California
|
0-32565
|
87-0673375
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
1330 Lake Robbins Drive, Suite 250
The Woodlands, TX
|
77380
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Emerging growth company | ☐ |
Item 2.02 |
Results of Operations and Financial Conditions
|
Item 9.01 |
Financial Statements and Exhibits
|
Exhibit
No.
|
Description
|
|
Press Release issued April 1, 2019.
|
RICEBRAN TECHNOLOGIES
|
||
Date: April 1, 2019
|
By:
|
/s/ Dennis Dykes
|
Dennis Dykes
|
||
Chief Financial Officer
|
||
(Duly Authorized Officer)
|
|
· |
Driving 2018 fourth quarter sales growth in excess of 15% for our stabilized rice bran and derivative products, our first meaningful overall growth in sales
for these products in many years.
|
|
· |
Completing the acquisition of Golden Ridge Rice Mills of Wynne, AR on November 28, 2018, giving RBT a meaningful, scalable, and controlled source of
stabilized rice bran in the dominant rice producing state and providing us a lowest cost scenario for rice bran supply, adding new product extensions to our product offering, and providing us enough Greenfield space to significantly
expand milling operations and add new products. We believe this new strategic direction will be a major factor in our growth and attaining meaningful adjusted EBITDA over the next several years.
|
|
· |
Successfully certifying our facilities in West Sacramento, CA, Dillon, MT, and Mermentau, LA during the third and fourth quarters, and this was a critical
step in positioning RBT as a high-value ingredient supplier.
|
|
· |
Increasing our shareholders’ equity to $23.7 million from $14.7 million, mainly as a result of cash received from the exercise of warrants into common stock
and also equity added through the acquisition of Golden Ridge Rice Mills.
|
|
· |
Relocating the corporate headquarters to Houston, TX on June 1, positioning us nearer to Arkansas, Louisiana, and Texas, collectively the largest rice
growing region in the United States.
|
|
· |
Revenues of $14.8 million were up from $13.4 million, inclusive of $0.9 million in revenue from Golden Ridge Rice Mills realized after its acquisition in late
November, 2018. Revenue in our bran business grew over 4% for the year, with the growth concentrated in the fourth quarter.
|
|
· |
Our gross profit margin of 20.2% in 2018 was down from 28.4% for three primary reasons. First, raw bran prices were above year-earlier levels in the first
three quarters of 2018 and have been flat since November. Second, we experienced a difficult supply issue at our Louisiana facility in the second and third quarters, and decided to support customers from our California facilities
despite massively higher transportation and production costs. This production issue also limited our ability to grow our business during this period. Third, lower margin sales from Golden Ridge Rice Mills were added to the overall
sales mixes.
|
|
· |
SG&A expenses expanded to $11.2 million from $9.9 million, with an expanded sales team, increased staffing to meet our certification needs, and the costs
of our relocation and costlier offices in Houston being major causes for the increase.
|
|
· |
Our loss from operations was $(8.2) million compared to $(6.1) million last year, and adjusted EBITDA was $(6.4) million versus $(4.1) million.
|
|
· |
Cash and equivalents of $7.0 million increased from $6.2 million last year.
|
|
· |
Total assets increased to $30.7 million from $17.4 million, mainly driven by the acquisition of Golden Ridge Rice Mills.
|
|
· |
Debt increased to $0.8 million from $16,000 as a result of the Golden Ridge Rice Mills acquisition.
|
|
· |
Shareholders’ equity increased to $23.7 million from $14.7 million.
|
|
· |
RBT delivered its first meaningful growth in its rice bran sales in many years during the 2018 fourth quarter, with revenue growth in excess of 15%.
|
|
· |
Our revenue growth was driven by new customer demand and growth from several of our most important customers.
|
|
· |
Golden Ridge Rice Mills contributed $0.9 million to our fourth quarter sales.
|
|
· |
Liquidity continued to improve in 1Q:19 with the proceeds from a $12.1 million share offering in March and $2.0 million from the exercise of warrants, more
than offsetting negative cash flows from operations and ongoing Cap Ex.
|
|
· |
We are in the planning and engineering stages for a large expansion of our rice milling and rice bran production facilities at Golden Ridge Rice Mills in
Wynne, Arkansas. As part of this expansion we are planning for the production of a transformational new stabilized rice bran product that we believe could constitute the largest available market opportunity so far in our rice bran
product history, with an identifiable market opportunity of 100 million or more pounds per year.
|
|
· |
Today we are announcing an agreement to acquire MGI Grain in East Grand Forks, MN for $3.5 million. MGI Grain is an ingredient company focused on barley and
oat products, areas that fit well with our rice and rice bran products. We see major opportunities for our sales team to sell these products and drive higher capacity utilization of MGI Grain’s facility, which is presently near 35%.
