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Calyxt Reports Record Third Quarter 2019 Financial Results

November 6, 2019 GMT

ROSEVILLE, Minn.--(BUSINESS WIRE)--Nov 6, 2019--

Calyxt, Inc. (NASDAQ: CLXT), a plant-based technology company focused on healthy food ingredients, has reported results for its third quarter ended September 30, 2019.

Key Third Quarter and Subsequent Highlights

Management Commentary

“The third quarter of 2019 was marked by a highly encouraging level of market acceptance and growing interest for our proprietary High Oleic, premium soybean oil and our first commercial product,” said Jim Blome, Chief Executive Officer. “We are expanding our geographic footprint and generating weather-risk diversity by growing 2020 acres, bringing five new varieties to market and adding Landus’ seed distribution and agronomy support for our High Oleic Soybeans.

“The TALEN® technology, which powers our innovation platform, is particularly exciting, allowing us to produce a plant that is based on precise and targeted changes to its natural genome. With our established processes we can develop a healthier food ingredient in a short amount of time relative to other development processes. Moreover, we believe we have an exciting product pipeline that we intend to advance over time either through our own commercial organization or in collaboration with other industry participants with established market access and scale,” continued Blome.

“Following our successful completion of a voluntary consultation with the Food and Drug Administration in February 2019, we launched our first commercial product, Calyno, which is a High Oleic Soybean Oil with zero grams of trans fat per serving, a reduced saturated fat content, low polymerization levels, and other unique benefits that make it particularly attractive in multiple food manufacturing and foodservice applications.

“Additionally, one of the world’s largest food service distributors, Sysco, took notice of the strong introduction and currently stocks and sells Calyno to its customers. Sysco’s customer count is now above 60 as commercial kitchens recognize the ROI possibilities that our oil can bring to their bottom line with up to 3X fry life and less varnish compared to commodity oils. Our research indicates that oil is one of the largest drivers of food costs in many restaurants and that the foodservice oil market is a $7.6 billion market segment, representing a large addressable market. We also see progress with food manufacturing, as large-scale industry participants accelerate their testing of specific applications of our oil. This $4.7 billion market segment is particularly appealing because our technology can deliver key characteristics like high stability, long shelf life and low polymerization,” explained Blome.

“To power Calyno’s growth trajectory, we have built out our supply chain – partnering with nearly 175 farmers in the Upper Midwest to grow our proprietary soybeans. Our collaboration with Agtegra, a farmer-owned grain and agronomy cooperative with more than 6,300 active member-owners in eastern North and South Dakota commenced in early 2019 and positions Calyxt with seed distribution, agronomy support, grain storage and transportation services. During the third quarter, we engaged Landus to increase our geographic footprint for acres by adding their seed distribution, agronomy support, grain storage and transportation services in Iowa. With the addition of Landus to our geographic footprint, we now have reach to 40% of the soybean acres grown in the United States. Based on these developments and our current progress, we are reiterating our 100,000 contracted acre target for 2020, up from 36,000 planted acres in 2019.

“We continue to drive our R&D pipeline and expand it to include R&D exploration in canola, hemp, oats, peas, peanuts, potatoes, soybeans and wheat, which advances our leadership position as an innovation platform. We also expanded our go-to-market strategy by seeking to develop collaborations with third parties for that innovation. We anticipate these collaborations will deliver new revenue streams and will drive the monetization of our technology platform,” said Blome.

“From an operating perspective, we have assembled a strong leadership team to drive the business and are adding strategic hires to the team. We are seeing additional revenue opportunities as well as strategic opportunities for our product pipeline. We are excited to deliver healthier food and food ingredients to consumers and I look forward to leveraging our first-mover advantage and cutting-edge technology to create long-term, sustainable value for our shareholders,” concluded Blome.

