Nov. 16, 2017
Marrone Bio Innovations, Inc. (MBI) has provided its financial results for the third quarter ended September 30, 2017 and a corporate update.
- GAAP revenues grew 31% to $14.8 million for the first nine months of 2017, compared to $11.4 million in the same year-ago period. GAAP revenues increased 16% to $4.2 million in the third quarter of 2017, compared to $3.6 million in the third quarter of 2016.
- Product shipments grew 36% to $15.2 million for the first nine months of 2017, compared to $11.2 million in the same year-ago period. Product shipments were $3.1 million in the third quarter of 2017, compared to $3.1 million in the third quarter of 2017.
- Gross margin increased to 41.2% for the first nine months of 2017, compared to 30.6% in the same year-ago period. Gross margin increased significantly to 40.9% in the third quarter of 2017, compared to 31.4% in the third quarter of 2016.
- In October 2017, the Company entered into an unsecured promissory note with an investor, enabling the funding of certain tranches at the lender's sole discretion. To date, the Company has received $2.0 million in funding under the note.
"We experienced several noteworthy catalysts in the third quarter of 2017, such as completion of our Grandevo WDG granulation line, as well as receiving EPA registration for MBI-110, which is the seventh product we've commercialized in 11 years," said Dr. Pam Marrone, CEO of MBI. "Despite these major events, unfavorable weather conditions reduced the number of expected sprays in several of our key markets. Historically, the third quarter produces the lowest sales of the year and is the most unpredictable, evidenced by hurricanes Irma and Maria which significantly impacted our sales in Florida and Puerto Rico. Fortunately, our portfolio approach to product development and marketing diversifies our revenue base and reduces the impact of any one variable on the success of the company as a whole, and allowed us to achieve above industry-average growth for the first nine months of 2017.
"We remain positive on the long-term outlook of our business and have made significant progress in penetrating the United States market and abroad. To that end, we have greatly expanded our reach in international markets through select partnerships with regionally significant firms such as ÉLÉPHANT VERT in North Africa, Kenya Biologics in Kenya and Tanzania. We have taken significant steps to increase product awareness in the substantial Central and South American market, such as sponsoring grower education events in Honduras and Chile, as well as successfully advancing field trials in Brazil, which have shown tremendous results to-date.
"We've also made an immense amount of progress on the R&D front and are near completing the development of our first generation bio-herbicide, MBI-014, which remains on track for EPA submission in the near-term. MBI-014 will address one of the largest needs of organic farming—controlling weeds—and we believe it will be the first new mode of action herbicide in 25 years. Also in the third quarter, on October 27, 2017, we received EPA registration for MBI-110—which we branded ‘Stargus™', for specialty crops and ‘Amplitude™' for row crops. To our knowledge, no other agricultural company has successfully commercialized 7 new agricultural products from 6 active ingredients in such a short amount of time."
Dr. Marrone concluded: "These R&D advancements, paired with the considerable progress in advancing distribution and product awareness, are translating into greater market opportunities and enhanced potential to create shareholder value."
Recent Operational Highlights
- Realized exceptional results from field trials in Brazil for Regalia®, Grandevo®, Majestene®, and Venerate®. MBI now anticipates a clear path to completion of the registration process in the country, paving the way to commercial sales in the large Brazilian crop protection market.
- Received EPA registration for MBI-110, branded "Stargus™" for specialty crops and "Amplitude™" for row crops. MBI plans to launch Stargus™ in the United States market in 2017.
- Completed the development of MBI-014 (formerly 010), an organic bio-herbicide that is set for an EPA submission in the near-term.
- Albaugh, a major row crop seed treatment provider, had a successful first season with the BioST seed treatment containing an MBI microorganism. Preliminary results are positive and point to substantial yield increases over the standards.
- Developed a strategy and focus to address grower demand of MBI products within the cannabis market through the creation of smaller pack sizes, hiring a cannabis segment sales specialist and utilizing Amazon as a direct-to-consumer sales channel.
- As part of MBI's collaboration with Evogene, transgenic plants carrying MBI's insecticidal genes were developed and one candidate showed promising results (100% kill) against cabbage looper. Additional tests are in progress.
- Joined a pilot project with AgShift, a Santa Clara-based agriculture technology startup, to assess the impact of the use of biological pesticides on the quality of fresh produce.
- Signed new distribution agreements in Africa with regionally significant firms such as ÉLÉPHANT VERT in North Africa and Kenya Biologics in Kenya and Tanzania.
- Finalized a distribution agreement with a large water treatment company for Zequanox.
- Currently in discussions with several food companies about how to best transition growers to organic and help their grower suppliers with specific pest and disease problems.
- Sponsored educational symposia for growers in Honduras and Chile with prominent local organizations to spread awareness of modern agricultural production technologies, including the use of biopesticides and stimulants in specialty crops.
- Completed construction of the Grandevo WDG granulation line at MBI's Marrone Michigan Manufacturing facility. This is currently producing a second-generation formulation to allow MBI to meet anticipated demand for this innovative new formulation.
- Discovered new methods to increase the potency of Majestene and Grandevo, driving notably higher gross margins and increasing the effective capacity of the Marrone Michigan Manufacturing facility.