Solazyme Reports Third Quarter 2013 Results

  Solazyme Reports Third Quarter 2013 Results

    US Manufacturing Facility (Clinton) Operating; Brazil Facility (Moema)
                                Commissioning;

          Commercial Product from Both Facilities Expected in 1Q14;

              Initial Production of Food Ingredients at Peoria;

  Announced Commercial Supply Agreements and Launched Second Skin-Care Brand

Business Wire

SOUTH SAN FRANCISCO, Calif. -- November 5, 2013

Solazyme, Inc. (NASDAQ: SZYM), a renewable oil and bioproducts company,
announced results today for the third quarter ended September 30, 2013.

“We continue to make significant progress toward commercializing our
breakthrough technology platform with two commercial production facilities
coming online in 1Q14,” said Jonathan Wolfson, CEO of Solazyme. “The facility
in Iowa is already supplying market development samples to customers.
Construction at the Brazil facility is in its final phases at over 90%
complete and commissioning is underway. While our timeline for oil production
at Moema has been moved into 1Q14, in part to accommodate additional
enhancements we are making at the facility, we are excited to be nearing
commercial production of our oils.

Our commercial progress has accelerated with the recent announcement of two
supply agreements and the extension of Joint Development Agreements with key
strategic partners. This underscores our ability to partner both for
development and commercialization of our Solazyme Tailored™ oils. We also
continue to advance the commercialization of our food ingredients, and we are
already manufacturing and actively supplying samples of the ingredients to
customers out of our Peoria facility. Finally, this week we launched a
completely new skin-care brand and product line, EverDeep™, our second brand
along with Algenist®. This launch significantly expands our Solazyme Health
Sciences portfolio.”

Financial Results

Total revenue for the third quarter ended September 30, 2013 was $10.6 million
compared with $8.6 million in the third quarter of 2012, an increase of 24%.
Revenues in the third quarter of 2013 included $4.8 million of product sales
compared to $3.8 million in the same period of 2012, an increase of 27%. In
the third quarter of 2013, development revenues with commercial partners came
in at $5.8 million versus $2.2 million, an increase of 160% over the same
period in the prior year. The increases in product and development revenues
with commercial partners were offset by much lower government funded revenues,
in line with our expectations.

Third quarter GAAP net loss attributable to Solazyme, Inc. common stockholders
was $30.7 million, which compares with net loss of $22.5 million in the prior
year period. On a non-GAAP basis, the net loss was $22.3 million for the third
quarter of 2013, compared with net loss of $19.4 million in the prior year
quarter. A reconciliation of GAAP to non-GAAP results is included below.

“We continue to closely manage our expenses and are well-capitalized to
broadly commercialize our technology in 2014,” said Tyler Painter, CFO of
Solazyme.

Recent Business Highlights

  *Enters Into Supply Agreement with Unilever: In September, Solazyme and
    Unilever finalized their first commercial supply agreement for a Solazyme
    Tailored^TM algal oil which includes an initial supply of at least 10,000
    MT. Supply is planned to begin in early 2014.
  *Enters Into Supply Agreement with Goulston Technologies: In October,
    Solazyme announced its entry into the textile lubricants market through a
    commercial supply agreement with Goulston Technologies, Inc. This
    agreement enables Goulston to introduce Solazyme’s algal oils into the
    estimated $1B textile lubricants market and the companies plan to further
    broaden the portfolio of Solazyme Tailored^TM algal oil offerings for this
    market.
  *Extension and Renewal of JDA agreements with Unilever and Bunge: Solazyme
    further deepened the relationship with the consumer packaged goods giant,
    Unilever, into 2014. Under the extended agreement, the companies plan to
    accelerate the commercialization of a second novel Tailored™ algal oil. In
    addition, Solazyme and Bunge extended and expanded their JDA to enable the
    Solazyme Bunge Renewable Oils JV to have access to a broader portfolio of
    oils.
  *Producing Whole Algal Food Ingredients at Peoria: Solazyme has begun
    production of Whole Algal food ingredients at Peoria and is actively
    delivering samples in response to over 160 requests from food ingredients
    companies and other potential customers.
  *Solazyme Health Sciences launches a new brand: This week, Solazyme Health
    Sciences launched EverDeep™, a new line of patented anti-aging skincare
    products that is distributed through direct response infomercials and the
    internet and which includes a new proprietary microalgae-based ingredient
    from Solazyme. This represents Solazyme’s second consumer-focused
    skin-care brand and a significant expansion of our Health Sciences
    business.

