RiceBran Technologies Announces 2012 Nine Month and Third Quarter Financial Results

Nov 15, 2012 08:01 ET

SCOTTSDALE, AZ--(Marketwire - Nov 15, 2012) - RiceBran Technologies (OTCQB: RIBT), a global leader in the production and marketing of value added products derived from rice bran, today announced its financial results for the first nine months and third quarter ended September 30, 2012.

W. John Short, CEO & President of RiceBran Technologies, commented, "We continue to make progress in all business segments. Revenue in our USA segment grew 16.3% in the third quarter compared to the prior year driven by increases in both our animal feed and human nutrition product families. That growth was achieved without significant revenue contribution from our exclusive distribution agreement with Beneo-Remy. That international distributor relationship had a slow start in the first three quarters of the year as we worked to standardize operating procedures between our companies. With those operating issues now resolved, we anticipate positive USA segment revenue contributions from our international sales effort during the fourth quarter, into 2013 and beyond. In addition to achieving significant revenue growth, we continue to carefully manage controllable expenses. We achieved a combined reduction of over $900,000 in total operating expenses in our USA and Corporate segments in the third quarter of 2012 as compared to 2011."

Mr. Short continued, "In our Brazil segment, we experienced an overall revenue decline of 7.2% in our third quarter based primarily on the 20.1% exchange rate decline for the Brazilian Real. However, total revenue on a local currency basis increased by 15.7% in the quarter. Our facility expansion has experienced delays and cost overruns resulting primarily from unforeseen costs incurred in refitting a 30 year old plant. Nevertheless, we expect to have necessary funding arrangements in place by year end and to complete all projects in the second quarter of 2013. Once the expansion and related projects are complete, we expect to increase raw rice bran processing from the current level of 6,000 metric tons per month to 9,000 metric tons per month."

Financial Results for the Third Quarter Ending September 30, 2012

Consolidated revenues for the three months ended September 30, 2012 totaled $9.3 million as compared to $9.4 million for the same period the prior year.

 
 2012 Third Quarter Revenue Breakdown By Business Segment
 September 30,   2012   2011   CHANGE
 Brazil segment
 % of Revenues
  $6.3 million
67.2%
  $6.8 million
72.0%
  -7.2%
 USA segment
 % of Revenues
  $3.1 million
32.8%
  $2.6 million
28.0%
  +16.3%
 Total Revenues   $9.3 million   $9.4 million   -0.6%
             

Brazil segment revenue for the 2012 third quarter totaled $6.3 million, a decrease of 7.2%, as compared to $6.8 million for the 2011 third quarter. On a local currency basis, revenues increased $1.1 million. Revenues decreased $1.6 million as a result of the average US Dollar-Brazilian Real exchange rate between periods resulting in a net decline of $0.5 million.

USA segment revenues improved 16.3% during the third quarter of 2012 to $3.1 million as compared to $2.6 million during the third quarter of 2011. Animal feed product revenues increased slightly due to price increases in spite of 13.6% lower volume. Human nutrition product revenues increased $0.4 million on 1.4% higher volume and the impact of price increases.

Consolidated gross profit for the three months ended September 30, 2012 and 2011 remained constant at $1.9 million for both periods. Gross profit margin remained relatively constant at 20.1% and 20.2% respectively.

Brazil segment gross profit totaled $1.0 million for the 2012 third quarter as compared to $1.2 million for the 2011 third quarter. Gross profit margin decreased to 15.8% for the current quarter as compared to 17.4% for the same period the prior year. Gross profit declined year-over-year as a result of a 20.1% decline in the average US Dollar-Brazilian Real foreign currency exchange rate between quarters. Margins declined due to significantly higher raw bran costs and decreased plant efficiency.

USA segment gross profit totaled $0.9 million for the 2012 third quarter as compared to $0.7 million for the 2011 third quarter. The increase was attributable to the implementation of earlier price increases and the offsetting effect of higher raw bran prices during the quarter.

Consolidated net loss attributable to RiceBran Technologies shareholders for the three months ended September 30, 2012, was $0.4 million compared to $1.5 million, for the three months ended September 30, 2011. The improvement was primarily due to the $1.0 million decrease in loss of operations which totaled $1.4 million for the 2012 third quarter as compared to $2.4 million for the 2011 third quarter. The improved loss from operations during the current quarter, as compared to the prior year period, was attributable to a $1.0 million improvement in consolidated operating expenses.

