Calyxt, Inc. (NASDAQ: CLXT), a plant-based technology company, has reported its financial results for the fourth quarter and full year ended December 31, 2019.
Key Fourth Quarter and 2019 Financial Highlights
Key Fourth Quarter 2019 and Early 2020 Operational Highlights
Product Development and Intellectual Property
Commercialization
Team
Environmental, Social & Governance (ESG)
Full Year 2019 Operational Highlights
Management Commentary
“2019 was a transformative year for Calyxt, centered around four major achievements: first, we built the team to execute on our technology-focused business plan; second, we transformed our R&D team and its work systems; third, we established our soybean supply chain to support our growth trajectory and our future wheat product launch; and fourth, we were the first company to commercialize a gene edited food product focused on consumer health, right here in the United States,” said Jim Blome, Chief Executive Officer of Calyxt.
“The commercialization of our HO soybean products serves as proof of concept and sets the stage for future growth. We intend to introduce new products leveraging a capital-light business model while monetizing multiple collaboration projects. Collaboration revenues are expected to be highly accretive to our current gross margins. We also intend to begin optimizing our soybean gross margins in 2020. We have proven to the world that TALEN® technology, which powers our innovation platform, is capable of improving plants, enabling us to bring healthier and more sustainable products to market.”
“We have assembled an industry-leading team across all our major functions. We have energized the organization and revitalized our product pipeline, more than doubling the projects now under development compared to this time a year ago. We are focused on delivering high value projects to the market,” continued Blome.
“Our HO soybean oil has a robust sales funnel and is being tested by multiple customers. The oil orders we received in early 2020 are a validation of our HO soybean oil’s capability and performance. To meet the expected demand for our oil, we nearly tripled our contracted soybean acreage compared to 2019 planting and expect to have a 25 percent market share of all HO soybean acres planted in the United States in 2020.”
“All of this sets the stage for a breakthrough 2020, where we expect to power our R&D pipeline with new projects and tools, as well as enhanced processes, initiate consultations with regulatory authorities, and continue to make stage advancements in our development process. We expect to begin selling hemp plants we produced using traditional plant breeding techniques. This will be the launch of our second product, and our first of several expected innovations from Calyxt in hemp. What excites me most about this launch is that our scientific team was presented with a challenge in hemp and was able to develop a solution – including a strategy, tools, and work processes – in just a few short months, demonstrating the power of our team. Specific to our soybean products, we expect to expand our customer base across our prioritized market segments, realize synergies in our supply chain, and improve our gross margin profile. We also expect to develop metrics and report on our ESG accomplishments, as much of our innovation is focused in this area as we aggressively push our efforts to revolutionize agriculture.”
“I look forward to providing an update on our technology and R&D pipeline during our upcoming analyst day in the second quarter, and our CFO, Bill Koschak, will be sharing our story with institutional investors at the upcoming 32nd Annual ROTH Conference in Orange County, California on March 16th,” concluded Blome.
Fourth Quarter 2019 Financial Results
Full Year 2019 Financial Results
2020 Financial Guidance
“We maintained our cash usage trajectory throughout 2019, while building out infrastructure to support the robust growth in our soybean business,” added Bill Koschak, Chief Financial Officer of Calyxt. “With investment in our corporate infrastructure, we are set to scale operations in 2020 – both in terms of finalizing new collaborations and increased sales volumes of our soybean products. Going forward we continue to see high revenue growth and an improved margin profile as we continue to bring new products to market leveraging our proprietary gene-editing technology.”
“Looking forward into 2020, we expect to continue our cash usage rate in line with what we delivered in 2019. I expect that our cash position will be sufficient to fund operations into mid-2021,” concluded Koschak.
Fourth Quarter and Full Year 2019 Results Conference Call
Calyxt, Inc. will hold a conference call today at 8:30 a.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2019. Chief Executive Officer Jim Blome, Chief Financial Officer Bill Koschak and Chief Science Officer Dan Voytas will host the conference call, which will be accompanied by a presentation and followed by a question and answer session.
To access the call, please use the following information:
Date: |
Thursday March 5, 2020 |
|
Time: |
8:30 a.m. EST, 5:30 a.m. PST |
|
Toll Free dial-in number: |
1-877-451-6152 |
|
Toll/International dial-in number: |
1-201-389-0879 |
|
Conference ID: |
13697762 |
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 at http://public.viavid.com/index.php?id=137490 and via the investor relations section of the Company’s website here.
The conference call will also be available for replay on the investor section of the Company’s website for one month.
Toll Free Replay Number: |
1-844-512-2921 |
|
International Replay Number: |
1-412-317-6671 |
|
Replay ID: |
13697762 |
The presentation used in the conference call and webcast will be available for reference on the Company’s IR website at https://ir.calyxt.com/.
