RiceBran Technologies (RIBT)

[wow_happens28]

RiceBran Technologies (RIBT) Q1 2023 Earnings Call Transcript

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Peter Bradley

Thank you, Jeff, and good afternoon to everyone. The primary focus of the Board of Directors during the past few months has been a strategic review of our business. Over the years multiple management teams with different strategies and a variety of initiatives have worked to try and create value in the public markets and none have reached the level of scale that were able to support the high fixed costs of this business in a sustainable way.

Given the company's market cap and the underlying value of our assets, we felt an exploration of strategic alternatives was warranted. In the first quarter, the Board made substantial progress with this effort. While the process is still ongoing, I can say at a high level that there is an active interest in the assets of the company, a number of opportunities that are being evaluated and with that a variety of potential outcomes.

While this review has been underway, our milling businesses maintained their current levels of performance in the first quarter compared to the second half of last year. This performance was offset by continued challenges in our value-added derivatives business. The agreement with Gander Foods with respect to our rice milling operations continue to drive improvement in the operating results at Golden Ridge.

Towards the end of the first quarter, we completed the capacity upgrade at MGI, providing us with 50% more capacity and a broader range of manufacturing capabilities. Production at MGI as of this month is fully online and so we believe we have a solid platform for future growth. The added value derivatives business continues to offset the gains we have made elsewhere due to increased competition and processing challenges internally.

During the quarter, Bill Keneally was named RiceBran's Interim CFO. Bill brings a significant amount of experience in mergers, acquisitions and valuation initiatives, which should serve the Board well as we explore strategic alternatives. During his career he has been instrumental in selling businesses and restructuring enterprises. These are important skills for RiceBran at this time.

We welcome Bill to RiceBran and let me now turn the call over to him to discuss the results in detail.

William Keneally

Thank you, Peter, and good afternoon everyone. First quarter revenues were $9.3 million, a 12.2% decrease compared to $10.6 million in the first quarter last year. This year-over-year decrease was primarily due to our value -- our added value derivatives business as Peter discussed.

Gross loss was $300,000 compared to a gross profit of $500,000 in the first quarter of 2022. The $800,000 decrease in gross profit was also attributed to our added value derivatives business. Selling, general and administrative expenses were $1.7 million, unchanged from the first quarter last year as we continue to aggressively manage expenses.

Operating losses this quarter were $2 million compared to $1.2 million in the first quarter of 2022. In the first quarter of 2023, we recognized other income of $300,000 upon receipt of restitution payments from a former employee, which had been ordered by a federal court in 2012.

As a result of higher operating losses being offset by lower other expenses, net loss in the first quarter of 2023 was $2 million or $0.31 per share, compared to $1.5 million or $0.29 per share in the first quarter of 2022. Adjusted EBITDA losses were $1.2 million in the first quarter of 2023, compared to adjusted EBITDA losses of $400,000 in the first quarter of 2022.

Turning to the balance sheet. We had $3.4 million in cash and equivalents as of March 31, 2023, a decline of $500,000 from December 31, 2022 due to cash used in operations and capital expenditure.

In conclusion and as Peter stated at the start of this call, the Board has submitted a strategic review of all the possible alternatives for the company. These alternatives are at various stages of review. And given the sensitive nature of this process, we are unable to provide further details at this time and therefore will not be taking any questions. Thank you for your time today.