Q3 High Oleic Soybean Product Revenue of $3
Million Represents Highest in Company History
Reiterates 2019 Annual Revenue Guidance of $7
Million to $8 Million
Operational Savings Expected to Extend Cash
Runway to Mid-2021
Over 70,000 2020 Acres Contracted as of October
31, 2019
Calyxt, Inc. (NASDAQ: CLXT), a plant-based technology company
focused on healthy food ingredients, has reported results for its
third quarter ended September 30, 2019.
Key Third Quarter and Subsequent Highlights
- Revenue increased to a record $3.0 million in the quarter,
driven by increased sales volumes of High Oleic Soybean Meal and
Calyno® High Oleic Soybean Oil to our growing customer base.
- Sysco’s customer count is now above 60 for Calyno High Oleic
Soybean Oil.
- Continue to maintain our 2019 revenue forecast of $7.0 million
to $8.0 million as the crush and sales plan we have in place for
the fourth quarter is expected to deliver achievement of our
guidance.
- Completed purchase of all remaining grain from the 2018
harvest.
- Net cash used in all activities for the third quarter of 2019
was $10.0 million, substantially in line with previously announced
financial guidance of $3.0 million to $3.25 million per month.
- Cash and cash equivalents totaled $66.4 million as of September
30, 2019.
- Operational savings expected to extend cash runway to
mid-2021.
- 2020 contracted acreage target for High Oleic Soybeans remains
at 100,000 acres, an increase from 36,000 planted acres in 2019 and
on track to achieve our goal of doubling contracted acres annually.
- As of October 31, 2019, we had contracted more than 70,000
acres for 2020.
- We will offer five new soybean varieties to support our
geographic expansion and acreage growth in 2020.
- We continue to develop products in our R&D pipeline as well
as R&D exploration in canola, hemp, oats, peas, peanuts,
potatoes, soybeans and wheat, reaffirming Calyxt’s position as an
innovation platform.
- Product development efforts are focused on wellness,
plant-based proteins and sustainability.
- We are exploring potential collaborations with third parties
for product ideas as part of an expanded go-to-market
strategy.
- Partnered with Landus Cooperative, the sixth largest grain
company in North America based on storage capacity, to expand our
geographic footprint for acreage growth and weather-risk diversity
by adding Landus’ seed distribution, agronomy support, grain
storage and transportation services for our High Oleic
Soybeans.
- Strengthened leadership team to support commercial growth
opportunities with the appointments of:
- Keith Blanks to the newly created position of Senior Vice
President of Sales and Marketing with a focus on driving sales
growth of Calyno soybean oil to food manufacturers, foodservice
distributors and operators, and other channels.
- Manoj Sahoo as Chief Business Development and Supply Chain
Officer, focusing his efforts on the development of strategic
collaborations for our product candidates and the continued
development and optimization of our supply chain.
Management Commentary
“The third quarter of 2019 was marked by a highly encouraging
level of market acceptance and growing interest for our proprietary
High Oleic, premium soybean oil and our first commercial product,”
said Jim Blome, Chief Executive Officer. “We are expanding our
geographic footprint and generating weather-risk diversity by
growing 2020 acres, bringing five new varieties to market and
adding Landus’ seed distribution and agronomy support for our High
Oleic Soybeans.
“The TALEN® technology, which powers our innovation platform, is
particularly exciting, allowing us to produce a plant that is based
on precise and targeted changes to its natural genome. With our
established processes we can develop a healthier food ingredient in
a short amount of time relative to other development processes.
Moreover, we believe we have an exciting product pipeline that we
intend to advance over time either through our own commercial
organization or in collaboration with other industry participants
with established market access and scale,” continued Blome.
“Following our successful completion of a voluntary consultation
with the Food and Drug Administration in February 2019, we launched
our first commercial product, Calyno, which is a High Oleic Soybean
Oil with zero grams of trans fat per serving, a reduced saturated
fat content, low polymerization levels, and other unique benefits
that make it particularly attractive in multiple food manufacturing
and foodservice applications.
“Additionally, one of the world’s largest food service
distributors, Sysco, took notice of the strong introduction and
currently stocks and sells Calyno to its customers. Sysco’s
customer count is now above 60 as commercial kitchens recognize the
ROI possibilities that our oil can bring to their bottom line with
up to 3X fry life and less varnish compared to commodity oils. Our
research indicates that oil is one of the largest drivers of food
costs in many restaurants and that the foodservice oil market is a
$7.6 billion market segment, representing a large addressable
market. We also see progress with food manufacturing, as
large-scale industry participants accelerate their testing of
specific applications of our oil. This $4.7 billion market segment
is particularly appealing because our technology can deliver key
characteristics like high stability, long shelf life and low
polymerization,” explained Blome.
“To power Calyno’s growth trajectory, we have built out our
supply chain – partnering with nearly 175 farmers in the Upper
Midwest to grow our proprietary soybeans. Our collaboration with
Agtegra, a farmer-owned grain and agronomy cooperative with more
than 6,300 active member-owners in eastern North and South Dakota
commenced in early 2019 and positions Calyxt with seed
distribution, agronomy support, grain storage and transportation
services. During the third quarter, we engaged Landus to increase
our geographic footprint for acres by adding their seed
distribution, agronomy support, grain storage and transportation
services in Iowa. With the addition of Landus to our geographic
footprint, we now have reach to 40% of the soybean acres grown in
the United States. Based on these developments and our current
progress, we are reiterating our 100,000 contracted acre target for
2020, up from 36,000 planted acres in 2019.
“We continue to drive our R&D pipeline and expand it to
include R&D exploration in canola, hemp, oats, peas, peanuts,
potatoes, soybeans and wheat, which advances our leadership
position as an innovation platform. We also expanded our
go-to-market strategy by seeking to develop collaborations with
third parties for that innovation. We anticipate these
collaborations will deliver new revenue streams and will drive the
monetization of our technology platform,” said Blome.
“From an operating perspective, we have assembled a strong
leadership team to drive the business and are adding strategic
hires to the team. We are seeing additional revenue opportunities
as well as strategic opportunities for our product pipeline. We are
excited to deliver healthier food and food ingredients to consumers
and I look forward to leveraging our first-mover advantage and
cutting-edge technology to create long-term, sustainable value for
our shareholders,” concluded Blome.
Third Quarter 2019 Financial Results
- Revenue in the third quarter of 2019 increased to a record $3.0
million, primarily driven by scaling crush activity, generating
sales momentum in soybean oil through foodservice distribution and
continued testing with large food manufacturers.
- R&D expenses in the third quarter of 2019 were $3.6
million, compared to $3.4 million in the third quarter of 2018. The
increase in R&D expenses is primarily due to an increase in
non-cash stock compensation expense of $567,000, a reversal of
payroll tax benefits that are no longer realizable of $536,000 and
the addition of personnel. R&D expenses for the third quarter
of 2018 included $1.1 million of grain costs we incurred prior to
our commercialization in the first quarter of 2019, which affects
the comparability of R&D expenses year over year.
- SG&A expenses in the third quarter of 2019 were $6.2
million, compared to $3.3 million in the third quarter of 2018. The
increase was driven by higher non-cash stock compensation costs of
$1.6 million, increased personnel costs of $880,000 and an increase
in professional fees expenses of $455,000. The increases in
personnel costs and professional fees are partially offset by a
reduction in the management fees we paid Cellectis, as we completed
the internalization of nearly all services previously provided by
Cellectis as of September 30, 2019.
- Net cash used in the third quarter of 2019 was $10.0 million,
substantially in line with previously announced financial guidance
of $3.0 million to $3.25 million per month.
- Net loss for the third quarter of 2019 was $10.7 million, or
$(0.32) per basic and diluted share, compared to a net loss of $7.5
million, or $(0.23) per basic and diluted share, in the third
quarter of 2018. The increase was driven by higher non-cash stock
compensation expenses of $2.1 million and costs associated with the
launching our first products in 2019.
- Adjusted EBITDA, a non-GAAP measure, increased to a loss of
$6.9 million for the third quarter of 2019 from a loss of $6.4
million in the third quarter of 2018 driven by increases personnel
costs, as the costs of commercialization in 2019 were largely
offset by reductions in grain costs expensed as R&D in 2018.
See below under the heading “Use of Non-GAAP Financial Information”
for a discussion of Adjusted EBITDA and a reconciliation of Net
Loss to Adjusted EBITDA, the most comparable GAAP measure.
- Cash and cash equivalents totaled $66.4 million as of September
30, 2019 compared to $93.8 million as of December 31, 2018.
“I am pleased with our cash usage trajectory in the third
quarter of 2019,” added Bill Koschak, Chief Financial Officer of
Calyxt. “We have largely completed investing in our G&A
platform required to scale the organization. Future investments are
expected to be in R&D as we grow our pipeline and collaboration
projects, and in sales, supply chain, quality and food safety to
support growth in our soybean product lines. We reiterate our prior
FY2019 financial guidance of $7 million to $8 million in revenue
and $3 million to $3.25 million in cash usage per month.
“Taking into account our anticipated usage going forward,
including operational savings we have identified, I believe our
cash position will be sufficient to fund operations to mid-2021,”
concluded Koschak.
Third Quarter 2019 Results Conference Call
Calyxt, Inc. will hold a conference call today at 4:30 p.m.
Eastern time to discuss its results for the third quarter ended
September 30, 2019. Chief Executive Officer Jim Blome, Chief
Financial Officer Bill Koschak, Chief Business Development and
Supply Chain Officer Manoj Sahoo, Chief Technology Officer Dr.
Travis Frey, and Senior Vice President of Sales & Marketing
Keith Blanks will host the conference call, followed by a question
and answer session.
To access the call, please use the following information:
Date:
Wednesday, November 6, 2019
Time:
4:30 p.m. EST, 1:30 p.m. PST
US & Canada dial-in number:
+1 (877) 407-9747
International dial-in number:
+1 (412) 902-0044
Conference ID:
13695884
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have difficulty connecting with the conference
call, please contact MZ Group at +1 (949) 491-8235.
The conference call will be broadcast live and available for
replay at https://bit.ly/35StOWl and via the investor relations
section of the Company’s website here.
A replay of the call will be available for one month following
the conference call.
Toll Free Replay Number:
+1 (877) 660-6853
International Replay Number:
+1 (201) 612-7415
Replay ID:
13695884
About Calyxt
Calyxt (NASDAQ: CLXT) is a plant-based technology company that
utilizes our patented technology to “Make The Food You Love A
Healthier Choice™”. The care we take extends beyond nutritional
value. We partner with farmers and food companies to deliver
traceable plant-based products developed to be healthier and more
sustainable than their conventional counterparts. We use cutting
edge plant breeding techniques to develop products that help
improve diets. We continuously pursue innovation to deliver good
food that is good for you.
Calyxt is located in Roseville, MN and is listed on the NASDAQ
market (ticker: CLXT). For further information, please visit our
website at www.calyxt.com.
Use of Non-GAAP Financial Information
To supplement our unaudited financial results prepared in
accordance with GAAP, we present Adjusted EBITDA, which is not a
measure defined by GAAP. We define Adjusted EBITDA as Net Loss
excluding Interest, net, Income tax expense, Depreciation and
Amortization expense, Stock-based compensation, Payroll tax
benefits that are no longer realizable, Section 16 officer
transition expenses and Forward Purchase Contract gains and losses.
We provide in the table below a reconciliation of Net Loss to
Adjusted EBITDA, which is the most directly comparable GAAP
financial measure. Adjusted EBITDA is not meant to be considered in
isolation or as a substitute for financial information presented in
accordance with GAAP, and Adjusted EBITDA should be viewed as
supplemental and in addition to Net Loss. Investors are cautioned
that there are material limitations associated with the use of
non-GAAP financial measures, which exclude charges that have an
effect on our reported financial results. In addition, other
companies may report Adjusted EBITDA or similarly titled measures
but calculate them differently, which reduces their usefulness as a
comparative measure.
Because Adjusted EBITDA excludes non-cash items and discrete or
infrequently occurring items, we believe that Adjusted EBITDA
provides investors with useful supplemental information about the
operational performance of our business and facilitates comparison
of our financial results between periods where certain items may
vary significantly independent of our business performance.
Moreover, our presentation of Adjusted EBITDA enhances transparency
because our management team utilizes this metric in evaluating, and
making operational decisions, regarding our business.
The tables below present a reconciliation of Net Loss to
Adjusted EBITDA:
Three months ended
September 30,
In Thousands
2019
2018
Net loss (GAAP measure)
$
(10,669)
$
(7,483)
Non-GAAP adjustments:
Stock-based compensation
2,705
589
Interest, net
(32)
(228)
Income tax expense
—
—
Depreciation & amortization
362
356
Payroll tax benefits that are no longer
realizable
536
(40)
Section 16 officer transition expenses
193
374
Loss on Forward Purchase Contracts
—
50
Adjusted EBITDA
$
(6,905)
$
(6,382)
Nine months ended
September 30,
In Thousands
2019
2018
Net loss (GAAP measure)
$
(27,477)
$
(19,429)
Non-GAAP adjustments:
Stock-based compensation
6,565
3,016
Interest, net
(296)
(88)
Income tax expense
—
—
Depreciation & amortization
1,051
727
Payroll tax benefits that are no longer
realizable
411
(48)
Section 16 officer transition expenses
1,054
374
Loss on Forward Purchase Contracts
—
413
Adjusted EBITDA
$
(18,692)
$
(15,035)
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue,” the
negative of these terms and other comparable terminology. These
forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of
our future financial or operating performance, our anticipated
product pipeline, collaboration or growth strategies and
anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements, including those factors discussed under the caption
entitled “Risk Factors” in our Annual Report on Form 10-K, along
with our other filings with the U.S. Securities and Exchange
Commission. We do not assume any obligation to publicly provide
revisions or updates to any forward-looking statements, whether as
a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by
applicable laws.
Certain market and industry data and forecasts included in this
press release were obtained from independent market research,
industry publications and surveys, governmental agencies and
publicly available information. We believe the data from such
third-party sources to be reliable. However, we have not
independently verified any of such data and cannot guarantee its
accuracy or completeness. Similarly, internal market research and
industry forecasts, which we believe to be reliable based upon our
management's knowledge of the market and the industry, have not
been verified by any independent sources. While we are not aware of
any misstatements regarding the market or industry data presented
herein, our estimates involve risks and uncertainties and are
subject to change based on various factors, including those
discussed under the caption entitled “Risk Factors” in our Annual
Report on Form 10-K, along with our other filings with the U.S.
Securities and Exchange Commission.
CALYXT, INC.
BALANCE SHEETS
(In Thousands, Except Par
Value and Share Amounts)
September 30,
2019
(unaudited)
December 31,
2018
Assets
Current assets:
Cash and cash equivalents
$
66,434
$
93,794
Restricted cash
381
381
Trade accounts receivable
1,304
—
Due from related parties
69
46
Inventory
2,371
—
Prepaid expenses and other current
assets
1,109
1,301
Total current assets
71,668
95,522
Non-current restricted cash
1,135
1,113
Land, buildings, and equipment
23,337
21,850
Other non-current assets
270
306
Total assets
$
96,410
$
118,791
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
945
$
818
Accrued expenses
1,958
2,007
Accrued compensation and benefits
1,783
1,305
Due to related parties
705
1,905
Current portion of financing lease
obligations
349
258
Other current liabilities
51
711
Total current liabilities
5,791
7,004
Financing lease obligations
18,331
18,227
Other non-current liabilities
159
163
Total liabilities
24,281
25,394
Stockholders’ equity:
Common stock, $0.0001 par value;
275,000,000 shares authorized; 32,926,312 shares issued and
32,867,413 shares outstanding as of September 30, 2019, and
32,664,429 shares issued and 32,648,893 shares outstanding as of
December 31, 2018
3
3
Additional paid-in capital
182,948
176,069
Common stock in treasury, at cost; 58,899
shares
(875
)
(230
)
Accumulated deficit
(109,892
)
(82,445
)
Accumulated other comprehensive loss
(55
)
—
Total stockholders’ equity
72,129
93,397
Total liabilities and stockholders’
equity
$
96,410
$
118,791
CALYXT, INC.
STATEMENTS OF
OPERATIONS
(Unaudited and in Thousands
Except Shares and Per Share Amounts)
Three Months Ended
September 30,
Nine months ended
September 30,
2019
2018
2019
2018
Revenue
$
2,967
$
27
$
3,533
$
234
Operating expenses:
Cost of revenue
3,528
—
3,865
—
Research and development
3,579
3,440
8,536
7,850
Selling, general and administrative
6,248
3,311
17,723
9,914
Management fees and royalties
305
975
1,117
1,957
Total operating expenses
13,660
7,726
31,241
19,721
Loss from operations
(10,693
)
(7,699
)
(27,708
)
(19,487
)
Interest, net
32
228
296
88
Foreign currency transaction loss
(8
)
(12
)
(35
)
(30
)
Loss before income taxes
(10,669
)
(7,483
)
(27,447
)
(19,429
)
Income taxes
—
—
—
—
Net loss
$
(10,669
)
$
(7,483
)
$
(27,447
)
$
(19,429
)
Basic and diluted loss per
share
$
(0.32
)
$
(0.23
)
$
(0.84
)
$
(0.65
)
Weighted average shares outstanding -
basic and diluted
32,866,467
32,381,010
32,759,194
30,040,926
CALYXT, INC.
STATEMENTS OF CASH
FLOWS
(Unaudited and in
Thousands)
Nine months ended September
30,
2019
2018
Operating activities
Net loss
$
(27,447
)
$
(19,429
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
1,051
727
Stock-based compensation
6,565
3,016
Unrealized foreign exchange gain
—
12
Changes in operating assets and
liabilities:
Trade accounts receivable
(1,304
)
—
Due to/from related parties
(1,223
)
576
Inventory
(2,371
)
—
Prepaid expenses and other assets
192
(341
)
Accounts payable
127
355
Accrued expenses
(49
)
880
Accrued compensation and benefits
478
70
Other accrued liabilities
(743
)
518
Other non-current assets
36
16
Net cash used by operating
activities
(24,688
)
(13,600
)
Investing activities
Purchases of land, buildings and
equipment
(2,538
)
(830
)
Net cash used by investing
activities
(2,538
)
(830
)
Financing activities
Costs incurred related to the issuance of
stock
—
(222
)
Proceeds from issuance of common stock
—
57,706
Repayments of financing lease
obligations
(195
)
—
Proceeds from the exercise of stock
options
314
2,128
Costs incurred related to shares withheld
for net share settlement
(645
)
—
Proceeds from the sale and leaseback of
land, buildings, and equipment
414
—
Net cash (used) provided by financing
activities
(112
)
59,612
Net (decrease) increase in cash, cash
equivalents and restricted cash
(27,338
)
45,182
Cash, cash equivalents and restricted cash
- beginning of period
95,288
56,664
Cash, cash equivalents and restricted
cash - end of period
$
67,950
$
101,846
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191106005896/en/
Calyxt Media Contact: Trina Lundblad, Director of
Corporate Communications (612) 790-0514 media@calyxt.com
Calyxt Investor Relations Contact: Chris Tyson Managing
Director MZ Group – MZ North America (949) 491-8235 CLXT@mzgroup.us
www.mzgroup.us
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