Q4 2022 RiceBran Technologies Earnings Call

Greetings and welcome to the Rice Bran technologies fourth quarter, and full year 2022 earnings call and webcast.

At this time, all participants are in listen only mode.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Please note. This conference is being recorded and I will now turn the conference over to your host Mr. Jeff on this <unk>, Sir the floor is yours.

Thank you good afternoon, everyone and welcome to the Rice Bran Technology's fourth quarter 'twenty 2022 financial results conference call hosting the call today are Peter Bradley Executive Chairman and Todd Mitchell, Vice friends, Chief operating Officer, and Chief Financial Officer.

I want to remind participants that during the call management's prepared remarks may contain forward looking statements that are subject to risks and uncertainties. Therefore, the company claims protection under the Safe Harbor for forward looking statements is contained in the private Securities Litigation Reform Act of 1995.

Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC.

In addition, any projections as to the Companys future performance represented by management include estimates as of today March 16, 2023, and the company assumes no obligation to update these projections in the future as market conditions change.

The webcast and certain financial information provided in the call, including reconciliations of non-GAAP financial measures to comparable GAAP financial measures are available at Www Dot Rice Bran, Texas Dot com on the Investor Relations page at this time I would like to turn the call over to Peter Peter. Please go ahead.

Thank you, Jeff and good morning, good afternoon to everyone.

22 was a year of both great progress and significant challenges.

Notably we entered into an agreement regarding the foods with respect to our rice milling operations and for the first time Goldman rates deliberate a full quarter of positive contribution to adjusted EBITDAR in the fourth quarter.

Additionally, <unk> already delivered strong revenue and profit contribution growth, particularly.

Particularly pleasing was the momentum was maintained in the fourth quarter. Despite challenges with the completing a major capital project at the mill.

<unk> now has 50% more capacity and a broader range of manufacturing capabilities.

A solid platform for growth.

The core <unk> business held its own delivering double digit revenue growth and maintained its profit contribution.

The benefits of the revenue growth and solid pricing action, though were offset by both higher raw material and operating costs.

While we've been able to grow volume through aggressive.

Those efforts, we were unable to maintain that our engagement with a previously disclosed disclosed new customer in the pet food category, because we were unable to resolve certain technical performance issues.

The added value derivatives business, though.

Yes.

The raw material and processing challenges, which materially impacted in the first half of the year.

And led to the inability to meet market demand, resulting in customer losses accentuated by increased competition in the derivatives category.

Now, let me turn the call over to talk to discuss the results.

Thank you Peter good afternoon, everyone.

We delivered another $10 million last quarter with year over year growth of 32% in the fourth quarter.

And 34% for the year.

Both mills are executing very well.

<unk> sales grew double digits for four quarters in a row.

However, while adjusted EBITDA losses declined sequentially and euro.

Year over year in the fourth quarter.

Largely due to a significant improvement at Golden Ridge results were below our expectations for both the quarter and the year.

Looking at the numbers in greater detail rare.

Revenue.

Revenue was $10 6 million in the fourth quarter of 2022, 32% increase from $8 million in the fourth quarter of 2021.

Total revenue was $41 6 million in 2022 at 34% increase from just over $31 million in 2021.

Growth for the quarter and for the year was led by Golden region in Gi and helped by double digit gains in core SRV sales all set by a decline in value add SRV derivative sales.

Gross losses.

Gross losses were 87000 in the fourth quarter of 2022.

Down from gross losses of 170 year 1000, a year ago.

Losses were 759000 for the full year 2022.

A $1 $2 million decline from gross profit of 44202021.

Gross losses for the quarter and for the year were driven by a decline in contribution margin from value add SRV derivative sales.

Set in part by improved results from Golden Ridge at MTI.

SG&A.

SG&A in the fourth quarter declined 5% to $1 5 million from $1 6 million a year ago.

Total SG&A for the year declined 6% to $6 7 million from $7 1 million in 2021.

Lower SGA for the quarter and for the year was driven by a reduction in director compensation and corporate expenses.

With the latter primarily due to lower support staff compensation and benefits from Subletting, our corporate headquarters.

Operating losses.

Operating losses declined 71% in the fourth quarter.

$1 6 million from operating losses of $5 6 million in the fourth quarter of 2021.

Operating losses for the year fell 31% to seven three.

$3 million.

From $10 6 million in 2021.

Operating losses in the fourth quarter and full year of 2021 included $3 9 million noncash charge for goodwill impairment.

Net losses.

Net loss for the fourth quarter was $1 7 million or <unk> 28 per share compared to a net loss of $5 4 million or $1 four per share a year ago.

Net loss for the full year.

Seven 9 million or $1 42 per share compared to a net loss of just under $9 million or $1 87 per share in 2021.

Net losses in 2021 included a gain of $1 8 million in the first quarter.

Forgiveness of the SBA PPP loan and the aforementioned $3 9 million charge in the fourth quarter for goodwill impairment.

Adjusted EBITDA.

Adjusted EBITDA losses were 654000 in the fourth quarter compared to adjusted EBITDA losses of 806000 in the fourth quarter of 2021.

Adjusted EBITDA losses for the full year were $3.

$8 million in the fourth quarter I'm sorry.

For the full year compared to adjusted EBITDA losses of $2 9 million for 2021.

Lower losses in the fourth quarter stemmed from a significant improvement in contribution from Golden Ridge, Although declined for the year reflected the decline in contribution from our value add SRV derivatives business.

Cash total cash flow.

$3 9 million at the end of the year down from $5 8 million at the end of 2021 and $4 4 million at the end of the third quarter of 2022.

With that I'll turn the call back to Peter for closing comments.

Thanks, Tony.

Despite the progress in parts of the company in 2022, notably the rice and specialty lending businesses.

<unk> B is not move forward as we wanted it to and the value weather derivatives business continues to suffer major broke and operational challenges.

Accordingly, we were not able to achieve the goal of positive jaws.

The EBIT.

The board is in the midst of the strategic review of all the possibilities for <unk> technologies.

These alternatives are at various stages of review.

Given the sensitive nature of this process.

Currently unable to provide any further details.

I'd like to thank everybody for their.

For the attention and I will turn it back to the operator.

Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation.