Benson Hill(US:BHIL)2023-03-13 17:48Financial Data and Key Metrics Changes - The company reported a loss of $77 million in adjusted EBITDA for 2022, which was within guidance, and expects a reduction in the adjusted EBITDA loss for 2023 to a range of $63 million to $68 million [9][22] - Operating expenses for 2022 were $129 million, and for 2023, the company expects operating expenses to be in the range of $125 million to $130 million, including approximately $30 million in non-cash depreciation and stock compensation [9][22] - The company had $175 million in available cash, restricted cash, and marketable securities as of December 31 [9][22] Business Line Data and Key Metrics Changes - Proprietary revenue grew nearly 100% year-over-year to $73 million, driven by demand for soybean-derived ingredient products [17][18] - The company expects proprietary revenues to increase by 40% to 50% in 2023, targeting a range of $100 million to $110 million [18][22] - Gross profit for 2022 was $8.5 million, and the company expects gross profit to more than double in 2023 to a range of $20 million to $30 million [22] Market Data and Key Metrics Changes - The company is experiencing a decline in non-GMO planted acres in the U.S. while demand for closed-loop production is increasing, leading to higher premiums for certain products [12][18] - The partnership with ADM is expected to enhance the company's ability to service aquaculture customers and expand its market reach [18][19] Company Strategy and Development Direction - The company is focusing on a more targeted growth strategy, emphasizing high-margin product categories while de-emphasizing lower-margin products [19][20] - The company plans to optimize its capital structure and is in advanced stages of finalizing a lending facility for up to $100 million to reduce interest expenses by approximately 40% [23][22] - The company aims to achieve positive adjusted EBITDA and positive free cash flow by 2025, with total revenues targeted to exceed $400 million [19][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's outlook, citing strong execution and the ability to adapt to market realities [20][22] - The company is taking necessary actions to address inflationary pressures and supply chain challenges while maintaining a focus on profitability [22][23] - Management highlighted the importance of maintaining relationships with farmer partners to meet demand and achieve growth targets [19][20] Other Important Information - The Fresh business is now reported as a discontinued operation, with the sale expected to be completed in the second quarter of 2023 [8] - The company is exploring strategic alternatives for its Seymour facility, which may include selling the asset [10][20] Q&A Session Summary Question: What are the dynamics for signing up growers for non-GMO beans? - The company noted high commodity prices and a decline in non-GMO planted acres, which has driven premiums higher, impacting profitability in some product areas [12] Question: Can you clarify the cash balance and the proceeds from the Fresh business sale? - The cash balance includes restricted cash and marketable securities, and the proceeds from the Fresh business divestiture are reflected in the cash balance [13][27] Question: What are the trade-offs regarding the Seymour facility? - The company evaluated working capital intensity and capacity to meet customer requirements, deciding to consider strategic alternatives for the facility [39][40] Question: What caused the lower end of the proprietary revenue range for 2022? - The lower revenue was attributed to timing and delays in customer commitments, not a reflection of pipeline quality [44][46] Question: How does the company expect to reduce interest expenses with the new lending facility? - The company anticipates a significant reduction in interest expenses due to a new conventional lending facility, which is expected to lower costs by approximately 40% [56][60]