Arcadia Biosciences (RKDA) 9 Nov 232023 Q3 Earnings call transcript

Good afternoon, and welcome to Arcadia Biosciences Third Quarter 2023 Financial Results and Business Highlights Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to T.J. Schaefer, Chief Financial Officer at Arcadia. Please go ahead.

afternoon. good and you, Thank

release Joining me President being Stan Arcadia's company's today and the Chief Executive call press the and to is can is arcadiabio.com. Officer. you Jacot, refer on at This webcast, call

remind information. Before Biosciences that on call will like expectations current statements Arcadia based forward-looking you on we making and would start, this we to be currently available

those the may based these factors that from uncertainties, statements differ and results and are on or company's since today. performance However, risks actual implied described materially involve

You the recently review company's can in safe our filed hard most language XX-Q.

the With over that, I will now Stan. turn call to

Good executing conference us to call. joining Greenfield, plan strategic Project afternoon, make the that today quarter pleased am XXXX to to our report potential path X-year third you a everyone. unlock and I provide Thank to profitability. Arcadia in for company's progress for continues our excellent

revenue stores after of as since than GoodWheat in our we of QX pasta by adds quarter. structure last with Water and are in care body our SG&A more exit from evidenced lowest Coconut And pancake operating XXXX. and a distribution of compared total Zola to growth leaner continued the X,XXX mixes resulting business XX% operations

And about to our I update spoke last quarter want scale today, more to those initiatives. plans quickly. key I on an provide

more higher in reorders. across and to result in First, point The GoodWheat market faster Pasta this turns is X,XXX lower now executing more and customer are we expected throughout expect XXXX. QX fully price price X drive growth stores, that in to competitive programs average and is than

Pasta with love clean is and resulting new your media in XX this impressions multiple our back. it picky We social messaging during plate rollout over guarantee, QX either will be the will National marketing October messaging in also partnerships. that new began Month, influencer money million or you GoodWheat a approved of

Pancake new & breakfast Arcadia's ingredients traditional delivers flour. as but well than in protein Waffle more into products was of Single-Serve and launch proprietary The of new Mixes regular Quikcakes. simple better-for-you which initiative with wheat second key with category and fiber in GoodWheat These sneaks as case wheat non-GMO the the scaling made texture pancakes, are same the flour,

testing, of product recognizing mix leading and I better-for-you initiative I mixes versus of foundation consumers the proposition, GoodWheat XXX prefer only retailers to be GoodWheat of year. GoodWheat pancake In & the and stores this that Cheese. am X:X innovative pasta today, are Pancake shipping mix. have provide the another the to taste announce end pancake XXXX, report in we the growth over by pleased the to Mac launch will Not will And for GoodWheat

is Cheese brands for household up the traditional over XX% The brands. Better-for-you category and of category been sales nearly has families. $X.X and long staple a billion growing Mac & in are make than faster

Mac packs in fiber GoodWheat than Cheese the more brand. brand & in of the Our Xx any category, leading the most

And & one with fiber servings is just & oatmeal protein per GoodWheat servings grams Mac protein like has of X.X same fact, XX GoodWheat broccoli. of serving. X pasta brand as a leading mixes or Mac of in serving In than pancake our and Cheese higher the Cheese

choose picky-eater Sneaky cheese. and There preservatives. approved no real Cheddar X White Three or Classic Cheese Mac Our are & and and from: artificial and dyes Delicious to flavors, made cheese Cheddar, with varieties

we And in and shipping of February, the be into retailers plan to the We XXX all shipping start this eatgoodwheat.com. X by varieties have online year. to will available stores over at end month

#X lime flavor new espresso to with pulp our flavor pineapple is water flavors. is #X water. introduction and the in has flavors, X For sparkling Water, the and Pineapple the original innovation coconut Zola focus Coconut to been add our of and extra lime

So new XXX% new will Launching will no QX sugar sales. and resealable non-GMO. be energize containers. flavors XXXX, Zola are in we believe flavors these natural, added these available offerings Both in XX.X-ounce

go announced July range that an explore could stated of which to or merger, review the options, sale strategic include strategic transactions. on last today other sale, would Arcadia strategic is XX, initiative The which a discuss acquisition, asset

As we new bring to would earnings discussed in calls in our existing value calls, us our acquisition wheat-based proposition plan strategic an allow an to GoodWheat business previous that for categories. the

asset events candidates and and We occur. partner, beginning and our process diligence updated opportunities as due keep are evaluating material sales merger larger are the potential banking we'll with also with you

can the company there strategic no out exploration the any will for that or transactions completing this of that However, set timetable strategic review. must been alternatives we of has entering be no the assurance in point conclusion result and