Third Quarter 2019 Financial Results

“I am pleased with our cash usage trajectory in the third quarter of 2019,” added Bill Koschak, Chief Financial Officer of Calyxt. “We have largely completed investing in our G&A platform required to scale the organization. Future investments are expected to be in R&D as we grow our pipeline and collaboration projects, and in sales, supply chain, quality and food safety to support growth in our soybean product lines. We reiterate our prior FY2019 financial guidance of $7 million to $8 million in revenue and $3 million to $3.25 million in cash usage per month.

“Taking into account our anticipated usage going forward, including operational savings we have identified, I believe our cash position will be sufficient to fund operations to mid-2021,” concluded Koschak.

Third Quarter 2019 Results Conference Call

Calyxt, Inc. will hold a conference call today at 4:30 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2019. Chief Executive Officer Jim Blome, Chief Financial Officer Bill Koschak, Chief Business Development and Supply Chain Officer Manoj Sahoo, Chief Technology Officer Dr. Travis Frey, and Senior Vice President of Sales & Marketing Keith Blanks will host the conference call, followed by a question and answer session.

To access the call, please use the following information:

Date:

Wednesday, November 6, 2019

Time:

4:30 p.m. EST, 1:30 p.m. PST

US & Canada dial-in number:

+1 (877) 407-9747

International dial-in number:

+1 (412) 902-0044

Conference ID:

13695884

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 and available for replay at https://bit.ly/35StOWl and via the investor relations section of the Company’s website here.

A replay of the call will be available for one month following the conference call.

Toll Free Replay Number:

+1 (877) 660-6853

International Replay Number:

+1 (201) 612-7415

Replay ID:

13695884

About Calyxt

Calyxt (NASDAQ: CLXT) is a plant-based technology company that utilizes our patented technology to “Make The Food You Love A Healthier Choice™”. The care we take extends beyond nutritional value. We partner with farmers and food companies to deliver traceable plant-based products developed to be healthier and more sustainable than their conventional counterparts. We use cutting edge plant breeding techniques to develop products that help improve diets. We continuously pursue innovation to deliver good food that is good for you.

Calyxt is located in Roseville, MN and is listed on the NASDAQ market (ticker: CLXT). For further information, please visit our website at www.calyxt.com.

Use of Non-GAAP Financial Information

To supplement our unaudited financial results prepared in accordance with GAAP, we present Adjusted EBITDA, which is not a measure defined by GAAP. We define Adjusted EBITDA as Net Loss excluding Interest, net, Income tax expense, Depreciation and Amortization expense, Stock-based compensation, Payroll tax benefits that are no longer realizable, Section 16 officer transition expenses and Forward Purchase Contract gains and losses. We provide in the table below a reconciliation of Net Loss to Adjusted EBITDA, which is the most directly comparable GAAP financial measure. Adjusted EBITDA is not meant to be considered in isolation or as a substitute for financial information presented in accordance with GAAP, and Adjusted EBITDA should be viewed as supplemental and in addition to Net Loss. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures, which exclude charges that have an effect on our reported financial results. In addition, other companies may report Adjusted EBITDA or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative 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. Moreover, our presentation of Adjusted EBITDA enhances transparency because our management team utilizes this metric in evaluating, and making operational decisions, regarding our business.

The tables below present a reconciliation of Net Loss to Adjusted EBITDA:

 

Three months ended

September 30,

In Thousands

2019

 

2018

Net loss (GAAP measure)

$

(10,669)

 

$

(7,483)

Non-GAAP adjustments:

 

 

 

 

 

Stock-based compensation

 

2,705

 

 

589

Interest, net

 

(32)

 

 

(228)

Income tax expense

 

 

 

Depreciation & amortization

 

362

 

 

356

Payroll tax benefits that are no longer realizable

 

536

 

 

(40)

Section 16 officer transition expenses

 

193

 

 

374

Loss on Forward Purchase Contracts

 

 

 

50

Adjusted EBITDA

$

(6,905)

 

$

(6,382)

 

Nine months ended

September 30,

In Thousands

2019

 

2018

Net loss (GAAP measure)

$

(27,477)

 

$

(19,429)

Non-GAAP adjustments:

