RiceBran Technologies Reports Financial Results for Q2 2014

SCOTTSDALE, Ariz., Aug. 13, 2014 /PRNewswire/ -- RiceBran Technologies (NASDAQ: RIBT) and (RIBTW) (the "Company" or "RBT"), a global leader in the production and marketing of value added products derived from rice bran, announced today the Company's financial results for the second quarter of 2014 ended June 30, 2014.

Financial Highlights

2^nd quarter consolidated revenues total $11.3 million, a 21% increase as compared to consolidated revenues of $9.4 million recorded in the 2^nd quarter of 2013

2^nd quarter USA Segment revenue increased by 116% to $6.7 million compared to the 2^nd quarter of 2013 and increased by 35% sequentially

2^nd quarter Brazil segment revenues of $4.6 million, up 71% sequentially as Irgovel begins to ramp operations

W. John Short, CEO and President, commented: "Top line performance improved significantly in the second quarter as USA segment revenues strengthened and we restarted production at Irgovel. USA sales increased significantly in spite of shutdowns related to expansion projects at both Healthy Natural in Irving, Texas and our Stage 2 plant in Dillon, Montana. Gross margins at our USA segment remained strong in spite of increased raw rice bran prices caused by the California drought. We continue re-engineering of our product mix to focus on higher margin functional food ingredients and B-to-B packaged functional food products." 

Short continued: "In Brazil, production restarted at Irgovel as expected and we delivered a significant sequential increase in sales. I am pleased to announce that each of the major pieces of equipment installed during the expansion was processed at a run rate well in excess of our 300 metric ton per day target for limited periods. Daily raw rice bran production has reached and surpassed 350 metric tons per day in every production area. Our production was hampered in June and July as rice mills operated well below capacity during the World Cup. Since that time the availability of raw rice bran is steadily increasing, and we anticipate it returning to normal levels in the current quarter which should set the stage for progressive improvement throughout the second half of 2014. With our two segments continuing to strengthen, we are confident we are in the right place at the right time to deliver sustained financial growth for our Company for the foreseeable future."

Operating Results

Consolidated revenues for Q2 2014 were $11.3 million, a 21% increase compared to last year's second quarter consolidated revenues of $9.4 million. The increase resulted from a 116% increase in revenues at the Company's USA segment as our H&N operations continue to drive revenue expansion.

Revenue from the Brazil segment totaled $4.6 million in the 2^nd quarter of 2014, a decline of 27% as compared to $6.3 million in the 2013 second quarter and a 71% increase from the $2.7 million reported in Q1 2014. While revenue declined due to the restart of the Company's Irgovel facility after the completion of installation of equipment necessary to increase capacity, the Company expects continued improvement in production and revenues at Irgovel for the remainder of 2014.

Consolidated gross profit in the second quarter declined by 6% to $1.2 million with consolidated gross margins declining from 13.6% of revenues in Q2 2013 to 10.5% in Q2 2014. The decline in gross margins was due to the costs associated with the restart of the plant at Irgovel which resulted in negative gross margins in the quarter while gross margins from the USA segment were 24.2%. Operating expenses increased to $4.2 million in the second quarter of 2014 compared to $2.6 million in the 2013 period. The increase in operating expenses is attributable to a $1.2 million increase in SG&A expenses and a $0.4 million increase in depreciation and amortization.

Adjusted EBITDA

Earnings before interest, taxes, depreciation, amortization, certain non-recurring expenses, other non-cash charges, and stock-based compensation ("Adjusted EBITDA") for the first six months of 2014 for the Corporate and USA segment was a loss of ($0.6) million - a significant improvement from a loss of ($2.9) million recorded in full year 2013. Adjusted EBITDA is a non-GAAP measure that management believes provides important insight into the Company's operating results (see reconciliation of non-GAAP measures below).

Net Loss

For the second quarter of 2014, the Company recorded a net loss attributable to common stockholders of ($15.1) million or a loss of ($3.52) per diluted share on 4.3 million weighted average shares outstanding. This compares to a loss of ($2.0) million or ($1.83) per diluted share on 1.1 million weighted average shares outstanding in the second quarter of 2013.

