Q4 2024 Arcadia Biosciences Inc Earnings Call
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Mark: Please be advised that today's conference is being recorded I would now like to hand, the conference over to Mark.
Mark: Our coming Chief Financial Officer at Arcadia. Please go ahead.
Mark: Thank you and good afternoon.
Mark: Joining me on the call today is to Jay Shafer, <unk>, President and Chief Executive Officer.
Mark: This call is being webcast and you can refer to the company's press release at Arcadia Bio Dot com.
Mark: Before we start <unk>.
Mark: To remind you that Arcadia biosciences will be making forward looking statements on this call based on current expectations and currently available information.
Mark: However, since these statements are based on factors that involve risks and uncertainties. The company's actual performance and results may differ materially from those described or implied today.
Mark: You can review the Companys Safe Harbor language in our most recently filed 10-K.
T. J.: With that I'll now turn the call over to T. J.
T. J.: Good afternoon, and thank you for joining us today to discuss our 2020 for fourth quarter and full year financial results.
T. J.: The year 2024 represented the culmination of a multiyear plan to put Arcadia on our path to profitability and I am extremely pleased with the progress we have made.
T. J.: Over the last two years, we have exited underperforming body care brands in an effort to simplify our business and focus our resources on our most promising brands.
T. J.: In mid 2024, we seized on an opportunity to monetize a portion of our wheat intellectual property portfolio through the sale of a trait as well as the good wheat brand of wheat products, which provided non dilutive capital while significantly reducing our operating expenses.
The year 2024 represented the culmination of a multiyear plan to put Arcadia on a path to profitability and I am extremely pleased with the progress we have made.
You can review the company's Safe Harbor language in our most recently filed 10-K.
T. J.: Today, we are a leaner company that is solely focused on growing our zola coconut water products and we are delivering what we said we would deliver.
T. J.: With that I'll now turn the call over to T. J.
T. J.: Over the last two years, we have exited underperforming body care brands in an effort to simplify our business and focus our resources on our most promising brands.
T. J.: Good afternoon, and thank you for joining us today to discuss our 2020 for fourth quarter and full year financial results.
T. J.: In May 2024 on our special Investor call. Following the sale of good REIT assets, we provided the following guidance for 2024.
Speaker Change: The year 2024 represented the culmination of a multiyear plan to put Arcadia on our path to profitability and I am extremely pleased with the progress we have made.
T. J.: In mid 2024, we seized on an opportunity to monetize a portion of our intellectual property portfolio through the sale of a trait as well as the good wheat brand of wheat products, which provided non dilutive capital while significantly reducing our operating expenses.
T. J.: We said full year revenue would essentially be in line with the $5 $3 million, we reported for full year 2023 prior to the sale of a good week.
Speaker Change: Over the last two years, we have exited underperforming body care brands in an effort to simplify our business and focus our resources on our most promising brands.
T. J.: That our gross profit dollars would be above $2 million.
T. J.: Today, we are a leaner company that is solely focused on growing our zola coconut water products and we are delivering what we said we would deliver.
Speaker Change: In mid 2024, we seized on an opportunity to monetize a portion of our intellectual property portfolio through the sale of a trait as well as the good wheat brand of wheat products, which provided non dilutive capital while significantly reducing our operating expenses.
T. J.: With gross margins in the low <unk>.
T. J.: And that our R&D and SG&A expenses would have a quarterly run rate of around $2 million in the second half of the year.
T. J.: In May 2024 on our special Investor call. Following the sale of good wheat assets, we provided the following guidance for 2024.
T. J.: The results we are reporting today illustrates the successful execution of our strategy with full year revenues of just over $5 million gross profit of $2 1 million and gross margins of 41, 3%.
Speaker Change: Today, we are a leaner company that is solely focused on growing our zola coconut water products and we are delivering what we said we would deliver.
T. J.: We said full year revenue would essentially be in line with the $5 $3 million, we reported for full year 2023 prior to the sale of a good week.
T. J.: That our gross profit dollars would be above $2 million.
Speaker Change: In May 2024 on our special Investor call. Following the sale of good REIT assets, we provided the following guidance for 2024.