With results. turn to that, the T.J. I'll to discuss QX T.J.? our call over financial

operations, Stan, you, walk highlights. results I focus which related body financial period all quarter third prepared afternoon, In we'll the results Thank through our and everyone. continuing on our Today, good excludes will discussed. for you care remarks, from my

me discontinued presented to spend now a minutes few brands as operations. providing being let some as So are these background just why

At exited margins focus Body half ceased for began Radian's increase the then in an and our brand business to also recall, care Naturals made and business, that manufacturers we and and freeing using cash. co-packing XXXX to in third-party you decision simplify Beauty effort our Care ProVault the we body the to license while our resources up time, of SoulSpring As activities manufacturing first July of in Savvy the XXXX.

core considered attractive be We scale. brands ProVault the and offer to provide Zola that could margins, differentiation GoodWheat, us give to and ability

lack majority that U.S. CBD products, not included as would take continued category to retailers of including such opportunities of retailers, Amazon. online distribution However, the as the challenges a one, CBD face

the that product behind large negative Three, mainstream be CBD platforms reduce or and category. a not locked retailers completely significantly Facebook to Search, that marketed Two, put step on to the ability many advertise. once four, could out the Google our such made of And did CBD doors had limiting products decision retailers as sold CBD Instagram, glass that sell sales. impact on many

we buyer. XXXX, unable And a that in In a at ProVault XXXX, longer strategic notified no began of retailers explore brands. we As result, alternatives find of September XXXX, producing product. but SoulSpring selling both we be stopped the to June beginning and to for the would we're we

well meaningful shift these the in strategic made with we all financial impact classify these operations as prior results, the as of decision discontinued that on the to Given disclosures. accordance had brands guidance year our businesses as the

at operations. basis, in revenues increased continuing to the of our driven XX% GoodWheat by year-over-year QX a of from higher X% largely end distribution $X.X higher of now that occurred increased distribution sales sequential and were Moving results as at lost GoodWheat On increased million Zola XXXX. by Zola. offset sales of Revenues

which QX Gross development expenses $XXX,XXX work year-to-date Research basis points resulted compared to above was XX% prior line XXXX period and as of year, expectations. the compared year. in result On below the XXXX last the of & a prior in of in in to $XX,XXX launch that innovation but margins our $XX,XXX same in quarter year, with QX Pancakes were Cheese. Mac nearly a basis, the gross prior margins our were have X,XXX XX% increased and

below $X.X SG&A Stan expenses mentioned lowest million the And and XXXX. the Care associated as Body were remarks, discussed XX% now his our Selling, year we brands, level general of below in opening with headcount administrative and as X% are lower driven prior the by last at expenses quarter, since primarily prior quarter.

We profile will an continue in to effort cash. evaluate to our expense conserve

of stock a in improvement income benefit of stockholders $XXX,XXX option expenses as to liabilities change year-over-year the net from reduction as common attributable interest loss and led million. XX% warrant operations. well The common a resulting in fair the $XXX,XXX a loss of continuing $X.X our in in We value of to recorded from

were million compared at a to decline Our QX of previous XXXX cash and the of million $XX.X end short-term quarter. investments the $X.X

grow to of our $X used expect the in an use million to by grain estimated Mac of We approximately million driven and that of & Pasta produce Cheese. related will the of cash fourth quarter, X be increase out to pounds payment

beginning $XXX,XXX from Bioceres. to by milestone receivable by $XXX,XXX $X declined in payments compared the year, Accounts of million driven the of

have higher we September year the next year at of the approval million of to production by in the all a attributable driven approximately $X.X with next inventory the QX As do related of beginning our runs sell collected plan payments HBX We months. of milestone and XXXX. not until to GoodWheat of May inventory and through X than this reminder, of production XX% over is runs balance any now the goods anticipate million $X.X Soy. Total Chinese to approximately finished

conclusion, we have with are In the made we so progress far. extremely pleased

latest the add to profit less XXXX to And cash X additional GoodWheat positive operations delivered gross have and to than scale years, the have quarters, our X through expenses and the our We consecutive reduced opportunity for to X now we burn potential continuing the million categories with lowest categories $X level in in acquisition. SG&A lowered enter from quarter.

