Solazyme, Inc. (NASDAQ: SZYM), a renewable oil and bioproducts company, announced today financial results for the third quarter ended September 30, 2012 and recent key corporate highlights.
The Company also announced separately today two important business developments:
- The signing of a JV Expansion Framework Agreement for its Solazyme Bunge Renewable Oils JV, which sets forth the intent to increase production capacity to 300,000 MT annually by 2016, includes new plans to broaden the portfolio of oils produced by the JV and describes joint market development for tailored food oils in Brazil; and
- The signing of strategic collaboration, manufacturing and market development agreements in which Solazyme and the Archer-Daniels-Midland Company (NYSE: ADM) will produce Solazyme’s tailored algal oils in ADM’s advanced fermentation plant in Clinton, Iowa.
“We continue to execute on our commercialization strategy, highlighted by on-target progress with our capacity build-outs, the execution of a JV expansion framework agreement with Bunge, and our new strategic relationship with ADM,” said Jonathan Wolfson, CEO of Solazyme. "We are actively supplying tailored oils from Peoria to customers, and positioning ourselves for our future commercial-scale operations when Moema, Clinton and other facilities come online.”
“At the same time, we have made substantial progress in recent months in growing our portfolio of high-value tailored triglyceride oil profiles targeted at attractive markets in food, confectionary and personal care,” Wolfson continued. “These developments are enabling us to showcase our value proposition to potential customers across attractive end markets, a key step in our strategy for long-term value creation.”
Total revenue for the third quarter ended September 30, 2012 was $8.6 million compared with $8.9 million in the third quarter of 2011. Third quarter GAAP net loss was $22.5 million, which compares with net loss of $14.1 million in the prior year period. On a non-GAAP basis, the net loss attributable to Solazyme, Inc. common stockholders was $19.4 million for the third quarter of 2012, compared with net loss attributable to common stockholders of $11.5 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.
“We continue to prudently manage the business, and we are proud to remain on schedule with all major projects. We have a healthy balance sheet and increasing partner commitments, and we are making steady progress against our planned capacity and commercialization strategy,” said Tyler Painter, CFO of Solazyme.
Other Recent Business Highlights
- Solazyme Bunge Renewable Oils pours foundation for Brazil facility: Solazyme and Bunge Global Innovation LLC (“Bunge”), a wholly-owned subsidiary of Bunge Limited (NYSE: BG), remain on track for a 100,000 metric ton renewable oil production facility adjacent to Bunge’s Moema sugarcane mill in Brazil. The earthwork has been concluded and the foundation work recently begun.
- Solazyme Roquette Nutritional Joint Venture Continues Forward: ThePhase II buildout for 5,000 MT of production in Lestrem is on track for completion in 2Q13.
- Peoria Manufacturing Operation: Peoria is currently producing high oleic and lauric oils, among others, for partners and routinely shipping multi-ton tailored oil samples to strategic partners.
- Algenist®: Revenue continues to climb reaching nearly $12 million for the year to date, more than double the comparable year-ago period. During the third quarter, we introduced two new SKUs, bringing the total number to fifteen.
Solazyme will hold a conference call for investors on November 14 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 38851131 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 three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care.
Solazyme®, the Solazyme logo and other trademarks or service names 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 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 planned facilities; the timetable for bringing facilities online; 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 or start-up of production facilities; its access to adequate supply of feedstock on favorable terms; its ability to manage operational costs at production facilities; its ability to manage operational costs at production facilities; 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 June 30, 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and nine months ended September 30, 2012 and 2011
In thousands, except per share amounts
|Three Months Ended September 30,||Nine Months Ended September 30,|
|Research and development programs||$||4,810||$||7,051||$||23,838||$||18,542|
Costs and operating expenses (1)
|Cost of product revenue||1,331||554||3,907||1,592|
|Research and development||16,534||10,866||50,276||28,692|
|Sales, general and administrative||13,849||11,527||41,628||28,591|
|Total costs and operating expenses||31,714||22,947||95,811||58,875|
|Loss from operations||(23,131||)||(14,010||)||(60,127||)||(34,798||)|
Other income (expense)
|Interest and other income (expense), net||626||(76||)||1,262||115|
|Loss on equity method investment||(683||)||-||(1,193||)||-|
|Gain (Loss) from change in fair value of warrant liability||685||-||1,536||(3,637||)|
|Total other income (expense)||628||(76||)||1,605||(3,522||)|
|Accretion of redeemable convertible preferred stock||-||-||-||(60||)|
|Net loss attributable to Solazyme, Inc. common stockholders||$||(22,503||)||$||(14,086||)||$||(58,522||)||$||(38,380||)|
|Net loss per share attributable to Solazyme, Inc. common stockholders, basic and diluted||$||(0.37||)||$||(0.24||)||$||(0.97||)||$||(1.15||)|
|Weighted average number of common shares used in loss per share computation, basic and diluted||60,678||59,508||60,387||33,272|
|Reconciliation of GAAP to non-GAAP basic net loss per share:||Three Months Ended September 30,||Nine Months Ended September 30,|
|In thousands, except per share amounts||2012||2011||2012||2011|
|Net loss attributable to Solazyme, Inc. common stockholders||$||(22,503||)||$||(14,086||)||$||(58,522||)||$||(38,380||)|
|Gain (Loss) from change in fair value of warrant liability||(685||)||-||(1,536||)||3,637|
|(1) Operating expenses include stock-based compensation expense as follows:|
|Research and development||1,001||534||2,939||1,567|
|Sales, general and administrative||2,742||2,018||8,619||6,008|
|Total stock-based compensation expense||3,743||2,552||11,558||7,575|
|Net loss attributable to Solazyme, Inc. common stockholders (non-GAAP)||$||(19,445||)||$||(11,534||)||$||(48,500||)||$||(27,168||)|
|Basic and diluted loss per share attributable to Solazyme, Inc. common stockholders (GAAP)||$||(0.37||)||$||(0.24||)||$||(0.97||)||$||(1.15||)|
|Gain (Loss) from change in fair value of warrant liability||(0.01||)||-||(0.02||)||0.11|
|Stock-based compensation expense||0.06||0.05||0.19||0.22|
|Net loss per share attributable to Solazyme,Inc. common stockholders (non-GAAP)||$||(0.32||)||$||(0.19||)||$||(0.80||)||$||(0.82||)|
|Condensed Consolidated Balance Sheets||September 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||167,101||$||243,724|
|Other current assets||18,353||15,169|
|Total current assets||185,454||258,893|
|Property, plant and equipment - net||32,269||25,985|
Liabilities and stockholders' equity
|Current portion of long-term debt||$||7,255||$||5,289|
|Other current liabilities||15,894||23,923|
|Total current liabilities||23,149||29,212|
|Total stockholders' equity||204,061||240,558|
|Total liabilities and stockholders' equity||$||237,733||$||285,224|