Year-Over-Year Revenues Increase 29% to
Third Quarter Record of $5.4 Million; Gross Margins Expand to
Record 48.3%; Operating Expenses Decrease by 19% to $6.8
Million
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 third
quarter ended September 30, 2018.
Management Commentary“I am
pleased to announce our strong third quarter financial results and
continued operational execution throughout our business,” said Dr.
Pam Marrone, Founder and CEO of Marrone Bio Innovations. “I am
excited about what I am seeing regarding the market’s acceptance of
biologicals in integrated programs with large growers. We continued
to strengthen our commercial team through the addition of key
hires, which when paired with customer education initiatives aimed
at the integration of our brands into traditional programs while
increasing our share in the organic market, we expect to drive
continued growth as we move into 2019.
“On the financial front, we grew revenue 29%
over last year to a third quarter record of $5.4 million, which is
notable as the third quarter is traditionally one of our slowest
times of year. In addition, our gross margins improved to a record
48.3%, while further trimming operating expenses 19% to $6.8
million. As a result of all of these factors, our cash usage from
operations was the lowest in our history as a public company.
“On the technology front, we continue to be
recognized throughout the industry for innovation. Venerate was
recently named the Best New Biological Product at the prestigious
Agrow Awards 2018, while we were awarded the renowned 2018 Bernard
Blum Award for a Novel Biocontrol Solution by the International
Biocontrol Manufacturers Association. When one considers our
history of product introductions, as well as our recent EPA
submission of our novel bioherbicide, MBI-014, and what we have in
our pipeline for the near future, I believe we will continue to
lead the integration of biologicals within the agricultural
industry.
“We continue to see encouraging trends
throughout our business, particularly in our three core areas of
focus: growing revenues, increasing gross margins over the long
term and diligently managing operating expenses. I believe we are
well positioned to continue to execute upon our business plan,
creating long-term value for our shareholders,” concluded Marrone.
Q3 2018 Financial Summary
- Revenues grew to $5.4 million in the third quarter of 2018,
compared to $4.2 million in the third quarter of 2017.
- Due to the adoption of the ASC 606 accounting standard (Revenue
From Contracts With Customers), 2018 over 2017 reported revenues
are not strictly an apples to apples comparison.
- Gross margins in the third quarter of 2018 increased
significantly to 48.3%, compared to 40.9% in the third quarter of
2017.
- Operating expenses in the third quarter of 2018 declined 19% to
$6.8 million, compared to $8.3 million in the third quarter of
2017.
- Net loss in the third quarter of 2018 improved significantly to
$4.4 million, compared to a net loss of $8.5 million in the third
quarter of 2017.
- Cash and cash equivalents, including restricted cash, totaled
$22.1 million on September 30, 2018 compared to $24.9 million on
June 30, 2018, reflecting cash usage of $2.8 million in the third
quarter of 2018.
Recent Operational
Highlights
- Submission of MBI-014 bioherbicide to the EPA.
- Expanded MBI’s international distribution network through new
deals with Hop Tri Investment Corporation in Vietnam and Cambodia
and with AMC/Agrimatco in Turkey.
- Strengthened the sales team through the appointment of Barner
Jones as the Director of National Sales and Account Management and
Jenna Combs as the Sales Manager of the Northern California
Territory.
- Awarded the 2018 Bernard Blum Award for a Novel Biocontrol
Solution by the International Biocontrol Manufacturers Association
in Basel, Switzerland.
- Venerate named Best New Biological Product at Agrow Awards 2018
in London, United Kingdom.
- Keith McGovern and Stuart Woolf, two major leaders in the
agricultural industry, joined the Board of Directors; Formed
Advisory Council to advise the Board and management’s strategic
vision for the Company.
- Launched a series of grower education initiatives aimed at
increasing awareness among both conventional and organic farmers
and the food channel.
- Among the many positive trial data around the globe, received
positive results with Grandevo and Venerate on almonds, walnuts,
tomatoes, peppers and cotton in California as well as on cannabis
in Canada, with Regalia in Brazil, Panama, Argentina and Tunisia,
Majestene in Europe and with Stargus in California and Canada.
