PR Newswire | Nov 5, 2020 08:02AM EST

11/05 07:00 CST

Amyris, Inc. Reports Third Quarter 2020 Financial ResultsRecord Product Revenue, Lower Cash Operating Expense, and Expanded Gross Margins EMERYVILLE, Calif., Nov. 5, 2020

EMERYVILLE, Calif., Nov. 5, 2020 /PRNewswire/ -- Amyris, Inc. (Nasdaq: AMRS), a leading synthetic biotechnology company in Sustainable Health and Clean Beauty markets through its consumer brands and a top supplier of sustainably sourced natural ingredients, today announced financial results for its third quarter ended September 30, 2020.

John Melo, President and Chief Executive Officer of Amyris said, "The third quarter of 2020 was another strong quarter for our company. Our ability to deliver record Product Revenue in these difficult and uncertain times is a testament to the resiliency of our team, the growing trend of consumers' commitment to sustainable brands, our products, and the robustness of our business model."

Mr. Melo added, "During the quarter, we continued to execute across the strategic priorities we laid out in the beginning of the year. Our consumer business is growing at over three times 2019 revenue and delivered significantly expanded Gross Margin. We expect the combination of a strong fourth quarter along with the successful completion of strategic transactions to set us up for a profitable 2021."

Q3 2020 Financial Highlights

* Sales Revenue: Product Revenue (Consumer & Ingredients) of $31 million was up 58% compared with the prior year quarter, with year-over-year revenue growth in Consumer (+203%) and Ingredients (+21%). * Cash operating expense of $43 million improved $5 million or 10% versus the prior year quarter, mostly due to lower G&A expense. * Adjusted EBITDA of -$33 million improved $10 million year-over-year due to strong revenue growth, improved gross margin and lower operating expense. * Interest expense of $7 million was down $10 million or 61% from Q3 2019 due to lower debt and an improved average interest rate.

Strategic Highlights

1.High growth consumer brands: above-market growth

* Recent Progress: * Our wholly owned consumer brands delivered 220% growth on a year-to-date basis. Product Revenue demonstrated three consecutive quarters of >55% YoY growth. * Continued international growth of Biossance.

* Upcoming milestone: * Pipette & fast-tracked to launch in China in November. * Biossance Entering China by year end

2.Scientific and commercial collaboration: fast time from lab to industrial scale

* Recent Progress: * Executed agreement with the Infectious Disease Research Institute (IDRI) to accelerate development of a mRNA vaccine platform, starting with COVID-19 as first application. * Scaled commercial production of Cannabigerol (CBG), leveraging our fermentation process capability.

* Upcoming milestone: * On track to deliver four molecules at scale, surpassing 2020 target of two to three. * Q4 Ingredients revenue to benefit from new products to market.

3.Supply chain optimization: enhanced product margins

* Recent Progress: * Year-to-date gross margins improved versus 2019 driven by both Consumer and Ingredients. Consumer margins were 67% year-to-date, well within the 60-70% anticipated target range. * Cosmetics Ingredient Business delivered 49% adjusted EBITDA margin.

* Upcoming milestone: * Construction of integrated Brazil ingredients plant on track for Q4 2021 commissioning.

4. Improved balance sheet, earnings and cash flow: financial foundation for success

* Recent Progress: * Improved margin profile of consumer brands and ingredients portfolio. * Q3 cash operating expense improved 10%, mostly due to lower G&A. * Q3 interest expense was down 61%. Debt was reduced 41% since the start of 2020.

Q3 2020 and Year-to-Date (YTD) Sales Revenue

Three Months Ended Nine Months Ended September 30, September 30,

(In millions) 2020 2019 YoY% 2020 2019 YoY%

Consumer 12.3 4.1 203% 34.4 10.8 220%

Ingredients 18.8 15.6 21% 42.2 33.7 25%

Product $ 31.1 $ 19.7 58% $ 76.6 $ 44.5 72%

Collaborations & Grants 3.1 7.0 -56% 12.0 15.5 -23%

Underlying Total $ 34.3 $ 26.7 28% $ 88.6 $ 59.9 48%

Other^1 -- 8.2 4.8 52.1

Reported Total $ 34.3 $ 35.0 -2% $ 93.4 $ 112.0 -17%

^1 Other: includes Vitamin E transaction and 2019 Lavvan collaboration revenue

* Q3 reported Total Revenue of $34 million included strong Product Revenue growth compared to the prior year quarter. * Q3 Product Revenue of $31 million increased $11 million or 58% compared with the prior year quarter, with year-over-year revenue growth in Consumer (+203%) and Ingredients (+21%). Q3 marks the third consecutive quarter of tripled year-over-year Consumer Revenue. * YTD Sales Revenue also saw strong growth from Product Revenue, partly offset by lower Collaboration Revenue.

