Marrone Bio Innovations Reports Second Quarter 2014 Financial Results

Quarterly Results Impacted by Adverse Weather in U.S.

Continued progress on execution of growth strategy – increased adoption, international expansion, new products and new crop segments

Extensive Pipeline Review and Prioritization

Business Wire

DAVIS, Calif.--(BUSINESS WIRE)--

Marrone Bio Innovations, Inc. (MBII), a provider of bio-based pest management and plant health products, today announced financial results for the second quarter ended June 30, 2014.

Financial Highlights for the Second Quarter of 2014

  • Revenues for the second quarter totaled $3.6 million, compared to $4.5 million in the second quarter of 2013. As in the first quarter of 2014, this comparison primarily reflects the ongoing impact of adverse weather across the Company’s growing regions, partially offset by increased adoption rates for all of its products, including Venerate, which began shipments and sold out all available inventory in the second quarter.
  • Net loss for the second quarter was $10.4 million compared to $10.2 million in first quarter 2014.

Pam Marrone, Chief Executive Officer of Marrone Bio Innovations stated, “We believe our momentum will build in the second half as our bio-based agricultural products, capable of both supplementing and substituting for many traditional solutions, demonstrate excellent value due to their combination of effectiveness, environmental friendliness and wide application. Additionally, we have now focused our development efforts on a suite of our best opportunities to ensure we maximize our return on investment and, at the same time, deepen our leadership position in this developing and disruptive category.”

As a result of the impact of bad weather on the year and the late Tuesday resignation of its COO, the Company is unable to give annual guidance at this time, but may be able to provide annual guidance at a later date.

Ms. Marrone concluded, “We still expect to close the year with considerable momentum for Regalia Rx in row crops, as well as Regalia, Grandevo and Venerate in specialty crops, increases from our new product introductions and finally international expansion. Since the close of the second quarter, it has become evident that the market conditions, particularly in the Southeastern US, will be meaningful. Nonetheless, our fundamental view of our opportunity and of our ability to achieve our potential has not changed.”

Recent Business Highlights

  • Inaugurated the M3 Production Facility; completed construction of Phase 1C; now operating three 20,000 liter fermentation tanks; M3 now producing Regalia, Grandevo and Zequanox.
  • Received $10 million loan guarantee from USDA with Five Star Bank for M3 development funding.
  • Completed extensive pipeline review and prioritized a select group of development products with a combined addressable market of approximately $40 billion.
  • Received EPA approval for open-water environment use of Zequanox molluscicide.
  • Signed multi-year collaboration with Evogene, an Israeli plant biotechnology company, for joint discovery and commercialization of products with novel modes of biological action for insect control.
  • Reached agreement with DSM Food Specialties to exchange microorganisms from respective libraries to advance research in respective areas of interest, food ingredients and crop protection/health.
  • Entered into collaborative agreement with Valagro for biostimulant development and acceleration of international market penetration.
  • Compelling results from field studies on effectiveness of Regalia on European wheat crops and for cotton crop enhancement.
  • Secured two patents for Grandevo, covering a key insecticidal compound and root treatment for corn rootworm, a problematic and widespread corn pest.
  • Brazil ANVISA published favorable registration decision for Regalia Maxx, now to be finalized by MAPA.
  • Received Colombia registration for Regalia, triggering milestone payment from FMC.
  • UK Data Assessment Report completed with recommendation to register Regalia in Europe, trigging milestone payment from Syngenta.
  • Began regulatory approval process for Grandevo in Europe and Brazil; began product trials.
  • Began European trials for MBI-110 on grape downy mildew, with favorable results.

Jim Boyd, Chief Financial Officer, commented, “We enjoy a strong balance sheet, reinforced by approximately $40 million in proceeds from our recent secondary offering. As we go forward, we will deploy capital in a disciplined manner to accelerate growth. We believe we are well positioned financially as well as strategically and with regard to our operating capabilities.”