Conference Call

Solazyme will hold a conference call for investors on November 5, 2013 at 1:30
p.m. PT (4:30 p.m. EDT). Investors may access the call by dialing (877)
291-1287. A live webcast of the call will be available from the Investor
Relations section of www.solazyme.com. A recording of the call will also be
available by calling (404) 537-3406; access code 86890037 beginning
approximately two hours after the call, and will be available for one week. A
webcast replay of the call will also be available from the Investor Relations
section of www.solazyme.com approximately two hours after the call and will be
available for up to thirty days.

About Solazyme, Inc.

Solazyme, Inc. (SZYM) is a renewable oil and bioproducts company that
transforms a range of low-cost plant-based sugars into high-value oils and
food ingredients. Headquartered in South San Francisco, Solazyme's renewable
products can replace or enhance oils derived from the world's three existing
sources – petroleum, plants and animal fats. Initially, Solazyme is focused on
commercializing its products into three target markets: (1) chemicals and
fuels, (2) nutrition and (3) skin and personal care.

Solazyme®, the Solazyme logo and other trademarks or service names are
trademarks of Solazyme, Inc.

Non-GAAP Financial Measures

This press release includes the following financial measure defined as a
“non-GAAP financial measure” by the Securities and Exchange Commission:
non-GAAP net loss. This measure may be different from non-GAAP financial
measures used by other companies. The presentation of this financial
information, which is not prepared under any comprehensive set of accounting
rules or principles, is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in accordance
with generally accepted accounting principles. For a reconciliation of this
non-GAAP financial measure to the nearest comparable GAAP measure, see
“Reconciliation of GAAP to Non-GAAP Basic Net Loss Per Share” included in the
tables to this press release.

This non-GAAP measure is provided to enhance investors’ overall understanding
of Solazyme’s current financial performance and Solazyme’s prospects for the
future. Specifically, Solazyme believes the non-GAAP measure provides useful
information to both management and investors by excluding certain expenses
that may not be indicative of its core operating results and business outlook.

For its internal budgeting process, Solazyme’s management uses financial
measures that do not include stock-based compensation expense or special
expenses such as non-cash gains or losses due to warrant and/or derivative
revaluations, amortization of debt discounts and issuance costs and
dissolution of Joint Ventures. In addition to the corresponding GAAP measures,
Solazyme’s management also uses the foregoing non-GAAP measure in reviewing
the financial results of Solazyme. Solazyme excludes stock-based compensation
expenses and special non-cash charges from its non-GAAP measures primarily
because they are non-cash expenses that management does not believe are
reflective of ongoing operating results.

Forward Looking Statements

This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 about
Solazyme, including statements that involve risks and uncertainties
concerning: its commercialization plans and commercialization timetable for
products; market opportunities; application development; agreement on
definitive supply terms for products, including selling prices for products;
expansion into a broad collaboration and entry into definitive agreements; the
attributes of the collaboration; the timetable for completion and capacity of
facilities; the timetable for bringing facilities online and manufacturing
products; the ability to bring manufacturing facilities online with partners;
the ability to have access and/or continue to have access to manufacturing
facilities constructed and/or owned by partners; development of additional
products; meeting commercialization and technology targets and other
objectives; its capital structure; and Solazyme’s ability to maintain its
relationships with its partners and customers. When used in this press
release, the words “will”, “expects”, “intends” and other similar expressions
and any other statements that are not historical facts are intended to
identify those assertions as forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Any such statement may
be influenced by a variety of factors, many of which are beyond the control of
Solazyme, that could cause actual outcomes and results to be materially
different from those projected, described, expressed or implied in this press
release due to a number of risks and uncertainties. Potential risks and
uncertainties include, among others: Solazyme’s limited operating history; its
limited history in commercializing products; implementation risk in deploying
new technologies; its limited experience in constructing and operating
commercial manufacturing facilities; market acceptance of its products; its
ability to sell its products at a profit; delays related to construction,
start-up, ramp-up, or funding of production facilities; its access to adequate
supply of feedstock on favorable terms; its ability to manage operational
costs at production facilities; its ability to enter into and maintain
strategic collaborations, including the funding thereof; its ability to obtain
requisite regulatory approvals; and its access, on favorable terms, to any
required financing. Accordingly, no assurances can be given that any of the
events anticipated by the forward-looking statements will transpire or occur,
or if any of them do so, what impact they will have on the results of
operations or financial condition of Solazyme.

In addition, please refer to the documents that Solazyme, Inc. files with the
Securities and Exchange Commission, including its Quarterly Report on Form
10-Q for the quarter ended June 30, 2013, for a discussion of these and other
risks. You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this press release. Solazyme is
not under any duty to update any of the information in this press release.

