Verenium posts profits in enzymes
April 15, 2010
News release posted May 10, 2010
Verenium Corp., developer of next-generation cellulosic ethanol and high-performance specialty enzymes, reported financial results for the first quarter of 2010. The company also provided a summary of recent highlights.
"I'm very pleased with the successful first quarter and start to 2010 Verenium had with both its biofuels and specialty enzymes business units," said Carlos A. Riva, president and CEO. "Of note, the $5 million in gross margin generated from enzyme sales for the quarter is a record for us and is an indication of the strength in that business."
Company highlights
Since the beginning of 2010, Verenium has made significant progress in several important areas, including:
Financial results
Total revenues for the quarter ended March 31, 2010 were $13.0 million compared to $14.4 million for the same period in the prior year, with product revenues representing 89 percent of total revenues for the three months ended March 31 compared to 73 percent for the same period in the prior year. Product revenues for the quarter ended March 31 increased to $11.6 million compared to $10.6 million for same period in the prior year, primarily due to an increase in revenues from the company's Veretase and Xylathin enzymes, which continued to gain acceptance in the grain ethanol markets, and Purifine enzyme for the soybean oil processing market. The company's Fuelzyme revenues returned to levels achieved in the first quarter of 2009, indicating recovery in the corn ethanol market.
Product gross margin dollars increased to $5 million in the first quarter ended March 31, 2010, versus $4.8 million for the same period in the prior year, due primarily to an increase in the royalty on Phyzyme profits received from Danisco, combined with an increase in sales of higher margin enzyme products.
Excluding cost of product revenues, total operating expenses decreased $2.3 million to $24.7 million (including share-based compensation of $0.5 million) for the three months ended March 31, 2010 from $27.0 million (including share-based compensation of $2.5 million) for the three months ended March 31, 2009. Excluding the impact of share-based compensation, total operating expenses decreased $0.3 million for the three months ended March 31 as compared to the same period in 2009 due to a $0.8 million decrease in expenses related to Vercipia Biofuels, the company's jointly owned special purpose entity with BP, which was included in the Company's consolidated results of operations during 2009. Effective for 2010, the results of operations for Vercipia are excluded from the company's consolidated results due to the deconsolidation based upon authoritative new accounting guidance. This decrease in expenses was partially offset by increases in expenses related to the company's ongoing demonstration-scale facility optimization efforts.
Total operating expenses include gross expenses incurred to support ongoing development related to the company's Galaxy joint venture with BP, which continues to be consolidated in the Company's financial statements. BP's share of the total operating expenses of the joint ventures was $7.5 million for the first quarter ended March 31 and $7.9 million for the first quarter ended March 31, 2009, and is included below operating expenses as "Loss attributed to non-controlling interest in consolidated entities" on the Company's Consolidated Income Statement. On a non-GAAP basis, net of BP's share of expenses, pro forma net operating expenses decreased as compared to prior periods, reflecting the cost sharing and the Company's expense minimization efforts.
Interest expense related almost exclusively to the cash and non-cash interest expense from the Company's convertible debt instruments. Of total net interest expense for the first quarter ended March 31, 2010, $0.5 million represents non-cash interest expense related to the Company's convertible notes, compared to $1.6 million in non-cash interest for the same period in 2009.
Net loss attributed to Verenium for the quarter ended March 31, 2010 was $12.0 million compared to net income $3.3 million for the same period in 2009. Adjusted for the non-cash impact of accounting related to the 8% and 9% convertible notes, the Company's non-GAAP pro-forma net loss for the quarter ended March 31, 2010 was $12.7 million compared to $13.6 million for the same period in the prior year. The company believes that excluding the non-cash impact of these items provides a more consistent measure of operating results.
As of March 31, the Company had unrestricted cash and cash equivalents totaling approximately $15.5 million compared to $32.1 million as of December 31, 2009. A significant portion of the decrease in cash and cash equivalents is due to the deconsolidation of Vercipia cash and cash equivalents of approximately $7.2 million, based upon authoritative accounting guidance effective on January 1, 2010. In April 2010, the company was awarded, and collected, an additional $4.9 million from the DOE related to activities at its demonstration-scale facility in Jennings, Louisiana, which is not reflected in the March 31, 2010 cash balance.
For more information on Verenium, visit http://www.verenium.com.
SOURCE: Verenium
Verenium Corp., developer of next-generation cellulosic ethanol and high-performance specialty enzymes, reported financial results for the first quarter of 2010. The company also provided a summary of recent highlights.
"I'm very pleased with the successful first quarter and start to 2010 Verenium had with both its biofuels and specialty enzymes business units," said Carlos A. Riva, president and CEO. "Of note, the $5 million in gross margin generated from enzyme sales for the quarter is a record for us and is an indication of the strength in that business."
