Solazyme reports second quarter results

Solazyme reports second quarter results

"Our product portfolio is well aligned with trends across our targeted end markets, and we are seeing a growing number of projects and customers today.”

Solazyme, Inc. (NASDAQ:SZYM), a renewable oil and specialty ingredients company, announced results for the second quarter ended June 30, 2015.

“We are making good progress against our core deliverables, the commercialization of high value products across food, personal care and industrial markets, and the delivery of key milestones at the Moema JV production facility in Brazil,” said Jonathan Wolfson, CEO of Solazyme. “While there is a lot of work ahead, I am proud of the Solazyme team, and what they have accomplished so far this year. I am excited about what is to come.”

“We are maintaining financial discipline in our operations and focusing our sales efforts on strategic revenue streams,” said Tyler Painter, COO and CFO of Solazyme. “On the commercial side, our product portfolio is well aligned with trends across our targeted end markets, and we are seeing a growing number of projects and customers today.”

Business Review

  • Foods - AlgaVia™ and AlgaWise™: We have a growing number of application projects in process with a variety of food and beverage manufacturers and are starting to see conversions from projects to customers. Most recently, a division of a major multinational food company launched a series of baking mixes using the AlgaVia protein and an exciting new beverage company is launching a meal replacement drink made with an AlgaWise oil.
  • Personal Care - AlgaPūr™ and Algenist®: We transitioned Natura Cosméticos, one of Latin America’s largest cosmetics and personal care product companies, from a development partner into a customer of AlgaPūr™ microalgae oil. We also partnered with BASF for the launch of the world’s first commercial microalgae-derived surfactant for use in home and personal care applications, utilizing AlgaPūr™. We continue to grow and expand our Algenist brand, which is now distributed in more than 2,500 stores in 22 countries and has reached 37 SKUs.
  • Industrials - Encapso™ and Soladiesel®: We continue to expand our Encapso™ work with Flotek in South America, including multiple successful wells in Colombia. In North America, Encapso is experiencing longer than anticipated sales cycles due to lower petroleum prices and substantially reduced rig counts. In our renewable fuels business, we were named one of three suppliers of blended fuel to UPS in support of its renewable fuels program, and we also successfully completed a two-year renewable diesel evaluation with Volkswagen of America.
  • Moema: During the second quarter of 2015, key power and steam redundancy projects were successfully completed which, along with other ongoing work at the facility, has led to significant improvements in power and steam reliability and allowed us to establish fully integrated operations on a more consistent basis. We are currently focused on optimizing and enhancing fully integrated operations from fermentation to oil production and improving overall performance.

Financial Results

Total revenue for the second quarter ended June 30, 2015 was $11.7 million compared with $15.9 million in the second quarter of 2014. The year over year decline in revenues was due to expected decreases in funded program revenue as well as in product revenue due to the timing of certain Algenist sales activities and slower than anticipated adoption rates for Encapso. GAAP net loss was $37.2 million for the second quarter of 2015, compared to net loss of $42.9 million in the prior year period. On a non-GAAP basis, the net loss was $31.7 million for the second quarter of 2015, compared with net loss of $32.9 million in the prior year quarter. A reconciliation of GAAP to non-GAAP results is included below.

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