T. J.: Our reported R&D and SG&A expenses in the second half of 2024 were $4 9 million, which.
T. J.: With gross margins in the low forties.
T. J.: And that our R&D and SG&A expenses would have a quarterly run rate of around $2 million in the second half of the year.
T. J.: Which resulted in a higher quarterly run rate than our previous guidance as we incurred approximately $1 $2 million of transaction related fees in the second half that we did not anticipate in may when we provided guidance.
Speaker Change: We said full year revenue would essentially be in line with the $5 $3 million, we reported for full year 2023 prior to the sale of a good week.
The results we are reporting today illustrate the successful execution of our strategy with full year revenues of just over $5 million gross profit of $2 1 million and gross margins of 41, 3%.
Speaker Change: That our gross profit dollars would be above $2 million.
Speaker Change: With gross margins in the low forties.
T. J.: But there is an even better story deeper below the surface of the full year numbers and that is one of momentum.
Speaker Change: And that our R&D and SG&A expenses would have a quarterly run rate of around $2 million in the second half of the year.
T. J.: Our reported R&D and SG&A expenses in the second half of 2024 were $4 9 million, which resulted in a higher quarterly run rate than our previous guidance as we incurred approximately $1 $2 million of transaction related.
T. J.: If I were speaking about Arcadia in 2024, using a sports analogy, we would be described as a second half team.
Speaker Change: The results we are reporting today illustrate the successful execution of our strategy with full year revenues of just over $5 million gross profit of $2 1 million and gross margins of 41, 3%.
T. J.: In the first half of 2020 for Arcadia sales declined 4% year over year.
T. J.: But in the second half of 2020 for Arcadia sales grew 32%. Despite the fact that our GLA business was down 60% in the second half compared to prior year as we sold through the remaining inventory.
T. J.: Fees in the second half that we did not anticipate in may when we provided guidance.
Speaker Change: Our reported R&D and SG&A expenses in the second half of 2024 were $4 9 million, which.
T. J.: But there is an even better story deeper below the surface of the full year numbers and that is one of momentum.
Speaker Change: <unk> and a higher quarterly run rate than our previous guidance as we incurred approximately $1 $2 million of transaction related fees in the second half that we did not anticipate in may when we provided guidance.
T. J.: The significant change in our business was driven by the tremendous amount of momentum with XOMA, which grew revenues, 16% in the first half of 2024 and 80% in the second half of 2024 as a result of the significant distribution gains in the second half by this hyper.
T. J.: If I were speaking about Arcadia in 2024, using a sports analogy, we would be described as a second half team.
T. J.: In the first half of 2020 for Arcadia sales declined 4% year over year.
T. J.: But there is an even better story deeper below the surface of the full year numbers and that is one of momentum.
T. J.: But in the second half of 2020 for Arcadia sales grew 32%. Despite the fact that our GLA business was down 60% in the second half compared to prior year as we sold through the remaining inventory.
T. J.: Focused team.
T. J.: In fact in the fourth quarter alone Zola sales increased 124% compared to the fourth quarter of last year.
T. J.: If I were speaking about our Acadia in 2024, using a sports analogy, we would be described as a second half team.
T. J.: Yeah.
Speaker Change: In the first half of 2020 for Arcadia sales declined 4% year over year.
T. J.: The significant change in our business was driven by the tremendous amount of momentum with Zola, which grew revenues, 16% in the first half of 2024.
T. J.: But the second half story is more than just a revenue story.
T. J.: While our consolidated Arcadia revenues increased more than 30% during the second half our use of operating cash decreased 30% in the second half compared to the first half of 2024 consistent with our strategy of profitable growth that we have previously discussed.
Speaker Change: But in the second half of 2020 for Arcadia sales grew 32%. Despite the fact that our GLA business was down 60% in the second half compared to prior year as we sold through the remaining inventory.
T. J.: 80% in the second half of 2024 as a result of the significant distribution gains in the second half by this hyper focus team.
T. J.: The significant change in our business was driven by the tremendous amount of momentum with Zola, which grew revenues, 16% in the first half of 2024 and 80% in the second half of 2024 as a result of the significant distribution gains in the second half by this hyper <unk>.
