drew, and I'll be your moderator. [Operator Instructions] I want to pass the conference over to your host, Tana Murphy, Acting Investor Relations Leader with Benson Hill. Tana, please go ahead.

Tana Murphy

morning. good and you, Thank We appreciate and our quarter to joining year XXXX us full outlook. review financial fourth you results and

today Benson Elsner, Dean Financial are Executive me Officer. and Chief Freeman, Hill's Officer; our Joining Chief Deanie

also Officer, in. Financial Benson on Susan incoming with listening March role have XX. Susan her We our Hill Chief Keefe, begins

this we filed year release. earnings morning, our full Earlier XXXX fourth quarter and

and the today. Hill we of high-level will for XX-K be during remarks Our Benson will of financial documents presentation a will an investor the today Hill's the available closes filed be future including outlook management and and These market section reference forward-looking commentary in website. prepared XXXX. will Investors performance, statements, business contain expectations from after the Comments Benson industry

subject in forward-looking Forward-looking XX-Ks to caution We risks, filings. cautionary materially cause Form differ statements of and in our referenced assumptions release investor other results factors could XX-Qs, notes uncertainties presentation factors you guarantees not the included and SEC and Form that the inherently in to to statements. those are Such are include performance. those consider press risk the and from

will to non-GAAP I our discuss presentation, measures. A turn financial the reconciliation now will Also, this release and during Deanie. to GAAP we in available presentation. is specific earnings investor call over

Adrienne Elsner

to XXXX our and for you transform review Thanks, results quarter the taking Thank full good joining us to Tana. year everyone. morning, And our fourth steps business. and to discuss we're

of knowledge work companies and in and our team. Susan and will public She and innovation private organizations our experience Susan great pipeline strategic wealth partnerships, that We're biosciences Benson CFO, development Keefe. the licensing sectors. Hill incoming joining Let by a technology-focused mature is Her technology, both with a be in working introducing of asset me start ahead. start-ups excited brings the

before Benson our to our been incredible Hill expanded strengthen Improvement segments; execute working diversifying our soy cost-cutting asset-light initiatives position under attractive and strategic delivering the balance our opportunities third, for strategy. portfolio us: to We've enter first, plan the Liquidity sheet second, and to partnerships a implementing Plan; three-part

walk explain those Hill positioned Today, in pace Benson through of progress is each and to fronts will you soy we've the protein. of why lead on well made I the significant innovation

Let's start with the liquidity expanded an update plan. improvement on

milestones significant As for $XX have you these strengthen our assets, processing key for the may soy sale our been improve sheet to our including and that identified cash last our and pleased sale balance designed recall, Seymour million position. milestones Creston I'm divested achieved. we October, of our very of facility facility to to report We've the million. $XX

savings. organization, We've restructured deliver significant enabling us to our cost

has and interest outlook our his XXXX $XX plus year fees. cash, Dean previously We These our expectations. now $XXX with for debt will address million XX%, enabled results ended section. line with million retire to approximately and recurring targets. reduced senior fully our CapEx more us Our communicated line in by than OpEx team with loan in in and term actions further in XXXX in representing approximately the

continue senior our months, entirely structure. capital our on team term our us. loan operating costs retired, for we is driving to opportunities to optimize looking In the the coming and expect With of ahead efficiencies, now ways reducing focused

new attractive to was plan our of pillar diversify soy portfolio market second segments. our The and enter

made Here, progress. enormous we've

portfolio. our innovation from platform, Crop trifecta technology the proprietary soy our facility engine, of germplasm speed soy breeding stems proven and our our advantage Accelerator Our CropOS

feed. with layers data, Our secures for germplasm it because advantage our along of of soybean breeding genomic first-mover represents decades differentiated literally animal

positioned that ramp-up. in and We into the the our to future. an partners broad ready aspect value pipeline, are is Benson feed acre markets potential including animal our with soybean well users model in creation, growing our we and largest months, our serve expand of our industry, advantaged X we end markets innovation and competitively last Hill the to diligence Over shift validated extensive strategy, on every asset-light to today conducted business the the and biofuel

varieties, January including across tolerance Benson Hill genetics the adoption. In to seamless Ultra our control weed an entire and simultaneously the of the herbicide or has and oligosaccharides our of low soy year, portfolio we The protein built we we've Protein toolbox trait most for provide introgression yield. large expect in announced advancements XXXX have both the surpassed genetics the improve expectations advanced industry. to this High acre industry gains of farmers in for achieved outpaced UHP-LO acquired

we on have a most experts industry But we what pipeline We for further today. varieties giving perhaps a UHP-LO with and the expand be stages final have seed from XXXX is time portfolio changer that we've field significantly from to feed XX exciting that's advantage moat. our end feedback confirmed XXXX the Animal is products heard testing, by users diets. us harvested are animal soybeans can lab in to available competitive deepen track about the game massive of will the a that that our in XX

