Codexis Reports 2010 First Quarter Results


    


    
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<p>REDWOOD CITY, Calif., <span class="xn-chron">May 26</span> /CNW/ -- Codexis, Inc. (Nasdaq:   CDXS) today announced financial results for the first quarter ending <span class="xn-chron">March 31, 2010</span>.</p>
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<p>Codexis completed an initial public offering of six million shares in <span class="xn-chron">April 2010</span>, raising gross proceeds of <span class="xn-money">$78 million</span> at a price per share of <span class="xn-money">$13.00</span>.</p>
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    Financial Highlights

    
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<p>For the first quarter, the company reported revenues of <span class="xn-money">$25.7 million</span>, an increase of 32% from <span class="xn-money">$19.4 million</span> in the same period last year and a net loss of (<span class="xn-money">$1.4 million</span>) or (<span class="xn-money">$0.50</span>) per basic and diluted share compared to a loss of (<span class="xn-money">$6.1 million</span>) or (<span class="xn-money">$2.35</span>) per basic and diluted share in the first quarter of 2009. Research and development expenses for the first quarter of 2010 declined 14% to <span class="xn-money">$13.0 million</span> from <span class="xn-money">$15.1 million</span> for the first quarter of 2009.</p>
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<p>On a non-GAAP basis, Adjusted EBITDA increased from (<span class="xn-money">$3.4</span>) million in the first quarter of 2009 to <span class="xn-money">$2.8 million</span> in the first quarter of 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented in the table below.</p>
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<p>Cash, cash equivalents and marketable securities for the first quarter decreased to <span class="xn-money">$39.3 million</span>, compared to <span class="xn-money">$55.6 million</span> at <span class="xn-chron">December 31, 2009</span>.</p>
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<p>For 2010, Codexis forecasts revenues of <span class="xn-money">$94 million to $98 million</span>, which would represent growth of 13% to 18% compared to 2009. Codexis expects Adjusted EBITDA to be positive for full year 2010.</p>
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    Conference Call

    
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<p>Codexis will hold a conference call for investors on <span class="xn-chron">May 26, 2010</span> at <span class="xn-chron">1:30PM PT</span>/<span class="xn-chron">4:30PM ET</span>.  The conference call dial-in numbers are US: 866-783-2145 or International:  857-350-1604, access code (56829308).  A live webcast of the call will also be available on the Investor Relations section of <a href="http://www.codexis.com">www.codexis.com</a>.  A recording of the call will be available by calling (US: 888-286-8010) or (International: 617-801-6888), access code (94161862) beginning approximately one hour after the call, and will be available for up to thirty days.  A webcast replay from today's call will also be available from the Investor Relations section of <a href="http://www.codexis.com">www.codexis.com</a> approximately one hour after the call and will be available for up to thirty days.</p>
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    About Codexis

    
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<p>Codexis, Inc. is a leading provider of optimized biocatalysts that make existing industrial processes faster, cleaner and more efficient than current methods and have the potential to make new industrial processes possible at commercial scale.  Codexis has commercialized its biocatalysts in the pharmaceutical industry and is developing biocatalysts for use in producing advanced biofuels under a multi-year research and development collaboration.  The company is also using its technology platform to pursue biocatalyst-enabled solutions in other bioindustrial markets, including carbon management, water treatment and chemicals.</p>
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    Forward-Looking Statements

    
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<p>This press release contains forward-looking statements relating to the Company's forecast for 2010 revenue and Adjusted EBITDA, as defined in this press release. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results.  Factors that could materially affect actual results can be found in Codexis' Registration Statement on Form S-1 dated <span class="xn-chron">December 28, 2009</span>, as amended, including under the caption "Risk Factors."  Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.</p>
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                                      Codexis, Inc.
                     Condensed Consolidated Statements of Operations
                                       (Unaudited)
                          (In Thousands, Except Share Amounts)
    
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                                                   Three Months Ended
                                                        March 31,
                                                     2010           2009
                                                     ----           ----
     Revenues:
          Product                                  $6,275         $4,571
          Related party collaborative research and
           development                             16,042         14,420
          Collaborative research and development      661            407
          Government grants                         2,722             12
                                                    -----            ---
    
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         Total revenues                            25,700         19,410
                                                   ------         ------
    
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     Costs and operating expenses:
          Cost of product revenues                  5,218          3,856
          Research and development                 12,982         15,134
          Selling, general and administrative       8,600          6,063
                                                    -----          -----
    
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     Total costs and operating expenses            26,800         25,053
                                                   ------         ------
    
