SAN DIEGO, Nov. 10, 2011 /PRNewswire/ -- Verenium Corporation (Nasdaq: VRNM), a leading industrial biotechnology company focused on the development and commercialization of high-performance enzymes, today reported a summary of recent Company highlights and financial results for the third quarter and nine months ended September 30, 2011.
"We have made strong financial and operational progress in the first nine months of this year," said James E. Levine, President and Chief Executive Officer at Verenium. "In the third quarter of 2010 we shifted our business strategy toward growing a leading, commercial industrial enzymes business. The continued increase in product revenue and record product gross profit we saw in the third quarter of 2011 are important indicators that we've had a solid year of progress against our new strategy and are well on our way to building a successful industrial biotechnology company."
Company HighlightsSince the beginning of 2011, Verenium has made significant progress on both operational and financial fronts. Recent accomplishments include:
Animal Health and Nutrition
Financial ResultsIn the commentary below, the historical results of the Company's ligno-cellulosic biofuels business for current and prior periods have been reclassified into discontinued operations as a result of the sale of the ligno-cellulosic biofuels business on September 2, 2010 to BP Biofuels North America LLC.
Revenues for the periods ended September 30, 2011 and 2010 were as follows (in thousands):Three Months Ended September 30,Nine Months Ended September 30,2011201020112010Revenues:Animal Health and Nutrition
1,9299504,5412,258All other products
38,476Total revenues for the nine months ended September 30, 2011 increased 22% to $46.9 million from $38.5 million for the same period in the prior year, with product revenues representing 90% or greater of total revenues in both periods. Product revenues for the nine months ended September 30, 2011 increased 14% to $42.3 million from $37.1 million for the same period in the prior year, primarily due to an increase in revenues from grain processing enzymes, including Fuelzyme® alpha-amylase, and Deltazym® GA L-E5 glucoamylase. These products continued to gain traction in the grain ethanol markets and together with Purifine® PLC for soybean oil processing, achieved significant revenue growth over 2010.
During the third quarter of 2011, in conjunction with rights assigned to Verenium as part of the separation agreement with Syngenta Participations AG in 2009, the Company received a license fee of $3.25 million for a commercial enzyme candidate that Syngenta had previously licensed to a third party. This amount was received by the Company and recorded into collaborative revenue for the three and nine months ended September 30, 2011 and represented non-recurring revenue.
Product Gross Profit and Gross Margin
Product gross profit for the nine months ended September 30, 2011 increased 16% to $16.1 million from $13.9 million for the same period in prior year. Gross margin increased to 38% of product revenue for the nine months ended September 30, 2011, compared to 37% for the nine months ended September 30, 2010. Gross margin increased primarily due to the overall growth and improvement from our grain and oilseed processing products. The Company achieved a record $6.0 million in product gross profit during the three months ended September 30, 2011.
Operating Expenses (excluding cost of product revenue and restructuring expense)
Excluding cost of product revenues and restructuring, total operating expenses related to continuing operations for the nine months ended September 30, 2011 decreased to $21.7 million (including share-based compensation of $0.5 million) from $25.1 million (including share-based compensation of $0.8 million) for the same period in the prior year; primarily due to a reimbursement of legal fees of $1.1 million for expenses incurred during 2010, reduction of facilities related costs as a result of BP assuming the Company's San Diego building leases, and to initiatives to decrease general and administrative expenses. Additionally, during the third quarter of 2010, the Company paid and expensed bonus payments of $1.4 million. As a partial offset, research and development costs for continued investment in pipeline products showed an increase.
On March 31, 2011 the Company closed its office in Cambridge, Massachusetts, resulting in a charge of $2.9 million, consisting of employee termination costs, facilities closure costs, and employee relocation costs for several employees who were relocated to San Diego.
Operating Loss from Continuing Operations
Operating loss from continuing operations for the nine months ended September 30, 2011 was $3.9 million compared to $9.8 million for the same period in 2010. Excluding the impact of restructuring expenses of $2.9 million, operating loss from continuing operations decreased to $0.9 million, primarily due to the reimbursement of legal fees, the $1.4 million bonus paid and expensed during the third quarter of 2010, and further reductions in general and administrative expenses.
Net Income (loss) from Continuing Operations
Net income from continuing operations for the nine months ended September 30, 2011 was $8.1 million compared to a net loss of $11.9 million for the same period in 2010, on a GAAP accounting basis. Adjusted for the impact of non-cash items related to the Company's convertible debt and non-cash income tax benefit in 2010, the Company's non-GAAP pro-forma net loss from continuing operations for the nine months ended September 30, 2011 was $6.2 million compared to $16.0 million for the same period in the prior year. The Company believes that excluding the impact of these items provides a more consistent measure of operating results.
The Company ended the third quarter of 2011 with $35.7 million in cash and cash equivalents, $5.0 million in restricted cash, and $34.9 million in debt at face value.
"We ended the third quarter with strong top and bottom line performance, as well as record product gross profit," said Jeffrey Black, Senior Vice President and Chief Financial Officer. "We believe we have balanced the right level of investment with appropriate cost controls, and remain focused on continued growth and medium-term profitability."
