Solazyme, Inc. (NASDAQ:SZYM), a renewable oil and bioproducts
company, announced today results for the second quarter ended June
30, 2014.
“Solazyme made important progress in the second quarter on its
commercialization path,” said Jonathan Wolfson, CEO of Solazyme.
“We are now manufacturing product in three facilities on two
continents. We are shipping multiple oils and have increased
production volumes out of our Clinton/Galva, Iowa operations, and
we have begun production and shipment from the Solazyme Bunge
Renewable Oils plant in Brazil. We are also building commercial
momentum, including an expanded multi-year agreement with AkzoNobel
involving funded joint development and targeting up to 10,000 MT of
oil per year. In food ingredients, we launched our AlgaVia™ brand
and won the highly prestigious IFT Food Expo innovation award. We
have more work ahead as we progress on our production ramps and
continue to build our commercial pipeline, but I believe we have
the products, the plants, the capital and the team to execute
moving forward.”
Financial Results
Total revenue for the second quarter of 2014 was $15.9 million
compared with $11.2 million in the second quarter of 2013, an
increase of 43%. Second quarter GAAP net loss was $42.9 million,
which compares with net loss of $25.8 million in the prior year
period. On a non-GAAP basis, the net loss was $32.9 million for the
second quarter of 2014, compared with net loss of $17.4 million in
the prior year quarter. A reconciliation of GAAP to non-GAAP
results is included below.
“We are continuing to drive fiscal discipline and balance sheet
management as we ramp our capacity and focus on delivering products
to our customers,” said Tyler Painter, CFO and COO of Solazyme. “We
achieved a number of milestones this quarter and continue to
strengthen our sales and market application efforts across our
targeted markets.”
Recent Business Highlights
- Commercial Production Begins at
Moema Facility. In late May 2014, Solazyme’s joint venture with
Bunge Global Innovation LLC successfully produced its first
commercially saleable products at the Solazyme Bunge Renewable Oils
plant in Brazil and has subsequently begun shipping. Both oil and
encapsulated lubricant, Encapso™, products have been manufactured
using full-scale production lines that include the 625,000L
fermentation tanks.
- Clinton/Galva production
progressing. Solazyme shipped additional commercial products,
expanded its customer base and increased total output by >40%
from Q1 2014 to Q2 2014.
- AkzoNobel expanded multi-year
agreement with supply terms targeting 10,000 MT annually and funded
joint-development. The expansion provides for funded product
development, as well as key terms for a multi-year supply agreement
targeting annual supply of up to 10,000 MT of renewable Tailored™
algal oils. The parties expect that Solazyme’s algal oil for the
new proprietary surfactant contemplated under the joint development
agreement and supply terms would be able to replace both petroleum-
and palm oil-derived chemicals.
- AlgaVia™ brand launched at
the International Food Technology (IFT) Food Expo, Solazyme’s High
Stability High Oleic oil won a prestigious 2014 IFT Innovation
Award, and Solazyme added key food ingredient customer, and
distribution agreements. Solazyme secured an important new
AlgaVia™ Whole Algal Flour customer, and also signed agreements
with two of the top North American food ingredient distributors to
meet demand in the US and Mexico.
- Signed agreement with a leading
North American oleochemicals company to commercialize
microalgae-derived oleic acids. The agreement is to
commercialize kosher certified high oleic algal oils for the oleic
fatty acid market. The SoleumTM base oils offer performance, safety
and sustainability.
Conference Call
Solazyme will hold a conference call for investors on July 30,
2014 at 1:30 p.m. PT (4:30 p.m. ET). Investors may access the call
by dialing 973-409-9250. A live webcast of the call will be
available from the Investor Relations section of www.solazyme.com.
A recording of the call will also be available by calling
404-537-3406; access code 69697417 beginning approximately two
hours after the call, and will be available for one week. A webcast
replay from today’s call will also be available from the Investor
Relations section of www.solazyme.com approximately two hours after
the call and will be available for up to thirty days.
