Marrone Bio Innovations, Inc. (“MBI” or the “Company”)
(NASDAQ:MBII), a leading provider of bio-based pest management and
plant health products for the agriculture, turf and ornamental and
water treatment markets, has provided its financial results for the
second quarter ended June 30, 2017.
Financial Highlights
- GAAP revenues grew 38% to $10.6 million in the first half of
2017, compared to $7.7 million in first half of 2016. GAAP revenues
increased 28% to $6.5 million in the second quarter of 2017,
compared to $5.0 million in the second quarter of 2016.
- Product shipments1 grew 51% to $12.1 million in the first half
of 2017, compared to $8.1 million in the first half of 2016.
Product shipments increased 36% to $5.7 million in the second
quarter 2017, compared to $4.2 million in the same year-ago
quarter.
- Gross margin increased to 41.3% in the first half of 2017,
compared to 30.2% in the first half of 2016. Gross margin increased
to 38.8% in the second quarter of 2017, compared to 38.2% in the
same quarter year-ago.
1 see notes at the end of this release for additional
information related to non-GAAP financial measures.
Management Commentary“We’ve continued our
steadfast progress in the first half and second quarter of 2017,
and despite unfavorable weather that we believe reduced the number
of expected sprays in some of our key markets—based upon historical
practices and use patterns by growers—we grew second quarter
shipments by over 36% to $5.7 million,” said Dr. Pam Marrone, CEO
of MBI. “This growth is particularly impressive given the
agricultural business for our competitors was down more than 15%,
on average, in the second quarter of 2017. We continue to enjoy
growth above industry average due to our portfolio approach to
product development and marketing, which focuses on addressing
unmet market needs and promotes significant opportunities for each
of our products.
“We have also continued our highly-targeted R&D focus on
near-term and existing products, which is paying off significantly.
A few recent highlights of our ongoing manufacturing improvement
efforts in R&D include a 4x improvement in
Grandevo® fermentation and an estimated 40% reduction to
downstream processing costs, as well as increasing the production
of Majestene®’s main nematicidal component, all of which are being
implemented as quickly as is feasible to improve product margins.
It is these sorts of breakthroughs that stand as a testament to our
innovation, and when combined with increasing sales and
continuously improving in-house manufacturing capabilities, we
expect to drive margin improvements in a meaningful way over the
long-term.”
Dr. Marrone concluded: “Our brands are achieving recognition in
the market place—both in U.S. and international markets—which has
translated to increased sales as we market our solutions to address
the unmet pest and disease challenges of our customers.”
Recent Operational Highlights
- Executed the successful launch of Haven™, an anti-transpirant
and sun protectant, which has experienced initial demand from
growers that is several times higher than MBI internal projections.
Haven has achieved improved quality and yields in targeted crops,
such as tree nuts and tree fruit, and has also been found to reduce
sun damage on berries, which is a new crop use for Haven.
- Became master distributor for Jet Harvest Solutions for the
organic Biofungicide/sanitizer, Jet-Ag®, a product that complements
our flagship fungicide, Regalia.
- Achieved excellent field trial results with all of our products
in key market regions in Latin America and Asia. Entered the
African market through the first commercial shipment of our
biofungicide, REYSANA™, to Morocco for use by growers on tomatoes,
grapes and cucurbits. Reysana contains the same ingredients as
Regalia® Biofungicide, which is now marketed and sold in more
than 10 countries worldwide.
- Expanded the approvals of MBI products on multiple state
listings for cannabis uses where those crops are authorized for
medicinal or adult use.
- Initiated new construction at MBI’s Marrone Michigan
Manufacturing facility to begin manufacturing Grandevo WDG, a
second-generation formulation, in the late fall, to will allow MBI
to meet anticipated demand for this newly introduced product.
- Completed, in conjunction with the U.S. Geological Survey,
state agencies and local conservation organizations, a U.S. EPA
Great Lakes Restoration Initiative-funded project that used
Zequanox® in an open water trial on Round Lake in Michigan.
The purpose of the study was to control invasive zebra and quagga
mussels that have disrupted and degraded ecosystems throughout the
United States, without harming native aquatic species or
recreational activities. Round Lake is a pilot for potential
large-scale habitat restoration efforts on the Great Lakes.
