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Benson Hill(BHIL) - 2024 Q2 - Quarterly Report
BHILBenson Hill(BHIL)2024-08-08 20:28

Business Model and Strategic Focus - Benson Hill transitioned to an asset-light business model, focusing on broadacre animal feed markets and securing partnerships to scale product innovations[114] - The company exited the soybean processing business to strengthen its balance sheet and focus on commercializing core business and intellectual property assets through partnerships[125] - The company's CropOS® technology platform and AI-driven innovations aim to monetize through licensing, direct seed sales, and technology access fees[115] Asset Divestitures and Liquidity Improvement - The company divested its soy-crushing facilities in Seymour, Indiana for 35.4millionandCreston,Iowafor35.4 million and Creston, Iowa for 72.2 million to improve liquidity and reduce operating costs[121][122] - Benson Hill repaid 58.4millionofitsConvertibleLoanandSecurityAgreementinNovember2023andfullyrepaidtheremaining58.4 million of its Convertible Loan and Security Agreement in November 2023 and fully repaid the remaining 59.0 million in February 2024[119][120] - The company's Liquidity Improvement Plan aims to improve liquidity by 65millionto65 million to 85 million by the end of 2024, including cost-cutting measures and asset sales[126] - Benson Hill incurred 12.7millionincostsrelatedtoitsexpandedLiquidityImprovementPlan,including12.7 million in costs related to its expanded Liquidity Improvement Plan, including 7.4 million from facility sales and 5.3millioninemployeeseveranceandbenefits[127]−Thecompanyrepaid5.3 million in employee severance and benefits[127] - The company repaid 59.9 million in Convertible Notes Payable during the six months ended June 30, 2024, significantly impacting financing cash outflows[173] Product Development and Innovation - The company's Ultra High Protein Low Oligosaccharides soybean varieties showed a 2% protein gain and a yield gap of only 3-5 bushels per acre compared to commodity GMO soybeans[116] - Benson Hill plans to release herbicide-tolerant Ultra High Protein soybean varieties commercially in 2025, with further expansion expected in 2026[116] Financial Performance and Liquidity - Revenue for the three months ended June 30, 2024 increased by 10.3million(4410.3 million (44%) to 33.8 million compared to the same period in 2023, driven by higher grain sales of proprietary soybeans and licensing agreements[136][137] - Cost of sales for the three months ended June 30, 2024 increased by 12.4million(5612.4 million (56%) to 34.6 million compared to the same period in 2023, primarily due to higher input costs from increased grain sales[136][139] - Research and development expenses for the three months ended June 30, 2024 decreased by 2.9million(282.9 million (28%) to 7.5 million compared to the same period in 2023, driven by reduced personnel-related costs[136][140] - Selling, general and administrative expenses for the three months ended June 30, 2024 increased by 3.6million(563.6 million (56%) to 10.2 million compared to the same period in 2023, due to a non-recurring 6.2millionreversaltostock−basedcompensationexpensein2023[136][140]−NetlossfromcontinuingoperationsforthethreemonthsendedJune30,2024improvedby6.2 million reversal to stock-based compensation expense in 2023[136][140] - Net loss from continuing operations for the three months ended June 30, 2024 improved by 18.5 million (51%) to 17.98millioncomparedtothesameperiodin2023[136]−RevenueforthesixmonthsendedJune30,2024decreasedby17.98 million compared to the same period in 2023[136] - Revenue for the six months ended June 30, 2024 decreased by 17.2 million (24%) to 54.9millioncomparedtothesameperiodin2023,primarilyduetolowerlow−margintradingvolumes[147][148]−CostofsalesforthesixmonthsendedJune30,2024decreasedby54.9 million compared to the same period in 2023, primarily due to lower low-margin trading volumes[147][148] - Cost of sales for the six months ended June 30, 2024 decreased by 15.7 million (24%) to 50.5millioncomparedtothesameperiodin2023,drivenbylowergrainsalesofproprietarysoybeansandyellowpeas[147][149]−ResearchanddevelopmentexpensesforthesixmonthsendedJune30,2024decreasedby50.5 million compared to the same period in 2023, driven by lower grain sales of proprietary soybeans and yellow peas[147][149] - Research and development expenses for the six months ended June 30, 2024 decreased by 8.6 million (37%) to 14.4millioncomparedtothesameperiodin2023,duetoreducedpersonnel−relatedcosts[147][150]−Selling,generalandadministrativeexpensesforthesixmonthsendedJune30,2024increasedby14.4 million compared to the same period in 2023, due to reduced personnel-related costs[147][150] - Selling, general and administrative expenses for the six months ended June 30, 2024 increased by 5.2 million (27%) to 25.0millioncomparedtothesameperiodin2023,primarilyduetoanon−recurring25.0 million compared to the same period in 2023, primarily due to