Company highlights
Since the beginning of 2010, Verenium has made significant progress in several important areas, including:
- Announced an additional $4.9 million award from the U.S. Department of Energy (DOE) to fund activities at the Company's demonstration-scale facility in Jennings, Louisiana;
- Extended the joint development program established in August 2008 with partner BP, including funding from BP of $2.5 million per month for an additional four months and a process for BP to fund certain additional activities associated with the technology development program;
- Continued the optimization process at the demonstration plant, including:
o Significantly increasing the ability to run campaigns through improved mechanical operability and reliability of the plant; and
o Setting new concentration records for enzyme production, a critical component in improving production economics.
- Generated record gross product margin of $5.0 million in the first quarter;
- Gained solid product sales growth with total product revenues representing 89 percent of total revenues in the first quarter;
- Improved revenue mix from increasing sales of Company's newer enzymes including Fuelzyme, Veretase and Purfine;
- Introduced Xylathin, a highly active enzyme designed to significantly improve the economics of fuel ethanol production from cereal grains, further expanding the Company's product portfolio;
- Implemented Purifine enzymatic degumming process into the world's largest soybean crushing facility; and
- Aggressively managed costs to conserve capital.
Financial results
Total revenues for the quarter ended March 31, 2010 were $13.0 million compared to $14.4 million for the same period in the prior year, with product revenues representing 89 percent of total revenues for the three months ended March 31 compared to 73 percent for the same period in the prior year. Product revenues for the quarter ended March 31 increased to $11.6 million compared to $10.6 million for same period in the prior year, primarily due to an increase in revenues from the company's Veretase and Xylathin enzymes, which continued to gain acceptance in the grain ethanol markets, and Purifine enzyme for the soybean oil processing market. The company's Fuelzyme revenues returned to levels achieved in the first quarter of 2009, indicating recovery in the corn ethanol market.
Product gross margin dollars increased to $5 million in the first quarter ended March 31, 2010, versus $4.8 million for the same period in the prior year, due primarily to an increase in the royalty on Phyzyme profits received from Danisco, combined with an increase in sales of higher margin enzyme products.
Excluding cost of product revenues, total operating expenses decreased $2.3 million to $24.7 million (including share-based compensation of $0.5 million) for the three months ended March 31, 2010 from $27.0 million (including share-based compensation of $2.5 million) for the three months ended March 31, 2009. Excluding the impact of share-based compensation, total operating expenses decreased $0.3 million for the three months ended March 31 as compared to the same period in 2009 due to a $0.8 million decrease in expenses related to Vercipia Biofuels, the company's jointly owned special purpose entity with BP, which was included in the Company's consolidated results of operations during 2009. Effective for 2010, the results of operations for Vercipia are excluded from the company's consolidated results due to the deconsolidation based upon authoritative new accounting guidance. This decrease in expenses was partially offset by increases in expenses related to the company's ongoing demonstration-scale facility optimization efforts.
Total operating expenses include gross expenses incurred to support ongoing development related to the company's Galaxy joint venture with BP, which continues to be consolidated in the Company's financial statements. BP's share of the total operating expenses of the joint ventures was $7.5 million for the first quarter ended March 31 and $7.9 million for the first quarter ended March 31, 2009, and is included below operating expenses as "Loss attributed to non-controlling interest in consolidated entities" on the Company's Consolidated Income Statement. On a non-GAAP basis, net of BP's share of expenses, pro forma net operating expenses decreased as compared to prior periods, reflecting the cost sharing and the Company's expense minimization efforts.
Interest expense related almost exclusively to the cash and non-cash interest expense from the Company's convertible debt instruments. Of total net interest expense for the first quarter ended March 31, 2010, $0.5 million represents non-cash interest expense related to the Company's convertible notes, compared to $1.6 million in non-cash interest for the same period in 2009.
Net loss attributed to Verenium for the quarter ended March 31, 2010 was $12.0 million compared to net income $3.3 million for the same period in 2009. Adjusted for the non-cash impact of accounting related to the 8% and 9% convertible notes, the Company's non-GAAP pro-forma net loss for the quarter ended March 31, 2010 was $12.7 million compared to $13.6 million for the same period in the prior year. The company believes that excluding the non-cash impact of these items provides a more consistent measure of operating results.
As of March 31, the Company had unrestricted cash and cash equivalents totaling approximately $15.5 million compared to $32.1 million as of December 31, 2009. A significant portion of the decrease in cash and cash equivalents is due to the deconsolidation of Vercipia cash and cash equivalents of approximately $7.2 million, based upon authoritative accounting guidance effective on January 1, 2010. In April 2010, the company was awarded, and collected, an additional $4.9 million from the DOE related to activities at its demonstration-scale facility in Jennings, Louisiana, which is not reflected in the March 31, 2010 cash balance.
For more information on Verenium, visit http://www.verenium.com.
SOURCE: Verenium
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