- Continued stellar efficacy trials of Stargus™ and
Amplitude™ (MBI-110) Biofungicides, slated for U.S. EPA
approval in the second half of 2017, against key crop
diseases. Launch plans have been developed and finalized,
with targeted placements with key growers scheduled in late
fall.
- Concluded a collaboration with strawberry industry leaders on
field evaluations and demonstrations of Ennoble™ (MBI-601), a
MBI-developed soil biofumigant that has gained U.S. EPA approval.
In field demonstrations, MBI-601 performed as well as a leading
toxic chemical fumigant.
- Progressed on development of MBI-014 (formerly 010), an organic
bioherbicide that is on target for an EPA submission in the fourth
quarter of 2017.
Conference Call and WebcastManagement will host
a conference call today, August 14, 2017 at 1:30 p.m. PDT (4:30
p.m. EDT) to discuss Marrone Bio Innovation’s second quarter 2017
financial results, provide a corporate update, and conclude with a
Q&A from participants. To participate, please use the following
information:
Q2 2017 Conference Call and WebcastDate:
Monday, August 14, 2017Time: 1:30 p.m. Pacific time (4:30 p.m.
Eastern time)U.S. Dial-in: 1-877-604-9668International Dial-in:
1-719-325-4749Conference ID: 6698757Webcast:
http://public.viavid.com/index.php?id=125013
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 September 14,
2017. 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 6698757. A webcast will also be available for 30 days on
the IR section of the Marrone Bio Innovations website or by
clicking here: MBII Q2 2017 Webcast.
Non-GAAP Financial MeasuresThe Company uses
product shipments, which is not defined by, or presented in
accordance with, generally accepted accounting principles (“GAAP”),
to evaluate various aspects of its business. Product shipments is a
non-GAAP financial measure and should be considered in addition to,
not as a substitute for, product revenues reported in accordance
with GAAP. Product shipments as used in this press release is
defined as product revenues, plus related party product revenues,
plus the incremental amount of deferred revenues accrued during the
applicable period from product shipments. This calculation
specifically excludes changes in deferred revenue related to
license revenues and customer deposits, and is intended to
approximate the total value of products sold and under contract for
sale in a given period. Product shipments, as defined by the
Company, may not be comparable to similarly titled measures used by
other companies. The Company’s management uses this non-GAAP
financial measure in order to have comparable results to analyze
sales performance from quarter to quarter. The Company has chosen
to provide this supplemental information regarding its sales in a
given period to investors to facilitate a meaningful evaluation of
actual operating results on a comparable basis with historical
results, including to track product adoption, and to assist
investors in their valuation of the Company. In future periods, the
calculation of product shipments may be different than in this
release.
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|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
June 30, 2017 |
|
June 30, 2016 |
Product
revenues |
|
$ |
6,418 |
|
|
$ |
4,957 |
|
|
|
$ |
10,514 |
|
$ |
7,534 |
Change
in deferred product revenue(a) |
|
|
(746 |
) |
|
|
(788 |
) |
|
|
|
1,620 |
|
|
521 |
Product
shipments |
|
$ |
5,672 |
|
|
$ |
4,169 |
|
|
|
$ |
12,134 |
|
$ |
8,055 |
|
|
|
|
|
|
|
|
|
|
(a) Change in deferred product revenue is defined as the
increase in the amount of deferred product revenues accrued during
the applicable period, less prior deferred product revenues
recognized during the applicable period, excluding the change in
deferred revenue associated with license fees and customer
deposits. For the three months ended June 30, 2017 and 2016,
deferred license revenues decreased $58,000 and $92,000,
respectively, and $116,000 and $184,000 for the six months ended
June 30, 2017 and 2016, respectively.
