The company has for years been developing a line of ingredients from rice bran, a feedstock that previously was used as low grade animal feed or was simply discarded. Many millions of tons of this raw material is available in the US as a byproduct of the production of white rice in California and Arkansas.
RBT, which was formerly known as NutraCea, has developed a suite of ingredients including a protein line called ProRyza. The company has had a sustainability message of finding high grade ingredients in erstwhile waste material. And the ingredients fit well into the modern push toward plant-based proteins and clean labels.
Nevertheless, the company has struggled to gain sufficient traction for its products. Complicating the story was a money losing investment in a Brazilian business and an apparently ill-considered move into contract manufacturing.
Streamlining the operation
All that is coming out in the wash, said CEO Robert Smith in a recent year-end earnings call with analysts. The call was posted in transcript form on the site seekingalpha.com.
“We completed a financing in early 2017 that provided RBC some time to get our financial house in order,” Smith said.
“We were then able to sell Healthy Natural, our contract blending and packaging business using the proceeds to pay-off our US based debt and replenish our cash balances and shareholder’s equity. This was followed by an investment in RBT from Continental Grain, adding further strength to our balance sheet. And late in the year, last year we exited our investment in Brazil; eliminating any further losses in this operation,” he added.
Brent Rystrom, RBT’s chief financial officer, said past results were depressed by the company’s stressed financial condition entering its fiscal 2017.
“We believe our financial condition limited new customer growth opportunities for us until we improved our finances simply because we were too risky for most customers to work with,” he said.
Michael Goose, president of RBT’s ingredient sales and marketing, noted that the company has had success bringing back previous customers, including a key pet and companion animal customer. And the company secured a new large unnamed lifestyle customer as its financial condition improved as 2017 went along, he said.
RBT posted modest revenue growth of 3% in 2017 to $13.4 million from $13 million. Net loss from operations narrowed to $6.1 million in 2017 from $9.3 million in 2016. Overall net loss was $5.3 three million versus $9.1 million respectively. Rystrom noted that the company finished the year with $6.2 million in cash and equivalents in hand, versus $342,000 at the end of 2016. He forecast $16 million in revenue for 2018 and an increasing pace of growth, with fourth quarter 2018 revenue predicted to be up 30% year of year.