Marrone Bio Innovations reports first quarter 2020 financial results
May. 12, 2020
First Quarter 2020 Financial Summary
- First quarter 2020 revenues increased 11 percent to $9.7 million. Key sales for the quarter included Venerate® for foliar applications in the vegetable and stone fruit markets, and the introduction of Stargus® biofungicide in California. Sales of Regalia® in almond and tree fruit crops continued to grow, as a result of our successful BioUnite program.
- Gross margins of 57.7 percent in the first quarter were a new record, marking the company’s sixth consecutive quarter of gross margins of 50+ percent.
- Operating expenses in the first quarter of 2020 were $11.2 million, up $2.6 million from the first quarter of 2019. Of the increase, $0.9 million was non-cash, including a $0.6 million non-cash amortization charge, as well as stock compensation expenses. In addition, $1.1 million of the increase was due to the addition of Pro Farm’s operating expenses.
- Net loss in the first quarter of 2020 was $7.0 million, a year-over-year increase of $3.1 million. The increase included $1.4 million in a non-cash charge related to the estimated fair value of warrants, $0.6 million in non-cash amortization charges associated with the acquisition of Pro Farm, a $0.3 million increase in non-cash stock compensation expenses and the $1.1 million addition of Pro Farm’s operating expenses, partially offset by increased gross profit.
- Adjusted EBITDA increased to a $3.7 million loss in the first quarter of 2020, from a $2.6 million loss in the first quarter of 2019, a $1.1 million difference. The increase was primarily due to the addition of Pro Farm’s operating expenses. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
- Cash used in operations was $6.3 million in the first quarter of 2020 as compared to $7.7 million in the first quarter of 2019.
“Farmers around the world are working tirelessly to ensure a safe and adequate food supply as they adjust to the changes brought on by the COVID-19 pandemic,” said Dr. Pam Marrone, Chief Executive Officer of Marrone Bio Innovations. “Growers remain focused on the task at hand: harvesting early crops, planting, increasing farm worker protection and adjusting to the changing demand from retail and food service.
“We are pleased with the progress we have made with the Pro Farm integration and continue to find exciting synergies, where both Marrone Bio and Pro Farm benefit from leveraging our existing partner relationships to expand geographically and create new product combinations. While we have seen year-over-year revenue growth in the first quarter of 2020 in part due to the addition of Pro Farm’s seed treatments, we expect greater growth for the remainder of 2020, notwithstanding the impact of COVID-19.”
“As an essential business, we are fortunate to continue to provide our grower customers with necessary crop protection and plant health tools. However, we anticipate continued challenges to the agricultural economy through the remainder of the year. In an uncertain environment, we have taken steps to reduce costs while retaining our workforce,” concluded Marrone.
Jim Boyd, Chief Financial Officer of Marrone Bio Innovations, added “Subsequent to the end of the quarter, two events took place that significantly reduced our business risk and strengthened our balance sheet. First, we applied for and received a $1.7 million loan under the Paycheck Protection Program as part of the Coronavirus Aid, Relief and Economic Security Act, which has helped us to maintain our workforce in the face of economic uncertainty. Second, we signed a warrant exchange agreement with existing institutional investors that provided $2.5 million in financing earlier this month, and that, if exercised in full, would result in up to $20 million in additional proceeds, which we expect would take us to an Adjusted EBITDA breakeven level of operations given our current outlook and plan.”
- The company signed a commercial agreement with Anasac Chile S.A. to develop and distribute Grandevo® and Venerate® bioinsecticides in Chile, as well as an additional agreement with UPL South Africa Ltd. to distribute Regalia Maxx, both significant export markets.
- Jet-Oxide® 15% post-harvest sanitizer and industrial disinfectant product is now approved by the U.S. Environmental Protection Agency (“EPA”) for use against human coronaviruses to sanitize industrial food and agricultural hard surfaces.
- Pacesetter™, a recently EPA-approved bio-based plant health product, is now available to corn, soybean, wheat and other row crop growers in the United States. In our BioUnite program, Pacesetter acts synergistically with conventional fungicides, increasing yield by up to seven bushels per acre in soybeans and 13 bushels per acre in corn.
- The company submitted registration for Stargus, its second biofungicide product, for use in the European Union, the second largest global fungicide market.
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