Marrone Bio Innovations, Inc. Reports First Quarter 2018 Financial Results

 

Company Successfully Completes Series of Comprehensive Capital Raise and Debt Refinancing Transactions, Generating $40 Million in Estimated Net Proceeds and Converting $45 Million of Debt into Equity

 

DAVIS, Calif., May 10, 2018 -

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 first quarter ended March 31, 2018.

 

Financial Highlights

 

GAAP revenues grew to $4.3 million in the first quarter of 2018, compared to $4.2 million in the first quarter of 2017.
Gross margin increased 300 basis points to 48.1% in the first quarter of 2018, compared to 45.1% in the first quarter of 2017.
Net loss decreased to $2.9 million in the first quarter of 2018, primarily as a result of a gain on the conversion of debt, compared to a net loss of $7.6 million in the first quarter of 2017.
Between October 2017 and May 2018, MBI completed an underwritten public offering, a series of private placements and a comprehensive debt refinancing transaction, which collectively generated approximately $40.0 million of net proceeds and converted $45.0 million of long term debt into equity.
Due to the adoption of ASC 606 (Revenue From Contracts With Customers), $5.9 million of deferred revenue was booked to the balance sheet as retained earnings in the first quarter instead of being run through the income statement.

 

Management Commentary

 

“The beginning of 2018 was highlighted by our comprehensive equity raise and debt refinancing initiatives, which dramatically improved our balance sheet to a point where we believe we have sufficient resources to fund operations, as currently planned, for the foreseeable future,” said Dr. Pam Marrone, CEO of MBI. “While sales were negatively affected in the first quarter due to unfavorable weather in the west, the Company is now better positioned than ever to aggressively execute on our growth plans.

 

“In addition, we have made significant efforts to bolster our commercial execution with the addition of Kevin Hammill—a highly qualified Chief Commercial Officer with 25 years of industry experience—as well as the comprehensive restructuring of our sales team and strategy. Finally, we’ve continued to strengthen our international distributor network and to drive increased demand for our products, including the Cannabis market.

 

“We’re also very pleased with our research and development and manufacturing initiatives which have proven extremely successful and driven significant increases to gross margins, as is evidenced by our 48.1% consolidated gross margins in the first quarter.

 

“As the Founder and CEO of Marrone Bio Innovations, I can confidently say that I have never been more optimistic than I am today about the future of our Company.”

 

  

 

 

Recent Operational Highlights

 

Hired Kevin Hammill as Chief Commercial Officer to develop MBI’s commercial team and presence into a leadership position within the industry. Kevin has 25 years of agrichemical and biologicals commercial experience.
Expanded MBI’s international distribution network through new deals in Israel, the Philippines and Central America.
Received a U.S. patent for the use of MBI’s bioherbicide for control of key weeds in rice and turf, strengthening MBI’s total intellectual property portfolio to more than 400 issued and pending patents.
Launched a microbe into the row crop seed treatment market with MBI’s strategic partner Albaugh, which is expected to translate into $8-10 million in revenue on an estimated 8-9 million acres in the next 3 years.
Use of Regalia, Grandevo and Venerate has been cleared by several key states for use on Cannabis, a rapidly growing market that we believe will represent an area of consistent growth for MBI on a go-forward basis.
Launched Zelto, a biological pesticide, in turf protection markets in the quarter and there are trials on 15 golf courses.
Research and development, manufacturing efforts and a favorable product mix have continued to increase gross margins.

 

Conference Call and Webcast

 

Management will host an investor conference call today at 1:30 p.m. PDT (4:30 p.m. EDT) to discuss Marrone Bio Innovation’s first quarter 2018 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

 

Q1 2018 Conference Call and Webcast

 

Date: Thursday, May 10, 2018

Time: 1:30 p.m. Pacific time (4:30 p.m. Eastern time)

U.S. Dial-in: 1-800-263-0877

International Dial-in: 1-323-794-2094

Conference ID: 7400713

Webcast: http://public.viavid.com/index.php?id=129395

 

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 June 10, 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 7400713. A webcast will also be available for 30 days on the IR section of the Marrone Bio Innovations website or by clicking here: MBII Q1 2018 Webcast.

 

About Marrone Bio Innovations

 

BIO WITH BITE.

 

Marrone Bio Innovations, Inc. (NASDAQ:MBII) strives to lead the movement to a more sustainable world through the discovery, development and promotion of biological products for pest management and plant health. MBI’s effective and environmentally responsible pest management solutions help customers operate more sustainably while uniquely improving plant health and increasing crop yields. MBI’s currently available commercial products are Regalia®, Grandevo®, Venerate®, Majestene®, Haven® StargusTM, AmplitudeTM, ZeltoTM and Zequanox®. MBI also distributes Bio-tam 2.0® for Isagro USA and Jet-Ag® for Jet Harvest in most regions of the U.S.

 

  

 

 

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.

