Davis, California, USA
August 16, 2021

Marrone Bio Innovations, Inc. (NASDAQ: MBII), an international leader in sustainable bioprotection and plant health solutions, has provided its financial results for the second quarter ended June 30, 2021. Key results include:

• The net loss in the second quarter was $3 million, a 6% increase, and Adjusted EBITDA was a loss of $0.7 million, a 51% improvement. For the first half of 2021, net income (loss) and Adjusted EBITDA improved 36% and 63%, respectively.
• Second quarter revenues rose 3%, with growth in specialty and row crop products constrained by challenging weather and supply chain conditions.
• Gross profit in the second quarter increased by 5%, resulting in gross margins of 61.7%, the 11th consecutive quarter of gross margins in excess of 50%.

Selected Financial Highlights

1 Adjusted EBITDA is a non-GAAP financial measure and is described in relation to its most directly comparable GAAP measure under “Use of Non-GAAP Financial Information” below.

Second Quarter 2021 Financial and Operational Summary

• Second quarter revenues increased by 3% to $12.6 million. Revenue growth was hampered by severe drought in the western United States, which lowered overall market demand for insecticides and fungicides. Compared with sales in second quarter of 2020, seed treatment sales were stronger in the United States but softer in Europe and Latin America, where supply chain and COVID-related constraints affected the timing of sales. Revenues from the Venerate family of insecticides and nematicides in specialty crop markets grew in Mexico and parts of Central and Latin America.
• Gross profit was $7.8 million as compared with $7.4 million in the second quarter of 2020, with gross margins of 61.7%. A favorable product mix contributed to the 5% improvement in gross profit and the 110 basis point improvement in gross margins.
• Operating expenses were $10.1 million for the quarter, and in line with the company’s commitment to maintain operating expenses flat with those in the prior year, plus inflation. The operating expense ratio – a key performance indicator that compares operating expenses to revenues – was 80%. In comparison, operating expenses of $9.4 million in the second quarter of 2020 benefited by a $1.4 million offset from a Paycheck Protection Program (PPP) loan secured to retain employees supporting the essential agricultural industry during the COVID-19 pandemic
• The net loss in the second quarter of 2021 was $3.0 million as compared with the net loss in the second quarter of 2020 of $2.9 million, which included the $1.4 million benefit of the PPP loan. Adjusted EBITDA was a loss of $0.7 million, as compared with an Adjusted EBITDA loss of $1.5 million in the same period last year. The company’s continued gross margin expansion and cost containment contributed to the improvement. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
• Cash used in operations of $1.3 million improved by 14%, largely driven by more efficient use of working capital. Cash used in operations in the second quarter of 2020 of $1.5 million included the benefit of $1.7 million in proceeds from the PPP loan.

First Half 2021 Financial and Operational Summary

• Revenues in the first half of 2021 improved by 8% to $23.6 million. The company saw growth in its bioinsecticides, primarily used in specialty crops, even as adverse weather conditions in the western United States reduced the size of the available pesticide market.   Sales of seed treatment products were strongest in the United States. Supply chain and COVID-related issues in Europe and Latin America delayed sales of plant health products, and the company anticipates recovering much of those revenues in the second half of the year.
• Gross profit of $14.7 million was a 14% increase from $13 million in gross profit in the first half of 2020. A favorable mix of seed treatment sales in the first half boosted gross margins by 300 basis points to 62.3%.
• First half 2021 operating expenses of $20.1 million were 2% lower than operating expenses of $20.6 million in the same period last year. Operating expenses in the first half of 2020 also benefited by a $1.4 million offset from the PPP loan. The operating expense ratio for the first six months improved by 900 basis points to 85% as a result of ongoing cost management efforts.
• The net loss of $6.3 million for the first half of the year was a 36% improvement as compared with the net loss of $9.9 million in the first six months of 2020. In comparison, the net loss in the first half of 2020 included non-cash adjustments related to warrant exercises, stock compensation and amortization charges, as well as the benefit of the PPP loan.
• First half 2021 Adjusted EBITDA was a loss of $1.9 million, a 63% improvement from the loss of $5.2 million in the same period in 2020. Growth across revenues and gross profit, coupled with cost discipline, drove the performance. Adjusted EBITDA is further described under “Use of Non-GAAP Financial Information” below.
• Cash used in operations was $6.3 million in the first six months of the 2021, a 19 percent improvement. Cash used in operations was $7.7 million in the first half of 2020, which included $1.7 million in proceeds from the PPP loan.

Management Commentary

“Despite external short-term headwinds, we grew revenues and made significant improvements across our key metrics – particularly Adjusted EBITDA – in the first half of the year. We expect to return to a more normalized revenue growth rate in the second half of the year, while carefully managing discretionary spending to ensure we continue our progress toward delivering Adjusted EBITDA breakeven in the near-term,” said Chief Executive Officer Kevin Helash.

“For the full year, we are projecting revenue growth in the mid-teens, and annual gross margins in the upper 50% range. We expect operating expenses to remain in line with those for 2020, adjusting for inflation,” Helash added. “We have multiple avenues to achieve Adjusted EBITDA breakeven, and believe we can sustain our upward trajectory and advance our leadership in sustainable agriculture.”

Website: http://marronebioinnovations.com/

Published: August 16, 2021