Marrone Bio Innovations Issues Shareholder Letter and Provides Operational Update
October 19 2020 - 8:31AM
Marrone Bio Innovations, Inc. (NASDAQ: MBII) (“Marrone Bio”), an
international leader in providing growers with sustainable
bioprotection and plant health solutions to support global
agricultural needs, today released a letter to shareholders from
Chief Executive Officer, Kevin Helash.
Dear Shareholders:
As we close the third quarter, I wanted to take
the opportunity to provide you with an update on our business and
the steps we are taking to accelerate our path to profitability. In
my first 60 days with the company, I have been impressed by the
team and our collective passion for addressing our customers’
needs.
We are building a full-service biologicals
organization with scope and capabilities across the highest growth
segments in the industry. Our objective is to break out of a
crowded and fragmented market and emerge as the clear leader in the
biologicals space, with the financial and operational wherewithal
to accelerate that position.
In our earnings release for the second quarter,
we noted that we expect to drive additional revenue growth and
international expansion in the second half of the year, with gross
margins in line with our annual target in the mid-50% range.
While we are rolling up the final numbers, the early indicators are
that the quarter is tracking with our expectations.
As we have seen so far this year, growth is
coming from multiple sources:
- Expanded sales of the existing
product line in core countries around the world;
- Continued development of
next-generation products and formulations; and
- The addition of new product sales
from our Pro Farm acquisition.
Longer-term, we believe growth also will come
from the commercialization of a robust R&D pipeline -- one that
is selectively focused on novel and efficacious biologically based
crop protection and crop input products.
As a team, we are planning for next year’s
budget and are in the midst of a detailed review of the pipeline.
Our objective has been to step back and identify the projects that
have the greatest potential in terms of revenues, internal rates of
return and net present values. We are focusing on three aspects of
R&D:
- One, the early wins – the
development part of R&D – that deliver next-generation
improvements in on-farm performance and cost of goods sold.
- Two, mid-term products that have a
high probability of success. These often are products already in
field trials that build on our established presence in pest
control, plant health and plant nutrition.
- Three, longer-term novel research
with early indicators of the potential to break new ground in terms
of performance, market reach and revenues.
We’ll discuss the pipeline in more detail during
our third-quarter earnings conference call, but I wanted to give
you a preview of the discipline being applied to the process.
The same rigor is in place across the
organization, with a relentless focus on operational excellence. We
are committed to being brilliant at the basics. While revenues and
gross profit are growing at a faster rate than operating expenses,
there is room for improvement. Our team has been revisiting all
aspects of the business to identify the areas that deserve
investment because they drive growth with considerable returns.
Finally, I’d like to recognize the work that Jim
Boyd, our CFO, has contributed to the company’s financial and
operational discipline. Jim has announced his well-earned
retirement, and leaves a legacy that will help guide our future
success. Jim has agreed to stay with us as we go through the search
and transition process with a new CFO, and we are grateful for his
continuing contributions.
It has been a busy and productive two months,
and as a team we are enthusiastic about the opportunities facing us
today. The catalysts to achieve profitability have been clearly
defined, and the path forward is being accelerated.
All the best,
Kevin Helash Chief Executive Officer
Forward Looking Statements
This 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 the views of Marrone Bio Innovations, Inc. (“MBI”) as
of any subsequent date. Examples of such statements include
statements regarding margins for the third quarter of 2020 and
remainder of the year, MBI’s future financial results and revenue
growth and plans for focusing the R&D pipeline. Such
forward-looking statements are based on information available to
MBI as of the date of this letter and involve a number of risks and
uncertainties, some beyond MBI’s control, that could cause actual
results to differ materially from those anticipated by these
forward-looking statements, including the recent uncertainty in the
global economy and industry-specific economy caused by the COVID-19
pandemic, consumer, regulatory and other factors affecting demand
for MBI’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, adverse decisions by regulatory
agencies and other relevant third parties and any difficulty in
integrating the acquired businesses. Additional information that
could lead to material changes in MBI’s performance is contained in
its filings with the Securities and Exchange Commission. MBI is
under no obligation to, and expressly disclaims any responsibility
to, update or alter forward-looking statements contained in this
press release, whether as a result of new information, future
events or otherwise.
Company Contact:Kevin Helash, Chief Executive
OfficerPhone: 530-750-2800info@marronebio.com
Investor Relations Contact:Greg Falesnik or
Luke ZimmermanMZ Group – MZ North AmericaPhone:
949-385-6449MBII@mzgroup.us
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