Marrone Bio Innovations, Inc. Reports First-Quarter 2022 Financial Results
RALEIGH, N.C., May 11, 2022 (GLOBE NEWSWIRE) -- (NASDAQ: MBII), an international leader in sustainable bioprotection and plant health solutions, has provided its financial results for the first quarter ended March 31, 2022. Key results include:
- Higher sales of row crop products in the first quarter were somewhat offset by lower sales into specialty crop markets, which were affected by adverse weather conditions.
- Based on the strength of current orders, revenues in the first half are expected to increase in the low- to mid-teens on a percentage basis.
- Gross profit of $6.2 million and gross margins of 55.9% reflected changes in product mix, higher raw material costs, and the expansion of operations at the Michigan manufacturing facility. As in prior years, the annual target for gross margins is being maintained in the upper 50% range.
- The company incurred higher operating expenses, primarily related to non-recurring costs associated with the previously announced merger agreement with Bioceres Crop Solutions (NASDAQ: BIOX). Ongoing operating expenses for the full year in 2022 are forecast to be flat with those in the prior year, plus inflation.
- On March 16, 2022, Marrone Bio and Bioceres Crop Solutions entered into a definitive agreement to combine the companies in an all-stock transaction expected to close in the third quarter of 2022.
Selected Financial Highlights
| $ in millions | Q1 2022 | Q1 2021 | % Increase (Decrease) |
| Revenues | $11.1 | $11.0 | 0.5% |
| Gross Profit | $6.2 | $7.0 | (10.9%) |
| Gross Margin | 55.9% | 63.1% | -721 bps |
| Operating Expenses | $13.2 | $10.0 | 32.3% |
| Operating Expense Ratio | 119.2% | 90.6% | +2,865bps |
| Net Income (Loss) | ($7.6) | ($3.3) | 132.9% |
| Adjusted EBITDA1 | ($5.4) | ($1.2) | 359.1% |
| Cash Used in Operations | ($8.4) | ($5.0) | 67.4% |
1Adjusted EBITDA is a non-GAAP financial measure and is described in relation to its most directly comparable GAAP measure under "Non-GAAP Financial Measures" below.
Management Commentary
“Our first-quarter results reflect a strong effort from our team despite external headwinds. Sales of seed treatments for row crops grew, while drought conditions and a colder spring in the western United States slowed the pull through of products for use in the specialty crop markets,” said Chief Executive Officer Kevin Helash. “We are now halfway through the historically more important selling season in the second quarter, and our orders in hand are particularly robust for foliar and seed treatments in row crops globally.
“We are forecasting low- to mid-teens percentage revenue growth for the first half of 2022, which would represent a material increase above our sales growth in the first half of 2021,” Helash added. “We continue to expect annual gross margins in the upper 50% range, while holding ongoing operating expenses flat, plus inflation, for the full year.
“The start to this year underscores the value of our focus on greater geographic and end-use market diversification. This strategy will advance with our proposed merger with Bioceres, which, as previously reported, we expect to close in the third quarter of 2022. We anticipate significant topline synergies as a result of the merger, as well as growth from new products in our combined research pipelines,” Helash concluded.
First Quarter 2022 Financial and Operational Summary
- First quarter revenues in 2022 were $11.1 million, as compared with $11.0 million in the first quarter of 2021. Revenues were strongest for seed treatments sold for use in row crops in the United States and Europe.
- This increase was partially offset by weaker specialty crop markets, particularly in the western United States. Cold weather and drought conditions curtailed use of the company’s bio-fungicides at the grower level.
- Gross profit of $6.2 million and gross margins of 55.9% reflected shifts in product mix and higher raw material costs, as well as short-term variances related to expanded production at the company’s Michigan manufacturing facility.
- Operating expenses increased primarily because of non-recurring legal and consulting costs associated with the proposed merger with Bioceres. For the full year 2022, ongoing operating expenses are expected to be flat with those in the prior year, plus inflation.