MGI Grain presently has annually sales near $3 million and has meaningful positive adjusted EBITDA.
|
|
· |
RBT sees annual revenue of approximately $37 million to $40 million in 2019 from our previous guidance of $40 million. We see strong growth from our rice
bran products, a full year of Golden Ridge Rice Mills’ results, and approximately nine months of MGI Grain’s results. We are adjusting our revenue assumptions lower for Golden Ridge Rice Mills to reflect a heavier mix of toll milling
than we previously assumed. This should have no negative impact on EBITDA as the profitability per pound processed is generally at least similar when toll milling compared to traditional milling.
|
|
· |
RBT remains focused on attaining positive adjusted EBITDA, which we now target to occur in the third or fourth quarter of 2019 versus our previous target of
the second or third quarter of 2019.
|
|
· |
Direct Dial-in number for US/Canada:
(201) 493-6780
|
|
· |
Toll Free Dial-in number for US/Canada: (
877) 407-3982
|
|
· |
Dial-In number for international callers: (201) 493-6780
|
|
· |
Participants will ask for the RiceBran Technologies 2018 Year End Financial Results Call
|
2018
|
2017
|
|||||||
Revenues
|
$
|
14,762
|
$
|
13,355
|
||||
Cost of goods sold
|
11,780
|
9,564
|
||||||
Gross profit
|
2,982
|
3,791
|
||||||
Selling, general and administrative expenses
|
11,194
|
9,888
|
||||||
Loss from continuing operations before other income (expense)
|
(8,212
|
)
|
(6,097
|
)
|
||||
Other income (expense):
|
||||||||
Interest expense
|
(12
|
)
|
(1,623
|
)
|
||||
Change in fair value of derivative warrant liabilities
|
-
|
670
|
||||||
Loss on extinguishment of debt
|
-
|
(8,290
|
)
|
|||||
Other income
|
193
|
307
|
||||||
Other expense
|
(25
|
)
|
(182
|
)
|
||||
Total other income (expense)
|
156
|
(9,118
|
)
|
|||||
Loss from continuing operations before income taxes
|
(8,056
|
)
|
(15,215
|
)
|
||||
Income tax (expense) benefit
|
(45
|
)
|
5,030
|
|||||
Loss from continuing operations
|
(8,101
|
)
|
(10,185
|
)
|
||||
Income from discontinued operations, net of tax
|
-
|
3,983
|
||||||
Net loss
|
(8,101
|
)
|
(6,202
|
)
|
||||
Less - Net loss attributable to noncontrolling interest
in discontinued operations
|
-
|
(1,671
|
)
|
|||||
Net loss attributable to RiceBran Technologies shareholders
|
(8,101
|
)
|
(4,531
|
)
|
||||
Less - Dividends on preferred stock, beneficial conversion feature
|
-
|
778
|
||||||
Net loss attributable to RiceBran Technologies common shareholders
|
$
|
(8,101
|
)
|
$
|
(5,309
|
)
|
||
Basic earnings (loss) per common share:
|
||||||||
Continuing operations
|
$
|
(0.37
|
)
|
$
|
(0.92
|
)
|
||
Discontinued operations
|
-
|
0.47
|
||||||
Basic loss per common share - RiceBran Technologies
|
$
|
(0.37
|
)
|
$
|
(0.45
|
)
|
||
Diluted earnings (loss) per common share:
|
||||||||
Continuing operations
|
$
|
(0.37
|
)
|
$
|
(0.92
|
)
|
||
Discontinued operations
|
-
|
0.47
|
||||||
Diluted loss per common share - RiceBran Technologies
|
$
|
(0.37
|
)
|
$
|
(0.45
|
)
|
||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
