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BH

Benson Hill, Inc. (BHIL)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 delivered revenue of $116.6M (+18% YoY) with reported gross profit of $7.0M; excluding open mark-to-market timing differences (OMM), gross margin was approximately 11% as high‑margin license sales and operational efficiencies helped offset commodity headwinds .
  • Adjusted EBITDA improved sharply YoY to a $(6.7)M loss from $(21.8)M in Q4’22, reflecting better gross profit and lower operating expense run rate from the Liquidity Improvement Plan .
  • FY23 revenue rose 24% to $473.3M; gross profit increased by $20.1M to $23.6M; year-end cash and marketable securities were ~$48.9M; the senior term loan was fully retired in Feb 2024 after paying down ~50% in Nov 2023, de‑risking the balance sheet .
  • 2024 framed as a transition year post divestitures (Seymour, Creston), with lower revenue expected but improved earnings quality as the model shifts to asset‑light partnerships and licensing in animal feed; no quantitative 2024 guidance provided .
  • S&P Global consensus estimates for Q4 2023 were unavailable in our data set; therefore, we do not present beats/misses vs. estimates (unavailable via S&P Global for BHIL).

What Went Well and What Went Wrong

  • What Went Well

    • Balance sheet de‑risking and liquidity: fully retired senior term loan in Feb 2024; ended 2023 with ~$48.9M in cash and marketable securities; management reiterated the pivot to asset‑light to improve capital efficiency .
    • Stronger mix and cost execution: Q4 proprietary revenue rose to $33.0M (+62.6% YoY) on license sales and higher proprietary grain; adjusted EBITDA loss narrowed to $(6.7)M vs $(21.8)M YoY; “Operating expenses, as adjusted” fell 26.6% YoY .
    • Strategic clarity and pipeline traction: Management emphasized an asset‑light pivot to broadacre animal feed with positive third‑party validation; end‑users called UHP‑LO “the Holy Grail product” given 20% higher protein and 92% fewer oligosaccharides enabling better feed conversion and gut health .

  • What Went Wrong

    • Mark‑to‑market drag and losses: Q4 included an ~$(6.2)M OMM loss; reported net loss from continuing operations widened to $(38.0)M vs $(30.8)M in Q4’22; interest expense also higher YoY .
    • Top‑line transition risk: 2024 revenue expected to be “much lower” due to divested soy processing assets; management flagged potential volatility during wind‑down of legacy activities .
    • Listing/structural overhangs: Company remained under NYSE $1 minimum price compliance and plans a reverse split proposal at the Aug 13, 2024 annual meeting to cure; going‑concern/liquidity risks are cited among forward‑looking risk factors .

Financial Results

Quarterly trend (Q2 → Q4 2023)

MetricQ2 2023Q3 2023Q4 2023
Revenue ($M)$109.0 $113.1 $116.6
Gross Profit ($M)$3.0 $4.1 $7.0
Net Loss from Continuing Ops ($M)$(49.1) $(19.2) $(38.0)
Basic & Diluted EPS – Continuing Ops$(0.26) $(0.10) $(0.20)
Adjusted EBITDA ($M)$(16.1) $(14.2) $(6.7)

Q4 YoY comparison

MetricQ4 2022Q4 2023
Revenue ($M)$99.2 $116.6
Gross Profit ($M)$0.8 $7.0
Net Loss from Continuing Ops ($M)$(30.8) $(38.0)
Basic & Diluted EPS – Continuing Ops$(0.17) $(0.20)
Adjusted EBITDA ($M)$(21.8) $(6.7)

Full year

MetricFY 2022FY 2023
Revenue ($M)$381.2 $473.3
Gross Profit ($M)$3.5 $23.6
Net Loss from Continuing Ops ($M)$(99.7) $(111.2)
Adjusted EBITDA ($M)$(81.6) $(47.7)

Segment/KPIs

MetricQ2 2023Q3 2023Q4 2023FY 2023
Proprietary Revenue ($M)$18.6 $33.1 $33.0 $110.0
Gross Profit excl OMM ($M)$6.1 $(0.2) $13.1 $23.3
Operating Expenses ($M)$40.4 $28.4 $30.5 $128.1
Operating Expenses, as Adjusted ($M)$—$—$24.0 $104.3
Free Cash Flow ($M)$(14.1) $—$(1.1) $(87.5)
Cash & Marketable Securities (period end, $M)$117.9 $86.2 $48.9 $48.9

Notes:

  • Q4 included ~$(6.2)M OMM loss; excluding OMM, Q4 gross margin was ~11% .
  • OMM quarterly impacts summarized in Exhibit tables (Q4 revenue impact $(4.8)M; GP impact $(6.2)M) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue ($M)FY 2023$390–$430 (Aug 9) $440–$450 (Nov 9) Raised
Operating Expenses, as Adjusted ($M)FY 2023$110–$115 (Aug 9) $101–$106 (Nov 9) Lowered
Net Loss from Continuing Ops ($M)FY 2023$(127)–$(137) (Aug 9) $(100)–$(105) (Nov 9) Improved
Adjusted EBITDA ($M)FY 2023$(53)–$(58) (Aug 9) $(50)–$(55) (Nov 9) Improved
Capital Expenditures ($M)FY 2023$15–$20 (Aug 9) $10–$15 (Nov 9) Lowered
Free Cash Flow ($M)FY 2023$(110)–$(118) (Aug 9) $(102)–$(107) (Nov 9) Improved
2024 OutlookFY 2024—Qualitative only: transition year; lower revenue post asset sales; focus on partnerships/licensing; loss reduction expected over time Narrative only

