SCOTTSDALE, AZ--(Marketwire - May 16, 2012) - NutraCea (OTCQB: NTRZ) (PINKSHEETS: NTRZ), a global leader in the production and marketing of value added products derived from rice bran, today announced its financial results for the first quarter ending March 31, 2012.
W. John Short, Chief Executive Officer of NutraCea, stated, "During the first quarter of 2012, we produced consolidated revenue growth of 12.7% compared to the same quarter last year. Our USA segment produced strong revenue growth of 31.0% driven by increases in both animal feed and human nutrition product sales. In spite of disruptions related to the technology additions and plant expansion under way at Irgovel, sales in our Brazil segment increased 4.8%."
"Improved sales performance in both operating segments was offset by historic highs in the prices of raw rice bran resulting from the effects of unusually high prices for traded alternative grains such as corn and soybeans. Already high pricing in the U.S. was further exacerbated by floods in the lower Mississippi River delta region and droughts and fires in Texas in the last half of 2011. Those weather related conditions appear to have subsided and we expect raw rice bran prices to begin to trend toward historical averages as we move through the year."
"The price increase implemented in the fourth quarter of 2011 in the USA segment in response to increased raw rice bran prices was partially reflected in our revenues in the first quarter of this year, but was not sufficient to completely offset higher raw material costs. We are closely monitoring raw bran cost and will consider further price adjustments as necessary."
"We continue to carefully manage expenses in all areas of the business. On the surface, total operating expenses in the combined Corporate and USA segments increased. However, taking into consideration the income from a settlement of $0.4 million and a recovery for $0.8 million recorded in the first quarter of last year, we actually improved operating expenses by $1.0 million or 30.8% for the combined Corporate and USA segments."
Adjusted for the settlement and recovery income, combined first quarter 2011 operating expense for the Corporate and USA segments was $3.2 million (actual corporate operating expense of $1.6 million plus actual USA operating expense of $0.5 million plus the adjustments for the $0.4 million settlement and $0.8 million recovery totals $3.2 million) as compared to $2.2 million for the first three months of 2012. Total operating expenses in our Brazil segment increased consistent with the investment in new products and expanded capacity that are expected to significantly improve profitability and operating cash flows in that segment over the next 36 months.
Short continued, "The fund raising completed in January 2012 in order to make final payments under the Amended Plan of Reorganization had a significant expense impact in the quarter. However, it is important to note that the financing expense and loss on extinguishment charges do not impact cash flow from operations."
"In spite of the unfavorable pricing environment for raw rice bran and its negative effect on margins, I am pleased with the operating performance of both of our operating business segments and the pace of the expansion at Irgovel, which we expect to bring fully on line in the second half of this year."
Financial results for the first quarter ended March 31, 2012
Consolidated revenues for the three months ended March 31, 2012 totaled $9.7 million, an increase of $1.1 million, or 12.7%, as compared to $8.6 million for the quarter ending March 31, 2011. The increase in revenue was attributable to increases in both operating segments of the business.
USA segment revenues increased 31.0% year-over-year. Animal feed product revenues increased $0.8 million and human nutrition product revenues increased $0.2 million due to the impact of price increases and higher volume. These gains were offset by a $0.2 million decline in revenues from toll processing infant cereal products, which ceased in April 2011.
Brazil segment revenues increased 4.8% year-over-year. As a result of market conditions and sales mix diversification efforts, DRB product revenues experienced a shift from bagged animal feed products to bulk DRB and oil revenues experienced a shift from crude RBO to refined oil. Bulk DRB revenues increased $1.0 million, or 84.5%, over the prior year quarter. Bagged animal feed product revenues declined $0.5 million, or 21.3%, due to decreased demand and competitive pressures. A $0.5 million decline in crude oil revenues was offset by a $0.5 million improvement in refined edible oil and derivative oil product revenues. Brazil segment revenues for the first quarter of 2012 were negatively impacted $0.2 million from a decline in the average exchange rate between reporting periods.
| Quarterly Revenue Breakdown By Business Segment (USD) |
| March 31, |
|
2012 |
|
2011 |
|
CHANGE |
Brazil segment
% of Revenues |
|
$6.3 million
65.0% |
|
$6.0 million
69.9% |
|
+4.8% |
USA segment
% of Revenues |
|
$3.4 million
35.0% |
|
$2.6 million
30.1% |
|
+31.0% |
| Total Revenues |
|
$9.7 million |
|
$8.6 million |
|
+12.7% |
Consolidated gross profit for the three months ended March 31, 2012 totaled $1.7 million as compared to $2.2 million for the same period the prior year. The decline is primarily attributable to higher raw bran costs.
