San Diego, California
March 16, 2007
Company achieved 61% increase
in product revenue over 2005
Diversa Corporation (Nasdaq: DVSA), a leader in the
development of high-performance specialty enzymes, today
reported financial results for the quarter and year ended
December 31, 2006. Revenue for the year ended December 31, 2006
was $49.2 million, compared to revenue of $54.3 million in 2005.
The net loss for the year, including restructuring and non-cash
stock based compensation charges of $17.7 million, was $39.3
million, or $0.85 per share, compared to a net loss of $89.7
million, or $2.04 per share, in 2005, which included a non-cash
impairment charge of $45.7 million. Product-related revenue was
$15.9 million in 2006, representing a 61% increase over
product-related revenue of $9.8 million in 2005. This increase
resulted primarily from increased sales of Phyzyme(TM) Phytase
sold through the Company's partnership with Danisco Animal
Nutrition.
Revenue for the quarter ended December 31, 2006 was $14.8
million, compared to revenue of $14.5 million for the fourth
quarter of 2005. Product-related revenue for the quarter ended
December 31, 2006 was $5.3 million, compared to product revenue
of $3.7 million in the fourth quarter of 2005. The net loss for
the quarter was $6.1 million, or $0.13 per share, compared to a
net loss of $54.7 million, or $1.23 per share, in the fourth
quarter of 2005, which included a non-cash impairment charge of
$45.7 million. At December 31, 2006, the Company had cash, cash
equivalents, and short-term investments totaling $51.9 million.
The decrease in total revenue for the year ended December 31,
2006, when compared to 2005, resulted primarily from the
Company's corporate strategy to de-emphasize grant revenue and
certain collaborations that were not strategic to its three
focus areas of biofuels, specialty industrial processes, and
health and nutrition. As a result, total revenues decreased 9%
compared to the year ended December 31, 2005, while
product-related revenue increased 61% over the same period.
Revenues have historically fluctuated from period to period and
will likely continue to fluctuate in the future based upon the
timing and composition of funding under existing and future
collaboration agreements and grants, the expected increase in
product sales based upon new product introductions, and
regulatory approval timelines.
The decrease in net loss from the previous year was primarily
due to a restructuring, announced January 5, 2006, which focused
the Company's resources on products with the greatest near-term
opportunities, reduced its workforce, and consolidated its
facilities. The Company recognized restructuring charges of
approximately $12.0 million in 2006 related to employee
separation and facilities consolidation costs.
In February of 2007, Diversa entered into an agreement to merge
with Celunol Corp. to create what Diversa believes would be the
first company with integrated, end-to-end technologies to
convert cellulosic biomass into fuel ethanol. In addition to
accelerating the Company's strategy to pursue vertical
integration within the biofuels industry, the Company expects
that the proposed merger has the potential to enhance Diversa's
existing enzyme business by providing access to a cellulosic
ethanol pilot plant and other downstream assets and capabilities
to accelerate Diversa's development of novel enzymes and enzyme
cocktails for the production of cellulosic ethanol. Subject to
receiving required regulatory and stockholder approvals, the
merger is expected to be completed by the end of the second
quarter of 2007.
"In 2006, Diversa substantially increased product revenues and
practiced fiscal discipline, all of which helped to produce a
significantly reduced net loss," commented Edward T. Shonsey,
Diversa's chief executive officer. "We continued to rebalance
our resources and developed a more focused business strategy. In
early 2007, we announced that we would explore additional
opportunities in the biofuels market where we believe the
potential for significant breakout opportunities exist and then
subsequently announced our agreement to merge with Celunol Corp.
in order to accelerate this vertical integration strategy.
Near-term, we expect to concentrate on:
* Expanding the marketing and sales of our Fuelzyme(TM)-LF
enzyme for more efficient grain ethanol production;
* Continuing to market our Purifine(TM) enzyme for enhanced
processing of both edible oils and biodiesel fuels;
* Making significant progress in our cellulosic ethanol
programs, including using vertical integration as a means to
accelerate enzyme development and logistics for the production
of cellulosic ethanol; and
* Successful completion of our merger with Celunol Corp."
Since 1994, San Diego-based Diversa Corporation has pioneered
the development of high-performance specialty enzymes. Diversa
possesses the world's broadest array of enzymes derived from
bio-diverse environments as well as patented DirectEvolution(R)
technologies. Diversa customizes enzymes for manufacturers
within the biofuels, industrial, and health and nutrition
markets to enable higher throughput, lower costs, and improved
environmental outcomes. On February 12, 2007, Diversa entered
into a merger agreement with Celunol Corp. pursuant to which a
wholly owned subsidiary of Diversa will merge with and into
Celunol, with Celunol as the surviving corporation, becoming a
wholly owned subsidiary of Diversa. The proposed merger
transaction is subject to customary closing conditions,
including receipt of certain regulatory approvals and the
approval of the stockholders of Diversa and Celunol. For more
information, please visit
www.diversa.com.
Additional Information about the Diversa/Celunol Merger and
Where to Find It
Diversa Corporation intends to file with the Securities and
Exchange Commission a registration statement on Form S-4 that
will include a proxy statement/prospectus and other relevant
documents in connection with the proposed merger transaction.
Investors and security holders of Diversa and Celunol are urged
to read the proxy statement/prospectus (including any amendments
or supplements to the proxy statement/prospectus) and other
relevant materials when they become available, because they will
contain important information about Diversa, Celunol, and the
proposed merger transaction. Investors may obtain a free copy of
these materials (when they are available) and other documents
filed with the Securities and Exchange Commission at the SEC's
website at http://www.sec.gov. A free copy of the proxy
statement/prospectus, when it becomes available, may also be
obtained from Diversa by directing a request to: Diversa
Corporation, 4955 Directors Place, San Diego, CA 92121, Attn.
Investor Relations. In addition, investors may access copies of
the documents filed with the SEC by Diversa on Diversa's website
at http://www.diversa.com.
Participants in the Solicitation
Diversa and its executive officers and directors and Celunol and
its executive officers and directors may be deemed to be
participants in the solicitation of proxies from the
stockholders of Diversa in connection with the proposed
transaction. Information regarding the special interests of
these executive officers and directors in the proposed
transaction will be included in the proxy statement/prospectus
referred to above. Additional information regarding the
executive officers and directors of Diversa is also included in
Diversa's proxy statement for its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on April 5, 2006.
This document is available free of charge at the SEC's website
(http://www.sec.gov) and from Investor Relations at Diversa at
the address described above. |
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