About Solazyme, Inc.
Solazyme, Inc. (SZYM) is a renewable oil and bioproducts company
that transforms a range of low-cost plant-based sugars into
high-value oils. Headquartered in South San Francisco, Solazyme’s
renewable products can replace or enhance oils derived from the
world’s three existing sources – petroleum, plants and animal fats.
Initially, Solazyme is focused on commercializing its products into
four target markets: (1) fuels and chemicals, (2) nutrition, (3)
oil field services and (4) consumer products.
Solazyme®, Encapso™, and the Solazyme logo are trademarks of
Solazyme, Inc.
Non-GAAP Financial Measures
This press release includes the following financial measure
defined as a “non-GAAP financial measure” by the Securities and
Exchange Commission: non-GAAP net loss. This measure may be
different from non-GAAP financial measures used by other companies.
The presentation of this financial information, which is not
prepared under any comprehensive set of accounting rules or
principles, is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with generally accepted accounting principles. For a
reconciliation of this non-GAAP financial measure to the nearest
comparable GAAP measure, see “Reconciliation of GAAP to Non-GAAP
Basic Net-Loss Per Share” included in the tables to this press
release.
This non-GAAP measure is provided to enhance investors’ overall
understanding of Solazyme’s current financial performance and
Solazyme’s prospects for the future. Specifically, Solazyme
believes the non-GAAP measure provides useful information to both
management and investors by excluding certain expenses that may not
be indicative of its core operating results and business
outlook.
For its internal budgeting process, Solazyme’s management uses
financial measures that do not include stock-based compensation
expense or special expenses such as non-cash gains or losses due to
warrant revaluations. In addition to the corresponding GAAP
measures, Solazyme’s management also uses the foregoing non-GAAP
measure in reviewing the financial results of Solazyme. Solazyme
excludes stock-based compensation expenses and special non-cash
charges from its non-GAAP measures primarily because they are
non-cash expenses that management does not believe are reflective
of ongoing operating results.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 about Solazyme, including statements that involve risks and
uncertainties concerning: its commercialization and production
plans; the commissioning of equipment and the ramping up of
facilities; meeting commercialization and technology targets;
successful product trials and market acceptance of its products;
and Solazyme’s ability to maintain its relationships with its
partners. When used in this press release, the words “will”,
“expects”, “intends” and other similar expressions and any other
statements that are not historical facts are intended to identify
those assertions as forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Any such
statement may be influenced by a variety of factors, many of which
are beyond the control of Solazyme, that could cause actual
outcomes and results to be materially different from those
projected, described, expressed or implied in this press release
due to a number of risks and uncertainties. Potential risks and
uncertainties include, among others: Solazyme’s limited operating
history; its limited history in commercializing products;
implementation risk in deploying new technologies; its limited
experience in constructing, ramping up and operating commercial
manufacturing facilities; its ability to sell its products at a
profit; delays related to construction, start-up and ramp-up of
production facilities; its ability to manage operational costs at
production facilities; its ability to enter into and maintain
strategic collaborations; successful product trials by its
customers and market acceptance of its products by end-users; its
ability to obtain requisite regulatory approvals; and its access,
on favorable terms, to any required financing. Accordingly, no
assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what impact they will have on the results of operations
or financial condition of Solazyme.
In addition, please refer to the documents that Solazyme, Inc.
files with the Securities and Exchange Commission, including its
Quarterly Report on Form 10-Q, as updated from time to time, for a
discussion of these and other risks. You are cautioned not to place
undue reliance on forward-looking statements, which speak only as
of the date of this press release. Solazyme is not under any duty
to update any of the information in this press release.