In fact, Grail they could they their said product, would design this be if that Holy it.

conversion, performance, and commodity feed higher yield more ingredients. protein XX% with room First, than for enabling other soybean meal, less required better with meal competitive

more better the acid reliance amino enabling less carbohydrates, digestibility amino oligosaccharide leading profile energy available going gut acids. an used And better hard-to-digest animal. XX% improved on synthetic and health, to be fewer to forward, XX% by Second,

cost sustainability In impressive every products can that the soy bit soy creation have true efforts years unlock Shadow our the of value The of breeding improved is last the margin Hill matters. Benson through our feed X producers. This pricing savings the in over cost is of the industry, creation animal benefits primary varieties. estimates innovation. value reduced production. Feed animal for tripled indicate and UHP-LO

the repeating these be value initially that results studies confidence now achieved. initial feeding can are proposition to us in validate conducted and We XXXX improvements give

products optimize the that portfolio in on complex. UHP-LO protein varieties, Looking beyond increase oil our we our will focus other

varieties Varieties our market. oligosaccharide potential. commodity for meal. further Our market for emerging low high combine the food in high-volume COVAL profit substantial heart combined protein, oligosaccharide market represents This lower oleic the oil and growth biofuel additional healthy, with out high feed the oil with for meal pipeline,

is of to strategic pillar our execute last The to partners plan secure our strategy.

by farmer the those a be Benson too, provide demands. can part dynamic. choice output the The a positioned we've to that decisions the end system what prefers value simply has Here, the not is system for unlocks end-user underway. what dimension finding made traits commodity progress. who not are to end Across of chain, provide the changes shift soy designed voice and but we're exciting organizations designed recognize a driven users. both of Hill choice growth Seed new by This user be input what traits to it. for current

end create to that the We we needs of incentivize the value by the seed user can first, customer. the focusing on all to the compelling from to farmer players have validated company

Our partnerships new the to the maturity model business leverage of and scale existing strategic encompasses asset-light value chain.

well is established the technology Licensing agriculture industry. in

non-GMO Hill, tofu been Benson food licensing high-protein, years. markets varieties for and specific fact, for before Schillinger, like that, has In

best-performing multiple create and by the non-GMO We to we infrastructure. going scale licensing the the market present of our distributors can share, feed end of have relationships that magnitude value forward different with serve the leveraging What's the soybean is market. we existing long-standing variety on significant intend

markets an animal the not is acres. for Every but potential seed The of partner, quite is highly Scaling millions whether producer or actually large, straightforward. represents a feed fragmented. market animal company

the the nature industry we've and our will response animal that from over of supply anticipate parent we be underway, of years. will UHP-LO factor the outstrip received seed, rate the demand limiting X our next Given discussions offtake the the which the

offtake with the establish value animal producers expect strategic of partnerships we time, to soybeans. proposition demonstrate agreements that and During to our further

been In to number expand agreements expand with our addition, of have we these go-to-market for A lay to partnerships. expect initiatives already seed to groundwork companies the licensing advanced reach.

year universities doubled validating example, will in For characteristics of we're testing an past we've varieties seed Most our agronomic licensing centers. of and the extensive independent of field this XX the varieties months. and our seed size latest these distribution testing the and our through network companies in be the of network

we multiple animal swine, segments X market within poultry aqua. the additional Over for years, conduct also studies next feed and will

has what we about on complexity and what reflect scope I excited a of going to just team in few and accomplish the achieved the expect forward. As I'm confident months, short

future the partners. focus partnerships. our operating reshape The have now We costs with landing and business revalidated lay processing entirely technology and capital pipeline, reduce a organization, to and divested energy built team retired business, groundwork dedicated the the securing strategic debt, is the of assets, new model, X

to company XXXX Benson we value. now an point the Hill is in as at drive shareholder inflection evolve

Dan best Freeman his thank XXXX this I and a Dean CFO guidance Dean? you wonderful in I'd cover like take his close, been over results to can watch to now in XXXX. Benson chapter. opportunity of for financial and it to wish Hill. we and As the contributions him to turn the him I'll has for things partner, next as

Dean Freeman

great Benson support good journey. and been pleasure and with thank good be I'm weeks, with morning, Hill Deanie, choice the really you Thanks, we've next and last the I a transition. Hill's done Susan the believe of as the CFO Benson to wishes of announcement future honor everybody, phase. work position an this working for of and an and part on excellent years to enjoyed your for the after the my proud company X last success. the few she's in I really over It's for

Okay.

