RiceBran Technologies Reports Financial Results for Q2 2016
SCOTTSDALE, Arizona, August 11, 2016 /PRNewswire/ --
USA Segment delivers record $8.8 million quarter on 27% revenue growth
Additions to Board bring significant industry experience and a proven track record of creating shareholder value
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.
Financial Highlights
Revenues: USA segment revenues increased by 27% quarter over quarter and by 13% sequentially to reach a record $8.8 million. Overall consolidated revenues for Q2 2016 were $10.5 million compared to $11.4 million in Q2 2015 due to Brazil segment revenue declining by 61% to $1.8 million in Q2 2016. Brazil segment revenues were negatively impacted by decreased throughput and a 12% decline in the value of the Brazilian currency.
Gross Profit: Consolidated Q2 2016 gross profit was $2.0 million compared to $ 2.2 million in Q2 2015. USA segment gross profit increased by 17% compared to Q2 2015 with margins remaining strong at 30%.
Adjusted EBITDA: The Company's USA and Corporate segment Adjusted EBITDA was $425,000 in Q2 2016 compared to Adjusted EBITDA of $543,000 in Q2 2015. The Brazil segment recorded an Adjusted EBITDA loss of ($1.0 million) in Q2 2016 compared to an Adjusted EBITDA loss of ($530,000) in Q2 2015. Overall consolidated Adjusted EBITDA loss in Q2 2016 was ($616,000) compared to an Adjusted EBITDA gain of $13,000 recorded in Q2 2015.
Net Loss: Q2 2016 consolidated net loss was ($8.1 million) compared to a consolidated net loss of ($4.0 million) recorded in Q2 2015. The quarterly loss includes a non-cash charge of $3.0 million for impairment of Brazil segment goodwill and expense of $1.1 million related to the proxy contest. Net loss attributable to RBT common shareholders was ($6.6 million) in Q2 2016 compared to ($3.5 million) in Q2 2015.
W. John Short, CEO and President, commented: "In the second quarter of 2016 we achieved record revenue in our USA segment for the second straight quarter. The increase in revenue, both quarter over quarter and sequentially, was derived from functional food ingredients and human ingredients as well as animal nutrition products. We continue to see favorable growth trends in our customer base from both established and new customers. Animal nutrition sales continue to grow as a result of our recent distribution agreement with Kentucky Equine Research. With strong customer demand and adequate supplies of bran, we believe we are well positioned to continue the positive revenue growth trend in our USA segment for the remainder of 2016. We expect to see initial revenues in Q3 from the sale of organic bran purchased from the Narula Group as we work to build additional momentum in the second half of 2016 to take advantage of the capacity investments we have made in our USA Segment plants over the past two years. We believe that we have strengthened our sales team by adding leadership and realigning responsibilities. With these changes, we intend to work diligently to build lasting value in this segment for years to come for the benefit of our stockholders."
Short continued, "The situation in Brazil remains extremely challenging with economic recession and adverse weather conditions continuing to weigh heavily on the segment. High costs for bran due to a poor harvest combined with working capital availability challenges have resulted in significantly reduced production levels at Irgovel. We continue to work with our private equity partner in Brazil to explore a full range of tactical and strategic alternatives for Irgovel with the aim of maximizing value for our shareholders. We are also excited to work closely with our newly elected board of directors to update our strategic plan for the USA Segment. We see continued strong demand in our USA segment and are confident we can drive improved performance for the remainder of 2016."
Q2 2016 Operating Results
Revenues
Consolidated revenues for Q2 2016 were $10.5 million compared to Q2 2015 consolidated revenues of $11.4 million. The decrease in consolidated revenue was due to a 61% quarter over quarter decline in revenue from our Brazil segment, partially offset by a 27% increase in revenue from our USA segment which rose to a record $8.8 million in Q2 2016. USA segment revenues were bolstered by a 30.1% increase in human ingredient and functional food revenues as well as a 16% increase animal nutrition revenues. Brazil Segment revenue was negatively impacted by a decrease in bran processing levels as well as a 12% quarter over quarter decline in the average Brazilian Real versus US Dollar exchange rate. The Company expects the business environment in Brazil to remain challenging throughout 2016.
Gross Profit
Consolidated gross profit for Q2 2016 was $2 million compared to gross profit of $2.2 million in Q2 2015 with gross profit percentage declining by 0.8 percentage points to 18.8%. USA segment gross profit reached $2.6 million, a 17.5% increase compared to $2.3 million in Q2 2015. Gross profit percentage from our USA segment declined by 2.6 percentage points to 30.1% due to an increase in lower margin animal nutrition sales coupled with a temporary bran supply issue at the Company's Mermentau facility that resulted in products being delivered out of California at a higher cost during the quarter. The decline in consolidated gross profit and gross profit percentage is attributable to the Company's Brazil segment where a decrease in access to raw bran caused a decline in production volume leading to a significant increase in negative gross profit.
Operating Expenses
Consolidated Q2 2016 operating expenses totaled $7.7 million compared to $3.8 million in Q2 2015. The increase was attributable to an estimated $3.0 million goodwill impairment charge related the Company's Brazil segment and $1.1 million of costs related to the proxy contest and subsequent settlement in July 2016.
