Davis, California, USA
November 10, 2021

Marrone Bio Innovations, Inc. (NASDAQ: MBII), an international leader in sustainable bioprotection and plant health solutions, has provided its financial results for the third quarter ended September 30, 2021. Key results include:

• Strategic focus on global expansion in the major row crops was a key contributor to the 12% revenue growth for the third quarter. Sales of biological fungicides also increased during the period.
• Stronger mix of higher margin seed treatments led to gross profit of 61.4% in the third quarter, the 12th consecutive quarter of gross margins in excess of 50%.
• The net loss in the third quarter of 2021 was $4.9 million, as compared with a net loss of $6.1 million in the third quarter of 2020. Higher revenues and gross margin expansion, coupled with continued cost containment, led to the 18% improvement in the net loss and the 22% improvement in the Adjusted EBITDA1 loss.

Selected Financial Highlights

1 Adjusted EBITDA is a non-GAAP financial measure and is described in relation to its most directly comparable GAAP measure under “Use of Non-GAAP Financial Information” below.
 

Management Commentary

“Our strategy to diversify our offerings of sustainable agricultural solutions globally – particularly with seed treatments – continues to be sound. This has allowed us to grow the business in the face of ongoing drought, input cost pressures and supply chain challenges affecting growers around the world,” said Chief Executive Officer Kevin Helash. “However, given the uncertainties in the agricultural markets as we close out the year, we now anticipate revenue growth in the low double-digit to mid-teens range for 2021 as we set the stage for more robust sales in 2022. We continue to expect our product mix will deliver annual gross margins in the upper 50% range, and operating expenses should remain in line with costs in 2020, plus inflation.

“As our distribution partners anticipate the needs of farmers for the 2022 growing season, we will be in position to ensure the right products are in the channel at the right time to maximize value and guarantee availability,” Helash added. “Our BioUnite program – which offers growers highly compatible and cost-effective treatments for diseases and pests – should have a significant advantage in today’s ag environment, and our objective is to maximize that opportunity as we look to 2022.

“The global trend toward growing more food with a gentler footprint remains intact, and we are at the forefront of meeting that need,” Helash concluded. “The return on investment our products provide – both for the farmer and the environment – will stand out as growers face higher costs for inputs linked to traditional chemicals and fossil fuels.”

Third Quarter 2021 Financial and Operational Summary

• Expansion in row crops globally was a key contributor to the 12% increase in third-quarter revenues as distribution partners acquired seed treatments in advance of the 2022 growing season. Despite ongoing drought conditions in specialty markets in the United States, revenues from the company’s biological fungicides grew as growers prepared for 2022 production.
• Gross profit growth of 21% outpaced revenue growth, reflecting the mix of high value offerings in the company’s product portfolio. Gross margins for the third quarter 2021 were 61.4%, a 470 basis point improvement over gross margins in the third quarter of 2020.
• Third-quarter operating expenses of $10.5 million were in line with the company’s commitment to maintain operating expenses flat with those in the prior year, plus inflation. Prudent cost management contributed to a 1,200 basis point improvement in the operating expense ratio – a key performance indicator that compares operating expenses to revenues.
• The net loss in the third quarter of 2021 was $4.9 million, as compared with a net loss of $6.1 million in the third quarter of 2020. Adjusted EBITDA was a loss of $2.8 million, as compared with an Adjusted EBITDA loss of $3.6 million in the same period last year. Both metrics improved because of the company’s strategic emphasis on revenue growth, margin expansion and cost containment. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
• Cash used in operations of $0.3 million improved by 64%, largely driven by the higher gross profit and lower net loss in the third quarter of 2021.

Year-to-Date 2021 Financial and Operational Summary

• For the first nine months of 2021, revenues increased 9% to $33.5 million from further adoption of the company’s seed treatments for major row crops. This improvement was somewhat offset by slower than expected growth in bioinsecticides for specialty crops, the use of which was affected by drought conditions, particularly in the western United States.
• Gross profit improved 16% year-to-date to $20.8 million, with gross margins up 350 basis points to 62.1%.
• Operating expenses for the first nine months of 2021 were $30.6 million, with a year-to-date operating expense ratio of 91%. Year-to-date operating expenses in 2020 benefited by $1.4 million from a Paycheck Protection Program (PPP) loan secured to retain employees supporting the essential agricultural industry during the COVID-19 pandemic, which has since been forgiven.
• The 2021 year-to-date net loss was $11.2 million, compared with a net loss of $16 million in the same period in 2020, as a result of higher sales, stronger margins and lower costs. The net loss for the first nine months of 2020 included non-cash adjustments related to warrant exercises, stock compensation and amortization charges, as well as the benefit of the PPP loan.
• Adjusted EBITDA in the first nine months of 2021 was a loss of $4.7 million, a 47% improvement from the loss of $8.8 million in the same period in 2020. Growth in revenues and gross profit, coupled with cost discipline, drove the performance. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
• Cash used in operations was $6.6 million in the nine months of 2021, a 24% improvement compared with a use of cash of $8.6 million in the same period of 2020. Cash used in operations in the first nine months of 2020 benefited from $1.7 million in proceeds from the PPP loan.
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Website: http://marronebioinnovations.com/

Published: November 10, 2021