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Marrone Bio Innovations, Inc. Reports First Quarter 2018 Financial Results
[May 10, 2018]

Marrone Bio Innovations, Inc. Reports First Quarter 2018 Financial Results

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

DAVIS, Calif., May 10, 2018 (GLOBE NEWSWIRE) -- 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.             

Conference Call and Webcast
Management will host an investor conference call today at 1:30 p.m. PDT (4:30 p.m. EDT) to discuss Marrone Bio Innovation’s first quarter 2018 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Q1 2018 Conference Call and Webcast
Date: Thursday, May 10, 2018
Time: 1:30 p.m. Pacific time (4:30 p.m. Eastern time)
U.S. Dial-in: 1-800-263-0877
International Dial-in: 1-323-794-2094
Conference ID: 7400713

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

A playback of the call will be available through June 10, 2018. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin number 7400713. A webcast will also be available for 30 days on the IR section of the Marrone Bio Innovations website or by clicking here: MBII Q1 2018 Webcast.

About Marrone Bio Innovations
Marrone Bio Innovations, Inc. (NASDAQ:MBII) strives to lead the movement to a more sustainable world through the discovery, development and promotion of biological products for pest management and plant health. MBI’s effective and environmentally responsible pest management solutions help customers operate more sustainably while uniquely improving plant health and increasing crop yields. MBI’s currently available commercial products are Regalia®, Grandevo®, Venerate®, Majestene®, Haven® StargusTM, AmplitudeTM, ZeltoTM and Zequanox®. MBI also distributes Bio-tam 2.0® for Isagro USA and Jet-Ag® for Jet Harvest in most regions of the U.S.

Marrone Bio Innovations is dedicated to pioneering smart biopesticide solutions that support a better tomorrow for both farmers, turf managers and consumers around the globe. For more information, please visit

Marrone Bio Innovations Forward Looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties.  All statements, other than statements of historical facts, included in this press release regarding strategy, future operations and plans, including assumptions underlying such statements, are forward-looking statements, and should not be relied upon as representing MBI’s views as of any subsequent date.  Examples of such statements include statements regarding the strength of the Company’s operations and financial position for 2018, anticipated cash resources for continued operations, sales of the Company’s products, enhancement of the Company’s sales and marketing efforts, the impact of the Company’s portfolio development strategy, planned regulatory submissions and potential approvals, anticipated product launches, the potential benefits of the Company’s products, MBI’s efforts with respect to marketing in U.S. and international markets, and results of potential third-party collaborations. Such forward-looking statements are based on information available to the Company as of the date of this release and involve a number of risks and uncertainties, some beyond the Company's control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including consumer, regulatory and other factors affecting demand for the Company’s products, any difficulty in marketing MBI’s products in global markets, competition in the market for pest management products, lack of understanding of bio-based pest management products by customers and growers, and adverse decisions by regulatory agencies and other relevant third parties.  Additional information that could lead to material changes in MBI’s performance is contained in its filings with the SEC.  MBI is under no obligation to, and expressly disclaims any responsibility to, update or alter forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

Marrone Bio Innovations Contacts:
Pam Marrone, CEO and Founder
Jim Boyd, CFO
Telephone: +1 (530) 750-2800

Investor Relations:
Greg Falesnik
Managing Director
MZ Group – MZ North America
Main: 949-385-6449         

Consolidated Balance Sheets
(In Thousands, Except Par Value) 
  MARCH 31,


   2018   2017 
Current assets:    
Cash and cash equivalents $  14,757  $  786 
Restricted cash, current portion    487     487 
Accounts receivable    4,352     3,785 
Inventories, net    10,047     9,827 
Deferred cost of product revenues    3     3,063 
Prepaid expenses and other current assets    780     1,170 
Total current assets    30,426     19,118 
Property, plant and equipment, net    15,700     16,016 
Restricted cash, less current portion    1,560     1,560 
Other assets    340     219 
Total assets $  48,026  $  36,913 
Liabilities and stockholders' equity (deficit)    
Current liabilities:    
Accounts payable $  2,621  $  3,800 
Accrued liabilities    6,871     8,189 
Accrued interest due to related parties    —     1,622 
Deferred revenue, current portion    303     6,193 
Derivative liability    —     674 
Debt, current portion    1,852     1,524 
Total current liabilities    11,647     22,002 
Deferred revenue, less current portion    2,512     2,046 
Debt, less current portion    11,974     24,407 
Debt due to related parties    7,285     37,822 
Other liabilities    923     1,287 
Total liabilities    34,341     87,564 
Commitments and contingencies (Note 8)    
Stockholders' equity (deficit):    
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares

  issued or outstanding at March 31, 2018 and December 31, 2017
    —     — 

Common stock: $0.00001 par value; 250,000 shares authorized, 102,093
  and 31,351 shares issued and outstanding as of March 31, 2018 and
  December 31, 2017, respectively
    1     — 
Additional paid in capital    279,863     214,921 
Accumulated deficit    (266,179)    (265,572)
Total stockholders' equity (deficit)    13,685     (50,651)
Total liabilities and stockholders' equity (deficit) $  48,026  $  36,913 


Consolidated Statements of Operations 
(In Thousands, Except Per Share Data) 
  2018  2017  
Product$  4,224 $  4,096  
License   100    58  
Total revenues   4,324    4,154  
Cost of product revenues   2,242    2,279  
Gross profit    2,082    1,875  
Operating Expenses:     
Research, development and patent   2,534    2,444  
Selling, general and administrative   5,024    5,343  
Total operating expenses   7,558    7,787  
Loss from operations   (5,476)   (5,912) 
Other income (expense):     
Interest expense   (1,119)   (636) 
Interest expense, net to related parties   (434)   (1,074) 
Change in fair value of financial
   (5,177)   —  
Loss on extinguishment of debt, net   (303)   —  
Gain on extinguishment of debt,
  related party 
   9,622    —  
Other income (expense), net   (31)   (7) 
Total other income (expense), net   2,558    (1,717) 
Net loss$  (2,918)$  (7,629) 
Basic and diluted net loss per common share:$  (0.04)  (0.31) 
Weighted-average shares outstanding used in computing basic and diluted
  net loss per common share:
   74,591    24,739  


Consolidated Statements of Cash Flows
(In Thousands)
  2018  2017 
Cash flows from operating activities    
Net loss$  (2,918)$  (7,629)
Adjustments to reconcile net loss to net cash
  used in operating activities:
Depreciation and amortization   478    521 
Gain on disposal of equipment   —     (4)
Share-based compensation   491    582 
Non-cash interest expense   611    337 
Change in fair value of financial instruments    5,177    — 
Loss on extinguishment of debt, net   303    — 
Gain on extinguishment of debt,
 related party, net 
   (9,622)   — 
Net changes in operating assets and liabilities:     — 
Accounts receivable   (567)   (4,481)
Inventories   (220)   347 
Prepaid Expenses and other assets   146    142 
Deferred cost of product revenues   2    (1,307)
Accounts payable   (1,092)   1,627 
Accrued and other liabilities   (793)   828 
Accrued interest due to related parties   (1,614)   (820)
Deferred revenue   (128)   2,307 
Net cash used in operating activities   (9,746)   (7,550)
Cash flows from investing activities    
Purchases of property, plant and equipment   (362)   (83)
Net cash used in investing activities   (362)   (83)
Cash flows from financing activities    
Proceeds from issuance of common stock, net of offering costs   21,820    — 
Proceeds from issuance of debt   2,000    — 
Proceeds from secured borrowings   3,520    — 
Reductions in secured borrowings   (3,194)   — 
Repayment of debt   (67)   (66)
Repayment of capital leases   —     (145)
Exercise of stock options   —     17 
Net cash provided by (used in) financing activities   24,079    (194)
Net increase (decrease) in cash and cash
  equivalents and restricted cash
   13,971    (7,827)
Cash and cash equivalents and restricted
  cash, beginning of period
   2,833    12,613 
Cash and cash equivalents and
  restricted cash, end of period
$  16,804 $  4,786 
Supplemental disclosure of cash flow information    
Cash paid for interest$  2,145 $  2,182 
Supplemental disclosure of non-cash investing and financing
Property, plant and equipment included in accounts payable and
  accrued liabilities
$  131 $  40 
Conversion of debt to equity$  14,122 $  — 
Conversion of debt, related party to equity$  30,948 $  — 

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