</pre>
<p>REDWOOD CITY, Calif., <span class="xn-chron">Aug. 5</span> /CNW/ -- Codexis, Inc. (Nasdaq: CDXS), a clean technology company, today announced financial results for the second quarter ended <span class="xn-chron">June 30, 2010</span>.</p>
<pre>
Financial Highlights
</pre>
<p>Revenue: For the second quarter of 2010, the company reported revenue of <span class="xn-money">$24.5 million</span>, an increase of 28% from <span class="xn-money">$19.2 million</span> in the second quarter of 2009. Product revenue of <span class="xn-money">$8.5 million</span> increased 102% over the same time period.</p>
<p/>
<p>Operating Expenses: Research and development expenses in the second quarter of 2010 were <span class="xn-money">$13.0 million</span> compared to <span class="xn-money">$12.1 million</span> for the second quarter of 2009. The increase was primarily due to higher depreciation and stock-based compensation expenses. Selling, general and administrative expenses in the second quarter of 2010 were <span class="xn-money">$8.7 million</span> compared to <span class="xn-money">$6.2 million</span> for the second quarter of 2009. The increase was primarily due to increased headcount, legal and accounting costs associated with preparing to become a public company and higher stock-based compensation expenses.</p>
<p/>
<p>Net Income/(Loss): Net loss was (<span class="xn-money">$3.9</span>) million, or (<span class="xn-money">$0.15</span>) per share, based on 26.6 million weighted average common shares outstanding in the second quarter of 2010. The company ended the quarter with 34.2 million shares outstanding as a result of the conversion of preferred stock and the issuance of new shares of common stock in connection with the company's initial public offering.</p>
<p/>
<p>Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from (<span class="xn-money">$0.1</span>) million in the second quarter of 2009 to <span class="xn-money">$0.5 million</span> in 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock warrants fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented below.</p>
<p/>
<p>Cash: Cash, cash equivalents and marketable securities for the second quarter of 2010 increased to <span class="xn-money">$100.3 million</span> compared to <span class="xn-money">$39.3 million</span> at <span class="xn-chron">March 31, 2010</span> and <span class="xn-money">$55.6 million</span> at <span class="xn-chron">December 31, 2009</span>. Codexis completed an initial public offering in <span class="xn-chron">April 2010</span>, generating net proceeds of <span class="xn-money">$72.5 million</span>.</p>
<pre>
Outlook
</pre>
<p>For 2010, Codexis affirms its forecast for 2010 annual revenue of <span class="xn-money">$94 million to $98 million</span>, which would represent growth of 13% to 18% compared to 2009, and affirms its expectation that Adjusted EBITDA will be positive for full year 2010.</p>
<pre>
Recent Events
</pre>
<p>In <span class="xn-chron">June 2010</span>, Merck and Codexis announced joint receipt of the Presidential Green Chemistry Challenge Award, given by the U.S. Environmental Protection Agency (EPA). The award recognized development of a novel biocatalytic production method for sitagliptin, the active pharmaceutical ingredient in Merck's Januvia. The new process improved efficiency and significantly decreased waste products, and was the subject of a joint Merck-Codexis paper published <span class="xn-chron">June 17, 2010</span> in the leading peer-review journal Science. This was Codexis' second EPA Green Chemistry award. The first was received in 2006 for an improved process for a key building block of atorvastatin, the active ingredient in Lipitor from Pfizer.</p>
<p/>
<p>On <span class="xn-chron">June 28, 2010</span>, Peter Strumph joined Codexis as Senior Vice President, Commercial Operations, a new position. <span class="xn-person">Mr. Strumph</span> is responsible for Codexis pharmaceutical product management and manufacturing operations worldwide. He brings to Codexis two decades of experience in senior manufacturing and operations management in the biopharmaceutical industry.</p>
<p/>
<p>"We are very pleased with the results of our second quarter, highlighted by strong financial performance and important milestones in both pharmaceuticals and bioindustrials," said <span class="xn-person">Alan Shaw</span>, Ph.D., President and Chief Executive Officer. "We continue to make excellent progress building a strong, sustainable clean technology company."</p>
<pre>
Conference Call
</pre>
<p>Codexis will hold a conference call for investors on <span class="xn-chron">August 5, 2010</span> at <span class="xn-chron">1:30 p.m. PT</span> (<span class="xn-chron">4:30 p.m. ET</span>). The conference call dial-in numbers are US: 866-788-0541 or International: 857-350-1679, access code 54501345. A live webcast of the call will also be available from 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 87964645 beginning approximately two hours 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 two hours after the call and will be available for up to thirty days.</p>
<pre>
About Codexis, Inc.