22,099,149
|
11,923,923
|
||||||
Diluted
|
22,099,149
|
11,923,923
|
2018
|
2017
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
7,044
|
$
|
6,203
|
||||
Restricted cash
|
225
|
775
|
||||||
Accounts receivable, net of allowance for doubtful accounts of $14 and $8
|
2,529
|
1,273
|
||||||
Purchase price working capital receivable
|
1,147
|
-
|
||||||
Inventories
|
||||||||
Finished goods
|
856
|
564
|
||||||
Packaging
|
102
|
114
|
||||||
Deposits and other current assets
|
610
|
519
|
||||||
Total current assets
|
12,513
|
9,448
|
||||||
Property and equipment, net
|
15,010
|
7,850
|
||||||
Goodwill
|
3,178
|
-
|
||||||
Other long-term assets, net
|
16
|
63
|
||||||
Total assets
|
$
|
30,717
|
$
|
17,361
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,583
|
$
|
765
|
||||
Commodities payable
|
2,735
|
-
|
||||||
Accrued salary, wages and benefits
|
933
|
773
|
||||||
Accrued expenses
|
520
|
741
|
||||||
Unearned revenue
|
145
|
75
|
||||||
Escrow liability
|
259
|
258
|
||||||
Note payable to seller of Golden Ridge
|
609
|
-
|
||||||
Long term debt, current portion
|
77
|
4
|
||||||
Total current liabilities
|
6,861
|
2,616
|
||||||
Long term debt, less current portion
|
145
|
12
|
||||||
Total liabilities
|
7,006
|
2,628
|
||||||
Commitments and contingencies
|
||||||||
Shareholders' Equity:
|
||||||||
Preferred stock, 20,000,000 shares authorized:
|
||||||||
Series G, convertible, 3,000 shares authorized, 405 and 630 shares issued and outstanding
in 2018 and 2017, respectively
|
201
|
313
|
||||||
Common stock, no par value, 50,000,000 shares authorized,
29,098,207 and 18,046,731shares issued and outstanding
|
296,739
|
279,548
|
||||||
Accumulated deficit
|
(273,229
|
)
|
(265,128
|
)
|
||||
Total shareholders' equity
|
23,711
|
14,733
|
||||||
Total liabilities and shareholders' equity
|
$
|
30,717
|
$
|
17,361
|
2018
|
2017
|
|||||||
Net income (loss)
|
$
|
(2,356
|
)
|
$
|
(1,795
|
)
|
||
Interest expense
|
7
|
7
|
||||||
Depreciation & amortization
|
229
|
186
|
||||||
Unadjusted EBITDA
|
$
|
(2,120
|
)
|
$
|
(1,602
|
)
|
||
Add Back Other Items:
|
||||||||
Change in fair value of derivative liabilities
|
-
|
138
|
||||||
Other income/expense
|
(132
|
)
|
(59
|
)
|
||||
Share-based compensation
|
269
|
169
|
||||||
Acquisition related expenses
|
132
|
-
|
||||||
Corporate relocation associated expenses
|
-
|
15
|
||||||
Adjusted EBITDA
|
$
|
(1,851
|
)
|
$
|
(1,339
|
)
|
2018
|
2017
|
|||||||
Net income (loss)
|
$
|
(8,056
|
)
|
$
|
(15,215
|
)
|
||
Interest expense
|
12
|
1,623
|
||||||
Depreciation & amortization
|
773
|
757
|
||||||
Unadjusted EBITDA
|
$
|
(7,271
|
)
|
$
|
(12,835
|
)
|
||
Add Back Other Items:
|
||||||||
Change in fair value of derivative liabilities
|
-
|
(670
|
)
|
|||||
Loss on extinguishment of debt
|
-
|
8,290
|
||||||
Other income/expense
|
(168
|
)
|
(125
|
)
|
||||
Share-based compensation
|
886
|
1,073
|
||||||
Acquisition related expenses
|
132
|
-
|
||||||
Corporate relocation associated expenses
|
-
|
116
|
||||||
Other
|
-
|
92
|
||||||
Adjusted EBITDA
|
$
|
(6,421
|
)
|
$
|
(4,059
|
)
|