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<p> Loss from operations                          (1,100)        (5,643)</p>
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          Interest income                              28             31
          Interest expense and other, net            (358)          (427)
     Loss before provision (benefit) for
      income taxes                                 (1,430)        (6,039)
          Provision  (benefit) for income taxes       (61)            54
                                                      ---            ---
     Net loss                                      (1,369)        (6,093)
                                                   ======         ======
    
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     Net loss per share of common stock,
     basic and diluted                             $(0.50)        $(2.35)
                                                   ------         ------
    
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     Weighted average common shares used in
      computing net loss per
     per share of common stock, basic and
      diluted                                       2,714          2,594
                                                    =====          =====


    
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                                     Codexis, Inc.
                         Condensed Consolidated Balance Sheets
                                      (Unaudited)
                                    (In Thousands)
    
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                                                      March 31, December 31,
                                                             2010       2009
                                                             ----       ----
    Assets
    Current assets:
       Cash and cash equivalents                          $29,197    $31,785
       Marketable securities                               10,067     23,778
       Accounts receivable, net                             6,561      7,246
       Inventories                                          2,912      2,915
       Prepaid expenses and other current
        assets                                              1,919      1,658
                                                            -----      -----
          Total current assets                             50,656     67,382
    
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    Restricted cash                                           731        731
    Property and equipment, net                            21,251     21,581
    Intangible assets, net                                    744        928
    Goodwill                                                3,241      3,241
    Other non-current assets                                7,213      5,173
                                                            -----      -----
        Total assets                                      $83,836    $99,036
                                                          =======    =======
    
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    Liabilities, redeemable convertible preferred stock,
    and shareholders' deficit
    Current liabilities:
       Accounts payable                                    $6,730     $9,999
       Accrued compensation                                 3,560      6,518
       Related party payable                                  548      1,314
       Other accrued liabilities                            9,294     10,376
       Redeemable convertible preferred stock
        warrant liability                                   2,405      2,009
       Deferred revenues                                      819      2,240
       Related party deferred revenues                      8,622     13,161
       Financing obligations                                5,455      5,368
          Total current liabilities                        37,433     50,985
    
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    Deferred revenues, net of current
     portion                                                1,811      1,856
    Related party deferred revenues, net of
     current portion                                        6,466      7,487
    Financing obligations, net of current
     portion                                                1,207      2,574
    Other long-term liabilities                             1,405      1,307
                                                            -----      -----
          Total  liabilities                               48,322     64,209
    
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    Redeemable convertible preferred stock
     issuable in series A to F                            179,672    179,672
    
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    Stockholders' deficit:
    Common stock                                                -          -
    Additional paid-in capital                             16,812     15,015
    Accumulated other comprehensive income
     (loss)                                                     7       (252)
    Accumulated deficit                                  (160,977)  (159,608)
                                                         --------   --------
          Total  stockholders' deficit                   (144,158)  (144,845)
        Total liabilities, redeemable
         convertible preferred stock, and
         shareholders' deficit                            $83,836    $99,036
                                                          =======    =======


    
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                                     Codexis, Inc.
                     Condensed Consolidated Statements of Cash Flow
                                      (Unaudited)
                                     (In Thousands)
    
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                                                        Three Months Ended
                                                            March 31,
                                                         2010           2009
                                                         ----           ----
    Operating activities:
      Net loss                                        $(1,369)       $(6,093)
      Adjustments to reconcile net loss to
       cash used in
         operating activities:
            Amortization of intangible assets             187            215
            Depreciation and amortization of
             property and equipment                     1,651          1,130
            Revaluation of redeemable convertible
             preferred stock warrant liability             96              6
            Stock-based compensation                    1,655            931
            Amortization of debt discount                  60            105
            Accretion (amortization) of premium/
             discount on marketable securities           (119)            24
      Changes in operating assets and
       liabilities:
         Accounts receivable                              685          1,644
         Inventories                                        3            116
         Prepaid expenses and other current
          assets                                         (261)          (151)
         Other assets                                     (71)             7
         Accounts payable                              (2,720)        (2,611)
         Accrued compensation                          (2,958)          (807)
         Accrued related party payable                   (766)         3,084
         Other accrued liabilities                     (1,372)        (4,204)
         Deferred revenues                             (7,026)        (1,764)
                                                       ------         ------
              Net cash used in operating activities   (12,025)        (8,368)
    