Financial Results for the Nine Months Ending September 30, 2012

Consolidated revenues for the nine months ended September 30, 2012 increased to $28.8 million as compared to $28.6 million for the same period of the prior year in spite of the negative impact of foreign currency exchange rates related to the Brazil segment.

 
 2012 First Nine Month Annual Revenue Breakdown By Business Segment
 September 30,   2012   2011   CHANGE
 Brazil segment
 % of Revenues
  $19.2 million
66.6%
  $20.4 million
71.5%
  -6.1%
 USA segment
 % of Revenues
  $9.6 million
33.4%
  $8.1 million
28.5%
  +18.5%
 Total Revenues   $28.8 million   $28.6 million   +0.9%
             

Brazil segment revenues totaled $19.2 million for the first nine months of 2012 as compared to $20.4 million for the first nine months of 2011, a decrease of 6.1%. On a local currency basis, revenues increased $2.2 million. However, revenues decreased $3.4 million as a result of the 14.4% decline in the average US Dollar-Brazilian Real exchange rate between these periods resulting in a net decline overall.

USA segment revenues totaled $9.6 million, an 18.5% increase, for the first nine months of 2012 as compared to $8.1 million for the same period the year prior. Animal nutrition revenues increased $0.7 million and human nutrition revenues grew $1.0 million due to a combination of both higher volume and price increases. Increases from these two markets were offset by a $0.2 million decline in revenues from toll processing infant cereal products which ceased in April 2011.

Consolidated gross profit for the first nine months of 2012 totaled $5.4 million, a decrease of 4.8%, as compared to $6.7 million for the same period the year prior. Gross profit margin was 18.7% for the first nine months of 2012 as compared to 23.4% for the first nine months of 2011.

The Brazil segment gross profit for the first nine months of 2012 totaled $2.5 million or 13.0% in 2012 as compared to $4.0 million or 19.4% in 2011. The gross profit decrease resulted from the decline in the average foreign currency exchange rate between periods, higher raw bran costs of approximately 39% compared to the same end of quarter prices in the prior year, an unfavorable shift in sales mix to lower bulk animal feed products and decreased plant efficiency due to the ongoing plant expansion project.

USA segment gross profit totaled $2.9 million for the first nine months of 2012, a decrease of 3.6% as compared to $2.7 million for the same period the year prior, primarily due to higher raw bran prices per ton. Gross profit margin for the first nine months of 2012 was 30.0% as compared to 33.7% for the same period in 2011.

Consolidated net loss attributable to RiceBran Technologies shareholders for the nine months ended September 30, 2012, was $9.4 million, or $0.05 per share, compared to $5.6 million, or $0.03 per share, for the nine months ended September 30, 2011. This net loss for the nine months ended September 30, 2012 includes $2.2 million in financing expenses, $4.9 million in loss on extinguishment recognized in connection with the 2012 issuances of the subordinated convertible notes, senior convertible debenture and related warrants, and $4.0 million in income from the change in fair value of derivative liabilities.

Conference Call Details:

Date:  Thursday, November 15, 2012
Time:  4:15 p.m. Eastern
Participant Dial-In:  (480) 629-9761
Live Webcast:  http://www.ricebrantech.com/InvestorRelations or http://public.viavid.com/index.php?id=102522  

It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:15 p.m. Eastern call. There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the Investor Relations section of the company website at http://www.ricebrantech.com/InvestorRelations or by clicking on the following link, http://public.viavid.com/index.php?id=102522.

Forward-Looking Statements
This release contains forward-looking statements, including, but not limited to, statements about our expectations regarding the revenue impact of our relationship with Beneo-Remy and our ability to raise necessary funding to complete projects in Brazil in the second quarter of 2013. These statements are made based upon current expectations that are subject to known and unknown risks and uncertainties. RiceBran Technologies does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in RiceBran Technologies' filings with the Securities and Exchange Commission, including its most recent periodic reports.

About RiceBran Technologies
RiceBran Technologies is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. Rice Bran Technologies has proprietary and patented intellectual property that allows us to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious human food ingredient and animal nutrition products. Our target markets are human food ingredients and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutraceutical supplement manufacturers and retailers, both domestically and internationally. More information can be found in our filings with the SEC and by visiting our website at www.ricebrantech.com.

