TerraVia™
Nov 5, 2014

Solazyme Reports Third Quarter 2014 Results

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Solazyme, Inc. (NASDAQ:SZYM), a renewable oil and bioproducts company, announced today results for the third quarter ended September 30, 2014.

"Solazyme made continued progress in manufacturing and commercial activity in the third quarter," said Jonathan Wolfson, CEO of Solazyme. "Our Clinton/Galva and Peoria facilities are performing well. Progress at Moema is more mixed with the upstream process operating as expected, while the downstream process will require continued work to establish consistent, fully integrated operations. Commercially, we're continuing to establish our Encapso™ and AlgaVia™ products in the marketplace while focusing additional attention on the development of higher value specialty products. Strategically, we're moving to intensify our focus on our high-value specialty portfolio, a move that will alter the near-term trajectory of our production ramp but which we believe will ultimately drive greater value for the Company."

Financial Results

Total revenue for the third quarter of 2014 was $17.6 million compared with $10.6 million in the third quarter of 2013, an increase of 65%. Third quarter GAAP net loss was $39.7 million, which compares with net loss of $30.7 million in the prior year period. On a non-GAAP basis, the net loss was $35.3 million for the third quarter of 2014, compared with net loss of $22.3 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results are included below.

"Our near term focus is on bringing Moema to fully integrated operations and focusing commercial activity around our high-value specialty products," said Tyler Painter, CFO and COO of Solazyme. "As we execute on these goals, we are emphasizing prudent management of our capital, optimizing our product mix and positioning our manufacturing assets to maximize returns."

Recent Business Highlights

Conference Call

Solazyme will hold a conference call for investors on November 5, 2014 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 11016807 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. (SZYM) 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 four target markets: (1) fuels and chemicals, (2) nutrition, (3) encapsulated lubricants and (4) consumer products.

Solazyme®, AlgaVia™, Encapso™, 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 measure defined as a "non-GAAP financial measure" by the Securities and Exchange Commission: non-GAAP net loss and non-GAAP net loss per share. This measure 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 this non-GAAP financial measure to the nearest comparable GAAP measure, see "Reconciliation of GAAP to Non-GAAP Basic Net-Loss Per Share" included in the tables to this press release.

This non-GAAP measure is 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 measure provides 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 income or expenses such as non-cash gains or losses due to warrant revaluations or one-time costs incurred outside the normal course of business. In addition to the corresponding GAAP measures, Solazyme's management also uses the foregoing non-GAAP measure in reviewing the financial results of Solazyme. Solazyme excludes stock-based compensation expenses and special cash and non-cash 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: its commercialization and production plans; the commissioning of equipment and the ramping up of facilities; meeting commercialization and technology targets; successful product trials and market acceptance of its products; and Solazyme's ability to maintain its relationships with its partners. 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, ramping up and operating commercial manufacturing facilities; its ability to sell its products at a profit; delays related to construction, start-up and ramp-up of production facilities; its ability to manage operational costs at production facilities; its ability to enter into and maintain strategic collaborations; successful product trials by its customers and market acceptance of its products by end-users; 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, as updated from time to time, 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.

 
SOLAZYME, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
(UNAUDITED)
 
        Three Months Ended

September 30,

    Nine Months Ended

September 30,

2014     2013 2014     2013

Revenues

       
Research and development programs $ 5,936 $ 5,824 $ 17,896 $ 14,764
Product revenues   11,623     4,797     27,993     13,712  
Total revenues 17,559 10,621 45,889 28,476
 

Costs and operating expenses (1)

Cost of product revenue 6,598 1,450 14,458 4,400
Research and development 20,571 17,556 63,470 46,191
Sales, general and administrative   25,883     15,708     68,127     46,010  
Total costs and operating expenses 53,052 34,714 146,055 96,601
       
Loss from operations (35,493 ) (24,093 ) (100,166 ) (68,125 )
 

Other income (expense) (2)