T. J.: In fact in the fourth quarter alone Zola sales increased 124% compared to the fourth quarter of last year.
T. J.: In fact, there were several opportunities for solar to secure even more distribution during the year, but we walked away from several opportunities that did not meet our profitability targets.
T. J.: Yeah.
T. J.: But the second half story is more than just a revenue story, while our consolidated Arcadia revenues increased more than 30% during the second half our use of operating cash decreased 30% in the second half compared to the first half of 2024 consistent with our.
T. J.: For full year 2020 for Zola sales increased 46% compared to the previous year, primarily driven by the new distribution I mentioned earlier.
T. J.: Focused team.
T. J.: In fact in the fourth quarter alone Zola sales increased 124% compared to the fourth quarter of last year.
T. J.: In 2024, we added more than <unk> hundred new stores and grew our retail distribution by 86%, resulting in the best annual performance Bresaola since Arcadia acquired the brand in May 2021.
T. J.: <unk> strategy of profitable growth that we have previously discussed.
T. J.: But the second half story is more than just a revenue story, while our consolidated Arcadia revenues increased more than 30% during the second half our use of operating cash decreased 30% in the second half compared to the first half of 2024.
T. J.: In fact, there were several opportunities for solar to secure even more distribution during the year, but we walked away from several opportunities that did not meet our profitability targets.
T. J.: From a gross margin standpoint, Zola gross margins in 2024 were 33%, which is consistent with the guidance. We provided previously of margins in the low to mid thirties.
T. J.: For full year 2020 for Zola sales increased 46% compared to the previous year, primarily driven by the new distribution I mentioned earlier.
T. J.: Consistent with our strategy of profitable growth that we have previously discussed.
T. J.: In fact, there were several opportunities for solar to secure even more distribution during the year, but we walked away from several opportunities that did not meet our profitability targets.
T. J.: The success, we experienced in 2024 has resulted in solar growth that is outpacing the coconut water category by more than two to one across all measured time periods.
T. J.: In 2024, we added more than 1600, new stores and grew our retail distribution by 86%, resulting in the best annual performance for Zola since Arcadia acquired the brand in May 2021.
T. J.: For full year 2020 for Zola sales increased 46% compared to the previous year, primarily driven by the new distribution I mentioned earlier.
T. J.: And this is a very healthy category, where full year growth in 24 was double the growth experienced in 2023 as consumer preferences shift to healthier beverages, such as coconut water.
T. J.: From a gross margin standpoint, Zola gross margins in 2024 were 33%, which is consistent with the guidance. We provided previously of margins in the low to mid thirties.
T. J.: In 2024, we added more than 1600, new stores and grew our retail distribution by 86%, resulting in the best annual performance for Zola since Arcadia acquired the brand in May 2021.
T. J.: Based on Nielsen data for the four weeks ending December 28, 2020 for the shelf stable coconut water category in grocery grew 28, 7%, while Zola increased 73, 7%.
T. J.: The success, we experienced in 2024 has resulted in solar growth that is outpacing the coconut water category by more than two to one across all measured time periods.
T. J.: From a gross margin standpoint, Zola gross margins in 2024 were 33%, which is consistent with the guidance. We provided previously of margins in the low to mid thirties.
T. J.: During the latest 13 weeks the category Rose 29, 2% compared to solar growth of 71, 8%.
T. J.: And this is a very healthy category, where full year growth in 24 was double the growth experienced in 2023 as consumer preferences shift to healthier beverages, such as coconut water.
T. J.: And for the full year the category grew 18, 5%, while Zola increased 38, 5%.
T. J.: The success, we experienced in 2024 has resulted in solid growth that is outpacing the coconut water category by more than two to one across all measured time periods.
T. J.: Based on Nielsen data for the four weeks ending December 28, 2020 for the shelf stable coconut water category in grocery grew 28, 7%, while Zola increased 73, 7%.
T. J.: As a reminder, when we provide Nielsen data the numbers refer to scan data, which is products sold through to the end customer.
T. J.: And this is a very healthy category, where full year growth in 24 was double the growth experienced in 2023 as consumer preferences shift to healthier beverages, such as coconut water.
T. J.: As a result, our reported Zola sales growth of 46% differs from the Nielsen number of 38, 5% as some product could still be in distribution centers or on store shelves.