Conference Call and
WebcastManagement will host an investor conference call
today at 1:30 p.m. PST (4:30 p.m. EST) to discuss Marrone Bio
Innovations’ third quarter 2018 financial results, provide a
corporate update, and conclude with a Q&A from participants. To
participate, please use the following information:
Q3 2018 Conference Call and WebcastDate:
Tuesday, November 13, 2018Time: 1:30 p.m. Pacific time (4:30 p.m.
Eastern time)U.S. Dial-in: 1-888-254-3590International Dial-in:
1-323-994-2093Conference ID: 5479635Webcast:
http://public.viavid.com/index.php?id=131910
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
December 13, 2018. 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 5479635. A webcast will also be available for
30 days on the IR section of the Marrone Bio Innovations website or
by clicking here: MBII Q3 2018 Webcast.
About Marrone Bio Innovations
Marrone Bio Innovations, Inc. (NASDAQ: MBII)
strives to lead the movement to more sustainable world through the
discovery, development and sale of innovative biological products
for crop protection, plant health and waterway systems treatment.
MBI has screened over 18,000 microorganisms and 350 plant extracts,
leveraging its in-depth knowledge of plant and soil
microbiomes enhanced by advanced molecular
technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its superior natural
product chemistry, MBI’s currently available commercial products
are Regalia®, Grandevo®, Venerate®, Majestene®, Haven® Stargus® and
Amplitude™, Zelto® and Zequanox®.
Marrone Bio Innovations is dedicated to
pioneering smart biopesticide solutions that support a better
tomorrow for both farmers, turf managers and consumers around the
globe. For more information, please visit 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.
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 the strength of the
Company’s position for executing on its business plan and
increasing shareholder value, 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 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. 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.
Marrone Bio Innovations Contacts:Pam Marrone,
CEO and FounderJim Boyd, CFOTelephone: +1 (530) 750-2800Email:
Info@marronebio.com
Investor Relations:Greg FalesnikManaging
DirectorMZ Group – MZ North AmericaMain: 949-385-6449
MBII@mzgroup.us
|
MARRONE BIO INNOVATIONS,
INC.Condensed Consolidated Balance
Sheets(In Thousands, Except Par Value) |
|
|
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31, 2017 |
|
|
(Unaudited) |
|
(Audited) |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
20,524 |
|
|
|
$ |
786 |
|
Restricted cash, current portion |
|
|
46 |
|
|
|
|
487 |
|
Accounts
receivable |
|
|
3,072 |
|
|
|
|
3,785 |
|
Inventories, net |
|
|
8,843 |
|
|
|
|
9,827 |
|
Deferred
cost of product revenues |
|
|
1 |
|
|
|
|
3,063 |
|
Prepaid
expenses and other current assets |
|
|
1,292 |
|
|
|
|
1,170 |
|
Total current
assets |
|
|
33,778 |
|
|
|
|
19,118 |
|
Property,
plant and equipment, net |
|
|
14,870 |
|
|
|
|
16,016 |
|
Restricted cash, less current portion |
|
|
1,560 |
|
|
|
|
1,560 |
|
Other
assets |
|
|
333 |
|
|
|
|
219 |
|
Total assets |
|
$ |
50,541 |
|
|
|
$ |
36,913 |
|
Liabilities and
stockholders’ equity (deficit) |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,862 |
|
|
|
$ |
3,800 |
|
Accrued
liabilities |
|
|
5,933 |
|
|
|
