TerraVia™
Jul 30, 2015

Solazyme Reports Second Quarter 2015 Results

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Solazyme, Inc. (NASDAQ:SZYM), a renewable oil and specialty ingredients company, announced today results for the second quarter ended June 30, 2015.

"We are making good progress against our core deliverables, the commercialization of high value products across food, personal care and industrial markets, and the delivery of key milestones at the Moema JV production facility in Brazil," said Jonathan Wolfson, CEO of Solazyme. "While there is a lot of work ahead, I am proud of the Solazyme team, and what they have accomplished so far this year. I am excited about what is to come."

"We are maintaining financial discipline in our operations and focusing our sales efforts on strategic revenue streams," said Tyler Painter, COO and CFO of Solazyme. "On the commercial side, our product portfolio is well aligned with trends across our targeted end markets, and we are seeing a growing number of projects and customers today."

Business Review

Financial Results

Total revenue for the second quarter ended June 30, 2015 was $11.7 million compared with $15.9 million in the second quarter of 2014. The year over year decline in revenues was due to expected decreases in funded program revenue as well as in product revenue due to the timing of certain Algenist sales activities and slower than anticipated adoption rates for Encapso. GAAP net loss was $37.2 million for the second quarter of 2015, compared to net loss of $42.9 million in the prior year period. On a non-GAAP basis, the net loss was $31.7 million for the second quarter of 2015, compared with net loss of $32.9 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.

Conference Call

Solazyme will hold a conference call for investors on July 30, 2015 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 85330573 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. develops and sells high-performance oils and ingredients that are better for people and better for the planet. Starting with microalgae, the world's original oil producer, Solazyme creates innovative, sustainable, high-performance products. These include renewable oils and ingredients that serve as the foundation for healthier foods; high-performance industrial products; unique home and personal care solutions; and more sustainable fuels. Headquartered in South San Francisco, Solazyme's mission is to solve some of the world's biggest problems with one of the world's smallest and earliest life forms: microalgae. For additional information, please visit Solazyme's website at www.solazyme.com.

Solazyme®, AlgaPūr™, AlgaVia™, AlgaWise™, Algenist®, Encapso™, Soladiesel®, 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 a "non-GAAP financial measure" by the Securities and Exchange Commission: non-GAAP net-loss and 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 measure, see "Reconciliation of GAAP to Non-GAAP Net-Loss and 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 expenses such as non-cash gains or losses related to derivative liabilities and 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 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 Six Months Ended
June 30,

June 30,

2015 2014 2015 2014

Revenues

Product revenues $ 8,307 $ 9,022 $ 17,128 $ 16,370
Research and development programs   3,433     6,917     7,217     11,960  
Total revenues 11,740 15,939 24,345 28,330
 

Costs and operating expenses (1)

Cost of product revenue 4,361 4,470 9,031 7,860
Research and development 12,747 22,064 25,301 42,899
Sales, general and administrative 20,981 21,637 42,249 42,244
Restructuring charges   (31 )   -     393     -  
Total costs and operating expenses 38,058 48,171 76,974 93,003
       
Loss from operations (26,318 ) (32,232 ) (52,629 ) (64,673 )
 

Other income (expense) (2)

Interest and other income (expense), net (3,410 ) (4,662 ) (6,683 ) (5,774 )
Loss from equity method investment (7,309 ) (4,278 ) (12,375 ) (8,112 )
Gain from change in fair value of warrant liability - - - 688
(Loss) gain from change in fair value of derivative liabilities   (134 )   (1,745 )   (149 )   273  
Total other income (expense) (10,853 ) (10,685 ) (19,207 ) (12,925 )
       
Net loss $ (37,171 ) $ (42,917 ) $ (71,836 ) $ (77,598 )
Net loss per share - basic and diluted $ (0.46 ) $ (0.56 ) $ (0.90 ) $ (1.07 )
 
Weighted average number of common shares used in net loss per share computation - basic and diluted 80,098 75,963 79,875 72,607
 
 
SOLAZYME, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET LOSS AND NET LOSS PER SHARE
In thousands, except per share amounts
(UNAUDITED)
         
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Net loss $ (37,171 ) $ (42,917 ) $ (71,836 ) $ (77,598 )
Gain from change in fair value of warrant liability - - - (688 )
Loss (gain) from change in fair value of derivative liabilities 134 1,745 149 (273 )
(1) Operating expenses includes costs as follows:
Research and development 1,472 1,910 2,584 3,730
Sales, general and administrative   3,246     3,886     6,204     8,675  
Total stock-based compensation expense 4,718 5,796 8,788 12,405
Restructuring charges (31 ) - 393 -
(2) Other income (expense) includes costs as follows:
Amortization of debt discount and issuance costs 633 736 1,256 986
Debt conversion expense   -     1,766     -     1,766  
Net loss (non-GAAP) $ (31,717 ) $ (32,874 ) $ (61,250 ) $ (63,402 )
 
Net loss per share (GAAP) - basic and diluted $ (0.46 ) $ (0.56 ) $ (0.90 ) $ (1.07 )
 
Gain from change in fair value of warrant liability - - - (0.01 )
Loss (gain) from change in fair value of derivative liabilities - 0.02 - -
Stock-based compensation expense 0.05 0.08 0.11 0.17
Restructuring charges - - - -
Amortization of debt discount and issuance costs 0.01 0.01 0.02 0.01
Debt conversion expense   -     0.02     -     0.03  
Net loss per share (non-GAAP) - basic and diluted $ (0.40 ) $ (0.43 ) $ (0.77 ) $ (0.87 )
 
 
SOLAZYME, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(UNAUDITED)
     

    June 30,    

December 31,
2015 2014

Assets

 

Current assets

Cash, cash equivalents and marketable securities $ 147,026 $ 207,308
Other current assets   22,744   26,619
Total current assets 169,770 233,927
Property, plant and equipment - net 33,197 36,080
Other assets   40,730   42,582
Total assets $ 243,697 $ 312,589
 

Liabilities and stockholders' equity

 

Current liabilities

Current portion of long-term debt $ - $ 6
Other current liabilities   16,610   23,448
Total current liabilities 16,610 23,454
Other liabilities 5,846 2,668
Long-term debt   201,408   200,091
Total liabilities   223,864   226,213
Total stockholders' equity   19,833   86,376
Total liabilities and stockholders' equity $ 243,697 $ 312,589

Solazyme, Inc.
Corporate Communications:
Genet Garamendi
press@solazyme.com
or
Mike Smargiassi
Brad Edwards
Brainerd Communicators, Inc.
212-986-6667
smarg@braincomm.com
edwards@braincomm.com

Source: Solazyme, Inc.

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