“During the first half of 2011 we continued our emphasis on increasing profitable sales and improving both gross profit dollars and gross profit margin while maintaining our focus on reducing operating expenses and driving the business toward positive cash flow and profitability in all business segments,” said W. John Short, chief executive officer. “Our investments in Bio-Refining are starting to pay off handsomely, and we expect continued improvement at Irgovel as the current expansion projects come on line between now and June 2012. Because Irgovel exceeded predetermined performance targets defined in the Alothon Membership Interest Purchase Agreement, Alothon accelerated their purchase of membership units, bringing an additional $1 million in cash into NutraCea.
“Our decision in early 2010 to exit the low margin infant cereal business has also paid off. Sales of rice bran for human ingredient applications and animal feed have increased, though at a slower pace than Bio-Refining and not as fast as planned, and margins in the SRB segment continue to improve.
“We are pleased that our Bio-Refining segment continues to generate cash, that revenues are growing in both the Bio-Refining and the remaining SRB segment product lines, and that the cash burn in the corporate segment has been reduced substantially. Nevertheless, we must continue to increase profitable revenues in our SRB business segment and reduce costs in all areas of the business in order to meet cash needs in the corporate and SRB segments. We have recently taken additional steps to conserve cash, including reductions in cash payments to our senior management team and our board, and we continue to pursue an equity and/or debt financing transaction.”