Codexis Reports Fourth Quarter and Full Year 2011 Results
REDWOOD CITY, Calif., Feb. 7, 2012 /PRNewswire/ -- Codexis, Inc. (NASDAQ: CDXS), a developer of industrial enzymes to enable the production of biofuels, bio-based chemicals, and pharmaceutical intermediates, today announced financial results for the fourth quarter and year ended December 31, 2011.
"In 2011, we launched our CodeXyme(TM) cellulase enzymes and CodeXol(TM) detergent alcohol product lines," said Alan Shaw, Ph.D., President and CEO of Codexis, Inc. "In 2012 we are focused on delivering world-class CodeXyme(TM) cellulase enzymes to our development partners, piloting production of CodeXol(TM), and delivering continued sales growth in our pharmaceuticals products and services".
Full Year 2011 Financial Highlights:
Revenue: For fiscal 2011, the company reported revenues of $123.9 million, an increase of $16.8 million or 16% over fiscal 2010 revenue of $107.1 million. Product revenue of $49.0 million increased $16.2 million or 49% over the prior year, driven by increased sales to both generic and innovator pharmaceutical customers. Collaborative R&D revenue of $71.4 million increased $1.2 million from $70.2 million over the prior year.
Operating Expenses: Research and development expenses for fiscal 2011 were $61.0 million, compared to $52.4 million for fiscal 2010. The increase was primarily due to additional headcount and amortization related to intellectual property purchased from Maxygen, Inc. Selling, general and administrative expenses for fiscal 2011 increased to $36.9 million compared to $33.8 million for fiscal 2010, driven by higher stock compensation expense and higher compensation expense due to headcount increases.
Net Loss: Net loss was ($16.6) million, or ($0.46) per share, based on 35.7 million weighted average common shares outstanding for fiscal year 2011. This compares to a net loss of ($8.5) million or ($0.35) per share for fiscal 2010.
Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA was $4.3 million for fiscal 2011 compared to $9.9 million for fiscal 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, cash equivalents and marketable securities at December 31, 2011, was $63.8 million compared to $74.1 million at December 31, 2010. The company used ($0.5) million in cash from operations in fiscal 2011.
Fourth Quarter 2011 Financial Highlights:
Revenue: For the fourth quarter of 2011, the company reported revenues of $33.5 million, an increase of $3.7 million or 12% over $29.8 million in the fourth quarter of 2010. Product revenue increased $6.9 million or 80% over the same time period of 2010.
Operating Expenses: Research and development expenses in the fourth quarter of 2011 were $15.5 million, compared to $13.3 million for the fourth quarter of 2010. The increase was primarily due to additional headcount for the development of CodeXol(TM) Detergent Alcohol. Selling, general and administrative expenses in the fourth quarter of 2011 increased to $9.8 million, compared to $8.6 million over the same time period of 2010, related to use of consultants, legal costs associated with intellectual property patent filing and increased costs related to SOX compliance.
Net Loss: Net loss was ($5.3) million, or ($0.15) per share, based on 36.0 million weighted average common shares outstanding in the fourth quarter of 2011. This compares to a net loss of ($0.5) million or ($0.01) per share during the fourth quarter of 2010.
Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA decreased from $4.4 million in the fourth quarter of 2010 to ($0.2) million in the fourth quarter of 2011. 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, cash equivalents and marketable securities at December 31, 2011 was $63.8 million compared to $70.6 million at September 30, 2011. The company used ($2.9) million in cash from operations in the fourth quarter.
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 2012, Codexis forecasts revenues in line with or exceeding 2011 results. Codexis expects 2012 Adjusted EBITDA will be positive.
Conference Call
Codexis will hold a conference call for investors on February 7, 2012 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 84268524 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 an industrial biotechnology company developing enzymes for the production of high value sustainable chemicals, clean fuels, cost effective pharmaceutical processes and renewable bioindustrial ingredients to make industry more efficient, productive and profitable. Partners and customers include global leaders such as Shell, Merck and Pfizer. For more information, see www.codexis.com.
Forward-Looking Statements
This press release contains forward-looking statements relating to Codexis' forecast for 2012 revenue and Adjusted EBITDA, and Codexis' ability to deliver CodeXyme(TM) cellulase enzymes to its development partners in 2012, pilot production of CodeXol(TM) in 2012, and deliver sales growth in its pharmaceuticals products and services in 2012. 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 include the risks that our operating results may fluctuate in the future, that we have a history of net losses and that we may be unable to successfully commercialize our technology in biofuels. Additional 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 7, 2011, 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 Per Share Amounts)
Three Months
Ended Year Ended
December 31, December 31,
------------ ------------
2011 2010 % change 2011 2010 % change
---- ---- -------- ---- ---- --------
Revenues:
Product $15,493 $8,586 80% $49,021 $32,835 49%
Collaborative research and
development 17,296 20,746 -17% 71,368 70,196 2%
Government grants 705 479 47% 3,476 4,073 -15%
--- --- ----- -----
Total revenues 33,494 29,811 12% 123,865 107,104 16%
------ ------ ------- -------
Costs and operating
expenses:
Cost of product revenues 13,067 8,126 61% 41,781 27,982 49%
Gross margin $ 2,426 460 427% 7,240 4,853 49%
Gross margin % 16% 5% 15% 15%
Research and development 15,548 13,349 16% 61,049 52,405 16%
Selling, general and
administrative 9,782 8,649 13% 36,942 33,841 9%
----- ----- ------ ------
. .