|
8,189 |
|
Accrued
interest due to related parties |
|
|
— |
|
|
|
|
1,622 |
|
Deferred
revenue, current portion |
|
|
356 |
|
|
|
|
6,193 |
|
Derivative liability |
|
|
— |
|
|
|
|
674 |
|
Debt,
current portion |
|
|
1,737 |
|
|
|
|
1,524 |
|
Total current
liabilities |
|
|
9,888 |
|
|
|
|
22,002 |
|
Deferred
revenue, less current portion |
|
|
2,632 |
|
|
|
|
2,046 |
|
Debt,
less current portion |
|
|
11,882 |
|
|
|
|
24,407 |
|
Debt due
to related parties |
|
|
7,300 |
|
|
|
|
37,822 |
|
Other
liabilities |
|
|
794 |
|
|
|
|
1,287 |
|
Total liabilities |
|
|
32,496 |
|
|
|
|
87,564 |
|
Commitments and
contingencies (Note 10) |
|
|
|
|
|
|
|
Stockholders’ equity
(deficit): |
|
|
|
|
|
|
|
Preferred stock:
$0.00001 par value; 20,000 shares authorized and no
shares issued or outstanding at September 30,
2018 and December 31, 2017 |
|
|
— |
|
|
|
|
— |
|
Common stock: $0.00001
par value; 250,000 shares authorized, 110,668 and
31,351 shares issued and outstanding as of September
30, 2018 and December 31, 2017,
respectively |
|
|
1 |
|
|
|
|
— |
|
Additional paid in capital |
|
|
293,506 |
|
|
|
|
214,921 |
|
Accumulated deficit |
|
|
(275,462 |
) |
|
|
|
(265,572 |
) |
Total stockholders’
equity (deficit) |
|
|
18,045 |
|
|
|
|
(50,651 |
) |
Total liabilities and
stockholders’ equity (deficit) |
|
$ |
50,541 |
|
|
|
$ |
36,913 |
|
|
MARRONE BIO INNOVATIONS,
INC.Condensed Consolidated Statements of
Operations(In Thousands, Except Per Share
Amounts)(Unaudited) |
|
|
|
THREE MONTHS ENDED SEPTEMBER 30, |
|
|
NINE MONTHS ENDED SEPTEMBER 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
5,310 |
|
|
$ |
4,161 |
|
|
|
15,171 |
|
|
$ |
14,675 |
|
License |
|
|
115 |
|
|
|
58 |
|
|
|
330 |
|
|
|
174 |
|
Total revenues |
|
|
5,425 |
|
|
|
4,219 |
|
|
|
15,501 |
|
|
|
14,849 |
|
Cost of
product revenues |
|
|
2,803 |
|
|
|
2,492 |
|
|
|
8,075 |
|
|
|
8,737 |
|
Gross profit |
|
|
2,622 |
|
|
|
1,727 |
|
|
|
7,426 |
|
|
|
6,112 |
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research,
development and patent |
|
|
2,658 |
|
|
|
3,152 |
|
|
|
7,685 |
|
|
|
8,449 |
|
Selling,
general and administrative |
|
|
4,117 |
|
|
|
5,174 |
|
|
|
13,861 |
|
|
|
15,590 |
|
Total operating
expenses |
|
|
6,775 |
|
|
|
8,326 |
|
|
|
21,546 |
|
|
|
24,039 |
|
Loss from
operations |
|
|
(4,153 |
) |
|
|
(6,599 |
) |
|
|
(14,120 |
) |
|
|
(17,927 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(300 |
) |
|
|
(804 |
) |
|
|
(1,759 |
) |
|
|
(2,308 |
) |
Interest
expense, related parties |
|
|
— |
|
|
|
(1,098 |
) |
|
|
(451 |
) |
|
|
(3,257 |
) |
Change in
fair value of financial instruments |
|
|
— |
|
|
|
— |
|
|
|
(5,177 |
) |
|
|
— |
|
Loss on
extinguishment of debt, net |
|
|
— |
|
|
|
— |
|
|
|
(303 |
) |
|
|
— |
|
Gain on
extinguishment of debt, related party |
|
|
— |
|
|
|
— |
|
|
|
9,622 |
|
|
|
— |
|
Other
income (expense), net |
|
|
14 |
|
|
|
(29 |
) |
|
|
(13 |
) |
|
|
(52 |
) |
Total other income
(expense), net |
|
|
(286 |
) |
|
|
(1,931 |
) |
|
|
1,919 |
|
|
|
(5,617 |
) |
Net loss |
|
$ |
(4,439 |
) |
|
$ |
(8,530 |
) |
|
$ |
(12,201 |
) |
|
$ |
(23,544 |
) |
Basic and diluted net
loss per common share: |
|
$ |
(0.04 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.83 |
) |
Weighted-average shares
outstanding used in computing basic and diluted net loss per common
share: |
|
|
110,568 |
|
|
|
31,351 |
|
|
|
98,067 |
|
|
|
28,507 |
|
|
