In fact, RiceBran just completed the best quarter in the history of our company in our USA Segment. Management delivered 53% quarter over quarter growth in the first quarter of 2016 as focus on the high value, high margin packaged functional food products in the fastest growing market segments in the US food industry: natural, organic and functional foods. 1We believe we are very well positioned to capitalize on specific favorable market trends that we believe will increase market acceptance of our products and lead to increased growth and profitability and improved stock price performance by emphasizing our strong positioning in natural, organic and functional foods: 1. Drive sales of our Stage II products into multiple natural, organic and functional food channels; 2. Leverage investments recently made to double production capacity of our Stage II products at both our Dillon Montana plant and at our Irving, Texas packaged functional food blending facility; 3. Capitalize on the increasing global demand for rice bran oil produced at the joint venture Irgovel plant in Brazil, where Irgovel management completed capital investments to increase raw rice bran processing capacity by approximately 50% in 2015; 4. Take advantage of strong consumer demand for non-genetically modified, gluten/soy/dairy free, natural, minimally processed, vegetarian and vegan "clean label" functional food products; 5. Increase our global distribution network; and 6. Continue to generate additional evidence-based functionality of our proprietary and process patented ingredients. RICEBRAN'S STRATEGIC PLAN IS YIELDING PERFORMANCE MOMENTUM In the first quarter of 2016, revenue in our USA segment grew significantly both quarter over quarter and year over year. Our sales growth was broad based coming from both human ingredients and functional foods as well as animal nutrition. Most importantly, we achieved this performance while at the same time reducing USA segment operating expenses quarter over quarter. Our first quarter 2016 results clearly reflect the significant progress we are making:
- USA segment revenues increase by 53% compared to Q1 2015 and by 23% sequentially to reach a record $7.8 million;
- Consolidated Q1 2016 gross profit improved by 100% to $2.2 million compared to $ 1.1 million in Q1 2015. USA segment gross profit increased by 49% compared to Q1 2015 with margins remaining strong at 31.7%;
- USA and Corporate segment achieved $376,000 in positive adjusted EBITDA in Q1 2016 compared to an adjusted EBITDA loss of ($647,000) in the same quarter of the prior year;
- Overall consolidated adjusted EBITDA in Q1 2016 was ($217,000), a $1.3 million improvement from the ($1.6 million) recorded in Q1 2015; and
- Q1 2016 consolidated net income was ($251,000), a 92% improvement compared to the ($3.0 million) net income recorded in Q1 2015.
While our operations in Brazil continue to struggle as a result of the country's economic collapse, the currency devaluation, banking collapse and supply chain difficulties, we have taken steps to limit further investment, streamline operations and continue to reduce costs to mitigate its effect on our overall business.1 Details of the strategic implementation and first quarter results can be found on the webcast of the investor presentation made on June 1, 2016 in New York to institutional investors at the following link: http://wsw.com/webcast/marcum4/ribt. YOUR BOARD IS HIGHLY QUALIFIED AND INDEPENDENT, WITH SIGNIFICANT RELEVANT EXPERIENCE TO OVERSEE THE SUCCESSFUL EXECUTION OF RICEBRAN'S STRATEGIC PLAN We believe the experience and expertise of your current directors is essential to overseeing the successful execution of RiceBran's strategic plan. We have taken careful measures to add individuals to your Board who have direct relevant experience and stature, which is reflected in the appointment of Marco V. Galante within the last year. Currently, your Board is composed of seven directors with diverse backgrounds and professional experience, five of whom are independent, and all of whom are elected annually. Together, these highly qualified individuals bring an intimate understanding of the natural food, functional food and nutritional supplement landscape, deep operational experience and broad-based finance and management experience, which will continue to prove invaluable to the Company moving forward. Your Board's nominees have the right experience to oversee the ongoing execution of RiceBran's current strategy and enhance shareholder value:
- W. John Short - Over 25 years of C-suite experience managing multi-national businesses in Asia, Europe and the US after more than a decade of international banking experience gained at Citibank in New York, Ecuador, Venezuela and Hong Kong.
- Marco V. Galante - Highly experienced business operator and investment banker with over 25 years of experience in the food and food ingredient business in the US and internationally. Partner and Principal at The J. H. Chapman Group.
- David Goldman - Audit Committee Chairman and CPA with over 35 years in senior positions at Deloitte & Touche LLP and significant SEC experience.
- Baruch Halpern - Founder and Managing Director of Halpern Capital, Baruch is a highly experienced investment banker with more than 10 years involvement with RiceBran Technologies and finance background at major US corporations.
- Henk W. Hoogenkamp - Chairman of the Executive Committee and former director of strategic technology at Solae, Henk is among the leading global experts on plant protein and is a widely published expert on all matters related to plant protein.
- Robert C. Schweitzer - In addition to his position as Chairman of the Board of Directors of RiceBran Technologies, Bob has been Chairman of the Board of NASDAQ listed 1-800-PetMeds for the past 12 years and is also lead independent director of OTC listed Omnicom.
- Peter A. Woog - Chairman of the Nominating and Corporate Governance Committee, Peter is a highly experienced corporate operator holding CEO and director positions in major international companies.
