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Marrone Bio Innovations, Inc. Reports Fourth-Quarter and Full-Year 2020 Financial Results

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Marrone Bio Innovations
·15 min read
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DAVIS, Calif., March 23, 2021 (GLOBE NEWSWIRE) -- Marrone Bio Innovations, Inc. (NASDAQ: MBII) has provided its financial results for the fourth quarter and full year ended December 31, 2020. Key results include:

  • Revenues increased 31% in fiscal year 2020, driven by expanded use of the company’s biological solutions as seed-and soil-treatments, and through greater global diversification.

  • Gross margins for the full year were 59.6%, as a result of improved product mix.

  • The focus on cost management resulted in a reduction in operating expenses for both the fourth quarter and the full year.

  • Net income (loss) and Adjusted EBITDA in fiscal year 2020 improved by 46% and 31%, respectively.

Selected Financial Highlights

$ in millions

Q4
2020

Q4
2019

% Increase
(Decrease)

FY 2020

FY 2019

% Increase
(Decrease)

Revenues

$7.7

$6.7

15%

$38.4

$29.4

31%

Gross Profit

$4.9

$3.7

32%

$22.9

$16.1

42%

Gross Margin

63.7%

55.8%

+790bps

59.6%

54.9%

+470bps

Operating Expenses

$9.0

$11.9

(24%)

$40.1

$44.1

(9%)

Operating Expense Ratio

117%

178%

-6,100bps

104%

150%

-4,600bps

Net Income (Loss)

($4.2)

($10.1)

(58%)

($20.2)

($37.2)

(46%)

Adjusted EBITDA¹

($2.2)

($5.3)

(58%)

($11.0)

($16.0)

(31%)

Cash Used in Operations

($7.4)

($4.9)

49%

($16.0)

($21.3)

(25%)

¹ Adjusted EBITDA is a non-GAAP financial measure and is described in relation to its most directly comparable GAAP measure under "Use of Non-GAAP Financial Information" below.

Fourth-Quarter 2020 Financial and Operational Summary

  • Revenues in the fourth quarter increased by 15% as the company’s seed- and soil-applied treatments for use in the U.S. row crops moved into the distribution channel in anticipation of the 2021 growing season. Higher sales of crop protection products – including Regalia® biofungicide and Venerate® bioinsecticide – for application in the outdoor vegetable and greenhouse markets in the United States also contributed to the gain.

  • Gross margins benefited from product mix in the quarter, increasing by 790 basis points to 63.7%.

  • Operating expenses declined by 24%, a direct result of continuing cost control. The significant improvement in the operating expense ratio – a key performance indicator that compares operating expenses to revenues – reflected both the increase in revenues and the decrease in spending.

  • The fourth-quarter net loss was $4.2 million as compared with a net loss of $10.1 million in the fourth quarter of 2019. The improvement was driven by the gains in revenues and gross profit, coupled with the benefits from cost management. In comparison, the net loss in the fourth quarter of 2019 included $1.3 million in one-time non-cash charges related to new or replacement warrants.

  • Cash used in operations in the fourth quarter of 2020 was $7.4 million, as compared with cash used in operations of $4.9 million in the same period in 2019. The increase reflected the timing of working capital needs for year-end shipment of products.

Full Year 2020 Financial and Operational Summary

  • Revenue growth of 31% year-over-year was driven by the company’s continued strategic shift into a more diverse mix of sales across crops, geographies and product offerings. Significant inroads were made in expanding the company’s geographic reach, with 20% of revenues coming from the European Union and Latin America, compared with 6% of revenues in 2019. Sales into row crops – such as corn, soybeans, cotton and wheat – increased with expanded offerings in plant health products and seed- and soil-applied treatments. Further market penetration and market share gains in the fruit-and-vegetables segment also contributed to the revenue increase, particularly for Regalia® and Venerate®.

