Codexis Reports 2010 First Quarter Results

News provided by

Codexis, Inc.

May 26, 2010, 04:05 ET

REDWOOD CITY, Calif., May 26 /PRNewswire-FirstCall/ -- Codexis, Inc. (Nasdaq: CDXS) today announced financial results for the first quarter ending March 31, 2010.

Codexis completed an initial public offering of six million shares in April 2010, raising gross proceeds of $78 million at a price per share of $13.00.

Financial Highlights

For the first quarter, the company reported revenues of $25.7 million, an increase of 32% from $19.4 million in the same period last year and a net loss of ($1.4 million) or ($0.50) per basic and diluted share compared to a loss of ($6.1 million) or ($2.35) per basic and diluted share in the first quarter of 2009. Research and development expenses for the first quarter of 2010 declined 14% to $13.0 million from $15.1 million for the first quarter of 2009.  

On a non-GAAP basis, Adjusted EBITDA increased from ($3.4) million in the first quarter of 2009 to $2.8 million in the first quarter of 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented in the table below.

Cash, cash equivalents and marketable securities for the first quarter decreased to $39.3 million, compared to $55.6 million at December 31, 2009.

For 2010, Codexis forecasts revenues of $94 million to $98 million, which would represent growth of 13% to 18% compared to 2009. Codexis expects Adjusted EBITDA to be positive for full year 2010.

Conference Call

Codexis will hold a conference call for investors on May 26, 2010 at 1:30PM PT/4:30PM ET.  The conference call dial-in numbers are US: 866-783-2145 or International:  857-350-1604, access code (56829308).  A live webcast of the call will also be available on 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 (94161862) beginning approximately one hour 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 one hour after the call and will be available for up to thirty days.

About Codexis

Codexis, Inc. is a leading provider of optimized biocatalysts that make existing industrial processes faster, cleaner and more efficient than current methods and have the potential to make new industrial processes possible at commercial scale.  Codexis has commercialized its biocatalysts in the pharmaceutical industry and is developing biocatalysts for use in producing advanced biofuels under a multi-year research and development collaboration.  The company is also using its technology platform to pursue biocatalyst-enabled solutions in other bioindustrial markets, including carbon management, water treatment and chemicals.

Forward-Looking Statements

This press release contains forward-looking statements relating to the Company's forecast for 2010 revenue and Adjusted EBITDA, as defined in this press release.  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 can be found in Codexis' Registration Statement on Form S-1 dated December 28, 2009, as amended, 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 Share Amounts)










Three Months Ended



March 31,



2010

2009

Revenues:





    Product

$            6,275

$           4,571

    Related party collaborative research and development

16,042

14,420

    Collaborative research and development

661

407

    Government grants

2,722

12








Total revenues


25,700

19,410








Costs and operating expenses:







    Cost of product revenues

5,218

3,856

    Research and development

12,982

15,134

    Selling, general and administrative

8,600

6,063








Total costs and operating expenses

26,800

25,053








Loss from operations


(1,100)

(5,643)








    Interest income

28

31

    Interest expense and other, net

(358)

(427)

Loss before provision (benefit) for income taxes


(1,430)

(6,039)

    Provision  (benefit) for income taxes


(61)

54

Net loss

(1,369)

(6,093)








Net loss per share of common stock,





basic and diluted

$            (0.50)

$          (2.35)








Weighted average common shares used in computing net loss per





per share of common stock, basic and diluted

2,714

2,594


Codexis, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands)









March 31,

December 31,


2010

2009

Assets





Current assets:





  Cash and cash equivalents


$                 29,197

$               31,785

  Marketable securities

10,067

23,778

  Accounts receivable, net


6,561

7,246

  Inventories


2,912

2,915

  Prepaid expenses and other current assets

1,919

1,658

     Total current assets


50,656

67,382







Restricted cash

731

731

Property and equipment, net


21,251

21,581

Intangible assets, net


744

928

Goodwill

3,241

3,241

Other non-current assets


7,213

5,173

Total assets


$               83,836

$             99,036







Liabilities, redeemable convertible preferred stock,

and shareholders' deficit



Current liabilities:





  Accounts payable


$                   6,730

$                 9,999

  Accrued compensation

3,560

6,518

  Related party payable

548

1,314

  Other accrued liabilities


9,294

10,376

  Redeemable convertible preferred stock warrant liability

2,405

2,009

  Deferred revenues


819

2,240

  Related party deferred revenues

8,622

13,161

  Financing obligations

5,455

5,368

     Total current liabilities


37,433

50,985







Deferred revenues, net of current portion

1,811

1,856

Related party deferred revenues, net of current portion

6,466

7,487

Financing obligations, net of current portion

1,207

2,574

Other long-term liabilities


1,405

1,307

     Total  liabilities


48,322

64,209







Redeemable convertible preferred stock issuable in series A to F

179,672

179,672







Stockholders' deficit:





Common stock

-

-

Additional paid-in capital

16,812

15,015

Accumulated other comprehensive income (loss)

7

(252)

Accumulated deficit

(160,977)

(159,608)

     Total  stockholders' deficit

(144,158)

(144,845)

Total liabilities, redeemable convertible preferred stock, and shareholders' deficit

$               83,836

$             99,036


Codexis, Inc.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

(In Thousands)







Three Months Ended


March 31,


2010

2009

Operating activities:



Net loss

$       (1,369)

$       (6,093)

Adjustments to reconcile net loss to cash used in



  operating activities:



   Amortization of intangible assets

187

215

   Depreciation and amortization of property and equipment

1,651

1,130

   Revaluation of redeemable convertible preferred stock warrant liability

96

6

   Stock-based compensation

1,655

931

   Amortization of debt discount

60

105

   Accretion (amortization) of premium/discount on marketable securities

(119)

24

Changes in operating assets and liabilities:



Accounts receivable

685

1,644

Inventories

3

116

Prepaid expenses and other current assets

(261)

(151)

Other assets

(71)

7

Accounts payable

(2,720)

(2,611)

Accrued compensation

(2,958)

(807)

Accrued related party payable

(766)

3,084

Other accrued liabilities

(1,372)

(4,204)

Deferred revenues

(7,026)

(1,764)

         Net cash used in operating activities

(12,025)

(8,368)





Investing activities:



Decrease  in restricted cash

-

220

Purchase of property and equipment

(1,320)

(1,340)

Proceeds from maturities of marketable securities

13,610

5,000

         Net cash provided by investing activities

12,290

3,880





Financing activities:



Principal payments on financing obligations

(1,339)

(1,424)

Payments in preparation for initial public offering

(1,636)

-

Proceeds from issuance of preferred stock

-

30,000

Proceeds from exercises of stock options

140

46

        Net cash provided by (used) in financing activities

(2,835)

28,622





   Effect of exchange rate changes on cash and cash equivalents

(18)

11





Net increase (decrease) in cash and cash equivalents

(2,588)

24,145

Cash and cash equivalents:



  Beginning of the period

31,785

21,903

  End of the period

29,197

46,048





  Marketable securities at the end of period

10,067

10,196





Cash, cash equivalents and marketable securities

$        39,264

$        56,244

Reconciliation of GAAP to Non-GAAP Financial Information

Adjusted EBITDA (earnings before interest, tax, depreciation, amortization, stock-based compensation and warrant related costs) for the first quarter of 2010 was $2.8 million compared to a loss of $3.4 million in the first quarter of 2009. 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 as a factor in evaluating management's performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.  

A reconciliation of Adjusted EBITDA to GAAP net income (loss) is included in the table below.

Codexis, Inc.

Reconciliation of Adjusted EBITDA to GAAP Net Income (Loss)

(Unaudited, Dollars In thousands)





For the three months ended March 31

Calculation of Adjusted EBITDA

2010

2009

Net income (loss)

(1,369)

(6,093)

Adjustments:

Minus: Interest income

28

31

Plus: Interest expense

298

403

Plus: Income taxes

(61)

54

Plus: Depreciation and amortization

1,838

1,345

Plus: Stock-based compensation

1,713

900

Plus: Preferred stock warrant fair market valuation adjustment

396

6




  Adjusted EBITDA

2,787

(3,416)

For the three months ended March 31, 2010, Adjusted EBITDA benefited from two sources of revenue. First, the Company recognized a $2.7 million grant from the Singapore government related to our pharmaceutical R&D program in Singapore. Second, we recognized a $1.4 million milestone payment from Shell for a biofuels research milestone achieved in late 2009 and validated in the first quarter of 2010.

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;
  • Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
  • 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:  Derick Sutton, [email protected], 650, 421-8130

Media: Lyn Christenson, [email protected], 650-421-8144 or Saskia Sidenfaden, [email protected], 212-827-3771

SOURCE Codexis, Inc.

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