Notably, model to key met lower increasingly high-value a under the all cash talk improvement actions not but enabled only balance environment. plan. market an sheet almost for revenue, implementing on This our asset-light Let's expanded the burn. laser-focused increase busy liquidity metrics our was we and for and the of also developing existing our despite on focused us XXXX or business We executing year. aggressively under substantially our team strengthen results. model, strategies It hit challenging guidance was

year-over-year by Looking end growth full sales year. of XX% Higher results, respectively, the at noncore proprietary volume the a technology grain of driven by consolidated improvement XX% growth proprietary million, in the sale and revenues driven at licenses. $XXX the higher the revenue products, and for nonproprietary year of XX% a grain we revenues year were in reported

EBITDA costs prior million, our profit with and the approximately we million Looking profit year-over-year. Free marketable met Adjusted cash the for onetime was of use approximately tripling $XX securities. million. improvement $XXX for year's cash targets than and prior cash XX% a further the of more our ended $XX gross a use performance. improvement year more to We targets forward but exceeded year, sets million cash $XX versus of in million $XXX that included of up loss million going $XX was beyond improvement $XX million gross than million, also revenues, $XX at us

higher actions. Our by improvements cost and were year-over-year cash largely driven efficiency proprietary volume revenues,

look our expenses at more in bit Let's operating a detail.

with previously $XXX included For the that expenses important It's approximately impairment were we the net in cost and charges Liquidity transformation business related related $XX other million reduction in Plan. operating year, our execution second goodwill and actions $XX million those quarter that nonrecurring costs note the disclosed approximately Improvement of in asset expanded divestitures, million. severance total the to and associated for to

will is the business as In a be animal XXXX. divested. very transition. going and we've Keep with It soy our ingredients products year previous different XXXX runoff include processing largely feed momentum including came XXXX truly the Turning associated for market. for revenues of as that of provider seed will in the plan reported of XXXX, the of look innovations assets our legacy a mind that to sale from to revenues business. grain we other model, the company's to now gain

revenue result much recent lower a expect as of divestitures. forward We going these

revenue the While out of will we further improvements proportionally EBITDA. to of significant we further partnership Coupled operating as our during decline transition, and reduction quality gross of improve expect continuing see over substantially earnings with model. the operations to losses balance this from reductions profit in time the with expect a adjusted the we expenses, build in

provides covenants And of the with restricted financing of with retirement further debt, coupled optionality elimination opportunities. for ample the high-cost highly

exploring strategic and expand financing In the are liquidity through fact, process to of balance of XXXX our beyond. the and additional we in alternatives

structure; will property our improvement second, be intellectual acquisition and expenses X As of transition licensing we expansion consider key model; of advancement three, of strategic optimization we and by key pipeline. of areas: one, our business our technology in performance deals; capital XXXX, of guided and operating four, continued finally, legacy of and margins; partnership successful our factors our

and Benson after can Hill year the has proven that team perform, year execute adapt.

runway durable created with demand are create growth. like of to Q&A. to We technologies up for our innovations substantial core open With seeing a I'd that, for

Operator

comes New Kristen Owen Instructions] from today Jersey. from [Operator question Our first

Kristen Owen

here Jersey, from know didn't guys. Oppenheimer. was we I that Well, from Well, go, but I New

of I the First, the maybe doing, Dean, the for ultimately revenue help provide this us about point, us for over of to there is revenue maybe at thank expansion for model, necessarily able XXXX. some transition we how Susan, to that of we'll Just business can that XX are months? leadership and understand varieties, help pipeline, the building clarity to the XX looking not you're you, team. potential? I'm the the wondering, welcome to third-party just understand your validation future that what milestones be contribute as to the understand next you the track the But also today be some of business in concrete think guidance to really

Dean Freeman

Louis. the from that of is it, lot is XXXX Kristen parse for script really and how assets business revenue if that you transactions. And fantastic potential way of get still of we've have the factors. securing I on of there's volatility out, bring of work the to through. and part Jersey, the lift a Look, St. depending our a I Yes. got I the outlook we've attributes -- through partnership done to licensing that's potential, X One through there's divested through And think the while work, key into think the I from kind think Dean bit play But legacy we've to and year. transition. read, this key think has early that to we'll the little the a really things development going has New

us announce, KPIs, in indicators sort And critical out for I we and execute my key of one. secure extent pointed X-step that the think as year, to then obviously, I And the a of that performance those is on revenue key licensing, we the -- expect aspects, allows are that and performance those I the to performance that and beyond. us you partnerships enables expect think, that the should XXXX in achieve