  • Gross profit in 2020 expanded at a greater rate than revenues, up 42% as compared with gross profit in 2019. The 470 basis point improvement in annual gross margins to 59.6% was primarily a function of sales into higher margin end-use markets.

  • Operating expenses were reduced by 9% to $40.1 million in 2020. With increased sales and lower costs, the operating expense ratio for the full year declined to 104%, as compared with 150% in 2019. Operating expenses in 2020 benefited by $1.4 million from a Paycheck Protection Program (PPP) loan secured to retain employees supporting the essential agricultural industry during the COVID-19 pandemic, which has since been forgiven.

  • The company reported improvements in both net income (loss) and Adjusted EBITDA for fiscal year 2020. Net loss was $20.2 million, a 46% improvement year over year, while Adjusted EBITDA improved by 31%. The net loss in 2020 included $1.5 million in one-time, non-cash charges related to the issuance of new or replacement warrants and a warrant modification, as compared with $7.6 million in similar non-cash charges in 2019. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.

  • Cash used in operations for 2020 was $16 million, a 25% improvement from cash used in operations in 2019. The improvement in net income, coupled with efficient use of working capital throughout the year, contributed to the increase. For the full year 2020, operating cash also benefited from $1.7 million in proceeds from the PPP loan.

Management Commentary

“We remain committed to our mission of rapidly advancing Marrone Bio toward profitability, and the results this year supported this objective,” said Chief Executive Officer Kevin Helash. “The dedication of our team, combined with the breadth and scope of our product line and our international footprint, were key drivers of our results in 2020.

“We expect this momentum to continue in 2021, with an ongoing focus on expanding sales both through our existing product portfolio and through potential strategic partnerships or acquisitions,” Helash added. “We intend to maintain operating expenses at 2020 levels, plus inflation, while growing revenues in the mid-20% range, with an annual target for gross margins in the mid-50% range.

“Looking forward, we expect a strong first half of the year, with revenue growth in line with our annual revenue target. Historically, our first quarter is one of our smaller quarters from a sales perspective as the market prepares for the upcoming growing season,” he concluded.

Conference Call and Webcast

Management will host an investor conference call at 4:30 p.m. ET (1:30 p.m. PT) on March 23, 2021 to discuss Marrone Bio Innovations’ fourth quarter and full year 2020 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Q4 and Full Year 2020 Conference Call and Webcast
Date: Tuesday, March 23, 2021
Time: 1:30 p.m. Pacific time (4:30 p.m. Eastern time)
U.S. Dial-in: 1-866-248-8441
International Dial-in: 1-323-289-6581
Conference ID: 3024576
Webcast: http://public.viavid.com/index.php?id=143854

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

A playback of the call will be available through April 23, 2021. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin number 1021625. A webcast will also be available for 30 days on the IR section of the Marrone Bio Innovations website or by clicking here: MBII Q4 2020 Webcast.

About Marrone Bio Innovations

Marrone Bio Innovations Inc. (NASDAQ: MBII) is a growth-oriented agricultural company leading the movement to environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. Our portfolio of 15 products help customers operate more sustainably while increasing their return on investment. The company’s commercial products are sold globally and supported by a robust portfolio of more than 500 issued and pending patents. Our end markets include row crops; fruits and vegetables; trees, nuts and vines; and greenhouse production. Marrone Bio’s research and development program uses proprietary technologies to isolate and screen naturally occurring microorganisms and plant extracts to create new, environmentally sound solutions in agriculture.

Learn more about Marrone Bio Innovations at www.marronebio.com. We also use our investor relations website, https://investors.marronebio.com, as well as our corporate Twitter account, @Marronebio, as means of disclosing material non-public information, and encourage our investors and others to monitor and review the information we make public in these locations. Follow us on social media: Twitter, LinkedIn and Instagram.

Non-GAAP Financial Measures

This earnings release discusses Adjusted EBITDA which is not a financial measure as defined by GAAP. This financial measure is presented as a supplemental measure of operating performance because we believe it can aid in, and enhance, the understanding of our financial results. In addition, we use Adjusted EBITDA as a measure internally for budgeting purposes.

