A year ago CEO Brent Rystrom predicted the company would bring in $37 million to $40 million in revenue in its fiscal 2019. In results reported recently the company achieved only $23.7 million, which was nevertheless a 60% rise over 2018 revenues.
Struggle to bring mill online
Rice Bran Technologies (RBT) has had several missteps over the years, including a money-losing foray into a Brazilian rice milling operation and an apparently ill considered move into contract manufacturing.
The latest struggle has been to fully integrate Golden Mills, a rice milling plant in Arkansas the company acquired in 2018. The facility needed a major refit to fulfill the company’s plans for it, and that took longer than expected. The goal of acquiring the facility was to have access to the lowest cost raw material in North America.
RBT does commodity rice milling but also creates a line of functional ingredients from rice bran as well as from barley and oats. Among those ingredients is a line of rice bran-derived proteins branded as ProRyza that is suitable for nutrition bars and meal replacement beverages. The company has operations in Arkansas, Louisiana, California, Montana and Minnesota. The Minnesota branch, a barley and oats milling operation called MGI, was acquired in 2019. RBT’s headquarters is in Houston.
Going full speed during crisis
In the company’s recent annual earnings call with stock analysts, Rystrom noted that while the coronavirus crisis will undoubtedly have huge impacts on the economy, the company plans to adhere to its strategic vision for the coming year. The call was posted in transcript form on the site seekingalpha.com.
Rystrom quoted from a Homeland Security Administration memo on the operations of essential supply chain companies that read: “If you work in a critical infrastructure industry as defined by the department of Homeland Security such as healthcare services and pharmaceutical and food supply you have a special responsibility to maintain your normal work schedule.”
Steep losses, but hope for future
The company reported a loss on an EBITDA basis of $13.7 million. The company did manage to raise $8 million in an equity offering in late 2019, and Rystrom anticipated a turnaround in the company’s bottom line for the coming year,
“Our adjusted EBITDA loss of $2.7 million in the fourth quarter improved significantly from the adjusted EBITDA loss of $3.4 million we reported in the 2019 third quarter. This was an important first step in improving our adjusted EBITDA towards positive results. Something we plan to attain by the second half of 2020,” he said.