“During the quarter, we continued to execute on the commercialization of our technology, and we are proud to say that we have continued to meet our key milestones. Among our achievements this quarter, we broke ground on our first 100,000 MT facility in Brazil and successfully commissioned our integrated biorefinery in Peoria, both on schedule,” said Jonathan Wolfson, CEO of Solazyme. “Our team remains focused on building out our renewable oil production capacity, working with industry leading partners to commercialize our tailored triglyceride oils, and continuing to demonstrate how our technology platform opens new market opportunities for our customers.”
Total revenue for the second quarter ended June 30, 2012 was $13.5 million compared with $7.4 million in the second quarter of 2011. Second quarter GAAP net loss attributable to Solazyme, Inc. common stockholders was $19.2 million, which compares with net loss attributable to common stockholders of $17.0 million in the prior year period. On a non-GAAP basis, the net loss attributable to Solazyme, Inc. common stockholders was $16.3 million for the second quarter of 2012, compared with net loss attributable to common stockholders of $10.0 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.
“We have a strong balance sheet and all of our current projects are fully funded,” said Tyler Painter, CFO of Solazyme. “Solazyme has been built on carefully managing every dollar we spend building our business and we will continue to focus on prudently deploying our capital to maximize future returns. Most importantly, we continue to create long-term stockholder value by executing on our commercialization plan and investing in our technology platform.”
Recent Business Highlights
- Solazyme Bunge Renewable Oils breaks ground on 100,000 MT facility: The joint venture between Solazyme and Bunge Global Innovation LLC (“Bunge”), a wholly-owned subsidiary of Bunge Limited (NYSE: BG), broke ground on schedule for the 100,000 metric ton renewable oil production facility adjacent to Bunge’s Moema sugarcane mill in Brazil.
- Announces successful commissioning of first integrated biorefinery (IBR) in Peoria, Illinois: Solazyme commenced fermentation operations at its Peoria facility in Q4 2011, commissioned the IBR and began the integrated production of tailored algal oils during Q2 2012. The start-up goals for the facility were achieved on schedule.
- Algenist® reports strong sales; announces two new products: In the first half of 2012, sales of Algenist®, Solazyme’s luxury skincare brand, have surpassed sales for the entire year of 2011. During the second quarter, Algenist® added two line extensions: the Ultra Lightweight UV Defense Fluid SPF 50 and the Targeted Deep Wrinkle Minimizer.
- Powers the Navy’s “Green Strike Group”: During the Rim of the Pacific (RIMPAC) fleet exercises, the world’s largest international maritime exercise, the US Navy deployed the “Green Strike Group”, a carrier strike group fueled by alternative sources of energy. Solazyme’s marine diesel and jet fuels, which have been used in testing and certification programs dating back to 2008, meet the military’s stringent specifications.
- U.S. Environmental Protection Agency (EPA) grants registration for Soladiesel®RD: Soladiesel®RD, Solazyme’s renewable diesel fuel, was granted registration by the U.S. Environmental Protection Agency (EPA), thus fulfilling the requirements to sell the fuel for commercial purposes. This registration enables Soladiesel®RD to be sold either neat (unblended) or in blends with petroleum.
Solazyme will hold a conference call for investors on August 7 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 11055144 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. 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 three target markets: (1) chemicals and fuels, (2) nutrition and (3) skin and personal care. For more information, please visit our website: http://www.solazyme.com
Solazyme®, the Solazyme logo and other trademarks or service names are the 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 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 plans and commercialization timetable for tailored oils; market opportunities; the capacity of the JV facility; development of additional tailored oils; meeting commercialization and technology targets; 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 and operating commercial manufacturing facilities; market acceptance of its products; delays related to construction, facilitization or start-up of production facilities; its access to adequate supply of feedstock on favorable terms; its ability to enter into and maintain strategic collaborations; 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 for the quarter ended March 31, 2012 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.
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three and six months ended June 30, 2012 and 2011|
|In thousands, except per share amounts|
|Three Months Ended June 30,||Six Months Ended June 30,|
|Research and development programs||$||9,468||$||6,092||$||19,028||$||11,491|
Costs and operating expenses (1)
|Cost of product revenue||1,330||374||2,576||1,038|
|Research and development||18,381||9,676||33,742||17,826|
|Sales, general and administrative||13,723||10,955||27,779||17,064|
|Total costs and operating expenses||33,434||21,005||64,097||35,928|
|Loss from operations||(19,889||)||(13,607||)||(36,996||)||(20,788||)|
Other income (expense)
|Net interest income (expense) and other income||309||(184||)||636||191|
|Loss on equity method investment||(510||)||-||(510||)||-|
|Gain (Loss) from change in fair value of warrant liability||851||(3,154||)||851||(3,637||)|
|Total other income (expense)||650||(3,338||)||977||(3,446||)|
|Accretion of redeemable convertible preferred stock||-||(24||)||-||(60||)|
|Net loss attributable to Solazyme, Inc. common stockholders||$||(19,239||)||$||(16,969||)||$||(36,019||)||$||(24,294||)|
|Net loss per share attributable to Solazyme, Inc. common stockholders, basic and diluted||$||(0.32||)||$||(0.61||)||$||(0.60||)||$||(1.22||)|
|Weighted average number of common shares used in loss per share computation, basic and diluted||60,378||27,673||60,239||19,960|
|Reconciliation of GAAP to non-GAAP basic net loss per share:||Three Months Ended June 30,||Six Months Ended June 30,|
|In thousands, except per share amounts||2012||2011||2012||2011|
|Net loss attributable to Solazyme, Inc. common stockholders||$||(19,239||)||$||(16,969||)||$||(36,019||)||$||(24,294||)|
|Gain (Loss) from change in fair value of warrant liability||(851||)||3,154||(851||)||3,637|
|(1) Operating expenses include stock-based compensation expense as follows:|
|Research and development||1,013||705||1,938||1,036|
|Sales, general and administrative||2,812||3,071||5,877||4,003|
|Total stock-based compensation expense||3,825||3,776||7,815||5,039|
|Net loss attributable to Solazyme, Inc. common stockholders (non-GAAP)||$||(16,265||)||$||(10,039||)||$||(29,055||)||$||(15,618||)|
|Basic and diluted loss per share attributable to Solazyme, Inc. common stockholders (GAAP)||$||(0.32||)||$||(0.61||)||$||(0.60||)||$||(1.22||)|
|Gain (Loss) from change in fair value of warrant liability||(0.01||)||0.11||(0.01||)||0.18|
|Stock-based compensation expense||0.06||0.14||0.13||0.26|
|Net loss per share attributable to Solazyme,Inc. common stockholders (non-GAAP)||$||(0.27||)||$||(0.36||)||$||(0.48||)||$||(0.78||)|
|Consolidated Balance Sheets||June 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||195,479||$||243,724|
|Other current assets||19,389||15,169|
|Total current assets||214,868||258,893|
|Property, plant and equipment - net||30,447||25,985|
Liabilities and stockholders' equity
|Current portion of long-term debt||$||7,184||$||5,289|
|Other current liabilities||14,582||23,923|
|Total current liabilities||21,766||29,212|
|Total stockholders' equity||221,538||240,558|
|Total liabilities and stockholders' equity||$||255,502||$||285,224|