Published: February 03, 2011
Codexis Reports Fourth Quarter and Full Year 2010 Results
REDWOOD CITY, Calif., Feb. 3, 2011 /PRNewswire/ -- Codexis, Inc. (Nasdaq: CDXS) today announced financial results for the fourth quarter and year ended December 31, 2010.
Full Year 2010 Financial Highlights:
Revenue: Revenue increased 29% to $107.1 million, driven by a 77% increase in sales of pharmaceutical products, from $18.6 million in 2009 to $32.8 million in 2010, and increases in collaborative R&D and government grants.
Operating Expenses: Full year operating expenses increased 2% to $86.2 million. R&D expenses decreased 4% to $52.4 million, primarily from the elimination of royalty payments to Maxygen, Inc. as a result of our acquisition of Maxygen's gene shuffling IP portfolio in October, 2010. SG&A expenses increased 13% to $33.8 million driven by increases in compensation and benefits and outside services costs associated with becoming a public company.
Net Loss: Net loss was ($8.5) million, or ($0.35) per share, based on 24.6 million weighted average common shares outstanding for the full year 2010. This compares to a net loss of ($20.3) million in 2009.
Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA was $9.9 million compared to a loss of ($7.3) million in 2009. Adjusted EBITDA is calculated by adjusting net loss for net interest expense, income taxes, depreciation, amortization, stock-based compensation and preferred stock warrant fair market valuation. A reconciliation of net loss to Adjusted EBITDA is presented below.
Fourth Quarter Financial Highlights:
Revenue: For the fourth quarter of 2010, the company reported revenues of $29.8 million, an increase of 23% from $24.2 million in the fourth quarter of 2009, primarily due to an increase of $3.4 million in product revenue, representing an increase of 67% over the same time period of 2009.
Operating Expenses: Research and development expenses in the fourth quarter of 2010 were $13.3 million, compared to $15.2 million for the fourth quarter of 2009. The decrease was primarily due to the reduction of royalty cost related to our acquisition of Maxygen's gene shuffling IP portfolio and a reduction of costs related to our joint development agreement with CO2 Solution. Selling, general and administrative expenses in the fourth quarter of 2010 declined to $8.6 million compared to $8.9 million over the same time period of 2009 primarily due to a reduction in discretionary expenses.
Net Loss: Net loss was ($0.5) million, or ($0.01) per share, based on 34.5 million weighted average common shares outstanding in the fourth quarter of 2010. This compares to a net loss of ($5.2) million or ($1.95) per share during the fourth quarter of 2009.
Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from ($1.1) million in the fourth quarter of 2009 to $4.4 million in the fourth quarter of 2010. Adjusted EBITDA is calculated by adjusting net loss for net interest expense, income taxes, depreciation, amortization, stock-based compensation and preferred stock warrant fair market valuation. A reconciliation of net loss to Adjusted EBITDA is presented below.
Cash: Cash, and cash equivalents at December 31, 2010, decreased to $72.4 million compared to $99.3 million at September 30, 2010 primarily due to our $20.0 million purchase of the Maxygen, Inc. gene shuffling IP portfolio in October 2010 and our $3.7 million debt repayment.
"In addition to our solid financial results, we continued to exceed our goals in our targeted commercial opportunities," said Alan Shaw, president and CEO of Codexis. "We achieved our technical milestones with Shell, we made our first shipments of two important enzymes to Merck and we saw substantial progress in our efforts in carbon capture and chemicals."
Outlook
Codexis' statements with regard to its outlook are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.
For the full year 2011, Codexis forecasts revenues of $120 million or greater, which would represent growth of 12% or greater compared to 2010. Codexis expects 2011 Adjusted EBITDA will be $5 million or greater.
Conference Call
Codexis will hold a conference call for investors on February 3, 2011 at 1:30 p.m. PT (4:30 p.m. ET). The conference call dial-in numbers are US: 866-788-0541 or International: 857-350-1679, access code 54501345. A live webcast of the call will also be available from the Investor Relations section of www.codexis.com. A recording of the call will be available by calling US: 888-286-8010 or International: 617-801-6888, access code 91197822 beginning approximately two hours after the call, and will be available for up to thirty days. A webcast replay from today's call will also be available from the Investor Relations section of www.codexis.com approximately two hours after the call and will be available for up to thirty days.
About Codexis, Inc.
Codexis is a clean technology company. Codexis develops optimized biocatalysts that make industrial processes faster, cleaner and more efficient. Codexis' technology is commercialized with leading global pharmaceutical companies and in development for advanced biofuels with Shell and carbon capture with Alstom. Other potential markets for the company's biocatalyst-enabled solutions include chemicals and water treatment.
