Strong progress in commercialization,
production and product development
Algenist transaction and appointment of new CEO
affirm path toward broad commercialization of food, nutrition and
specialty ingredients business
TerraVia (NASDAQ: TVIA), a next-generation food, nutrition and
specialty ingredients company and pioneer in algae innovation,
announced today results for the second quarter ended June 30,
2016.
Results for the second quarter and first half of 2016 highlight
early progress in TerraVia’s refined focus on food, nutrition and
specialty ingredients. Recent developments include:
- Growth in the Company’s food platform
with Q2 2016 food sales up nearly three-fold versus the comparable
quarter in 2015. In addition, the Company’s first consumer branded
food product, Thrive® Culinary Algae Oil, saw a three-fold increase
in units sold in the quarter versus Q1 of this year.
- The recently announced agreement to
divest a majority interest in the Algenist® premium skin care brand
to Tengram Capital Partners, a leading global private equity firm
focused on investing in and building consumer brands, is expected
to close in the third quarter. The transaction further enables
TerraVia’s refined focus on foods while adding to the Company’s
capital base and preserving opportunities to benefit from
Algenist’s future success under Tengram’s leadership.
- Today’s announced appointment of Apu
Mody as CEO and a member of the Board of Directors, effective on or
about August 22nd. Current co-founder, Chairman and CEO Jonathan
Wolfson will continue to serve as CEO until that time, and will
then assume the role of Executive Chairman. The appointment of Mr.
Mody is part of the planned transition announced in March.
“I believe that the last five months since our announced
transition to TerraVia have been the most productive in the
company’s history,” said Jonathan Wolfson, CEO of TerraVia. “Our
second quarter progress in commercialization, production and
product development, combined with the Algenist transaction and
appointment of Apu Mody as our next CEO, puts us firmly on course
to becoming a leader in food and ingredients leveraging our
breakthrough algae platform. We are excited about the opportunities
we see to serve demand for healthier and more sustainable food and
ingredient alternatives that are better for people and the
planet.”
Financial Review
Financial results for the second quarter of 2016 reflect
progress in the Company’s transition to food, nutrition and
specialty ingredients, offset by the impacts of exiting industrial
businesses. Total revenue was $9.9 million compared with $11.7
million in the second quarter of 2015. Results include
approximately $5.5 million of revenue from Algenist in the quarter
versus $5.2 million in the second quarter of 2015. As reported on
August 3, 2016, TerraVia has agreed to sell a majority interest in
Algenist to Tengram Capital Partners. Excluding Algenist revenue,
adjusted revenue for the second quarter of 2016 was $4.4 million
versus $6.5 million in 2015, reflecting planned declines in
industrial revenue partially offset by strong growth in food
revenue.
GAAP net loss narrowed to $27.4 million for the second quarter
of 2016, from a net loss of $37.2 million in the prior year period
as the Company begins to benefit from reductions in cash operating
expenditures. On a non-GAAP basis, the net loss also declined to
$21.9 million for the second quarter of 2016, compared with net
loss of $31.7 million in the prior year quarter. A reconciliation
of GAAP to non-GAAP net loss is included in the financial tables
appended to this press release.
Tyler Painter, COO and CFO of TerraVia commented, “We are
pleased with our progress in streamlining operations and refocusing
on our core growth markets of food, nutrition and specialty
ingredients, but we have more to do. On the financial front, we are
focused on managing our resources and capital flexibility with a
focus on successful commercialization across our key product lines
including Thrive®, AlgaVia®, AlgaWise®, AlgaPrime™ and AlgaPur™.
The transaction for the Algenist Skincare brand is aligned with
this strategy and is another important step in strengthening our
balance sheet and reducing ongoing operating cash needs.”
Conference Call
TerraVia will hold a conference call for investors on August 8,
2016 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.terravia.com A
recording of the call will also be available by calling
404-537-3406; access code 47417201 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.terravia.com approximately two hours after
the call and will be available for up to thirty days.
About TerraVia
TerraVia is a next-generation food, nutrition and specialty
ingredients company that harnesses the power of algae, the mother
of all plants and earth's original superfood. With a portfolio of
breakthrough ingredients and manufacturing, the Company is well
positioned to help meet the growing need of consumer packaged goods
and established and emerging food manufacturers to improve the
nutritional profile of foods without sacrificing taste, and to
develop select consumer brands. The Company also manufacturers a
range of specialty personal care ingredients for key strategic
partners. Headquartered in South San Francisco, the Company's
mission is to create products that are truly better for people and
better for the planet. For additional information, please visit
TerraVia's website at www.terravia.com.
TerraVia, Algenist®, Thrive®, AlgaPrime™, AlgaVia®, AlgaWise®,
AlgaPur™, the TerraVia logo and other trademarks or service names
are the trademarks of TerraVia Holdings, 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
Net Loss” included in the tables to this press release.
