NutraCea Reports Full Year 2010 Financial Results

Mar 31, 2011, 19:21 ET from NutraCea

SCOTTSDALE, Ariz., March 31, 2011 /PRNewswire/ --

For Full Year 2010:

  • Gross profit increased to $7.0 million, or 22.1% of revenues  
  • Operating expenses declined 41.1% to $20.9 million  
  • Net loss  declined to $15.7 million, a 51% improvement

NutraCea (Pink Sheets: NTRZ), a world leader in production and marketing of stabilized rice bran (SRB), rice bran oil (RBO) and their derivative products, today announced full year financial results for the year ended December 31, 2010.

Divestiture of non-core businesses, including the sale of its nutraceutical distribution business, its infant cereal product line and its equine brands products, reduced revenues by $2.6 million or 7.8% in 2010 compared to 2009.  This revenue reduction was partially offset by an increase of $1.0 million in the bio-refining segment, resulting in a net decline in 2010 revenues of $1.6 million or 4.8%.  Core SRB product revenues held steady in a difficult business environment.

Despite the reduction in total revenues in 2010, consolidated gross profit rose 13.2% to $7.0 million, or 22.1% of revenues, compared to a gross profit of $6.2 million, or 18.6% of revenues for 2009.  Gross profit margin in the SRB segment grew to 36.9% for 2010 from 23.3% for 2009.  This improvement resulted primarily from the sale of low margin and non-core product lines combined with payroll and operating cost reductions at production facilities.  Gross profit in the bio-refining segment was down slightly with improved pricing offset by higher plant maintenance costs included in cost of goods sold.

Operating expenses decreased by $14.6 million or 41.1% in 2010. Cost cutting efforts across the business that began in 2009 and continued in 2010 resulted in a combined $6.0 million reduction in  SG&A and professional fees for full year 2010.  The net loss attributable to NutraCea shareholders of $32.1 million, or $(0.17) per basic and diluted share, previously reported for 2009 was reduced by $16.4 million to a net loss attributable to NutraCea shareholders of $15.7 million, or $(0.08) per basic and diluted share for 2010.  The 2010 loss represents a 51% improvement from 2009 and a $48.9 million or 76% improvement from the $64.6 million net loss reported for 2008.  

W. John Short, Chairman and CEO, commented, "The restructuring initiatives that began in 2009 and continued in 2010 allowed NutraCea to successfully emerge from Chapter 11, settle class action lawsuits within D&O policy limits, shed underperforming and  non-core businesses, pay our secured creditors in full, fund ongoing operations, settle with the SEC, pay the significant legal and restructuring costs related to the Chapter 11 process and position the Company to pay unsecured creditors in full without impairing our shareholders.  To date, we have paid approximately 70% of our secured and unsecured creditor obligations.  We expect to pay our remaining obligations to unsecured creditors during the 2011 calendar year.  

“We are pleased to report that our rice bran oil bio-refining business, currently represented by Irgovel,  was operationally cash flow positive in 2010.  In addition, in January 2011 we sold to Alothon Group, through its AF Bran Holdings subsidiaries, a minority interest in our subsidiary that owns Irgovel.  Their investment will allow us to move forward with technology improvements and a capacity expansion that should significantly improve cash flow and profitability in the Brazilian operation.  

"We are proud of the improvement in all aspects of our business in 2010, especially the significant increases in operating gross margins and the major reductions in expenses resulting from our restructuring.  And while we expect to show further improvement across all business segments in 2011 and beyond, we will not be satisfied until all segments of the business are generating positive cash flow and earning an attractive after tax return for our shareholders.  

"There are still challenges to overcome. However, as a leaner, more cost-efficient company with a significantly stronger management team, we believe we are well positioned to continue to deliver improved performance in our core SRB and rice oil bio-refining businesses in 2011 and beyond."  

On Friday, April 1, 2011 at 1:00 p.m. EDT NutraCea will hold a conference call to discuss its fiscal 2010 financial results. Individuals wishing to participate in the conference call on Friday, April 1st at 1 pm EDT may dial toll-free (877)407-8033 (domestic) or (201)689-8338 (international); there is no passcode.

The conference call replay, available through April 7, 2011, can be accessed by dialing toll-free (877) 660-6853 (domestic) or (201)612-7415 (international), and provide account number 284 and conference ID 370017. The webcast will also be archived on the NutraCea website at http://www.nutracea.com/FinancialResults2010.

Forward-Looking Statements

This release may contain forward-looking statements, including statements about NutraCea's expectations regarding the payment of unsecured creditors, the capacity expansion at its Brazilian operation and the improvement of its financial performance and technology. These statements are made based upon current expectations that are subject to known and unknown risks and uncertainties. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in NutraCea's filings with the Securities and Exchange Commission, including NutraCea's most recent periodic reports.