</pre>
<p>Codexis is a clean technology company. Codexis develops optimized biocatalysts that make industrial processes faster, cleaner and more efficient. Codexis' technology is commercialized with leading global pharmaceutical companies and in development for advanced biofuels with Shell. Other potential markets include carbon capture, water treatment and chemicals.</p>
<pre>
Forward-Looking Statements
</pre>
<p>This press release contains forward-looking statements relating to the Company's forecast for 2010 revenue and Adjusted EBITDA, which is defined elsewhere 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' Quarterly Report on Form 10-Q dated <span class="xn-chron">May 28, 2010</span>, 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>
<pre>
</pre>
<p> </p>
<pre>
Codexis, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Share Amounts)
</pre>
<p> </p>
<p> </p>
<pre>
Three Months
Ended
June 30,
2010 2009 % change
---- ---- --------
Revenues:
Product $8,484 $4,193 102%
Related party collaborative
research and development 14,653 14,544 1%
Collaborative research and
development 851 461 85%
Government grants 492 - nm
--- ---
</pre>
<p> </p>
<pre>
Total revenues 24,480 19,198 28%
------ ------
</pre>
<p> </p>
<pre>
Costs and operating expenses:
Cost of product revenues 6,075 3,412 78%
Gross margin $ 2,409 781
Gross margin % 28% 19%
Research and development 13,004 12,112 7%
Selling, general and
administrative 8,652 6,178 40%
----- -----
</pre>
<p> </p>
<pre>
Total costs and operating
expenses 27,731 21,702 28%
------ ------
</pre>
<p> </p>
<p>Loss from operations (3,251) (2,504) 30%</p>
<p> </p>
<pre>
Interest income 46 45 2%
Interest expense and other, net (654) (358) 83%
Loss before provision for income
taxes (3,859) (2,817) 37%
Provision for income taxes 87 41 112%
--- ---
Net loss $(3,946) $(2,858) 38%
======= =======
</pre>
<p> </p>
<pre>
Net loss per share of common
stock,
basic and diluted $(0.15) $(1.09)
------ ------
</pre>
<p> </p>
<pre>
Weighted average common shares
used in computing net loss per
share of common stock, basic and
diluted 26,557 2,613
====== =====
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
Six Months Ended
June 30,
2010 2009 % change
---- ---- --------
Revenues:
Product $14,760 $8,765 68%
Related party collaborative
research and development 30,695 28,963 6%
Collaborative research and
development 1,511 869 74%
Government grants 3,214 12 nm
----- ---
</pre>
<p> </p>
<pre>
Total revenues 50,180 38,609 30%
------ ------
</pre>
<p> </p>
<pre>
Costs and operating expenses:
Cost of product revenues 11,293 7,268 55%
Gross margin $ 3,467 1,497
Gross margin % 23% 17%
Research and development 25,986 27,246 -5%
Selling, general and
administrative 17,252 12,241 41%
------ ------
. .
Total costs and operating
expenses 54,531 46,755 17%
------ ------
</pre>
<p> </p>
<p>Loss from operations (4,351) (8,146) -47%</p>
<p> </p>
<pre>
Interest income 74 76 -3%
Interest expense and other, net (1,012) (786) 29%
Loss before provision for income
taxes (5,289) (8,856) -40%
Provision for income taxes 26 95 -73%
--- ---
Net loss $(5,315) $(8,951) -41%
======= =======
</pre>
<p> </p>
<pre>
Net loss per share of common
stock,
basic and diluted $(0.36) $(3.44)
------ ------
</pre>
<p> </p>
<pre>
Weighted average common shares
used in computing net loss per
share of common stock, basic and
diluted 14,701 2,602
====== =====
</pre>
<p> </p>
<pre>
Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
</pre>
<p> </p>
<p> </p>
<pre>
December
June 30, 31,
2010 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $51,413 $31,785
Marketable securities 48,894 23,778
Accounts receivable, net 7,197 7,246
Related party accounts receivable 92 -
Inventories 2,176 2,915
Prepaid expenses and other current
assets 4,788 1,658
----- -----
Total current assets 114,560 67,382
</pre>
<p> </p>
<pre>
Restricted cash 668 731
Property and equipment, net 21,332 21,581
Intangible assets, net 650 928
Goodwill 3,241 3,241
Other non-current assets 3,224 5,173
----- -----
Total assets $143,675 $99,036
======== =======
</pre>
<p> </p>
<pre>
Liabilities, redeemable convertible preferred stock, and
shareholders' equity (deficit)
Current liabilities:
Accounts payable $8,036 $9,999
Accrued compensation 5,041 6,518
Related party payable 268 1,314
Other accrued liabilities 7,550 10,376
Redeemable convertible preferred stock
warrant liability - 2,009
Deferred revenues 501 2,240
Related party deferred revenues 4,084 13,161
Financing obligations 5,367 5,368
Total current liabilities 30,847 50,985
</pre>
<p> </p>
<pre>
Deferred revenues, net of current
portion 1,764 1,856
Related party deferred revenues, net of
current portion 5,445 7,487
Financing obligations, net of current
portion - 2,574
Other long-term liabilities 1,324 1,307
----- -----
Total liabilities 39,380 64,209
</pre>
<p> </p>
<pre>
Redeemable convertible preferred stock
issuable in series A to F - 179,672
</pre>
<p> </p>
<pre>
Stockholders' equity (deficit):
