THE WOODLANDS, TEXAS, US —RiceBran Technologies (RBT) sustained a wide operating loss for the year ended Dec. 31, 2019, which primarily reflected losses from Golden Ridge and a shift away from higher margin products.
“In 2019, RiceBran Technologies devoted significant time, effort and resources to making investments and improvements, particularly in debottlenecking Golden Ridge and through the acquisition and integration of MGI Grain,” said Brent Rystrom, president and chief executive officer (CEO) of RBT. “As a result of these strategic actions, we believe we are well-positioned to drive stronger results in 2020. We are already seeing rapidly accelerating growth at Golden Ridge, where revenues increased nearly 90% sequentially in the fourth quarter with additional sequential growth of near 70% expected in first quarter of 2020.
“Additionally, with the mill now running at much higher levels, we can ramp up our bran production and start shipping large volumes of stabilized rice bran from Golden Ridge in the second quarter of this year that will meaningfully impact sales and EBITDA. As a result of this and progress at MGI Grain and our traditional SRB businesses, we are excited for our opportunity to drive substantial sales and EBITDA growth in 2020 and beyond for RiceBran Technologies.”
RiceBran sustained an operating loss of $14.6 million in the year ended Dec. 31, 2019, which compared with a loss of $8.2 million in the same period a year ago. The company suffered a gross loss of $861,000 in 2019, which compared with gross profit of $2.982 million in 2018.
“We completed several initiatives in 2019 to improve financial performance in 2020,” said Todd Mitchell, chief financial officer (CFO). “Most notable were the investments we made to reposition our largest facilities to enhance growth, securing a flexible source of working capital funding, and completing a secondary offering in December. We plan to improve profitability in 2020 by leveraging lower costs of raw materials, more efficient labor management, and a significant reduction in SG&A. As a result of these initiatives and broader management strategies, we believe the company is well-positioned to grow the business, improve profitability, and build value for stockholders in 2020 and throughout the years to come.”
Revenue of $23.7 million was up 61% from $14.8 million in 2018, driven by a full year of revenue from Golden Ridge, acquired in November 2018, together with three quarters of revenue from MGI Grain, acquired in early April 2019. Revenue for RBT’s stabilized rice bran business grew modestly, with annual growth impacted by lower-than-expected results in the fourth quarter.
As a producer of non-perishable food, RBT expects to remain fully operational during the COVID-19 crisis.
“As a manufacturer of non-perishable foods, RiceBran Technologies is focused on maximizing production to do our part in keeping the US supply chain for food functioning in these trying times related to COVID-19,” Rystrom said. “As a participant in what the Department of Homeland Security terms the ‘critical infrastructure industry’ of food and agriculture, all of our employees are focused on keeping our facilities operating and producing.”
Mitchell added: “If we are able to maintain operations as planned, we expect annual revenue in 2020 of approximately $37 million to $40 million, reducing quarterly EBITDA losses sequentially from fourth quarter 2019 levels and transitioning to positive EBITDA in the second half of the year. We expect over 50% of total revenue to be attributable to our Golden Ridge operations, and we look for sequential gains in revenue to continue throughout the year. We anticipate total SG&A for the year of less than $10 million, with approximately $2.2 million to $2.4 million in depreciation and amortization and $1.1 million in non-cash compensation.”
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