August 8, 2022
Consolidated revenues increased 179 percent year-over-year to $110.7 million driven by a 312 percent increase in Ingredients segment revenues.
Strategic partnership with ADM represents a significant milestone in the planned scaling of proprietary soy innovations through an asset-light licensing model.
Management is assessing strategic alternatives for the Fresh business.
Strong performance in the Ingredients segment raises revenue guidance for 2022.
Continued rapid growth and execution of the strategic plan further enables achievement of previously stated 2025 financial targets.
ST. LOUIS, MO – August 8, 2022 – Benson Hill, Inc. (NYSE: BHIL, the “Company” or “Benson Hill”), a food tech company unlocking the natural genetic diversity of plants, today announced operating and financial results for the quarter ended June 30, 2022.
“We continue to validate our proprietary soy ingredients portfolio as well as our go-to-market approach through a new strategic partnership with ADM while also delivering another quarter of strong financial performance,” said Matt Crisp, Chief Executive Officer of Benson Hill. “The momentum we see in the business is real and building, and current macro challenges continue to require innovation to evolve to a more customized and resilient food system.”
Second Quarter Results Compared to the Same Period of 2021
The impact of mark-to-market timing differences on the profit and loss statement and reconciliation of non-GAAP financial measures can be found on pages 6 and 10, respectively.
- Revenues were $110.7 million, an increase of $71.1 million, or 179 percent led by robust growth in the Ingredients segment.
- Gross profit was $5.6 million, an increase in profitability of $5.6 million, which includes a realized $5.2 million gain related to mark-to-market timing differences that partially offset losses in the first quarter.
- Operating expenses were $34.5 million, an increase of $9.9 million, which included $5.7 million for non-cash items. The increase was primarily driven by higher wages, insurance costs to run expanded operations, and requirements associated with being a public company.
- Inclusive of the mark-to-market timing differences, the reported net loss was $27.6 million compared to a net loss of $27.4 million. Adjusted EBITDA was a loss of $15.7 million compared to a loss of $15.8 million.
- Cash and marketable securities on hand were $209.9 million as of June 30, 2022.
Ingredients Segment
- Revenues for the segment were $93.5 million, an increase of $70.8 million, or 312 percent. Proprietary soy revenues were $12.2 million, an increase of approximately 60 percent, due to increased availability and customer demand for food ingredients, meal, and oil products. In addition, revenues increased for non-proprietary soy ingredients, which was attributable to the acquisition of two soy processing facilities in the prior year.
- Gross profit was $5.7 million, which includes a $5.2 million realized gain related to mark-to-market timing differences that partially offset losses in the first quarter. Strong operating performance in the quarter was the result of demand for proprietary soy products, and non-proprietary soy and yellow pea products. The positive upside from the strong sales has temporarily placed stress on the current supply chain structure, which in addition to inflationary pressures, negatively impacted freight, logistics and factory overhead costs.
- Inclusive of the mark-to-market timing differences, Adjusted EBITDA for the segment was a loss of $1.1 million, a decrease in loss of $5.3 million.
Fresh Segment
- Revenues for the segment were $17.1 million, an increase of $0.2 million, or 1 percent. The modest increase was the result of a crop failure due to a pest infestation impacting farmed peppers.
- Gross loss was $0.2 million, partially driven by a $1.6 million loss due to the crop failure noted above.
- Adjusted EBITDA was a loss of $0.3 million, which was a decrease in segment profitability of $0.5 million.
First Six-Month Results Compared to the Same Period of 2021
- Revenues were $203.2 million, an increase of $131.7 million, or 184 percent, led by robust growth in the Ingredients segment.
- Ingredients segment revenues were $159.6 million, an increase of $122.7 million, or 332 percent. Proprietary revenues were $26.3 million, an increase of 93 percent.
- Fresh segment revenues were $43.4 million, an increase of $9.0 million, or 26 percent.
- Gross profit was $0.4 million, a decline in profitability of $0.2 million, which includes $2.9 million related to the remaining losses in the first quarter from mark-to-market timing differences, cost pressures in the Ingredients segment supply chain, and the write-down of inventory in the Fresh segment. When considering the effect of the timing of the mark-to-market adjustments, gross profit was $3.3 million.
- Operating expenses were $69.9 million, an increase of $24.5 million, which includes higher costs to operate as a public company as well as $11.4 million for non-cash stock compensation and non-recurring costs including the PIPE transaction closed in March of this year.
- Inclusive of the mark-to-market timing differences, the reported net loss was $44.1 million compared to a net loss of $49.8 million. Adjusted EBITDA was a loss of $43.2 million compared to a loss of $30.6 million.
- Ingredients segment Adjusted EBITDA was a loss of $16.0 million.
- Fresh segment Adjusted EBITDA was $1.9 million.
Strategic Update
Today, the Company announced a long-term strategic partnership with ADM to process and commercialize a portfolio of ingredients derived from Benson Hill’s innovative Ultra-High Protein soybeans. The collaboration will serve a variety of plant-based food and beverage markets to meet savory, sweet and dairy customer needs. In some cases, the innovative ingredients enabled by Benson Hill genetics feature less processed proteins with significant sustainability benefits, representing a new frontier in taste, texture, nutrition, and functionality for alternative protein solutions.
Management believes the movement to improve the food system is a once-in-a-generation opportunity to advance the adoption of plant-based foods. With this belief, the Company is exploring strategic options for the Fresh business, which will allow management to focus its time and resources solely on the tremendous market opportunity for soy and yellow pea protein ingredients.
As previously stated, the Company continues to explore options to further extend its cash position, which is currently sufficient to fund the business into 2024. Last month, the Company completed the drawdown of the remaining $20 million available in its $100 million debt facility, which is included in the $209.9 million balance for cash and marketable securities as of June 30, 2022. As part of its partnership with ADM, the expected revenues include payments for access to Benson Hill genetics through technology access fees during the life of the agreement, as well as milestone payments upon achievement of certain agreed upon performance objectives.
These and other strategic accomplishments over the past year demonstrate the progress the Company is making to execute its strategic plan and achieve its previously stated financial targets in 2025:
- Consolidated revenue in excess of $500 million, including $350 million or more of proprietary Ingredients revenue;
- Gross profit margin greater than 25 percent; and
- Positive EBITDA and free cash flow.
2022 Outlook
As a result of the strong demand for non-proprietary ingredient products, management expects full year revenues for the Ingredients segment of $275 million to $325 million, above the previous guidance of $250 million to $275 million. Full year expectations for proprietary revenues remain in the range of $70 million to $80 million. There is no change in the expectations for the Fresh segment with revenues of $65 million to $75 million. On a consolidated basis, 2022 revenues are now expected to be $340 million to $400 million.
Gross profit guidance remains in the range of $9 million to $13 million as higher expected revenues are offset by higher costs. Contribution margins for the proprietary portfolio remain in the range of 1 percent to 3 percent as the Company continues to focus on its near-term objective to increase market share. The Company expects high-single digit gross margins for the Fresh segment.
The Company maintains the expectation of a net loss of $148 million to $153 million and an Adjusted EBITDA loss of $80 million to $85 million, which is in line with the Adjusted EBITDA loss in 2021.
Finally, the Company expects use of cash to moderate in 2022 due to higher gross margins, lower Capex requirements and cost management efforts.
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