RiceBran Technologies: Reports Q2/2015 Results

Scottsdale / AZ. (rbt) RiceBran Technologies (up to October 2012 NutraCea), a global leader in the production and marketing of value added products derived from rice bran, announced the Company’s financial results for the second quarter ended June 30, 2015.

Financial Highlights

  • Company achieves positive consolidated Adjusted Ebitda in Q2/2015
  • Q2/2015 consolidated revenues reach 11.4 million USD up 18 percent sequentially from Q1 and up modestly compared to 11.3 million USD in Q2/2014
  • Q2/2015 USA segment revenues rise to a record 6.9 million USD with gross profit percentage rising 8.5 points to 32.7 percent
  • Q2/2015 Brazil segment revenues increased 35 percent year-over-year in local currency; in U.S. Dollars revenue was 4.5 million USD in Q2/2015 compared to 4.6 million USD in Q2/2014

W. John Short, CEO + President, commented: «Reaching positive consolidated Adjusted Ebitda is a significant milestone for RiceBran Technologies. While this modest positive result represents a small step forward from a financial perspective, it serves as evidence that we are moving in the right direction despite the challenges we still face with the economy and currency in Brazil and the drought in California. More importantly, our efforts in both segments to improve sales mix while controlling costs have yielded positive results including strong growth in our USA segment gross profit and narrowing losses in Brazil. With our expansion and repair projects behind us in Brazil and our expansions complete in the USA Segment, we are focused on increasing profitable sales to fill available capacity and improving our bottom line».

Short continued: «To improve performance, we have further reduced costs in Brazil in Q2 in line with reduced raw bran availability. We are already seeing positive results from that realignment and expect to achieve positive unaudited Adjusted Ebitda in Brazil in the month of July. As we move into the second half of 2015, we are focused on our goal of reaching positive consolidated cash flows through higher margin revenue expansion coupled with continued tight cost control».

Operating Results

Consolidated revenues in Q2/2015 were 11.4 million USD compared to 11.3 million USD in Q2/2014. The modest increase in revenue was a result of increased revenues from our USA segment partially offset by a decrease in revenue from our Brazil segment due to the negative impact of foreign currency exchange rate declines.

Revenue from our USA segment reached a record 6.9 million USD in Q2/2015, up 2.1 percent from revenue of 6.7 million USD recorded in Q2/2014. Our revenue mix in Q2/2015 continued to shift to higher margin functional ingredients and packaged foods.

Revenue from the Brazil segment totalled 4.5 million USD in Q2/2015, essentially flat compared to revenue of 4.6 million USD recorded in Q2/2014. Revenue was negatively impacted by approximately 1.7 million USD due to foreign currency translation related to the decline in the Brazilian currency exchange rate. On a local currency basis, Brazil segment revenue in the quarter increased by 35 percent compared to Q2/2014. Revenue from Brazil is expected to build progressively throughout the remainder of 2015 despite economic difficulties that continue to affect our supply chain and our ability to produce at maximum capacity.

Consolidated gross profit in Q2/2015 increased by 83 percent to 2.2 million USD compared to 1.2 million USD recorded in the 2nd quarter of 2014. Overall, our consolidated gross profit percentage increased by 9.1 percentage points to 19.6 percent reflecting the shift to higher margin product sales in our USA Segment and a narrowing of negative gross profit in Brazil. Gross profit in Brazil was negatively impacted by the sell through of lower quality finished goods inventory resulting from raw bran supply issues. Operating expenses declined to 3.8 million USD in Q2/2015 compared to 4.2 million USD Q2/2014 primarily due to a reduction in employee related expenses and an incremental decline in amortization expenses.

Adjusted Ebitda

Earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash charges (Adjusted Ebitda) for Q2/2015 was 13’000 USD at the consolidated level. This compares to a consolidated Adjusted Ebitda loss of 1.1 million USD in Q2/2014. This improvement was driven by our USA segment which recorded Adjusted Ebitda of 543’000 USD, largely offset by an Adjusted Ebitda loss of 530’000 USD in the Brazil segment. Adjusted Ebitda is a non-GAAP measure that management believes provides important insight into RBT’s operating results.

Net Loss

For the second quarter of 2015 the Company recorded a net loss attributable to shareholders of (3.5) million USD or a loss of (0.38) USD per diluted share on 9.2 million weighted average shares outstanding. This compares to a loss of (15.1) million USD or (3.52) USD per diluted share on 4.3 million weighted average shares outstanding in the second quarter of 2014.

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