Benson Hill, Inc. (NYSE: BHIL, the “Company” or “Benson Hill”), an ag tech company unlocking the natural genetic diversity of plants, today announced operating and financial results for the quarter ended March 31, 2024.
“2024 represents a year of transition as we evolve our business to a licensing model. In the first quarter Benson Hill took decisive actions to strengthen our balance sheet and enhance our financial flexibility,” said Deanie Elsner, Chief Executive Officer of Benson Hill. “We also demonstrated our commitment to drive operational efficiencies and reduce operating costs, while we explore ways to optimize our capital structure following the retirement of high-cost corporate debt.”
“Benson Hill has a significant competitive advantage, a defined strategy, and a strong management team which positions us well to enter larger markets such as animal feed and biofuels,” Elsner added. “We have consistently demonstrated our ability to perform, execute, and adapt to market dynamics. We have tremendous confidence in our technology and in our team, and we look forward to delivering solid performance throughout 2024.”
Key Milestones
During the first quarter of 2024, Benson Hill achieved multiple milestones on its strategic path, positioning the Company for long-term growth and value creation:
- The Company strengthened its balance sheet with the successful divestiture of the Creston, Iowa, soy processing facility and retirement of approximately $120 million in high-cost, restrictive debt.
- Benson Hill’s financial profile will significantly shift due to the reclassification of its soy processing revenues and associated costs, which were approximately 73 percent of our 2023 revenues and costs of goods sold. The expected growth in licensing revenue within its plan is expected to generate an expansion in gross profit margins relative to historical gross profit margin levels.
- Management’s rigorous focus on cash management and expense reduction successfully extended the cash runway.
- The team expanded partnerships with seed distributors and industry stakeholders to accelerate the commercialization of its innovative soybean varieties. Benson Hill is planting more than 42 varieties across 358 independent testing locations this crop year to validate the agronomic characteristics of its genetics across multiple maturity zones.
- Benson Hill also progressed product candidates with significant yield improvements and continued innovation in soybean varieties delivering higher-quality oil. Its robust commercial pipeline is in the final stages of field testing, and the Company is on track to significantly expand its seed portfolio from 22 to more than 35 varieties by 2025. New non-GMO, Ultra-High Protein, Low Oligosaccharide (UHP-LO) varieties are expected to yield on par with GMO commercial varieties by 2026. UHP-LO varieties containing a herbicide-tolerance trait (to enhance weed control for large-acre adoption) are on track to be commercialized in 2027.
- The team validated benefits of proprietary soybean meal in animal feed. In particular, the Company’s proprietary UHP-LO soybean varieties have shown compelling cost and performance benefits, as evidenced by a recent feeding trial with Perdue Farms. These results give management confidence in the expected value creation of $100 to $230 per acre, compared to commodity soybeans.
- The Company’s executive leadership team recently welcomed Susan Keefe as Chief Financial Officer and Dan Cosgrove, former CEO of Growers Edge, as Chief Administrative Officer and General Counsel. The Company continues to invest in talent with diverse industry experience.
First Quarter Results Compared to the Same Period of 2023
The following financial results exclude former Fresh Segment and Seymour, Indiana, and Creston, Iowa, processing facilities reported in discontinued operations. The reconciliation of non-GAAP financial measures can be found in the accompanying financial tables.
The combined results of the Company’s divested businesses have been reclassified and presented as discontinued operations, resulting in a significant reduction in reported revenues and related expenses. Moving forward, the primary source of revenue and margins will come in the form of seed licensing royalties and related technology access fees. Royalty revenues are expected to grow in line with acreage acquisition.
- Reported revenues were $21.1 million, a decrease of $27.5 million, or 56.6 percent, driven by 2023 revenue from low margin trading volumes generated by business development efforts that did not repeat in 2024. Sales of other non-proprietary soybeans also declined, partially offset by an increase in licensing revenue.
- Gross profit was $5.2 million, an increase in profitability of $0.6 million. While revenue declined significantly, the revenue reductions were primarily in categories with low margins. The revenue increase in partnerships and licensing agreements were related to high margin contracts, driving overall gross profit up.
- Operating expenses were $21.8 million, a decrease of $4.1 million, or 15.8 percent, which include approximately $4.3 million of non-recurring costs relating to exit costs for the divestiture of the Creston facility, expenses related to business transition, and other items. Operating expenses, as adjusted, which exclude these non-recurring items, declined by 32.1 percent to $17.5 million for the quarter due to cost reductions realized through the Company’s expanded Liquidity Improvement Plan.
- Selling, general, and administrative expenses were $14.8 million, an increase of $1.6 million, or 12.1 percent, inclusive of $4.3 million of non-recurring costs.
- R&D expenses were $6.9 million, a decrease of $5.7 million, or 45.1 percent.
- Net loss from continuing operations, net of income taxes, was $26.3 million, an increase in reported loss of $19.5 million. Adjusted EBITDA was a loss of $7.1 million, compared to a loss of $14.5 million in the prior year which represents a reduction in loss of $7.4 million, compared to the same period in 2023. The improvement for 2024 was driven by a reduction in operating expenses from actions associated with the execution of the expanded Liquidity Improvement Plan.
- Cash and marketable securities of $30.5 million were on hand as of March 31, 2024.
Outlook
“As we transition our business to a licensing model, our revenues and costs will be lower, and our margins will increase over time, which will drive improvement in the quality of our earnings,” said Susan Keefe, Chief Financial Officer of Benson Hill. “Our achievements in meeting milestones with partners and advancing R&D efforts serve as a strong foundation for the next stage of Benson Hill’s growth, supporting our pursuit of additional sources of capital.”
Additional Details
Additional information about Benson Hill’s results can be found in the Company’s Shareholder Letter and in the Current Report on Form 8-K filed today with the SEC. Documents are also posted at investors.bensonhill.com.