- The company also budgeted for higher research and development (R&D) costs for registration fees and toxicology reports in support of its regulatory applications for new products. The operating expense ratio – a key performance indicator that compares operating expenses to revenues – increased to 119.2%.
- Net loss in the first quarter of 2022 was $7.6 million, as compared with a net loss of $3.3 million in the first quarter of 2021. Adjusted EBITDA was a loss of $5.4 million in the first quarter of 2022, as compared with a loss of $1.2 million in the first quarter of 2021. Lower revenues and gross profit, combined with higher operating expenses, contributed to the greater losses. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
- Cash used in operations was $8.4 million as compared with cash used in operations of $5.0 million in the first quarter of 2021. Higher inventories to support future sales and accrued liabilities associated with merger and acquisition costs were the primary drivers of the greater use of operating cash.
Conference Call and Webcast
Management will host an investor conference call at 4:30 p.m. ET on May 11, 2022 to discuss Marrone Bio Innovations’ first quarter 2022 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q1 2022 Conference Call and Webcast
Date: Wednesday, May 11, 2022
Time: 4:30 p.m. Eastern
U.S. Dial-in: 1-844-612-2103
International Dial-in: 1-918-922-3145
Conference ID: 7668618
Webcast: -server.com/mmc/p/7rybiofs
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 May 18, 2022. To listen, call 1-855-859-2056 within the United States or 1-404-537-3406 when calling internationally. Please use the replay pin number 7668618. A webcast will also be available for 30 days on the IR section of the Marrone Bio Innovations website or by clicking here: .
About Marrone Bio Innovations
Marrone Bio Innovations Inc. (NASDAQ: MBII) is a growth-oriented agricultural company leading the movement to environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. Our portfolio of 18 products helps customers operate more sustainably while increasing their return on investment. The company’s commercial products are sold globally and supported by a robust portfolio of more than 500 issued and pending patents. Our end markets include row crops; fruits and vegetables; trees, nuts and vines; and greenhouse production. Marrone Bio’s research and development program uses proprietary technologies to isolate and screen naturally occurring microorganisms and plant extracts to create new, environmentally sound solutions in agriculture.
Learn more about Marrone Bio Innovations at . We also use our investor relations website, , as well as our corporate Twitter account, @Marronebio, as means of disclosing material non-public information, and encourage our investors and others to monitor and review the information we make public in these locations. Follow us on social media: , and .
Non-GAAP Financial Measures
This earnings release discusses Adjusted EBITDA which is not a financial measure as defined by GAAP. This financial measure is presented as a supplemental measure of operating performance because we believe it can aid in, and enhance, the understanding of our financial results. In addition, we use Adjusted EBITDA as a measure internally for budgeting purposes.
We define Adjusted EBITDA as net income (loss) before (1) interest expense (income), net, (2) income tax expense (benefit), (3) depreciation, (4) amortization of intangible assets, (5) stock-based compensation expense, plus (6) from time to time, certain other items which are specific transaction-related items. Other companies may define or calculate this measure differently, limiting the usefulness as a comparative measure. Because of this limitation, this non-GAAP financial measure should not be considered in isolation or as substitute for or superior to performance measures calculated in accordance with GAAP and should be read in conjunction with the financial statement tables.