Q3 2020 and Year-to-Date (YTD) Other Key Financials

* Q3 Gross margin of 41% was supported by strong improvement in Product margins. Q3 Product gross margin of 35% grew $11 million versus the prior year quarter with a $9 million year-over-year improvement from Consumer and $2 million from Ingredients. YTD Gross margin also reflected a strong improvement in Product margins. Prior year gross margins were helped by higher Collaboration Revenue and a one-off Vitamin E transaction. * Q3 Cash Operating Expense of $43 million improved $5 million or 10% versus the prior year quarter. Improvements in G&A and R&D expense were partly redirected to marketing investments to support Consumer brand growth. T&E expense was down due to COVID-19. Sequential cash operating expense was flat despite continued topline growth. YTD cash operating expense of $130 million was down $6 million or 4%. * Q3 Adjusted EBITDA of -$33 million improved $10 million versus the prior year quarter due to strong revenue growth, improved gross margins and lower expense. YTD adjusted EBITDA of -$101 million improved from -$131 million in the prior year driven by gross margin growth and lower operating expense. Adjusted EBITDA excludes one-time impact from Vitamin E, Lavvan revenue and a one-off credit loss. * Interest Expense of $7 million was down $10 million or 61% from Q3 2019 due to lower debt and an improved average interest rate. Q3 2020 finished with debt of $175m, which compares to $241m at the end of the prior year quarter. YTD interest expense of $42 million improved by $3 million. * Q3 GAAP Net Income of -$23 million compared with -$60 million in 2019. The year-over-year and year-to-date comparisons are impacted by various non-cash adjustments related to fair value of derivatives and debt. * Diluted EPS of -$0.41 compared with -$0.56 for Q3 of 2019. YTD diluted EPS was -$1.46, which compared to -$2.11 for YTD 2019.

Despite strong financial performance in the third quarter, the extent to which the COVID-19 pandemic could affect Amyris' future financial results and operations is subject to a high degree of uncertainty, and therefore the company is not providing formal guidance at this time.

FINANCIAL RESULTS AND NON-GAAP INFORMATION

To supplement our financial results and guidance presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. These non-GAAP measures are among the factors management uses in planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Amyris's historical performance as well as comparisons to the operating results of other companies. Management believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management to understand, manage, and evaluate our business and make operating decisions. Our non-GAAP financial measures include the following:

Non-GAAP net income (loss) is calculated as GAAP net income/loss excluding stock-based compensation expense, gains or losses from change in fair value of debt, gains and losses from changes in the fair value of derivatives, losses on debt extinguishment, losses allocated to participating securities, deemed dividends to preferred stockholders, contract asset credit loss reserve, inventory lower of cost or net realizable value adjustments, loss from investment in affiliate and other income/expense.

Adjusted diluted EPS is calculated by dividing Non-GAAP net income (loss) by the weighted average shares, basic and diluted outstanding for the period.

Non-GAAP Gross Margin (Gross Margin) is calculated as GAAP revenues divided by GAAP cost of products sold excluding excess capacity, depreciation and amortization, other costs/provisions and inventory lower of cost or net realizable value adjustments.

Non-GAAP Cash Operating Expense is calculated as GAAP Operating Expense minus non-cash stock-based compensation, depreciation and amortization. In Q3 2020 it also excluded a one-off credit loss.

EBITDA is calculated as GAAP net loss less interest, expense, income tax expense, depreciation and amortization, deemed dividends to preferred stockholders and losses allocated to participating securities.

Adjusted EBITDA is calculated as EBITDA less stock-based compensation expense, gains or losses from change in fair value of debt, gains and losses from changes in the fair value of derivatives, losses on debt extinguishment, other income/expense, net, loss from investment in affiliate, contract asset credit loss reserve and inventory lower of cost or net realizable value adjustments.

Non-GAAP financial information is not prepared under a comprehensive set of accounting rules, and therefore, should only be read in conjunction with financial information reported under U.S. GAAP in order to understand Amyris's operating performance. A reconciliation of the non-GAAP financial measures presented in this release to the most directly comparable GAAP financial measure, is provided in the tables attached to this press release.

Conference CallAmyris will host its third quarter 2020 conference call today at 9:00 am ET (6:00 am PT) to discuss its financial results and provide an update on the company's business. Those who wish to listen to the conference call should dial into (877) 870-4263 (U.S.) or (412)-317-0790 (international) and ask to be joined to the Amyris, Inc. call. A live webcast of the call will be available online on the Amyris website. To listen via live webcast, please visit: http://investors.amyris.com.

