RiceBran Technologies

Good afternoon, ladies and gentlemen, and welcome to the Rice Brand Technologies third quarter 2022 earnings call and webcast. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Rob Fink. Rob, the floor is yours.

Thank you, operator, and good afternoon, and welcome to the Rice Brand Technologies third quarter 2022 2022 Financial Results Conference Call. Hosting the call today are Peter Bradley, Executive Chairman, and Todd Mitchell, Rice Brands Chief Operating Officer and Chief Financial Officer. I want to remind participants that during this call, management's prepared remarks may contain forward-looking statements that are subject to risks and uncertainties. Management may also make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC. In addition, any projections as to the company's future performance represented by management include estimates as of today November 3, 2022, and the company assumes no obligation to update these projections in the future as market conditions change. This webcast and certain financial information provided on the call, including reconciliation of non-GAAP financial measures to comparable GAAP financial measures, are available at ricebrandtech.com on the investor relations page. With that said, I'd now like to turn the call over to Peter. Peter, the call is yours. Thank you, Rob, and good afternoon to everyone.

Rice Brand continues to see strong demand for our products. As a result, we were able to deliver another $10 million revenue quarter with year-over-year revenue up 48%. Our specialty milling businesses are running very well and capitalizing on strong demand for high-quality domestically sourced grains. and we saw double-digit growth in our core SLB sales for the third quarter in a row. We are pushing hard to get to our core SLB growth targets and re-accelerate our value-add business, but both are underperforming the levels we would like them to be at. To be clear, all of the initiatives we are undertaking and which we discussed last quarter necessary to get the company to profitability continue to move forward it's just taking a little longer than we expected of note significant progress was made in the third quarter at both our milling businesses at golden ridge we signed an agreement in september that put sourcing selling and the day-to-day operations of the mill in the hands of a local agent who owns a very well-run mill down the road with this extensive network of local farmers to buy create grain from ability to drive even further operating efficiencies and to better segment the sales book we believe he will be able to generate significantly better spread than we've been able to achieve on our own and importantly our agreement will give with him is for him to be compensated in common stock on a performance basis aligning indirectly with shareholders and at MGI which has always generated positive cash flow for us and which is experiencing strong demand growth this year, we are all but one segment away from completing a major mechanical upgrade to the mill, which will add 50% throughput capacity and significantly resolve the plant's deferred maintenance issue, which we inherited. As a result of these initiatives, we expect to significantly improve contribution from both businesses. We look for this to begin at Golden Ridge in the fourth quarter with greater impact going into the first quarter of 23. And we expect a very similar dynamic for MGI with our capacity expansion largely already booked through 2023. Elsewhere, we continue to push forward with the initiative related to our core SRB and value-add SRB derivatives business, albeit at a bit slower pace than we'd expected. At our core SLB business, we began shipping to our new pet food customer in the third quarter, but as we highlighted in the press release, overall volumes for the fourth quarter will fall short of our expectations. This is due to a technical issue that both parties knew had to be resolved when we entered into this agreement, which it turns out needs to be resolved sooner rather than later. And at our value add SRB derivatives business, production issues have been fixed, and we are rebuilding sales momentum with our core customers. But sales to our distribution partners fell short of expectations for the third quarter, and we're still having issues with imported feedstock. We're addressing both issues, but both are weighing on our sales and contribution margin. Notably, problems with obtaining imported feedstock could delay the initial ramp of unused SKUs, which we had expected in the fourth quarter. These factors temper our near-term outlook for sales and profitability for both these businesses, although we continue to expect to generate sales in the fourth quarter that are on par with the prior quarters of 2022. And we look for incremental improvement in overall profitability as evidence of real movement forward on all of our initiatives to achieve profitability. Let me now turn the call over to Todd for a review of the quarter in more detail.