Davis, California, USA
November 10, 2022
— GoodWheat™ Pasta distribution doubles from Q2
— Gross margins improve to 28%
— Streamlined operations focus on higher-margin brands
Arcadia Biosciences, Inc.® (Nasdaq: RKDA), a producer and marketer of innovative, plant-based health and wellness products, today released its financial and business results for the third quarter of 2022.
“We’ve made significant progress this year transitioning Arcadia to a leaner, more focused organization,” said Stan Jacot, president and CEO of Arcadia Biosciences. “And we continue to lay the groundwork for long-term growth and profitability as we execute on our three-year strategy, Project Greenfield.
“Our GoodWheat™ launch is outperforming expectations, having already reached our year-end goal of 1,000 stores, and acceptance continues to grow. And we’ve streamlined the business to focus on our higher-margin brands, which included divesting the Saavy Naturals brand and our manufacturing facility. As a result, we’ve more than doubled our margins quarter-over-quarter in Q3, validating our ability to grow the business while keeping costs under control.”
Arcadia Biosciences, Inc.
Financial Snapshot
(Unaudited)
($ in thousands)
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| 2022 |
|
2021 |
|
Favorable /
(Unfavorable) |
|
2022 |
|
2021 |
|
Favorable / (Unfavorable) |
| |
|
|
|
|
$ |
% |
|
|
|
|
|
$ |
% |
| Total revenues |
1,878 |
|
2,376 |
|
(498) |
(21%) |
|
8,956 |
|
4,609 |
|
4,347 |
94% |
| Total operating expenses |
6,458 |
|
11,089 |
|
4,631 |
42% |
|
21,941 |
|
26,331 |
|
4,390 |
17% |
| Loss from operations |
(4,580) |
|
(8,713) |
|
4,133 |
47% |
|
(12,985) |
|
(21,722) |
|
8,737 |
40% |
| Net loss attributable to common stockholders |
(2,867) |
|
(2,175) |
|
(692) |
(32%) |
|
(11,132) |
|
(5,378) |
|
(5,754) |
(107%) |
More detailed financial statements are included in the Form 8-K filed today, available in the Investors section of the company’s website under SEC Filings.
Revenues
In the third quarter of 2022, revenues were $1.9 million, compared to $2.4 million in the third quarter of 2021 – a $498,000 decrease driven primarily by lower body care and GLA revenue, partially offset by GoodWheat pasta sales. Revenues for the first nine months of 2022 were $9.0 million, compared to $4.6 million in the first nine months of 2021. The increase was driven by higher coconut water and body care products, along with GoodWheat pasta and grain sales.
Operating Expenses
In the third quarter of 2022, operating expenses were $6.5 million compared to $11.1 million in the third quarter of 2021, and the first nine months of 2022 operating expenses were $21.9 million compared to $26.3 million in the first nine months of 2021.
Cost of revenues in the third quarter of 2022 were $1.3 million, or $1.2 million lower than $2.5 million in the third quarter of 2021, primarily driven by lower revenues and lower inventory write-downs. Cost of revenues for the first nine months of 2022 were $8.3 million, or $3.3 million higher than $5.0 million in the first nine months of 2021, the result of higher revenues.
Research and development (R&D) spending decreased by $783,000 and $2.3 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, as a result of the company’s focus on commercialization, which has led to lower employee-related expenses and research-related activity costs.
Selling, general and administrative (SG&A) costs for the three and nine months ended September 30, 2022 were $1.5 million and $2.9 million lower than in the three and nine months ended September 30, 2021, respectively, primarily driven by lower employee expenses, lease expense and consulting fees. Acquisition fees recognized in 2021 were not present in 2022.
Net Income Attributable to Common Stockholders
Net loss attributable to common stockholders for the third quarter of 2022 was $2.9 million, or $0.12 per share, a $692,000 increase from the $2.2 million, or $0.10 per share, net loss for the third quarter of 2021. The loss from operations in the third quarter of 2022 was $4.1 million less than in the third quarter of 2021, primarily due to lower cost of revenues, SG&A expenses and impairment of property and equipment. This favorability was mostly offset by $2.9 million lower non-cash income from the change in the fair value of common stock warrant and option liabilities and the $1.1 million gain on extinguishment of a PPP loan in 2021 that was not applicable to 2022.
Net loss attributable to common stockholders for the first nine months of 2022 was $11.1 million, or $0.48 per share, a $5.7 million increase from the $5.4 million, or $0.26 per share, net loss for the first nine months of 2021. The loss from operations in third quarter year to date 2022 was $8.7 million less than third quarter year to date 2021, primarily due to lower SG&A expenses, R&D expenses and impairment of property and equipment, as well as the gain on sale of Verdeca in 2022. The remeasurement and sale of Bioceres stock in the first and second quarters of 2021 impacted net loss attributable to common stockholders significantly with a gain of $10.2 million in the first nine months of 2021. No such gain was recorded in 2022. In addition, the non-cash income of a change in fair value of common stock warrant and option liabilities was $2.7 million lower in the first nine months of 2022 compared to the same period in 2021, and 2021 included a gain on the extinguishment of a PPP loan in the amount of $1.1 million that was not applicable to 2021.
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