RiceBran Technologies Reports 2013 Second Quarter Financial Results

19 Aug 2013 --- RiceBran Technologies, a global leader in the production and marketing of value added products derived from rice bran, announced its financial results for the second quarter ended June 30, 2013.

2013 Operational Highlights to Date:
- Proryza rice bran protein products were launched at the Institute of Food Technologies Annual Meeting in Chicago, marking RIBT's entry into the vegetable protein market using sustainable raw materials.
- Strong demand for Stage 2 products both domestically and internationally has resulted in additional shifts being added at RIBT's Dillon, Montana plant beginning in August.
- Phase I of the plant expansion project in Brazil continues: new bran receiving facilities are scheduled to be completed in September, new bran preparation systems in October and extractor upgrades/expansion in January 2014.
- Extruders have been delivered to Wilmar for installation in their Harbin, China rice mill.
- RIBT secured a revolving credit facility with TCA Global Credit Master Fund to support working capital needs.

Financial Results for the Second Quarter Ended June 30, 2013:
Consolidated revenues for the three months ended June 30, 2013, were $9.4 million compared to $9.7 million in the prior year period, a decrease of $0.3 million, or 3.3%. USA segment revenues remained largely unchanged from the second quarter of 2012. Brazil segment revenues decreased $0.3 million, or 4.5%, as a result of a 5.3% decline in the average exchange rate (US dollar to Brazilian real) between these periods.

Consolidated gross profit in 2013 decreased $0.5 million to $1.3 million for the three months ended June 30, 2013, compared to the prior year period primarily due to higher raw bran costs, which were approximately 22% higher in the USA Segment and 19% higher in the Brazil segment. Raw bran prices have begun to moderate compared to all time highs experienced in 2012 and early 2013, but remain at high levels.

Consolidated operating expenses were $2.6 million, compared to $4.6 million for the second quarter of 2012, an improvement of $2.1 million resulting from a reduction in USA segment impairment charges between period of $1.1 million and gains on sales of equipment of $0.7 million predominantly related to sale of extruders to Wilmar. Brazil segment operating expense improved slightly by $0.2 million on lower professional fees.

Consolidated other expense was $1.8 million for the second quarter of 2013, compared to other income of $1.9 million for the second quarter of 2012. The increase in other expense of $3.7 million was comprised of the following:
- A USA segment $1.8 million increase in expense from the change in the fair value of derivative warrant and conversion liabilities, primarily as a result of changes in the price of our common stock between valuation dates. The decrease in the price of our common stock from March 31 to June 30 in each period, was the primary reason the derivative warrant and conversion liabilities fair value decreased, resulting in the recognition of other income in the second quarters of 2013 and 2012.
- USA segment $0.5 million loss on extinguishment in 2013, comprised of losses on the conversion of $0.3 million of our senior debenture and the prepayment of $0.3 million on those debentures;
- USA segment $0.5 million financing expense in 2013 associated with issuances of the subordinated convertible notes and related warrants.
- A $0.6 million increase in interest expense, as a result of (i) an increase in average debt outstanding in both the USA and Brazil segments and (ii) the increase in interest expense in the USA segment as a result of amortizing the debt discount on a senior debenture when the principal was paid in 2013.

W. John Short, CEO & President, commented, "Revenue on a quarter-over-quarter basis was largely unchanged considering the decline in the Brazilian Real. We continue to push forward with the introduction of new human food ingredient products while growing existing lines. The animal nutrition market continues to be challenging due to high bran costs. In Brazil, we look forward to completing the plant expansion early next year. We are confident that we will resume growth as the Brazil expansion comes on line and as new and existing USA segment products gain traction."