TerraVia (NASDAQ:TVIA), a next-generation food, nutrition and
specialty ingredients company and pioneer in algae innovation,
announced today financial results for the first quarter ended March
31, 2017.
“We met all of our commercial and operational goals for the
first quarter as we executed against our focused strategy. We
remain on track to meet our 2017 guidance,” said Apu Mody, CEO of
TerraVia. “In particular, we’re excited about the market traction
we are seeing with AlgaPrime™ DHA, which is showing early signs of
being a blockbuster new product that can become a vital feed
ingredient for aquaculture and potentially other nutrition markets.
Also, as we disclosed today, the company now has a defined
timeframe in place for the consideration of strategic alternatives
that will chart the future course for TerraVia and our valuable
technology platform.”
As disclosed separately today, TerraVia has entered into a
forbearance agreement with certain of its convertible debt holders
as the company continues to work on a plan to restructure its debt
and has set a timeframe in which to conclude these negotiations.
TerraVia is actively engaged in a process with strategic and
financial parties that could result in a sale of all, substantially
all, or a portion of the company prior to termination of the
forbearance period.
Results for the first quarter highlight progress in TerraVia’s
refined strategic focus on food, nutrition and specialty
ingredients. Recent developments include:
- TerraVia’s AlgaPrime™ DHA building
early momentum in global aquaculture market in partnership with
Bunge, BioMar and Lerøy Seafood Group
- AlgaPrime™ DHA Essential to Sustainably
Sourced Salmon from Leading Chilean Salmon Farmer Ventisqueros
- Thrive® Culinary Algae Oil Receives
BrandSpark International 2017 Best New Product Award in the Cooking
Oil/Spray Category
- TerraVia's Algae Butter, Which Can
Replace Palm Oil and Hydrogenated Oils, Receives FDA GRAS No
Questions Letter
Financial Review
Financial results for the first quarter of 2017 reflect progress
in the Company’s transition to food, nutrition and specialty
ingredients.
Total revenue was $4.5 million compared with $4.9 million in the
first quarter of 2016. GAAP net loss narrowed to $22.6 million for
the first quarter of 2017, from a net loss of $26.5 million in the
prior year period as the Company continues to benefit from
reductions in cash operating expenditures. On a non-GAAP basis, the
net loss also declined to $19.2 million for the first quarter of
2017, compared with net loss of $21.2 million in the prior year
quarter.
Excluding intercompany transactions, revenues from the 50.1%
owned unconsolidated SB Oils JV totaled $2.9 million for the first
quarter versus $1.1 million in the first quarter of 2016.
“Our results for the first quarter reflect early momentum for
AlgaPrime™ DHA combined with diligent cost and capital management,”
commented Tyler Painter, COO and CFO of TerraVia. “As we move
through the process of seeking to restructure our balance sheet and
evaluating strategic alternatives, we continue to take prudent
steps to reduce cash and capital commitments while keeping the
company on track with our growth goals for the year.”
Conference Call
TerraVia Holdings, Inc. will hold a conference call for
investors on May 3, 2017 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 on the Investors section of
www.terravia.com. A recording of the
call will also be available by calling 404-537-3406; access code
12923661 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 on the Investors section of www.terravia.com
approximately two hours after the call and will be available for up
to thirty days.
About TerraVia
TerraVia is a plant-based food, nutrition and specialty
ingredients company that harnesses the power of algae, the mother
of all plants and earth's original superfood. With a portfolio of
breakthrough ingredients and manufacturing, the Company is well
positioned to help meet the growing need of consumer packaged goods
and established and emerging food manufacturers to improve the
nutritional profile of foods without sacrificing taste, and to
develop select consumer brands. The Company also manufactures a
range of specialty personal care ingredients for key strategic
partners. Headquartered in South San Francisco, the Company's
mission is to create products that are truly better for people and
better for the planet. For additional information, please visit
TerraVia's website at www.terravia.com.
TerraVia, Thrive®, AlgaPrime™, the TerraVia logo and other
trademarks or service names are the trademarks of TerraVia
Holdings, 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” included in the tables to this press release.
