Exhibit 99.1

LOGO

   

Codexis, Inc.

200 Penobscot Drive

Redwood City, CA 94063

Tel: 650.421.8100

www.codexis.com

Q2 2011 Earnings Press Release

Codexis Reports Second Quarter 2011 Results

Introduces CodeXolTM Detergent Alcohols

Redwood City, CA – July 28, 2011 – Codexis, Inc. (Nasdaq: CDXS) today announced introduction of the CodeXolTM detergent alcohol product line, and announced financial results for the second quarter ended June 30, 2011.

CodeXol Detergent Alcohols:

Detergent alcohols - a $6 billion worldwide market – are used to make surfactants which act as cleaning and emulsifying agents in household products. They are widely used in laundry detergents, shampoos and other consumer products. Detergent alcohols today are made from non-sustainable palm kernel and petroleum sources. CodeXol detergent alcohols will be produced from sustainable sources.

“We look forward to introducing the CodeXol line of detergent alcohols to the household and consumer products markets,” said Alan Shaw, Ph.D., President and Chief Executive Officer. “Major consumer products companies are actively seeking more sustainable raw materials for their products in order to reduce environmental impact and minimize volatility in their supply chains. Detergent alcohols can be made from sugar and, ultimately, sustainable cellulosic biomass. Our proprietary cellulase enzymes, along with the detergent alcohols collaboration with Chemtex that we also announced today, represent important steps toward addressing this growing market need.”

The CodeXolTM product line, a family of detergent alcohols that is under development, is enabled by Codexis’ proprietary CodeEvolver directed evolution technology.

Second Quarter Financial Highlights:

Revenue: For the second quarter of 2011, the company reported revenues of $26.1 million, an increase of 6% from $24.5 million in the second quarter of 2010. Product revenue of $8.4 million decreased 1% over the same time period primarily due to the timing of product orders. Collaborative R&D revenue of $2.5 million increased 198% from $0.9 million in the second quarter of 2010, driven mainly by funded research for our carbon capture program.

Operating Expenses: Research and development expenses in the second quarter of 2011 were $15.0 million, compared to $13.0 million for the second quarter of 2010. The increase was primarily due to an increase in amortization related to intellectual property purchased from Maxygen, Inc. and stock compensation expenses. Selling, general and administrative expenses in the second quarter of 2011 increased to $9.3 million compared to $8.7 million over the same period of 2010, driven by higher stock compensation expense and higher compensation expense due to headcount increases.

Net Loss: Net loss was ($5.0) million, or ($0.14) per share, based on 35.7 million weighted average common shares outstanding in the second quarter of 2011. This compares to a net loss of ($3.9) million or ($0.15) per share during the second quarter of 2010.

Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA decreased from $0.5 million in the second quarter of 2010 to $67,000 in 2011. 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 June 30, 2011, decreased to $72.4 million compared to $82.0 million at March 31, 2011. The company used ($0.3) million in cash from operations in the second quarter.

 

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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.

For the full year 2011, Codexis reaffirms its prior guidance and forecasts revenues of $120 million or greater, which would represent growth of 12% or greater compared to 2010. Codexis expects 2011 Adjusted EBITDA will be $5 million or greater.

Recent Developments

 

   

Codexis announced today a broad collaboration with Chemtex, a wholly-owned company of Italy’s Gruppo Mossi & Ghisolfi (“M&G Group”), to develop and produce sustainable detergent alcohols for use in the household products market. The collaboration includes development of second generation detergent alcohols from cellulosic (non-food) biomass. The collaboration combines Chemtex’s efficient pretreatment technology with Codexis’ high performance enzymes and fermentation process to convert a wide variety of feedstocks into detergent alcohols. The parties expect that the production process will initially be piloted at Chemtex’s R&D facility in Rivalta, Italy. Larger scale demonstrations are anticipated at Chemtex’s 40,000 metric ton per year cellulosic ethanol plant in Crescentino, Italy that is expected to be operational in 2012. Chemtex will provide engineering services for the design and construction of Codexis commercial facilities for the production of detergent alcohols. Codexis will market products resulting from the collaboration.

