TerraVia™
Mar 14, 2016

TerraVia (Solazyme) Reports Fourth Quarter and Full Year 2015 Results

New 5-year Supply Agreement with Unilever Aligns with Company's Transition to Food, Nutrition and Specialty Ingredients

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Solazyme, Inc. (NASDAQ:SZYM), now known as TerraVia™, a pioneer in algae innovation and a food, nutrition and specialty ingredients company, announced today results for the fourth quarter and full year ended December 31, 2015.

"As announced last week, we are moving forward with a refined focus on our food, nutrition and specialty ingredients portfolio, and we are actively transitioning to the TerraVia™ banner," said Jonathan Wolfson, CEO of TerraVia™. "Today's important announcement with Unilever, in conjunction with the recent expansion of our joint venture with Bunge into sustainable and healthier foods, shows that the two companies who know us best are reaffirming and expanding their commitments with us, representing further validation of our products, manufacturing capabilities, cost structure and sustainability profile. In an era when most of the innovation taking place in food is in the reformulation, repackaging, and marketing of existing products and ingredients, we are different in that we have built and offer true innovation with new, and unique ingredients based on algae, the mother of all plants, and earth's original superfood. As TerraVia™, we are today uniquely positioned to bring algae into the mainstream in food, nutrition and specialty ingredients."

Solazyme announced separately today that it has signed a definitive multi-year global supply agreement with Unilever. The five-year, multi-oil supply agreement provides for Unilever to purchase renewable algae oils for use in personal care products and is expected to represent total revenue of more than $200 million over the term of the agreement. The agreement follows last week's announcement that Solazyme is refining its business to focus on food, nutrition and specialty ingredients, harnessing the power of its transformational algae innovation platform. Solazyme has been renamed "TerraVia" to reflect this focus and the journey to improve the lives of people and the planet.

"We have streamlined our cost structure, strengthened our capital position, and are in a good position to commercialize our offerings in 2016 and beyond," said Tyler Painter, COO and CFO of TerraVia™. "We move forward as TerraVia™ with an improved financial profile, and we believe our refined focus positions us to deliver enhanced performance and profitability longer term."

Financial Results

Total revenue for the fourth quarter of 2015 was $10.4 million compared with $14.5 million in the fourth quarter of 2014. GAAP net loss was $34.7 million for the fourth quarter of 2015, compared to net loss of $44.9 million in the prior year period. On a non-GAAP basis, the net loss was $26.1 million for the fourth quarter of 2015, compared with net loss of $35.5 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.

Total revenue for 2015 was $46.1 million compared with $60.4 million in the prior year. The year over year decline in revenues was due to expected decreases in funded program revenue and lower product sales primarily for certain industrial applications as the Company strategically narrowed its focus on higher value product sales. Full year 2015 GAAP net loss was $141.4 million, compared with a $162.1 million loss in the prior year. On a non-GAAP basis, the net loss was $118.3 million for 2015, compared with $133.4 million in 2014.

Conference Call

Solazyme will hold a conference call for investors on March 14, 2016 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 60294557 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 TerraVia

TerraVia™ (formerly Solazyme®), is a next generation food, nutrition and specialty ingredients company that harnesses the power of algae, the mother of all plants and earth's original superfood. With a portfolio of breakthrough ingredients and manufacturing, the Company is well positioned to help meet the growing need of consumer packaged goods and established and emerging food manufacturers to improve the nutritional profile of foods without sacrificing taste, and to develop select consumer brands. The Company also manufactures a range of specialty personal care ingredients for key strategic partners. Headquartered in South San Francisco, the Company's mission is to create products that are truly better for people and better for the planet. For additional information, please visit TerraVia's website at www.terravia.com.

Solazyme®, TerraVia™, 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. 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 these 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, restructuring charges or special expenses such as non-cash gains or losses related to derivative liabilities and warrant revaluations. In addition to the corresponding GAAP measure, 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 strategic, product, commercialization and production plans; its transition of corporate identity; meeting commercialization and technology targets; aggregate value of future revenue; the timing and ramp-up of sales; successful product trials and market acceptance and adoption of its products; its ability to close its strategic financing; 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 manufacturing and commercializing products; its ability to successfully transition its corporate identity; production management risks; implementation risk in deploying new technologies; its limited experience in constructing, ramping up and operating commercial manufacturing facilities; its ability to successfully develop and commercialize products; its ability to sell its products at a profit; delays related to ramp-up and optimization of production facilities; availability of consistent, reliable power and steam; its ability to manage costs; its ability to enter into and maintain strategic collaborations; successful product trials by its customers and market acceptance and adoption 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 Reports on Form 10-Q and Annual Report on Form 10-K, 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
December 31,