This non-GAAP measure is provided to enhance investors’ overall
understanding of TerraVia’s current financial performance and
TerraVia’s prospects for the future. Specifically, TerraVia
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, TerraVia’s management uses
financial measures that do not include stock-based compensation
expense, restructuring expense, or special expenses such as
non-cash gains or losses related to derivative liabilities, costs
associated with debt restructuring activities, amortization of debt
discount and issuance costs, and income (loss) from discontinued
operations. In addition to the corresponding GAAP measure,
TerraVia’s management also uses the foregoing non-GAAP measures in
reviewing the financial results of TerraVia. TerraVia excludes
stock-based compensation expenses, debt conversion expenses, income
tax benefit, 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 TerraVia, including statements that involve risks and
uncertainties concerning: its strategic, product, commercialization
and production plans and market opportunities; its ability to
consummate a transaction for all, substantially all, or a portion
of the company; ongoing activities to sell all or a significant
portion of the company; ongoing activities to equitize the debt of
the company’s noteholders; the prospects of the sales and/or
equitization activities being successful; the impact of failure to
sell all or a significant portion of the company and/or equitize
the company’s debt; the impact on other company obligations of an
event of default by the company under its 5.00% convertible senior
subordinated notes due 2019 (“2019 Notes”) issued pursuant to an
Indenture dated as of April 1, 2014 (“2019 Indenture”); its ability
to manage and reduce its costs and capital commitments; its ability
to maximize value for stakeholders; its ability to raise additional
capital and/or recapitalize its outstanding convertible senior
subordinated notes; and its 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 TerraVia, 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: TerraVia’s limited operating
history; its limited history in manufacturing and commercializing
products; production management risks; implementation risk in
deploying new technologies; its limited experience in constructing,
ramping up and operating commercial manufacturing facilities; its
ability to successfully develop and commercialize products; its
ability to sell its products at a profit; delays related to ramp-up
and optimization of production facilities; availability of
consistent, reliable power and steam; its ability to manage costs;
its ability to enter into and maintain strategic collaborations;
successful product trials by its customers and market acceptance
and adoption of its products by end-users; its ability to obtain
requisite regulatory approvals; its access, on favorable terms, to
any required financing; its ability to obtain interest on
acceptable terms in the sale and/or equitization activities; early
termination of the forbearance period provided in the forbearance
agreement it entered into with certain holders of the 2019 Notes;
adverse responses from customers, partners and investors to the
2019 Indenture event of default, sales process or equitization
process; and the impact of the 2019 Indenture event of default on
its ability to recapitalize or restructure its debt or raise
additional capital. 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
TerraVia.
In addition, please refer to the documents that TerraVia
Holdings, Inc. files with the Securities and Exchange Commission,
including its Annual Report on Form 10-K and 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. TerraVia is not under any duty to update any of the
information in this press release.
TERRAVIA HOLDINGS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS In thousands, except per share amounts
(UNAUDITED)
Three Months Ended March
31,
2017 2016 Revenues Product revenues $ 815 $
1,301 Research and development programs 3,704
3,587 Total revenues
4,519 4,888
Costs and operating expenses Cost of product revenues 1,249
1,304 Research and development 6,968 8,231 Sales, general and
administrative 9,188 11,642 Restructuring charges 626 1,190
Arbitration award (2,369 ) - Total costs and
operating expenses
15,662 22,367 Loss
from continuing operations before other income (expense)
(11,143 ) (17,479 ) Other
income (expense) Interest and other income (expense), net
(2,485 ) (3,198 ) Debt conversion expense (2,436 ) - Loss from
equity method investments (6,523 ) (4,872 ) Gain from change in
fair value of derivative liabilities - 82
Total other income (expense), net
(11,444
) (7,988 ) Loss from continuing
operations
(22,587 ) (25,467 ) Loss
from discontinued operations - (1,045 )
Net
loss $ (22,587 ) $ (26,512
) Net loss per share, basic and diluted Continuing
operations $ (0.23 ) $ (0.31 ) Discontinued operations -
(0.01 )
Net loss per share, basic and diluted
$ (0.23 ) $ (0.32 )
Weighted average number of common shares used in net loss
per share computation - basic and diluted 98,950
81,950 TERRAVIA HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET LOSS AND NET LOSS PER
SHARE In thousands, except per share amounts (UNAUDITED)
Three Months Ended March
31,
2017 2016 GAAP Net loss $
(22,587 ) $ (26,512 ) Operating
expenses includes costs as follows: Research and development 482
544 Sales, general and administrative 1,181
1,983 Total stock-based compensation expense 1,663 2,527
Costs associated with debt restructuring activities 466 -
Restructuring charges 626 1,190 Arbitration award (2,369 ) - Other
income (expense) includes costs as follows: Amortization of debt
discount and issuance costs 577 666 Debt conversion expense 2,436 -
Gain from change in fair value of derivative liabilities - (82 )
Loss from discontinued operations - 1,045
Non-GAAP Net loss $ (19,188 )
$ (21,166 ) GAAP Net loss per share
- basic and diluted $ (0.23 ) $
(0.32 ) Stock-based compensation expense 0.02 0.03
Restructuring charges 0.01 0.01 Arbitration award (0.02 ) -
Amortization of debt discount and issuance costs 0.01 0.01 Debt
conversion expense 0.02 - Loss from discontinued operations
- 0.01
Non-GAAP Net loss per share - basic
and diluted $ (0.19 ) $
(0.26 ) TERRAVIA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS In thousands
(UNAUDITED)
March 31, December 31,
2017 2016
Assets
Current
assets
Cash, cash equivalents and marketable securities $ 44,813 $ 64,031
Other current assets 4,995 3,968
Total current assets 49,808 67,999 Property,
plant and equipment - net 21,393 22,674 Equity method investments
46,082 43,856 Other assets 1,100 1,180
Total assets $ 118,383 $
135,709
Liabilities,
convertible preferred stock and stockholders'
deficit
Convertible debt $ 167,881 $ 174,620 Other 16,200
17,682
Total liabilities 184,081
192,302
Convertible preferred stock
11,508 25,653 Total stockholders' deficit
(77,206 ) (82,246 )
Total liabilities, convertible preferred stock and stockholders'
deficit $ 118,383 $ 135,709
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JM Strategic Communications GroupJeff Majtyka,
646-776-0886jeff@jmscgroup.comorTaylor Krafchik,
646-776-0886taylor@jmscgroup.com