RiceBran Technologies Q4 Sales Dip, Net Loss Narrows
31 Mar 2016 --- RiceBran Technologies, a global leader in the production and marketing of value added products derived from rice bran, 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. 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%.
The company 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.
The 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.
W. John Short, CEO and President, commented: "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. 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 $930,000 over the same period in 2014. As we begin 2016, the repositioning of our top customer is now complete and their reformulated products launched successfully in February. We are seeing significant improvement in revenues from both our largest customer and some of the more than 80 new customers added in 2015. The demand picture for our products continues to improve and will be further strengthened in the second half of this year with the addition of organic rice bran products to our portfolio based on the agreements we entered into with Narula."
Short continued, "In Brazil, 15 years of almost uninterrupted economic growth abruptly ended in 2015. Brazilian GDP fell by 3.8% in 2015 and the currency reached an all-time low of more than R$ 4 to the US Dollar. Both the economy and the currency were negatively impacted by the end of the commodities super-cycle, 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."
Short concluded, "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, and to take necessary actions to respond to the continuing economic and political challenges in Brazil."
Last week, RiceBran Technologies announced that it has completed the legal process necessary for the release of the US$1.9 million that has been held in escrow at a San Francisco bank since the Company's acquisition of Irgovel in 2008.
The Company received a final judgment in its favor for a total of US$1.9 million plus interest from the US District Court for the District of Arizona in January, 2016 related to an arbitral award of R$7.8 million, including interest and penalties, from a Brazilian arbitration panel. After completing the necessary processes with the California Courts to enforce the judgment, the Company has received and presented definitive legal documents from the California Court to the escrow agent at the bank clearing the way for the release of funds and expects that the US$1.9 million will be released to the Company before the end of the month. After release of the escrow funds, the Company has remaining claims of approximately R$ 2.8 million that will be pursued against assets held by the defendants in Brazil.
W. John Short, CEO and President, commented: "We are pleased to have received a definitive instruction from the California Court instructing the escrow agent to release the escrow funds. The final release of US$1.9 million will close the book on our 2008 purchase of Irgovel. We will use the proceeds of the escrow release to pay down a portion of our USA segment debt and to provide additional working capital to support growth in our USA Segment."
