Bioceres Crop Solutions (NASDAQ:BIOX) held its third-quarter earnings conference call on Tuesday. Below is the complete transcript from the call.

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The full earnings call is available at https://events.q4inc.com/attendee/717574163

Summary

BIOX reported a net loss of $10 million for the fiscal third quarter of 2026, primarily due to a decline in revenue and gross profit, accompanied by increased financial expenses.

The company is undergoing a strategic transition, focusing on operational efficiency and exploring strategic arrangements, despite ongoing litigation related to secured notes.

Total revenues declined by 23% year-over-year to $39.4 million, with the seeds and integrated products segment seeing a 71% decline, while crop nutrition was the only segment posting growth.

The foreclosure of Profarm Group assets led to a non-cash impairment loss of $179 million, significantly impacting the company's balance sheet.

Management emphasized ongoing efforts to stabilize the business, preserve liquidity, and improve financial flexibility through disciplined execution and strategic reviews.

Full Transcript

OPERATOR

Hello everyone. Thank you for joining us and welcome to BIOX Fiscal Third Quarter 2026 Financial and operational results call. After today's prepared remarks we will host a question and answer session. If you would like to ask a question, please press star and the number one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Paula Cervanti, Head of Investor Relations. Paula, please go ahead.

Paula Cervanti

Thank you and good morning everyone. Welcome to BIOX 3rd fiscal quarter 2026 earnings conference call. Our prepared remarks today will be led by our Chief Executive Officer Federico Truco, our General Counsel Jose Roque and our Chief Financial Officer Ezekiel Seimer Maher. All of them will be available for the Q and A session following the presentation. During this call we will be making forward looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. I refer you to the forward looking statements SECtion of the earnings release and presentation as well as the recent filings with SEC. We assume no obligation to update or revise any forward looking statements to reflect new or changed circumstances. In today's presentation we will be making references to certain non GAAP financial measures. Reconciliations of the non GAAP measures can be found in our earnings press release. This conference call is being webcast and the link is available at our investor relations website. It is now my pleasure to turn the call over to Federico.

Federico Truco (Chief Executive Officer)

Thanks, Paula and good morning to everyone. Thanks for joining us today. Please turn to slide number three for today's key business and financial highlights. This quarter reflects a period of transition and operational refocusing for the company. While it is historically our weakest quarter from a baseline business perspective, total revenues and gross profits showed a decline compared to the same quarter last year, which was partially offset by an improvement in operational expenses. Net loss was $10 million, primarily reflecting lower gross profit as well as increased financial expenses, all of which will be described in greater detail later in the presentation. Also, in the last three years we have booked profits from IP rights and other commercial arrangements in this quarter which help us offset baseline operating losses. Although we continue to explore strategic arrangements with our partners on a regular basis and see these as a recurrent source of profitability this year, the timing of profit generating arrangements did not coincide with the initial months of the calendar year. As I have stated in my message to shareholders of March 16, we recognize the significance of the events surrounding ProFarm and uncertainty generated by the ongoing litigation process. Jose Roque, our General Counsel will now provide an update of the ongoing litigation. Please turn to slide number four.

Jose Roque (General Counsel)

Thank you, Federico and good morning to everyone on the call. As previously disclosed, in November 2025, four holders of secured notes issued under no purchase agreements dated August 2022 filed a lawsuit in New York against the Company and certain guarantor affiliates. The plaintiffs alleged that defaults occurred under those agreements and are seeking payment of amounts they say became immediately due. The Company strongly disputes these allegations. As explained in court filings, each of the alleged defaults turns on contested facts. The Company has at all times acted in good faith and under active board supervision to manage liquidity and preserve enterprise value. We have also asserted counterclaims against the plaintiffs and third party individuals. On January 20, 2026, as part of the litigation process, the note holders conducted a foreclosure auction involving the ProFarm Group Inc. Collateral, A note holder affiliated entity was the only qualified bidder and acquired the assets through a $15 million credit bid. We believe and continue to argue in litigation that the foreclosure was conducted in a commercially unreasonable manner and we have asserted counterclaims challenging the process. The case remains in its early stages and the Company intends to continue both our active defense against note holders allegations and the pursuit of our affirmative claims. While we remain confident in our legal position, I would remind listeners that my statements regarding the litigation are subject to the usual disclaimers regarding forward looking statements and that actual results may differ materially. The Company intends to continue updating shareholders regarding material developments in the litigation through appropriate disclosures, including where applicable, reports on Form 6K.