SOLAZYME, 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
Research and development programs $ 6,917 $ 6,260 $ 11,960
$ 8,940 Product revenues 9,022 4,915
16,370 8,915 Total revenues
15,939 11,175 28,330 17,855
Costs and
operating expenses (1)
Cost of product revenue 4,470 1,496 7,860 2,950 Research and
development 22,064 14,915 42,899 28,635 Sales, general and
administrative 21,637 15,436
42,244 30,302 Total costs and operating
expenses
48,171 31,847 93,003 61,887
Loss from operations
(32,232
) (20,672 ) (64,673 )
(44,032 )
Other income
(expense) (2)
Interest and other income (expense), net (4,662 ) (1,439 ) (5,774 )
(2,962 ) Loss from equity method investments (4,278 ) (2,222 )
(8,112 ) (3,181 ) (Loss) gain from change in fair value of warrant
liability - (679 ) 688 (625 )
(Loss) gain from change in fair value of
derivativeliabilities
(1,745 ) (813 ) 273 (1,550 )
Total other income (expense)
(10,685 ) (5,153
) (12,925 ) (8,318 )
Net loss $ (42,917
) $ (25,825 ) $ (77,598
) $ (52,350 ) Net loss per share,
basic and diluted $ (0.56 ) $
(0.42 ) $ (1.07 ) $
(0.85 )
Weighted average number of common
shares used inloss per share computation, basic and
diluted
75,963 61,958 72,607 61,751
SOLAZYME, INC. RECONCILIATION OF GAAP TO NON-GAAP
BASIC NET LOSS PER SHARE In thousands, except per share amounts
(UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2014 2013 2014 2013
Net loss $ (42,917 ) $ (25,825 ) $ (77,598 ) $ (52,350 )
Loss (gain) from change in fair value of warrant liability - 679
(688 ) 625 Loss (gain) from change in fair value of derivative
liabilities 1,745 813 (273 ) 1,550
(1) Operating expenses include stock-based
compensationexpense as follows:
Research and development 1,910 1,478 3,730 2,567 Sales, general and
administrative 3,886 3,738 8,675
6,654 Total stock-based compensation expense
5,796 5,216 12,405 9,221 (2) Other income (expense) includes costs
as follows: Amortization of debt discount and issuance costs 736
410 986 745 Debt conversion expense 1,766 - 1,766 - Dissolution of
the Solazyme Roquette JV - 1,347
- 1,347
Net loss (non-GAAP) $
(32,874 ) $ (17,360 ) $
(63,402 ) $ (38,862 )
Basic and diluted loss per share (GAAP) $ (0.56 ) $ (0.42 ) $ (1.07
) $ (0.85 ) Loss (gain) from change in fair value of warrant
liability - 0.01 (0.01 ) 0.01
Loss (gain) loss from change in fair value
of derivativeliabilities
0.02 0.02 - 0.03 Stock-based compensation expense 0.08 0.08 0.17
0.15 Amortization of debt discount and issuance costs 0.01 0.01
0.01 0.01 Debt conversion expense 0.02 - 0.03 - Dissolution of the
Solazyme Roquette JV - 0.02 -
0.02
Net loss per share (non-GAAP)
$ (0.43 ) $ (0.28 )
$ (0.87 ) $ (0.63 )
SOLAZYME, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS In thousands (UNAUDITED)
June
30, December 31, 2014 2013
Assets
Current
assets
Cash, cash equivalents and marketable securities $ 285,166 $
167,521 Other current assets 35,610 24,296
Total
current assets 320,776 191,817 Property, plant
and equipment - net 38,715 40,089 Other assets 44,281
26,799
Total assets $ 403,772 $
258,705
Liabilities and
stockholders' equity
Current
liabilities
Current portion of long-term debt $ 38 $ 65 Other current
liabilities 30,438 25,229
Total current
liabilities 30,476 25,294 Other liabilities 818
1,006 Long-term debt 206,741 93,457
Total
liabilities 238,035 119,757
Total stockholders' equity 165,737
138,948 Total liabilities and stockholders' equity
$ 403,772 $ 258,705
Solazyme, Inc.Corporate Communications:Genet
Garamendipress@solazyme.comOrJeff MajtykaBrad EdwardsBrainerd
Communicators,
Inc.212-986-6667majtyka@braincomm.comedwards@braincomm.com