Marrone Bio Innovations reports Q2 revenue increased 74% to record $12.2 million

Gross margins in the second quarter of 2020 were 60.6%, the seventh consecutive quarter in which gross margins exceeded 50%.  The margin improvement reflected the mix of high-margin foliar and seed treatment products sold in the second quarter.  Second quarter 2020 gross profit of $7.4 million was nearly double gross profit of the same period in 2019.

Operating expenses in the second quarter of 2020 decreased 8% to $9.4 million, compared with $10.2 million in the comparable period in 2019.  Operating expenses benefited by $1.4 million from a Paycheck Protection Program (PPP) loan secured to retain employees supporting the essential agricultural industry during the COVID-19 pandemic.  Spending in the quarter also included the addition of operating expenses from the 2019 acquisition of Pro Farm.

The operating expense ratio – comparing operating expenses to revenues – was 77% in the second quarter of 2020, as compared with 146% in the second quarter of 2019.  The ratio improvement quarter-to-quarter reflected significant revenue growth coupled with cost savings efforts and the benefit of the PPP loan.

Net income (loss) in the second quarter of 2020 decreased 58% to a loss of $2.9 million, as compared with a net loss of $6.8 million in the second quarter of 2019.    The net loss in the quarter included non-cash adjustments for warrant exercises, stock compensation and the amortization of intangibles related to the Pro Farm acquisition.

Adjusted EBITDA improved by 61%, with a loss of $1.5 million in the second quarter of 2020 as compared with a loss of $3.8 million in the same period last year.  Record revenues and gross profit, plus lower operating expenses, drove the improvement in both the net loss and Adjusted EBITDA.  Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.

Gross profit in the first half rose 47% to $13 million.  Gross margins increased by 330 basis points to 59.3%, reflecting product mix.

Operating expenses increased 9% to $20.6 million in the first half of 2020, compared with operating expenses of $18.9 million in the first half of 2019.  The increase was driven by the addition of six months of operating expenses from Pro Farm, somewhat offset by the benefit of $1.4 million from the PPP loan.

The operating expense ratio for the first half of 2020 was 94%, a 2,600 basis point improvement that reflected a higher rate of growth for revenues.

Net income (loss) in the first half decreased to a loss of $9.9 million, an improvement over the net loss of $10.7 million in the same period last year.  Record revenues and gross profit contributed to the improvement in net loss, somewhat offset by the increase in operating expenses, plus non-cash adjustments related to warrant exercises, stock compensation and amortization charge.

Adjusted EBITDA in the first half of 2020 was a loss of $5.2 million, an 18 percent improvement from an Adjusted EBITDA  loss of $6.4 million in the first half of 2019.  Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.

The company entered into a warrant exchange agreement with existing institutional investors, which, assuming exercise in full, is expected to provide adequate cash to reach cash flow breakeven under the company’s current operating plan.  The total number of outstanding warrants was reduced by approximately 35%, from 52.6 million to 36.5 million.  Expiration dates were significantly shortened ,with new warrants issued in five tranches, expiring by the end of 2021.

Entered into an agreement with Vive Crop Protection to offer a suite of ground-breaking products for U.S. growers that combines the active ingredient in Regalia® with a proven fungicide.  The pre-mix product also will contain Vive’s Allosperse Delivery System technology for use in multi applications in major crops, pending regulatory approvals.  The company will have rights to directly market a version of the product to specialty crop growers in California.