Nov 7, 2011

Solazyme Reports Third Quarter 2011 Results

Company Continues to Advance Commercialization of Tailored Oils:

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Solazyme, Inc. (NASDAQ:SZYM), a renewable oil and bioproducts company, announced today financial results for the third quarter ended September 30, 2011 and recent key corporate highlights.

"We are making substantial progress with the commercialization of our high value tailored oils," said Jonathan Wolfson, CEO, Solazyme. "During the last three months, we advanced important partnerships with industry leaders Bunge, Roquette and Unilever. All of these partners are committing significant capital and expertise into accelerating our commercialization and profitability. Demand for our products continues to be strong and our technology is proven, as evidenced by United Airlines choosing Solajet™ for the first U.S. commercial flight on biofuels this morning."

Today, Solazyme also announced three new non-binding feedstock agreements. These agreements, combined with the Company's previously announced partnership with Bunge, would support the production of 450,000 Metric Tons of annual tailored oil capacity in Brazil and the United States.

"These new agreements offer further evidence of both our execution and the compelling value proposition we offer to our partners," added Mr. Wolfson. "Combined with our Bunge agreement, we have signed four agreements since August that are expected to give us access to the feedstock required to meet 90% of our manufacturing capacity targets for 2015."

Financial Results

Total revenue for the third quarter ended September 30, 2011 was $8.9 million compared with $4.6 million in the third quarter of 2010. Third quarter GAAP net loss attributable to Solazyme, Inc. common stockholders was $14.1 million, which compares with $9.0 million in the prior year period. On a non-GAAP basis, the net loss attributable to Solazyme, Inc. common stockholders was $11.5 million for the quarter, compared with $8.6 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.

"We offer our partners a compelling value proposition to diversify their business, improve margins and earn an attractive return on their capital in a relatively short period of time," said Tyler Painter, CFO, Solazyme. "With $250.6 million in cash, cash equivalents and marketable securities, we are well capitalized and are on track to achieve our commercialization targets."

Business Highlights

Conference Call

Solazyme will hold a conference call for investors on November 7, 2011 at 1:30 p.m. PT (4:30 p.m. ET). Investors may access the call by dialing 973.409.9250. A live webcast of the call will be available from the Investor Relations section of www.solazyme.com. A recording of the call will also be available by calling 404.537.3406; access code 17752851 beginning approximately two hours after the call, and will be available for one week. A webcast replay from today's call will also be available from the Investor Relations section of www.solazyme.com approximately two hours after the call and will be available for up to thirty days.

About Solazyme, Inc.

Solazyme, Inc. is a renewable oil and bioproducts company that transforms a range of low-cost plant-based sugars into high-value oils. Headquartered in South San Francisco, Solazyme's renewable products can replace or enhance oils derived from the world's three existing sources — petroleum, plants and animal fats. Initially, Solazyme is focused on commercializing its products into three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care. For more information, please visit our website: http://www.solazyme.com

Solazyme®, the Solazyme logo and other trademarks or service names are the trademarks of Solazyme, Inc.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as "non-GAAP financial measures" by the Securities and Exchange Commission: non-GAAP net loss and non-GAAP net loss per share. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measures, see "Reconciliation of GAAP to Non-GAAP Net-Loss Per Share" included in the tables to this press release.

These non-GAAP measures are provided to enhance investors' overall understanding of Solazyme's current financial performance and Solazyme 's prospects for the future. Specifically, Solazyme believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of its core operating results and business outlook.

For its internal budgeting process, Solazyme's management uses financial measures that do not include stock-based compensation expense or special one-time expenses such as non-cash losses due to warrant revaluations. In addition to the corresponding GAAP measures, Solazyme's management also uses the foregoing non-GAAP measures in reviewing the financial results of Solazyme. Solazyme excludes stock-based compensation expenses and special non-cash one-time charges from its non-GAAP measures primarily because they are non-cash expenses that management does not believe are reflective of ongoing operating results.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Solazyme, including statements that involve risks and uncertainties concerning: the commercialization plans and commercialization timetable for its tailored oils and applications thereof; the future market demand for its tailored oils; the timetable of its manufacturing scale-up and the volume of oils that may be produced from such scale-up; the ability of its feedstock agreements to support its tailored oil production capacity requirements; the timetable for completion of the production plant in Brazil; the timetable for production at the Phase I facility and construction of the Phase II facility in Lestrem, France; the timetable for production at its Peoria facility; business and financial benefits to its partners and the timeframe thereof; and its future ability to sign commercial partnerships and secure additional feedstock. When used in this press release, the words "will", "expects", "intends" and other similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statement may be influenced by a variety of factors, many of which are beyond the control of Solazyme, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this press release due to a number of risks and uncertainties. Potential risks and uncertainties include, among others: Solazyme's limited operating history; its limited history in commercializing products; implementation risk in deploying new technologies; its limited experience in constructing and operating commercial manufacturing facilities; delays related to construction, facilitization or start-up of production facilities; its access to adequate supply of feedstock on favorable terms; its ability to enter into and maintain strategic collaborations; its ability to obtain requisite regulatory approvals; and its access, on favorable terms, to any required financing. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Solazyme.