A replay of the webcast will be available on the Investor Relations section of the company's website approximately two hours after the conclusion of the call. Additional information on Amyris' third quarter 2020 results can also be found on the Company's website.

About AmyrisAmyris (Nasdaq: AMRS) is a science and technology leader in the research, development and production of sustainable ingredients for the Sustainable Health, Clean Beauty and Flavors & Fragrances markets. Amyris uses an impressive array of exclusive technologies, including state-of-the-art machine learning, robotics and artificial intelligence. Our ingredients are included in over 3,000 products from the world's top brands, reaching more than 200 million consumers. Amyris is proud to own three consumer brands - all built around its No Compromise(r) promise of clean ingredients: Biossance(tm) clean beauty skincare, Pipette(tm) clean baby skincare and Purecane(tm), a zero-calorie sweetener naturally derived from sugarcane. For more information, please visit www.amyris.com.

Forward-Looking StatementsThis release contains forward-looking statements, and any statements other than statements of historical fact could be deemed to be forward-looking statements. These forward-looking statements include, among other things, statements regarding future events, such as anticipated completion of strategic transactions and achievement of milestones, growth in the Sustainable Health and Clean, Beauty and Wellness markets, including international expansion and timing thereof, expected sustained cash generation and profitability, development of vaccines, delivery of molecules at scale, and operational optimization, including the expected commissioning of the new plant in Brazil, and expectations regarding Amyris's financial and operational results and ability to achieve its business plan in 2020 and beyond. These statements are based on management's current expectations and actual results and future events may differ materially due to risks and uncertainties, including risks related to Amyris's liquidity and ability to fund operating and capital expenses, risks related to its financing activities, risks related to potential delays or failures in development, production and commercialization of products, risks related to Amyris's reliance on third parties, and other risks detailed from time to time in filings Amyris makes with the Securities and Exchange Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Amyris disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise.

Amyris, the Amyris logo, No Compromise, Biossance, Pipette, and Purecane are trademarks or registered trademarks of Amyris, Inc. in the U.S. and/or other countries.

Financial Tables Follow

Amyris, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)

(In thousands, except shares and per share amounts) September 30, December 31, 2020 2019

Assets

Current assets:

Cash and cash equivalents $ 38,280 $ 270

Restricted cash 329 469

Accounts receivable, net 27,365 16,322

Accounts receivable - related party, net 419 3,868

Contract assets 2,081 8,485

Contract assets - related party 1,204 -

Inventories 37,212 27,770

Deferred cost of products sold - related party 9,454 3,677

Prepaid expenses and other current assets 14,894 12,750

Total current assets 131,238 73,611

Property, plant and equipment, net 29,791 28,930

Contract assets, noncurrent - related party - 1,203

Deferred cost of products sold, noncurrent - related 11,858 12,815party

Restricted cash, noncurrent 960 960

Recoverable taxes from Brazilian government entities 5,127 7,676

Right-of-use assets under financing leases, net 10,702 12,863

Right-of-use assets under operating leases, net 10,904 13,203

Other assets 5,359 9,705

Total assets $ 205,939 $ 160,966

Liabilities, Mezzanine Equity and Stockholders'Deficit

Current liabilities:

Accounts payable $ 30,357 $ 51,234

Accrued and other current liabilities 28,430 36,655

Financing lease liabilities 3,882 3,465

Operating lease liabilities 5,051 4,625

Contract liabilities 4,430 1,353

Debt, current portion 31,431 45,313

Related party debt, current portion - 18,492

Total current liabilities 103,581 161,137

Long-term debt, net of current portion 26,176 48,452

Related party debt, net of current portion 116,799 149,515

Financing lease liabilities, net of current portion 1,171 4,166

Operating lease liabilities, net of current portion 11,109 15,037

Derivative liabilities 3,834 9,803

Other noncurrent liabilities 21,996 23,024

Total liabilities 284,666 411,134

Commitments and contingencies

Mezzanine equity:

Contingently redeemable common stock 5,000 5,000

Stockholders' deficit:

Preferred stock - -

Common stock 24 12

Additional paid-in capital 1,938,411 1,543,668

Accumulated other comprehensive loss (49,505) (43,804)

Accumulated deficit (1,977,075) (1,755,653)

Total Amyris, Inc. stockholders' deficit (88,145) (255,777)

Noncontrolling interest 4,418 609

Total stockholders' deficit (83,727) (255,168)

Total liabilities, mezzanine equity and $ 205,939 $ 160,966stockholders' deficit

Amyris, Inc.

CONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(In thousands, except shares and per share 2020 2019 2020 2019amounts)

Revenue:

Renewable products $ $ $ $ 27,577 17,363 70,619 41,367

Licenses and royalties 3,563 2,305 9,714 43,387

Grants and collaborations 3,118 15,285 13,060 27,267

Total revenue 34,258 34,953 93,393 112,021

Cost and operating expenses:

Cost of products sold 25,822 20,654 60,710 53,482

Research and development^(1) 18,197 19,032 52,288 56,093

Sales, general and administrative^(1) 38,321 33,341 100,838 92,456

Total cost and operating expenses 82,340 73,027 213,836 202,031

Loss from operations (48,082) (38,074) (120,443) (90,010)

Other income (expense):

Interest expense (6,627) (16,857) (41,747) (44,608)

Gain (loss) from change in fair value of 1,999 (398) (6,498) (2,437)derivative instruments

Gain (loss) from change in fair value of 34,360 (2,055) 2,908 (18,629)debt

Loss upon extinguishment of debt (2,606) (2,721) (51,954) (8,596)

Other income (expense), net (49) 1,076 1,452 920

Total other expense, net 27,077 (20,955) (95,839) (73,350)

Loss before income taxes and loss from (21,005) (59,029) (216,282) (163,360)investment in affiliate

Provision for income taxes (83) (533) (273) (533)

Loss from investment in affiliate (366) - (1,058) -

Net loss (21,454) (59,562) (217,613) (163,893)

Less: income attributable to noncontrolling (1,702) - (3,809) -interest

Net loss attributable to Amyris, Inc. (23,156) (59,562) (221,422) (163,893)

Less: deemed dividend to preferredstockholder on issuance and modification of - - - (34,964)common stock warrants

Less: deemed dividend to preferredstockholders on conversion of Series E (67,151) - (67,151) -preferred stock

Less: loss allocated to participating 6,832 1,655 15,369 6,233securities

Net loss attributable to Amyris, Inc. common (83,475) (57,907) (273,204) (192,624)stockholders, basic

Adjustment to earnings allocated to 744 - 120 -participating securities

Interest on convertible debt 1,081 - 317 -

Gain from change in fair value of debt (17,221) - (5,945) -

Net loss attributable to Amyris, Inc. common $ $ $ $stockholders, diluted (98,871) (57,907) (278,712) (192,624)

Weighted-average shares of common stockoutstanding used in computing loss per share 227,267,553 103,449,612 189,192,973 91,344,150of common stock, basic

Basic loss per share attributable to common $ $ $ $ stockholders (0.37) (0.56) (1.44) (2.11)

Weighted-average shares of common stock 227,267,553 103,449,612 189,192,973 91,344,150outstanding

Effect of dilutive convertible debt 15,464,681 - 2,313,525 -

Weighted-average shares of common stockequivalents used in computing loss per share 242,732,234 103,449,612 191,506,498 91,344,150of common stock, diluted

Diluted loss per share attributable to $ $ $ $ common stockholders (0.41) (0.56) (1.46) (2.11)

^(1)Includes stock-based compensationexpense as follows:

Research and development $ $ $ $ 928 663 2,774 2,002

Sales, general and administrative 2,492 2,571 7,081 8,058

$ $ $ $ 3,420 3,234 9,855 10,060

Amyris, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIALINFORMATION(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(In thousands, except per share data) 2020 2019 2020 2019

Net loss attributable to Amyris, Inc. common $ $ $ $stockholders - Basic (GAAP) (83,475) (57,907) (273,204) (192,624)

Non-GAAP adjustments:

Stock-based compensation expense 3,420 3,234 9,855 10,060

(Gain) loss from change in fair value of (1,999) 398 6,498 2,437derivative instruments

(Gain) loss from change in fair value of (34,360) 2,055 (2,908) 18,629debt

Loss upon extinguishment of debt 2,606 2,721 51,954 8,596

Income attributable to noncontrolling 1,702 - 3,809 -interest

Deemed dividend to preferred stockholder onissuance and modification of common stock - - - 34,964warrants

Loss allocated to participating securities (6,832) (1,655) (15,369) (6,233)

Deemed dividend upon conversion of Series E 67,151 - 67,151 -preferred stock into common stock

Contract asset credit loss reserve 8,342 - 8,342 -

Inventory lower-of-cost-or-net realizable 1,337 (1,080) 374 (1,396)value adjustment

Other (income) expense, net, and loss from 415 (1,076) (394) (920)investment in affiliate