USA segment gross profit was negatively impacted by $0.4 million due to higher raw bran prices per ton during the three months ended March 31, 2012, as compared to the prior year three month period. Raw bran costs were on a continually escalating trend starting in early 2011. This caused a USA segment margin decrease of approximately 12.4 percentage points. To offset the impact of higher raw bran prices, we increased SRB selling prices in the first and fourth quarter of 2011. The full impact of those increases impacted the first quarter of 2012.
Brazil segment gross profit percentage declined from 21.3% to 11.5%. The margin reduction was attributable to higher raw bran costs, an unfavorable shift in sales mix to lower margin products and decreased plant efficiency associated with lower processing volumes for raw bran. Raw bran costs were approximately 26.6% higher in the first three months of 2012 compared to the 2011 period. Only a portion of these higher costs could be offset with higher selling prices due to competitive market pressures.
Consolidated operating expenses were $4.1 million for the first quarter of 2012, compared to $3.5 million for the first quarter of 2011, an increase of $0.6 million. The first quarter of 2011 included offsets to expense as follows: (i) the Corporate segment recorded $0.4 million of income in SG&A associated with a settlement with a former officer and (ii) the USA segment recorded $0.8 million of income relative to a recovery from a former customer.
Consolidated net loss attributable to NutraCea shareholders for the three months ended March 31, 2012, was $8.8 million, or $0.04 per share, compared to $4.1 million, or $0.02 per share, for the three months ended March 31, 2011. The decline of $4.8 million between periods was primarily due to the $1.5 million financing expense and the $3.0 million loss on extinguishment recognized in connection with the January 2012 issuance of the subordinated convertible notes, senior convertible debenture and related warrants.
Liquidity and Capital Resources
On the balance sheet, cash and cash equivalents totaled $0.5 million. Total current assets and total assets were $12.1 million and $50.6 million respectively. Total current liabilities and total liabilities were $13.0 million and $36.0 million respectively. Total equity was $5.0 million as of March 31, 2012.
Conference Call Details:
Date: Thursday, May 17th, 2012
Time: 4:15 p.m. Eastern
Participant Dial-In: (480) 629-9713
Live Webcast: http://www.nutracea.com/InvestorRelations, or http://public.viavid.com/index.php?id=100538
It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:15 p.m. Eastern call. There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the Investor Relations section of the company website at http://www.nutracea.com/InvestorRelations or by clicking on the following link, http://public.viavid.com/index.php?id=100538.
Forward-Looking Statements
This release contains forward-looking statements, including, but not limited to, statements about NutraCea's expectations regarding raw rice bran prices, profitability, operating cash flow, price adjustments and the completion of capital projects in Brazil. These statements are made based upon current expectations that are subject to known and unknown risks and uncertainties. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in NutraCea's filings with the Securities and Exchange Commission, including NutraCea's most recent periodic reports.
About NutraCea
NutraCea is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. NutraCea has proprietary and patented intellectual property that allows us to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious human food and animal nutrition products. Our target markets are human food and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutraceutical supplement manufacturers and retailers, both domestically and internationally. More information can be found in the Company's filings with the SEC and by visiting our website at www.nutracea.com.
