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, | 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 | $ | — | ||
