Metabolix, Inc. (NASDAQ: MBLX), an innovation-driven performance biomaterials company delivering sustainable solutions to the plastics, chemicals and energy industries, today reported financial results for the three months ended September 30, 2013.
“In the third quarter, we continued to make progress in the execution of our commercial strategy and in developing high value applications for our PHA products,” said Richard P. Eno, President and Chief Executive Officer.
“In biopolymers, we continue to develop markets for compostable film and bags, for performance additives and for applications requiring functional biodegradation. In October, we launched I6003rp, a new polymeric modifier for recycled PVC, and presented data on the product at a technical conference. In September, we broadened our suite of film resins with the launch of Mvera B5010, a new certified compostable resin for film and bag applications. Mvera B5010 is a product developed in collaboration with Samsung Fine Chemicals. We featured these products plus I6001, another PHA performance additive for flexible and semi-rigid PVC, at the recent K 2013 International Trade Fair held in Germany last month.”
Mr. Eno continued, “Engineering work is ongoing aimed at establishing commercial PHA manufacturing, and in parallel, we continue to advance our formulation expertise, which allows us to extend our inventory and optimize products to meet market needs.”
“In our chemicals platform, we recently achieved three key technical milestones in our program. We demonstrated a process to efficiently recover ultra-high purity bio-GBL from fermentation broth. We also showed that our fermentation process and P4HB technology can be adapted to produce deuterated bio-GBL. In addition, we demonstrated the robust nature of our microbial strains for production of biobased chemicals based on the successful conversion of second generation, or cellulosic, sugars to PHA precursors for C3 (bio-acrylic) and C4 chemicals,” added Mr. Eno.
THIRD QUARTER AND NINE MONTHS 2013 FINANCIAL OVERVIEW
Metabolix manages its finances with an emphasis on cash flow. The Company has maintained this focus and ended the third quarter with $25.7 million in unrestricted cash and investments. The Company’s net cash used for operating activities during the third quarter of 2013 was $5.9 million, which decreased from the net cash used of $6.3 million for the comparable quarter in 2012. Metabolix continues to have no debt.
Total revenue in the third quarter of 2013 was $0.9 million, compared to $0.7 million for the comparable quarter in 2012. The third quarter revenue consisted primarily of revenue from work performed on government research grants and product sales. Grant revenue of $0.6 million remained consistent over the same quarter of 2012, primarily as a result of work performed on the Company’s $6.0 million DOE grant. Biopolymer product orders of $0.2 million were shipped and billed during the Company’s third quarter of 2013. Revenue recognition was deferred for the majority of these shipments in accordance with the Company’s policy to defer product revenue for the greater of 60 days or until receipt of customer payment. During the third quarter, $0.3 million in product revenue was recognized, which is a $0.2 million increase over the comparable quarter of 2012, primarily attributable to the Company’s implementation of the current product revenue recognition policy during the third quarter of 2012 which resulted in limited revenue recognized during Q3 2012.
Cost of product revenue recognized was $0.5 million during the quarter ended September 30, 2013, compared to $0.3 million for the comparable period in 2012. The increase of $0.2 million was primarily attributable to an increase in associated product revenue recognized.
Research and development expenses were $4.6 million for the third quarter of 2013, compared to $4.9 million for the same period in 2012. The decrease of $0.3 million is primarily due to a $0.1 million reduction in employee compensation and benefits and a decrease in depreciation expense of $0.1 million. Selling, general and administrative expenses were $3.0 million for the third quarter of 2013 compared to $3.2 million for the comparable quarter in 2012. The decrease of $0.2 million is primarily attributable to a $0.2 million reduction in professional fees related to patent activities.
The Company reported a net loss of $7.3 million, or $0.21 per share, for the third quarter of 2013, as compared to a net loss of $7.7 million, or $0.23 per share, for the third quarter of 2012.
Revenue for the nine months ended September 30, 2013 was $4.5 million, compared to $40.9 million in the same period of 2012. The year-over-year decrease was primarily related to $38.9 million in deferred revenue that was recognized in 2012 as a result of the termination of the Telles joint venture in early 2012. Product revenue, grant revenue and research and development revenue increased by $1.4 million, $0.5 million and $0.6 million, respectively, during the nine months ended September 30, 2013 compared to the comparable period in 2012.
Cost of product revenue was $2.2 million during the nine months ended September 30, 2013, compared to $0.8 million for the comparable period in 2012. The $1.4 million increase is primarily attributable to an increase in associated product revenue recognized.
Research and development expenses were $14.4 million for the first nine months of 2013, compared to $16.0 million for the same period in 2012. The nine month decrease of $1.6 million is primarily the result of decreased employee compensation and benefit expenses of $1.0 million, reduced consulting fees of $0.3 million, and decreased depreciation expense of $0.3 million. Selling, general and administrative expenses were $9.7 million for the first nine months of 2013, as compared to $11.0 million for the comparable nine-month period in 2012. The decrease of $1.3 million is primarily the result of decreased employee compensation and benefit expenses of $0.7 million and a $0.4 million reduction in professional fees related to patent activities.
The Company reported a net loss of $21.9 million, or $0.64 per share, for the nine months ended September 30, 2013 compared to net income of $13.1 million, or $0.38 per share, for the same period in 2012.
The Company’s net cash used in operating activities during the nine months ended September 30, 2013 was $20.2 million, which represents a decrease in cash usage from $24.4 million for the comparable period in 2012. The $4.2 million decrease in net cash usage is primarily attributed to the Company’s payment of $3.0 million to Telles in early 2012 to acquire the inventory from the ended Telles joint venture, and reduced operating expenses period-over-period. The Company currently expects that its cash and investments, together with funds expected to be received from existing government research grants and expected product sales, will be sufficient to meet its projected operating requirements into the third quarter of 2014. The Company will attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners or through additional credit lines or other debt financing sources, in order to increase the funds available to support future operations.