 

   

Codexis announced today that Pedro I. Mizutani, Executive Vice President in charge of upstream business at Raízen Energia Participações S.A., had been elected to the Codexis Board of Directors effective July 15, 2011. Mr. Mitzutani serves as the Board representative of Raízen, a biofuels joint venture between Shell and Cosan and Codexis’ largest stockholder. Raízen is Brazil’s largest sugar and ethanol producer. Prior to joining Raízen, Mr. Mizutani served as CEO of Cosan Sugar and Ethanol. On June 2, Codexis announced that Equilon Enterprises LLC, a wholly owned subsidiary of Royal Dutch Shell plc, had completed the transfer of approximately 5.6 million shares of Codexis common stock to Raízen. This transfer occurred as part of the closing of the joint venture.

 

   

Codexis announced on July 12, 2011 that it had successfully completed a 20,000 liter scale up of the company’s proprietary cellulase enzymes. This scale up is an important milestone for Codexis as it continues to move toward commercializing these enzymes. Codexis’ cellulase enzymes may be used to convert non-food biomass to fermentable sugars, and ultimately to sustainable products including biofuels and bio-based performance ingredients in household goods such as laundry detergents and shampoos.

 

   

Codexis and Shell have a research and development collaboration agreement that is focused on the development of advanced biofuels. Consistent with its increasing focus on cellulosic ethanol, Shell has decided to shift resources out of the diesel fuel program and into the cellulosic ethanol program. As part of this resource re-allocation, Shell will reduce the number of funded Codexis full-time equivalents, or FTEs, from 128 to 116 effective mid-August 2011, at which point 8 additional FTEs will move to the cellulosic ethanol program funded by Shell.

 

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Conference Call

Codexis will hold a conference call for investors on July 28, 2011 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 93136720 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 is in development for advanced biofuels with Shell, carbon capture and biobased chemicals. Wastewater treatment is a potential future market.

Forward-Looking Statements

This press release contains forward-looking statements relating to the company’s ability to develop and commercialize its CodeXol line of detergent alcohols, the company’s forecast for 2011 revenue and Adjusted EBITDA, the ability of Codexis and Chemtex to develop and commercialize detergent alcohols from a wide variety of feedstocks, the company’s ability to develop and produce cellulase enzymes at commercial scale, and funding and staffing on our Shell biofuels research collaboration. 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 May 6, 2011, included 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
June 30,
    % change     Six Months Ended
June 30,
    % change  
     2011     2010       2011     2010    

Revenues:

            

Product

   $ 8,397      $ 8,484        -1   $ 21,329      $ 14,760        45

Related party collaborative research and development

     14,847        14,653        1     29,670        30,695        -3

Collaborative research and development

     2,538        851        198     5,201        1,511        244

Government grants

     273        492        -45     889        3,214        -72
                                    

Total revenues

     26,055        24,480        6     57,089        50,180        14
                                    

Costs and operating expenses:

            

Cost of product revenues

     7,106        6,075        17     18,756        11,293        66

Gross margin $

     1,291        2,409        -46     2,573        3,467        -26

Gross margin %

     15     28       12     23  

Research and development

     14,965        13,004        15     28,715        25,986        11

Selling, general and administrative

     9,276        8,652        7     18,289        17,252        6
                                    

Total costs and operating expenses

     31,347        27,731        13     65,760        54,531        21
                                    

Loss from operations

     (5,292     (3,251     63     (8,671     (4,351     99

Interest income

     71        46        54     120        74        62

Interest expense and other, net

     16        (654     nm        34        (1,012     nm   
                                    

Loss before provision (benefit) for income taxes

     (5,205     (3,859     35     (8,517     (5,289     61

Provision (benefit) for income taxes

     (165     87        nm        (6     26        nm   
                                    

Net loss

   $ (5,040   $ (3,946     28   $ (8,511   $ (5,315     60
                                    

Net loss per share of common stock, basic and diluted

   $ (0.14   $ (0.15     $ (0.24   $ (0.36  
                                    

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

     35,685        26,557          35,402        14,701     
                                    

 

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Codexis, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands)

 

     June 30,
2011
    December 31,
2010
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 32,082      $ 72,396   

