Solazyme Reports Third Quarter 2015 Results

Solazyme

, Inc. (NASDAQ:SZYM), a renewable oil and specialty ingredients company, announced today results for the third quarter ended September 30, 2015.

“At Solazyme, we are committed to improving the lives of people and the planet by leveraging the power of microalgae to produce sustainable, high performance oils and ingredients,” said Jonathan Wolfson, CEO of Solazyme. “Today we have announced important milestones with increased commitments from some of our key strategic partners. These partners have been working with us for years, understand our manufacturing capabilities, our commercial path and the power of our technology platform.”

“We are making significant progress across our food, personal care and industrial markets,” said Tyler Painter, COO and CFO of Solazyme. “Although some of this progress is not yet reflected on the top line, we believe we are building a strong integrated business foundation with a competitive cost structure and first class manufacturing capabilities. As we continue to focus on high value products and our ability to bring new, sustainable solutions to market, we are becoming increasingly well positioned to deliver value to our stakeholders.”

Business Review

  • Expanded Joint Venture with Bunge: As announced separately today, Solazyme and Bunge expanded the joint venture that builds upon the companies’ original partnership. The expansion adds an additional focus on food and as part of the agreement, Bunge’s global food team will take a leadership role in the sales, marketing and application development for certain food oils. In addition, Bunge will provide oil processing, global distribution and logistics, while Solazyme will be committing certain expertise in food related technology. Further, the partners also entered a separate agreement to expand their co-funded research programs to include new unique products in nutrition and specialty fats.
  • Foods – AlgaVia™, AlgaWise™ and the Introduction of Thrive™ Culinary Algae Oil: Our food ingredients continue to generate strong market interest and expand their project pipelines. We are seeing customers transition from the development stage and begin to introduce our ingredients commercially. We also recently introduced Thrive™ algae oil, a consumer focused culinary oil that delivers oil characteristics superior to competing oils, such as canola oil, olive oil and coconut oil. Initial feedback from consumers has been very positive, and we believe Thrive™ algae oil has strong adoption potential for cooking, baking and dressing applications.
  • Personal Care – AlgaP?r™, Algenist® and Extended Joint Development Agreement with Unilever: We recently extended our Joint Development Agreement with our long-term partner Unilever, which will build upon our years of collaborative work to jointly develop a new-to-market oil. We also continue to build upon our relationship with BASF with the recent expansion into Brazil of the first commercial microalgae-derived surfactant utilizing AlgaP?r™. We also continued to grow and expand our Algenist brand, which is now available in 22 countries and has reached 39 SKUs with a number of product introductions planned for early 2016 including a new Power moisturizer and a color correcting cosmetics line.
  • Moema: A primary area of focus remains planned optimization projects as we look to further improve key production metrics. Recent developments at Moema include production of our first food oil, reaching the production requirements necessary to begin selling food grade oils, and improvements in our cost profile. We are now making routine deliveries to Unilever and are shipping to Natura Cosméticos as well. With the combination of the expanded JV with Bunge and the ongoing progress we are seeing at Moema, the company has made the decision to focus production at Moema and Peoria, and to terminate its existing contracts for the Clinton and Galva manufacturing facilities.
  • Industrials – Encapso™: We made further progress with our Encapso™ lubricant in international markets, including a recent order from Flotek for an application in a new oilfield in the Middle East.

Financial Results

Total revenue for the third quarter ended September 30, 2015 was $11.4 million compared with $17.6 million in the third quarter of 2014. The year over year decline in revenues was due to expected decreases in funded program revenue and slower than anticipated adoption rates for Encapso lubricant. On a sequential quarter basis, revenues were roughly unchanged due to improved Algenist performance, offset by funded programs. GAAP net loss was $34.9 million for the third quarter of 2015, compared to net loss of $39.7 million in the prior year period. On a non-GAAP basis, the net loss was $30.9 million for the third quarter of 2015, compared with net loss of $35.3 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.

 

SOLAZYME, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
(UNAUDITED)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015201420152014
Revenues
Product revenues$9,133$11,623$26,261$27,993
Research and development programs2,2665,9369,48317,896
Total revenues11,39917,55935,74445,889
Costs and operating expenses (1)
Cost of product revenue4,5706,59813,60114,458
Research and development13,20720,57138,50863,470
Sales, general and administrative19,59625,88361,84568,127
Restructuring charges(21)372
Total costs and operating expenses37,35253,052114,326146,055
Loss from operations(25,953)(35,493)(78,582)(100,166)
Other income (expense) (2)
Interest and other income (expense), net(3,225)(3,188)(9,908)(8,962)
Loss from equity method investments(5,916)(7,201)(18,291)(15,313)
Gain from change in fair value of warrant liability688
Gain from change in fair value of derivative liabilities1766,205276,478
Total other income (expense)(8,965)(4,184)(28,172)(17,109)
Net loss$(34,918)$(39,677)$(106,754)$(117,275)
Net loss per share – basic and diluted$(0.43)$(0.50)$(1.33)$(1.57)

Weighted average number of common shares used in net
loss per share computation – basic and diluted

80,29878,86780,01774,716
SOLAZYME, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET LOSS AND NET LOSS PER SHARE
In thousands, except per share amounts
(UNAUDITED)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015201420152014
Net loss$(34,918)$(39,677)$(106,754)$(117,275)
Gain from change in fair value of warrant liability(688)
Gain from change in fair value of derivative liabilities(176)(6,205)(27)(6,478)
(1) Operating expenses includes costs as follows:
Research and development1,0111,9413,5955,671
Sales, general and administrative2,5134,3478,71713,022
Total stock-based compensation expense3,5246,28812,31218,693
Litigation settlement, net of insurance reimbursement3,6574,507
Restructuring charges(21)372
(2) Other income (expense) includes costs as follows:
Amortization of debt discount and issuance costs6446081,9001,594
Debt conversion expense1,766
Net loss (non-GAAP)$(30,947)$(35,329)$(92,197)$(97,881)
Net loss per share (GAAP) – basic and diluted$(0.43)$(0.50)$(1.33)$(1.57)
Gain from change in fair value of warrant liability(0.01)
Gain from change in fair value of derivative liabilities(0.08)(0.09)
Stock-based compensation expense0.030.080.160.25
Litigation settlement, net of insurance reimbursement0.040.06
Restructuring charges
Amortization of debt discount and issuance costs0.010.010.020.02
Debt conversion expense0.03
Net loss per share (non-GAAP) – basic and diluted$(0.39)$(0.45)$(1.15)$(1.31)
SOLAZYME, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(UNAUDITED)
September 30,December 31,
20152014

Assets

Current assets

Cash, cash equivalents and marketable securities$117,245$207,308
Other current assets22,11426,619
Total current assets139,359233,927
Property, plant and equipment – net32,11936,080
Other assets37,56442,582
Total assets$209,042$312,589

Liabilities and stockholders’ equity

Current liabilities

Current portion of long-term debt$$6
Other current liabilities18,85923,448
Total current liabilities18,85923,454
Other liabilities7,8892,668
Long-term debt201,831200,091
Total liabilities228,579226,213
Total stockholders’ (deficit) equity(19,537)86,376
Total liabilities and stockholders’ (deficit) equity$209,042$312,589

Press Release About Press Release

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.