About Calyxt
Calyxt (NASDAQ: CLXT), based in Roseville, Minnesota is a plant-based technology company. We partner with like-minded farmers and companies to deliver plant-based products with wellness and sustainability benefits. We use cutting edge plant breeding techniques to innovate and develop solutions to address unmet consumer and market demands. For further information, please visit our website at www.calyxt.com.
Use of Non-GAAP Financial Information
To supplement our audited financial results prepared in accordance with GAAP, we have prepared certain non-GAAP measures that include or exclude special items. These non-GAAP measures are not meant to be considered in isolation or as a substitute for financial information presented in accordance with GAAP and should be viewed as supplemental and in addition to our financial information presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In addition, other companies may report similarly titled measures, but calculate them differently, which reduces their usefulness as a comparative measure. Management utilizes these non-GAAP metrics as performance measures in evaluating and making operational decisions regarding our business.
We provide gross margin, as adjusted, a non-GAAP measure that reflects the impact grain costs expensed as R&D and net realizable value adjustments to inventories have on our reported gross margins. Grain costs expensed as R&D before we commercialize a product have the effect of increasing our reported margins post-launch in periods when product with no associated cost were sold. Net realizable value adjustments to our inventories have the effect of decreasing gross margins in a current period that would have been recorded in the future when the underlying product was sold.
We provide in the tables below a reconciliation of gross margin, as adjusted to gross margin, which is the most directly comparable GAAP financial measure. We provide gross margin, as adjusted, because we believe that this non-GAAP financial metric provides investors with useful supplemental information at this early stage of commercialization as the amounts being adjusted affect the period to period comparability of our gross margins and financial performance.
We do not provide a reconciliation of gross margin, as adjusted, on a forward-looking basis as we are not able to determine this measure without unreasonable effort for future periods. The potential amount of net realizable value adjustments to our inventories at year end 2020 is unknown at this time. We are not able to determine that amount because it involves making assumptions about 2020 ending inventories from 2019 and 2020 plantings, 2021 margin expectations based on future selling prices and product costs and future changes in commodity futures markets prices for soybeans.
The tables below present a reconciliation of gross margin to gross margin, as adjusted:
|
Three months ended December 31, |
||||||
In Thousands |
2019 |
2018 |
|||||
Gross margin (GAAP measure) |
$ |
(1,652 |
) |
$ |
2 |
|
|
Gross margin percentage |
|
(44 |
%) |
|
100 |
% |
|
Adjustments: |
|
|
|
|
|
||
Net realizable value adjustment to inventories |
|
37 |
|
|
— |
||
Gross margin, as adjusted |
$ |
(1,615 |
) |
$ |
2 |
|
|
Gross margin, as adjusted, percentage |
|
(43 |
%) |
|
100 |
% |
|
|
|||||||
|
Year Ended December 31, |
||||||||
In Thousands |
2019 |
2018 |
|||||||
Gross margin (GAAP measure) |
$ |
(1,984 |
) |
$ |
236 |
|
|||
Gross margin percentage |
|
(27 |
%) |
|
100 |
% |
|||
Adjustments: |
|
|
|
|
|||||
Grain costs expensed as R&D in a prior period |
|
(3,349 |
) |
|
— |
||||
Net realizable value adjustment to inventories |
|
869 |
|
|
— |
||||
Gross margin, as adjusted |
$ |
(4,464 |
) |
$ |
236 |
|
|||
Gross margin, as adjusted, percentage |
|
(61 |
%) |
|
100 |
% |
|||
We present adjusted EBITDA and define it as net loss excluding interest, net, income tax expense, depreciation and amortization expenses, stock-based compensation expenses, Section 16 officer transition expenses, R&D payroll tax credits that are no longer realizable, grain costs expensed as R&D and net realizable value adjustments to inventories.
We provide in the tables below a reconciliation of adjusted EBITDA to net loss, which is the most directly comparable GAAP financial 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.
