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.
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.
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.
Consolidated Balance Sheets
December 31, 2010 and 2009
(in thousands, except share amounts)
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful
accounts of $277 and $153
Notes receivable, current portion, net of allowance for doubtful
notes receivable of $636 and $636
Deferred tax asset
Deposits and other current assets
Assets held for sale - property, plant and equipment
Assets held for sale - trademarks
Total current assets
Notes receivable, net of current portion
Property, plant and equipment, net
Intangible assets, net
Equity method investment
Other long-term assets
LIABILITIES AND EQUITY
Long-term debt, current portion
Warrant liability, current portion
Total current liabilities
Liabilities subject to compromise
Long-term debt, net of current portion
Deferred tax liability
Warrant liability, net of current portion
Other long-term liabilities
Commitments and contingencies
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
Accumulated other comprehensive loss
Total equity attributable to NutraCea shareholders
Total liabilities and equity
Consolidated Statements of Operations
Years Ended December 31, 2010 and 2009
(in thousands, except per share amounts)
Cost of goods sold
Selling, general and administrative
Impairment of property, plant and equipment
Impairment of trademarks
Loss on disposal of trademarks, property, plant and equipment
Provision for doubtful accounts receivable and notes receivable
Research and development
Total operating expenses
Loss from operations
Other income (expense):
Loss on equity method investments
Foreign exchange loss
Warrant liability income (expense)
Total other income (expense)
Loss on disposal of property, plant and equipment
Impairment of property, plant and equipment
Total reorganization expenses
Loss before income taxes
Income tax benefit
Net loss attributable to noncontrolling interest
Net loss attributable to NutraCea shareholders
Loss per share attributable to NutraCea shareholders
Weighted average number of shares outstanding