Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 5, 2010

 

 

Codexis, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-34705   71-0872999

(State or other Jurisdiction of

Incorporation or Organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

Codexis, Inc.

200 Penobscot Drive

Redwood City, CA

  94063
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: 650-421-8100

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition

On August 5, 2010, Codexis, Inc. announced its financial results for the second quarter of 2010. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished and not filed:

 

99.1

   Press Release dated August 5, 2010, entitled “Codexis Grows Revenue 28% in Second Quarter”

 

2


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  CODEXIS, INC.
Date: August 5, 2010   By:  

/S/    ROBERT LAWSON        

    Robert Lawson
    Chief Financial Officer

 

3


EXHIBIT INDEX

 

Exhibit
No.

  

Description

99.1

   Press Release dated August 5, 2010, entitled “Codexis Grows Revenue 28% in Second Quarter”

 

4

Press Release

Exhibit 99.1

 

LOGO   

 

Codexis, Inc.

200 Penobscot Drive

Redwood City, CA 94063

650.421.8100

www.codexis.com

Codexis Grows Revenue 28% in Second Quarter

Redwood City, CA – August 5, 2010 – Codexis, Inc. (NASDAQ: CDXS), a clean technology company, today announced financial results for the second quarter ended June 30, 2010.

Financial Highlights

Revenue: For the second quarter of 2010, the company reported revenue of $24.5 million, an increase of 28% from $19.2 million in the second quarter of 2009. Product revenue of $8.5 million increased 102% over the same time period.

Operating Expenses: Research and development expenses in the second quarter of 2010 were $13.0 million compared to $12.1 million for the second quarter of 2009. The increase was primarily due to higher depreciation and stock-based compensation expenses. Selling, general and administrative expenses in the second quarter of 2010 were $8.7 million compared to $6.2 million for the second quarter of 2009. The increase was primarily due to increased headcount, legal and accounting costs associated with preparing to become a public company and higher stock-based compensation expenses.

Net Income/(Loss): Net loss was ($3.9) million, or ($0.15) per share, based on 26.6 million weighted average common shares outstanding in the second quarter of 2010. The company ended the quarter with 34.2 million shares outstanding as a result of the conversion of preferred stock and the issuance of new shares of common stock in connection with the company’s initial public offering.

Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from ($0.1) million in the second quarter of 2009 to $0.5 million in 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock warrants fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented below.

Cash: Cash, cash equivalents and marketable securities for the second quarter of 2010 increased to $100.3 million compared to $39.3 million at March 31, 2010 and $55.6 million at December 31, 2009. Codexis completed an initial public offering in April 2010, generating net proceeds of $72.5 million.

 

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Outlook

For 2010, Codexis affirms its forecast for 2010 annual revenue of $94 million to $98 million, which would represent growth of 13% to 18% compared to 2009, and affirms its expectation that Adjusted EBITDA will be positive for full year 2010.

Recent Events

In June 2010, Merck and Codexis announced joint receipt of the Presidential Green Chemistry Challenge Award, given by the U.S. Environmental Protection Agency (EPA). The award recognized development of a novel biocatalytic production method for sitagliptin, the active pharmaceutical ingredient in Merck’s Januvia. The new process improved efficiency and significantly decreased waste products, and was the subject of a joint Merck-Codexis paper published June 17, 2010 in the leading peer-review journal Science. This was Codexis’ second EPA Green Chemistry award. The first was received in 2006 for an improved process for a key building block of atorvastatin, the active ingredient in Lipitor from Pfizer.

On June 28, 2010, Peter Strumph joined Codexis as Senior Vice President, Commercial Operations, a new position. Mr. Strumph is responsible for Codexis pharmaceutical product management and manufacturing operations worldwide. He brings to Codexis two decades of experience in senior manufacturing and operations management in the biopharmaceutical industry.

“We are very pleased with the results of our second quarter, highlighted by strong financial performance and important milestones in both pharmaceuticals and bioindustrials,” said Alan Shaw, Ph.D., President and Chief Executive Officer. “We continue to make excellent progress building a strong, sustainable clean technology company.”

