Amyris reports Third Quarter 2015 financial results
EMERYVILLE, Calif., Nov. 5, 2015—Amyris, Inc. (Nasdaq:AMRS), the industrial bioscience company, today announced financial results for the third quarter ended September 30, 2015.
“During the third quarter, we continued to execute on our plan, including improving our balance sheet while growing our collaborations pipeline with the signing of a key agreement with DARPA, and we continued to lower our cash costs,” said John Melo, Amyris President & CEO. “We also achieved breakthrough fermentation performance with our second fragrance molecule, which we began manufacturing in September and which we expect to make a strong contribution to our fourth-quarter product revenues.”
“We are tracking a number of collaborations opportunities that, when combined with a sequential acceleration in product revenue in the fourth quarter should have Amyris on track to complete a solid 2015,” continued Melo. “We are also highly focused on continuing to improve our financial performance which, when combined with our strong growth in Personal Care ingredients and High Performance specialty chemicals, will help set the stage for 2016 to be a positive free cash flow year for the company.”
Business Highlights
Other key operating and development highlights during the third quarter and, more recently, included:
Collaborations
Announced multi-year technology investment agreement with DARPA with a contract value of approximately $35 million, and allow Amyris to expand its research activities across multiple new organisms, add hundreds of new molecules from multiple pathways to Amyris’s product portfolio, and integrate several advanced technologies into Amyris’s strain improvement pipeline.
Progressed food ingredients collaboration, with approximately $1 million in milestone payments received to date.
Personal Care
Entered into a memorandum of understanding for exclusive cosmetic distribution partnership with Contém1g, as exclusive retail distributor of Biossance™ brand products in Brazil ─ 2nd largest and one of fastest-growing cosmetics markets in world.
Manufactured second critical fragrance ingredient successfully developed and produced at industrial scale just 10 months after starting as a research and development target due to the unprecedented speed and predictable, breakthrough performance of Amyris’s HI-RYSE™ (Hyper-Integration for Rapid Yeast Strain Engineering) technology platform.
Performance Chemicals
Expanded distribution of Muck Daddy™ with top auto detailing brand, Adam’s Polishes, through co-branded inclusion in its catalog and positioned Muck Daddy for further market expansion through custom formulations, private label, and co-branded products, along with direct sales.
Achieved record low farnesene cash cost of production of $1.75/liter, positioning Amyris to accelerate sales growth in performance polymers and industrial solvents markets where Amyris’s products are environmentally and cost advantaged for customers.
Financial Performance
Third Quarter 2015
GAAP revenues were $8.6 million, compared with $16.3 million for the third quarter of 2014. The decline was driven by a large annual F&F product sale in Q3 2014. Our second F&F product sales, representing the initial sale under an annual supply agreement, is expected to ship in the fourth quarter of this year. Collaboration and grants revenues contributed $4.4 million to total GAAP revenues for the quarter, compared with $4.9 million for the third quarter of 2014.
Cost of products sold decreased to $8.5 million for third-quarter 2015 from $10.1 million for the third quarter of 2014 driven mainly by lower product sales. Our adjusted gross margin in Q3 2015, excluding inventory provisions, depreciation, and excess capacity, declined due to a greater percentage of fuel sales overall in the product mix, as well as the Q3 2014 F&F shipment.
Net loss attributable to Amyris common stockholders for the third quarter of 2015 was $76.7 million, or $0.55 per basic share and diluted basis. Included in the third quarter net loss were several large non-cash related items, including a loss from debt extinguishment, acceleration of the amortization of debt discount, changes in fair value of derivatives, and impairment of assets. Adjusted net loss, excluding these non-recurring items, and excluding stock-based compensation, was $32.3 million, or $0.23 per basic share.
Net cash outflow in Q3 2015, before financing was $25.0 million, compared to $32.8 million for Q3 2014. Q3 2015 cash outflow, similar to Q2 2015, was driven by the timing of collaboration inflows, as well as higher marketing spend in the third quarter. We expect an improvement in cash flow in the fourth quarter supported by collaboration inflows and improved product sales and sales mix.
Nine Months Ended September 30, 2015
GAAP revenues were $24.3 million for the nine months ended September 30, 2015 compared with $31.7 million for the same period last year. The decline was driven by the large initial annual F&F product shipment occurring in Q3 2014. Collaboration revenues contributed $14.6 million of total revenues for the nine months ended September 30, 2015, compared with $13.0 million for the same period in 2014.
Cash revenue inflows for the nine months ended September 30, 2015 were $41.3 million.
Net loss attributable to Amyris common stockholders for the nine months ended September 30, 2015, was $176.0 million, or $1.76 per basic and diluted share. Included in the nine months ended September 30, 2015 net loss were several large non-cash related items, including a loss from debt extinguishment, acceleration of the amortization of debt discount, changes in fair value of derivatives, and impairment of assets. Adjusted net loss, excluding these non-recurring items, and excluding stock-based compensation, was $101.8 million, or $1.02 per basic share.
FINANCIAL RESULTS AND NON-GAAP INFORMATION
Condensed consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis. Management believes that it is useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Amyris’s historical performance as well as comparisons to the operating results of other companies. Management believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision-making.
Adjusted net income (loss) is calculated using GAAP net income (loss) excluding loss on purchase commitments and impairment of property, plant, and equipment, stock-based compensation, gains and losses from changes in fair value of derivatives and losses on debt extinguishment and acceleration of debt discount accretion.
Cash revenue inflows represent GAAP product revenue plus the cash received from collaborations and grants. Cash revenue inflows are calculated using GAAP revenues and adding the related changes in accounts receivable and deferred liabilities related to revenue recognized for these collaborations and grants to equal funds received during the period, along with any funding associated with collaborations.
Non-GAAP financial information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP in order to understand Amyris’s operating performance. A reconciliation of the non-GAAP financial measures presented in this release, including non-GAAP net income (loss), cash revenue inflows, and other measures, is provided in the tables attached to this press release.
QUARTERLY CONFERENCE CALL TODAY
Amyris will discuss these results and provide a business update in a conference call scheduled for 4:30 p.m. ET (1:30 p.m. PT) today. Investors may access the call by dialing (866) 516-3867, participant passcode: 65063680.
A live audio webcast of this conference call and accompanying presentation is also available by visiting the investor relations section of the company’s website at http://investors.amyris.com. A replay of the webcast will be available at the investor relations section of the company’s website approximately two hours after the conclusion of the call.
About Amyris
Amyris is the integrated renewable products company that is enabling the world’s leading brands to achieve sustainable growth. Amyris applies its innovative bioscience solutions to convert plant sugars into hydrocarbon molecules, specialty ingredients and consumer products. The company is delivering its No Compromise® products in focused markets, including specialty and performance chemicals, fragrance ingredients, and cosmetic emollients. More information about the company is available at www.amyris.com.