Marketable securities

     14,593        —     

Accounts receivable, net

     11,306        10,620   

Related party accounts receivable

     —          4,713   

Inventories

     4,187        2,817   

Prepaid expenses and other current assets

     2,380        1,646   
                

Total current assets

     64,548        92,192   

Restricted cash

     1,512        1,466   

Non-current marketable securities

     25,769        1,650   

Property and equipment, net

     21,611        21,452   

Intangible assets, net

     18,301        20,158   

Goodwill

     3,241        3,241   

Other non-current assets

     1,153        1,141   
                

Total assets

   $ 136,135      $ 141,300   
                

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 7,714      $ 9,208   

Accrued compensation

     5,019        8,107   

Other accrued liabilities

     7,406        5,630   

Deferred revenues

     386        455   

Related party deferred revenues

     4,084        4,084   
                

Total current liabilities

     24,609        27,484   

Deferred revenues, net of current portion

     1,579        1,671   

Related party deferred revenues, net of current portion

     1,361        3,403   

Other long-term liabilities

     1,800        1,381   
                

Total liabilities

     29,349        33,939   

Stockholders’ equity:

    

Common stock

     4        4   

Additional paid-in capital

     283,028        275,540   

Accumulated other comprehensive loss

     415        (34

Accumulated deficit

     (176,661     (168,149
                

Total stockholders’ equity

     106,786        107,361   
                

Total liabilities and stockholders’ equity

   $ 136,135      $ 141,300   
                

 

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Codexis, Inc.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

(In Thousands)

 

     Six Months Ended
June 30,
 
     2011     2010  

Operating activities:

    

Net loss

   $ (8,511   $ (5,315

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

    

Amortization of intangible assets

     1,858        302   

Depreciation and amortization of property and equipment

     3,760        3,438   

Revaluation of redeemable convertible preferred stock warrant liability

     —          677   

Loss (gain) on disposal of property and equipment

     59        —     

Gain from extinguishment of asset retirement obligation

     (124     —     

Stock-based compensation

     4,856        3,951   

Accretion of asset retirement obligation

     29        —     

Amortization of debt discount

     —          104   

Accretion (amortization) of premium/discount on marketable securities

     51        183   

Changes in operating assets and liabilities:

    

Accounts receivable

     4,027        (42

Inventories

     (1,370     739   

Prepaid expenses and other current assets

     (735     (3,126

Other assets

     (13     2,395   

Accounts payable

     (1,493     (1,413

Accrued compensation

     (3,088     (1,477

Related party payable

     —          (1,046

Other accrued liabilities

     2,554        (5,133

Deferred revenues

     (2,203     (12,950
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (343     (18,713
  

 

 

   

 

 

 

Investing activities:

    

(Increase) decrease in restricted cash

     (46     65   

Purchase of property and equipment

     (4,187     (3,192

Purchase of marketable securities

     (38,152     (49,051

Proceeds from sale of marketable securities

     —          1,605   

Proceeds from maturities of marketable securities

     —          21,960   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (42,385     (28,613
  

 

 

   

 

 

 

Financing activities:

    

Principal payments on financing obligations

     —          (2,681

Payments in preparation for initial public offering

     —          (3,106

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

     —          72,539   

Proceeds from exercises of stock options

     2,390        254   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     2,390        67,006   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     24        (52
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (40,314     19,628   

Cash and cash equivalents:

    

Beginning of the period

     72,396        31,785   
  

 

 

   

 

 

 

End of the period

     32,082        51,413   

Marketable securities at the end of period

     40,362        48,894   
  

 

 

   

 

 

 

Cash, cash equivalents and marketable securities

   $ 72,444      $ 100,307   
  

 

 

   

 

 

 

 

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Reconciliation of GAAP to Non-GAAP Financial Information

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 to evaluate the effectiveness of our business strategies.

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

Codexis, Inc.

Reconciliation of GAAP Net Loss to Adjusted EBITDA

(Unaudited)

(In Thousands)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 

Calculation of Adjusted EBITDA

   2011     2010     2011     2010  

Net loss

   $ (5,040   $ (3,946   $ (8,511   $ (5,315

Adjustments:

        

Minus: Interest income

     (71     (46     (120     (74

Plus: Interest expense

     —          96        —          394   

Plus: Income taxes

     (165     87        (6     26   

Plus: Depreciation and amortization

     2,794        1,884        5,618        3,740   

Plus: Stock-based compensation

     2,549        2,171        4,835        3,885   

Plus: Preferred stock warrant fair market valuation adjustment

     —          281        —          677   
                                

Adjusted EBITDA

   $ 67      $ 527      $ 1,816      $ 3,333   
                                

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;

 

   

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.

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: Henk Adriaenssens, ir@codexis.com, 650-421-8331

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

 

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