Attached files
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| 8-K - FORM 8-K - CODEXIS, INC. | d8k.htm |
Exhibit 99.1
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Codexis, Inc. 200 Penobscot Drive Redwood City, CA 94063 650.421.8100 www.codexis.com |
Codexis Grows Revenue 28% in Second Quarter
Redwood City, CA – August 5, 2010 – Codexis, Inc. (NASDAQ: CDXS), a clean technology company, today announced financial results for the second quarter ended June 30, 2010.
Financial Highlights
Revenue: For the second quarter of 2010, the company reported revenue of $24.5 million, an increase of 28% from $19.2 million in the second quarter of 2009. Product revenue of $8.5 million increased 102% over the same time period.
Operating Expenses: Research and development expenses in the second quarter of 2010 were $13.0 million compared to $12.1 million for the second quarter of 2009. The increase was primarily due to higher depreciation and stock-based compensation expenses. Selling, general and administrative expenses in the second quarter of 2010 were $8.7 million compared to $6.2 million for the second quarter of 2009. The increase was primarily due to increased headcount, legal and accounting costs associated with preparing to become a public company and higher stock-based compensation expenses.
Net Income/(Loss): Net loss was ($3.9) million, or ($0.15) per share, based on 26.6 million weighted average common shares outstanding in the second quarter of 2010. The company ended the quarter with 34.2 million shares outstanding as a result of the conversion of preferred stock and the issuance of new shares of common stock in connection with the company’s initial public offering.
Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from ($0.1) million in the second quarter of 2009 to $0.5 million in 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock warrants fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented below.
Cash: Cash, cash equivalents and marketable securities for the second quarter of 2010 increased to $100.3 million compared to $39.3 million at March 31, 2010 and $55.6 million at December 31, 2009. Codexis completed an initial public offering in April 2010, generating net proceeds of $72.5 million.
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Outlook
For 2010, Codexis affirms its forecast for 2010 annual revenue of $94 million to $98 million, which would represent growth of 13% to 18% compared to 2009, and affirms its expectation that Adjusted EBITDA will be positive for full year 2010.
Recent Events
In June 2010, Merck and Codexis announced joint receipt of the Presidential Green Chemistry Challenge Award, given by the U.S. Environmental Protection Agency (EPA). The award recognized development of a novel biocatalytic production method for sitagliptin, the active pharmaceutical ingredient in Merck’s Januvia. The new process improved efficiency and significantly decreased waste products, and was the subject of a joint Merck-Codexis paper published June 17, 2010 in the leading peer-review journal Science. This was Codexis’ second EPA Green Chemistry award. The first was received in 2006 for an improved process for a key building block of atorvastatin, the active ingredient in Lipitor from Pfizer.
On June 28, 2010, Peter Strumph joined Codexis as Senior Vice President, Commercial Operations, a new position. Mr. Strumph is responsible for Codexis pharmaceutical product management and manufacturing operations worldwide. He brings to Codexis two decades of experience in senior manufacturing and operations management in the biopharmaceutical industry.
“We are very pleased with the results of our second quarter, highlighted by strong financial performance and important milestones in both pharmaceuticals and bioindustrials,” said Alan Shaw, Ph.D., President and Chief Executive Officer. “We continue to make excellent progress building a strong, sustainable clean technology company.”
Conference Call
Codexis will hold a conference call for investors on August 5, 2010 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 87964645 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. Other potential markets include carbon capture, water treatment and chemicals.
