Solazyme Reports Fourth Quarter and Full Year 2013 Results

  Solazyme Reports Fourth Quarter and Full Year 2013 Results                    Commercial Production Underway at Clinton                           Moema Facility Commissioning  Business Wire  SOUTH SAN FRANCISCO, Calif. -- February 26, 2014  Solazyme, Inc. (NASDAQ:SZYM), a Renewable™ oil and bioproducts company, announced today results for the fourth quarter and full year ended December 31, 2013.  “2013 was a year of great progress for Solazyme as we readied our first major capacity projects, signed new commercial supply agreements, added important joint development partners, and further expanded our portfolio of Tailored™ oils,” said Jonathan Wolfson, CEO of Solazyme. “In the first half of 2014, we are focused on successfully executing Solazyme’s entry into broad commercial operations. We have begun shipping multiple products from the Clinton/Galva, Iowa facilities and are deep into commissioning in Brazil as we complete the first-of-its-kind 100,000MT Solazyme Bunge Renewable Oils (SB Oils) facility at Moema. In these early days we are focused on generating consistent and reliable production for our partners, ahead of accelerating our production ramp later this year.”  Financial Results  Total revenue for the fourth quarter ended December 31, 2013 was $11.3 million compared with $8.4 million in the fourth quarter of 2012. Fourth quarter GAAP net loss was $33.3 million, which compares with net loss of $24.6 million in the prior year period. On a non-GAAP basis, the net loss was $27.4 million for the fourth quarter of 2013, compared with net loss of $21.5 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.  Total revenue for the year ended December 31, 2013 was $39.8 million compared with $44.1 million in the prior year. Full year revenue, excluding government funded program revenue, was $39.5 million compared with $29.7 million in the prior year. Full year 2013 GAAP net loss was $116.4 million, compared with $83.1 million in the prior year. On a non-GAAP basis, the net loss was $88.6 million for 2013, compared with $70.0 million in 2012.  “Solazyme’s 2013 results included 21% growth in our most commercially mature business, as our Algenist^® skin care line expanded its product offerings and geographic footprint. We also delivered on all of our joint development milestones for our partners,” said Tyler Painter, CFO of Solazyme. “We anticipate continued growth in these revenue streams in 2014 and look forward to growing product revenues from commercial supply of our products later this year as we ramp commercial production. In the meantime, Solazyme remains in a healthy financial position as we complete our first plants and prepare to broadly scale operations.”  2013 Highlights    *Laid Foundation for Commercial Manufacturing in 2014: In 2013,  Solazyme     completed construction of the 20,000 MT Archer-Daniels-Midland Company     facility in Clinton, Iowa and the downstream companion facility operated     by American Natural Products in Galva, Iowa and neared completion of the     100,000 MT SB Oils facility in Brazil, setting the stage for the     commercial operations that commenced at the Clinton/Galva facilities in     early 2014, as well as the commissioning that is currently underway at the     SB Oils facility in Brazil.   *Production of Food Ingredients: Rapidly mobilized in the second half of     2013 to successfully manufacture both Whole Algal Flour ingredients at the     Peoria facility.   *Research Partnerships Continue to Flourish: In 2013,  Solazyme announced a     partnership with Mitsui & Co. Ltd. to develop a new suite of Tailored™     oils and is ahead of schedule with both of the first two oils under this     agreement. Solazyme also signed a joint development agreement with     AkzoNobel and extended its key JDA agreements with Bunge Limited and     Unilever.   *Commercial Supply Agreements Signed: Solazyme announced a 10,000 MT supply     agreement with its long-term partner Unilever in the third quarter of 2013     and signed agreements with other customers, including fabric lubricant     leader Goulston Technologies Inc. and metalworking lubricant distributor     Koda Distribution Group, positioning its Tailored™ oils across multiple     markets.   *Development of New Tailored™ Oils: Solazyme continued to expand its     technology platform through the development of multiple high value oils     including its myristic, oleic, erucic, capric and caprylic Tailored oils.   *Solid Algenist^® Sales Growth: Solazyme continued to grow its Algenist     skincare brand, which now boasts 21 SKUs and was recently launched in     China. Algenist revenues totaled $19.9 million in 2013, a 21% increase     versus 2012. The Algenist brand also won the 2014 Marie Claire Prix     d’Excellence de la Beauté in France. Algenist was unanimously selected by     the judging panel.  Conference Call  Solazyme will hold a conference call for investors on February 26 at 1:30 p.m. PT (4:30 p.m. ET). Investors may access the call by dialing 973-409-9250. 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 71686679 beginning approximately two hours after the call, and will be available for one week. A webcast replay from today’s 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. 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) fuels and chemicals, (2) nutrition and (3) skin and personal care.  Solazyme^®, Algenist^®, Tailored™, Renewable™ and the Solazyme logo 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 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 revaluations. 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 and production plans and commercialization timetable for its products; the growth of product and research and development revenues; selling prices for products; the ramping up of facilities; the timetable for bringing facilities online; meeting commercialization and technology targets; and Solazyme’s ability to maintain its relationships with its partners. 