RiceBran Technologies Reports Full Year 2017 Financial Results

SACRAMENTO, California, March 15, 2018

Business Highlights

• Successfully exited from unprofitable operations in Brazil and completed the sale of its Healthy Natural contract manufacturing business for $18.3 million in cash to focus on proprietary ingredient business. 
• Secured a direct $2.9 million equity investment from Continental Grain to fuel future sales growth.
• Expanded GPMs by over 400bps and reduced annual SG&A expenses by $2.5 million or 20.2% through cost cutting initiatives.
• Significantly improved balance sheet with year-end 2017 cash totaling $6.2 million and shareholders' equity rising to $14.7 million compared to cash of $342,000 and a shareholders' deficit of $(632,000) at year-end 2016.
• Added key sales personnel in the second half of 2017 to help drive future ingredient sales growth.

"We are pleased with the progress we made in 2017 as we completed the work to put RBT on sound financial footing," said Dr. Robert Smith, CEO.  "Our expanded salesforce is now focused on targeted customer niches, and we are seeing progress in growing those niches.  We believe this will translate into accelerating revenue growth starting with the 2018 second quarter and we expect our quarterly adjusted EBITDA to improve markedly by the end of 2018."

Highlights of RBT's 2017 results:

• RiceBran Technologies reported revenue of $13.4 million in 2017 versus $13.0 million in 2016.  Sales of our Animal Nutrition product sales were up 9% while Food product sales fell 2%. 
• Gross profit expanded to $3.8 million from $3.1 million, and gross profit rate was 28.39% in 2017 versus 24.09% last year.  Raw bran prices were a favorable impact for much of the year, while obsolete inventory costs also fell. 
• SG&A costs were sharply lower at $9.9 million in 2017 versus $12.4 million in 2016, reflecting aggressive company efforts to improve profitability.  Primary drivers of this decrease included lower payroll, travel and entertainment, marketing, and annual meeting expenses (the latter related to the 2016 proxy contest). 
• Our loss from operations of $(6.1) million in 2017 was improved from $(9.3 million) as a result of higher gross profit and lower SG&A. 
• Our adjusted EBITDA was $(4.1) million in 2017, improved from $(5.4) million in 2016. 

Highlights of RBT's 2017 fourth quarter results:

• The fourth quarter saw sales decline 3% to $3.1 million from $3.2 million in the 2016 fourth quarter.  Although we were not expecting growth in the fourth quarter, our performance was partially constrained by end of quarter customer delivery timing issues and some unexpected downtime at one of our facilities. 
• Gross profit was $666,000 in the 2017 fourth quarter versus $578,000 in the 2016 fourth quarter, and gross profit rate improved to 21.15% from 17.87%.  Inventory reserves helped gross profit margins, which was partially offset by higher raw bran prices. 
• SG&A expenses totaled $2.46 million in the 2017 fourth quarter versus $2.96 million in the 2016 fourth quarter, declining to 78.12% of revenue from 91.38%.  Lower stock option, bonus, office, and fee expenses were primary causes of the decrease. 
• Operating loss of $(1.79) million in the 2017 fourth quarter improved from $(2.38) million in the 2016 fourth quarter, and adjusted EBITDA was $(1.34) million compared to $(1.69) million, respectively.   

RBT's balance sheet was substantially strengthened in 2017:

• Year-end cash and cash equivalents totaled $6.2 million in 2017 versus $342,000 at the end of 2016. 
• Debt was reduced to $16,000 at the end of 2017 from $9.0 million at the end of 2016.
• Shareholders' equity totaled $14.7 million at year-end 2017, up from $(632,000) a year earlier. 
• Most of the improved financial condition resulted from the proceeds and gain on our sale of Healthy Natural and an amended agreement that allowed us to change the accounting treatment for many of our warrants to equity treatment versus liability. 

"We are in a strong position to pursue growth opportunities," noted Brent Rystrom, COO and CFO.  "Our sales team, led by Michael Goose, is making major inroads in identifying and selling to new customers as well as building volumes with existing customers.  We see this leading to a progressive acceleration in revenue growth beginning in the 2018 second quarter.  We plan to hold non-selling expenses flat in 2018, which should drive sharply improving profitability."