| GAAP to non-GAAP Reconciliation | ||||||
| (in 000s) | ||||||
| THREE MONTHS ENDED MARCH 31, | THREE MONTHS ENDED MARCH 31, | |||||
| 2022 | 2021 | |||||
| Net Loss (AS REPORTED) | $ | (7,596 | ) | $ | (3,261 | ) |
| Taxes | (11 | ) | 41 | |||
| Interest expense | 551 | 393 | ||||
| Depreciation and amortization | 885 | 874 | ||||
| EBITDA | $ | (6,171 | ) | $ | (1,953 | ) |
| Stock based compensation | 822 | 915 | ||||
| Change in fair value of contingent consideration | (32 | ) | (134 | ) | ||
| Adjusted EBITDA | $ | (5,381 | ) | $ | (1,172 | ) |
Marrone Bio Innovations Forward Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements 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 company’s views as of any subsequent date. Examples of such statements include financial guidance and other statements regarding the company’s future revenue growth, margins, operating expenses, and other financial results; the potential benefits and value of the company’s products; statements regarding the diversification and geographic expansion of the company’s business; and statements regarding the potential completion and potential benefits of a merger transaction with Bioceres Crop Solutions. 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 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 the company’s products, any difficulty in expanding the company’s sales and marketing infrastructure or marketing the company’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 actions by distributors, manufacturers, regulatory agencies, shareholders and other relevant third parties and costs associated with the Bioceres transaction or any other strategic acquisitions or other business opportunities we elect to pursue, failure to satisfy any of the other conditions to the proposed transaction with Bioceres on a timely basis or at all, and the occurrence of events that may give rise to a right of one or both of the parties to terminate the definitive agreement with Bioceres. Additional information that could lead to material changes in the company’s performance is contained in its filings with the Securities and Exchange Commission. The company 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 Contact:
Telephone: 530-750-2800
MARRONE BIO INNOVATIONS, INC.
Condensed Consolidated Balance Sheets
(In Thousands, Except Par Value)
| MARCH 31, | DECEMBER 31, | |||||||
| 2022 | 2021 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 9,362 | $ | 19,623 | ||||
| Accounts receivable | 12,110 | 13,211 | ||||||
| Inventories | 10,122 | 8,633 | ||||||
| Prepaid expenses and other current assets | 1,369 | 1,211 | ||||||
| Total current assets | 32,963 | 42,678 | ||||||
| Property, plant and equipment, net | 12,456 | 12,676 | ||||||
| Right of use assets, net | 3,329 | 3,637 | ||||||
| Intangible assets, net | 18,426 | 19,011 | ||||||
| Goodwill | 6,740 | 6,740 | ||||||
| Restricted cash | 1,560 | 1,560 | ||||||
| Other assets | 740 | 754 | ||||||
| Total assets | $ | 76,214 | $ | 87,056 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,359 | $ | 2,687 | ||||
| Accrued liabilities | 12,354 | 14,851 | ||||||
| Deferred revenue, current portion | 285 | 360 | ||||||
| Lease liability, current portion | 1,433 | 1,381 | ||||||
| Debt, current portion, net | 24,280 | 25,909 | ||||||
| Total current liabilities | 41,711 | 45,188 | ||||||
| Deferred revenue, less current portion | 1,079 | 1,165 | ||||||
| Lease liability, less current portion | 2,153 | 2,511 | ||||||
| Debt, less current portion, net | 7,592 | 7,691 | ||||||
| Other liabilities | 807 | 848 | ||||||
| Total liabilities | 53,342 | 57,403 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at March 31, 2022 and December 31, 2021 | — | — | ||||||
| Common stock: $0.00001 par value; 250,000 shares authorized, 182,275 and 182,224 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 1 | 1 | ||||||
| Additional paid in capital | 387,838 | 387,023 | ||||||
| Accumulated deficit | (364,967 | ) | (357,371 | ) | ||||
| Total stockholders' equity | 22,872 | 29,653 | ||||||
| Total liabilities and stockholders' equity | $ | 76,214 | $ | 87,056 | ||||
MARRONE BIO INNOVATIONS, INC.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
| THREE MONTHS ENDED MARCH 31, | THREE MONTHS ENDED MARCH 31, | |||||
| 2022 | 2021 | |||||
| Revenues: | ||||||
| Product | $ | 10,982 | $ | 10,904 | ||
| License | 115 | 134 | ||||
| Total revenues | 11,097 | 11,038 | ||||
| Cost of product revenues | 4,891 | 4,069 | ||||
| Gross profit | 6,206 | 6,969 | ||||
| Operating Expenses: | ||||||
| Research, development and patent | 3,160 | 2,512 | ||||
| Selling, general and administrative | 10,068 | 7,483 | ||||
| Total operating expenses | 13,228 | 9,995 | ||||
| Loss from operations | (7,022 | ) | (3,026 | ) | ||
| Other income (expense): | ||||||
| Interest expense | (551 | ) | (393 | ) | ||
| Change in fair value of contingent consideration | 32 | 134 | ||||
| Other income, net | (66 | ) | 65 | |||
| Total other expense, net | (585 | ) | (194 | ) | ||
| Net loss before income taxes | (7,607 | ) | (3,220 | ) | ||
| Income tax expense | 11 | (41 | ) | |||
| Net Loss | $ | (7,596 | ) | $ | (3,261 | ) |
| Basic and diluted net loss per common share: | $ | (0.04 | ) | $ | (0.02 | ) |
| Weighted-average shares outstanding used in computing basic and diluted net loss per common share: | 182,261 | 168,938 | ||||
MARRONE BIO INNOVATIONS, INC.
