Name: RiceBran Technologies Q3 2023 Earnings Call
Start: 2023-12-20T00:00:00.000Z

Executive Summary

Q3 2023 revenue was $4.857M, down 27% YoY as Golden Ridge Rice Mills saw a ~$1.2M decline from end-of-season crop availability and MGI Grain declined ~$0.6M on lower commodity prices .
Gross margin was -10% vs -8% in Q3 2022 and 0% in Q2 2023; operating loss (EBIT) was $(1.730)M, +13% YoY, reflecting commodity supply changes and strategic cost rationalization .
GAAP diluted EPS was $(0.26), improving vs $(0.38) in Q3 2022 and vs $(1.54) in Q2 2023 due to absence of discontinued ops losses in Q3 2023 .
The Board is advancing a strategic review following the Q2 divestiture of the stabilized rice bran business and has curtailed quarterly calls as it evaluates alternatives and capitalizes on public listing and carryforward tax assets .
Liquidity remains tight: cash was $0.466M at 9/30/23; current debt was $3.378M and shareholders’ equity was $(0.784)M at quarter-end, highlighting balance sheet constraints as strategic options are pursued .

What Went Well and What Went Wrong

SG&A from continuing operations decreased by $186k YoY as overhead (primarily staff) was reduced, partly offset by higher legal costs tied to the strategic review .
Net loss improved YoY: continuing ops net loss narrowed to $(1.782)M vs $(1.551)M in Q3 2022 on a per-share basis of $(0.26) vs $(0.29); total GAAP EPS improved to $(0.26) vs $(0.38), reflecting no discontinued ops losses in Q3 2023 .
Management continues to reposition the portfolio after selling the SRB business in Q2, aiming for a more sustainable organization and better leverage of public listing and tax assets .

Revenue fell 27% YoY to $4.857M, driven by Golden Ridge (~~$1.2M) on end-of-season crop scarcity and MGI (~~$0.6M) on lower commodity prices, pressuring volumes and pricing .
Gross margin deteriorated to -10% vs -8% in Q3 2022 (and from 0% in Q2 2023), with rationalization of less-profitable business amid commodity supply changes .
Operating loss (EBIT) increased 13% YoY to $(1.730)M; cash declined to $0.466M with current liabilities of $10.039M, underscoring near-term liquidity challenges .

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($USD Millions)	$6.637	$6.269	$4.857
Gross Margin (%)	-8%	0%	-10%
Operating Income (EBIT) ($USD Millions)	$(1.998)	$(1.620)	$(1.730)
Net Income – Continuing Ops ($USD Millions)	$(1.551)	$(1.836)	$(1.782)
Diluted EPS – Total GAAP ($USD)	$(0.38)	$(1.54)	$(0.26)
Weighted Avg. Shares (Millions)	5.332	6.723	6.806

Segment/Driver	YoY Revenue Impact ($USD)	Commentary
Golden Ridge Rice Mills	~$(1.2)M	Lack of end-of-season crop availability led to lower volumes
MGI Grain	~$(0.6)M	Lower commodity prices pressured revenue

KPI	Q4 2022	Q2 2023	Q3 2023
Cash & Equivalents ($USD Millions)	$3.941	$0.302	$0.466
Current Debt ($USD Millions)	$6.155	$3.739	$3.378
Total Current Liabilities ($USD Millions)	$11.277	$9.457	$10.039
Shareholders’ Equity ($USD Millions)	$12.909	$0.882	$(0.784)

Actuals vs Estimates (Q3 2023)	Actual	Consensus	Surprise
Revenue ($USD Millions)	$4.857	N/A (S&P Global unavailable)	N/A
Primary EPS (GAAP) ($USD)	$(0.26)	N/A (S&P Global unavailable)	N/A

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY/Q4 2023	None provided	None provided (strategic review ongoing; company forwent quarterly calls)	Maintained (no formal guidance)