With call I turn for will to that, the now operator over back questions. the

the first from H.C. [Operator Instructions] question Our & line of from Wainwright Dipesh comes Co. Patel

Selvaraju. made Dipesh, look maybe has at Ram progress anything you can additional in Is there in strategic time for else economics is as also capturing standing for GoodWheat. then value in lines? what including This you that been alternatives, highlight the chain And

comments be around would that some So helpful.

Dipesh. Yes. Thank you,

continuing are are our that transactions, your to first in ready that right work diligently to So any we're give pipeline closing we line in time a have we're to steps. For of don't the there do and question, terms but several

In front do chain, expect our several terms have agreements our rest that of that we some in partners. of front next we of are And capturing news our earnings on do call. value through supply more of the in

line comes question from Capital Lake next Street Our Markets. Ben of from the Klieve

quarter of to little questions handful top you. it bottom, for a seems. Nice guys. Congratulations from Have here

it really Zola, saw Zola the into First sounds second in all, continued that some you in the quarter of like of the on momentum third.

coming comment Zola's few of top retail you of quarters distribution a impact the versus ago challenges the are watermark emerged? line Thai online, flavors the that the to can the today contributions some and new Excluding before new on

calling in Yes, today, Ben. sure. And thanks for

we are in the had last yes, of still there continuing. challenges quarter Zola, or QX For that XXXX,

expect so by And we're lap those to QX XXXX. of to going

XXXX. and seen do But seen a the we distribution expect have be in also improve. have start for incremental innovation catalyst we velocities We distribution, more to to

the guys a retail accelerated insights about that manner the Okay. you're took I ago -- maybe what now in Perfect. you new from of little lessons stores Any initial ago running growth more you year and GoodWheat you're old, you now today? would driving there mean XX not challenges be from placements helpful. retail with more, year talk how placements maybe kind wondering can into a did run I'm into if now. curious, that a The a months

Yes.

number a XX pasta it in good brands. great of be learning we size conference we where to go of points to we earlier and successful country. regions better-for-you programs. been also of months, launched, accounts, back we number shelf, different about was different had gaining had different in pricing the had if learning in the comparison lots with shelf on So calls accounts, we about that on promoted SKUs We've were other distribution spoken We've placement, as price and need of

those our all going into So that footprint. can current ways optimize we factors distribution are

category for in our So SKUs. there's and making to have of pasta more I the include lineup And pasta we those the some think distribution. accounts nurturing that SKUs expand that's sure those we're really to the that focus accounts, opportunities is

more the think pancake And we're those category. & applying our Cheese the pasta. for category I recently, what that's launched now as key learnings really also and learnings we've So Mac

did call Pancakes, Mac I believe? a the out hear third Great. up? question. & costs quarter Okay. Or that remarks, your I clarifying am in with Cheese prepared On associated T.J., making and I you

No. Yes.

expenses they to I So Cheese. R&D were of Mac pancakes related the for that in out preparing and called QX launches & higher

Okay.

So for directionally -- products. both QX given costs of in were R&D those higher

missed I thought I number. Okay. an explicit

last then me. can far. of kind it a doors sense retail be of to can kind high-level lot us built looking for -- any get any XX the I look ending through overall XXXX, of guys now? expectations from question really mean you you regarding is you XXXX I metrics months looks of at help the mean, like at And Okay. really that you high-level of kind give provide scale to you're so into a hope momentum that as 'XX,

sure. Yes,

doors. the XXXX. for nurture XXXX, doors large attractive first There ending we when half really today. to X we are the retailers GoodWheat, X,XXX make year. But of be that -- online indispensably add we the growing the to accounts up the the are we're sure in over come larger our we'll really, be in categories is where additional in think want and almost that And we that become that accounts in we to plan X,XXX may those I

double-digit GoodWheat would say next So planning growth for I Zola. then still the on year we're for and same

it. Got

good Okay. Very it. really on more about. leave to nice talk Plenty a again Congratulations here. place quarter good. That's a to

I'm further turn for Jacot to at like would now to no I showing Stan questions this it time. closing back remarks.

as we is position XXXX, the in summary, enter in its history. In Arcadia best

been wheat the commercialized acquisition. potential to in categories add categories more technology has Our with proprietary X through

for low We innovation have higher to again updating gross resulted order opportunity joining runway to rolling This and organization we in have extend care of execute the our margins. And year. your and have has plan. future. Coconut forward great Water We brand a our exited growth next us, in the the high rightsized finally, the line day. and structure top Thanks are body stronger and resource look you rest and revitalizing to cost out our with business early streamlined in Zola

your for the conclude conference. you today's This in Thank program. participation does

You now disconnect. may