Adrienne Elsner

would our that, about results, I to thing you 'XX other XX% back just go proprietary revenue only add the perspective, stream. represented Kristen, to if for our of

assets, out and transition with we as having we're what pushing XXXX forward so through And primarily longer go we the grain processing harvest. no is soy

no benchmark we be those doing be partnerships think handoff partnerships we'll revenue update strategic But strategic we going and handling and to and partnerships of the pushing and proprietary think At it just milestones about really the will for you benchmark commodity directly kind can of be so the by a same those And numbers. begin gives We're they the processing forward. out the I of sizable transitioning those. to build a be you that side the those to side will our and able how going which to the through, time, business. we're longer to as right. through we're business of strategic And revenue Dean's land

Kristen Owen

Okay. which a a fees time stoppage you made. but is bulking of bit me upfront understand what looks of kind a maybe And -- is agreement partnership, And of recognize expression, the some forgive period that cadence and you just an how there's of me, I'm there's technology like? seeds. of then the strategic that like little up over sign just forgive the When licensing looking there for help

Adrienne Elsner

Absolutely.

background. cases, array If span in nature, of have be more The they in if tech tend agreement. bit tied broad-based little more nature an a you or offtake they them. they're give or exclusive profiles. had of nature, to fees In tolling I'll access to exclusivity some So strategic are partnerships they in

on just it have arranged. depends partnership, we the strategic So

licensing seed course, and in along the fee, some of of distribution terms comes our of exclusivity the then, germplasm, both with tolling, that. We have the with managed typically that historically kind exclusivity

breadth we the In out. in of happens factor rate terms and comments, the -- I speed is and seeds by how these seed UHP-LO the our we mentioned which the happens. build vocal leading on can offtake upfront

building many quickly to possible. going for as as to years literally seeds. those produce the possible And our the as seeds grain ability outpace are as as bulking get acres these those quickly next over believe X that that -- them We so as demand to is we up possible, to

going these So to be maximum we're to we get going at believe out.

into historically about herbicide needed acres are XX germplasm talked when that to you farmers That control. can that the access your the The or broad can you think trait begins on annually, reason We your provides have into acre that broad seeds grow about so tolerance we integrated UHP-LO. weed amounts. the in supply need because feed segment, why the million an support important And to acre into introgressing that's produce go in XXXX. ground U.S. for have animal is to acres in that HT you literally

to next we can in can, process broad and and partnerships so our in our do the acre can is to literally the requirement, then move in that innovation that's how are why execute we And de-risked confident fast of in say and demand, and focus focus go the is plan go. as is XXXX. broad that to the we really we we and really X to how years we're up and tie the strategic as HT creativity terms And requirement fast

becomes really focused derisked executional excellence. a And so it plan on

Kristen Owen

support about kind through extremely reduction just run OpEx That's is years? thinking you've X thinking you bridge last operating How rate line of the next that expense The taken. me to over the through helpful. time one the you're for this

Dean Freeman

million. continuing between about we Kristen, within cash script, basis. Yes, and set the you a target run aligning improvement rate run the about for on talked is structure we OpEx from through to talked $XX talked there. business. about lot and the a rate when achieved that assess sort we it cost million communicated XXXX needs $XX about $XX We $XX to with with think should And run room the expect company certainly million the -- million that, obviously, of we of We've expect that a I and target rate the CapEx. But that, as of we of

Adrienne Elsner

expect earnings I he and important cash depending to we his build in the really points rate to quality point, was drop it partnership would how we substantial time the around Yes. think, some, or as going burn think run I over in script, over made really of And Dean's out structure, is financial this to time on the see our improvement because a model. really

that, combined cash in So further going operating reductions with in a would burn expenses, less result forward. of

in we And We plan against can OpEx strategy. that continue the Dean's this place. have we'll expenses point, transition to so manage the a to and deliver

Operator

We the have questions queue. further no in

I Deanie to So their closing for hand over Elsner will remarks.

Adrienne Elsner

and we to day. Tana runway opportunities pleased to get the strategy execute our you if any and Thank confident advantage, team, for has create to you questions with Hill I'm need Benson look headed where beyond. to take extremely to really more again hear we've and value forward. outlined all this additional much. poised you XXXX today. true back strong a a a touch morning management have great and about us the you strategy a us joining I'm well-defined so at we're propel have robust Murphy in a Thank additional in really 'XX creation competitive with

Operator

the conference concludes call. Benson That Hill

webcast. You may and line your exit now the disconnect

Benson Hill (BHIL) 14 Mar 242023 Q4 Earnings call transcript