Exhibit 99.1

 

LOGO   Codexis, Inc.
  200 Penobscot Drive
  Redwood City, CA 94063
 

Tel: 650.421.8100

www.codexis.com

Codexis Grows Revenue 35 Percent in Third Quarter; Raises 2010 Outlook

Redwood City, CA – October 28, 2010 – Codexis, Inc. (NASDAQ: CDXS) today announced financial results for the third quarter ended September 30, 2010.

Financial Highlights

Revenue: For the third quarter of 2010, the company reported revenues of $27.1 million, an increase of 35% from $20.1 million in the third quarter of 2009, primarily due to an increase of $4.9 million in product revenue, representing an increase of 105% over the same time period.

Operating Expenses: Research and development expenses in the third quarter of 2010 were $13.1 million, compared to $12.2 million for the third quarter of 2009. The increase was primarily due to higher depreciation and stock-based compensation expenses. Selling, general and administrative expenses in the third quarter of 2010 declined to $7.9 million compared to $8.7 million same period of 2009 primarily due to a reduction in discretionary expenses.

Net Income/(Loss): Net loss was ($2.7) million, or ($0.08) per share, based on 34.2 million weighted average common shares outstanding in the third quarter of 2010. This compares to a net loss of ($6.2) million during the third quarter of 2009.

Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from ($2.7) million in the third quarter of 2009 to $2.1 million in 2010. Adjusted EBITDA is calculated by adjusting net loss for net interest expense, income taxes, depreciation, amortization, stock-based compensation and preferred stock warrant fair market valuation. A reconciliation of net loss to Adjusted EBITDA is presented below.

Cash: Cash, cash equivalents and marketable securities at September 30, 2010 decreased to $99.3 million compared to $100.3 million at June 30, 2010.

Outlook

Codexis’ statements with regard to its outlook are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under “Forward-Looking Statements” below.

 

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Codexis increases its full year revenue guidance for 2010. For full year 2010, Codexis forecasts revenues of greater than $100 million, which would represent growth of 21% or greater compared to 2009. Codexis affirms its expectation that Adjusted EBITDA will be positive for the full year 2010; and expects Adjusted EBITDA will be greater than $7 million for the year.

Conference Call

Codexis will hold a conference call for investors on October 28, 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 43072209 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 for the company’s biocatalyst-enabled solutions include carbon capture, water treatment and chemicals.

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 filed with the Securities and Exchange Commission on August 6, 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.

 

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Codexis, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except Per Share Amounts)

 

     Three Months Ended
September 30,
          Nine Months Ended
September 30,
       
     2010     2009     % change     2010     2009     % change  

Revenues:

            

Product

   $ 9,491      $ 4,636        105   $ 24,250      $ 13,401        81

Related party collaborative research and development

     16,178        15,000        8     46,873        43,963        7

Collaborative research and development

     1,065        426        150     2,577        1,295        99

Government grants

     379        —          nm        3,593        11        nm   
                                    

Total revenues

     27,113        20,062        35     77,293        58,670        32
                                    

Costs and operating expenses:

            

Cost of product revenues

     8,563        4,618        85     19,856        11,886        67

Gross margin $

     928        18          4,394        1,515     

Gross margin %

     10     0       18     11  

Research and development

     13,070        12,239        7     39,056        39,486        -1

Selling, general and administrative

     7,940        8,699        -9     25,192        20,939        20
                                    

Total costs and operating expenses

     29,573        25,556        16     84,104        72,311        16
                                    

Loss from operations

     (2,460     (5,494     -55     (6,811     (13,641     -50

Interest income

     61        64        -5     135        141        -4

Interest expense and other, net

     (35     (744     -95     (1,047     (1,530     -32
                                    

Loss before provision (benefit) for income taxes

     (2,434     (6,174     -61     (7,723     (15,030     -49

Provision (benefit) for income taxes

     298        (16     nm        324        79        310
                                    

Net loss

   $ (2,732   $ (6,158     -56   $ (8,047   $ (15,109     -47
                                    

Net loss per share of common stock, basic and diluted

   $ (0.08   $ (2.35     $ (0.38   $ (5.79  
                                    

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

     34,200        2,624          21,272        2,609     
                                    

 

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Codexis, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands)

 

     September 30,
2010
    December 31,
2009
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 99,274      $ 31,785   

Marketable securities

     —          23,778   

Accounts receivable, net

     13,841        7,246   

Related party accounts receivable

     1,537        —     

Inventories

     3,245        2,915   

Prepaid expenses and other current assets

     1,871        1,658   
                

Total current assets

     119,768        67,382   

Restricted cash

     666        731   

Property and equipment, net

     21,018        21,581   

Intangible assets, net

     562        928   

Goodwill

     3,241        3,241   

Other non-current assets

     2,821        5,173   
                

Total assets

   $ 148,076      $ 99,036   
                

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

    

Current liabilities:

    