Federico Truco (Chief Executive Officer)

Thank you, Jose. Please now turn to slide number five for an introduction to Ezequiel Seimer Maher who joined us as CFO at the beginning of the year. Ezekiel comes to us after a nearly 20 year career in agriculture with positions of increasing seniority at Monsanto first and then at CHS where he was Regional Finance Director and then Director of Operational Excellence for South America until joining us. We're delighted to have Ezequiel in the team and very grateful for his commitment to our organization, particularly in light of joining at a time of significant uncertainty. Ezekiel, welcome. Now turning the call over to you to discuss the accounting impact of the profarm foreclosure as well as the quarter's financial performance for our continuing operations.

Ezequiel Seimer Maher

Thank you Federico for the introduction and good morning everyone. It is great to be here. In my first turning call with BIOX, let's begin with slide 6 which as Federico mentioned, detailed the impact of the January 2026 foreclosure auction involving the Profarm Group on our financials. As a result of the foreclosure process, the Profarm business was classified as discontinued operations and its assets and liabilities were reclassified accordingly in our financial statements. Based on the expected proceed from the foreclosure auction, the Company recognized a non cash impairment and loss associated with the transaction during the second quarter of fiscal year 2026. In total, approximately $194 million of the net assets associated with the Profarm Group business was recognized or reclassified after considering the 15 million credit bid submitted by note holders. This results in accumulated non cash loss of approximately 179 million. The largest impact were reductions in intangible assets and goodwill together with reductions in property, plant and equipment and working capital balance. These were partially offset by the derecognition of liabilities associated with the profound group business. These impacts were recognized in the second quarter and are reflected in the current balance sheet presentations. Now let's walk through the financial results for the quarter and first let me remind you that all financial results discussed below reflect the Company's continuing operation for all periods presented and previous year's amount have been recast to exclude the ProFarm Group business. Unless otherwise noted. Let's turn to slide 7 to begin looking at revenues. Total revenues for the quarter were 39.4 million representing a 23% decline versus the same period last year. Before discussing the segments, I think it's important to remember that the fiscal third quarter is seasonally the lowest quarter for our continuous operation, particularly following the ProFarm foreclosure auction and the resulting reduction in North America operations. This quarter typically consigns with lower planting and harvesting activities in the Southern Hemisphere, meaning that fluctuation in demand, pricing and products mix tend to have a more visible impact on quarterly performance. Looking at segments performance, we saw a mixed dynamic across the portfolio in crop protections, revenue were 24.6 million town 18% year over year. The decline was mainly driven by softened demand and competitive pressure in certain categories, particularly in adjuvants and third party products. In Argentina we also continue to see inventory adjustments across the distribution channel which affected purchasing activity in third party products. Pricing pressure in post patent categories also weighted on revenues. In seeds and integrated products, revenues declined 71% year over year. This continues the trend we've seen over the last several quarters as downstream seeds and grain sales are phased out as part of the strategic shift towards a more asset light and lower working capital intense model in seeds. As we discussed before, this transition reduced reported revenues in the near term while also lowering exposure to lower margin and more working capital. Intense activity Crop nutrition was the one segment that posted growth during the quarter with revenues increase 15% year over year to 11.6 million. Growth was mainly driven by microbidded fertilizer supported by a low comparable base and stronger demand dynamics during the quarter amid global supply and pricing uncertainties associated with geopolitical tensions. Overall, Renu's performance during the quarter reflect a combination of softer market conditions in certain categories together with ongoing portfolio transition effect. Moving now to GROSS PROFIT on slide eight, gross profit for the quarter was 12.7 million compared to 18.1 million in the same period last year representing a 30% year over year decline. The decline was relative broad based across the three segments. In crop protection, gross profit performance largely mirrored the decline in revenues. Margins across the different product categories were generally stable although overall segment margin came down from 37 to 35% mainly due to the lower contribution from adjuvants. Within the mixed this quarter in seeds and integrated products, gross profit declined in absolute terms but significantly less than revenues. As a result, gross margin improved from 19% to 30% reflecting a more favorable mix with a higher relative contribution from seed treatment packs versus downstream grain sales. Finally, crop nutrition gross profit declined 38% despite higher revenues. The main driver here was obsolete adjustment related to inoculants following an updated inventory assessment during this quarter. Excluding this adjustment, underlying profitability in the inoculants business remained broadly stable year over year. Overall gross margin declined from 35 to 32% reflecting lower revenues, product mix effects and inoculant adjustments disclosed above. Excluding that non recurring adjustment, underlying gross margin performance remains broadly in line with the prior year period. Now let's Please turn to Slide 9 for a review of the adjusted EBITDA. Adjusted EBITDA for the quarter was negative 0.6 million compared to positive 9.1 million in the prior year quarter. When looking at this year over year comparison, it is important to separate a couple of non recurring items affecting comparability across periods. First, the period quarter included approximately 7.7 million of non recurring other income associated with changes in contractual obligations and intellectual property arrangements as part of the recognition of reorganization in seeds. The absence of that income had a significant impact on comparability versus last year. Second, during the current quarter, crop nutrition results were impacted by a non recurrent inoculant obsolence adjustment associated with an update inventory assessment. Looking beyond these items, underlying operations performance reflect lower gross profit across part of the business, particularly in crop protection although the iteration was partially offset by continuous progress on cost control organizational streamlined initiatives. These actions resulted in an even full reduction in operation expense during the quarter, while joint ventures result also improved year over year and provided an additional positive contribution to EBITDA. Finally, let's turn to slide number 10 to review our balance sheet cash position and a brief update on the debt situation. As of March 31, 2026, total financial debt stood at approximately 229 million, broadly stable compared to the previous quarter. Cash, cash equivalents and short term Investments total approximately 14 million, resulting in a net financial debt of approximately 214 million, also stable on a sequential basis. One important point to highlight is that following the acceleration notice received in connection with the noteholder situation discussed earlier in the call, substantially all of the related debt is currently classified as short term in our balance sheet presentation. As Federico and Jose previously noted, the Company continues to dispute both the purported acceleration of the notes and the commercial reasonable of the PRO form for closer action. These matters remain subject to ongoing legal proceedings and the Company intends to continue vigorously defending its position and pursuing its claim and contract claims in the litigation. At the same time, we continue to evaluate constructive alternatives and maintaining the allowance with relevant stakeholders where appropriate. As Feriko mentioned earlier, we are also advancing a report filing process for risk of active debt obligation in Argentina, including voluntary maturity extensions, discussions with bondholders and continued coordination with key banking partners. More broadly, management remains highly focused on liquidity preservation, working capital discipline and tighter capital allocation across the organization as we continue to stabilize the platform and improve financial flexibility over time. With that, I will turn the call back over to Federico. Thank you.