MARRONE BIO INNOVATIONS,
INC.Condensed Consolidated Statements of Cash
Flows(In Thousands) |
|
|
|
NINE MONTHS ENDED SEPTEMBER 30, |
|
|
2018 |
|
|
2017 |
Cash flows from
operating activities |
|
|
|
|
|
|
|
Net loss |
|
$ |
(12,201 |
) |
|
$ |
(23,544 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,427 |
|
|
|
1,540 |
|
Loss
(gain) on disposal of equipment |
|
|
— |
|
|
|
365 |
|
Share-based compensation |
|
|
1,310 |
|
|
|
1,724 |
|
Non-cash
interest expense |
|
|
807 |
|
|
|
1,130 |
|
Change in
fair value of financial instruments |
|
|
5,177 |
|
|
|
— |
|
Loss on
extinguishment of debt, net |
|
|
303 |
|
|
|
— |
|
Gain on
extinguishment of debt, related party, net |
|
|
(9,622 |
) |
|
|
— |
|
Net
changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
713 |
|
|
|
1,723 |
|
Inventories |
|
|
984 |
|
|
|
(851 |
) |
Prepaid
expenses and other assets |
|
|
(359 |
) |
|
|
420 |
|
Deferred
cost of product revenues |
|
|
4 |
|
|
|
(255 |
) |
Accounts
payable |
|
|
(1,835 |
) |
|
|
1,282 |
|
Accrued
and other liabilities |
|
|
(1,794 |
) |
|
|
2,491 |
|
Accrued
interest due to related parties |
|
|
(1,614 |
) |
|
|
(803 |
) |
Deferred
revenue |
|
|
(114 |
) |
|
|
341 |
|
Net cash used in
operating activities |
|
|
(16,814 |
) |
|
|
(14,437 |
) |
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(496 |
) |
|
|
(391 |
) |
Sale of
property, plant and equipment |
|
|
— |
|
|
|
15 |
|
Net cash used in
investing activities |
|
|
(496 |
) |
|
|
(376 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
Proceeds
from issuance of common stock, net of offering costs |
|
|
34,485 |
|
|
|
8,188 |
|
Proceeds
from issuance of debt |
|
|
2,000 |
|
|
|
— |
|
Proceeds
from secured borrowings |
|
|
15,402 |
|
|
|
7,831 |
|
Reductions in secured borrowings |
|
|
(15,181 |
) |
|
|
(6,631 |
) |
Repayment
of debt |
|
|
(190 |
) |
|
|
(340 |
) |
Repayment
of capital leases |
|
|
— |
|
|
|
(420 |
) |
Financing
costs |
|
|
— |
|
|
|
(215 |
) |
Net
settlement of stock options |
|
|
(14 |
) |
|
|
— |
|
Exercise
of stock options |
|
|
7 |
|
|
|
17 |
|
Exercise
of warrants |
|
|
98 |
|
|
|
— |
|
Net cash provided by
financing activities |
|
|
36,607 |
|
|
|
8,430 |
|
Net increase (decrease)
in cash and cash equivalents and restricted cash |
|
|
19,297 |
|
|
|
(6,383 |
) |
Cash and cash
equivalents and restricted cash, beginning of period |
|
|
2,833 |
|
|
|
12,613 |
|
Cash and cash
equivalents and restricted cash, end of period |
|
$ |
22,130 |
|
|
$ |
6,230 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure
of cash flow information |
|
|
|
|
|
|
|
Cash paid
for interest |
|
$ |
2,698 |
|
|
$ |
5,231 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure
of non-cash investing and financing activities |
|
|
|
|
|
|
|
Property,
plant and equipment included in accounts payable and
accrued liabilities |
|
$ |
30 |
|
|
$ |
331 |
|
Equipment
acquired with debt |
|
$ |
— |
|
|
$ |
495 |
|
Embedded
derivative liability associated with bridge loan |
|
$ |
573 |
|
|
$ |
— |
|
Conversion of debt to equity |
|
$ |
10,000 |
|
|
$ |
— |
|
Conversion of bridge loan (convertible note) to equity |
|
$ |
6,000 |
|
|
$ |
— |
|
Conversion of debt, related party to equity |
|
$ |
35,000 |
|
|
$ |
— |
|
Conversion of accrued liabilities into equity associated with the
granting of restricted stock units |
|
$ |
205 |
|
|
$ |
— |
|
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