Topic	Previous Mentions (Q1 2023 and Q2 2023)	Current Period (Q3 2023)	Trend
Strategic review / alternatives	Board initiated and advanced review; active interest in assets; no Q&A on Q1 call due to sensitivity	Review continues; highlights value of public listing and carryforward tax assets	Ongoing
SRB business disposition	SRB derivatives declines noted; divestiture completed in Q2	Q3 commentary references Q2 SRB divestiture as first step	Portfolio simplification
Operations: Golden Ridge	Partnership with Gander Foods improving performance (Q1)	YoY revenue down ~$1.2M on crop availability constraints	Mixed: operational partnership, but supply headwind
Operations: MGI Grain	Capacity upgrade completed late Q1; 50% more capacity; fully online; growth expected	YoY revenue down ~$0.6M on lower commodity prices	Capacity up, pricing headwinds
Gross margin trajectory	Q1 gross loss; Q2 returned to positive gross profit ($24k)	Q3 gross margin -10% amid rationalization and supply changes	Volatile/under pressure
Legal/OpEx and investor comms	SG&A flat in Q1; legal costs higher in Q2; company forwent quarterly call	SG&A down $186k YoY; legal costs remain elevated for review	Cost rationalization vs review costs
Liquidity and balance sheet	Q1 cash $3.4M; Q2 cash $0.3M; debt reduced	Q3 cash $0.466M; equity negative $(0.784)M	Tightening

“The Board of Directors continues to advance a strategic review, with the goal of creating a more sustainable organization that can better capitalize on the benefits of a public listing and the significant carryforward tax assets that have been accumulated. The divestiture of our stabilized rice bran business during the second quarter was the first step in this ongoing process.” — Eric Tompkins, Executive Chairman .
“There is active interest in the assets of the company, a number of opportunities that are being evaluated and with that a variety of potential outcomes.” — Peter Bradley, Executive Chairman (Q1 call) .
“First quarter revenues were $9.3 million… Gross loss was $300,000… Operating losses this quarter were $2 million… we are unable to provide further details at this time and therefore will not be taking any questions.” — William Keneally, Interim CFO (Q1 call) .

Q1 2023 call concluded without Q&A due to the sensitivity of the strategic review; management explicitly stated they would not be taking questions .
In Q2 2023, the company forwent the quarterly conference call entirely given ongoing strategic process; no Q3 transcript is available, consistent with the curtailed investor communications during the review .

S&P Global consensus estimates for Q3 2023 were unavailable for RIBT, so no comparison of actual vs consensus can be made this quarter.
Future estimate tracking will resume once S&P Global coverage/mapping is available and management normalizes guidance communications .

The quarter’s 27% YoY revenue decline to $4.857M was driven by crop availability at Golden Ridge and commodity price pressure at MGI; margin pressure intensified with gross margin at -10% .
Operating loss rose 13% YoY to $(1.730)M, while GAAP EPS improved to $(0.26) vs $(0.38) in Q3 2022 and $(1.54) in Q2 2023 due to the absence of discontinued ops losses .
Liquidity is constrained: cash of $0.466M, current liabilities of $10.039M, and shareholders’ equity of $(0.784)M at 9/30/23 underscore the urgency of strategic actions and/or capital solutions .
Strategic review remains the central narrative post-SRB divestiture; management is prioritizing cost rationalization and optionality to unlock asset value through the public listing structure and tax assets .
Investor communications are limited during the review: Q2 call was skipped and Q1 call had no Q&A, reducing near-term visibility; monitoring 8-Ks for updates is essential .
Operational levers exist (MGI capacity expansion; Golden Ridge partnership), but external factors (crop cycles, commodity prices) materially influence volumes and margin trajectory .
Near-term trading likely hinges on strategic review milestones, balance sheet developments, and any operational stabilization signals (e.g., improved crop availability or price environment) disclosed in subsequent filings .