During the latest 13 weeks the category Rose 29, 2% compared to solar growth of 71, 8%.
Speaker Change: Based on Nielsen data for the four weeks ending December 28, 2020 for the shelf stable coconut water category in grocery grew 28, 7%, while Zola increased 73, 7%.
T. J.: And for the full year the category grew 18, 5%, while Zola increased 38, 5%.
T. J.: Yeah.
T. J.: So in summary, 2024 was a tale of two stories.
T. J.: In the first half the focus was on right sizing the business and positioning Zola for success.
T. J.: As a reminder, when we provide Nielsen data the numbers refer to scan data, which is products sold through to the end customer.
T. J.: During the latest 13 weeks the category Rose 29, 2% compared to Zola growth of 71, 8%.
T. J.: The second half was about executing on our strategy driving growth Enzo and delivering on the commitments we made earlier in the year.
T. J.: As a result, our reported dollar sales growth of 46% differs from the Nielsen number of 38, 5%.
T. J.: And for the full year the category grew 18, 5%, while Zola increased 38, 5%.
T. J.: As we begin 2025, we believe that <unk> has significant momentum based on the new distribution that was put in place in the back half of 2024 as well as a pipeline of new opportunities to drive additional growth in the future.
Some product could still be in distribution centers or on store shelves.
T. J.: As a reminder, when we provide Nielsen data the numbers refer to scan data, which is products sold through to the end customer.
Okay.
T. J.: So in summary, 2024 was a tale of two stories.
T. J.: In the first half the focus was on right sizing the business and positioning Zola for success.
T. J.: As a result, our reported Zola sales growth of 46% differs from the Nielsen number of 38, 5% as some product could still be in distribution centers or on store shelves.
T. J.: Before I turn the call over to Mark I want to provide an update on the pending transaction with Roosevelt resources.
T. J.: The second half was about executing on our strategy driving growth in solar and delivering on the commitments we made earlier in the year.
T. J.: But before I begin I want to state upfront that the comments I can make today will be limited.
T. J.: Yeah.
T. J.: So in summary, 2000.
Speaker Change: For further information and discussion I would refer you to our form S. Four registration statement that has been filed with the Securities and Exchange Commission.
T. J.: As we begin.
Speaker Change: Having said that as you are all aware on December five 2024, we announced that we had entered into a definitive securities exchange agreement with Roosevelt resources, a privately held oil and gas exploration and production company based in Dallas, Texas.
As we begin 2025, we believe that <unk> has significant momentum based on the new distribution that was put in place in the back half of 2024.
As well as a pipeline of new opportunities to drive additional growth in the future.
Speaker Change: As I mentioned previously we filed a registration statement on form S. Four with the SEC on February 14th 2025.
Before I turn the call over to Mark.
I want to provide an update on the pending transaction with Roosevelt resources.
Speaker Change: Related to the proposed share issuance and a stockholder meeting to vote on certain proposals relating to the transaction.
But before I begin I want to state upfront that the comments I can make today will be limited.
Speaker Change: As is customary in these types of transactions. The SEC can provide multiple rounds of comments on the matters included in the registration statement.
For further information and discussion I would refer you to our form S. Four registration statement that has been filed with the Securities and Exchange Commission.
Speaker Change: Once we complete the review process and the registration statement has been declared effective by the SEC, we intend to distribute proxy materials to our stockholders to vote on proposals relating to the transaction.
Having said that as you are all aware on December five 2024, we announced that we had entered into a definitive securities exchange agreement with Roosevelt resources, a privately held oil and gas exploration and production company based in Dallas, Texas.
Speaker Change: Given the timing of the initial filing as well as various actions required to go through the SEC review process.
As I mentioned previously we filed a registration statement on form S. Four with the SEC on February 14th 2025.
Speaker Change: We currently expect the transaction to be completed towards the end of Q2.
Speaker Change: With that I will now turn the call over to Mark to discuss our 2020 for Q4 and full year financial results Mark.
Related to the proposed share issuance and a stockholder meeting to vote on certain proposals relating to the transaction.
As is customary in these types of transactions. The SEC can provide multiple rounds of comments on the matters included in the registration statement.
Mark: Thank you T J and welcome to everyone joining us on the call.