Conference Call

Codexis will hold a conference call for investors on August 5, 2010 at 1:30 p.m. PT (4:30 p.m. ET). The conference call dial-in numbers are US: 866-788-0541 or International: 857-350-1679, access code 54501345. A live webcast of the call will also be available from the Investor Relations section of www.codexis.com. A recording of the call will be available by calling US: 888-286-8010 or International: 617-801-6888, access code 87964645 beginning approximately two hours after the call, and will be available for up to thirty days. A webcast replay from today’s call will also be available from the Investor Relations section of www.codexis.com approximately two hours after the call and will be available for up to thirty days.

About Codexis, Inc.

Codexis is a clean technology company. Codexis develops optimized biocatalysts that make industrial processes faster, cleaner and more efficient. Codexis’ technology is commercialized with leading global pharmaceutical companies and in development for advanced biofuels with Shell. Other potential markets include carbon capture, water treatment and chemicals.

 

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Forward-Looking Statements

This press release contains forward-looking statements relating to the Company’s forecast for 2010 revenue and Adjusted EBITDA, which is defined elsewhere in this press release. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results. Factors that could materially affect actual results can be found in Codexis’ Quarterly Report on Form 10-Q dated May 28, 2010, including under the caption “Risk Factors.” Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.

Codexis, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except Share Amounts)

 

     Three Months Ended
June 30,
          Six Months Ended
June 30,
       
     2010     2009     % change     2010     2009     % change  

Revenues:

            

Product

   $ 8,484      $ 4,193      102   $ 14,760      $ 8,765      68

Related party collaborative research and development

     14,653        14,544      1     30,695        28,963      6

Collaborative research and development

     851        461      85     1,511        869      74

Government grants

     492        —        nm        3,214        12      nm   
                                    

Total revenues

     24,480        19,198      28     50,180        38,609      30
                                    

Costs and operating expenses:

            

Cost of product revenues

     6,075        3,412      78     11,293        7,268      55

Gross margin $

     2,409        781          3,467        1,497     

Gross margin %

     28     19       23     17  

Research and development

     13,004        12,112      7     25,986        27,246      -5

Selling, general and administrative

     8,652        6,178      40     17,252        12,241      41
                                    

Total costs and operating expenses

     27,731        21,702      28     54,531        46,755      17
                                    

Loss from operations

     (3,251     (2,504   30     (4,351     (8,146   -47

Interest income

     46        45      2     74        76      -3

Interest expense and other, net

     (654     (358   83     (1,012     (786   29
                                    

Loss before provision for income taxes

     (3,859     (2,817   37     (5,289     (8,856   -40

Provision for income taxes

     87        41      112     26        95      -73
                                    

Net loss

   $ (3,946   $ (2,858   38   $ (5,315   $ (8,951   -41
                                    

Net loss per share of common stock, basic and diluted

   $ (0.15   $ (1.09     $ (0.36   $ (3.44  
                                    

Weighted average common shares used in computing net loss per share of common stock, basic and diluted

     26,557        2,613          14,701        2,602     
                                    

 

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Codexis, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands)

 

     June 30,
2010
    December 31,
2009
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 51,413      $ 31,785   

Marketable securities

     48,894        23,778   

Accounts receivable, net

     7,197        7,246   

Related party accounts receivable

     92        —     

Inventories

     2,176        2,915   

Prepaid expenses and other current assets

     4,788        1,658   
                

Total current assets

     114,560        67,382   

Restricted cash

     668        731   

Property and equipment, net

     21,332        21,581   

Intangible assets, net

     650        928   

Goodwill

     3,241        3,241   

Other non-current assets

     3,224        5,173   
                

Total assets

   $ 143,675      $ 99,036   
                

Liabilities, redeemable convertible preferred stock, and shareholders’ equity (deficit)

    

Current liabilities:

    

Accounts payable

   $ 8,036      $ 9,999   

Accrued compensation

     5,041        6,518   

Related party payable

     268        1,314   

Other accrued liabilities

     7,550        10,376   

Redeemable convertible preferred stock warrant liability

     —          2,009   

Deferred revenues

     501        2,240   

Related party deferred revenues

     4,084        13,161   

Financing obligations

     5,367        5,368   
                

Total current liabilities

     30,847        50,985   

Deferred revenues, net of current portion

     1,764        1,856   

Related party deferred revenues, net of current portion

     5,445        7,487   

Financing obligations, net of current portion

     —          2,574   

Other long-term liabilities

     1,324        1,307   
                

Total liabilities

     39,380        64,209   

Redeemable convertible preferred stock issuable in series A to F

     —          179,672   

Stockholders’ equity (deficit):

    