a non-recurring 6.2 million reversal to stock-based compensation expense in 2023[147][150] - Adjusted EBITDA for the six months ended June 30, 2024 improved to a loss of 19.5million,areductionof19.5 million, a reduction of 10.2 million compared to the same period in 2023, driven by reduced operating expenses from the Liquidity Improvement Plan[159] - As of June 30, 2024, the company's liquidity consisted of cash and marketable securities totaling 29.5million[160]−Thecompanyrepaid29.5 million[160] - The company repaid 58.4 million of Convertible Notes Payable in November 2023 and an additional 59.0millioninFebruary2024,leaving59.0 million in February 2024, leaving 16.1 million in outstanding debt as of the report date[161] - The company incurred a net loss from continuing operations of 44.3millionandused44.3 million and used 26.5 million in cash flows from operating activities for the six months ended June 30, 2024[162] - The company estimates its existing cash and cash equivalents of 29.5millionwilllastthroughDecember31,2024,butwillnotbesufficienttofundoperationsforthenext12months[164]−Thecompanyfacessubstantialdoubtaboutitsabilitytocontinueasagoingconcernduetoinsufficientforecastedcashflowstomeetcontractualcommitmentsandobligations[165]−Thecompanyplanstoimproveliquiditythroughcostreductions,staffreductions,andexploringstrategicalternatives,includingequityordebtfinancing[166]−Netcashusedinoperatingactivitiesimprovedby29.5 million will last through December 31, 2024, but will not be sufficient to fund operations for the next 12 months[164] - The company faces substantial doubt about its ability to continue as a going concern due to insufficient forecasted cash flows to meet contractual commitments and obligations[165] - The company plans to improve liquidity through cost reductions, staff reductions, and exploring strategic alternatives, including equity or debt financing[166] - Net cash used in operating activities improved by 17.8 million year-over-year, from 44.3millionin2023to44.3 million in 2023 to 26.5 million in 2024, driven by cost-cutting measures and reduced payments on accounts payable[171] - Net cash provided by investing activities increased by 26.0millionyear−over−year,from26.0 million year-over-year, from 46.1 million in 2023 to 72.1millionin2024,primarilydueto72.1 million in 2024, primarily due to 57.7 million from the sale of discontinued operations[172] - Net cash used in financing activities increased by 44.7millionyear−over−year,from44.7 million year-over-year, from 7.8 million in 2023 to 52.5millionin2024,mainlyduetotherepaymentof52.5 million in 2024, mainly due to the repayment of 59.9 million in Convertible Notes Payable[173] - Cash, cash equivalents, and restricted cash decreased by 6.8millionyear−over−year,from6.8 million year-over-year, from 37.4 million in 2023 to 9.3millionin2024[170]−Netcashinflowsfromdiscontinuedoperationsininvestingactivitiessurgedto9.3 million in 2024[170] - Net cash inflows from discontinued operations in investing activities surged to 57.6 million in 2024, compared to 1.3millionin2023,duetothesaleofdiscontinuedoperations[172]−Netcashflowsfromdiscontinuedoperationsinoperatingactivitiesdecreasedby1.3 million in 2023, due to the sale of discontinued operations[172] - Net cash flows from discontinued operations in operating activities decreased by 5.5 million year-over-year, from 10.3millionusedin2023to10.3 million used in 2023 to 4.9 million provided in 2024[171] - The company's cash position at the end of the period was 9.3million,downfrom9.3 million, down from 16.1 million at the beginning of the period[170] Impairment and Other Financial Items - The company recorded an impairment to the carrying value of goodwill of 9.3millionincontinuingoperationsand9.3 million in continuing operations and 10.0 million in discontinued operations as of June 30, 2023[141][151] - Net interest expense for the six months ended June 30, 2024 decreased by 2.9millionto2.9 million to 10.3 million compared to the same period in 2023, driven by the full repayment of Convertible Notes Payable in February 2024[152] - Changes in fair value of warrants and conversion option decreased by 18.4millionto18.4 million to 0.3 million for the six months ended June 30, 2024, due to fluctuations in share price and equity volatility[153] - Total other income for the six months ended June 30, 2024 was 0.7million,adecreaseof0.7 million, a decrease of 3.5 million compared to the same period in 2023, primarily due to a $2.1 million receipt from a corporate-owned life insurance policy[154] Corporate Actions and Accounting - The company's reverse stock split of 1-for-35 was effected on July 18, 2024, with all share and per share amounts retroactively adjusted in financial statements[117] - No material changes were reported in the company's critical accounting policies or market risk disclosures compared to the previous year[177][180] - The company did not enter into any off-balance sheet arrangements during the reporting period[176]