RiceBran Technologies: Reports Q3/2015 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 third quarter ended September 30, 2015.

Financial Highlights

  • Q3/2015 consolidated gross profit margins improve 13.8 percentage points to 23.1 percent compared to 9.3 percent in Q3/2014
  • Brazil Segment achieves Adjusted Ebitda of 205’000 USD in Q3/2015, a 1.7 million USD improvement compared to Q3/2014
  • Q3/2015 consolidated revenues totalled 8.9 million USD, a decline of 14 percent compared to 10.4 million USD in Q3/2014, due principally to a 2.1 million USD currency translation loss in Brazil
  • Q3/2015 consolidated operating expenses were reduced 1.3 million USD or 28 percent from 4.7 million USD to 3.4 million USD

W. John Short, CEO + President, commented: «While our third quarter results continue to reflect the negative macroeconomic challenges we face in Brazil, we are pleased to have achieved a significant objective in our Brazil Segment: positive Adjusted Ebitda. Our efforts to restructure operations at Irgovel have been successful and we are beginning to demonstrate the earnings potential of our rice bran bio-refining business model. On a local currency basis we achieved 33 percent growth in Q3 revenues, delivered record local currency revenue in Brazil in the first nine months of 2015 and produced a healthy gross profit margin of over 19 percent in Q3/2015. These significant improvements were largely hidden by the negative impact caused by the decline of the Brazilian Real».

Short continued: «In our USA Segment, our largest natural products customer slowed purchases in Q3 as they moved into larger warehousing facilities to support expected future growth. The relocation resulted in reduced purchase orders from that customer in Q3, which contributed to a 14.6 percent decline in USA Segment revenue for the quarter. However, with that relocation now complete, we are already seeing marked improvement. Revenue in October was the highest in our Company’s history in the USA Segment, and we expect continued improvement as we move through the remainder of 2015 and into 2016».

«We remain focused on our goal of reaching consistent positive Adjusted Ebitda and positive consolidated cash flow in both segments through continued revenue expansion, further margin improvement, customer diversification and continued tight cost control».

Operating Results

Consolidated revenues in Q3/2015 experienced a 14 percent decline to 8.9 million USD compared to 10.4 million USD in Q3/2014 primarily due to the (2.1) million USD negative impact of foreign currency translation from our Brazil Segment as a result of the sharp decline in Brazil’s currency. On a constant currency basis, consolidated revenues would have increased by six percent in the period.

While Q3/2015 Brazil Segment revenue increased 33 percent year over year on a local currency basis, revenue in US Dollars, after foreign currency translation, totalled 3.9 million USD, a decline of 14.1 percent from revenue of 4.5 million USD recorded in Q3/2014.

Revenue from our USA Segment in Q3/2015 declined 14.6 percent to 5.0 million USD compared to revenue of 5.9 million USD recorded in Q3/2014. The decrease was primarily due to a large natural products customer reducing purchases in the quarter as they moved into larger facilities to support expected future growth. Revenue was also negatively impacted, to a lesser extent, by a continued decline in sales to large consumer package goods (CPG) companies.

Consolidated gross profit for Q3/2015 was 2.1 million USD, a 113 percent increase compared to gross profit of 1.0 million USD recorded in Q3/2014. Our consolidated gross profit percentage increased by 13.8 percentage points to 23.1 percent in Q3/2015 due to significant improvement in our Brazil Segment where gross margin percentage reached 19.1 percent compared to negative gross margin percentage of (23.5 percent) in Q3/2014. This improvement is primarily a result of increased efficiency at our Irgovel plant related to the plant restructuring initiated in Q2/2015, partially offset by an 8.2 percentage point decline in gross profit percentage in our USA Segment in Q3/2015.

Continued tight cost control and restructuring to reduce costs at Irgovel combined with the foreign exchange impact in Brazil resulted in a 1.3 million USD reduction in operating expenses to 3.4 million USD in Q3/2015 compared to 4.7 million USD in Q3/2014.

Adjusted Ebitda

Consolidated earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash charges (Adjusted Ebitda) for Q3/2015 was a loss of (269’000 USD), an improvement of 1.3 million USD, compared to a consolidated Adjusted Ebitda loss of (1.6) million USD in Q3/2014. The improvement in Adjusted Ebitda was driven by our Brazil segment which recorded a positive Adjusted Ebitda of 205’000 USD, due to a significant improvement in gross margins coupled with our cost control initiatives. The improved Adjusted Ebitda in our Brazil segment was offset by an Adjusted Ebitda loss of (474’000 USD) in our USA segment. Adjusted Ebitda is a non-GAAP measure that management believes provides important insight into RBT’s operating results.

Net Loss

The Company recorded a net loss attributable to shareholders of (0.5) million USD in Q3/2015 or a loss of (0.06) USD per diluted share on 9.2 million weighted average shares outstanding. This represents a 0.41 USD per diluted share improvement compared to a loss of (3.7) million USD or (0.47) USD per diluted share on 7.9 million weighted average shares outstanding in Q3/2014. Additional information can be found in the Company’s Form 10-Q filed with the United States Securities and Exchange Commission on November 12, 2015 (Image: pixabay.com).