Conference Call Information

Pamela Marrone, the Company’s President & CEO, and James Boyd, CFO, will host a conference call today at 4:30 p.m. ET to discuss the results of the quarter, followed by a question and answer session for the investment community. A live webcast of the call can be accessed on the Marrone Bio Innovations investor relations website at investors.marronebio.com. To access the call, dial toll-free 877-303-6220 or 760-298-5095 (international). The participant passcode is 76402268.

To listen to a telephonic replay of the conference call, dial toll-free 855-859-2056 or 404-537-3406 (international) and enter passcode 76402268. The replay will be available beginning at 7:30 p.m. ET on Thursday, August 7, 2014 and will last through 11:59 p.m. on Saturday, August 9. The webcast will also be available for replay the following 90 days of the conference call.

About Marrone Bio Innovations

Marrone Bio Innovations, Inc. (MBII) is a leading provider of bio-based pest management and plant health products for the agriculture, turf and ornamental, and water treatment markets. Our effective and environmentally responsible solutions help customers operate more sustainably while controlling pests, improving plant health, and increasing crop yields. We have a proprietary discovery process, a rapid development platform, and a robust pipeline of pest management and plant health product candidates. At Marrone Bio Innovations we are dedicated to pioneering better biopesticides that support a better tomorrow for users around the globe. For more information, please visit www.marronebio.com.

Forward-Looking Statements

The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this press release include statements regarding our expectations, beliefs, hopes, goals, intentions, initiatives or strategies, including statements relating to leveraging our platform to penetrate new markets and the results from the field trials and anticipated sales of our products. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements, including the timing of and costs associated with the launch of products, the difficulty in predicting the timing or outcome of product research and development efforts and regulatory approvals. Additional relevant information concerning risks can be found in the Form 10-K that the Company filed with the Securities and Exchange Commission on March 25, 2014.

       

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Balance Sheets

(In Thousands, Except Par Value)

 
JUNE 30,
2014
DECEMBER 31,
2013
(Unaudited)
 
Assets
Current assets:
Cash and cash equivalents $ 57,630 $ 24,455
Restricted cash, current portion 3,325
Short-term investments 249 13,677
Accounts receivable 4,110 6,215
Accounts receivable from related parties 490 903
Inventories, net 12,501 11,666
Prepaid expenses and other current assets   1,768     1,737  
 
Total current assets 80,073 58,653
Property, plant and equipment, net 18,485 9,420
Restricted cash, less current portion 1,560
Other assets   899     806  
 
Total assets $ 101,017   $ 68,879  
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 5,185 $ 4,460
Accrued liabilities 3,511 4,380
Deferred revenue, current portion 537 1,209
Deferred revenue from related parties, current portion 131
Capital lease obligations, current portion 1,836 1,401
Debt, current portion   340     157  
 
Total current liabilities 11,409 11,738
Deferred revenue, less current portion 1,043 744
Deferred revenue from related parties, less current portion 628
Capital lease obligations, less current portion 886 1,134
Debt, less current portion 22,090 12,280
Other liabilities   577     571  
 
Total liabilities 36,005 27,095
Commitments and contingencies
Stockholders’ equity:
Preferred stock
Common stock
Additional paid in capital 191,079 147,220
Accumulated deficit   (126,067 )   (105,436 )
 
Total stockholders’ equity   65,012     41,784  
 
Total liabilities and stockholders’ equity $ 101,017   $ 68,879  
 
       