The use of product shipments has certain limitations. The
Company's presentation of this non-GAAP financial measure may be
different from the presentation used by other companies, and
therefore comparability may be limited. We compensate for these
limitations by providing the relevant disclosure of our product
revenues, related party revenues, deferred revenues and other items
both in our reconciliations to the historical GAAP financial
measures and in our consolidated financial statements, all of which
should be considered when evaluating our performance. Product
shipments are used in addition to and in conjunction with results
presented in accordance with GAAP, and should not be considered as
an alternative to product revenues, deferred revenues, total
revenues, operating income, or any other operating performance
measure prescribed by GAAP, nor should these measures be relied
upon to the exclusion of GAAP financial measures. Product shipments
reflects an additional way of viewing our operations that we
believe, when viewed with our GAAP results and the reconciliations
to the corresponding historical GAAP financial measures, provides a
more complete understanding of factors and trends affecting our
business than could be obtained absent this disclosure. Management
strongly encourages investors to review our financial information
in its entirety, including the attached unaudited condensed
consolidated financial statements, and not to rely on a single
financial measure.
About Marrone Bio Innovations Smart.
Natural. Solutions.Marrone Bio Innovations, Inc.
(NASDAQ:MBII) strives to lead the movement to a more sustainable
world through the discovery, development and promotion of
biological products for pest management and plant health. MBI’s
effective and environmentally responsible pest management solutions
help customers operate more sustainably while uniquely improving
plant health and increasing crop yields. MBI currently has six
commercially available products (Regalia®, Grandevo®, Venerate®,
Majestene®, Haven™ and Zequanox®) as well as eight product
candidates in various stages of the company’s rapid development
pipeline. MBI also distributes Bio-tam 2.0® for Isagro USA in the
western U.S. and Jet-Ag® for Jet Harvest in most regions of the
U.S.
Marrone Bio Innovations is dedicated to pioneering smart
biopesticide solutions that support a better tomorrow for both
farmers and consumers around the globe. For more information,
please visit www.marronebio.com.
Marrone Bio Innovations Forward Looking
StatementsThis press release contains forward-looking
statements that 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 MBI’s views as of any subsequent date. Examples
of such statements include statements regarding sales of the
Company’s products, the potential benefits of the Company’s
products, MBI’s efforts with respect to marketing in U.S. and
international markets, the completion and timing of new
construction at the Company’s manufacturing facility and
anticipated product launches and EPA submissions. 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
consumer, regulatory and other factors affecting demand for the
Company’s products, any difficulty in marketing MBI’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 decisions by
regulatory agencies and other relevant third parties, and any
inability to raise capital to fund operations and service the
Company’s debt. Additional information that could lead to
material changes in MBI’s performance is contained in its filings
with the SEC. MBI 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.
