MINNEAPOLIS, MN, March 12, 2015 /CNW/ – BioAmber Inc. (NYSE: BIOA), an industrial biotechnology company producing sustainable chemicals including bio-based succinic acid, today announced its financial results for the fourth quarter and year ended December 31, 2014. Highlights included:
- Substantial progress was made on construction of the 30,000 metric ton capacity commercial plant in Sarnia, and subsequent to the quarter the Company began commissioning the facility
- The Company added a total of 21 new customers in 2014 and signed two significant take-or-pay agreements, including a 15-year commitment to purchase one third of Sarnia capacity annually
- Net cash used in operating activities for the year ended December 31, 2014 was reduced by 22% to $21.5 million, compared to $27.5 million in the year ended December 31, 2013
“We are on the verge of completing our first commercial succinic acid plant within the original budget estimate, a significant achievement and milestone for our company,” said Jean-Francois Huc, BioAmber’s Chief Executive Officer. “We are ready for operations, with steam and electricity supply already hooked up to the plant, tested and live. All plant operators have been hired and trained, and our key long-term supply agreements for sugar, steam and electricity signed. In the coming weeks we will complete construction and in parallel start up the plant and qualify our product with customers, with the goal to be in commercial operation in Q3 2015,” he added.
- Construction has progressed well and is expected to be completed in two months; the projected final cost of the plant remains within the original budget estimate of $125 million +/- 10%
- Preparation is complete from an operational standpoint: all operators have been recruited and trained, the plant is connected to fully operational steam and power lines, and long term supply agreements for glucose, steam, electricity and maintenance services have been executed
- Subsequent to the quarter end, the Company initiated commissioning of the Sarnia plant, a process that is anticipated to take approximately 5 months
Other Business Highlights
- BioAmber added 5 new customers in the fourth quarter of 2014
- The Company signed two take-or pay-agreements for Sarnia with Vinmar and PTTMCCBiochem that will ramp up in 2015 and represent 15,000 metric tons of annual sales in 2016 and 2017
- New uses for BioAmber’s Bio-SATM were validated in the lubricants and paints/coatings markets, and unique flavoring performance for di-sodium succinate was demonstrated in food applications
- The Company ended as planned its toll manufacturing contract with ARD in Pomacle, France
- Net cash used in operating activities was reduced by 22% year-over-year, with an average monthly cash burn of under $2.0 million per month in 2014
- The Company closed on a three year, $25 million loan from Tennenbaum Capital Partners and used the proceeds to reimburse the outstanding loan with Hercules Technology Growth Capital
- Cash on hand was $51.0 million as of December 31, 2014
Full Year 2014 Financial Results
Revenues for the year ended December 31, 2014 decreased to $1.5 million from $2.7 million for the same period in 2013. Sales volume in 2014 was slightly higher than in 2013, but was offset by a decrease in the average sales price that resulted from customers seeking pricing more in line with the prices BioAmber has contractually committed to for future Sarnia supply. The Company continues to manage sales in an effort to preserve its bio-succinic acid inventory levels in advance of the Sarnia plant start-up.
Gross loss in the year ended December 31, 2014 was $4.5 million, compared to a gross loss of $24,000 for the same period in 2013. The increase was due to lower selling prices combined with an inventory reserve of $2.5 million and higher fixed production costs in 2014 than in 2013. These costs resulted from the transition away from the French demo plant to Sarnia production and pricing.
Research and development expenses for the year ended December 31, 2014 were $15.2 million, a decrease of $1.4 million from the same period in 2013. The decrease was primarily due the completion of the yeast development project with Cargill in 2013, greater in-house management of the patent portfolio, and a reduction of expenses related to our adipic acid platform. These reductions were partially offset by an increase in payroll costs that resulted from a shift away from the use of external labs to in-house R&D resources.
Sales and marketing expenses in the year ended December 31, 2014 were $4.5 million, versus $4.7 million in 2013. The decrease was primarily due to a decrease in third-party market study expenses and in incentive remuneration.
General and administrative expenses for the year ended December 31, 2014 increased to $10.7 million, from $9.8 million for the same period in 2013. The increase was primarily due to an increase in stock-based compensation due to stock option cancellations in the second quarter of 2014 and additional cost related to compliance and other costs associated with being a public company.
Foreign currency losses in the year ended December 31, 2014 were $151,000 as compared to a loss of $306,000 for the same period in 2013. The decrease stemmed from lower Canadian dollar cash balances in 2014 that were partly offset by a weaker Canadian versus US dollar during the period.
During the year ended December 31, 2014, the Company incurred net financial charges of $11.7 million as compared to an income of $7.4 million in the same period in 2013. The net financial charges in the year were mainly the result of $4.8 million of interest expense and end of term charge accretion on the loan from Hercules Technology Growth Capital, which was fully repaid in December 2014, compared to $1.8 million in 2013, and a $7.2 million of non-cash charge related to changes in the fair market value of the warrants issued in connection with the Company’s initial public offering, compared to a gain of $10.3 million recorded in 2013. The warrants are revalued at each reporting period resulting in a non-cash amount being recorded in the statement of operations for as long as the warrants remain outstanding.
The Company recorded a net loss attributable to BioAmber Inc. shareholders of $46.4 million, or a loss of $2.32 per share, for the year ended December 31, 2014, as compared to a net loss of $33.2 million, or a loss of $2.13 per share, for the same period in 2013.
The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the year ended December 31, 2014 was $34.7 million, or a loss of $1.74 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $33.6 million, or a loss of $2.16 per share, for the same period in 2013. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the year ended December 31, 2014, the impact of the change in fair value of the warrants issued in connection with the IPO, the loss from the extinguishment of debt, a non-cash reserve taken on the recorded value of inventory, and the non-cash expense resulting from the cancellation of certain employee stock options. For the year ended December 31, 2013, it excludes the impact of the change in fair value of the warrants issued in connection with the IPO, the intangibles and long lived assets impairment charges, the accelerated vesting of certain employee stock options from the IPO, and the non-cash gain from the extinguishment of debt. Please refer to Annex A: “Non-GAAP Financial Information—Adjusted Net Loss Attributable to BioAmber Inc. Shareholders” for more information regarding this non-GAAP financial metric.
BioAmber (NYSE: BIOA) is an industrial biotechnology company producing sustainable chemicals. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into sustainable chemicals for use in a wide variety of everyday products including plastics, resins, food additives and personal care products.