Common stock 4 -
Additional paid-in capital 269,077 15,015
Accumulated other comprehensive income
(loss) 137 (252)
Accumulated deficit (164,923) (159,608)
-------- --------
Total stockholders' equity (deficit) 104,295 (144,845)
------- --------
Total liabilities, redeemable
convertible preferred stock, and
shareholders' equity (deficit) $143,675 $99,036
======== =======
</pre>
<p> </p>
<pre>
Codexis, Inc.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(In Thousands)
</pre>
<p> </p>
<p> </p>
<pre>
Six Months Ended
June 30,
2010 2009
---- ----
Operating activities:
Net loss $(5,315) $(8,951)
Adjustments to reconcile net loss to
cash used in
operating activities:
Amortization of intangible assets 302 462
Depreciation and amortization of
property and equipment 3,438 2,346
Revaluation of redeemable convertible
preferred stock warrant liability 677 6
Stock-based compensation 3,951 1,893
Amortization of debt discount 104 200
Accretion (amortization) of premium/
discount on marketable securities 183 131
Changes in operating assets and
liabilities:
Accounts receivable (42) 91
Inventories 739 (630)
Prepaid expenses and other current
assets (3,126) (617)
Other assets 2,395 50
Accounts payable (1,413) (1,952)
Accrued compensation (1,477) 139
Accrued related party payable (1,046) 2
Other accrued liabilities (5,133) (3,924)
Deferred revenues (12,950) 1,290
------- -----
Net cash (used in) operating
activities (18,713) (9,464)
</pre>
<p> </p>
<pre>
Investing activities:
Decrease in restricted cash 65 203
Purchase of property and equipment (3,192) (4,518)
Purchase of marketable securities (49,051) (28,802)
Proceeds from sales of marketable
securities 1,605 -
Proceeds from maturities of
marketable securities 21,960 11,500
Net cash (used in) investing
activities (28,613) (21,617)
</pre>
<p> </p>
<pre>
Financing activities:
Principal payments on financing
obligations (2,681) (2,674)
Payments in preparation for initial
public offering (3,106) -
Proceeds from issuance of preferred
stock - 40,000
Proceeds from issuance of common
stock on IPO 72,539 -
Proceeds from exercises of stock
options 254 62
--- ---
Net cash provided by financing
activities 67,006 37,388
</pre>
<p> </p>
<pre>
Effect of exchange rate changes on
cash and cash equivalents (52) (56)
--- ---
</pre>
<p> </p>
<pre>
Net increase in cash and cash
equivalents 19,628 6,251
Cash and cash equivalents:
Beginning of the period 31,785 21,903
------ ------
End of the period 51,413 28,154
</pre>
<p> </p>
<pre>
Marketable securities at the end of
period 48,894 32,403
</pre>
<p> </p>
<pre>
Cash, cash equivalents and marketable
securities $100,307 $60,557
======== =======
Reconciliation of GAAP to Non-GAAP Financial Information
</pre>
<p>Adjusted EBITDA (earnings before interest, tax, depreciation, amortization, stock-based compensation and warrant related costs) for the second quarter of 2010 was <span class="xn-money">$0.5 million</span> compared to a loss of <span class="xn-money">$0.1 million</span> in the second quarter of 2009. For the six months ended <span class="xn-chron">June 30, 2010</span>, Adjusted EBITDA improved to <span class="xn-money">$3.3 million</span> from a loss of <span class="xn-money">$3.5 million</span> in the same period in 2009. The key driver of this improvement was a <span class="xn-money">$3.6 million</span> reduction in net loss.</p>
<p/>
<p>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>
<p/>
<p>A reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the table below.</p>
<p/>
<p> </p>
<p> </p>
<pre>
Codexis, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited, In Thousands)
</pre>
<p> </p>
<pre>
Three Months Six Months
Ended Ended
June 30 June 30
Calculation of Adjusted EBITDA 2010 2009 2010 2009
------------------------------ ---- ---- ---- ----
Net income (loss) $(3,946) $(2,858) $(5,315) $(8,951)
Adjustments:
Minus: Interest income (46) (45) (74) (76)
Plus: Interest expense 96 358 394 761
Plus: Income taxes 87 41 26 95
Plus: Depreciation and
amortization 1,884 1,444 3,740 2,808
Plus: Stock-based compensation 2,171 962 3,885 1,862
Plus: Preferred stock warrant
fair market valuation adjustment 281 - 677 6
</pre>
<p> </p>
<pre>
Adjusted EBITDA $527 $(98) $3,333 $(3,495)
</pre>
<p>Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:</p>
<pre>
-- 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 significant 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.
</pre>
<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>
<p/>
<p> </p>
<p> </p>
<pre>
Contacts:
Investors: Derick Sutton, [email protected], 650-421-8130
Media: Lyn Christenson, [email protected], 650-421-8144 or
Saskia Sidenfaden, [email protected], 212-827-3771.
For further information: Investors, Derick Sutton, +1-650-421-8130, [email protected], or Media, Lyn Christenson, +1-650-421-8144, [email protected], both of Codexis, Inc.; or Saskia Sidenfaden, +1-212-827-3771, [email protected], for Codexis, Inc. Web Site: http://www.codexis.com
Share this article