RiceBran quarterly revenues decline, GPM improves

5 Apr 2016

RiceBran Technologies has announced that consolidated revenues for Q4 2015 were $9.9 million compared to $10.7 million in the same quarter of the prior year, but gross profit improved by 200% to $2.7 million.

RiceBran quarterly revenues decline, GPM improves

RiceBran Technologies has announced the company’s financial results for both the full year and the fourth quarter ended December 31, 2015.

Consolidated revenues for Q4 2015 were $9.9 million compared to $10.7 million in the same quarter of the prior year. USA segment revenue increased to $6.3 million, up 15% from $5.5 million in Q4 2014. Brazil segment revenue declined from $5.2 million in Q4 2014 to $3.6 million in Q4 2015 due principally to a decline in the value of the Brazilian currency.

Consolidated Q4 2015 gross profit improved by 200% to $2.7 million compared to $ 0.9 million in Q4 2014 with USA segment gross margins reaching 34.9% and Brazil segment improving to 14.5%.

RiceBran achieved $650,000 in consolidated positive adjusted EBITDA in Q4 2015 with positive contributions from both the USA and the Brazil segments, compared to an adjusted EBITDA loss of ($1.6 million) in Q4 2014, an improvement of more than $2.2 million quarter over quarter.

Q4 2015 consolidated net loss narrowed to ($1.4 million), a 56% improvement compared to a consolidated net loss of ($3.2 million) recorded in Q4 2014.

Full year 2015 consolidated revenues were essentially unchanged at $40 million as a 36% increase in local currency revenues year-over-year was offset by a 28% decline in Brazil’s currency exchange rate.

Full year 2015 consolidated gross profit increased by 81% to $8.1 million compared to $4.5 million in 2014 reflecting gross profit improvements in both the USA and the Brazil segments.

"For full year 2015 we delivered a significant improvement in consolidated bottom line results despite essentially flat revenues resulting from (i) a major repositioning for future growth of our largest USA Segment customer; and (ii) the severe macroeconomic and currency challenges we faced in Brazil throughout the year,” said W. John Short, CEO and President. “In our USA Segment, our largest customer moved into new space to support future growth, reformulated its entire product line for relaunch in Q1 2016 and worked off inventory of legacy products throughout the second half of the year, all of which resulted in slower revenue growth for that customer in the second half of 2015. In the face of that slower second half growth, we focused on adding new customers, increasing high margin product sales and carefully managing expenses. As a result, we delivered a strong fourth quarter where sales increased 15% over Q4 2014, gross profit increased 30% over the same period and adjusted EBITDA reached $511,000 - an improvement of $930,000 over the same period in 2014. As we begin 2016, the repositioning of our top customer is now complete and their reformulated products launched successfully in February. We are seeing significant improvement in revenues from both our largest customer and some of the more than 80 new customers added in 2015. The demand picture for our products continues to improve and will be further strengthened in the second half of this year with the addition of organic rice bran products to our portfolio based on the agreements we entered into with Narula.”

“In Brazil, 15 years of almost uninterrupted economic growth abruptly ended in 2015. Brazilian GDP fell by 3.8% in 2015 and the currency reached an all-time low of more than R$ 4 to the US Dollar. Both the economy and the currency were negatively impacted by the end of the commodities supercycle, the collapse of global oil prices and local political scandals. Brazilian GDP is forecast to fall by another 1.5% to 2% in 2016. In the face of this collapse, we responded swiftly by significantly downsizing plant operations in mid-2015 and were able to achieve positive adjusted EBITDA in the second half of the year. The economy has continued to deteriorate entering 2016 and we are taking further measures to downsize our Brazilian operations while these conditions persist. In spite of the bad economic and political news coming out of Brazil, global demand for our Brazilian products remains strong. With our plant expansion complete, we are well positioned to produce at post-expansion target levels when economic conditions improve. Another piece of good news out of Brazil is that after nearly 5 years of litigation, we recently recovered $1.9 million that has been held as restricted cash in an escrow account. Those funds have now been released to RiceBran Technologies and have been used to repay debt and increase working capital availability.”

“Overall, we expect to continue to build on the Q4 2015 USA segment momentum throughout 2016 with continued improvement in both top and bottom line performance,” Short concluded, “and to take necessary actions to respond to the continuing economic and political challenges in Brazil.”

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