Total costs and operating
expenses 38,397 30,124 27% 139,772 114,228 22%
------ ------ ------- -------
Loss from operations (4,903) (313) 1466% (15,907) (7,124) 123%
Interest income 77 31 148% 273 166 64%
Interest expense and
other, net (297) (153) 94% (675) (1,199) -44%
---- ---- ---- ------
Loss before provision for
income taxes (5,123) (435) 1078% (16,309) (8,157) 100%
Provision for income taxes 174 60 190% 241 384 -37%
--- --- --- ---
Net loss $(5,297) $(495) 970% $(16,550) $(8,541) 94%
======= ===== ======== =======
Net loss per share of
common stock,
basic and diluted $(0.15) $(0.01) $(0.46) $(0.35)
====== ====== ====== ======
Weighted average common
shares used in computing
net loss per share of
common stock, basic and
diluted 35,965 34,452 35,674 24,594
====== ====== ====== ======
Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
December 31, December 31,
2011 2010
---- ----
Assets
Current assets:
Cash and cash equivalents $25,762 $72,396
Marketable securities 27,720 -
Accounts receivable, net 18,917 15,333
Inventories 4,488 2,817
Prepaid expenses and other current
assets 2,345 1,646
----- -----
Total current assets 79,232 92,192
Restricted cash 1,511 1,466
Non-current marketable securities 10,348 1,650
Property and equipment, net 24,176 21,452
Intangible assets, net 16,442 20,158
Goodwill 3,241 3,241
Other non-current assets 972 1,141
--- -----
Total assets $135,922 $141,300
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $10,364 $9,208
Accrued compensation 6,785 8,107
Other accrued liabilities 7,354 5,630
Deferred revenues 3,789 4,539
Total current liabilities 28,292 27,484
Deferred revenues, net of current
portion 1,485 5,074
Other long-term liabilities 3,455 1,381
----- -----
Total liabilities 33,232 33,939
Stockholders' equity:
Common stock 4 4
Additional paid-in capital 287,792 275,540
Accumulated other comprehensive income
(loss) (407) (34)
Accumulated deficit (184,699) (168,149)
-------- --------
Total stockholders' equity 102,690 107,361
------- -------
Total liabilities, and stockholders'
equity $135,922 $141,300
======== ========
Codexis, Inc.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(In Thousands)
Year Ended
December 31,
------------
2011 2010
---- ----
Operating activities:
Net loss $(16,550) $(8,541)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Amortization of intangible assets 3,716 1,063
Depreciation and amortization of
property and equipment 7,755 7,246
Revaluation of redeemable
convertible preferred stock warrant
liability - 0 677
Loss (gain) on disposal of property
and equipment 49 148
Gain from extinguishment of asset
retirement obligation (124) -
Extinguishment of royalty payable - 461
Stock-based compensation 9,431 8,737
Accretion of asset retirement
obligation 39 146
Amortization of debt discount - 26
Accretion (amortization) of premium/
discount on marketable securities 771 511
Changes in operating assets and
liabilities:
Accounts receivable (3,583) (8,087)
Inventories (1,671) 98
Prepaid expenses and other current
assets (682) 13
Other assets 513 2,814
Accounts payable 1,156 (2,105)
Accrued compensation (1,322) 1,589
Other accrued liabilities 4,351 (6,048)
Deferred revenues (4,339) (15,131)
------ -------
Net cash used in operating
activities (490) (16,383)
---- -------
Investing activities:
Increase in restricted cash (45) (735)
Purchase of property and equipment (10,736) (6,990)
Purchase of marketable securities (52,564) (49,051)
Purchase of Maxygen patent portfolio (20,705)
Proceeds from sale of marketable
securities 6,037 1,605
Proceeds from maturities of
marketable securities 8,500 70,695
Proceeds from disposal of property
and equipment 15
Net cash used in investing
activities (48,808) (5,166)
------- ------
Financing activities:
Principal payments on financing
obligations - (8,026)
Payments in preparation for initial
public offering - (3,870)
Proceeds from issuance of common
stock on IPO, net of underwriting
discounts - - 72,541
Proceeds from exercises of stock
options 2,579 1,594
----- -----
Net cash provided by financing
activities 2,579 62,239
----- ------
Effect of exchange rate changes on
cash and cash equivalents 85 (79)
--- ---
Net increase (decrease) in cash and
cash equivalents (46,634) 40,611
Cash and cash equivalents:
Beginning of the period 72,396 31,785
------ ------
End of the period 25,762 72,396
Marketable securities at the end of
period 38,068 1,650
Cash, cash equivalents and
marketable securities $63,830 $74,046
======= =======
Reclassification of preferred stock
warrant from liability to
additional paid-in capital $2,686
======
Conversion of preferred stock to
common stock and additional paid-
in capital $179,672
========
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 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 Ended Year Ended
December 31, December 31,
------------ ------------
Calculation of Adjusted
EBITDA 2011 2010 2011 2010
----------------------- ---- ---- ---- ----
Net loss $(5,297) $(495) $(16,550) $(8,541)
Adjustments:
Minus: Interest income (77) (31) (273) (166)
Plus: Interest expense - 5 - 529
Plus: Income taxes 174 60 241 384
Plus: Depreciation and
amortization 3,006 2,609 11,471 8,309
Plus: Stock-based
compensation 2,038 2,271 9,431 8,737
Plus: Preferred stock
warrant fair market
valuation adjustment - - - 677
Adjusted EBITDA $(156) $4,419 $4,320 $9,929
===== ====== ====== ======
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: Jay Sarwar, ir@codexis.com, 650-421-8331
Media: Lyn Christenson, lyn.christenson@codexis.com, 650-421-8144 or Saskia Sidenfaden, ssidenfaden@mww.com, 212-827-3771.
SOURCE Codexis, Inc.