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|
MARRONE BIO INNOVATIONS, INC. |
|
Condensed Consolidated Balance
Sheets |
|
(In Thousands, Except Par Value) |
|
|
|
|
|
|
|
|
|
JUNE 30, 2017 |
|
DECEMBER 31,
2016 |
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
10,242 |
|
|
$ |
9,609 |
|
|
Restricted cash, current portion |
|
|
1,444 |
|
|
|
1,444 |
|
|
Accounts
receivable |
|
|
5,794 |
|
|
|
3,592 |
|
|
Inventories, net |
|
|
8,364 |
|
|
|
8,482 |
|
|
Deferred
cost of product revenues |
|
|
3,410 |
|
|
|
2,688 |
|
|
Prepaid
expenses and other current assets |
|
|
387 |
|
|
|
1,060 |
|
|
Total
current assets |
|
|
29,641 |
|
|
|
26,875 |
|
|
Property,
plant and equipment, net |
|
|
16,476 |
|
|
|
17,343 |
|
|
Restricted cash, less current portion |
|
|
1,560 |
|
|
|
1,560 |
|
|
Other
assets |
|
|
140 |
|
|
|
205 |
|
|
Total
assets |
|
$ |
47,817 |
|
|
$ |
45,983 |
|
|
Liabilities and stockholders' deficit |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
|
$ |
3,197 |
|
|
$ |
1,385 |
|
|
Accrued
liabilities |
|
|
6,730 |
|
|
|
5,508 |
|
|
Accrued
interest due to related parties |
|
|
1,596 |
|
|
|
1,618 |
|
|
Deferred
revenue, current portion |
|
|
6,755 |
|
|
|
5,647 |
|
|
Capital
lease obligations, current portion |
|
|
487 |
|
|
|
839 |
|
|
Debt,
current portion |
|
|
2,954 |
|
|
|
252 |
|
|
Total
current liabilities |
|
|
21,719 |
|
|
|
15,249 |
|
|
Deferred
revenue, less current portion |
|
|
2,186 |
|
|
|
1,787 |
|
|
Debt,
less current portion |
|
|
21,029 |
|
|
|
21,083 |
|
|
Debt due
to related parties |
|
|
37,240 |
|
|
|
36,667 |
|
|
Other
liabilities |
|
|
1,293 |
|
|
|
1,381 |
|
|
Total
liabilities |
|
|
83,467 |
|
|
|
76,167 |
|
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
Stockholders' deficit: |
|
|
|
|
|
Preferred
stock: $0.00001 par value; 20,000 shares authorized and no shares
issued or outstanding at June 30, 2017 and December 31, 2016 |
|
|
— |
|
|
|
— |
|
|
Common
stock: $0.00001 par value; 250,000 shares authorized, 31,351 shares
issued and outstanding as of June 30, 2017 and 24,661 as
of December 31, 2016 |
|
|
— |
|
|
|
— |
|
|
Additional paid in capital |
|
|
214,011 |
|
|
|
204,463 |
|
|
Accumulated deficit |
|
|
(249,661 |
) |
|
|
(234,647 |
) |
|
Total
stockholders' deficit |
|
|
(35,650 |
) |
|
|
(30,184 |
) |
|
Total
liabilities and stockholders' deficit |
|
$ |
47,817 |
|
|
$ |
45,983 |
|
|
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, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
Product |
|
$ |
6,418 |
|
|
$ |
4,957 |
|
|
$ |
10,514 |
|
|
$ |
7,534 |
|
License |
|
|
58 |
|
|
|
92 |
|
|
|
116 |
|
|
|
184 |
|
Total
revenues |
|
|
6,476 |
|
|
|
5,049 |
|
|
|
10,630 |
|
|
|
7,718 |
|
Cost of
product revenues |
|
|
3,966 |
|
|
|
3,118 |
|
|
|
6,245 |
|
|
|
5,387 |
|
Gross
profit |
|
|
2,510 |
|
|
|
1,931 |
|
|
|
4,385 |
|
|
|
2,331 |
|
Operating Expenses: |
|
|
|
|
|
|
|
|
Research,
development and patent |
|
|
2,853 |
|
|
|
2,313 |
|
|
|
5,297 |
|
|
|
4,635 |
|
Selling,
general and administrative |
|
|
5,073 |
|
|
|
4,512 |
|
|
|
10,416 |
|
|
|
10,042 |
|
Total
operating expenses |
|
|
7,926 |
|
|
|
6,825 |
|
|
|
15,713 |
|
|
|
14,677 |
|
Loss
from operations |
|
|
(5,416 |
) |
|
|
(4,894 |
) |
|
|
(11,328 |
) |
|
|
(12,346 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest
income |
|
|
— |
|
|
|
10 |
|
|
|
1 |
|
|
|
25 |
|
Interest
expense |
|
|
(869 |
) |
|
|
(759 |
) |
|
|
(1,505 |
) |
|
|
(1,509 |
) |
Interest
expense to related parties |
|
|
(1,085 |
) |
|
|
(1,083 |
) |
|
|
(2,159 |
) |
|
|
(2,166 |
) |
Other
income (expense), net |
|
|
(15 |
) |
|
|
(57 |
) |
|
|
(23 |
) |
|
|
(63 |
) |
Total
other expense, net |