Adjusted EBITDA
On a fully consolidated basis, the Company recorded a consolidated Adjusted EBITDA loss of ($616,000) in Q2 2016 compared to an Adjusted EBITDA gain of $13,000 recorded in Q2 2015. USA and Corporate segment Adjusted EBITDA in Q2 2016 was $425,000 compared to prior year Adjusted EBITDA of $543,000. Brazil segment Adjusted EBITDA loss increased to ($1.0 million) in Q2 2016, compared to an Adjusted EBITDA loss of ($530,000) in Q2 2015. Adjusted EBITDA is a non-GAAP measure 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 2016 the Company recorded a net loss attributable to shareholders of ($6.6 million) or a loss of ($0.72) per diluted share on 9.2 million weighted average shares outstanding. This compares to a loss of ($3.5 million) or ($0.38) per diluted share on 9.2 million weighted average shares outstanding in the first quarter of 2015.
Additional information can be found in the Company's Form 10-Q filed with the United States Securities and Exchange Commission on August 11, 2016.
The Company will hold a conference call to discuss its Q2 2016 results on August 11, 2016 at 4:30 PM EDT. Call-in information is as follows:
- Date: August 11, 2016
- Time: 4:30 p.m. Eastern Daylight Time
- Direct Dial-in number for US/Canada: (201) 493-6780
- Toll Free Dial-in number for US/Canada: (877) 407-3982
- Dial-In number for international callers: (201) 493-6780
- Participants will ask for the RiceBran Technologies Second Quarter 2016 Financial Results Call
This call is being webcast by ViaVid and can be accessed at https://public.viavid.com/index.php?id=120780
The call will also be available for replay by accessing https://public.viavid.com/index.php?id=120780.
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, sales of organic bran, strategic alternatives for Irgovel, product demand, supply of raw materials, 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.
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 three month and six month periods ended June 30, 2016 and 2015. 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 three months ended June 30, 2016 (in thousands)
Corp. & USA Brazil Consolidated
Net income (loss) $ (3,477) $ (4,639) $ (8,116)
Interest expense 454 287 741
Interest income - 23 23
Income tax benefit - - -
Depreciation & amortization 516 247 763
Unadjusted EBITDA $ (2,507) $ (4,082) $ (6,589)
Add Back Other Items:
Change in fair value of derivative liabilities 1,663 - 1,663
Gain on resolution of Irgovel purchase litigation - - -
Loss on extinguishment - - -
Foreign currency exchange, net - (72) (72)
Other income/expense - 75 75
Goodwill impairment - 3,024 3,024
Severance payments - - -
Proxy contest expense 1,057 - 1,057
Share-based compensation 212 14 226
Other - - -
Adjusted EBITDA $ 425 $ (1,041) $ (616)
RiceBran Technologies
Adjusted EBITDA Reconciliation
For the three months ended June 30, 2015 (in thousands)
Corp. & USA Brazil Consolidated
Net loss $ (2,222) $ (1,736) $ (3,958)
Interest expense 357 518 875
Interest income - (19) (19)
Income tax benefit (6) - (6)
Depreciation & amortization 710 472 1,182
Unadjusted EBITDA $ (1,161) $ (765) $ (1,926)
Add Back Other Items:
Change in fair value of derivative liabilities (384) - (384)
Loss on extinguishment 1,904 - 1,904
Foreign currency exchange, net - (32) (32)
Other income/expense - 74 74
Severance payments - 180 180
Share-based compensation 184 13 197
Adjusted EBITDA $ 543 $ (530) $ 13
Adjusted EBITDA Reconciliation
For the six months ended June 30, 2016 (in thousands)
Corp. & USA Brazil Consolidated
Net income (loss) $ (2,272) $ (5,982) $ (8,254)
Interest expense 1,133 699 1,832
Interest income - (10) (10)
Income tax benefit - - -
Depreciation & amortization 1,033 452 1,485
Unadjusted EBITDA $ (106) $ (4,841) $ (4,947)
Add Back Other Items:
Change in fair value of derivative liabilities 852 - 852
Gain on resolution of Irgovel purchase litigation (1,598) - (1,598)
Loss on extinguishment - - -
Foreign currency exchange, net - (138) (138)
Other income/expense - 140 140
Goodwill impairment - 3,024 3,024
Severance payments - 153 153
Proxy contest expense 1,057 - 1,057
Share-based compensation 429 27 456
Other 167 - 167
Adjusted EBITDA $ 801 $ (1,635) $ (834)
RiceBran Technologies
Adjusted EBITDA Reconciliation
For the six months ended June 30, 2015 (in thousands)
Corp. & USA Brazil Consolidated
Net loss $ (3,569) $ (4,034) $ (7,603)
Interest expense 650 1,023 1,673
Interest income - (68) (68)
Income tax benefit (13) - (13)
Depreciation & amortization 1,259 1,085 2,344
Unadjusted EBITDA $ (1,673) $ (1,994) $ (3,667)
Add Back Other Items:
Change in fair value of derivative liabilities (557) - (557)
Loss on extinguishment 1,904 - 1,904
Foreign currency exchange, net - 188 188
Other income/expense (155) 147 (8)
Severance payments - 180 180
Share-based compensation 376 26 402
Adjusted EBITDA $ (105) $ (1,453) $ (1,558)
Investor Contact:
Ascendant Partners, LLC
Fred Sommer
+1-(732)-410-9810
[email protected]
SOURCE RiceBran Technologies
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