Benson Hill Inc (BHIL, Financial), a food tech company specializing in plant genetics, released its third-quarter financial results on November 9, 2023. The company faced a challenging quarter with a decrease in overall revenues and a slight reduction in gross profit, yet managed to increase proprietary revenues significantly. The results reflect the company's resilience in a tough market environment and its strategic shift towards an asset-light business model.
Financial Performance Overview
Benson Hill Inc (BHIL, Financial) reported third-quarter revenues of $113.1 million, an 8% decrease from the same period last year, primarily due to a 17% decline in non-proprietary revenues. However, proprietary revenues saw a notable increase of 27.2% year-over-year, reaching $33.1 million. This increase was attributed to better product availability and the sale of proprietary soybeans into the commodity market.
The gross profit for the quarter was reported at $4.1 million, down from $5.9 million in the previous year. However, when excluding a favorable $4.3 million impact from open mark-to-market timing differences, the gross profit turned into a loss of $0.2 million. This loss was due to the sale of proprietary products into the commodity markets at less favorable margins and supply chain issues, including logistics and unscheduled maintenance costs.
Operating expenses decreased by $2 million to $28.4 million, reflecting the company's cost reduction efforts. Selling, general, and administrative expenses fell by 5.5%, and R&D expenses decreased by 8%. The net loss from continuing operations improved to $19.2 million, down from a loss of $26.4 million in the same quarter of the previous year.
Balance Sheet and Cash Flow
As of September 30, 2023, Benson Hill Inc (BHIL, Financial) had $86.2 million in cash, restricted cash, and marketable securities. The company's balance sheet showed a decrease in total assets from $500.9 million at the end of 2022 to $352.5 million. The reduction in assets was accompanied by a decrease in total liabilities from $307 million to $232 million, reflecting the company's efforts to pay down debt and improve liquidity.
Outlook for 2023
Management has improved its financial guidance for 2023, driven by expectations for better performance in the fourth quarter and continued benefits from the Liquidity Improvement Plan. The company now anticipates consolidated revenues between $440 and $450 million, with proprietary revenues expected to be in the range of $100 to $110 million. Gross profit is projected to be between $20 and $25 million, with operating expenses forecasted to be between $122 and $127 million. Adjusted EBITDA is expected to show a loss of $50 to $55 million, and free cash flow is projected to be negative $102 to $107 million.
Benson Hill's CEO, Deanie Elsner, commented on the quarter's performance and the company's strategic direction:
“Our team effectively managed a challenging third quarter, addressing some softness in soy crush margins and reduced demand for proprietary products because of market headwinds,”Elsner said.
“We expect these market challenges to persist, further supporting our decision to accelerate the shift to an asset-light business model designed to serve broadacre animal feed markets with our seed innovations enabled through the CropOS® platform.”
For value investors and potential GuruFocus.com members, Benson Hill Inc (BHIL, Financial)'s latest earnings report presents a mixed picture. While the company faces headwinds and a challenging market environment, its strategic adjustments and improved financial outlook for 2023 may offer a silver lining. The company's commitment to reducing debt and shifting towards an asset-light model could position it well for future growth, making it a company to watch in the evolving food tech landscape.
Explore the complete 8-K earnings release (here) from Benson Hill Inc for further details.