 

 

 

 

 

Stock-based compensation

 

6,565

 

 

3,016

Interest, net

 

(296)

 

 

(88)

Income tax expense

 

 

 

Depreciation & amortization

 

1,051

 

 

727

Payroll tax benefits that are no longer realizable

 

411

 

 

(48)

Section 16 officer transition expenses

 

1,054

 

 

374

Loss on Forward Purchase Contracts

 

 

 

413

Adjusted EBITDA

$

(18,692)

 

$

(15,035)

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 subject to risks, uncertainties and assumptions about us, may include projections of our future financial or operating performance, our anticipated product pipeline, collaboration or growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. 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 applicable laws.

Certain market and industry data and forecasts included in this press release were obtained from independent market research, industry publications and surveys, governmental agencies and publicly available information. We believe the data from such third-party sources to be reliable. However, we have not independently verified any of such data and cannot guarantee its accuracy or completeness. Similarly, internal market research and industry forecasts, which we believe to be reliable based upon our management’s knowledge of the market and the industry, have not been verified by any independent sources. While we are not aware of any misstatements regarding the market or industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors, including those 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.

CALYXT, INC.

BALANCE SHEETS

(In Thousands, Except Par Value and Share Amounts)

 

 

September 30,

2019

(unaudited)

 

December 31,

2018

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

66,434

 

 

$

93,794

 

Restricted cash

 

381

 

 

 

381

 

Trade accounts receivable

 

1,304

 

 

 

 

Due from related parties

 

69

 

 

 

46

 

Inventory

 

2,371

 

 

 

 

Prepaid expenses and other current assets

 

1,109

 

 

 

1,301

 

Total current assets

 

71,668

 

 

 

95,522

 

Non-current restricted cash

 

1,135

 

 

 

1,113

 

Land, buildings, and equipment

 

23,337

 

 

 

21,850

 

Other non-current assets

 

270

 

 

 

306

 

Total assets

$

96,410

 

 

$

118,791

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

945

 

 

$

818

 

Accrued expenses

 

1,958

 

 

 

2,007

 

Accrued compensation and benefits

 

1,783

 

 

 

1,305

 

Due to related parties

 

705

 

 

 

1,905

 

Current portion of financing lease obligations

 

349

 

 

 

258

 

Other current liabilities

 

51

 

 

 

711

 

Total current liabilities

 

5,791

 

 

 

7,004

 

Financing lease obligations

 

18,331

 

 

 

18,227

 

Other non-current liabilities

 

159

 

 

 

163

 

Total liabilities

 

24,281

 

 

 

25,394

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 275,000,000 shares authorized; 32,926,312 shares issued and 32,867,413 shares outstanding as of September 30, 2019, and 32,664,429 shares issued and 32,648,893 shares outstanding as of December 31, 2018

 

3

 

 

 

3

 

Additional paid-in capital

 

182,948

 

 

 

176,069

 

Common stock in treasury, at cost; 58,899 shares

 

(875

)

 

 

(230

)

Accumulated deficit

 

(109,892

)

 

 

(82,445

)

Accumulated other comprehensive loss

 

(55

)

 

 

 

Total stockholders’ equity

 

72,129

 

 

 

93,397

 

Total liabilities and stockholders’ equity

$

96,410

 

 

$

118,791

 

 

CALYXT, INC.

STATEMENTS OF OPERATIONS

(Unaudited and in Thousands Except Shares and Per Share Amounts)

 

 

Three Months Ended

September 30,

 

Nine months ended

September 30,

 

2019

 

2018

 

2019

 

2018

Revenue

$

2,967

 

 

$

27

 

 

$

3,533

 

 

$

234

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

3,528

 

 

 

 

 

 

3,865

 

 

 

 

Research and development

 

3,579

 

 

 

3,440

 

 

 

8,536

 

 

 

7,850

 

Selling, general and administrative

 

6,248

 

 

 

3,311

 

 

 

17,723

 

 

 

9,914

 