Common stock

     4        —     

Additional paid-in capital

     269,077        15,015   

Accumulated other comprehensive income (loss)

     137        (252

Accumulated deficit

     (164,923     (159,608
                

Total stockholders’ equity (deficit)

     104,295        (144,845
                

Total liabilities, redeemable convertible preferred stock, and shareholders’ equity (deficit)

   $ 143,675      $ 99,036   
                

 

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Codexis, Inc.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

(In Thousands)

 

     Six Months Ended
June 30,
 
     2010     2009  

Operating activities:

    

Net loss

   $ (5,315   $ (8,951

Adjustments to reconcile net loss to cash used in operating activities:

    

Amortization of intangible assets

     302        462   

Depreciation and amortization of property and equipment

     3,438        2,346   

Revaluation of redeemable convertible preferred stock warrant liability

     677        6   

Stock-based compensation

     3,951        1,893   

Amortization of debt discount

     104        200   

Accretion (amortization) of premium/discount on marketable securities

     183        131   

Changes in operating assets and liabilities:

    

Accounts receivable

     (42     91   

Inventories

     739        (630

Prepaid expenses and other current assets

     (3,126     (617

Other assets

     2,395        50   

Accounts payable

     (1,413     (1,952

Accrued compensation

     (1,477     139   

Accrued related party payable

     (1,046     2   

Other accrued liabilities

     (5,133     (3,924

Deferred revenues

     (12,950     1,290   
                

Net cash (used in) operating activities

     (18,713     (9,464

Investing activities:

    

Decrease in restricted cash

     65        203   

Purchase of property and equipment

     (3,192     (4,518

Purchase of marketable securities

     (49,051     (28,802

Proceeds from sales of marketable securities

     1,605        —     

Proceeds from maturities of marketable securities

     21,960        11,500   
                

Net cash (used in) investing activities

     (28,613     (21,617

Financing activities:

    

Principal payments on financing obligations

     (2,681     (2,674

Payments in preparation for initial public offering

     (3,106     —     

Proceeds from issuance of preferred stock

     —          40,000   

Proceeds from issuance of common stock on IPO

     72,539        —     

Proceeds from exercises of stock options

     254        62   
                

Net cash provided by financing activities

     67,006        37,388   

Effect of exchange rate changes on cash and cash equivalents

     (52     (56
                

Net increase in cash and cash equivalents

     19,628        6,251   

Cash and cash equivalents:

    

Beginning of the period

     31,785        21,903   
                

End of the period

     51,413        28,154   

Marketable securities at the end of period

     48,894        32,403   
                

Cash, cash equivalents and marketable securities

   $ 100,307      $ 60,557   
                

 

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Reconciliation of GAAP to Non-GAAP Financial Information

Adjusted EBITDA (earnings before interest, tax, depreciation, amortization, stock-based compensation and warrant related costs) for the second quarter of 2010 was $0.5 million compared to a loss of $0.1 million in the second quarter of 2009. For the six months ended June 30, 2010, Adjusted EBITDA improved to $3.3 million from a loss of $3.5 million in the same period in 2009. The key driver of this improvement was a $3.6 million reduction in net loss.

We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA as a factor in evaluating management’s performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.

A reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the table below.

Codexis, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(Unaudited)

(In Thousands)

 

     Three Months Ended
June 30
    Six Months Ended
June 30
 

Calculation of Adjusted EBITDA

   2010     2009     2010     2009  

Net income (loss)

   $ (3,946   $ (2,858   $ (5,315   $ (8,951

Adjustments:

        

Minus: Interest income

     (46     (45     (74     (76

Plus: Interest expense

     96        358        394        761   

Plus: Income taxes

     87        41        26        95   

Plus: Depreciation and amortization

     1,884        1,444        3,740        2,808   

Plus: Stock-based compensation

     2,171        962        3,885        1,862   

Plus: Preferred stock warrant fair market valuation adjustment

     281        —          677        6   
                                

Adjusted EBITDA

   $ 527      $ (98   $ 3,333      $ (3,495
                                

Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:

 

   

Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

   

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

 

   

Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

 

   

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

 

   

Non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.

 

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Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

Contacts:

Investors: Derick Sutton, derick.sutton@codexis.com, 650-421-8130

Media: Lyn Christenson, lyn.christenson@codexis.com, 650-421-8144 or Saskia Sidenfaden, ssidenfaden@mww.com, 212-827-3771.

 

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