Arcadia Biosciences(RKDA) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q2 2021 were $1.4 million, a significant increase from $281,000 in Q2 2020, primarily driven by the acquisition of Lief Brands and Zola coconut water [28] - Year-to-date revenues increased by $1.6 million, with $837,000 generated from the newly acquired brands [28] - Net loss attributable to common stockholders was $5.3 million in Q2 2021, compared to $9.7 million in Q2 2020 [34] Business Line Data and Key Metrics Changes - The acquisition of Lief Brands contributed significantly to revenue growth, with the brands generating $1.1 million in Q2 2021 [28] - Cost of product revenues for Q2 2021 was $1.6 million, an increase of $97,000 from Q2 2020, mainly due to the new product sales [29] - R&D expenses decreased to $1.1 million in Q2 2021 from $2 million in Q2 2020, reflecting a shift towards commercialization of consumer products [31] Market Data and Key Metrics Changes - The company is focusing on the health and wellness market, with plans to launch GoodWheat products that address fiber deficiencies in consumer diets [12] - The GoodWheat brand aims to disrupt the wheat industry by offering superior nutrition without additives [11] Company Strategy and Development Direction - The company is transitioning to a consumer-focused enterprise, emphasizing health and wellness brands [4] - Plans include launching multiple GoodWheat pasta products in late Q4 2021, followed by a significant marketing campaign in January 2022 [17][19] - The company is enhancing its management capacity by recruiting experienced professionals in key roles [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Lief Brands and the potential for meaningful top-line growth [5][8] - The company is well-positioned with sufficient inventory to meet production needs for the next two years, despite challenging crop conditions in the wheat market [45] - Future operating expenses will be evaluated as the company streamlines operations post-acquisition [46][47] Other Important Information - The company successfully sold Bioceres shares, generating over $27 million in cash, which bolsters its financial resources [24][25] - The balance of cash and cash equivalents was $44 million at the end of Q2 2021, up $11.2 million from Q1 2021 [37] Q&A Session Summary Question: Performance of acquired brands - Management noted that the acquired brands performed consistently, with Zola coconut water showing strong performance [40] Question: Supply issues with Three Farm Daughters - Management clarified that Three Farm Daughters opted to license Arcadia's technology, leading to a halt in their activities as they evaluate their future direction [42][44] Question: Impact of crop conditions on raw ingredient supply - Management stated that they have sufficient inventory for the next two years and do not foresee production concerns [45] Question: Operating expense run rate - Management indicated that operating expenses are subject to change as they evaluate the integration of new brands and streamline operations [46][47]