Federico Truco (Chief Executive Officer)

Thanks Ezequiel and please turn to slide 11, our final slide for today. While market conditions in several areas of our business remain challenging and the effects of the transition in seeds continue to weigh on reported results, we are increasingly focused on strengthening the fundamentals of the organization and prioritizing disciplined execution across the business. During the quarter, we continued advancing initiatives aimed at simplifying the organization, improving operational efficiency, strengthening working capital management and improving cash generation, while advancing liability management initiatives across key operating subsidiaries. In parallel, we are reinforcing governance and internal processes and concluding a strategic review of our continuing and conducting a strategic review of our continuing operations, including initiatives focused on organizational streamlining and capital allocation optimization to ensure that capital management to ensure that capital management attention and resources remain aligned with the areas where we believe we can create the greatest long term value. We recognize the uncertainty generated by the ongoing litigation while we continue to pursue the appropriate legal course and evaluate constructive alternatives where possible. Our priority remains clear, stabilizing the business, preserving the value of our core operations, and positioning the company to for a more resilient and sustainable future. With that, I think we can now turn the call over to Q and A.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question, please press star and the number one on your telephone keypad to raise your hand. Now, to withdraw your question, press star one. Again, we ask that you pick up your handset when asking a question to allow for optimum sound quality if you are muted locally. Please remember to unmute your device. Again, to ask a question, press star one on your telephone keypad. Now, please stand by while we compile the Q and A. Your first question comes from the line of Kemp Dolliver with Brookline Capital Markets. Your line is open. Please go ahead.

Kemp Dolliver

Thank you. Good morning. I did miss the first few minutes of the presentation, but I think you can go on to add some information on this. What are you doing with regard to collections? It looks like you've made some progress on reducing receivables, but it's hard to tell given the restatements where you stand currently on that initiative. Thank you.

Federico Truco (Chief Executive Officer)

Hi, Kem. Thanks for joining us today. It's good to hear you. I will pass that question over to Ezequiel, and first I'll. I'll say that we're emphasizing, obviously, reducing receivables and. And the. And. And advancing collections to prioritize liquidity and keep working capital discipline. But Ezekiel might be able to provide more color into this.

Ezequiel Seimer Maher

Oh, hi. Hi, Kemp. A pleasure. Two angles. First is we have been working on, let's say, giving alternatives to our customers to advance the receivables with some type of incentive. And on the other side, we have been working on new sales being done in lower sell period by giving some attractive to shorter terms that are more common to the industry.

Kemp Dolliver

Okay, what. What was operating cash flow for the quarter and then year to date?

Ezequiel Seimer Maher

We can provide that after. Yeah, we. We don't have the number. The exact number here, but we can provide that information on. On the analyst session with you.

Kemp Dolliver

Okay, thank you. That's all I have. Thank you. Thank you.

OPERATOR

As there are no further questions at this time, I will turn the call back to Federico Trucco for closing remarks.

Federico Truco (Chief Executive Officer)

Thank you and thanks again, everyone, for joining. We remain available for any additional information that might be required and hope everyone has a great rest of the week.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.