NutraCea (NTRZ), a world leader in production and marketing of value added products derived from rice bran, announced its financial results for the first quarter ended March 31, 2011.
The Company reported consolidated revenues for the first quarter of 2011 of $8.0 million, compared to $7.2 million for the first quarter of 2010, an increase of 10.7%. Revenues in the Company's Bio-Refining segment increased 36.4% or $1.5 million in the first quarter of 2011. SRB segment revenues declined $0.7 million primarily due to divestiture of the infant cereal business in March 2010, which was partially offset by toll processing revenue of $0.2 million, combined with a $0.4 million decline in animal and human nutrition product revenues.
Consolidated gross profit percentage for the first quarter of 2011 rose 3.7 percentage points, to 27.7%. Bio-Refining gross profit percentage increased 10.6 percentage points, to 23.7%, in the first quarter of 2011 due to favorable pricing and volume increases across all product categories. SRB segment gross profit percentage declined 1.3 percentage points, to 36.2%. SRB segment revenues in the first quarter of 2011 included low margin toll processing associated with the sale of the infant cereal business. We discontinued toll processing in April 2011 and expect an SRB segment gross profit percentage of approximately 40% in the second quarter of 2011.
Operating expenses decreased by $1.6 million, or 30.8%, to $3.5 million in the first quarter of 2011. Consolidated selling, general and administrative (SG&A) costs declined 16.0% to $3.4 million, primarily due to continued efforts to control costs in the Corporate and SRB segments.
The Company reported a loss from operations of $1.3 million for the first quarter of 2011, an improvement of $2.0 million, or 61.6%.
The net loss attributable to NutraCea shareholders for the first quarter of 2011 increased to $4.1 million, or ($0.02) per basic and diluted share, compared to $3.3 million, or ($0.02) per basic and diluted share, for the first quarter of 2010. The reportable loss for the first quarter of 2011 included a non-cash charge for warrant liability expense of $2.6 million. Warrant liabilities are stated at fair value on our balance sheet, as determined by acceptable valuation methods. This non-cash warrant liability expense was partially offset by higher sales in the Bio-Refining segment, improved margins, lower SG&A expenses and recovery of accounts receivable previously written off.
W. John Short, Chief Executive Officer, commented, "We are pleased to report growth in consolidated revenues and improvement in gross profit margins in all go-forward businesses. Increased sales and margins combined with close attention to spending at every level helped to substantially reduce our loss from operations. While we are pleased with the continued improvement achieved in the first quarter, challenges remain. All of us at NutraCea are focused on growing our SRB and Bio-Refining segment revenues while we continue to carefully manage costs. We will not be satisfied until we achieve sustainable positive cash flow and profitability for the benefit of all NutraCea stakeholders."
Leo Gingras, President and Chief Operating Officer, noted, "Our Bio-Refining segment continues to be a major contributor to our improving financial performance. As reported earlier, Irgovel's better-than-plan performance between October 1, 2010 and March 31, 2011, resulted in our partners closing early on an additional membership interest purchase that increased their ownership in Nutra SA to 40.2% in April 2011. We continue to move ahead expeditiously on the expansion and technology improvement projects at Irgovel and expect to meet the original timetables for bringing these projects on line later this year and in 2012."
The replay of the conference session, and additional financial information referenced during the teleconference, can also be accessed via the Web at http://www.nutracea.com/ConferenceCall-Q1-2011.
NutraCea is a world leader in production and marketing of value added products derived from rice bran. NutraCea holds many patents for SRB production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, normally an underutilized co-product of rice milling. NutraCea also produces rice based consumer health supplements, which can be found at http://www.nutraceaonline.com. More information can be found in the Company's filings with the SEC and by visiting our website at http://www.NutraCea.com.