Davis, California, USA
May 10, 2018
Company Successfully Completes Series of Comprehensive Capital Raise and Debt Refinancing Transactions, Generating $40 Million in Estimated Net Proceeds and Converting $45 Million of Debt into Equity
Marrone Bio Innovations, Inc. (“MBI” or the “Company”) (NASDAQ:MBII), a leading provider of bio-based pest management and plant health products for the agriculture, turf and ornamental and water treatment markets, has provided its financial results for the first quarter ended March 31, 2018.
Financial Highlights
- GAAP revenues grew to $4.3 million in the first quarter of 2018, compared to $4.2 million in the first quarter of 2017.
- Gross margin increased 300 basis points to 48.1% in the first quarter of 2018, compared to 45.1% in the first quarter of 2017.
- Net loss decreased to $2.9 million in the first quarter of 2018, primarily as a result of a gain on the conversion of debt, compared to a net loss of $7.6 million in the first quarter of 2017.
- Between October 2017 and May 2018, MBI completed an underwritten public offering, a series of private placements and a comprehensive debt refinancing transaction, which collectively generated approximately $40.0 million of net proceeds and converted $45.0 million of long term debt into equity.
- Due to the adoption of ASC 606 (Revenue From Contracts With Customers), $5.9 million of deferred revenue was booked to the balance sheet as retained earnings in the first quarter instead of being run through the income statement.
Management Commentary
“The beginning of 2018 was highlighted by our comprehensive equity raise and debt refinancing initiatives, which dramatically improved our balance sheet to a point where we believe we have sufficient resources to fund operations, as currently planned, for the foreseeable future,” said Dr. Pam Marrone, CEO of MBI. “While sales were negatively affected in the first quarter due to unfavorable weather in the west, the Company is now better positioned than ever to aggressively execute on our growth plans.
“In addition, we have made significant efforts to bolster our commercial execution with the addition of Kevin Hammill—a highly qualified Chief Commercial Officer with 25 years of industry experience—as well as the comprehensive restructuring of our sales team and strategy. Finally, we’ve continued to strengthen our international distributor network and to drive increased demand for our products, including the Cannabis market.
“We’re also very pleased with our research and development and manufacturing initiatives which have proven extremely successful and driven significant increases to gross margins, as is evidenced by our 48.1% consolidated gross margins in the first quarter.
“As the Founder and CEO of Marrone Bio Innovations, I can confidently say that I have never been more optimistic than I am today about the future of our Company.”
Recent Operational Highlights
- Hired Kevin Hammill as Chief Commercial Officer to develop MBI’s commercial team and presence into a leadership position within the industry. Kevin has 25 years of agrichemical and biologicals commercial experience.
- Expanded MBI’s international distribution network through new deals in Israel, the Philippines and Central America.
- Received a U.S. patent for the use of MBI’s bioherbicide for control of key weeds in rice and turf, strengthening MBI’s total intellectual property portfolio to more than 400 issued and pending patents.
- Launched a microbe into the row crop seed treatment market with MBI’s strategic partner Albaugh, which is expected to translate into $8-10 million in revenue on an estimated 8-9 million acres in the next 3 years.
- Use of Regalia, Grandevo and Venerate has been cleared by several key states for use on Cannabis, a rapidly growing market that we believe will represent an area of consistent growth for MBI on a go-forward basis.
- Launched Zelto, a biological pesticide, in turf protection markets in the quarter and there are trials on 15 golf courses.
- Research and development, manufacturing efforts and a favorable product mix have continued to increase gross margins.
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