Letter to RiceX Shareholders from Daniel L. McPeak, Sr., Chairman and Chief Executive Officer
Dear Shareholder:
EL DORADO HILLS, Calif.--(BUSINESS WIRE)--April 7, 1999-- Greetings from beautiful El Dorado Hills, California. It has been four months since I have returned as Chief Executive Officer of The RiceX® Company. As you are aware, The RiceX Company has experienced great turmoil in its growth over the last two years. This has weighed heavily on me, but without some concrete news, I could not give you suitable information as to the results of our efforts until now.
Two years ago, the Board of Directors, with the approval of our largest shareholders, decided to expand our management team in an effort to support the increasing demands of our business and to lead us into the new millennium. Unfortunately, due to a number of factors including, but not limited to, the lack of sufficient financing to support our growth model, the Board decided to execute its power and returned to me the responsibility of leading your company into the future. This change was effective on November 13, 1998.
After four months of arduous work and dedication by the entire staff, I can eagerly and happily report to you that the trend in our business is firmly back on a path of profitability and has already surpassed the levels of performance that we anticipated two years ago.
With the efficiencies that have been initiated, the reduced overhead and recent sales increases, I can now report that your company has achieved positive cash flow in March and anticipates a continuation of this trend. In addition, I expect your company to achieve positive earnings from operations by the end of 1999.
Some of the events which have allowed us to improve the prospects and opportunity for your company to return to its former levels of shareholder value are:
-- We secured a financing package at the end of December, which was
sufficient for us to finalize our acquisition of the Montana
processing facility.
-- We have reduced our operating expenses by more than $250,000 per
month, which constitutes a 59% reduction in the monthly operating
expenses.
-- We have entered into contracts with our equine customers
resulting in incremental sales increases of more than 60%.
-- We have begun shipments on a $16 million product sale to a
government-backed joint venture in the Peoples' Republic of
China.
-- Our previously announced strategic alliances with Monsanto,
Kellogg's, Archer Daniels Midland, Amway and SunJoy of China,
continue to move forward at an even quicker pace than had been
previously anticipated.
-- We have begun to establish a relationship with a multi-billion
dollar Asian Pharmaceutical consortium for the sale of our
"Nutraceutical" products.
This dramatic turnaround could not have been achieved without the dedicated support and ceaseless effort of my ''new'' management team. These people, all of whom survived the pressures and distractions of the past two years, have dedicated themselves to rebuilding RiceX into the leading nutritional food company in the world. Each of these individuals has earned your appreciation and support. We invite you to communicate with any of these people for further information pertaining to your special interests.
-0-
Dan McPeak, Jr. Vice President - General Manager
Ike Lynch Vice President - Chief Operating Officer
Todd Crow Vice President - Finance
I am certain that you will agree that the future for our company is NOW. The task is difficult but certainly well defined. I have the greatest confidence that by the end of this year, actually this century, you will be able to look back and appreciate what can be accomplished with the right compliment of products, hard work from a dedicated staff and a faithful shareholder group.
Thank you for your trust, loyalty and support. That is what has kept us going. Please call me at any time. I haven't forgotten that I work for you.
Sincerely,
The RiceX® Company
Daniel L. McPeak, Sr.
Chairman and Chief Executive Officer |