In other words: if LF-RB Group were to succeed in its proxy contest, a group owning 9% of your Company would take 100% control of the Board of your Company without paying other RiceBran shareholders a control premium.Moreover, RiceBran has consistently engaged in open dialogue with its shareholders and is receptive to constructive ideas, whatever the source. However, in our conversations with LF-RB Group, we have requested resumes of proposed board and management candidates as well as business plans for our Company. To date, nothing has been forthcoming. We have heard nothing strategic or constructive regarding any ideas to increase shareholder value - either publicly or during our face-to-face meeting with the LF-RB Group. In addition, the dissidents are proposing to install as CEO a candidate with no experience managing a public company and no C-suite experience at ANY company. PLEASE VOTE THE WHITE PROXY CARD TODAY Your vote matters and your Board believes that your interests are best served by the re-election of Messrs. Short, Galante, Goldman, Halpern, Hoogenkamp, Schweitzer, and Woog, who have played an integral role in helping transform RiceBran into a turnkey provider of healthy natural products. We believe the LF-RB Group's ambush tactics and the lack of any kind of plan for the business risks derailing the significant progress your Board has made towards profitable growth. We believe RiceBran's shareholders can protect the value of their investment by voting on the WHITE proxy card "FOR" the reelection of your Board's highly qualified and experienced director nominees: W. John Short, Marco V. Galante, David Goldman, Baruch Halpern, Henk W. Hoogenkamp, Robert C. Schweitzer, and Peter A. Woog. Your vote is extremely important, no matter how many or how few shares you own. As the annual meeting date is quickly approaching, we urge you to vote TODAY by telephone, online, or by signing and dating the enclosed WHITE proxy card and returning it in the postage-paid envelope provided. Please do NOT return or otherwise vote any gold proxy card that may be sent to you by LF-RB GROUP Management, LLC. If you have any questions or need assistance voting your shares, please contact our proxy solicitor, Morrow & Co., stockholders should call 800-662-5200 and banks and brokers should call 203-658-9400 or by email at email@example.com. On behalf of the Board of Directors, thank you for your continued support.
|Robert C. Schweitzer, Chairman of the Board||W. John Short, Chief Executive Officer|
About RiceBran TechnologiesRiceBran Technologies is a packaged functional food, functional food ingredient, human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from traditional and organic rice bran. RiceBran Technologies has proprietary and patented technology that allows us to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious packaged functional foods, functional food ingredients, human food ingredients and animal nutrition products. Our target markets are retailers, brand owners, wholesalers and manufacturers of packaged functional foods, functional food ingredients, human food ingredients and animal nutrition products, both domestically and internationally. More information can be found in the Company's filings with the SEC and by visiting our website at http://www.ricebrantech.com. Important Additional Information RiceBran Technologies ("RiceBran"), its directors and certain of its executive officers are participants in the solicitation of proxies from RiceBran shareholders in connection with the matters to be considered at RiceBran's 2016 Annual Meeting of Shareholders. In connection with its solicitation of proxies from RiceBran shareholders, RiceBran filed its definitive proxy statement and WHITE proxy card with the U.S. Securities and Exchange Commission (the "SEC") on April 29, 2016 and supplemented its definitive proxy statement on May 11, 2016 and June 2, 2016. RICEBRAN SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD AS SOON AS THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of RiceBran's directors and executive officers in RiceBran's stock, restricted stock and options is included in their SEC filings on Forms 3, 4, and 5, which can be found through RiceBran's website ( www.ricebrantech.com) in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in RiceBran's other SEC filings, including RiceBran's definitive proxy statement for the 2016 Annual Meeting and its Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by RiceBran with the SEC for no charge at the SEC's website at www.sec.gov. Copies of these documents will also be available at no charge at RiceBran's website at www.ricebrantech.com, by writing to RiceBran Technologies, at 6720 N. Scottsdale Road, Suite 390, Scottsdale, Arizona 85253, Attn: Investor Relations, or by calling RiceBran's proxy solicitor, Morrow & Co., toll-free at 800-662-5200 for shareholders, or 203-658-9400 for banks and brokers. Forward-Looking Statements This release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public RiceBran's progress, business opportunities and growth prospects, readers and listeners are cautioned that such forward-looking statements represent management's opinion. Although management believes that the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual results may differ materially from those described. RiceBran's operations and business prospects are always subject to risk and uncertainties. Important factors that may cause actual results to differ are set forth in RiceBran's filings with the SEC. RiceBran undertakes no obligation to update the results of these forward-looking statements to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. This presentation does not constitute an offer to sell securities including but not limited to within any jurisdiction in which the sale of such securities would be unlawful. This presentation does not constitute a solicitation or offer to sell securities. Such offer and the information set forth herein have not been reviewed, approved or disapproved, nor has the accuracy or adequacy of the information set forth herein been passed upon, by the SEC or any state securities administrator. Any representation to the contrary is a criminal offense. An investment in the securities offered by RiceBran is speculative and involves a high degree of risk. Investment in the securities offered hereby is suitable only for persons of substantial financial means who can afford a total loss of their investment. RiceBran is a reporting company pursuant to the Securities Exchange Act of 1934, as amended, and makes periodic filings with the SEC at the SEC's website at www.sec.gov. Prospective investors are urged to read these documents and any other relevant documents to be filed by RiceBran with the SEC when they become available because they contain and will contain important information.