   
RiceBran Technologies  
Condensed Consolidated Statements of Operations  
Three and Nine Months Ended September 30, 2012 and 2011  
(Unaudited) (in thousands, except per share amounts)  
   
   
  Three Months     Nine Months  
  2012     2011     2012     2011  
                               
Revenues $ 9,349     $ 9,405     $ 28,806     $ 28,555  
Cost of goods sold   7,473       7,506       23,426       21,863  
Gross profit   1,876       1,899       5,380       6,692  
                               
Operating expenses:                              
  Selling, general and administrative   2,864       3,734       9,567       10,975  
  Professional fees   366       518       1,353       2,118  
  Impairment of property, plant and equipment   -       -       1,069       -  
  Recovery from former customer   -       -       -       (800 )
    Total operating expenses   3,230       4,252       11,989       12,293  
                               
Loss from operations   (1,354 )     (2,353 )     (6,609 )     (5,601 )
                               
Other income (expense):                              
  Interest income   3       25       66       105  
  Interest expense   (498 )     (302 )     (1,303 )     (1,114 )
  Foreign currency exchange, net   209       (321 )     (573 )     (268 )
  Change in fair value of derivative warrant and conversion liabilities   3,502       916       4,008       775  
  Loss on extinguishment   (1,955 )     -       (4,941 )     -  
  Financing expense   (640 )     -       (2,184 )     -  
  Other income   18       46       25       423  
  Other expense   (59 )     (24 )     (176 )     (460 )
    Total other income (expense)   580       340       (5,078 )     (539 )
                               
Loss before income taxes   (774 )     (2,013 )     (11,687 )     (6,140 )
Income taxes   194       244       1,105       252  
Net loss   (580 )     (1,769 )     (10,582 )     (5,888 )
Net loss attributable to noncontrolling interest in Nutra SA   212       276       1,184       315  
Net loss attributable to RiceBran Technologies shareholders $ (368 )   $ (1,493 )   $ (9,398 )   $ (5,573 )
                               
Loss per share attributable to RiceBran Technologies shareholders                              
  Basic $ (0.00 )   $ (0.01 )   $ (0.05 )   $ (0.03 )
  Diluted $ (0.00 )   $ (0.01 )   $ (0.05 )   $ (0.03 )
                               
Weighted average number of shares outstanding                              
  Basic   204,869       199,381       204,048       197,651  
  Diluted   204,869       199,381       204,048       197,651  
                               
                               
                               
RiceBran Technologies  
Condensed Consolidated Balance Sheets  
September 30, 2012 and December 31, 2011  
(Unaudited) (in thousands, except share amounts)  
   
   
  September 30,     December 31,  
  2012     2011  
ASSETS              
Current assets:              
  Cash and cash equivalents $ 850     $ 3,329  
  Restricted cash   1,918       2,118  
  Accounts receivable, net of allowance for doubtful accounts of $500 and $323   3,919       3,702  
  Inventories   2,336       2,297  
  Note receivable   -       700  
  Deferred tax assets   352       159  
  Income and operating taxes recoverable   1,339       1,659  
  Deposits and other current assets   1,061       1,049  
    Total current assets   11,775       15,013  
               
Property, plant and equipment, net   28,905       27,995  
Intangible assets, net   2,872       3,928  
Goodwill   4,821       5,240  
Other long-term assets   384       56  
    Total assets $ 48,757     $ 52,232  
               
LIABILITIES, TEMPORARY EQUITY AND EQUITY              
Current liabilities:              
  Accounts payable $ 3,531     $ 2,995  
  Accrued expenses   4,976       4,202  
  Long-term debt, current portion   7,305       6,792  
  Pre-petition liabilities   -       1,615  
    Total current liabilities   15,812       15,604  
               
Long-term liabilities:              
  Long-term debt, net of current portion   11,278       7,933  
  Deferred tax liability   2,648       3,767  
  Derivative warrant liabilities   6,426       1,296  
    Total liabilities   36,164       28,600  
               
Commitments and contingencies              
               
Redeemable noncontrolling interest in Nutra SA   8,265       9,918  
               
Equity:              
  Preferred stock, 20,000,000 authorized and none issued   -       -  
  Common stock, no par value, 500,000,000 shares authorized, 205,151,437 and 201,264,622 shares issued and outstanding   210,114       209,613  
  Accumulated deficit   (204,309 )     (194,911 )
  Accumulated other comprehensive loss   (1,477 )     (988 )
    Total equity   4,328       13,714  
    Total liabilities, temporary equity and equity $ 48,757     $ 52,232  
               

For further information, please contact: