Amyris, Inc. Reports Third Quarter 2020 Financial Results
EMERYVILLE, Calif., Nov. 5, 2020 /PRNewswire/ -- Amyris, Inc. (Nasdaq: AMRS), a leading synthetic biotechnology company in Sustainable Health and Clean Beauty markets through its consumer brands and a top supplier of sustainably sourced natural ingredients, today announced financial results for its third quarter ended September 30, 2020.
John Melo, President and Chief Executive Officer of Amyris said, "The third quarter of 2020 was another strong quarter for our company. Our ability to deliver record Product Revenue in these difficult and uncertain times is a testament to the resiliency of our team, the growing trend of consumers' commitment to sustainable brands, our products, and the robustness of our business model."
Mr. Melo added, "During the quarter, we continued to execute across the strategic priorities we laid out in the beginning of the year. Our consumer business is growing at over three times 2019 revenue and delivered significantly expanded Gross Margin. We expect the combination of a strong fourth quarter along with the successful completion of strategic transactions to set us up for a profitable 2021."
Q3 2020 Financial Highlights
-- Sales Revenue: Product Revenue (Consumer & Ingredients) of $31 million
was up 58% compared with the prior year quarter, with year-over-year
revenue growth in Consumer (+203%) and Ingredients (+21%).
-- Cash operating expense of $43 million improved $5 million or 10% versus
the prior year quarter, mostly due to lower G&A expense.
-- Adjusted EBITDA of -$33 million improved $10 million year-over-year due
to strong revenue growth, improved gross margin and lower operating
expense.
-- Interest expense of $7 million was down $10 million or 61% from Q3 2019
due to lower debt and an improved average interest rate.
Strategic Highlights
1. High growth consumer brands: above-market growth
-- Recent Progress:
-- Our wholly owned consumer brands delivered 220% growth on a
year-to-date basis. Product Revenue demonstrated three consecutive
quarters of >55% YoY growth.
-- Continued international growth of Biossance.
-- Upcoming milestone:
-- Pipette & fast-tracked to launch in China in November.
-- Biossance Entering China by year end
2. Scientific and commercial collaboration: fast time from lab to industrial scale
-- Recent Progress:
-- Executed agreement with the Infectious Disease Research Institute
(IDRI) to accelerate development of a mRNA vaccine platform,
starting with COVID-19 as first application.
-- Scaled commercial production of Cannabigerol (CBG), leveraging our
fermentation process capability.
-- Upcoming milestone:
-- On track to deliver four molecules at scale, surpassing 2020 target
of two to three.
-- Q4 Ingredients revenue to benefit from new products to market.
3. Supply chain optimization: enhanced product margins
-- Recent Progress:
-- Year-to-date gross margins improved versus 2019 driven by both
Consumer and Ingredients. Consumer margins were 67% year-to-date,
well within the 60-70% anticipated target range.
-- Cosmetics Ingredient Business delivered 49% adjusted EBITDA margin.
-- Upcoming milestone:
-- Construction of integrated Brazil ingredients plant on track for Q4
2021 commissioning.
4. Improved balance sheet, earnings and cash flow: financial foundation for success
-- Recent Progress:
-- Improved margin profile of consumer brands and ingredients
portfolio.
-- Q3 cash operating expense improved 10%, mostly due to lower G&A.
-- Q3 interest expense was down 61%. Debt was reduced 41% since the
start of 2020.
Q3 2020 and Year-to-Date (YTD) Sales Revenue
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2020 2019 YoY% 2020 2019 YoY%
---
Consumer 12.3 4.1 203% 34.4 10.8 220%
Ingredients 18.8 15.6 21% 42.2 33.7 25%
Product $31.1 $19.7 58% $76.6 $44.5 72%
Collaborations &
Grants 3.1 7.0 -56% 12.0 15.5 -23%
Underlying Total $34.3 $26.7 28% $88.6 $59.9 48%
Other(1) 8.2 4.8 52.1
Reported Total $34.3 $35.0 -2% $93.4 $112.0 -17%
(1) Other: includes Vitamin E
transaction and 2019 Lavvan
collaboration revenue
-- Q3 reported Total Revenue of $34 million included strong Product Revenue
growth compared to the prior year quarter.
-- Q3 Product Revenue of $31 million increased $11 million or 58% compared
with the prior year quarter, with year-over-year revenue growth in
Consumer (+203%) and Ingredients (+21%). Q3 marks the third consecutive
quarter of tripled year-over-year Consumer Revenue.
-- YTD Sales Revenue also saw strong growth from Product Revenue, partly
offset by lower Collaboration Revenue.
Q3 2020 and Year-to-Date (YTD) Other Key Financials
-- Q3 Gross margin of 41% was supported by strong improvement in Product
margins. Q3 Product gross margin of 35% grew $11 million versus the
prior year quarter with a $9 million year-over-year improvement from
Consumer and $2 million from Ingredients. YTD Gross margin also
reflected a strong improvement in Product margins. Prior year gross
margins were helped by higher Collaboration Revenue and a one-off
Vitamin E transaction.
-- Q3 Cash Operating Expense of $43 million improved $5 million or 10%
versus the prior year quarter. Improvements in G&A and R&D expense were
partly redirected to marketing investments to support Consumer brand
growth. T&E expense was down due to COVID-19. Sequential cash operating
expense was flat despite continued topline growth. YTD cash operating
expense of $130 million was down $6 million or 4%.
-- Q3 Adjusted EBITDA of -$33 million improved $10 million versus the prior
year quarter due to strong revenue growth, improved gross margins and
lower expense. YTD adjusted EBITDA of -$101 million improved from -$131
million in the prior year driven by gross margin growth and lower
operating expense. Adjusted EBITDA excludes one-time impact from Vitamin
E, Lavvan revenue and a one-off credit loss.
-- Interest Expense of $7 million was down $10 million or 61% from Q3 2019
due to lower debt and an improved average interest rate. Q3 2020
finished with debt of $175m, which compares to $241m at the end of the
prior year quarter. YTD interest expense of $42 million improved by $3
million.
-- Q3 GAAP Net Income of -$23 million compared with -$60 million in 2019.
The year-over-year and year-to-date comparisons are impacted by various
non-cash adjustments related to fair value of derivatives and debt.
-- Diluted EPS of -$0.41 compared with -$0.56 for Q3 of 2019. YTD diluted
EPS was -$1.46, which compared to -$2.11 for YTD 2019.
Despite strong financial performance in the third quarter, the extent to which the COVID-19 pandemic could affect Amyris' future financial results and operations is subject to a high degree of uncertainty, and therefore the company is not providing formal guidance at this time.
FINANCIAL RESULTS AND NON-GAAP INFORMATION
To supplement our financial results and guidance presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. These non-GAAP measures are among the factors management uses in planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Amyris's historical performance as well as comparisons to the operating results of other companies. Management believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management to understand, manage, and evaluate our business and make operating decisions. Our non-GAAP financial measures include the following:
Non-GAAP net income (loss) is calculated as GAAP net income/loss excluding stock-based compensation expense, gains or losses from change in fair value of debt, gains and losses from changes in the fair value of derivatives, losses on debt extinguishment, losses allocated to participating securities, deemed dividends to preferred stockholders, contract asset credit loss reserve, inventory lower of cost or net realizable value adjustments, loss from investment in affiliate and other income/expense.
Adjusted diluted EPS is calculated by dividing Non-GAAP net income (loss) by the weighted average shares, basic and diluted outstanding for the period.
Non-GAAP Gross Margin (Gross Margin) is calculated as GAAP revenues divided by GAAP cost of products sold excluding excess capacity, depreciation and amortization, other costs/provisions and inventory lower of cost or net realizable value adjustments.
Non-GAAP Cash Operating Expense is calculated as GAAP Operating Expense minus non-cash stock-based compensation, depreciation and amortization. In Q3 2020 it also excluded a one-off credit loss.
EBITDA is calculated as GAAP net loss less interest, expense, income tax expense, depreciation and amortization, deemed dividends to preferred stockholders and losses allocated to participating securities.
Adjusted EBITDA is calculated as EBITDA less stock-based compensation expense, gains or losses from change in fair value of debt, gains and losses from changes in the fair value of derivatives, losses on debt extinguishment, other income/expense, net, loss from investment in affiliate, contract asset credit loss reserve and inventory lower of cost or net realizable value adjustments.
Non-GAAP financial information is not prepared under a comprehensive set of accounting rules, and therefore, should only be read in conjunction with financial information reported under U.S. GAAP in order to understand Amyris's operating performance. A reconciliation of the non-GAAP financial measures presented in this release to the most directly comparable GAAP financial measure, is provided in the tables attached to this press release.
Conference Call
Amyris will host its third quarter 2020 conference call today at 9:00 am ET (6:00 am PT) to discuss its financial results and provide an update on the company's business. Those who wish to listen to the conference call should dial into (877) 870-4263 (U.S.) or (412)-317-0790 (international) and ask to be joined to the Amyris, Inc. call. A live webcast of the call will be available online on the Amyris website. To listen via live webcast, please visit: http://investors.amyris.com.
A replay of the webcast will be available on the Investor Relations section of the company's website approximately two hours after the conclusion of the call. Additional information on Amyris' third quarter 2020 results can also be found on the Company's website.
About Amyris
Amyris (Nasdaq: AMRS) is a science and technology leader in the research, development and production of sustainable ingredients for the Sustainable Health, Clean Beauty and Flavors & Fragrances markets. Amyris uses an impressive array of exclusive technologies, including state-of-the-art machine learning, robotics and artificial intelligence. Our ingredients are included in over 3,000 products from the world's top brands, reaching more than 200 million consumers. Amyris is proud to own three consumer brands - all built around its No Compromise® promise of clean ingredients: Biossance(TM) clean beauty skincare, Pipette(TM) clean baby skincare and Purecane(TM), a zero-calorie sweetener naturally derived from sugarcane. For more information, please visit www.amyris.com.
Forward-Looking Statements
This release contains forward-looking statements, and any statements other than statements of historical fact could be deemed to be forward-looking statements. These forward-looking statements include, among other things, statements regarding future events, such as anticipated completion of strategic transactions and achievement of milestones, growth in the Sustainable Health and Clean, Beauty and Wellness markets, including international expansion and timing thereof, expected sustained cash generation and profitability, development of vaccines, delivery of molecules at scale, and operational optimization, including the expected commissioning of the new plant in Brazil, and expectations regarding Amyris's financial and operational results and ability to achieve its business plan in 2020 and beyond. These statements are based on management's current expectations and actual results and future events may differ materially due to risks and uncertainties, including risks related to Amyris's liquidity and ability to fund operating and capital expenses, risks related to its financing activities, risks related to potential delays or failures in development, production and commercialization of products, risks related to Amyris's reliance on third parties, and other risks detailed from time to time in filings Amyris makes with the Securities and Exchange Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Amyris disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise.
Amyris, the Amyris logo, No Compromise, Biossance, Pipette, and Purecane are trademarks or registered trademarks of Amyris, Inc. in the U.S. and/or other countries.
Financial Tables Follow
Amyris, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except shares and per share amounts)
September 30,
December 31,
2020 2019
---
Assets
Current assets:
Cash and cash equivalents $38,280 $270
Restricted cash 329 469
Accounts receivable, net 27,365 16,322
Accounts receivable - related party, net 419 3,868
Contract assets 2,081 8,485
Contract assets - related party 1,204
Inventories 37,212 27,770
Deferred cost of products sold - related party 9,454 3,677
Prepaid expenses and other current assets 14,894 12,750
Total current assets 131,238 73,611
Property, plant and equipment, net 29,791 28,930
Contract assets, noncurrent - related party 1,203
Deferred cost of products sold, noncurrent - related party 11,858 12,815
Restricted cash, noncurrent 960 960
Recoverable taxes from Brazilian government entities 5,127 7,676
Right-of-use assets under financing leases, net 10,702 12,863
Right-of-use assets under operating leases, net 10,904 13,203
Other assets 5,359 9,705
Total assets $205,939 $160,966
Liabilities, Mezzanine Equity and Stockholders' Deficit
Current liabilities:
Accounts payable $30,357 $51,234
Accrued and other current liabilities 28,430 36,655
Financing lease liabilities 3,882 3,465
Operating lease liabilities 5,051 4,625
Contract liabilities 4,430 1,353
Debt, current portion 31,431 45,313
Related party debt, current portion 18,492
Total current liabilities 103,581 161,137
Long-term debt, net of current portion 26,176 48,452
Related party debt, net of current portion 116,799 149,515
Financing lease liabilities, net of current portion 1,171 4,166
Operating lease liabilities, net of current portion 11,109 15,037
Derivative liabilities 3,834 9,803
Other noncurrent liabilities 21,996 23,024
Total liabilities 284,666 411,134
Commitments and contingencies
Mezzanine equity:
Contingently redeemable common stock 5,000 5,000
Stockholders' deficit:
Preferred stock
Common stock 24 12
Additional paid-in capital 1,938,411 1,543,668
Accumulated other comprehensive loss (49,505) (43,804)
Accumulated deficit (1,977,075) (1,755,653)
Total Amyris, Inc. stockholders' deficit (88,145) (255,777)
Noncontrolling interest 4,418 609
Total stockholders' deficit (83,727) (255,168)
Total liabilities, mezzanine equity and stockholders' deficit $205,939 $160,966
Amyris, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except shares and per share amounts) 2020 2019 2020 2019
---
Revenue:
Renewable products $27,577 $17,363 $70,619 $41,367
Licenses and royalties 3,563 2,305 9,714 43,387
Grants and collaborations 3,118 15,285 13,060 27,267
Total revenue 34,258 34,953 93,393 112,021
Cost and operating expenses:
Cost of products sold 25,822 20,654 60,710 53,482
Research and development(1) 18,197 19,032 52,288 56,093
Sales, general and administrative(1) 38,321 33,341 100,838 92,456
Total cost and operating expenses 82,340 73,027 213,836 202,031
Loss from operations (48,082) (38,074) (120,443) (90,010)
Other income (expense):
Interest expense (6,627) (16,857) (41,747) (44,608)
Gain (loss) from change in fair value of derivative instruments 1,999 (398) (6,498) (2,437)
Gain (loss) from change in fair value of debt 34,360 (2,055) 2,908 (18,629)
Loss upon extinguishment of debt (2,606) (2,721) (51,954) (8,596)
Other income (expense), net (49) 1,076 1,452 920
Total other expense, net 27,077 (20,955) (95,839) (73,350)
Loss before income taxes and loss from investment in affiliate (21,005) (59,029) (216,282) (163,360)
Provision for income taxes (83) (533) (273) (533)
Loss from investment in affiliate (366) (1,058)
Net loss (21,454) (59,562) (217,613) (163,893)
Less: income attributable to noncontrolling interest (1,702) (3,809)
Net loss attributable to Amyris, Inc. (23,156) (59,562) (221,422) (163,893)
Less: deemed dividend to preferred stockholder on issuance and modification of common stock warrants (34,964)
Less: deemed dividend to preferred stockholders on conversion of Series E preferred stock (67,151) (67,151)
Less: loss allocated to participating securities 6,832 1,655 15,369 6,233
Net loss attributable to Amyris, Inc. common stockholders, basic (83,475) (57,907) (273,204) (192,624)
Adjustment to earnings allocated to participating securities 744 120
Interest on convertible debt 1,081 317
Gain from change in fair value of debt (17,221) (5,945)
Net loss attributable to Amyris, Inc. common stockholders, diluted $(98,871) $(57,907) $(278,712) $(192,624)
Weighted-average shares of common stock outstanding used in computing loss per share of common stock, basic 227,267,553 103,449,612 189,192,973 91,344,150
Basic loss per share attributable to common stockholders $(0.37) $(0.56) $(1.44) $(2.11)
Weighted-average shares of common stock outstanding 227,267,553 103,449,612 189,192,973 91,344,150
Effect of dilutive convertible debt 15,464,681 2,313,525
Weighted-average shares of common stock equivalents used in computing loss per share of common stock, diluted 242,732,234 103,449,612 191,506,498 91,344,150
Diluted loss per share attributable to common stockholders $(0.41) $(0.56) $(1.46) $(2.11)
(1)Includes stock-based compensation expense as follows:
Research and development $928 $663 $2,774 $2,002
Sales, general and administrative 2,492 2,571 7,081 8,058
$3,420 $3,234 $9,855 $10,060
Amyris, Inc.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except per share data) 2020 2019 2020 2019
---
Net loss attributable to Amyris, Inc. common stockholders - Basic (GAAP) $(83,475) $(57,907) $(273,204) $(192,624)
Non-GAAP adjustments:
Stock-based compensation expense 3,420 3,234 9,855 10,060
(Gain) loss from change in fair value of derivative instruments (1,999) 398 6,498 2,437
(Gain) loss from change in fair value of debt (34,360) 2,055 (2,908) 18,629
Loss upon extinguishment of debt 2,606 2,721 51,954 8,596
Income attributable to noncontrolling interest 1,702 3,809
Deemed dividend to preferred stockholder on issuance and modification of common stock warrants 34,964
Loss allocated to participating securities (6,832) (1,655) (15,369) (6,233)
Deemed dividend upon conversion of Series E preferred stock into common stock 67,151 67,151
Contract asset credit loss reserve 8,342 8,342
Inventory lower-of-cost-or-net realizable value adjustment 1,337 (1,080) 374 (1,396)
Other (income) expense, net, and loss from investment in affiliate 415 (1,076) (394) (920)
Net loss attributable to Amyris, Inc. common stockholders - Basic (non-GAAP) $(41,693) $(53,310) $(143,892) $(126,487)
Weighted-average shares outstanding
Weighted-average shares of common stock outstanding used in computing loss per share of common stock, basic 227,267,553 103,449,612 189,192,973 91,344,150
Loss per share attributable to Amyris, Inc. common stockholders - Basic (GAAP) $(0.37) $(0.56) $(1.44) $(2.11)
Non-GAAP adjustments:
Stock-based compensation expense 0.02 0.03 0.05 0.11
(Gain) loss from change in fair value of derivative instruments (0.01) 0.00 0.03 0.03
(Gain) loss from change in fair value of debt (0.15) 0.02 (0.02) 0.20
Loss upon extinguishment of debt 0.01 0.03 0.27 0.09
Income attributable to noncontrolling interest 0.01 0.02
Deemed dividend to preferred stockholder on issuance and modification of common stock warrants 0.38
Loss allocated to participating securities (0.03) (0.02) (0.08) (0.07)
Deemed dividend upon conversion of Series E preferred stock into common stock 0.30 0.35
Contract asset credit loss reserve 0.04 0.04
Inventory lower-of-cost-or-net realizable value adjustment 0.01 (0.01) 0.00 (0.02)
Other (income) expense, net, and loss from investment in affiliate 0.00 (0.01) (0.00) (0.01)
Net loss per share attributable to Amyris, Inc. common stockholders - Basic (non-GAAP)(1) $(0.18) $(0.52) $(0.76) $(1.38)
(1)Amounts may not sum due to rounding.
Three Months Ended Nine Months Ended
September 30, September 30,
Adjusted EBITDA 2020 2019 2020 2019
GAAP net loss attributable to Amyris, Inc. common stockholders - Basic $(83,475) $(57,907) $(273,204) $(192,624)
Interest expense 6,627 16,857 41,747 44,608
Income taxes 83 533 273 533
Depreciation and amortization 1,905 969 5,300 2,691
Deemed dividend to preferred stockholder on issuance and modification of common stock warrants 34,964
Deemed dividend upon conversion of Series E preferred stock into common stock 67,151 67,151
Loss allocated to participating securities (6,832) (1,655) (15,369) (6,233)
EBITDA (14,541) (41,203) (174,102) (116,061)
Income attributable to noncontrolling interest 1,702 3,809
Gain (loss) from change in fair value of derivative instruments and debt, loss upon extinguishment of debt,
other (income) expense, and loss from investment in affiliate (33,338) 4,098 55,150 28,742
Inventory lower-of-cost-or-net realizable value adjustment 1,337 (1,080) 374 (1,396)
Stock-based compensation 3,420 3,234 9,855 10,060
Contract asset credit loss reserve 8,342 8,342
Adjusted EBITDA $(33,078) $(34,951) $(96,572) $(78,655)
Amyris, Inc.
RECONCILIATION OF GAAP TO NON-
GAAP FINANCIAL INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands) 2020 2019 2020 2019
---
Revenue (GAAP and non-GAAP) $34,258 $34,953 $93,393 $112,021
Cost of products sold (GAAP) $25,822 $20,654 $60,710 $53,482
Other costs/provisions (3,848) (1,103) (8,937) (3,924)
Inventory lower-of-cost-or-net realizable value adjustment (1,337) 1,080 (374) 1,396
Excess capacity (90) (757) (571) (1,430)
Depreciation and amortization (407) (218) (846) (496)
Cost of products sold (non-GAAP) $20,140 $19,656 $49,982 $49,028
Adjusted gross profit (non-GAAP) $14,118 $15,297 $43,411 $62,993
Gross margin % 41% 44% 46% 56%
Research and development expense (GAAP) $18,197 $19,032 $52,288 $56,093
Stock-based compensation expense (928) (663) (2,774) (2,002)
Depreciation and amortization (1,271) (471) (3,763) (1,341)
Research and development expense (non-GAAP) $15,998 $17,898 $45,751 $52,750
Sales, general and administrative expense (GAAP) $38,321 $33,341 $100,838 $92,456
Stock-based compensation expense (2,440) (2,571) (7,029) (8,058)
Depreciation and amortization (227) (279) (691) (854)
Contract asset credit loss reserve (8,342) (8,342)
Sales, general and administrative expense (non-GAAP) $27,312 $30,491 $84,776 $83,544
Cash operating expense 43310 $48,389 $130,527 $136,294
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SOURCE Amyris, Inc.