 

Marrone Bio Innovations 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 MBI’s views as of any subsequent date. Examples of such statements include statements regarding the strength of the Company’s operations and financial position for 2018, anticipated cash resources for continued operations, sales of the Company’s products, enhancement of the Company’s sales and marketing efforts, the impact of the Company’s portfolio development strategy, planned regulatory submissions and potential approvals, anticipated product launches, the potential benefits of the Company’s products, MBI’s efforts with respect to marketing in U.S. and international markets, and results of potential third-party collaborations. 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 Founder

Jim Boyd, CFO

Telephone: +1 (530) 750-2800

Email: Info@marronebio.com

 

Investor Relations:

 

Greg Falesnik

Managing Director

MZ Group – MZ North America

Main: 949-385-6449

MBII@mzgroup.us

 

  

 

 

MARRONE BIO INNOVATION, INC.

Consolidated Balance Sheets

(In Thousands, Except Par Value)

 

   MARCH 31, 2018   DECEMBER 31, 2017 
   (Unaudited)     
Assets          
Current assets:          
Cash and cash equivalents  $14,757   $786 
Restricted cash, current portion   487    487 
Accounts receivable   4,352    3,785 
Inventories, net   10,047    9,827 
Deferred cost of product revenues   3    3,063 
Prepaid expenses and other current assets   780    1,170 
Total current assets   30,426    19,118 
Property, plant and equipment, net   15,700    16,016 
Restricted cash, less current portion   1,560    1,560 
Other assets   340    219 
Total assets  $48,026   $36,913 
Liabilities and stockholders’ equity (deficit)          
Current liabilities:          
Accounts payable  $2,621   $3,800 
Accrued liabilities   6,871    8,189 
Accrued interest due to related parties       1,622 
Deferred revenue, current portion   303    6,193 
Derivative liability       674 
Debt, current portion   1,852    1,524 
Total current liabilities   11,647   22,002 
Deferred revenue, less current portion   2,512    2,046 
Debt, less current portion   11,974    24,407 
Debt due to related parties   7,285    37,822 
Other liabilities   923    1,287 
Total liabilities   34,341    87,564 
Commitments and contingencies (Note 8)          
Stockholders’ equity (deficit):          
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at March 31, 2018 and December 31, 2017        
Common stock: $0.00001 par value; 250,000 shares authorized, 102,093 and 31,351 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively   1     
Additional paid in capital   279,863    214,921 
Accumulated deficit   (266,179)   (265,572)
Total stockholders’ equity (deficit)   13,685    (50,651)
Total liabilities and stockholders’ equity (deficit)  $48,026   $36,913 

 

  

 

 

MARRONE BIO INNOVATIONS, INC.

Consolidated Statements of Operations

(In Thousands, Except Per Share Data)

 

   THREE MONTHS ENDED
MARCH 31,
 
   2018   2017 
Revenues:          
Product  $4,224   $4,096 
License   100    58 
Total revenues   4,324    4,154 
Cost of product revenues   2,242    2,279 
Gross profit   2,082    1,875 
Operating Expenses:          
Research, development and patent   2,534    2,444 
Selling, general and administrative   5,024    5,343 
Total operating expenses   7,558    7,787 
Loss from operations   (5,476)   (5,912)
Other income (expense):          
Interest expense   (1,119)   (636)
Interest expense, net to related parties   (434)   (1,074)
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   (31)   (7)
Total other income (expense), net   2,558    (1,717)
Net loss  $(2,918)  $(7,629)
           
Basic and diluted net loss per common share:  $(0.04)  $(0.31)
Weighted-average shares outstanding used in computing basic and diluted net loss per common share:   74,591    24,739 

 

  

 

 

MARRONE BIO INNOVATIONS, INC.

Consolidated Statements of Cash Flows

(In Thousands)

 

  

THREE MONTHS ENDED
MARCH 31,

 
   2018   2017 
Cash flows from operating activities          
Net loss  $(2,918)  $(7,629)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   478    521 
Gain on disposal of equipment       (4)
Share-based compensation   491    582 
Non-cash interest expense   611    337 
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   (567)   (4,481)
Inventories   (220)   347 
Prepaid Expenses and other assets   146    142 
Deferred cost of product revenues   2    (1,307)
Accounts payable   (1,092)   1,627 
Accrued and other liabilities   (793)   828 
Accrued interest due to related parties   (1,614)   (820)
Deferred revenue   (128)   2,307 
Net cash used in operating activities   (9,746)   (7,550)
Cash flows from investing activities          
Purchases of property, plant and equipment   (362)   (83)
Net cash used in investing activities   (362)   (83)
Cash flows from financing activities          
Proceeds from issuance of common stock, net of offering costs   21,820     
Proceeds from issuance of debt   2,000     
Proceeds from secured borrowings   3,520     
Reductions in secured borrowings   (3,194)    
Repayment of debt   (67)   (66)
Repayment of capital leases       (145)
Exercise of stock options       17 
Net cash provided by (used in) financing activities   24,079    (194)
Net increase (decrease) in cash and cash equivalents and restricted cash   13,971    (7,827)
Cash and cash equivalents and restricted cash, beginning of period   2,833    12,613 
Cash and cash equivalents and restricted cash, end of period  $16,804   $4,786 
           
Supplemental disclosure of cash flow information          
Cash paid for interest  $2,145   $2,182 
Supplemental disclosure of non-cash investing and financing activities          
Property, plant and equipment included in accounts payable and accrued liabilities  $131   $40 
Conversion of debt to equity  $14,122   $ 
Conversion of debt, related party to equity  $30,948   $ 

 

  

 

 


The following information was filed by Marrone Bio Innovations Inc (MBII) on Thursday, May 10, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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