RiceBran Technologies (NASDAQ: RIBT) and (RIBTW), a global leader in the production and marketing of value added products derived from rice bran, announced the Company's financial results for the second quarter of 2014 ended June 30, 2014.
- Second quarter consolidated revenues total $11.3 million, a 21 percent increase as compared to consolidated revenues of $9.4 million recorded in the second quarter of 2013
- Second quarter USA Segment revenue increased by 116 percent to $6.7 million compared to the second quarter of 2013 and increased by 35 percent sequentially
- Second quarter Brazil segment revenues of $4.6 million, up 71 percent sequentially as Irgovel begins to ramp operations
W. John Short, CEO and president, commented: "Top line performance improved significantly in the second quarter as USA segment revenues strengthened and we restarted production at Irgovel. USA sales increased significantly in spite of shutdowns related to expansion projects at both Healthy Natural in Irving, Texas and our Stage 2 plant in Dillon, Mont. Gross margins at our USA segment remained strong in spite of increased raw rice bran prices caused by the California drought. We continue re-engineering of our product mix to focus on higher margin functional food ingredients and B-to-B packaged functional food products."
Short continued: "In Brazil, production restarted at Irgovel as expected and we delivered a significant sequential increase in sales. I am pleased to announce that each of the major pieces of equipment installed during the expansion was processed at a run rate well in excess of our 300 metric ton per day target for limited periods. Daily raw rice bran production has reached and surpassed 350 metric tons per day in every production area. Our production was hampered in June and July as rice mills operated well below capacity during the World Cup. Since that time the availability of raw rice bran is steadily increasing, and we anticipate it returning to normal levels in the current quarter which should set the stage for progressive improvement throughout the second half of 2014. With our two segments continuing to strengthen, we are confident we are in the right place at the right time to deliver sustained financial growth for our Company for the foreseeable future."
Consolidated revenues for Q2 2014 were $11.3 million, a 21 percent increase compared to last year's second quarter consolidated revenues of $9.4 million. The increase resulted from a 116 percent increase in revenues at the Company's USA segment as our H&N operations continue to drive revenue expansion.
Revenue from the Brazil segment totaled $4.6 million in the second quarter of 2014, a decline of 27 percent as compared to $6.3 million in the 2013 second quarter and a 71 percent increase from the $2.7 million reported in Q1 2014. While revenue declined due to the restart of the Company's Irgovel facility after the completion of installation of equipment necessary to increase capacity, the Company expects continued improvement in production and revenues at Irgovel for the remainder of 2014.
Consolidated gross profit in the second quarter declined by 6 percent to $1.2 million with consolidated gross margins declining from 13.6 percent of revenues in Q2 2013 to 10.5 percent in Q2 2014. The decline in gross margins was due to the costs associated with the restart of the plant at Irgovel which resulted in negative gross margins in the quarter while gross margins from the USA segment were 24.2 percent. Operating expenses increased to $4.2 million in the second quarter of 2014 compared to $2.6 million in the 2013 period. The increase in operating expenses is attributable to a $1.2 million increase in SG&A expenses and a $0.4 million increase in depreciation and amortization.
Earnings before interest, taxes, depreciation, amortization, certain non-recurring expenses, other non-cash charges, and stock-based compensation (Adjusted EBITDA) for the first six months of 2014 for the Corporate and USA segment was a loss of ($0.6) million—a significant improvement from a loss of ($2.9) million recorded in full year 2013. Adjusted EBITDA is a non-GAAP measure that management believes provides important insight into the Company's operating results (see reconciliation of non-GAAP measures below).
For the second quarter of 2014, the Company recorded a net loss attributable to common stockholders of ($15.1) million or a loss of ($3.52) per diluted share on 4.3 million weighted average shares outstanding. This compares to a loss of ($2.0) million or ($1.83) per diluted share on 1.1 million weighted average shares outstanding in the second quarter of 2013.
Dale Belt, CFO commented, "We remain focused on our business plan to meet our current 2014 financial guidance for full year revenues of $59 million with full year Adjusted EBITDA of $6 million and build on the sales momentum we have delivered in this quarter. As we move into the second half of 2014, our plan is subject to certain risks including the availability of and further upward pressure on California raw rice bran due to severe drought conditions in the Sacramento Valley, and our ability to pass any potential increased costs to our end customers to maintain margins. Additionally, with the short term slowdown of raw rice bran production in Brazil now abating, our Irgovel team is working diligently to reach our 2014 production goals in the second half of the year. We remain confident that with additional capacity coming online in the U.S. and Irgovel progressively ramping second half production that we are beginning to fire on all cylinders and are well positioned to capitalize on growing demand in the food and beverage industry for gluten free, non-GMO, minimally processed healthy, natural and functional foods."