| |
|
| |
|
| |
|
| NutraCea |
|
| Condensed Consolidated Statements of Cash Flows |
|
| Three Months Ended March 31, 2012 and 2011 |
|
| (Unaudited) (in thousands) |
|
| |
|
| |
|
2012 |
|
|
2011 |
|
| Cash flow from operating activities: |
|
|
|
|
|
|
|
|
| |
Net loss |
|
$ |
(9,372 |
) |
|
$ |
(4,087 |
) |
| |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| |
|
Depreciation and amortization |
|
|
1,439 |
|
|
|
1,186 |
|
| |
|
Provision for doubtful accounts receivable |
|
|
305 |
|
|
|
60 |
|
| |
|
Stock and share-based compensation |
|
|
346 |
|
|
|
208 |
|
| |
|
Change in fair value of derivative warrant and conversion liabilities | |
|
2,362 |
|
|
|
2,576 |
|
| |
|
Financing expense |
|
|
1,524 |
|
|
|
- |
|
| |
|
Loss on extinguishment |
|
|
2,986 |
|
|
|
- |
|
| |
|
Deferred tax benefit |
|
|
(541 |
) |
|
|
(175 |
) |
| |
|
Other |
|
|
38 |
|
|
|
13 |
|
| |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| |
|
|
Accounts receivable |
|
|
(439 |
) |
|
|
510 |
|
| |
|
|
Inventories |
|
|
431 |
|
|
|
(70 |
) |
| |
|
|
Accounts payable and accrued expenses |
|
|
(349 |
) |
|
|
(122 |
) |
| |
|
|
Pre-petition liabilities |
|
|
(1,615 |
) |
|
|
(3,531 |
) |
| |
|
|
Other |
|
|
(60 |
) |
|
|
(916 |
) |
| |
|
|
|
Net cash used in operating activities |
|
|
(2,945 |
) |
|
|
(4,348 | ) |
| |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
| |
Receipts on notes receivable |
|
|
300 |
|
|
|
400 |
|
| |
Purchases of property, plant and equipment |
|
|
(1,543 |
) |
|
|
(1,853 |
) |
| |
Proceeds from sale of property, plant and equipment |
|
|
213 |
|
|
|
- |
|
| |
Restricted cash |
|
|
200 |
|
|
|
(201 |
) |
| |
Other |
|
|
(9 |
) |
|
|
43 |
|
| |
|
|
|
Net cash used in investing activities |
|
|
(839 |
) |
|
|
(1,611 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
| |
Proceeds from issuance of convertible debt and related warrants |
|
|
2,362 |
|
|
|
500 |
|
| |
Proceeds from sale of membership interests in Nutra SA, net of costs |
|
|
- |
|
|
|
7,725 |
|
| |
Payments of debt |
|
| (2,995 |
) |
|
|
(2,382 |
) |
| |
Proceeds from issuance of debt |
|
|
1,385 |
|
|
|
816 |
|
| |
|
|
|
Net cash provided by financing activities |
|
|
752 |
|
|
|
6,659 |
|
| |
|
|
|
|
|
|
|
|
| Effect of exchange rate changes on cash and cash equivalents |
|
|
171 |
|
|
|
(18 |
) |
| Net change in cash and cash equivalents |
|
|
(2,861 |
) |
|
|
682 |
|
| Cash and cash equivalents, beginning of period |
|
|
3,329 |
|
|
|
537 |
|
| Cash and cash equivalents, end of period |
|
$ |
468 |
|
|
$ |
1,219 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental disclosures: |
|
|
|
|
|
|
|
|
| |
Cash paid for interest |
|
$ |
373 |
|
|
$ |
206 |
|
| |
Cash paid for income taxes |
|
|
- |
|
|
|
- |
|
| |
|
| |
|
| |
|
| NutraCea |
|
| Condensed Consolidated Balance Sheets |
|
| March 31, 2012 and December 31, 2011 |
|
| (Unaudited) (in thousands, except share amounts) |
|
| |
|
| |
|
March 31, |
|
|
December 31, |
|
| |
|
2012 |
|
|
2011 |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
| |
Cash and cash equivalents |
|
$ |
468 |
|
|
$ |
3,329 |
|
| |
Restricted cash |
|
|
1,918 |
|
|
|
2,118 |
|
| |
Accounts receivable, net of allowance for doubtful accounts of $586 and $323 |
|
|
3,904 |
|
|
|
3,702 |
|
| |
Inventories |
|
|
2,130 |
|
|
|
2,297 |
|
| |
Note receivable |
|
|
400 |
|
|
|
700 |
|
| |
Deferred tax asset |
|
|
422 |
|
|
|
159 |
|
| |
Income and operating taxes recoverable |
|
|
1,698 |
|
|
|
1,659 |
|
| |
Deposits and other current assets |
|
|
1,161 | |
|
|
1,049 |
|
| |
|
|
Total current assets |
|
|
12,101 |
|
|
|
15,013 |
|
| |
|
|
|
|
|
|
|
|
| Property, plant and equipment, net |
|
|
29,080 |
|
|
|
27,995 |
|
| Intangible assets, net |
|
|
3,671 |
|
|
|
3,928 |
|
| Goodwill |
|
|
5,358 |
|
|
|
5,240 |
|
| Other long-term assets |