Condensed Consolidated Statements of Cash Flows
(In Thousands, Unaudited)
| THREE MONTHS ENDED MARCH 31, | THREE MONTHS ENDED MARCH 31, | |||||
| 2022 | 2021 | |||||
| Cash flows from operating activities | ||||||
| Net loss | $ | (7,596 | ) | $ | (3,261 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Depreciation and amortization | 885 | 874 | ||||
| Change in inventory reserves | (84 | ) | (75 | ) | ||
| Right of use assets amortization | 308 | 215 | ||||
| Share-based compensation | 822 | 915 | ||||
| Non-cash interest expense | 33 | 48 | ||||
| Change in fair value of contingent consideration | (32 | ) | (134 | ) | ||
| Net changes in operating assets and liabilities: | ||||||
| Accounts receivable | 1,101 | (3,420 | ) | |||
| Inventories | (1,405 | ) | 279 | |||
| Prepaid Expenses and other assets | (144 | ) | 356 | |||
| Accounts payable | 790 | 252 | ||||
| Accrued and other liabilities | (2,578 | ) | (763 | ) | ||
| Lease Liability | (306 | ) | (225 | ) | ||
| Deferred revenue | (190 | ) | (78 | ) | ||
| Net cash used in operating activities | (8,396 | ) | (5,017 | ) | ||
| Cash flows from investing activities | ||||||
| Payment of consideration in connection with previous asset purchase | — | (750 | ) | |||
| Purchases of property, plant and equipment | (198 | ) | (119 | ) | ||
| Net cash used in investing activities | (198 | ) | (869 | ) | ||
| Cash flows from financing activities | ||||||
| Proceeds from secured borrowings | 10,430 | 11,504 | ||||
| Repayment in secured borrowings | (12,066 | ) | (8,725 | ) | ||
| Repayment of debt | (96 | ) | (99 | ) | ||
| Net settlement of options | — | 27 | ||||
| Proceeds from employee stock purchase plan | 65 | 86 | ||||
| Exercise of warrants | — | 6,175 | ||||
| Net cash provided by financing activities | (1,667 | ) | 8,968 | |||
| Net increase in cash and cash equivalents and restricted cash | (10,261 | ) | 3,082 | |||
| Cash and cash equivalents and restricted cash, beginning of period | 21,183 | 17,401 | ||||
| Cash and cash equivalents and restricted cash, end of period | $ | 10,922 | $ | 20,483 | ||
| Supplemental disclosure of cash flow information | ||||||
| Cash paid for interest | $ | 489 | $ | 339 | ||
| Supplemental disclosure of non-cash investing and financing activities | ||||||
| Property, plant and equipment included in accounts payable and accrued liabilities | $ | 118 | $ | 43 | ||
| Right of use assets (non-cash) acquired | $ | — | $ | 253 | ||
| Accrued liabilities related to equity compensation earned but not granted | $ | 72 | $ | — | ||