The tables below present a reconciliation of net loss to adjusted EBITDA:
|
Three months ended December 31, |
||||||||
In Thousands |
2019 |
2018 |
|||||||
Net loss (GAAP measure) |
$ |
(12,165 |
) |
$ |
(8,468 |
) |
|||
Non-GAAP adjustments: |
|
|
|
|
|
|
|||
Interest, net |
|
186 |
|
|
(176 |
) |
|||
Income tax expense |
|
— |
|
|
— |
|
|||
Depreciation and amortization expenses |
|
556 |
|
|
354 |
|
|||
Stock-based compensation expenses |
|
2,610 |
|
|
1,369 |
|
|||
Section 16 officer transition expenses |
|
117 |
|
|
336 |
|
|||
Research and development payroll tax credit |
|
— |
|
|
(130 |
) |
|||
Grain costs expensed as R&D |
|
— |
|
|
1,230 |
|
|||
Net realizable value adjustment to inventories |
|
37 |
|
|
— |
|
|||
Adjusted EBITDA |
$ |
(8,659 |
) |
$ |
(5,485 |
) |
|||
|
Year Ended December 31, |
||||||||
In Thousands |
2019 |
2018 |
|||||||
Net loss (GAAP measure) |
$ |
(39,612 |
) |
$ |
(27,897 |
) |
|||
Non-GAAP adjustments: |
|
|
|
|
|
|
|||
Interest, net |
|
(110 |
) |
|
(264 |
) |
|||
Income tax expense |
|
— |
|
|
— |
|
|||
Depreciation and amortization expenses |
|
1,607 |
|
|
1,081 |
|
|||
Stock-based compensation expenses |
|
9,175 |
|
|
4,385 |
|
|||
Section 16 officer transition expenses |
|
1,169 |
|
|
740 |
|
|||
Research and development payroll tax credit |
|
411 |
|
|
(250 |
) |
|||
Grain costs expensed as R&D |
|
(3,349 |
) |
|
3,349 |
|
|||
Net realizable value adjustment to inventories |
|
869 |
|
|
— |
|
|||
Adjusted EBITDA |
$ |
(29,840 |
) |
$ |
(18,856 |
) |
|||
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 based on our current assumptions and expectations, are subject to risks and uncertainties. Forward-looking statements in this press release may include statements about our future financial performance, product pipeline and development, commercialization efforts, regulatory progression, potential collaborations and partnerships, growth strategies, and anticipated trends in our business. These statements are predictions based on our current expectations and projections about future events and trends. Our actual results could be materially different than those expressed, implied, or anticipated by forward-looking statements. 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 law.
CALYXT, INC.
|
||||||||||
|
|
December 31, |
||||||||
|
|
2019 |
|
|
2018 |
|||||
Assets |
|
|
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
58,610 |
|
|
$ |
|
93,794 |
|
Restricted cash |
|
|
388 |
|
|
|
381 |
|
||
Trade accounts receivable |
|
|
1,122 |
|
|
|
— |
|
||
Due from related parties |
|
|
— |
|
|
|
46 |
|
||
Inventory |
|
|
2,594 |
|
|
|
— |
|
||
Prepaid expenses and other current assets |
|
|
808 |
|
|
|
1,301 |
|
||
Total current assets |
|
|
63,522 |
|
|
|
95,522 |
|
||
Non-current restricted cash |
|
|
1,040 |
|
|
|
1,113 |
|
||
Land, buildings and equipment |
|
|
23,212 |
|
|
|
21,850 |
|
||
Other non-current assets |
|
|
324 |
|
|
|
306 |
|
||
Total assets |
|
$ |
|
88,098 |
|
|
$ |
|
118,791 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
1,077 |
|
|
$ |
|
818 |
|
Accrued expenses |
|
|
2,544 |
|
|
|
2,007 |
|
||
Accrued compensation and benefits |
|
|
2,181 |
|
|
|
1,305 |
|
||
Due to related parties |
|
|
977 |
|
|
|
1,905 |
|
||
Current portion of financing lease obligations |
|
|
356 |
|
|
|
258 |
|
||
Other current liabilities |
|
|
61 |
|
|
|
711 |
|
||
Total current liabilities |
|
|
7,196 |
|
|
|
7,004 |
|
||
Financing lease obligations |
|
|
18,244 |
|
|
|
18,227 |
|
||
Other non-current liabilities |
|
|
150 |
|
|
|
163 |
|
||
Total liabilities |
|
|
25,590 |
|
|
|
25,394 |
|
||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
||
Common stock, $0.0001 par value; 275,000,000 shares authorized; 33,033,689 shares issued and 32,951,329 shares outstanding as of December 31, 2019 and 32,664,429 shares issued and 32,648,893 shares outstanding as of December 31, 2108 |
|
|
3 |
|
|
|
3 |
|
||
Additional paid-in capital |
|
|
185,588 |
|
|
|
176,069 |
|
||
Common stock in treasury, at cost, shares of 82,360 as of December 31, 2019 and 15,536 as of December 31, 2018 |
|
|
(1,043 |
) |
|
|
(230 |
) |
||
Accumulated deficit |
|
|
(122,057 |
) |
|
|
(82,445 |
) |
||
Accumulated other comprehensive income |
|
|
17 |
|
|
|
— |
|
||
Total stockholders’ equity |
|
|
62,508 |
|
|
|
93,397 |
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
88,098 |
|
|
$ |
|
118,791 |
|
CALYXT, INC.
