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05/10/18
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 (GLOBE NEWSWIRE) -- 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,

  DECEMBER 31,

      2018       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   $   —  
         

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Source: Marrone Bio Innovations