Year Ended
December 31,
2015 2014 2015 2014

Revenues

Product revenues $   7,039 $   9,353 $   33,300 $   37,346
Research and development programs     3,348       5,149       12,831       23,045  
Total revenues 10,387 14,502 46,131 60,391
 

Costs and operating expenses

Cost of product revenue 4,578 6,154 18,179 20,612
Research and development 9,586 18,210 48,094 81,680
Sales, general and administrative 18,888 22,139 80,733 90,266
Restructuring charges     4,581       3,514       4,953       3,514  
Total costs and operating expenses 37,633 50,017 151,959 196,072
       
Loss from operations (27,246 ) (35,515 ) (105,828 ) (135,681 )
 

Other income (expense)

Interest and other income (expense), net (3,323 ) (3,205 ) (13,231 ) (12,167 )
Loss from equity method investments (4,098 ) (7,724 ) (22,389 ) (23,037 )
Gain from change in fair value of warrant liability - - - 688
Gain (loss) from change in fair value of derivative liabilities     (26 )     1,578       1       8,056  
Total other income (expense), net (7,447 ) (9,351 ) (35,619 ) (26,460 )
       
Net loss $   (34,693 ) $   (44,866 ) $   (141,447 ) $   (162,141 )
Net loss per share - basic and diluted $   (0.43 ) $   (0.57 ) $   (1.76 ) $   (2.14 )
 

Weighted average number of common shares used in net
loss per share computation - basic and diluted

80,600 79,330 80,165 75,879
 
 
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
December 31,
Year Ended
December 31,
    2015       2014       2015       2014  
GAAP Net loss $   (34,693 ) $   (44,866 ) $   (141,447 ) $   (162,141 )
Gain from change in fair value of warrant liability - - - (688 )
(Gain) loss from change in fair value of derivative liabilities 26 (1,578 ) (1 ) (8,056 )

Operating expenses includes costs as follows:

Research and development 967 1,736 4,562 7,407
Sales, general and administrative     2,405       5,120       11,122       18,142  
Total stock-based compensation expense 3,372 6,856 15,684 25,549
Litigation settlement, net of insurance reimbursement - (8 ) - 4,499
Restructuring charges 4,581 3,514 4,953 3,514

Other income (expense) includes costs as follows:

Amortization of debt discount and issuance costs 654 612 2,554 2,206
Debt conversion expense     -       -       -       1,766  
Non-GAAP Net loss $   (26,060 ) $   (35,470 ) $   (118,257 ) $   (133,351 )
 
GAAP Net loss per share - basic and diluted $ (0.43 ) $ (0.57 ) $ (1.76 ) $ (2.14 )
 
Gain from change in fair value of warrant liability - - - (0.01 )
(Gain) loss from change in fair value of derivative liabilities - (0.02 ) - (0.11 )
Stock-based compensation expense 0.04 0.09 0.19 0.34
Litigation settlement, net of insurance reimbursement - - - 0.06
Restructuring charges 0.06 0.04 0.06 0.05
Amortization of debt discount and issuance costs 0.01 0.01 0.03 0.03
Debt conversion expense     -       -       -       0.02  
Non-GAAP Net loss per share - basic and diluted $   (0.32 ) $   (0.45 ) $   (1.48 ) $   (1.76 )
 
 
SOLAZYME, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(UNAUDITED)
             
December 31, December 31,
2015 2014

Assets

 

Current assets

Cash, cash equivalents and marketable securities $   97,975 $   207,308
Other current assets     20,969       26,619
Total current assets 118,944 233,927
Property, plant and equipment - net 26,344 36,080
Investment in Solazyme Bunge JV 35,910 40,934
Other assets     1,225       1,648
Total assets $   182,423   $   312,589
 

Liabilities and stockholders' equity

 

Current liabilities

Current portion of long-term debt $ - $ 6
Other current liabilities     25,330       23,448
Total current liabilities 25,330 23,454
Other liabilities 1,102 2,668
Long-term debt     202,466       200,091
Total liabilities     228,898       226,213
Total stockholders' (deficit) equity     (46,475 )     86,376
Total liabilities and stockholders' (deficit) equity $   182,423   $   312,589
 
 

Solazyme, Inc.
Corporate Communications:
Genet Garamendi
info@terravia.com
press@solazyme.com
or
JM Strategic Communications Group
Jeff Majtyka, 646-776-0886
jeff@jmscgroup.com

Source: Solazyme, Inc.

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