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Forward-Looking Statements
This press release contains forward-looking statements relating to the Company’s forecast for 2010 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 dated May 28, 2010, including 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 Share Amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||
| 2010 | 2009 | % change | 2010 | 2009 | % change | |||||||||||||||||
| Revenues: |
||||||||||||||||||||||
| Product |
$ | 8,484 | $ | 4,193 | 102 | % | $ | 14,760 | $ | 8,765 | 68 | % | ||||||||||
| Related party collaborative research and development |
14,653 | 14,544 | 1 | % | 30,695 | 28,963 | 6 | % | ||||||||||||||
| Collaborative research and development |
851 | 461 | 85 | % | 1,511 | 869 | 74 | % | ||||||||||||||
| Government grants |
492 | — | nm | 3,214 | 12 | nm | ||||||||||||||||
| Total revenues |
24,480 | 19,198 | 28 | % | 50,180 | 38,609 | 30 | % | ||||||||||||||
| Costs and operating expenses: |
||||||||||||||||||||||
| Cost of product revenues |
6,075 | 3,412 | 78 | % | 11,293 | 7,268 | 55 | % | ||||||||||||||
| Gross margin $ |
2,409 | 781 | 3,467 | 1,497 | ||||||||||||||||||
| Gross margin % |
28 | % | 19 | % | 23 | % | 17 | % | ||||||||||||||
| Research and development |
13,004 | 12,112 | 7 | % | 25,986 | 27,246 | -5 | % | ||||||||||||||
| Selling, general and administrative |
8,652 | 6,178 | 40 | % | 17,252 | 12,241 | 41 | % | ||||||||||||||
| Total costs and operating expenses |
27,731 | 21,702 | 28 | % | 54,531 | 46,755 | 17 | % | ||||||||||||||
| Loss from operations |
(3,251 | ) | (2,504 | ) | 30 | % | (4,351 | ) | (8,146 | ) | -47 | % | ||||||||||
| Interest income |
46 | 45 | 2 | % | 74 | 76 | -3 | % | ||||||||||||||
| Interest expense and other, net |
(654 | ) | (358 | ) | 83 | % | (1,012 | ) | (786 | ) | 29 | % | ||||||||||
| Loss before provision for income taxes |
(3,859 | ) | (2,817 | ) | 37 | % | (5,289 | ) | (8,856 | ) | -40 | % | ||||||||||
| Provision for income taxes |
87 | 41 | 112 | % | 26 | 95 | -73 | % | ||||||||||||||
| Net loss |
$ | (3,946 | ) | $ | (2,858 | ) | 38 | % | $ | (5,315 | ) | $ | (8,951 | ) | -41 | % | ||||||
| Net loss per share of common stock, basic and diluted |
$ | (0.15 | ) | $ | (1.09 | ) | $ | (0.36 | ) | $ | (3.44 | ) | ||||||||||
| Weighted average common shares used in computing net loss per share of common stock, basic and diluted |
26,557 | 2,613 | 14,701 | 2,602 | ||||||||||||||||||
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Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
| June 30, 2010 |
December 31, 2009 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 51,413 | $ | 31,785 | ||||
| Marketable securities |
48,894 | 23,778 | ||||||
| Accounts receivable, net |
7,197 | 7,246 | ||||||
| Related party accounts receivable |
92 | — | ||||||
| Inventories |
2,176 | 2,915 | ||||||
| Prepaid expenses and other current assets |
4,788 | 1,658 | ||||||
| Total current assets |
114,560 | 67,382 | ||||||
| Restricted cash |
668 | 731 | ||||||
| Property and equipment, net |
21,332 | 21,581 | ||||||
| Intangible assets, net |
650 | 928 | ||||||
| Goodwill |
3,241 | 3,241 | ||||||
| Other non-current assets |
3,224 | 5,173 | ||||||
| Total assets |
$ | 143,675 | $ | 99,036 | ||||
| Liabilities, redeemable convertible preferred stock, and shareholders’ equity (deficit) |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 8,036 | $ | 9,999 | ||||
| Accrued compensation |
5,041 | 6,518 | ||||||
| Related party payable |
268 | 1,314 | ||||||
| Other accrued liabilities |
7,550 | 10,376 | ||||||
| Redeemable convertible preferred stock warrant liability |
— | 2,009 | ||||||
| Deferred revenues |
501 | 2,240 | ||||||
| Related party deferred revenues |
4,084 | 13,161 | ||||||
| Financing obligations |
5,367 | 5,368 | ||||||
| Total current liabilities |
30,847 | 50,985 | ||||||
| Deferred revenues, net of current portion |
1,764 | 1,856 | ||||||
| Related party deferred revenues, net of current portion |
5,445 | 7,487 | ||||||
| Financing obligations, net of current portion |
— | 2,574 | ||||||
| Other long-term liabilities |
1,324 | 1,307 | ||||||
| Total liabilities |
39,380 | 64,209 | ||||||
| Redeemable convertible preferred stock issuable in series A to F |
— | 179,672 | ||||||
| Stockholders’ equity (deficit): |
||||||||
| Common stock |
4 | — | ||||||
| Additional paid-in capital |
269,077 | 15,015 | ||||||
| Accumulated other comprehensive income (loss) |
137 | (252 | ) | |||||
| Accumulated deficit |
(164,923 | ) | (159,608 | ) | ||||
| Total stockholders’ equity (deficit) |
104,295 | (144,845 | ) | |||||
| Total liabilities, redeemable convertible preferred stock, and shareholders’ equity (deficit) |
$ | 143,675 | $ | 99,036 | ||||