Forward-Looking Statements
This press release contains forward-looking statements relating to the company's forecast for 2011 revenue and Adjusted EBITDA, which is defined elsewhere in this press release. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results. Factors that could materially affect actual results can be found in Codexis' Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2010, included under the caption "Risk Factors." Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.
Codexis, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended
December 31,
------------
2010 2009 % change
---- ---- --------
Revenues:
Product $8,586 $5,152 67%
Related party collaborative
research and development 19,275 18,693 3%
Collaborative research and
development 1,471 358 311%
Government grants 479 35 nm
--- ---
Total revenues 29,811 24,238 23%
------ ------
Costs and operating expenses:
Cost of product revenues 8,126 4,792 70%
Gross margin $ 460 360
Gross margin % 5% 7%
Research and development 13,349 15,240 -12%
Selling, general and
administrative 8,649 8,932 -3%
----- -----
Total costs and operating
expenses 30,124 28,964 4%
------ ------
Loss from operations (313) (4,726) -93%
Interest income 31 39 -21%
Interest expense and other,
net (153) (507) -70%
Loss before provision
(benefit) for income taxes (435) (5,194) -92%
Provision (benefit) for
income taxes 60 (13) nm
--- ---
Net loss $(495) $(5,181) -90%
===== =======
Net loss per share of common
stock,
basic and diluted $(0.01) $(1.95)
====== ======
Weighted average common
shares used in computing net
loss per share of common
stock, basic and diluted 34,452 2,653
====== =====
Twelve Months Ended
December 31,
------------
2010 2009 % change
---- ---- --------
Revenues:
Product $32,835 $18,554 77%
Related party collaborative
research and development 66,148 62,656 6%
Collaborative research and
development 4,048 1,652 145%
Government grants 4,073 46 nm
----- ---
Total revenues 107,104 82,908 29%
------- ------
Costs and operating
expenses:
Cost of product revenues 27,982 16,678 68%
Gross margin $ 4,853 1,876
Gross margin % 15% 10%
Research and development 52,405 54,725 -4%
Selling, general and
administrative 33,841 29,871 13%
------ ------
Total costs and operating
expenses 114,228 101,274 13%
------- -------
Loss from operations (7,124) (18,366) -61%
Interest income 166 180 -8%
Interest expense and other,
net (1,199) (2,037) -41%
Loss before provision
(benefit) for income taxes (8,157) (20,223) -60%
Provision (benefit) for
income taxes 384 66 482%
--- ---
Net loss $(8,541) $(20,289) -58%
======= ========
Net loss per share of
common stock,
basic and diluted $(0.35) $(7.74)
====== ======
Weighted average common
shares used in computing
net loss per share of
common stock, basic and
diluted 24,594 2,622
====== =====
Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
December December
31, 31,
2010 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $72,396 $31,785
Marketable securities - 23,778
Accounts receivable, net 10,620 7,246
Related party accounts receivable 4,713 -
Inventories 2,817 2,915
Prepaid expenses and other current assets 1,646 1,658
----- -----
Total current assets 92,192 67,382
Restricted cash 1,466 731
Property and equipment, net 21,452 21,581
Intangible assets, net 20,158 928
Goodwill 3,241 3,241
Other non-current assets 2,791 5,173
----- -----
Total assets $141,300 $99,036
======== =======
Liabilities, redeemable convertible
preferred stock, and shareholders' equity
(deficit)
Current liabilities:
Accounts payable $9,208 $9,999
Accrued compensation 8,107 6,518
Related party payable - 1,314
Other accrued liabilities 5,630 10,376
Redeemable convertible preferred stock
warrant liability - 2,009
Deferred revenues 455 2,240
Related party deferred revenues 4,084 13,161
Financing obligations - 5,368
Total current liabilities 27,484 50,985
Deferred revenues, net of current portion 1,671 1,856
Related party deferred revenues, net of
current portion 3,403 7,487
Financing obligations, net of current
portion - 2,574
Other long-term liabilities 1,381 1,307
----- -----
Total liabilities 33,939 64,209
Redeemable convertible preferred stock
issuable in series A to F - 179,672
Stockholders' equity (deficit):
Common stock 4 -
Additional paid-in capital 275,540 15,015
Accumulated other comprehensive loss (34) (252)
Accumulated deficit (168,149) (159,608)
-------- --------
Total stockholders' equity (deficit) 107,361 (144,845)
------- --------
Total liabilities, redeemable convertible
preferred stock, and shareholders' equity