SOLAZYME, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
(UNAUDITED)
                                                              
                         Three Months Ended          Nine Months Ended
                         September 30,               September 30,
                         2013          2012          2013          2012
Revenues
Research and             $ 5,824       $ 4,810       $ 14,764      $ 23,838
development programs
Product revenues          4,797       3,773       13,712      11,846  
Total revenues             10,621        8,583         28,476        35,684
                                                                   
Costs and operating
expenses (1)
Cost of product            1,450         1,331         4,400         3,907
revenue
Research and               17,556        16,534        46,191        50,276
development
Sales, general and        15,708      13,849      46,010      41,628  
administrative
Total costs and            34,714        31,714        96,601        95,811
operating expenses
                                                                
Loss from operations       (24,093 )     (23,131 )     (68,125 )     (60,127 )
                                                                   
Other income (expense)
(2)
Interest and other         (1,614  )     626           (4,576  )     1,262
income (expense), net
Loss from equity           (2,360  )     (683    )     (5,541  )     (1,193  )
method investment
Gain (loss) from
change in fair value       200           685           (425    )     1,536
of warrant liability
Loss from change in
fair value of             (2,836  )    -           (4,386  )    -       
derivative liability
Total other income         (6,610  )     628           (14,928 )     1,605
(expense)
                                                                
Net loss                 $ (30,703 )   $ (22,503 )   $ (83,053 )   $ (58,522 )
Net loss per share,      $ (0.47   )   $ (0.37   )   $ (1.32   )   $ (0.97   )
basic and diluted
                                                                   
Weighted average
number of common
shares used in loss        64,812        60,678        62,783        60,387
per share computation,
basic and diluted
                                                                             

SOLAZYME, INC.
RECONCILIATION OF GAAP TO NON-GAAP BASIC NET LOSS PER SHARE
In thousands, except per share amounts
(UNAUDITED)
                                                              
                         Three Months Ended          Nine Months Ended
                         September 30,               September 30,
                          2013       2012          2013          2012
Net loss                 $ (30,703 )   $ (22,503 )   $ (83,053 )   $ (58,522 )
(Gain) loss from
change in fair value       (200    )     (685    )     425           (1,536  )
of warrant liability
Loss from change in
fair value of              2,836         -             4,386         -
derivative liability
(1) Operating expenses
include stock-based
compensation expense
as follows:
Research and               1,544         1,001         4,111         2,939
development
Sales, general and        3,687       2,742       10,341      8,619   
administrative
Total stock-based          5,231         3,743         14,452        11,558
compensation expense
(2) Other income
(expense) includes
costs as follows:
Amortization of debt
discount and issuance      503           -             1,248         -
costs
Dissolution of the        59          -           1,406       -       
Solazyme Roquette JV
Net loss (non-GAAP)      $ (22,274 )   $ (19,445 )   $ (61,136 )   $ (48,500 )
                                                                   
Basic and diluted loss   $ (0.47   )   $ (0.37   )   $ (1.32   )   $ (0.97   )
per share (GAAP)
                                                                   
(Gain) loss from
change in fair value       -             (0.01   )     0.01          (0.02   )
of warrant liability
Loss from change in
fair value of              0.04          -             0.07          -
derivative liability
Stock-based                0.08          0.06          0.23          0.19
compensation expense
Amortization of debt
discount and issuance      0.01          -             0.02          -
costs
Dissolution of the        -           -           0.02        -       
Solazyme Roquette JV
Net loss per share       $ (0.34   )   $ (0.32   )   $ (0.97   )   $ (0.80   )
(non-GAAP)
                                                                             

SOLAZYME, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(UNAUDITED)
                                                 September 30,  December 31,
                                                  2013            2012
Assets
                                                                  
Current assets
Cash, cash equivalents and marketable             $   194,355     $   149,005
securities
Other current assets                                  25,554          16,274
                                                                 
Total current assets                                  219,909         165,279
                                                                  
Property, plant and equipment - net                   35,682          32,225
Other assets                                          23,209          19,520
                                                                 
Total assets                                      $   278,800     $   217,024
                                                                  
Liabilities and stockholders' equity
                                                                  
Current liabilities
Current portion of long-term debt                 $   63          $   7,331
Other current liabilities                             20,331          17,607
                                                                 
Total current liabilities                             20,394          24,938
                                                                  
Other liabilities                                     1,899           1,138
Long-term debt                                       91,231         7,637
Total liabilities                                    113,524        33,713
Total stockholders' equity                            165,276         183,311
                                                                 
Total liabilities and stockholders' equity        $   278,800     $   217,024

Contact:

Solazyme, Inc.
Corporate Communications:
Genet Garamendi
press@solazyme.com
Or
Brainerd Communicators, Inc.
Jeff Majtyka, 212-986-6667
majtyka@braincomm.com
Brad Edwards, 212-986-6667
edwards@braincomm.com