Marrone Bio's (NASDAQ:MBII) third quarter revenue was in line with our estimate, $6.97 million actual (including some into the hemp market) versus our $6.80 million estimate.
Gross margins continued to improve year over year (seasonality and changes in crops make sequential quarter numbers meaningless) and we expect this trend to continue.
Operating expenses were affected by several (large) charges $1.4 million for a litigation settlement and $2.7 million for several acquisitions that occurred in the 3Q19. Apart from these operating expenses were $$9.2 million as compared to our estimate of $9.0 million. We expect operating expense to increase to within the band of $10 million to $12 million a quarter in 2020.
The acquisitions had minimal impact in the third quarter but should have a modest impact in 4Q19.
The company issued, and discussed in the conference call the progress of its new MBI-014 (granular) and its companion MB-015 (liquid) bioherbicides. This is a broad leaf systemic herbicides that is effective against many weeds that have become resistant to such products as glyphosphate (RoundUp). A patents has been issued on the basic microorganism. MBI-115 was found to be very effective against Palmer amaranth, a member of the pigweed family.
The necessary regulatory submissions are being filed for the two bioherbicides and product approval is possible in 2020 with marketing and sale in 2021.
We have adjusted our estimates to reflect the new level operation expenses and the increased share count.
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