About VereniumVerenium, an industrial biotechnology company, is a global leader in developing high-performance enzymes. Verenium's tailored enzymes are environmentally friendly, making products and processes greener and more cost-effective for industries, including the global food and fuel markets. Read more at www.verenium.com.
Forward-Looking Statements Statements in this press release that are not strictly historical are "forward-looking" and involve a high degree of risk and uncertainty. These include, but are not limited to, statements related to Verenium's lines of business, operations, capabilities, commercialization activities, corporate partnerships, target markets and future financial performance, results and objectives, all of which are prospective. Such statements are only predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to the differences include, but are not limited to, risks associated with Verenium's strategic focus, technologies, ability to obtain additional capital to support its planned operations and financial obligations, dependence on patents and proprietary rights, and protection and enforcement of its patents and proprietary rights, the commercial prospects of the industries in which Verenium operates and sells products, Verenium's dependence on manufacturing and/or license agreements, its ability to achieve milestones under existing and future collaboration agreements, the ability of Verenium and its partners to commercialize its technologies and products (including by obtaining any required regulatory approvals) using Verenium's technologies, the timing for launching any commercial products and projects, the ability of Verenium and its collaborators to market and sell any products that it or they commercialize, the development or availability of competitive products or technologies, the future ability of Verenium to enter into and/or maintain collaboration and joint venture agreements and licenses, and risks and other uncertainties more fully described in Verenium's filings with the Securities and Exchange Commission, including, but not limited to, Verenium's annual report on Form 10-K for the year ended December 31, 2010 and any updates contained in its subsequently filed quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date hereof, and Verenium expressly disclaims any intent or obligation to update these forward-looking statements.
Vice President, Corporate Communications
Manager, Corporate Communications
email@example.comVerenium CorporationCondensed Consolidated Statements of Operations(unaudited, in thousands, except per share amounts)Three Months Ended September 30, Nine Months Ended September 30,2011201020112010Revenues: Product
37,085 Collaborative and license
18,41612,57246,94638,476Operating expenses: Cost of product revenue
8,6987,83326,17423,179Product gross profit
6,0444,40016,07813,906Product gross margin
41%36%38%37% Research and development
2,6731,4487,5934,124 Selling, general and administrative
4,9407,83814,10621,010 Restructuring charges
20--2,940--Total operating expenses
16,33117,11950,81348,313Operating income (loss) from continuing operations
2,085(4,547)(3,867)(9,837)Other income and expense: Interest and other expense, net
(618)(2,072)(2,371)(6,179) Gain on debt extinguishment upon conversion of convertible notes
------598 Gain (loss) on debt extinguishment upon repurchase of convertible notes
4,065(3,384)15,349(3,384) Gain (loss) on net change in fair value of derivative assets and liabilities
290(299)(1,005)(1,017)Total other income (expense), net
3,737(5,755)11,973(9,982)Net income (loss) from continuing operations before income taxes
5,822(10,302)8,106(19,819)Income tax benefit
--7,928--7,928Net income (loss) from continuing operations
5,822(2,374)8,106(11,891) Net Income (loss) from discontinued operations
(24)31,980379,841Less: Loss attributed to noncontrolling interests in
consolidated entities – discontinued operations
--10,108--25,283Net income attributed to Verenium
23,233Basic and diluted net income (loss) per share:
(0.97) Discontinued operations
.80 Net income
.90Shares used in computing basic and diluted net income (loss) per share
12,60712,37112,60712,231Verenium CorporationCondensed Consolidated Balance Sheet Data(unaudited, in thousands)September 30,December 31,20112010Cash and cash equivalents
87,929Restricted cash, short term
5,000--Accounts receivable, net
5,9485,316Other current assets
2,7152,694Restricted cash, long term
--5,000Property and equipment, net
5,5133,134Other noncurrent assets
,757Current liabilities, excluding deferred revenue,
restructuring, convertible notes and liabilities of
,849Deferred revenue, current
3,894894Accrued restructuring, current
587--Convertible notes, at carrying value (face value of
$34.9 million at September 30, 2011 and
$74.7 million at December 31, 2010)
34,85188,011Other long term liabilities
9801,216Liabilities of discontinued operations
12,3193,170Total liabilities and stockholders' equity
,757Verenium CorporationUnaudited Supplemental and Non-GAAP Pro Forma Financial Information (in thousands, except per share amounts)The following unaudited supplemental and non-GAAP pro forma financial information is derived from the Company's condensed consolidated financial statements for the three and nine months periods ended September 30, 2011 and 2010, as reported under GAAP. The Company believes that such supplemental and non-GAAP financial information is helpful to understand the results of operations of the business. Non-GAAP Pro Forma Net Loss From Continuing OperationsThree Months Ended
September 30,Nine Months Ended
September 30,2011201020112010Income (loss) from continuing operations
(11,891)Adjustments: Income tax benefit
--(7,928)--(7,928)(Gain) loss on debt extinguishment upon repurchase of convertible notes
(4,065)3,384(15,349)3,384(Gain) on debt extinguishment upon conversion of convertible notes
------(598)(Gain) loss on net change in fair value of derivative assets and liabilities
(290)2991,0051,017Non-GAAP pro forma net income (loss) from continuing operations
(16,016)Non-GAAP pro forma net income (loss) from continuing operations per share
|SOURCE Verenium Corporation|
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