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    Investing activities:
      Decrease  in restricted cash                          -            220
      Purchase of property and equipment               (1,320)        (1,340)
      Proceeds from maturities of marketable
       securities                                      13,610          5,000
              Net cash provided by investing
               activities                              12,290          3,880
    
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    Financing activities:
      Principal payments on financing
       obligations                                     (1,339)        (1,424)
      Payments in preparation for initial
       public offering                                 (1,636)             -
      Proceeds from issuance of preferred
       stock                                                -         30,000
      Proceeds from exercises of stock options            140             46
                                                          ---            ---
             Net cash provided by (used) in financing
              activities                               (2,835)        28,622
    
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        Effect of exchange rate changes on cash
         and cash equivalents                             (18)            11
                                                          ---            ---
    
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    Net increase (decrease) in cash and cash
     equivalents                                       (2,588)        24,145
    Cash and cash equivalents:
       Beginning of the period                         31,785         21,903
                                                       ------         ------
       End of the period                               29,197         46,048
    
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       Marketable securities at the end of
        period                                         10,067         10,196
    
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    Cash, cash equivalents and marketable
     securities                                       $39,264        $56,244
                                                      =======        =======


    Reconciliation of GAAP to Non-GAAP Financial Information

    
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<p>Adjusted EBITDA (earnings before interest, tax, depreciation, amortization, stock-based compensation and warrant related costs) for the first quarter of 2010 was <span class="xn-money">$2.8 million</span> compared to a loss of <span class="xn-money">$3.4 million</span> in the first quarter of 2009. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA as a factor in evaluating management's performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.</p>
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<p>A reconciliation of Adjusted EBITDA to GAAP net income (loss) is included in the table below.</p>
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                                  Codexis, Inc.
           Reconciliation of Adjusted EBITDA to GAAP Net Income (Loss)
                        (Unaudited, Dollars In thousands)
    
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                                        For the three months ended March 31
    Calculation of Adjusted EBITDA                     2010          2009
    ------------------------------                     ----          ----
    Net income (loss)                                (1,369)       (6,093)
    Adjustments:                                         28            31
    Minus: Interest income
    Plus: Interest expense                              298           403
    Plus: Income taxes                                  (61)           54
    Plus: Depreciation and amortization               1,838         1,345
    Plus: Stock-based compensation                    1,713           900
    Plus: Preferred stock warrant fair
     market valuation adjustment                        396             6
    
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       Adjusted EBITDA                                2,787        (3,416)


    
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<p>For the three months ended <span class="xn-chron">March 31, 2010</span>, Adjusted EBITDA benefited from two sources of revenue. First, the Company recognized a <span class="xn-money">$2.7 million</span> grant from the <span class="xn-location">Singapore</span> government related to our pharmaceutical R&D program in <span class="xn-location">Singapore</span>. Second, we recognized a <span class="xn-money">$1.4 million</span> milestone payment from Shell for a biofuels research milestone achieved in late 2009 and validated in the first quarter of 2010.</p>
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<p>Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:</p>
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    --  Adjusted EBITDA does not reflect our cash expenditures, or future
        requirements, for capital expenditures or contractual commitments;
    --  Adjusted EBITDA does not reflect changes in, or cash requirements for,
        our working capital needs;
    --  Adjusted EBITDA does not reflect the interest expense, or the cash
        requirements necessary to service interest or principal payments, on
        our debts;
    --  Although depreciation and amortization are non-cash charges, the
assets
        being depreciated and amortized will often have to be replaced in the
        future, and Adjusted EBITDA does not reflect any cash requirements for
        such replacements; and
    --  Non-cash compensation is and will remain a key element of our overall
        long-term incentive compensation package, although we exclude it as an
        expense when evaluating our ongoing operating performance for a
        particular period.


    
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<p>Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.</p>
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    Contacts:
    Investors:  Derick Sutton, derick.sutton@codexis.com, 650, 421-8130
    
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<p>Media: <span class="xn-person">Lyn Christenson</span>, <a href="mailto:lyn.christenson@codexis.com">lyn.christenson@codexis.com</a>, 650-421-8144 or Saskia Sidenfaden, <a href="mailto:ssidenfaden@mww.com">ssidenfaden@mww.com</a>, 212-827-3771</p>
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For further information: For further information: Investors, Derick Sutton, +1-650-421-8130, derick.sutton@codexis.com, or Media, Lyn Christenson, +1-650-421-8144, lyn.christenson@codexis.com, both of Codexis, Inc.; or Saskia Sidenfaden, +1-212-827-3771, ssidenfaden@mww.com, for Codexis, Inc. Web Site: http://www.codexis.com

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