RiceBran Technologies (RIBT) Reports In-Line Q2 EPS; Lowers FY18 Revenue Guidance

RiceBran Technologies (NASDAQ: RIBT) reported Q2 EPS of ($0.11), in-line with the analyst estimate of ($0.11). Revenue for the quarter came in at $3.2 million versus the consensus estimate of $2.99 million.

"We are making progress on many fronts positioning RiceBran Technologies for substantial growth,\" said Brent Rystrom, Chief Operating Officer and Chief Financial Officer. "We are pleased with our new bran supply agreement with Golden Ridge Rice Mills, which will provide our first source of supply from Arkansas, the largest rice producing state in the country. This agreement also provides us the option to acquire Golden Ridge Rice Mills, which we believe could be a transformational event for RBT and our shareholders by enabling us to substantially improve our supply chain management capabilities through outright control of a major source of bran supply and could position us for many other product and growth opportunities. We are excited by the progress of our sales team and their development of our sales pipeline, and our efforts to improve and expand bran supply emboldens our confidence that we can deliver on growth. And our balance sheet remains in strong position to fund our transition to growth."

Business Highlights:

• Revenue in the second quarter totaled $3.2 million, better than our updated guidance but below our original expectations for the period. Net loss of $(2.2) million and adjusted EBITDA of $(1.8) million in the second quarter of 2018 compared to net loss of $(1.2) million and adjusted EBITDA of $(1.3) million in the same period in the prior year. Both revenue and margins were negatively impacted during the second quarter by the loss of production at our Mermentau, LA facility starting in mid-April, which limited our ability to grow the business and caused us to ship more from our California facilities at much higher freight costs. In addition, gross margin was negatively impacted by reduced production at our Dillon, MT facility due to a large Cap Ex project related to attaining plant certification and an increase of approximately 37.9% in raw bran prices.
• Our balance sheet remains liquid and strong. We received $3.9 million of proceeds from warrant exercises during the quarter, which more than offset cash burn from operations and helped to increase shareholders\' equity. We ended the quarter with cash and cash equivalents of $7.7 million, debt of $14,000, and shareholders\' equity of $16.8 million.
• We entered into a new rice bran supply agreement with Golden Ridge Rice Mills. Golden Ridge Rice Mills will provide us with stabilized rice bran (SRB) from its location in Wynne, AR. This agreement positions RBT to expand our sourcing capabilities into Arkansas, the largest rice producing state in the U.S.
• We also secured an option to purchase Golden Ridge Rice Mills. We believe that owning and operating rice mills and the related rice bran production facilities will be an important part of our future supply of SRB, in addition to working with our current rice mill partners. It would also provide us substantial space to develop new products derived from SRB, an area of concentration for us where we see many growth opportunities.
• We are excited by the anticipated growth in our sales pipeline and are working to add additional production capacity to our system to meet expected growth this year and next.
• The Company now sees 2018 revenue of $14.0-$15.0 million. We expect modest revenue growth in the third quarter and more substantial growth in the fourth quarter.

"We made important progress during the quarter in both our system-wide certification efforts, and through the development of our relationship with Golden Ridge Rice Mills," said Dr. Robert Smith, CEO and President. "As our Mermentau operations resume production in the third quarter and we add production supplies from Golden Ridge Rice Mills, we believe we are well positioned to pursue accelerating growth."

GUIDANCE:

RiceBran Technologies sees FY2018 revenue of $14-15 million, versus the consensus of $14.47 million.

For earnings history and earnings-related data on RiceBran Technologies (RIBT) click here.

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