Accounts payable

   $ 8,639      $ 9,999   

Accrued compensation

     6,046        6,518   

Related party payable

     487        1,314   

Other accrued liabilities

     7,856        10,376   

Redeemable convertible preferred stock warrant liability

     —          2,009   

Deferred revenues

     704        2,240   

Related party deferred revenues

     8,622        13,161   

Financing obligations

     4,032        5,368   
                

Total current liabilities

     36,386        50,985   

Deferred revenues, net of current portion

     1,718        1,856   

Related party deferred revenues, net of current portion

     4,424        7,487   

Financing obligations, net of current portion

     —          2,574   

Other long-term liabilities

     1,415        1,307   
                

Total liabilities

     43,943        64,209   

Redeemable convertible preferred stock issuable in series A to F

     —          179,672   

Stockholders’ equity (deficit):

    

Common stock

     4        —     

Additional paid-in capital

     271,832        15,015   

Accumulated other comprehensive loss

     (47     (252

Accumulated deficit

     (167,656     (159,608
                

Total stockholders’ equity (deficit)

     104,133        (144,845
                

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

   $ 148,076      $ 99,036   
                

 

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Codexis, Inc.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

(In Thousands)

 

     Nine Months Ended
September 30,
 
     2010     2009  

Operating activities:

    

Net loss

   $ (8,047   $ (15,109

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

    

Amortization of intangible assets

     402        707   

Depreciation and amortization of property and equipment

     5,298        3,727   

Revaluation of redeemable convertible preferred stock warrant liability

     677        349   

Gain on disposal of property and equipment

     —          (50

Stock-based compensation

     6,466        3,179   

Amortization of debt discount

     70        283   

Accretion (amortization) of premium/discount on marketable securities

     511        368   

Changes in operating assets and liabilities:

    

Accounts receivable

     (8,132     (842

Inventories

     (331     511   

Prepaid expenses and other current assets

     (213     (499

Other assets

     2,602        (629

Accounts payable

     (1,360     (929

Accrued compensation

     (472     1,128   

Accrued related party payable

     (827     (91

Other accrued liabilities

     (3,420     (4,366

Deferred revenues

     (9,276     (3,266
                

Net cash (used in) operating activities

     (16,052     (15,529

Investing activities:

    

Decrease in restricted cash

     65        194   

Purchase of property and equipment

     (4,740     (6,491

Purchase of marketable securities

     (49,051     (35,619

Proceeds from sales of marketable securities

     1,605        —     

Proceeds from maturities of marketable securities

     70,696        17,175   
                

Net cash provided by (used in) investing activities

     18,575        (24,741

Financing activities:

    

Principal payments on financing obligations

     (3,979     (4,004

Payments in preparation for initial public offering

     (3,870     —     

Proceeds from issuance of preferred stock

     —          45,000   

Proceeds from issuance of common stock on IPO, net of underwriting discounts

     72,551        —     

Proceeds from exercises of stock options

     279        72   
                

Net cash provided by financing activities

     64,981        41,068   

Effect of exchange rate changes on cash and cash equivalents

     (15     (57
                

Net increase in cash and cash equivalents

     67,489        741   

Cash and cash equivalents:

    

Beginning of the period

     31,785        21,903   
                

End of the period

     99,274        22,644   

Marketable securities at the end of period

     —          33,318   
                

Cash, cash equivalents and marketable securities

   $ 99,274      $ 55,962   
                

 

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Reconciliation of GAAP to Non-GAAP Financial Information

Adjusted EBITDA (calculated by adjusting net loss for net interest expense, income taxes, depreciation, amortization, stock-based compensation and preferred stock warrant fair market valuation) for the third quarter of 2010 was $2.1 million compared to a loss of $2.7 million in the third quarter of 2009. For the nine months ended September 30, 2010, Adjusted EBITDA improved to $5.5 million from a loss of $6.2 million in the same period in 2009. The key driver of this improvement was a $7.1 million reduction in net loss.

In this press release, in addition to GAAP financial results, 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, Dollars In Thousands)

 

     Three months ended
September 30,
    Nine months ended
September 30,
 

Calculation of Adjusted EBITDA

       2010             2009             2010             2009      

Net income (loss)

   $ (2,732   $ (6,158   $ (8,047   $ (15,109

Adjustments:

Minus: Interest income

     (61     (64     (135     (141

Plus: Interest expense

     130        317        524        1,078   

Plus: Income taxes

     298        (16     324        79   

Plus: Depreciation and amortization

     1,960        1,626        5,700        4,434   

Plus: Stock-based compensation

     2,549        1,286        6,433        3,148   

Plus: Preferred stock warrant fair market valuation adjustment

     —          344        677        349   
                                

Adjusted EBITDA

   $ 2,144      $ (2,665   $ 5,476      $ (6,162
                                

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

 

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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.

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: Robert Lawson, robert.lawson@codexis.com, 650-421-8137

Media: Lyn Christenson, lyn.christenson@codexis.com, 650-421-8144 or Saskia Sidenfaden,

ssidenfaden@mww.com, 212-827-3771.

 

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