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 
THREE MONTHS ENDED

JUNE 30,

SIX MONTHS ENDED

JUNE 30,

  2014         2013     2014         2013  
Revenues:
Product $ 3,414 $ 4,152 $ 5,511 $ 6,525
License 51 48 96 96
Related party   164     300     812     609  
Total revenues 3,629 4,500 6,419 7,230
Cost of product revenues, including cost of product revenues to related parties of $73 and $170 for the three months ended June 30, 2014 and 2013, respectively, and $265 and $364 for the six months ended June 30, 2014 and 2013, respectively   2,849     3,398     4,501     5,193  
Gross profit 780 1,102 1,918 2,037
Operating expenses:
Research, development and patent 4,264 3,941 8,546 7,224
Selling, general and administrative   5,989     3,107     12,319     5,954  
Total operating expenses   10,253     7,048     20,865     13,178  
Loss from operations (9,473 ) (5,946 ) (18,947 ) (11,141 )
Other income (expense):
Interest income 11 - 21 1
Interest expense (825 ) (2,285 ) (1,598 ) (4,270 )
Change in estimated fair value of financial instruments - 6,550 - 2,987
Gain on extinguishment of debt - 49 - 49
Other income (expense), net   (98 )   (7 )   (107 )   (14 )
Total other income (expense), net   (912 )   4,307     (1,684 )   (1,247 )
Loss before income taxes (10,385 ) (1,639 ) (20,631 ) (12,388 )
Income taxes   -     -     -     -  
Net loss (10,385 ) (1,639 ) (20,631 ) (12,388 )
Deemed dividend on convertible notes   -     (1,378 )   -     (1,378 )
Net loss attributable to common stockholders $ (10,385 ) $ (3,017 ) $ (20,631 ) $ (13,766 )
 
Net loss per common share:
Basic $ (0.50 ) $ (2.36 ) $ (1.02 ) $ (10.81 )
Diluted $ (0.50 ) $ (2.67 ) $ (1.02 ) $ (10.81 )
Weighted-average shares outstanding used in computing net loss per common share:
Basic   20,775     1,277     20,150     1,273  
Diluted   20,775     1,347     20,150     1,273  
 
       

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

 
SIX MONTHS ENDED
JUNE 30,
  2014     2013  
Cash flows from operating activities
Net loss

$

(20,631

)

$

(12,388

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,081 356
Loss on disposal of equipment 85
Share-based compensation 2,722 588
Non-cash interest expense 495 3,404
Change in estimated fair value of financial instruments

(2,987

)

Gain on extinguishment of debt

(49

)

Amortization of investment securities premiums/discounts, net 10
Net changes in operating assets and liabilities:
Accounts receivable 2,105

(804

)

Accounts receivable from related parties 413 (131 )
Inventories

(835

)

(2,056

)

Prepaid expenses and other assets

(350

)

(1,633

)

Accounts payable 330 2,196
Accrued and other liabilities

(628

)

(743

)

Deferred revenue

(799

)

(96

)

Deferred revenue from related parties  

(333

)

 

(66

)

 
Net cash used in operating activities

(16,335

)

(14,409

)

Cash flows from investing activities
Purchases of property, plant and equipment

(9,425

)

(1,338

)

Purchase of short-term investments

(49

)

Maturities of short-term investments   13,467      
 
Net cash provided by (used in) investing activities 3,993

(1,338

)

Cash flows from financing activities
Proceeds from public offering, net of offering costs and underwriting commissions 39,959
Proceeds from issuance of convertible notes payable 6,529
Proceeds from issuance debt, net of issuance costs 9,621 3,700
Repayment of debt

(137

)

(9,303

)

Proceeds from line of credit 4,687
Repayment of line of credit

(4,687

)

Repayment of capital leases

(219

)

(98

)

Change in restricted cash

(4,885

)

9,139
Proceeds from exercise of stock options 1,128 11
Proceeds from exercise of common stock warrants   50      
 
Net cash provided by financing activities 45,517 9,978
Net increase (decrease) in cash and cash equivalents 33,175

(5,769

)

Cash and cash equivalents, beginning of period   24,455     10,006  
 
Cash and cash equivalents, end of period $ 57,630   $ 4,237  
 
Supplemental disclosure of cash flow information
Cash paid for interest, net of capitalized interest of $648 and $279 for the six months ended June 30, 2014 and 2013, respectively $ 1,103   $ 866  
 
Supplemental disclosure of non-cash investing and financing activities
Property, plant and equipment included in accounts payable and accrued liabilities $ 834   $  
 
Equipment acquired under capital leases $ 646   $ 256  
 
Interest added to the principal of convertible notes $   $ 1,299  
 

Contact:
ICR, Inc.
Investors:
James R. Palczynski, 203-247-2095
ir@marronebio.com
or
Media:
Anton Nicholas, 203-682-8200
pr@marronebio.com

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