We define Adjusted EBITDA as net income (loss) before (1) interest expense (income), net, (2) income tax expense (benefit), (3) depreciation, (4) amortization of intangible assets, (5) stock-based compensation expense, plus (6) from time to time, certain other items which are specific transaction-related items. Other companies may define or calculate this measure differently, limiting the usefulness as a comparative measure. Because of this limitation, this non-GAAP financial measure should not be considered in isolation or as substitute for or superior to performance measures calculated in accordance with GAAP and should be read in conjunction with the financial statement tables.

YEAR ENDED

YEAR ENDED

DECEMBER 31,

DECEMBER 31,

2020

2019

Net Loss (AS REPORTED)

$

(20,168

)

$

(37,175

)

Taxes

29

-

Interest expense

1,443

1,474

Depreciation and amortization

3,558

2,349

EBITDA

$

(15,138

)

$

(33,352

)

Stock based compensation

3,595

3,686

Acquisition related costs

-

3,744

Litigation cost and settlement

-

1,914

Loss on modification of warrants

72

1,564

Loss on issuance of new warrants

1,391

6,065

Change in fair value of contingent consideration

445

342

Reduction in expenses related to PPP funds

(1,396

)

-

Adjusted EBITDA

$

(11,031

)

$

(16,037

)

Marrone Bio Innovations Forward Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations and plans, including assumptions underlying such statements, are forward-looking statements, and should not be relied upon as representing the company’s views as of any subsequent date. Examples of such statements include financial guidance and other statements regarding the company’s future revenue growth, margins and other financial results; expansion of the company’s product portfolio; expectations regarding agricultural market trends; and the potential benefits of the company’s products. Such forward-looking statements are based on information available to the company as of the date of this release and involve a number of risks and uncertainties, some beyond the company’s control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including the recent uncertainty in the global economy and industry-specific economy caused by the COVID-19 pandemic, consumer, regulatory and other factors affecting demand for the company’s products, any difficulty in expanding the company’s sales and marketing infrastructure or marketing the company’s products in global markets, competition in the market for pest management products, lack of understanding of bio-based pest management products by customers and growers, and adverse actions by distributors, manufacturers, regulatory agencies and other relevant third parties. Additional information that could lead to material changes in the company’s performance is contained in its filings with the Securities and Exchange Commission. The company is under no obligation to, and expressly disclaims any responsibility to, update or alter forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

Marrone Bio Innovations Contacts:
Clyde Montevirgen
Vice President of Business Development & Investor Relations
Telephone: 530-750-2800
info@marronebio.com

Investor Relations:
Lucas A. Zimmerman
Senior Vice President
MZ Group – MZ North America
Main: 949-259-4987
MBII@mzgroup.us


MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Balance Sheets
(Unaudited, In Thousands, Except Par Value)

DECEMBER 31,

DECEMBER 31,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

15,841

$

6,252

Accounts receivable

10,113

5,925

Inventories

6,618

8,149

Prepaid expenses and other current assets

1,688

1,390

Total current assets

34,260

21,716

Property, plant and equipment, net

12,565

13,260

Right of use assets, net

3,760

4,567

Intangible assets, net

21,383

23,842

Goodwill

6,740

6,764

Restricted cash

1,560

1,560

Other assets

929

1,008

Total assets

$

81,197

$

72,717

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

1,895

$

3,379

Accrued liabilities

11,650

12,467

Deferred revenue, current portion

374

427

Lease liability, current portion

1,008

913

Debt, current portion, net

9,301

3,899

Total current liabilities

24,228

21,085

Deferred revenue, less current portion

1,628

1,986

Lease liability, less current portion

3,050

3,970

Debt, less current portion, net

11,479

11,847

Debt due to related parties

7,300

7,300

Other liabilities

2,102

2,971

Total liabilities

49,787

49,159

Commitments and contingencies

Stockholders' equity:

Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at December 31, 2020 and December 31, 2019

Common stock: $0.00001 par value; 250,000 shares authorized, 167,478 and 139,526 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively

1

1

Additional paid in capital

372,226

344,206

Accumulated deficit

(340,817

)

(320,649

)

Total stockholders' equity

31,410

23,558

Total liabilities and stockholders' equity

$

81,197

$

72,717


MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)

DECEMBER 31,

DECEMBER 31,

2020

2019

Revenues:

Product

$

37,915

$

28,912

License

459

461

Total revenues

38,374

29,373

Cost of product revenues

15,505

13,260

Gross profit

22,869

16,113

Operating Expenses:

Research, development and patent

11,330

14,026

Selling, general and administrative

28,734

30,072

Total operating expenses

40,064

44,098

Loss from operations

(17,195

)

(27,985

)

Other income (expense):

Interest expense

(1,443

)

(1,474

)

Loss on modification of warrants

(72

)

(1,564

)

Loss on issuance of new warrants

(1,391

)

(6,065

)

Change in fair value of contingent consideration

(445

)

(342

)

Other income, net

407

255

Total other expense, net

(2,944

)

(9,190

)

Net loss before Income Taxes

$

(20,139

)

$

(37,175

)

Income Tax Expense

(29

)

Net Loss

(20,168

)

(37,175

)

Basic and diluted net loss per common share:

$

(0.14

)

$

(0.32

)

Weighted-average shares outstanding used in computing basic and diluted net loss per common share:

148,892

117,982


MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Cash Flows
(Unaudited - In Thousands)

DECEMBER 31,

DECEMBER 31,

2020

2019

Cash flows from operating activities

Net loss

$

(20,168

)

$

(37,175

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

3,558

2,349

Gain on disposal of equipment

(9

)

(21

)

Right of use assets amortization

807

805

Share-based compensation

3,595

3,686

Non-cash interest expense

226

277

Loss on modification of warrants

72

1,564

Loss on issuance of new warrants

1,391

6,065

Change in fair value of contingent consideration

445

342

Net changes in operating assets and liabilities:

Accounts receivable

(4,188

)

(2,622

)

Inventories

1,531

599

Prepaid Expenses and other assets

(219

)

(327

)

Accounts payable

(1,409

)

1,204

Accrued and other liabilities

(148

)

3,223

Lease Liability

(825

)

(627

)

Deferred revenue

(618

)

(681

)

Net cash used in operating activities

(15,959

)

(21,339

)

Cash flows from investing activities

Payment of consideration in connection with previous asset purchase

(1,240

)

(669

)

Business combination, net of cash acquired

(5,849

)

Purchases of property, plant and equipment

(559

)

(296

)

Proceeds from sale of equipment

2

21

Net cash used in investing activities

(1,797

)

(6,793

)

Cash flows from financing activities

Proceeds from issuance of debt

202

141

Proceeds from secured borrowings

40,127

29,376

Repayment in secured borrowings

(34,790

)

(27,822

)

Repayment of debt

(524

)

(1,715

)

Equity offering costs

(104

)

Exercise of stock options

108

55

Proceeds from employee stock purchase plan

254

128

Net settlement of options

Exercise of warrants

22,072

16,000

Net cash provided by financing activities

27,345

16,163

Net increase (decrease) in cash and cash equivalents and restricted cash

9,589

(11,969

)

Cash and cash equivalents and restricted cash, beginning of period

7,812

19,781

Cash and cash equivalents and restricted cash, end of period

$

17,401

$

7,812

Supplemental disclosure of cash flow information

Cash paid for interest

$

1,166

$

1,175

Supplemental disclosure of non-cash investing and financing activities

Property, plant and equipment included in accounts payable and accrued liabilities

$

44

$

Fair Value of non-cash consideration issued in acquisition transactions

$

$

23,917

Conversion of accrued liabilities into equity associated with the granting of restricted stock units

$

632

$