NutraCea, a global leader in the production and marketing of value added products derived from rice bran, announces its financial results for the first six months and the second quarter ended June 30, 2012.
W. John Short, CEO and president of NutraCea, commented, "We continued to make solid progress in all major operating aspects of our business in the first half of 2012, and the capital raise closed at the end of July provides the funds necessary to continue to execute our tactical and strategic plans for the USA segment through year end and into 2013."
"We are especially encouraged by the nearly 20 percent revenue increase year-over-year for the first six months of 2012 in our USA segment. This growth was achieved in spite of a delay in the launch of our co-branded, exclusive distribution alliance with Beneo-Remy. That joint sales effort with Beneo is now on track and we expect sales by Beneo in EMEA and elsewhere to begin to contribute significantly to the growth of SRB sales in that underserved region of the world."
"In addition, after an 18 month technical product development cycle, we became an approved vendor and introduced our stabilized rice bran as a soy replacement in new products recently launched by one of the world's largest producers of comminuted meats. This is an exciting development that opens the door for significant market penetration in the market for hot dogs, sausages and other comminuted meat products in the coming months and years."
"Sales in our Brazil segment increased for both the first half and the second quarter of 2012 in local currency terms, though the significant depreciation of the Brazilian Reais resulted in a drop in sales in US dollar terms. We are particularly pleased with the increase in sales on a local currency basis given that we have had several production interruptions at Irgovel as we brought on line new electrical power substations and a new animal nutrition plant in the first half of 2012. We plan to close the entire plant at Irgovel for an estimated four to six weeks in the fourth quarter to install new bran preparation and new deodorizing/refining equipment that will allow us to significantly improve both plant efficiency and product quality while broadening our range of products. In addition, during the shutdown period we will increase the production capacity of the extractor, which is the heart of the manufacturing process, to more than 100,000 metric tons of raw bran processing capacity per year. All projects, product improvements and additions, as well as the expansion of plant processing capacity, are expected to be fully online by the first quarter of 2013."
"In the first half of 2012 we experienced a challenging sourcing market for our core raw material as both US and Brazilian prices for raw rice bran were pushed higher by drought and competition for raw bran as an animal feed component. The current drought in the US and resulting shortfalls in corn and soy crops are expected to keep upward pressure on raw rice bran prices. We expect to continue to adjust sales prices upward in response to increasing raw material costs. In spite of the pressure on our margins due to these weather driven shortages, I am pleased with our performance in the first half of 2012 and am optimistic about both our US and Brazil segments through the second half of the year and into 2013."
Financial and operational highlights
- Consolidated revenues for the six months ended June 30, 2012 totaled $19.5 million.
- Revenue for the USA segment grew 19.5 percent for the six month period to $6.6 million.
- Brazil segment sales increased on a local currency basis despite brief periods of shutdown at Irgovel for facility upgrades.
- In June 2012, NutraCea showed at the IFT Expo in Las Vegas and attracted significant interest from major global food, supplement and pharmaceutical manufacturers seeking cost-effective ingredients and applications that can provide clean label and health claims.
- NutraCea is adding new technologies and upgrading machinery and equipment in several product processes at the Brazil segment bio-refining facility, Irgovel, to add new and upgraded product offerings and expand Irgovel's raw rice bran processing capacity to more than 100,000 metric tons per year.
- Continued work with DSM under the Joint Development Agreement aimed at extraction and concentration of rice protein continues apace.
- The fund raising completed in the third quarter provides working capital to continue executing tactical and strategic plans through the remainder of 2012 and into 2013.