|
|
404 |
|
|
|
56 |
|
| |
|
|
Total assets |
|
$ |
50,614 |
|
|
$ |
52,232 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES, TEMPORARY EQUITY AND EQUITY |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
| |
Accounts payable |
|
$ |
3,092 |
|
|
$ |
2,995 |
|
| |
Accrued expenses |
|
|
4,593 |
|
|
|
4,202 |
|
| |
Long-term debt, current portion | |
|
5,294 |
|
|
|
6,792 |
|
| |
Pre-petition liabilities |
|
|
- |
|
|
|
1,615 |
|
| |
|
|
Total current liabilities |
|
|
12,979 |
|
|
|
15,604 |
|
| |
|
|
|
|
|
|
|
|
| Long-term liabilities: |
|
|
|
|
|
|
|
|
| |
Long-term debt, net of current portion |
|
|
11,998 |
|
|
|
7,933 |
|
| |
Deferred tax liability |
|
|
3,586 |
|
|
|
3,767 |
|
| |
Derivative warrant liabilities |
|
|
7,476 |
|
|
|
1,296 |
|
| |
|
|
Total liabilities |
|
|
36,039 |
|
|
|
28,600 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and contingencies |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Redeemable noncontrolling interest in Nutra SA |
|
|
9,545 |
| |
|
9,918 |
|
| |
|
|
|
|
|
|
|
|
| Equity: |
|
|
|
|
|
|
|
|
| |
Equity attributable to NutraCea shareholders: |
|
|
|
|
|
|
|
|
| |
|
Preferred stock, 20,000,000 authorized and none issued |
|
|
- |
|
|
|
- |
|
| |
|
Common stock, no par value, 500,000,000 shares authorized, 204,766,437 and 201,264,622 shares issued and outstanding |
|
|
209,581 |
|
|
|
209,613 |
|
| |
|
Accumulated deficit |
|
|
(203,740 |
) |
|
|
(194,911 |
) |
| |
|
Accumulated other comprehensive loss |
|
|
(811 |
) |
|
|
(988 |
) |
| |
|
|
Total equity |
|
|
5,030 |
|
|
|
13,714 |
|
| |
|
|
Total liabilities, temporary equity and equity |
|
$ |
50,614 |
|
|
$ |
52,232 |
|
| |
|
| |
|
| |
|
| NutraCea |
|
| Condensed Consolidated Statements of Operations |
|
| Three Months Ended March 31, 2012 and 2011 |
|
| (Unaudited) (in thousands, except per share amounts) |
|
| |
|
| | |
2012 |
|
|
2011 |
|
| |
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
9,746 |
|
|
$ |
8,648 |
|
| Cost of goods sold |
|
|
8,005 |
|
|
|
6,442 |
|
| Gross profit |
|
|
1,741 |
|
|
|
2,206 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| |
Selling, general and administrative |
|
|
3,645 |
|
|
|
3,477 |
|
| |
Professional fees |
|
|
471 |
|
|
|
802 |
|
| |
Recovery from former customer |
|
|
- |
|
|
|
(800 |
) |
| |
|
Total operating expenses |
|
|
4,116 |
|
|
|
3,479 |
|
| |
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(2,375 |
) |
|
| (1,273 |
) |
| |
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
| |
Interest income |
|
|
47 |
|
|
|
13 |
|
| |
Interest expense |
|
|
(418 |
) |
|
|
(388 |
) |
| |
Foreign currency exchange, net |
|
|
(206 |
) |
|
|
44 |
|
| |
Change in fair value of derivative warrant and conversion liabilities |
|
|
(2,362 |
) |
|
|
(2,576 |
) |
| |
Loss on extinguishment |
|
|
(2,986 |
) |
|
|
- |
|
| |
Financing expense |
|
|
(1,524 |
) |
|
|
- |
|
| |
Other income |
|
|
4 |
|
|
|
58 |
|
| |
Other expense |
|
|
(94 |
) |
|
|
(25 |
) |
| |
|
Total other income (expense) |
|
|
(7,539 |
) |
|
|
(2,874 |
) |
| |
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
|
(9,914 | ) |
|
|
(4,147 |
) |
| Income tax benefit |
|
|
542 |
|
|
|
60 |
|
| Net loss |
|
|
(9,372 |
) |
|
|
(4,087 |
) |
| Net loss attributable to noncontrolling interest in Nutra SA |
|
|
543 |
|
|
|
28 |
|
| Net loss attributable to NutraCea shareholders |
|
$ |
(8,829 |
) |
|
$ |
(4,059 |
) |
| |
|
|
|
|
|
|
|
|
| Loss per share attributable to NutraCea shareholders |
|
|
|
|
|
|
|
|
| |
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.02 |
) |
| |
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.02 |
) |
| |
|
|
|
|
|
|
|
|
| Weighted average number of shares outstanding |
|
|
|
|
|
|
|
|
| |
Basic |
|
|
202,686 |
|
|
|
195,358 |
|
| |
Diluted |
|
|
202,686 |
| |
|
195,358 |
|