|
|||||||||||
|
Year Ended December 31, |
||||||||||
|
2019 |
|
2018 |
||||||||
Revenue |
|
$ |
7,296 |
|
|
|
$ |
236 |
|
||
Costs of goods sold |
|
|
9,280 |
|
|
|
|
— |
|
||
Gross margin |
|
|
(1,984 |
) |
|
|
|
236 |
|
||
Operating expenses: |
|
|
|
|
|
|
|
|
|||
Research and development |
|
|
12,213 |
|
|
|
|
10,358 |
|
||
Selling and supply chain |
|
|
5,172 |
|
|
|
|
2,352 |
|
||
General and administrative |
|
|
18,966 |
|
|
|
|
13,356 |
|
||
Management fees |
|
|
1,338 |
|
|
|
|
2,285 |
|
||
Total operating expenses |
|
|
37,689 |
|
|
|
|
28,351 |
|
||
Loss from operations |
(39,673 |
) |
(28,115 |
) | |||||||
Interest, net |
|
|
110 |
|
|
|
|
264 |
|
||
Foreign currency transaction (loss) |
|
|
(49 |
) |
|
|
(46 |
) |
|||
Loss before income taxes |
|
|
(39,612 |
) |
|
|
(27,897 |
) |
|||
Income taxes |
|
|
— |
|
|
|
— |
|
|||
Net loss |
|
$ |
(39,612 |
) |
|
$ |
(27,897 |
) |
|||
Basic and diluted loss per share |
|
$ |
(1.21 |
) |
|
$ |
(0.91 |
) |
|||
Weighted average shares outstanding - basic and diluted |
|
|
32,805,684 |
|
|
|
|
30,683,421 |
|
CALYXT, INC.
|
|||||||
|
Year Ended December 31, |
||||||
|
2019 |
2018 |
|||||
Operating activities |
|
|
|
|
|
|
|
Net loss |
$ |
(39,612 |
) |
$ |
(27,897 |
) |
|
Adjustments to reconcile net loss to net cash used by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization expenses |
|
1,607 |
|
|
1,081 |
|
|
Loss on disposal of land, buildings and equipment |
|
— |
|
|
23 |
|
|
Stock-based compensation |
|
9,175 |
|
|
4,385 |
|
|
Unrealized foreign exchange gain loss |
|
— |
|
|
(12 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Trade accounts receivable |
|
(1,122 |
) |
|
— |
|
|
Due to/from related parties |
|
(882 |
) |
|
676 |
|
|
Inventory |
|
(2,594 |
) |
|
— |
|
|
Prepaid expenses and other assets |
|
493 |
|
|
(726 |
) |
|
Accounts payable |
|
259 |
|
|
(118 |
) |
|
Accrued expenses |
|
537 |
|
|
985 |
|
|
Accrued compensation and benefits |
|
876 |
|
|
360 |
|
|
Other accrued liabilities |
|
(670 |
) |
|
940 |
|
|
Other non-current assets |
|
(18 |
) |
|
51 |
|
|
Net cash used by operating activities |
|
(31,951 |
) |
|
(20,252 |
) |
|
Investing activities |
|
|
|
|
|
|
|
Purchases of land, buildings and equipment |
|
(2,969 |
) |
|
(1,847 |
) |
|
Other |
|
— |
|
|
50 |
|
|
Net cash used by investing activities |
|
(2,969 |
) |
|
(1,797 |
) |
|
Financing activities |
|
|
|
|
|
|
|
Costs incurred related to the issuance of stock |
|
— |
|
|
(665 |
) |
|
Proceeds from common stock issuance |
|
— |
|
|
57,706 |
|
|
Repayments of financing lease obligations |
|
(275 |
) |
|
— |
|
|
Advances from Cellectis |
|
— |
|
|
— |
|
|
Repayment of advances from Cellectis |
|
— |
|
|
— |
|
|
Proceeds from the exercise of stock options |
|
344 |
|
|
2,622 |
|
|
Costs incurred related to shares withheld for net settlement |
|
(813 |
) |
|
(230 |
) |
|
Proceeds from sale and leaseback of land, buildings and equipment |
|
414 |
|
|
1,240 |
|
|
Net cash (used) provided by financing activities |
|
(330 |
) |
|
60,673 |
|
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
(35,250 |
) |
|
38,624 |
|
|
Cash, cash equivalents and restricted cash - beginning of period |
|
95,288 |
|
|
56,664 |
|
|
Cash, cash equivalents and restricted cash - end of period |
$ |
60,038 |
|
$ |
95,288 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200305005280/en/
Calyxt Media Contact:
Trina Lundblad, Director of Corporate Communications
(612) 790-0514
[email protected]
Calyxt Investor Relations Contact:
Chris Tyson, Managing Director
MZ Group – MZ North America
(949) 491-8235
[email protected]
www.mzgroup.us