Additional information can be found in the Company's Form 10-Q filed with the United States Securities and Exchange Commission ("SEC") on August 12, 2014.

Dale Belt, CFO commented, "We remain focused on our business plan to meet our current 2014 financial guidance for full year revenues of $59 million with full year Adjusted EBITDA of $6 million and build on the sales momentum we have delivered in this quarter. As we move into the second half of 2014, our plan is subject to certain risks including the availability of and further upward pressure on California raw rice bran due to severe drought conditions in the Sacramento Valley, and our ability to pass any potential increased costs to our end customers to maintain margins. Additionally, with the short term slowdown of raw rice bran production in Brazil now abating, our Irgovel team is working diligently to reach our 2014 production goals in the second half of the year. We remain confident that with additional capacity coming online in the U.S. and Irgovel progressively ramping second half production that we are beginning to fire on all cylinders and are well positioned to capitalize on growing demand in the food and beverage industry for gluten free, non-GMO, minimally processed healthy, natural and functional foods."

Conference Call

The Company will hold a conference call to discuss its 2^nd quarter results, recent events and strategic initiatives on August 20, 2014 at 4:30 EDT. Call-in information for any interested parties will be provided prior to that date. 

About RiceBran Technologies

RiceBran Technologies is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. RiceBran Technologies has proprietary and patented intellectual property that allows us to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious human food ingredient and animal nutrition products.  Our target markets are human food ingredients and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutritional supplement manufacturers and retailers, both domestically and internationally. More information can be found in the Company's filings with the SEC and by visiting our website at http://www.ricebrantech.com.

Forward-Looking Statements

This release contains forward-looking statements, including, but not limited to, statements about RiceBran Technologies' expectations regarding financial performance, production capacity, and production levels, product demand, completion of projects and future growth. These statements are made based upon current expectations that are subject to known and unknown risks and uncertainties.  RiceBran Technologies does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information.  Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in this press release and in RiceBran Technologies' filings with the Securities and Exchange Commission, including its most recent periodic reports.  For a description of the adjustments and factors used to forecast our Adjusted EBITDA for 2014, please refer to our Registration Statement on Form S-1/A that was filed with the Securities and Exchange Commission on December 11, 2013.

Investor Contact:
Ascendant Partners, LLC
Fred Sommer
+1-732-410-9810
[email protected]

USE OF NON-GAAP FINANCIAL INFORMATION

We utilize "Adjusted EBITDA" as a supplemental measure in our ongoing analysis of short term and long term cash requirement and liquidity needs. Adjusted EBITDA does not represent cash flows from operations as defined by generally accepted accounting principles ("GAAP"), is not a measure derived in accordance with GAAP and should not be considered as an alternative to net income (the most comparable GAAP financial measure to EBITDA). Management uses Adjusted EBITDA as an indicator of our current financial performance. By eliminating the impact of all material non-cash charges as well as items that do not regularly occur, we believe that Adjusted EBITDA provides a more accurate and informative indicator of our cash requirements.

The table below contains a reconciliation of net income (GAAP) and Adjusted EBITDA (Non-GAAP) for the six months ended June 30, 2014 and the year ended December 31, 2013.  We do not provide a reconciliation of forward-looking net income (GAAP) to Adjusted EBITDA (non-GAAP).  Due to the nature of certain reconciling items, it is not possible to predict with any reliability what future outcomes may be with regard to the expense or income that may ultimately be recognized in future periods.  Any forward-looking Adjusted EBITDA information that we may provide from time to time consistently excludes the same items from projected net income that are excluded from actual net income in the table below. 

RiceBran Technologies
Adjusted EBITDA Reconciliation
For the six months ended June 30, 2014 (in thousands)

RiceBran Technologies
Adjusted EBITDA Reconciliation
For the year ended December 31, 2013 (in thousands)

SOURCE RiceBran Technologies

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