|
|
(1,969 |
) |
|
|
(1,889 |
) |
|
|
(3,686 |
) |
|
|
(3,713 |
) |
Loss
before income taxes |
|
|
(7,385 |
) |
|
|
(6,783 |
) |
|
|
(15,014 |
) |
|
|
(16,059 |
) |
Income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net
loss |
|
$ |
(7,385 |
) |
|
$ |
(6,783 |
) |
|
$ |
(15,014 |
) |
|
$ |
(16,059 |
) |
Basic
and diluted net loss per common share |
|
$ |
(0.25 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.65 |
) |
Weighted-average shares
outstanding used in computing net loss per common share |
|
|
29,401 |
|
|
|
24,598 |
|
|
|
27,070 |
|
|
|
24,584 |
|
MARRONE BIO INNOVATIONS, INC. |
Condensed Consolidated Statements of Cash
Flows |
(In Thousands, Except Par Value) |
(Unaudited) |
|
|
|
|
|
|
|
SIX MONTHS ENDED JUNE
30, |
|
|
|
2017 |
|
|
|
2016 |
|
Cash
flows from operating activities |
|
|
|
|
Net
loss |
|
$ |
(15,014 |
) |
|
$ |
(16,059 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
1,034 |
|
|
|
1,150 |
|
Loss
(gain) on disposal of equipment |
|
|
(4 |
) |
|
|
58 |
|
Share-based compensation |
|
|
1,169 |
|
|
|
1,327 |
|
Non-cash
interest expense |
|
|
730 |
|
|
|
657 |
|
Net
changes in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
(2,202 |
) |
|
|
(2,196 |
) |
Inventories |
|
|
118 |
|
|
|
1,068 |
|
Prepaid
expenses and other assets |
|
|
738 |
|
|
|
403 |
|
Deferred
cost of product revenues |
|
|
(722 |
) |
|
|
(430 |
) |
Accounts
payable |
|
|
1,595 |
|
|
|
196 |
|
Accrued
and other liabilities |
|
|
1,242 |
|
|
|
(1,419 |
) |
Accrued
interest due to related parties |
|
|
(22 |
) |
|
|
425 |
|
Deferred
revenue |
|
|
1,507 |
|
|
|
1,449 |
|
Deferred
revenue from related parties |
|
|
— |
|
|
|
(168 |
) |
Net cash
used in operating activities |
|
|
(9,831 |
) |
|
|
(13,539 |
) |
Cash
flows from investing activities |
|
|
|
|
Purchases of property, plant and equipment |
|
|
(160 |
) |
|
|
(93 |
) |
Net cash
used in investing activities |
|
|
(160 |
) |
|
|
(93 |
) |
Cash
flows from financing activities |
|
|
|
|
Proceeds
from issuance of common stock, net of offering costs |
|
|
8,223 |
|
|
|
— |
|
Repayment of debt |
|
|
(134 |
) |
|
|
(129 |
) |
Proceeds
from secured borrowings |
|
|
6,151 |
|
|
|
— |
|
Reductions in secured borrowings |
|
|
(3,281 |
) |
|
|
— |
|
Repayment of capital leases |
|
|
(352 |
) |
|
|
(346 |
) |
Change
in restricted cash |
|
|
— |
|
|
|
15,412 |
|
Exercise
of stock options |
|
|
17 |
|
|
|
16 |
|
Net cash
provided by financing activities |
|
|
10,624 |
|
|
|
14,953 |
|
Net
increase in cash and cash equivalents |
|
|
633 |
|
|
|
1,321 |
|
Cash and
cash equivalents, beginning of period |
|
|
9,609 |
|
|
|
19,838 |
|
Cash and
cash equivalents, end of period |
|
$ |
10,242 |
|
|
$ |
21,159 |
|
Supplemental disclosure of cash flow information |
|
|
|
|
Cash paid
for interest |
|
$ |
2,938 |
|
|
$ |
2,595 |
|
Supplemental disclosure of non-cash investing and financing
activities |
|
|
|
|
Property, plant and equipment included in accounts payable and
accrued liabilities |
|
$ |
7 |
|
|
$ |
24 |
|
Financing costs in accounts payable |
|
$ |
215 |
|
|
$ |
— |
|
Equipment acquired under capital leases |
|
$ |
— |
|
|
$ |
1,586 |
|
Marrone Bio Innovations Contacts:
Pam Marrone, CEO and Founder
Julie Versman, Sr. Director of International Business
Telephone: +1 (530) 750-2800
Email: Info@marronebio.com
Investor Relations:
Greg Falesnik
Managing Director
MZ Group – MZ North America
Main: 949-385-6449
MBII@mzgroup.us
www.mzgroup.us
Marrone Bio Innovations (NASDAQ:MBII)
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Marrone Bio Innovations (NASDAQ:MBII)
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