This non-GAAP measure is provided to enhance investors’ overall
understanding of TerraVia’s current financial performance and
TerraVia’s prospects for the future. Specifically, TerraVia
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, TerraVia’s management uses
financial measures that do not include stock-based compensation
expense, restructuring expense, or special expenses such as
non-cash gains or losses related to derivative liabilities and
amortization of debt discount and issuance costs. In addition to
the corresponding GAAP measure, TerraVia’s management also uses the
foregoing non-GAAP measures in reviewing the financial results of
TerraVia. TerraVia excludes stock-based compensation expenses, debt
conversion 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 TerraVia, including statements that involve risks and
uncertainties concerning: its strategic, product, commercialization
and production plans; its transition of corporate strategy and
identity; changes in management and the timing thereof; meeting
commercialization and technology targets; the timing and ramp-up of
sales; successful product trials and market acceptance and adoption
of its products; the closing of a sale of TerraVia’s Algenist
business; the ability of the activities to be pursued in the future
by TerraVia and Tengram to create value; TerraVia’s future business
focus; and TerraVia’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 TerraVia, 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: TerraVia’s limited operating
history; its limited history in manufacturing and commercializing
products; its ability to successfully transition its corporate
strategy and identity; the commencement of employment of a new
chief executive officer and a successful transition to a new chief
executive officer; production management risks; implementation risk
in deploying new technologies; its limited experience in
constructing, ramping up and operating commercial manufacturing
facilities; its ability to successfully develop and commercialize
products; its ability to sell its products at a profit; delays
related to ramp-up and optimization of production facilities;
availability of consistent, reliable power and steam; its ability
to manage costs; its ability to enter into and maintain strategic
collaborations; successful product trials by its customers and
market acceptance and adoption of its products by end-users; its
ability to obtain requisite regulatory approvals; its access, on
favorable terms, to any required financing; its ability to meet the
closing conditions of the Algenist sale; and its ability to
successfully transition its corporate strategy and identity.
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 TerraVia.
In addition, please refer to the documents that TerraVia, Inc.
files with the Securities and Exchange Commission, including its
Annual Report on Form 10-K and Quarterly Reports 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. TerraVia is not under any duty to update any of the
information in this press release.
TERRAVIA HOLDINGS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS In thousands, except per share amounts
(UNAUDITED)
Three Months
Ended June 30, Six Months Ended June 30,
2016 2015
2016 2015
Revenues
Product revenues $ 6,355 $ 8,307 $ 13,627 $ 17,128 Research and
development programs 3,592 3,433
7,179 7,217 Total revenues
9,947
11,740 20,806 24,345
Costs and
operating expenses
Cost of product revenue 2,725 4,361 5,942 9,031 Research and
development 8,276 12,747 16,507 25,301 Sales, general and
administrative 16,000 20,981 32,768 42,249 Restructuring charges
49 (31 ) 1,239 393
Total costs and operating expenses
27,050 38,058
56,456 76,974 Loss from
operations
(17,103 ) (26,318 )
(35,650 ) (52,629 )
Other income
(expense)
Interest and other income (expense), net (3,192 ) (3,410 ) (6,367 )
(6,683 ) Debt conversion expense (1,785 ) - (1,785 ) - Loss from
equity method investments (5,358 ) (7,309 ) (10,230 ) (12,375 )
Change in fair value of derivative liabilities -
(134 ) 82 (149 ) Total other income
(expense), net
(10,335 ) (10,853 )
(18,300 ) (19,207 )
Net loss $ (27,438 )
$ (37,171 ) $ (53,950 )
$ (71,836 ) Net loss per share - basic and
diluted $ (0.33 ) $ (0.46
) $ (0.65 ) $ (0.90
) Weighted average number of common shares used in
net loss per share computation - basic and diluted
84,380 80,098 83,165 79,875
TERRAVIA HOLDINGS, INC. RECONCILIATION OF GAAP TO
NON-GAAP NET LOSS AND NET LOSS PER SHARE In thousands, except
per share amounts (UNAUDITED)
Three Months Ended June 30, Six Months Ended
June 30, 2016 2015
2016 2015 GAAP Net
loss $ (27,438 ) $ (37,171 ) $ (53,950 ) $ (71,836 ) Change in
fair value of derivative liabilities - 134 (82 ) 149 Operating
expenses includes costs as follows: Research and development 757
1,472 1,301 2,584 Sales, general and administrative 2,328
3,246 4,520 6,204
Total stock-based compensation expense 3,085 4,718 5,821 8,788
Restructuring charges 49 (31 ) 1,239 393 Other income (expense)
includes costs as follows: Amortization of debt discount and
issuance costs 641 633 1,307 1,256 Debt conversion expense
1,785 - 1,785 -
Non-GAAP Net loss $ (21,878 ) $
(31,717 ) $ (43,880 ) $
(61,250 ) GAAP Net loss per share - basic and
diluted $ (0.33 ) $ (0.46 ) $ (0.65 ) $ (0.90 ) Stock-based
compensation expense 0.04 0.05 0.07 0.11 Restructuring charges - -
0.01 - Amortization of debt discount and issuance costs 0.01 0.01
0.02 0.02 Debt conversion expense 0.02 -
0.02 -
Non-GAAP Net loss per
share - basic and diluted $ (0.26 )
$ (0.40 ) $ (0.53 )
$ (0.77 ) TERRAVIA HOLDINGS,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS In thousands
(UNAUDITED)
June 30, December
31, 2016 2015
Assets
Current
assets
Cash, cash equivalents and marketable securities $ 82,523 $ 97,975
Other current assets 21,373 20,969
Total current assets 103,896 118,944 Property,
plant and equipment - net 25,155 26,344 Investment in Solazyme
Bunge JV 38,913 35,910 Other assets 1,177 774
Total assets $ 169,141 $
181,972
Liabilities,
convertible preferred stock and stockholders'
deficit
Total current liabilities $ 21,810 $ 25,330 Other
liabilities 1,359 1,102 Long-term debt 197,828
202,015
Total liabilities 220,997
228,447 Convertible preferred
stock 26,732 - Total stockholders' deficit
(78,588 ) (46,475 )
Total liabilities, convertible preferred stock and stockholders'
deficit $ 169,141 $ 181,972
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TerraViaCorporate Communications:Genet
Garamendipress@terravia.comorJM Strategic Communications GroupJeff
Majtyka, 646-776-0886jeff@jmscgroup.comTaylor Krafchik,
646-776-0886taylor@jmscgroup.com