Arcadia Biosciences(RKDA) - 2020 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved record revenues of $8 million in 2020, approximately 80% of the initial revenue guidance of $10 million [5][29] - Total revenues increased significantly from $1.2 million in 2019 to $8 million in 2020, primarily driven by GoodWheat licensing revenues [29] - The net loss attributable to common stockholders decreased to $4.7 million in 2020 from $28.8 million in 2019, aided by a non-cash gain of $6.6 million [31] Business Line Data and Key Metrics Changes - The company expanded its product offerings to six categories, including GoodWheat pasta, flour, grain sales, GoodHemp CBD seed sales, CBD oil, and GLA consumer products [6] - GoodWheat license revenues contributed $6.7 million to total revenues, marking a significant increase from previous years [28] - Cost of product revenues rose to $5.2 million in 2020 from $885,000 in 2019 due to inventory write-downs [29] Market Data and Key Metrics Changes - The global wheat flour market was valued at $181 billion in 2019 and is projected to reach $220 billion by 2027, indicating a significant market opportunity for the company [13] - The company noted a contraction in U.S. hemp acreage, particularly for CBD extract, impacting the GoodHemp business [25] Company Strategy and Development Direction - The company is transitioning to a commercial entity focused on food science innovation, leveraging its proprietary non-GM advanced breeding technologies [11] - A comprehensive strategy is being developed to optimize product offerings and expand market reach, particularly in consumer packaged goods [15][16] - The company aims to become the gold standard in wheat, emphasizing the nutritional benefits of GoodWheat [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's agility and potential for growth as market conditions normalize post-pandemic [33] - The company is well-positioned to capitalize on emerging markets, particularly in the hemp sector, once regulatory clarity is achieved [46] Other Important Information - The company successfully integrated Industrial Seed Innovations to enhance its GoodHemp portfolio and accelerate its breeding program [22] - The balance of cash and cash equivalents was $60 million at the end of 2020, bolstered by a private equity placement [32] Q&A Session Summary Question: Update on R&D pipeline from trait discovery process - Management confirmed ongoing advancements in trait discovery for both hemp and wheat, with a shift towards food innovation [36][38] Question: Plans for growing inventory and Good Mills launch - Management indicated plans for inventory growth in preparation for a Good Mills launch in Europe, with optimism about testing in Q2 [41][42] Question: Timetable for hemp revenues and Canadian partner expectations - Management expects the majority of GoodHemp revenues in Q2, with ongoing shipments to Canadian partners pending Health Canada approval [66][67]