Marrone Bio Innovations, Inc. reports first-quarter 2022 financial results

Marrone Bio Innovations, Inc. (NASDAQ: MBII), an international leader in sustainable bioprotection and plant health solutions, has provided its financial results for the first quarter ended March 31, 2022. Key results include:

• Higher sales of row crop products in the first quarter were somewhat offset by lower sales into specialty crop markets, which were affected by adverse weather conditions.

• Based on the strength of current orders, revenues in the first half are expected to increase in the low- to mid-teens on a percentage basis.

• Gross profit of $6.2 million and gross margins of 55.9% reflected changes in product mix, higher raw material costs, and the expansion of operations at the Michigan manufacturing facility. As in prior years, the annual target for gross margins is being maintained in the upper 50% range.

• The company incurred higher operating expenses, primarily related to non-recurring costs associated with the previously announced merger agreement with Bioceres Crop Solutions (NASDAQ: BIOX). Ongoing operating expenses for the full year in 2022 are forecast to be flat with those in the prior year, plus inflation.

• On March 16, 2022, Marrone Bio and Bioceres Crop Solutions entered into a definitive agreement to combine the companies in an all-stock transaction expected to close in the third quarter of 2022.

Selected Financial Highlights

¹Adjusted EBITDA is a non-GAAP financial measure and is described in relation to its most directly comparable GAAP measure under “Non-GAAP Financial Measures“ below.

Management Commentary

“Our first-quarter results reflect a strong effort from our team despite external headwinds. Sales of seed treatments for row crops grew, while drought conditions and a colder spring in the western United States slowed the pull through of products for use in the specialty crop markets,” said Chief Executive Officer Kevin Helash. “We are now halfway through the historically more important selling season in the second quarter, and our orders in hand are particularly robust for foliar and seed treatments in row crops globally.

“We are forecasting low- to mid-teens percentage revenue growth for the first half of 2022, which would represent a material increase above our sales growth in the first half of 2021,” Helash added. “We continue to expect annual gross margins in the upper 50% range, while holding ongoing operating expenses flat, plus inflation, for the full year.

“The start to this year underscores the value of our focus on greater geographic and end-use market diversification. This strategy will advance with our proposed merger with Bioceres, which, as previously reported, we expect to close in the third quarter of 2022. We anticipate significant topline synergies as a result of the merger, as well as growth from new products in our combined research pipelines,” Helash concluded.

First Quarter 2022 Financial and Operational Summary

• First quarter revenues in 2022 were $11.1 million, as compared with $11.0 million in the first quarter of 2021. Revenues were strongest for seed treatments sold for use in row crops in the United States and Europe.

• This increase was partially offset by weaker specialty crop markets, particularly in the western United States. Cold weather and drought conditions curtailed use of the company’s bio-fungicides at the grower level.

• Gross profit of $6.2 million and gross margins of 55.9% reflected shifts in product mix and higher raw material costs, as well as short-term variances related to expanded production at the company’s Michigan manufacturing facility.

• Operating expenses increased primarily because of non-recurring legal and consulting costs associated with the proposed merger with Bioceres. For the full year 2022, ongoing operating expenses are expected to be flat with those in the prior year, plus inflation.

• The company also budgeted for higher research and development (R&D) costs for registration fees and toxicology reports in support of its regulatory applications for new products. The operating expense ratio – a key performance indicator that compares operating expenses to revenues – increased to 119.2%.

• Net loss in the first quarter of 2022 was $7.6 million, as compared with a net loss of $3.3 million in the first quarter of 2021. Adjusted EBITDA was a loss of $5.4 million in the first quarter of 2022, as compared with a loss of $1.2 million in the first quarter of 2021. Lower revenues and gross profit, combined with higher operating expenses, contributed to the greater losses. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.

• Cash used in operations was $8.4 million as compared with cash used in operations of $5.0 million in the first quarter of 2021. Higher inventories to support future sales and accrued liabilities associated with merger and acquisition costs were the primary drivers of the greater use of operating cash.