About NutraCea

NutraCea is a world leader in production and marketing of stabilized rice bran (SRB), rice bran oil (RBO) and their derivative products. NutraCea holds many patents for stabilized rice bran (SRB) production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, normally an underutilized co-product of rice milling. NutraCea also produces consumer rice based health supplements which can be found at http://www.nutraceaonline.com. More information can be found in the Company's filings with the SEC and by visiting our website at http://www.NutraCea.com.

NutraCea

Consolidated Balance Sheets  

December 31, 2010 and 2009

(in thousands, except share amounts)

2010

2009

ASSETS

Current assets:

Cash and cash equivalents

$         537

$          952

Restricted cash

1,917

1,915

Accounts receivable, net of allowance for doubtful

accounts of $277 and $153

3,502

3,506

Inventories

2,994

3,238

Notes receivable, current portion, net of allowance for doubtful

notes receivable of $636 and $636

1,200

1,200

Deferred tax asset

292

-

Deposits and other current assets

2,255

2,637

Assets held for sale - property, plant and equipment

3,598

14,551

Assets held for sale - trademarks

-

650

Total current assets

16,295

28,649

Notes receivable, net of current portion

600

1,800

Property, plant and equipment, net

24,054

26,243

Intangible assets, net

6,296

7,679

Goodwill

5,835

5,626

Equity method investment

49

91

Other long-term assets

95

80

Total assets

$     53,224

$      70,168

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$      2,573

$        2,588

Accrued expenses

4,266

5,080

Pre-petition liabilities

6,406

-

Long-term debt, current portion

3,235

6,642

Warrant liability, current portion

-

34

Total current liabilities

16,480

14,344

Liabilities subject to compromise

-

6,988

Long-term liabilities:

Long-term debt, net of current portion

7,365

5,957

Deferred tax liability

4,361

5,110

Warrant liability, net of current portion

1,628

1,245

Other long-term liabilities

1,000

1,000

Total liabilities

30,834

34,644

Commitments and contingencies

Equity:

Equity attributable to NutraCea shareholders:

Convertible, series E preferred stock, no par value, $1,000 stated value,

2,743 shares authorized, no shares outstanding

-

-

Convertible, series D preferred stock, no par value, $1,000 stated value,

10,000 shares authorized,  no shares outstanding

-

-

Common stock, no par value, 350,000,000 shares authorized, 

195,359,109 and 192,967,680 shares issued and outstanding

207,432

205,291

Accumulated deficit

(184,812)

(169,144)

Accumulated other comprehensive loss

(74)

(467)

Total equity attributable to NutraCea shareholders

22,546

35,680

Noncontrolling interest

(156)

(156)

Total equity

22,390

35,524

Total liabilities and equity

$     53,224

$      70,168

NutraCea

Consolidated Statements of Operations

Years Ended December 31, 2010 and 2009

(in thousands, except per share amounts)

2010

2009

Revenues

$    31,631

$   33,223

Cost of goods sold

24,647

27,054

Gross profit

6,984

6,169

Operating expenses:

Selling, general and administrative

15,743

21,003

Professional fees

2,027

2,797

Impairment of property, plant and equipment

1,900

8,845

Impairment of trademarks

-

1,594

Loss on disposal of trademarks, property, plant and equipment

943

202

Provision for doubtful accounts receivable and notes receivable

153

125

Research and development

123

897

Total operating expenses

20,889

35,463

Loss from operations

(13,905)

(29,294)

Other income (expense):

Interest income

156

448

Interest expense

(1,542)

(2,314)

Loss on equity method investments

(42)

(218)

Foreign exchange loss

-

(72)

Warrant liability income (expense)

(349)

2,634

Other income

112

-

Other expense

-

(436)

Total other income (expense)

(1,665)

42

Reorganization expenses:

Professional fees

1,033

180

Loss on disposal of property, plant and equipment

-

3,016

Impairment of property, plant and equipment

-

229

    Total reorganization expenses

1,033

3,425

Loss before income taxes

(16,603)

(32,677)

Income tax benefit

935

474

Net loss

(15,668)

(32,203)

Net loss attributable to noncontrolling interest

-

108

Net loss attributable to NutraCea shareholders

$  (15,668)

$  (32,095)

Loss per share attributable to NutraCea shareholders

Basic

$      (0.08)

$     (0.17)

Diluted

$      (0.08)

$     (0.17)

Weighted average number of shares outstanding

Basic

193,196

183,553

Diluted

193,196

183,553

SOURCE NutraCea



RELATED LINKS

http://www.nutraceaonline.com