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Asset‑light transitionAnnounced strategic alternatives; plan to divest processing assets; pivot to licensing/partnerships Model pivot affirmed; 2024 a transition year with lower revenue but higher‑quality earnings over time Accelerating
Partnerships & licensingADM partnership; exploring JV/licensing; seed distribution expansion Expect sizable offtake/licensing; exclusivity/tech access fees possible; demand expected to outstrip seed supply near‑term Building
Cost reductionsLiquidity Improvement Plan: $33M run‑rate OpEx savings target; additional $5–$10M targeted Run‑rate cash OpEx+CapEx targeted at $55–$60M in 2024; continuing to align cost base Improving
Supply/demand & marginsCommodity headwinds; proprietary sales into commodity channels; Q3 GP ex‑OMM negative Q4 GP improved; ex‑OMM margin ~11%; OMM loss ~$(6.2)M Stabilizing
Debt & liquidityPlan to retire high‑cost debt by Mar 1, 2024 Senior term loan fully retired in Feb 2024; exploring further financing/strategic alternatives De‑risking
Regulatory/listing—NYSE $1 price deficiency; reverse split proposal for Aug 13, 2024 AGM Overhang persists
R&D pipelineNext‑gen UHP, herbicide tolerance integration; 2026 material availability Scaling from 22→35 varieties by 2025; UHP‑LO HT on ground in 2026; broadacre 2027 Advancing
Animal feed focusEarly emphasis on livestock feed adjacency Third‑party validation: “Holy Grail” attributes (20% higher protein; 92% fewer oligosaccharides; better digestibility) Strengthening

Management Commentary

  • “2023 marked a year of significant progress and change... We are now rapidly evolving to an asset‑light business model designed to serve broadacre animal feed markets.” – CEO Deanie Elsner .
  • “2024 will be a year of transition. We believe the steps we have taken to reduce costs and pay down debt will position the Company to successfully execute on its strategic plans in 2024.” – CFO Dean Freeman .
  • On product-market fit: “Animal feed industry experts have confirmed that the soybeans we harvested in 2023 will be a game changer... if they could design their Holy Grail product, this would be it.” – CEO .
  • On milestones & execution focus: “We have revalidated our technology pipeline, built a new business model, reshaped the organization, divested 2 processing assets, retired debt, reduced costs and laid the groundwork with future partners.” – CEO .

Q&A Highlights

  • Milestones to track through 12–18 months: transition of legacy model, and announcement/execution of partnership and licensing transactions to drive 2024–2025 revenue .
  • Partnership economics and cadence: structures range from exclusivity/tech access fees to offtake agreements; near‑term rate‑limiter is bulking UHP‑LO seed over two years; HT introgression on ground in 2026, enabling broadacre in 2027 .
  • Run‑rate OpEx: cash OpEx+CapEx targeted at ~$55–$60M for 2024, with room for further improvement as model transitions .
  • Revenue visibility: 2024 revenue expected “much lower” with wind‑down of legacy processing; volatility possible early in 2024 as legacy contracts roll off .

Estimates Context

  • S&P Global consensus estimates for Q4 2023 (revenue and EPS) were unavailable in our SPGI data mapping for BHIL at the time of analysis; therefore, we do not present beat/miss vs. Wall Street. We attempted retrieval, but no CIQ mapping was available for BHIL in the S&P Global database used.

Key Takeaways for Investors

  • Balance sheet risk has eased materially with full retirement of the senior term loan; this should lower interest burden and expand financing optionality as the company executes an asset‑light model .
  • The narrative pivot is toward licensing/partnerships in animal feed; management expects demand to outstrip seed supply for UHP‑LO in the near term, a constructive setup if execution secures acreage and offtake .
  • Cost structure is resetting lower; adjusted EBITDA improved YoY and further OpEx discipline is planned, supporting a path to lower cash burn in 2024 despite reduced revenue .
  • Reported results remain sensitive to mark‑to‑market timing differences; excluding OMM, Q4 gross margin was healthier, underscoring the importance of hedge/unwind timing on reported margins .
  • Execution risks include scaling seed supply, landing sizable licensing deals, and managing the 2024 revenue trough; management flagged potential near‑term revenue volatility .
  • Regulatory overhang persists with NYSE minimum price deficiency; reverse split authorization is planned for the Aug 13, 2024 AGM, which could be a mechanical catalyst for compliance .
  • Without formal 2024 guidance or available Street consensus, updates on partnership signings, seed bulking progress, and run‑rate OpEx reductions are likely to drive stock narrative near term .