In addition, please refer to the documents that Solazyme, Inc. files with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 for a discussion of these and other risks. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. Solazyme is not under any duty to update any of the information in this press release.

Three and nine months ended September 30, 2011 and 2010
In thousands, except per share amounts
  Three Months Ended September 30,   Nine Months Ended September 30,
  2011       2010     2011       2010  


Research and development programs $ 7,051   $ 4,632 $ 18,542   $ 14,800
Product revenue $ 1,886 $ - 5,535 -
Total revenues 8,937 4,632 24,077 14,800


Operating expenses (1)

Cost of product revenue 554 - 1,592 -
Research and development 10,866 9,260 28,692 21,841
Sales, general and administrative   11,527       4,331     28,591       11,415  
Total operating expenses 22,947 13,591 58,875 33,256
Loss from operations (14,010 ) (8,959 ) (34,798 ) (18,456 )

Other income (expense)

Net interest and other income (76 ) 35 115 (105 )
Loss from change in fair value of warrant liabilities   -       -     (3,637 )     (638 )
Total other income (expense) (76 ) 35 (3,522 ) (743 )
Net loss (14,086 ) (8,924 ) (38,320 ) (19,199 )
Accretion on redeemable convertible preferred stock   -       (33 )   (60 )     (103 )
Net loss attributable to Solazyme, Inc. common stockholders $ (14,086 )   $ (8,957 ) $ (38,380 )   $ (19,302 )
Net loss per share attributable to Solazyme, Inc. common stockholders, basic and diluted $ (0.24 )   $ (0.77 ) $ (1.15 )   $ (1.70 )
Weighted average number of common shares used in loss per share computation, basic and diluted 59,508 11,708 33,272 11,364
Reconciliation of GAAP to non-GAAP net loss per share: Three Months Ended September 30, Nine Months Ended September 30,
In thousands, except per share amounts   2011       2010     2011       2010  
Net loss attributable to Solazyme, Inc. common stockholders $ (14,086 ) $ (8,957 ) $ (38,380 ) $ (19,302 )
Loss from change in fair value of warrant liabilities - - 3,637 638
(1) Operating expenses include stock-based compensation expense as follows:
Research and development 534 113 1,567 282
Sales, general and administrative   2,018       231     6,008       673  
Total stock-based compensation expense 2,552 344 7,575 955
Net loss attributable to Solazyme, Inc. common stockholders (non-GAAP) $ (11,534 )   $ (8,613 ) $ (27,168 )   $ (17,709 )
Loss per share attributable to Solazyme, Inc. common stockholders (GAAP) $ (0.24 ) $ (0.77 ) $ (1.15 ) $ (1.70 )
Loss from change in fair value of warrant liabilities - - 0.11 0.06
Stock-based compensation expense 0.05 0.03 0.22 0.08
Net loss per share attributable to Solazyme,Inc. common stockholders (non-GAAP) $ (0.19 )   $ (0.74 ) $ (0.82 )   $ (1.56 )
Condensed Consolidated Balance Sheets September 30, December 31,
In thousands   2011     2010  

Current assets

Cash and cash equivalents $ 113,200 $ 32,497
Marketable securities 137,383 49,533
Accounts receivable 1,156 670
Unbilled revenue 5,164 3,467
Inventories 3,194 -
Prepaids and other current assets 4,396 1,816
Total current assets 264,493 87,983
Property, plant and equipment - net 22,319 5,693
Other assets 301 308
Total assets $ 287,113   $ 93,984  


Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)


Current liabilities

Accounts payable $ 5,038 $ 6,137
Accrued liabilities 7,549 4,320
Current portion of long-term debt 4,673 50
Deferred revenue 914 1,363
Preferred stock warrant liability - 2,961
Other current liabilities 81 -
Total current liabilities 18,255 14,831
Other liabilities 560 728
Long-term debt 15,837 179
Total liabilities   34,652     15,738  
Commitments and contingencies

Redeemable convertible preferred stock

Preferred stock - Series A - 2,991
Preferred stock - Series B - 8,645
Preferred stock - Series C - 56,943
Preferred stock - Series D - 59,734
Total redeemable convertible preferred stock - 128,313

Stockholders' equity (deficit)

Common stock 60 12
Additional paid-in capital 344,382 4,393
Notes receivable from stockholders - (1,597 )
Accumulated other comprehensive loss (766 ) (40 )
Accumulated deficit (91,215 ) (52,835 )
Total stockholders' equity (deficit) 252,461 (50,067 )
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 287,113   $ 93,984  

Solazyme, Inc.
Public Relations:
Genet Garamendi
The Blueshirt Group
Chris Danne, 415-217-7722
Maria Riley, 415-217-7722

Source: Solazyme, Inc.

News Provided by Acquire Media