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, ramping up and operating commercial manufacturing facilities; its ability to sell its products at a profit; delays related to construction, start-up and ramp-up of production facilities; its ability to manage operational costs at production facilities; its ability to enter into and maintain strategic collaborations; 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 Reports on Form 10-Q, as updated from time to time, 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           Twelve Months Ended                           December 31,                    December 31,                     2013        2012               2013         2012 Revenues                                                        Research and development         $ 5,024      $ 3,811            $ 19,788      $ 27,649 programs Product              6,250       4,613            19,962       16,459    revenues Total revenues        11,274       8,424              39,750        44,108                                                                               Costs and operating expenses (1) Cost of product       1,985        1,404              6,385         5,311 revenue Research and          20,381       16,108             66,572        66,384 development Sales, general and                  16,923      15,888           62,933       57,516    administrative Total costs and operating             39,289       33,400             135,890       129,211 expenses                                                                          Loss from             (28,015)     (24,976)           (96,140)      (85,103) operations                                                                               Other income (expense) (2) Interest and other income          (1,191)      249                (5,767)       1,511 (expense), net Loss from equity method         (2,696)      (631)              (8,237)       (1,824) investment Gain from change in fair value of              572          748                147           2,284 warrant liability Loss from change in fair value of             (2,006)     -                (6,392)      -         derivative liability Total other income                (5,321)      366                (20,249)      1,971 (expense)                                                                          Net loss            $ (33,336)   $ (24,610)        $ (116,389)   $ (83,132)  Net loss per share, basic        $ (0.49)     $ (0.40)          $ (1.81)      $ (1.37)    and diluted                                                                               Weighted average number of common shares used in loss per              68,453       60,873             64,212        60,509 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             Twelve Months Ended                                                                         December 31,                   December 31,                         2013       2012             2013        2012 Net loss               $ (33,336)   $ (24,610)        $ (116,389)   $ (83,132) Gain from change in fair value of         (572)        (748)             (147)         (2,284) warrant liability Loss from change in fair value of         2,006        -                 6,392         - derivative liability (1) Operating expenses include stock-based compensation expense as follows: Research and             1,806        985               5,917         3,924 development Sales, general and      2,395       2,859            12,736       11,478 administrative Total stock-based compensation             4,201        3,844             18,653        15,402 expense (2) Other income (expense) includes costs as follows: Amortization of debt discount and        281          -                 1,529         - issuance costs Dissolution of the Solazyme Roquette       -           -                1,406        - JV Net loss               $ (27,420)   $ (21,514)        $ (88,556)    $ (70,014) (non-GAAP)                                                                      Basic and diluted loss per share         $ (0.49)     $ (0.40)          $ (1.81)      $ (1.37) (GAAP)                                                                      Gain from change in fair value of         (0.01)       (0.01)            -             (0.04) warrant liability Loss from change in fair value of         0.03         -                 0.10          - derivative liability Stock-based compensation             0.07         0.06              0.29          0.25 expense Amortization of debt discount and        -            -                 0.02          - issuance costs Dissolution of the Solazyme Roquette       -           -                0.02         - JV Net loss per share     $ (0.40)     $ (0.35)          $ (1.38)      $ (1.16) (non-GAAP)    SOLAZYME, INC. CONDENSED CONSOLIDATED BALANCE SHEETS In thousands (UNAUDITED)                                                                                                          December 31,         December 31,                                              2013                 2012 Assets                                                                    Current assets Cash, cash equivalents and marketable        $   167,521          $   149,005 securities Other current assets                            24,296              16,274 Total current assets                             191,817              165,279 Property, plant and equipment - net              40,089               32,225 Other assets                                    26,799              19,520 Total assets                                 $   258,705          $   217,024                                                                    Liabilities and stockholders' equity                                                                    Current liabilities Current portion of long-term debt            $   65               $   7,331 Other current liabilities                       25,229              17,607 Total current liabilities                        25,294               24,938 Other liabilities                                1,006                1,138 Long-term debt                                  93,457              7,637 Total liabilities                               119,757             33,713 Total stockholders' equity                      138,948             183,311 Total liabilities and stockholders'          $   258,705          $   217,024 equity   Contact:  Solazyme, Inc. Corporate Communications: Genet Garamendi press@solazyme.com or Brainerd Communicators, Inc. Jeff Majtyka,212-986-6667 majtyka@braincomm.com or Brad Edwards,212-986-6667 edwards@braincomm.com