Mark: I would like to remind everyone that my discussion of the financial results will refer to the impact of continuing operations only.
Once we complete the review process and the registration statement has been declared effective by the SEC, we intend to distribute proxy materials to our stockholders to vote on proposals relating to the transaction.
Mark: Reference to prior year results will exclude the impact of the discontinued good wheat and body care operations.
Mark: With that I will begin our discussion of the financial results.
Mark: In Q4 total revenues were approximately $1 2 million and this represented an increase of 56% compared to the same period of last year.
Given the timing of the initial filing as well as various actions required to go through the SEC review process.
Mark: It's worth noting that this increase in revenues occurred despite a sharp decline in sales of GLA oil as we sold through the last of our remaining inventory.
We currently expect the transaction to be completed towards the end of Q2.
With that I will now turn the call over to Mark to discuss our 2020 for Q4 and full year financial results Mark.
Mark: This decline in sales of GLA oil was offset by a 124% increase in solar revenues.
Mark: Now despite the fact that Q4 tends to be in the slow end of our seasonality curve.
Thank you T J and welcome to everyone joining us on the call I.
Mark: Zola sales in Q4 of this year were higher than the best quarter than all of 2023.
I would like to remind everyone that my discussion of the financial results will refer to the impact of continuing operations only.
Mark: For the full year total revenues increased to 13% compared to 2023.
Any reference to prior year results will exclude the impact of the discontinued good wheat and body care operations.
Mark: This was driven by a 46% increase in dollar sales overcoming a 49% decline in sales of GLA oil.
With that I will begin our discussion of the financial results.
In Q4 total revenues were approximately $1 2 million and this represented an increase of 56% compared to the same period of last year.
Mark: The cost of revenues in 2024 was approximately $3 million and this represented a 36% increase compared to last year.
Mark: The increase in the cost of revenues was driven by the increase in <unk> sales as product costs made up 84% of the total cost of revenues in 2024.
It's worth noting that this increase in revenues occurred despite a sharp decline in sales of GLA oil as we sold through the last of our remaining inventory.
Mark: And 93% of the total cost of revenues in 2023.
This decline in sales of GLA oil was offset by a 124% increase in solar revenues.
Mark: The effect of this shift in the product sales mix can be seen in our gross margin rate, which declined from 51% in 2023% to 41% in 2024.
And despite the fact that Q4 tends to be in the slow and our seasonality curve.
<unk> sales in Q4 of this year were higher than the best quarter than all of 2023.
Mark: The gross margin rate in Q4 of 2024 was 32%.
For the full year total revenues increased to 13% compared to 2023.
Mark: Research and development costs were $53000 in 2024.
This was driven by a 46% increase in solar sales overcoming a 49% decline in sales of GLA oil.
Mark: This was a decrease of $11000 compared to 2023 and that reflects our strategy to develop the zillow brand by leveraging our existing resources and minimizing new investment.
The cost of revenues in 2024 was approximately $3 million and this represented a 36% increase compared to last year.
Mark: Selling general and administrative costs in 2024 were $9 $6 million and that included $2 million of transaction costs related to the sale of <unk> assets as well as the pending transaction with Roosevelt resources.
The increase in the cost of revenues was driven by the increase in solar sales as product costs made up 84% of the total cost of revenues in 2024.
And 93% of the total cost of revenues in 2023.
Mark: In comparison SG&A costs in 2023 were $8 2 million.
The effect of this shift in the product sales mix can be seen in our gross margin rate, which declined from 51% in 2023 to <unk>, 41% in 2024.
Mark: For Q4 of this year, selling general and administrative costs were $2 7 million.
Mark: That included $700000 of transaction related costs in.
Mark: In comparison SG&A costs in Q4 of last year were $1 7 billion.
The gross margin rate in Q4 of 2024 was 32%.
Research and development costs were <unk> $53000 in 2024.
Mark: The loss from discontinued operations was $2 7 million.
This was a decrease of $11000 compared to 2023 and it reflects our strategy to develop the zillow brand by leveraging our existing resources and minimizing new investment.
Mark: For all of 2024, and the cost was mostly comprised of termination costs and fees for the remaining employees and vendors that supported the good week business.