(deficit) $141,300 $99,036
======== =======
Codexis, Inc.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(In Thousands)
Twelve Months
Ended
December 31,
2010 2009
---- ----
Operating activities:
Net loss $(8,541) $(20,289)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Amortization of intangible assets 1,063 957
Depreciation and amortization of
property and equipment 7,246 5,172
Revaluation of redeemable
convertible preferred stock warrant
liability 677 627
Loss (gain) on disposal of property
and equipment 148 (50)
Extinguishment of royalty payable 461 -
Stock-based compensation 8,737 4,822
Accretion of asset retirement
obligation 146 43
Amortization of debt discount 26 311
Accretion (amortization) of premium/
discount on marketable securities 511 594
Changes in operating assets and
liabilities:
Accounts receivable (8,087) (1,054)
Inventories 98 58
Prepaid expenses and other current
assets 13 11
Other assets 2,814 (228)
Accounts payable (791) 189
Accrued compensation 1,589 2,434
Related party payable (1,314) 879
Other accrued liabilities (6,048) (3,792)
Deferred revenues (15,131) 530
------- ---
Net cash used in operating
activities (16,383) (8,786)
------- ------
Investing activities:
(Increase) decrease in restricted
cash (735) 193
Purchase of property and equipment (6,990) (10,697)
Purchase of marketable securities (49,051) (37,118)
Purchase of Maxygen patent portfolio (20,705) -
Proceeds from sale of marketable
securities 1,605 -
Proceeds from maturities of
marketable securities 70,695 27,980
Proceeds from disposal of property
and equipment 15 -
Purchase of CO2 Solution common
shares - (1,316)
Net cash provided by (used in)
investing activities (5,166) (20,958)
------ -------
Financing activities:
Principal payments on financing
obligations (8,026) (6,087)
Payments in preparation for initial
public offering (3,870) (959)
Proceeds from issuance of preferred
stock, net of issuance costs - 46,926
Proceeds from issuance of common
stock on IPO, net of underwriting
discounts 72,541 -
Proceeds from exercises of stock
options 1,594 117
----- ---
Net cash provided by financing
activities 62,239 39,997
------ ------
Effect of exchange rate changes on
cash and cash equivalents (79) (371)
--- ----
Net increase in cash and cash
equivalents 40,611 9,882
Cash and cash equivalents:
Beginning of the period 31,785 21,903
------ ------
End of the period 72,396 31,785
Marketable securities at the end of
period - 23,778
Cash, cash equivalents and
marketable securities $72,396 $55,563
======= =======
Reconciliation of GAAP to Non-GAAP Financial Information
In this press release, in addition to GAAP financial results, we present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA as a factor in evaluating management's performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.
A reconciliation of GAAP net loss to Adjusted EBITDA is included in the table below.
Codexis, Inc.
Reconciliation of GAAP Net Loss to Adjusted EBITDA
(Unaudited)
(In Thousands)
Three months Twelve months
ended ended
December 31, December 31,
Calculation of Adjusted EBITDA 2010 2009 2010 2009
------------------------------ ---- ---- ---- ----
Net loss $(495) $(5,181) $(8,541) $(20,289)
Adjustments:
Minus: Interest income (31) (39) (166) (180)
Plus: Interest expense 5 336 529 1,413
Plus: Income taxes 60 (13) 384 66
Plus: Depreciation and
amortization 2,593 1,713 8,266 6,119
Plus: Stock-based compensation 2,296 1,763 8,728 4,912
Plus: Preferred stock warrant
fair market valuation
adjustment - 277 677 627
Adjusted EBITDA $4,428 $(1,144) $9,877 $(7,332)
====== ======= ====== =======
Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:
-- Adjusted EBITDA does not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
-- Adjusted EBITDA does not reflect changes in, or cash requirements for,
our working capital needs;
-- Although depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in the
future, and Adjusted EBITDA does not reflect any cash requirements for
such replacements; and
-- Non-cash compensation is and will remain a key element of our overall
long-term incentive compensation package, although we exclude it as an
expense when evaluating our ongoing operating performance for a
particular period.
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.
Contacts:
Investors: Robert Lawson, robert.lawson@codexis.com, 650-421-8137
Media: Lyn Christenson, lyn.christenson@codexis.com, 650-421-8144 or
Saskia Sidenfaden, ssidenfaden@mww.com, 212-827-3771.
SOURCE Codexis, Inc.
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