Arcadia Biosciences(RKDA) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q2 2022 revenues increased by 175% year-over-year, reaching $3.9 million compared to $1.4 million in Q2 2021 [5][36] - Year-to-date revenues for 2022 were $7.1 million, up 217% from $2.2 million in the same period of 2021 [36] - Total operating expenses decreased by 16% year-over-year, amounting to $7.6 million in Q2 2022 compared to $9.1 million in Q2 2021 [8][39] - Net loss attributable to common stockholders was $3.8 million in Q2 2022, an improvement from $5.3 million in Q2 2021 [45] Business Line Data and Key Metrics Changes - GoodWheat pasta was officially launched, contributing to a record level of consumer product sales [9][10] - ProVault brand saw a 4x increase in units and sales compared to Q2 last year, despite the topical pain relief category being flat [16] - Zola coconut water sales grew by 7.6%, although unit sales declined by 15% due to price increases [18] Market Data and Key Metrics Changes - The pasta category, where GoodWheat is positioned, saw a 25% increase in sales, with unit sales up 5% [14] - The topical pain relief category experienced a 1.3% decline in sales, primarily due to private label declines [16] - The coconut water category's sales growth was driven by price increases, despite a decline in unit sales [18] Company Strategy and Development Direction - The company is focusing on simplifying operations and exiting non-core businesses, such as GoodHemp and Archipelago [21][25] - Project Greenfield is a three-year plan aimed at establishing GoodWheat in retail categories worth over $10 billion [27][28] - The strategy includes expanding distribution for ProVault and Zola, leveraging partnerships for licensing revenue, and building an agile organization [30][31][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of GoodWheat and its impact on the pasta category [14][20] - The company anticipates a slight dip in revenue and operating expenses in Q3 due to transitions but expects improvements in Q4 [26] - Management emphasized the importance of aligning resources with compelling opportunities to drive shareholder value [34] Other Important Information - The company recognized $862,000 in license revenue from Bioceres related to the Chinese approval of HB4 soy [5] - Significant write-downs and adjustments were included in total operating expenses, impacting financial results [8][40] Q&A Session Summary Question: Clarification on sequential improvement from Q1 to Q2 - The sequential improvement was primarily driven by product sales, excluding GoodWheat's contribution [50][52] Question: Update on GoodWheat retail locations - GoodWheat was in about 200 stores by the end of Q2 and is expected to double to 1,000 stores by the end of Q4 [53] Question: Net cash impact from divestitures - The company expects a net breakeven for the year from divestitures, with value anticipated in 2023 through reduced operating expenses and higher margins [55] Question: Benchmarks for the three-year plan - The plan relies heavily on GoodWheat's expansion and will provide more guidance in future quarters [58] Question: Geographic strategy for retail locations - The strategy involves aligning with mid- to large regional retailers across the nation, focusing on effective go-to-market models [61] Question: R&D efforts in product formulation - R&D is focused on GoodWheat and developing formulations for other categories beyond pasta [67]