Interest and other income (expense), net (3,188 ) (1,614 ) (8,962 ) (4,576 )
Loss from equity method investments (7,201 ) (2,360 ) (15,313 ) (5,541 )
Gain (loss) from change in fair value of warrant liability - 200 688 (425 )
Gain (loss) from change in fair value of derivative liabilities   6,205     (2,836 )   6,478     (4,386 )
Total other income (expense) (4,184 ) (6,610 ) (17,109 ) (14,928 )
       
Net loss $ (39,677 ) $ (30,703 ) $ (117,275 ) $ (83,053 )
Net loss per share, basic and diluted $ (0.50 ) $ (0.47 ) $ (1.57 ) $ (1.32 )
 

Weighted average number of common shares used in loss per share

computation, basic and diluted

78,867 64,812 74,716 62,783
 
 
SOLAZYME, INC.
RECONCILIATION OF GAAP TO NON-GAAP BASIC NET LOSS PER SHARE
In thousands, except per share amounts
(UNAUDITED)
 
        Three Months Ended

September 30,

    Nine Months Ended

September 30,

2014       2013 2014       2013
Net loss $ (39,677 ) $ (30,703 ) $ (117,275 ) $ (83,053 )
(Gain) loss from change in fair value of warrant liability - (200 ) (688 ) 425
(Gain) loss from change in fair value of derivative liabilities (6,205 ) 2,836 (6,478 ) 4,386
(1) Operating expenses includes costs as follows:
Research and development 1,941 1,544 5,671 4,111
Sales, general and administrative   4,347     3,687     13,022     10,341  
Total stock-based compensation expense 6,288 5,231 18,693 14,452
Litigation settlement, net of insurance reimbursement 3,657 - 4,507 -
(2) Other income (expense) includes costs as follows:
Amortization of debt discount and issuance costs 608 503 1,594 1,248
Debt conversion expense - - 1,766 -
Dissolution of the Solazyme Roquette JV   -     59     -     1,406  
Net loss (non-GAAP) $ (35,329 ) $ (22,274 ) $ (97,881 ) $ (61,136 )
 
Basic and diluted loss per share (GAAP) $ (0.50 ) $ (0.47 ) $ (1.57 ) $ (1.32 )
(Gain) loss from change in fair value of warrant liability - - (0.01 ) 0.01
(Gain) loss from change in fair value of derivative liabilities (0.08 ) 0.04 (0.09 ) 0.07
Stock-based compensation expense 0.08 0.08 0.25 0.23
Litigation settlement, net of insurance reimbursement 0.04 - 0.06 -
Amortization of debt discount and issuance costs 0.01 0.01 0.02 0.02
Debt conversion expense - - 0.03 -
Dissolution of the Solazyme Roquette JV   -     -     -     0.02  
Net loss per share (non-GAAP) $ (0.45 ) $ (0.34 ) $ (1.31 ) $ (0.97 )
 
 
SOLAZYME, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(UNAUDITED)
 
        September 30,       December 31,
2014 2013

Assets

 

Current assets

Cash, cash equivalents and marketable securities $ 250,181 $ 167,521
Other current assets   32,513   24,296
Total current assets 282,694 191,817
Property, plant and equipment - net 38,034 40,089
Other assets   43,588   26,799
Total assets $ 364,316 $ 258,705
 

Liabilities and stockholders' equity

 

Current liabilities

Current portion of long-term debt $ 22 $ 65
Other current liabilities   33,220   25,229
Total current liabilities 33,242 25,294
Other liabilities 1,351 1,006
Long-term debt   201,100   93,457
Total liabilities   235,693   119,757
Total stockholders' equity   128,623   138,948
Total liabilities and stockholders' equity $ 364,316 $ 258,705
 

Contacts
Solazyme, Inc.
Genet Garamendi
Corporate Communications
press@solazyme.com
or
Brainerd Communicators, Inc.
Jeff Majtyka, 212-986-6667
majtyka@braincomm.com
or
Brad Edwards, 212-986-6667
edwards@braincomm.com

Source: Solazyme, Inc.

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