Mark: As expected losses from discontinued operations have declined as the year progressed and losses in Q4 were $23000.
Selling general and administrative costs in 2024 were $9 $6 million and that included $2 million of transaction costs related to the sale of <unk> assets as well as the pending transaction with Roosevelt resources.
Mark: Moving to the balance sheet, we ended 2024 with $4 2 million of cash compared to $11 $6 million at the start of the year.
In comparison SG&A costs in 2023 were $8 2 million.
Mark: As TJ mentioned, we have been able to reduce our operating costs, our operating and cash consumption in the second half of the year and this has allowed for us to keep our overall cash consumption steady despite having $700000 of transaction related costs in Q4.
For Q4 of this year, selling general and administrative costs were $2 $7 million and that included $700000 of transaction related costs.
In comparison SG&A costs in Q4 of last year were $1 7 billion.
Mark: We ended 2024 with $1 $2 million of accounts receivable compared to $500000 at the start of the year.
The loss from discontinued operations was $2 7 million.
For all of 2024, and the cost was mostly comprised of termination costs and fees for the remaining employees and vendors that supported the good wheat business.
Mark: This increase reflects the year on year growth in Q4, as the low revenues as well as the addition of interest related to the short term portion of our note receivable from the sale of <unk> assets.
As expected losses from discontinued operations have declined as the year progressed and losses in Q4 were $23000.
Mark: We ended 2024 with an inventory balance of $904000 compared to $837000 at the start of the year.
Moving to the balance sheet, we ended 2024 with $4 $2 million of cash compared to $11 $6 million at the start of the year.
Mark: The growth in inventory reflects the impact of higher solar revenues in Q4, as well as the effect of longer lead times from our coconut water suppliers.
As T. J mentioned, we have been able to reduce our operating costs, our operating cash consumption in the second half of the year and this has allowed for us to keep our overall cash consumption steady despite having $700000 of transaction related costs in Q4.
Mark: Yes.
Mark: The promissory note we received from the sale of <unk> assets continues to accrue interest at the prime rate.
We are scheduled to receive approximately $2 $5 million of cash in May of 2025, as the first repayment of principal and interest.
We ended 2024 with $1 $2 million of accounts receivable compared to $500000 at the start of the year.
Mark: In conclusion, we have ended 2024, having successfully executed the restructuring of our business, while making improvements in almost all aspects of our financial performance.
This increase reflects the year on year growth in Q4 solar revenues as well as the addition of interest related to the short term portion of our note receivable from the sale of <unk> assets.
Mark: We continue to achieve some of our highest rates of revenue growth and outpaced the category without additional investment.
Mark: Also we continued to reduce our use of cash from ongoing operations, allowing us to maintain our overall cash consumption, while we make progress in our transaction with Roosevelt resources.
We ended 2024 with an inventory balance of $904000 compared to $837000 at the start of the year.
The growth in inventory reflects the impact of higher solar revenues in Q4, as well as the effect of longer lead times from our coconut water suppliers.
Mark: I'll now turn the call over to the operator for questions.
Mark: Thank you as a reminder, if he would like to ask a question. Please press star one on your telephone.
The promissory note we received from the sale of <unk> assets continues to accrue interest at the prime rate we.
Speaker Change: Automated message advising your hand this race.
We are scheduled to receive approximately $2 $5 million of cash in may of 2025.
Speaker Change: So I'll ask that you. Please wait for your name and company to be announced before proceeding with your question one moment. Please.
First repayment of principal and interest.
Speaker Change: Okay.
In conclusion, we have ended 2024, having successfully executed the restructuring of our business, while making improvements in almost all aspects of our financial performance.
Speaker Change: And our first question stay will come from the line of Ben cleaning of Lake Street. Your line is open.
Speaker Change: Alright, Thanks for taking my questions and congratulations on getting into the year here on the first question on Zola distribution can.
We continue to achieve some of our highest rates of revenue growth and outpaced the category without additional investment.
Speaker Change: Can you elaborate a bit on your expectations for continued distribution growth in 2025.
Also we continued to reduce our use of cash from ongoing operations, allowing us to maintain our overall cash consumption, while we make progress in our transaction with Roosevelt resources.
Speaker Change: Sure so.
