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Codexis Reports Third Quarter 2011 Results

REDWOOD CITY, Calif., Nov. 1, 2011 /PRNewswire/ -- Codexis, Inc. (NASDAQ: CDXS) today announced financial results for the third quarter ended September 30, 2011.  

Third Quarter Financial Highlights:Revenue: For the third quarter of 2011, the company reported revenues of $33.3 million, an increase of 23% from $27.1 million in the third quarter of 2010.  Product revenue of $12.2 million increased 29% over the prior year quarter driven primarily by an increase in product sales to both generic and innovator pharmaceutical customers.  Collaborative R&D revenue of $19.2 million increased from $17.2 million in the third quarter of 2010, driven mainly by milestones earned in the company’s Shell collaboration and by funded research for Codexis’ carbon capture program.

Operating Expenses:  Research and development expenses in the third quarter of 2011 were $16.8 million, compared to $13.1 million for the third quarter of 2010.  The increase was primarily due to additional headcount, an increase in amortization related to intellectual property purchased from Maxygen, Inc. and stock compensation expenses. Selling, general and administrative expenses in the third quarter of 2011 increased to $8.9 million compared to $7.9 million over the same period of 2010, driven by higher stock compensation expense and higher compensation expense due to headcount increases.

Net Loss:  Net loss was ($2.7) million, or ($0.08) per share, based on 35.9 million weighted average common shares outstanding in the third quarter of 2011.  This compares to a net loss of ($2.7) million or ($0.08) per share during the third quarter of 2010.  

Adjusted EBITDA:  On a non-GAAP basis, Adjusted EBITDA increased from $2.1 million in the third quarter of 2010 to $2.6 million in 2011. Adjusted EBITDA is calculated by adjusting net loss for net interest, 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 September 30, 2011, decreased to $70.6 million compared to $72.4 million at June 30, 2011.  The company generated $2.7 million in cash from operations in the third quarter.

OutlookCodexis’ 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.

Recent EventsOn October 24, 2011, Codexis announced that one year after launch, its Codex® Screening Kits are in use or in evaluation in manufacturing process development at 50 pharmaceutical companies worldwide. Codex® Screening Kits were introduced in October 2010. Pharmaceutical and fine chemical companies including Merck, Roche, DSM and Dainippon Sumitomo are among the global customers using Codex® Screening Kits and Codex® Panels to reduce pharmaceutical manufacturing process development time and cost. In addition, more than 10,000 kilograms of various enzymes used in commercial pharmaceutical intermediates production processes have been manufactured by the company’s enzyme production partners.

On October 11, 2011, Codexis announced that Achilles Antonio Clement has been named Director, Latin America.  Mr. Clement joined Codexis from DuPont in Latin America.  He will head the newly-formed Codexis do Brasil Participacoes Ltda., Codexis’ Brazilian subsidiary, and will manage Codexis' expanding role in Latin America.

On September 27, 2011, Codexis and Raizen Energia S.A. announced the signing of a joint development agreement to develop an improved first generation ethanol process with enhanced performance economics. Under the terms of the agreement, Raizen and Codexis will deploy the Codexis CodeEvolver™ directed evolution technology platform to improve Raizen's current process for producing ethanol made from sugar.

Conference CallCodexis will hold a conference call for investors on November 1, 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 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 approximately two hours after the call and will be available for up to thirty days.

About Codexis, Inc.Codexis is an industrial biotechnology company producing high value sustainable chemicals, clean fuels, cost effective pharmaceutical processes and  renewable bioindustrial ingredients to make industry more efficient, productive and profitable.  Partners include global leaders such as Shell, Merck and Pfizer.  For more information, see

Forward-Looking StatementsThis press release contains forward-looking statements relating to Codexis’ forecast for 2011 revenue and Adjusted EBITDA, and Codexis’ ability to improve Raízen’s ethanol process.  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 August 3, 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 EndedNine Months EndedSeptember 30,September 30,20112010% change20112010% changeRevenues:Product$ 12,199$  9,49129%$  33,528$ 24,25038%Collaborative research and development19,20117,24311%54,07349,4509%Government grants1,882379397%2,7713,593-23%Total revenues 33,28227,11323%90,37277,29317%Costs and operating expenses: Cost of product revenues9,9588,56316%28,71319,85645%Gross margin $2,241928141%4,8154,39410%Gross margin %18%10%14%18%Research and development16,78613,07028%45,50239,05617%Selling, general and administrative8,8717,94012%27,16025,1928% . . Total costs and operating expenses35,61529,57320%101,37584,10421%Loss from operations (2,333)(2,460)-5%(11,003)(6,811)62%Interest income766125%19513544%Interest expense and other, net(411)(35)1074%(378)(1,047)-64%Loss before provision for income taxes (2,668)(2,434)10%(11,186)(7,723)45%Provision for income taxes 74298-75%68324-79%Net loss$ (2,742)$ (2,732)0%$ (11,254)$ (8,047)40%Net loss per share of common stock,basic and diluted$   (0.08)$   (0.08)$
(0.32)$   (0.38)Weighted average common shares used in computing net loss per share of common stock, basic and diluted35,91934,20035,57621,272Codexis, Inc.Condensed Consolidated Balance Sheets(Unaudited)(In Thousands)September 30,December 31,20112010AssetsCurrent assets:   Cash and cash equivalents $
72,396   Marketable securities19,503-   Accounts receivable, net 19,32515,333   Inventories 5,2402,817   Prepaid expenses and other current assets2,8371,646Total current assets 77,03792,192Restricted cash1,5111,466Non-current marketable securities21,0201,650Property and equipment, net 23,32121,452Intangible assets, net 17,37220,158Goodwill3,2413,241Other non-current assets 1,1201,141Total assets $
41,300Liabilities and shareholders' equityCurrent liabilities:   Accounts payable $
9,208   Accrued compensation6,1658,107   Other accrued liabilities 12,1005,630   Deferred revenues 8,6324,539Total current liabilities 34,40627,484Deferred revenues, net of current portion1,8715,074Other long-term liabilities 1,8701,381Total  liabilities 38,14733,939Stockholders' equity:Common stock44Additional paid-in capital285,650275,540Accumulated other comprehensive income (loss)223(34)Accumulated deficit(179,402)(168,149)Total  stockholders' equity106,475107,361Total liabilities, and shareholders' equity$
41,300Codexis, Inc.Condensed Consolidated Statements of Cash Flow(Unaudited)(In Thousands)Nine Months EndedSeptember 30,20112010Operating activities:Net loss$ (11,254)$   (8,047)Adjustments to reconcile net loss to net cash used in operating activities:Amortization of intangible assets2,787402Depreciation and amortization of property and equipment5,6785,298Revaluation of redeemable convertible preferred stock warrant liability-677Loss (gain) on disposal of property and equipment31-Gain from extinguishment of asset retirement obligation(124)-Stock-based compensation7,3936,466Accretion of asset retirement obligation27-Amortization of debt discount-70Accretion (amortization) of premium/discount on marketable securities501511Changes in operating assets and liabilities:Accounts receivable(3,991)(8,132)Inventories(2,423)(331)Prepaid expenses and other current assets(844)(213)Other assets202,602Accounts payable(1,699)(1,360)Accrued compensation(1,942)(472)Other accrued liabilities7,355(4,247)Deferred revenues891(9,276)Net cash provided by (used in) operating activities2,406(16,052)Investing activities:(Increase) decrease  in restricted cash(46)65Purchase of property and equipment(7,813)(4,740)Purchase of marketable securities(50,900)(49,051)Proceeds from sale of marketable securities5,0081,605Proceeds from maturities of marketable securities6,50070,696Net cash provided by (used in) investing activities(47,251)18,575Financing activities:Principal payments on financing obligations-(3,979)Payments in preparation for initial public offering-(3,870)Proceeds from issuance of common stock on IPO, net of underwriting discounts-72,551Proceeds from exercises of stock options2,476279Net cash provided by (used in) financing activities2,47664,981Effect of exchange rate changes on cash and cash equivalents105(15)Net increase in cash and cash equivalents(42,264)67,489Cash and cash equivalents:   Beginning of the period72,39631,785   End of the period30,13299,274   Marketable securities at the end of period40,52347,306Cash, cash equivalents and marketable securities$  70,655$ 146,580Reclassification of preferred stock warrant from liability to additional paid-in capital$
2,686Conversion of preferred stock to common stock and additional paid-in capital$ 179,672Reconciliation of GAAP to Non-GAAP Financial InformationIn 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 EndedNine Months EndedSeptember 30,September 30,Calculation of Adjusted EBITDA2011201020112010Net loss

$(2,742)$(2,732)$(11,254)$(8,047)Adjustments:Minus: Interest income


(195)(135)Plus: Interest expense

-130-524Plus: Income taxes

7429868324Plus: Depreciation and amortization

2,8461,9488,4655,700Plus: Stock-based compensation

2,5362,5487,3936,466Plus: Preferred stock warrant fair market valuation adjustment

---677   Adjusted EBITDA$  2,638$  2,131$
4,477$  5,509Adjusted 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.

    Investors:   Henk Adriaenssens,, 650-421-8331
    Media: Lyn Christenson,, 650-421-8144 or Saskia Sidenfaden,, 212-827-3771.


    SOURCE Codexis, Inc.
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