Management fees and royalties

 

305

 

 

 

975

 

 

 

1,117

 

 

 

1,957

 

Total operating expenses

 

13,660

 

 

 

7,726

 

 

 

31,241

 

 

 

19,721

 

Loss from operations

 

(10,693

)

 

 

(7,699

)

 

 

(27,708

)

 

 

(19,487

)

Interest, net

 

32

 

 

 

228

 

 

 

296

 

 

 

88

 

Foreign currency transaction loss

 

(8

)

 

 

(12

)

 

 

(35

)

 

 

(30

)

Loss before income taxes

 

(10,669

)

 

 

(7,483

)

 

 

(27,447

)

 

 

(19,429

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(10,669

)

 

$

(7,483

)

 

$

(27,447

)

 

$

(19,429

)

Basic and diluted loss per share

$

(0.32

)

 

$

(0.23

)

 

$

(0.84

)

 

$

(0.65

)

Weighted average shares outstanding - basic and diluted

 

32,866,467

 

 

 

32,381,010

 

 

 

32,759,194

 

 

 

30,040,926

 

 

CALYXT, INC.

STATEMENTS OF CASH FLOWS

(Unaudited and in Thousands)

 

 

Nine months ended September 30,

 

2019

 

2018

Operating activities

 

 

 

 

 

 

 

Net loss

$

(27,447

)

 

$

(19,429

)

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

 

 

 

 

 

 

 

Depreciation

 

1,051

 

 

 

727

 

Stock-based compensation

 

6,565

 

 

 

3,016

 

Unrealized foreign exchange gain

 

 

 

 

12

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Trade accounts receivable

 

(1,304

)

 

 

 

Due to/from related parties

 

(1,223

)

 

 

576

 

Inventory

 

(2,371

)

 

 

 

Prepaid expenses and other assets

 

192

 

 

 

(341

)

Accounts payable

 

127

 

 

 

355

 

Accrued expenses

 

(49

)

 

 

880

 

Accrued compensation and benefits

 

478

 

 

 

70

 

Other accrued liabilities

 

(743

)

 

 

518

 

Other non-current assets

 

36

 

 

 

16

 

Net cash used by operating activities

 

(24,688

)

 

 

(13,600

)

Investing activities

 

 

 

 

 

 

 

Purchases of land, buildings and equipment

 

(2,538

)

 

 

(830

)

Net cash used by investing activities

 

(2,538

)

 

 

(830

)

Financing activities

 

 

 

 

 

 

 

Costs incurred related to the issuance of stock

 

 

 

 

(222

)

Proceeds from issuance of common stock

 

 

 

 

57,706

 

Repayments of financing lease obligations

 

(195

)

 

 

 

Proceeds from the exercise of stock options

 

314

 

 

 

2,128

 

Costs incurred related to shares withheld for net share settlement

 

(645

)

 

 

 

Proceeds from the sale and leaseback of land, buildings, and equipment

 

414

 

 

 

 

Net cash (used) provided by financing activities

 

(112

)

 

 

59,612

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(27,338

)

 

 

45,182

 

Cash, cash equivalents and restricted cash - beginning of period

 

95,288

 

 

 

56,664

 

Cash, cash equivalents and restricted cash - end of period

$

67,950

 

 

$

101,846

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191106005896/en/

CONTACT: Calyxt Media Contact:

Trina Lundblad, Director of Corporate Communications

(612) 790-0514

media@calyxt.comCalyxt Investor Relations Contact:

Chris Tyson

Managing Director

MZ Group – MZ North America

(949) 491-8235

CLXT@mzgroup.us

www.mzgroup.us

KEYWORD: MINNESOTA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: RETAIL TECHNOLOGY OTHER TECHNOLOGY AGRICULTURE NATURAL RESOURCES FOOD/BEVERAGE

SOURCE: Calyxt, Inc.

Copyright Business Wire 2019.

PUB: 11/06/2019 04:05 PM/DISC: 11/06/2019 04:05 PM

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