Speaker Change: Yes, we do have a healthy pipeline.
I will now turn the call over to the operator for questions.
Speaker Change: As we as we enter 2025.
Thank you.
Speaker Change: I don't want to.
I remind if he would like to ask a question. Please press star one on your telephone.
Speaker Change: Provide any specific numbers.
The automated message advising your hand. This raise we also ask that you. Please wait for your name and company to be announced before proceeding with your question one moment. Please.
Speaker Change: But the pipeline is as healthy in 'twenty five as it was in 'twenty four.
Speaker Change: We will also benefit as we noted a lot of the new distribution and gains came in the second half of the year. So.
Okay.
And our first question today will come from the line of Ben cleaning of Lake Street. Your line is open.
Speaker Change: So we will benefit.
Speaker Change: The just the full 12 months of all of that new distribution in 2025 compared to 224.
Alright, Thanks for taking my questions and congratulations on getting into the year here on the first question on Zola distribution can.
Can you elaborate a bit on your expectations for continued distribution growth here in 2025.
Speaker Change: Okay.
Speaker Change: Very helpful.
Speaker Change: On an.
Speaker Change: GLA can you.
Sure so.
Speaker Change:
Speaker Change: Help me with some housekeeping here what was the full year GLA revenue and then also in the <unk>.
Yes, we do have a healthy pipeline.
As we as we enter 2025.
Speaker Change: Fourth quarter, and then can you confirm you guys are 100% sold out of that product as of 12 31 24.
I don't want to.
Provide any specific numbers.
But the pipeline is as healthy in 'twenty five as it was in 'twenty four.
Speaker Change: Yep.
Speaker Change: So full year.
Speaker Change: GLA revenue.
We will also benefit as we noted a lot of the new distribution and gains came in the second half of the year. So.
Speaker Change: Was 756000.
T. J.: So we will benefit.
Q4 was 55000.
T. J.: The just the full 12 months of all of that new distribution in 2025 compared to 224.
Speaker Change: And we have complete we are completely out of GLA inventory there will be no GLA sales in 2025.
Speaker Change: Okay.
Speaker Change: Very helpful.
Speaker Change: Okay perfect.
Speaker Change: On an.
Speaker Change: Very good and then last one for me and I'll get back in queue is regarding your efforts to monetize.
Speaker Change: Ngls can you.
Speaker Change: Help me with some housekeeping here what was the full year GLA revenue and then also in the fourth quarter and then can you confirm you guys are 100% sold out of that product as of 12 31 24.
Speaker Change: The legacy.
Speaker Change: IP from from the <unk>.
Speaker Change: From the prior year business model can you update us on kind of the status of any of those efforts, how advanced any conversations or any expectations or any goals I guess for future events.
Speaker Change: Okay.
Speaker Change: Yep.
Speaker Change: So full year.
Speaker Change: GLA revenue.
Speaker Change: Sure.
Speaker Change: So as you are aware, we still do have a portfolio of patents predominantly focused on wheat.
Speaker Change: 756000.
Speaker Change: Q4 was 55000.
Speaker Change: It would be our our resistant starch reduced gluten and oxidative stability patent portfolio.
Speaker Change: And we have complete we are completely out of GLA inventory there will be no GLA sales in 2025.
Speaker Change: We are.
Speaker Change: We are seeking to monetize.
Speaker Change: Okay perfect.
Speaker Change: Very good and then last one for me and I'll get back in queue is regarding your efforts to monetize.
Speaker Change: That entire patent portfolio.
Speaker Change: I would say.
Speaker Change: It will it will likely be a series of transactions there will not be one buyer.
Speaker Change: The legacy.
Speaker Change: IP from from the <unk>.
Speaker Change: From the prior year business model can you update us on kind of the status of any of those efforts, how advanced any conversations or any expectations or any goals I guess for future events.
Speaker Change: For the entire portfolio and part of that is really due to just some of the legal constraints that we have based on <unk>.
Speaker Change: Licensing deals or the relationships that we have with existing partners.
Speaker Change: Sure.
Speaker Change: So as you are aware, we still do have a portfolio of patents predominantly focused on wheat.
Speaker Change: What youll probably see us.
Speaker Change: Potentially.
Speaker Change: One four.