Net loss attributable to Amyris, Inc. common $ $ $ $stockholders - Basic (non-GAAP) (41,693) (53,310) (143,892) (126,487)

Weighted-average shares outstanding

Weighted-average shares of common stockoutstanding used in computing loss per share 227,267,553 103,449,612 189,192,973 91,344,150of common stock, basic

Loss per share attributable to Amyris, Inc. $ $ $ $ common stockholders - Basic (GAAP) (0.37) (0.56) (1.44) (2.11)

Non-GAAP adjustments:

Stock-based compensation expense 0.02 0.03 0.05 0.11

(Gain) loss from change in fair value of (0.01) 0.00 0.03 0.03derivative instruments

(Gain) loss from change in fair value of (0.15) 0.02 (0.02) 0.20debt

Loss upon extinguishment of debt 0.01 0.03 0.27 0.09

Income attributable to noncontrolling 0.01 - 0.02 -interest

Deemed dividend to preferred stockholder onissuance and modification of common stock - - - 0.38warrants

Loss allocated to participating securities (0.03) (0.02) (0.08) (0.07)

Deemed dividend upon conversion of Series E 0.30 - 0.35 -preferred stock into common stock

Contract asset credit loss reserve 0.04 - 0.04 -

Inventory lower-of-cost-or-net realizable 0.01 (0.01) 0.00 (0.02)value adjustment

Other (income) expense, net, and loss from 0.00 (0.01) (0.00) (0.01)investment in affiliate

Net loss per share attributable to Amyris, $ $ $ $ Inc. common stockholders - Basic (non-GAAP)^ (0.18) (0.52) (0.76) (1.38)(1)

^(1)Amounts may not sum due to rounding.

Three Months Ended Nine Months Ended September 30, September 30,

Adjusted EBITDA 2020 2019 2020 2019

GAAP net loss attributable to Amyris, Inc. $ $ $ $common stockholders - Basic (83,475) (57,907) (273,204) (192,624)

Interest expense 6,627 16,857 41,747 44,608

Income taxes 83 533 273 533

Depreciation and amortization 1,905 969 5,300 2,691

Deemed dividend to preferred stockholder onissuance and modification of common stock - - - 34,964warrants

Deemed dividend upon conversion of Series E 67,151 - 67,151 -preferred stock into common stock

Loss allocated to participating securities (6,832) (1,655) (15,369) (6,233)

EBITDA (14,541) (41,203) (174,102) (116,061)

Income attributable to noncontrolling 1,702 - 3,809 -interest

Gain (loss) from change in fair value ofderivative instruments and debt, loss uponextinguishment of debt, other (income) (33,338) 4,098 55,150 28,742expense, and loss from investment inaffiliate

Inventory lower-of-cost-or-net realizable 1,337 (1,080) 374 (1,396)value adjustment

Stock-based compensation 3,420 3,234 9,855 10,060

Contract asset credit loss reserve 8,342 - 8,342 -

Adjusted EBITDA $ $ $ $ (33,078) (34,951) (96,572) (78,655)

Amyris, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(In thousands) 2020 2019 2020 2019

Revenue (GAAP and non-GAAP) $34,258 $34,953 $ $112,021 93,393

Cost of products sold (GAAP) $25,822 $20,654 $ $ 60,710 53,482

Other costs/provisions (3,848) (1,103) (8,937) (3,924)

Inventory lower-of-cost-or-net realizable (1,337) 1,080 (374) 1,396value adjustment

Excess capacity (90) (757) (571) (1,430)

Depreciation and amortization (407) (218) (846) (496)

Cost of products sold (non-GAAP) $20,140 $19,656 $ $ 49,982 49,028

Adjusted gross profit (non-GAAP) $14,118 $15,297 $ $ 43,411 62,993

Gross margin % 41% 44% 46% 56%

Research and development expense (GAAP) $18,197 $19,032 $ $ 52,288 56,093

Stock-based compensation expense (928) (663) (2,774) (2,002)

Depreciation and amortization (1,271) (471) (3,763) (1,341)

Research and development expense $15,998 $17,898 $ $(non-GAAP) 45,751 52,750

Sales, general and administrative expense $38,321 $33,341 $100,838 $(GAAP) 92,456

Stock-based compensation expense (2,440) (2,571) (7,029) (8,058)

Depreciation and amortization (227) (279) (691) (854)

Contract asset credit loss reserve (8,342) - (8,342) -

Sales, general and administrative expense $27,312 $30,491 $ $(non-GAAP) 84,776 83,544

Cash operating expense 43310 $48,389 $130,527 $136,294

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SOURCE Amyris, Inc.