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Codexis, Inc.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(In Thousands)
| Six Months Ended June 30, |
||||||||
| 2010 | 2009 | |||||||
| Operating activities: |
||||||||
| Net loss |
$ | (5,315 | ) | $ | (8,951 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: |
||||||||
| Amortization of intangible assets |
302 | 462 | ||||||
| Depreciation and amortization of property and equipment |
3,438 | 2,346 | ||||||
| Revaluation of redeemable convertible preferred stock warrant liability |
677 | 6 | ||||||
| Stock-based compensation |
3,951 | 1,893 | ||||||
| Amortization of debt discount |
104 | 200 | ||||||
| Accretion (amortization) of premium/discount on marketable securities |
183 | 131 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(42 | ) | 91 | |||||
| Inventories |
739 | (630 | ) | |||||
| Prepaid expenses and other current assets |
(3,126 | ) | (617 | ) | ||||
| Other assets |
2,395 | 50 | ||||||
| Accounts payable |
(1,413 | ) | (1,952 | ) | ||||
| Accrued compensation |
(1,477 | ) | 139 | |||||
| Accrued related party payable |
(1,046 | ) | 2 | |||||
| Other accrued liabilities |
(5,133 | ) | (3,924 | ) | ||||
| Deferred revenues |
(12,950 | ) | 1,290 | |||||
| Net cash (used in) operating activities |
(18,713 | ) | (9,464 | ) | ||||
| Investing activities: |
||||||||
| Decrease in restricted cash |
65 | 203 | ||||||
| Purchase of property and equipment |
(3,192 | ) | (4,518 | ) | ||||
| Purchase of marketable securities |
(49,051 | ) | (28,802 | ) | ||||
| Proceeds from sales of marketable securities |
1,605 | — | ||||||
| Proceeds from maturities of marketable securities |
21,960 | 11,500 | ||||||
| Net cash (used in) investing activities |
(28,613 | ) | (21,617 | ) | ||||
| Financing activities: |
||||||||
| Principal payments on financing obligations |
(2,681 | ) | (2,674 | ) | ||||
| Payments in preparation for initial public offering |
(3,106 | ) | — | |||||
| Proceeds from issuance of preferred stock |
— | 40,000 | ||||||
| Proceeds from issuance of common stock on IPO |
72,539 | — | ||||||
| Proceeds from exercises of stock options |
254 | 62 | ||||||
| Net cash provided by financing activities |
67,006 | 37,388 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
(52 | ) | (56 | ) | ||||
| Net increase in cash and cash equivalents |
19,628 | 6,251 | ||||||
| Cash and cash equivalents: |
||||||||
| Beginning of the period |
31,785 | 21,903 | ||||||
| End of the period |
51,413 | 28,154 | ||||||
| Marketable securities at the end of period |
48,894 | 32,403 | ||||||
| Cash, cash equivalents and marketable securities |
$ | 100,307 | $ | 60,557 | ||||
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Reconciliation of GAAP to Non-GAAP Financial Information
Adjusted EBITDA (earnings before interest, tax, depreciation, amortization, stock-based compensation and warrant related costs) for the second quarter of 2010 was $0.5 million compared to a loss of $0.1 million in the second quarter of 2009. For the six months ended June 30, 2010, Adjusted EBITDA improved to $3.3 million from a loss of $3.5 million in the same period in 2009. The key driver of this improvement was a $3.6 million reduction in net loss.
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 income (loss) to Adjusted EBITDA is included in the table below.
Codexis, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited)
(In Thousands)
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| Calculation of Adjusted EBITDA |
2010 | 2009 | 2010 | 2009 | ||||||||||||
| Net income (loss) |
$ | (3,946 | ) | $ | (2,858 | ) | $ | (5,315 | ) | $ | (8,951 | ) | ||||
| Adjustments: |
||||||||||||||||
| Minus: Interest income |
(46 | ) | (45 | ) | (74 | ) | (76 | ) | ||||||||
| Plus: Interest expense |
96 | 358 | 394 | 761 | ||||||||||||
| Plus: Income taxes |
87 | 41 | 26 | 95 | ||||||||||||
| Plus: Depreciation and amortization |
1,884 | 1,444 | 3,740 | 2,808 | ||||||||||||
| Plus: Stock-based compensation |
2,171 | 962 | 3,885 | 1,862 | ||||||||||||
| Plus: Preferred stock warrant fair market valuation adjustment |
281 | — | 677 | 6 | ||||||||||||
| Adjusted EBITDA |
$ | 527 | $ | (98 | ) | $ | 3,333 | $ | (3,495 | ) | ||||||
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; |
| • | Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; |
| • | 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. |
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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: Derick Sutton, derick.sutton@codexis.com, 650-421-8130
Media: Lyn Christenson, lyn.christenson@codexis.com, 650-421-8144 or Saskia Sidenfaden, ssidenfaden@mww.com, 212-827-3771.
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