Speaker Change: Or to even more.
Speaker Change: It would be our our resistant starch reduced gluten and oxidative stability patent portfolio.
Speaker Change: <unk> actions to kind of unwind.
Speaker Change: That portfolio.
Speaker Change: In terms of timeline I think.
Speaker Change: We are.
Speaker Change: We are in advanced stages in terms of those discussions.
Speaker Change:
Speaker Change: We are seeking to monetize.
Speaker Change: So.
Speaker Change: That entire patent portfolio.
Speaker Change: I am hopeful that we could have something done in the first half of the year.
Speaker Change: I would say.
Speaker Change: It will it will likely be a series of transactions there will not be one buyer.
Speaker Change: That we would be able to announce.
T. J.: For the entire portfolio and part of that is really due to just some of the legal constraints that we have based on.
Speaker Change: <unk>.
Speaker Change: That would be kind of my target.
Speaker Change: Got it very good.
Speaker Change: Well best of luck with.
Speaker Change: Both of those initiatives and best of luck here hopefully final days of the Rosebel transaction. Thanks for taking my question I'll get back in queue.
T. J.: Licensing deals or the relationships that we have with existing partners.
T. J.: I think what Youll, probably see us.
Speaker Change: Thank you.
T. J.: Potentially.
T. J.: One.
T. J.: Thank you and I would like to go ahead and turn the call back over to TJ for closing remarks. Please go ahead.
T. J.: Or to even more.
T. J.: <unk> actions to kind of unwind.
T. J.: That portfolio.
T. J.: So in closing we developed a strategy that we believed maximize the potential of our strongest brand solar.
T. J.: In terms of timeline I think.
Speaker Change: We are in advanced stages in terms of those discussions.
T. J.: And we have executed on that strategy in the second half of 2024, increasing revenues, 80%, while delivering on all of the commitments that we communicated back in May.
T. J.: So.
T. J.: I am hopeful that we could have something done in the first half of the year.
T. J.:
T. J.: That we would be able to announce.
T. J.: At the same time, our top line is expanding we are also maintain tight cost controls or.
T. J.: That would be kind of my target.
T. J.: Got it very good.
T. J.: <unk> has now produced gross margins in excess of 30% for eight straight quarters, and our 2020 for use of cash in operations is at the lowest level since <unk> went public a decade ago.
T. J.: Well best of luck with.
T. J.: With all of those initiatives and best of luck here in the hopefully final days of the Rosebel transaction. Thanks for taking my question I'll get back in queue.
T. J.: Thank you.
T. J.: Thank you and I would like to go ahead and turn the call back over to TJ for closing remarks. Please go ahead.
T. J.: Zola distribution expansion, particularly in the second half of 2024 provides tremendous momentum as we enter 2025.
T. J.: So in closing we developed a strategy that we believed maximize the potential of our strongest brand solar.
T. J.: This concludes my remarks, thank you for your interest in Arcadia and have a great day.
T. J.: And we have executed on that strategy in the second half of 2024, increasing revenues, 80%, while delivering on all of the commitments that we communicated back in May.
T. J.: Thank you so much for participating in today's conference call you may now disconnect.
T. J.: At the same time, our top line is expanding we are also maintain tight cost controls.
T. J.: Arcadia has now produced gross margins in excess of 30% for eight straight quarters, and our 2020 for use of cash in operations is at the lowest level since <unk> went public a decade ago.
T. J.: Zola distribution expansion, particularly in the second half of 2024 provides tremendous momentum as we enter 2025.
T. J.: This concludes my remarks, thank you for your interest in Arcadia and have a great day.
T. J.: Thank you so much for participating in today's conference call you may now disconnect.
T. J.: [music].
T. J.: Sure.
T. J.: <unk>.
T. J.: [music].
T. J.: Yes.
T. J.: [music].
T. J.: Yes.
T. J.: [music].
T. J.: Okay.
T. J.: [music].
T. J.: Sure.
T. J.: Okay.
T. J.: Okay.
T. J.: [music].
Yes.
T. J.: Yes.
T. J.: [music].
T. J.: Yes.
T. J.: [music].
T. J.: Okay.
T. J.: Okay.
T. J.: Okay.
T. J.: [music].