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Press Release

BioAmber Inc. Announces Record Revenues for the Fourth Quarter and Year End 2017

BioAmber
Posted on: 31 Mar 18

MONTREAL, March 27, 2018 /PRNewswire/ - BioAmber Inc. (OTCPK: BIOA) today announced operational and financial results for the three months and year ended December 31, 2017.

Q4 2017 Highlights:

The fourth quarter revenue of $5.4 million is a record quarter for BioAmber and a 755% increase on a year over year basis.

Profitability in the fourth quarter showed material gains from Q4, 2016. Gross margins improved from -231% to -20%, while total operating costs were reduced by 17% when excluding the impairment charge and write-off of property and intangible assets.

New applications for BioAmber's bio-succinic acid continue to grow our customer base and drive our revenue opportunities. We added another 5 customers in Q4, 2017, and an additional 8 thus far in Q1, 2018, bringing our total customer base to over 80. We are now exporting to 17 countries from our Sarnia, Ontario plant.

BioAmber Sarnia was approved as a participant in the Ontario Cap and Trade Program. We foresee the allowances gained through participation in this program as having a positive impact on our profitability as we ramp up to full capacity.

During the fourth quarter BioAmber recorded an impairment charge and write-off of $78 million. This charge is a non-cash item.

Full Year 2017 Highlights:

2017 sales of bio-succinic acid were $14.9 million, an increase of 81% over the previous year.

We continue to work towards the adoption of bio-succinic acid in the manufacture of PET bottles. Our independent development partners have had successful scale up trials for PET packaging resin in both China and Spain.

We received independent, positive results on the benefits of bio-succinic acid in the animal feed market. Developments continue with partners, including additional testing as well as feed product formulation work.

We have embarked on an aggressive cost reduction program to reduce the variable cost of manufacturing at our Sarnia facility by 25-35%. Initial benefits from this cost-reduction program are expected in Q3, 2018.

Subsequent to December 31, 2017, Bioamber reached an agreement with its senior lenders to release $3.2 million in restricted cash, and raised $7 million via an equity offering.

We will hold a special meeting of stockholders on April 27, 2018 during which we will ask our shareholders to approve proposals to immediately increase our authorized shares and to eventually effect a reverse stock split, with the goal to be in a position to consider a relisting of our shares at a national exchange.

"In 2017, BioAmber delivered on the growth potential foreseen in the bio-succinic acid market, with revenues in the year 81% higher than 2016. We have broadened our application pattern and diversified our customer mix. Our profitability is improving, as demonstrated in Q4, and will be further bolstered by our aggressive program to reduce variable manufacturing costs," noted Rick Eno, CEO. "Moving forward, we continue to see strong long-term volume growth based on a robust commercial pipeline with an associated improvement in profitability." 

Q4 and Year End 2017 Financial Results

Q4 2017 Financial Highlights

Revenue for the fourth quarter 2017 was $5.4 million compared to $631,000 in Q4 2016, an increase of 755%. This increase was driven by higher volumes offset by lower average selling price.

Cost of goods sold increased from $2.1 million for the quarter ended December 31, 2016 to $6.5 million for the quarter ended December 31, 2017, driven primarily by increased volume sold, increased production volumes, an increase in royalties and partially offset by lower production costs.

General and administrative expenses increased slightly by $0.1 million to $2.2 million for the quarter ended December 31, 2017 as compared to $2.1 million for the quarter ended December 31, 2016. The increase was mainly due to legal fees related to the class action lawsuit.

R&D expenses, net, decreased by $0.9 million to $1.2 million for the quarter ended December 31, 2017 as compared to $2.1 million for the quarter ended December 31, 2016, primarily due to a reduction in R&D expense required to support the Sarnia facility and reduced spending on patents and new applications.

Sales and marketing expenses decreased by $0.4 million to $0.3 million for the quarter ended December 31, 2017 as compared to $0.7 million for the quarter ended December 31, 2016, driven by a decrease in personnel following the reorganization of the commercial functions in 2016.

Subsequent to the year-end on February 13, 2018, we received gross proceeds of $7.0 million from an equity issuance.

Full-Year 2017 Financial Results

Revenues for the year ended December 31, 2017 were $14.9 million compared to $8.3 million in 2016.  The 81% increase relative to the previous year was driven by an increase in the quantity of bio-succinic acid sold from our Sarnia operations and offset by a decrease in the average selling price.

Cost of goods sold increased from $13.7 million for the year ended December 31, 2016 to $22.3 million for the year ended December 31, 2017. This increase was driven primarily by an increase in volume sold, increased production volume, an increase in royalties and partially offset by lower production costs.

General and administrative expenses increased by $2.9 million to $12.4 million for the year ended December 31, 2017 as compared to $9.5 million for the year ended December 31, 2016. The increase was mainly due to $1.2 million in severance costs in relation with the departures of senior executives and $1.2 million in additional stock-based compensation expense for the accelerated vesting of unvested stock-options. Recruitment and legal fees were higher in 2017 compared to 2016 related to the recruitment of new senior executives and the class action lawsuit.

Research and development expenses, net, decreased by $1.7 million to $5.5million for the year ended December 31, 2017 as compared to $7.2 million for the year ended December 31, 2016, primarily due to a reduction in research and development expense required to support the Sarnia facility and reduced spending on patents and new applications.  

Sales and marketing expenses decreased by $1 million to $1.9 million for the year ended December 31, 2017 as compared to $2.9 million for the year ended December 31, 2016, driven mainly by a decrease in salaries, benefits and associated costs, including travel expense, following the reorganization of the commercial functions in 2016.

Depreciation of property and equipment and amortization of intangible assets expense increased by $0.3 million to $5.1 million for the year ended December 31, 2017 as compared to $4.8 million for the year ended December 31, 2016.

The foreign exchange (gain) loss increased by $383,000 to a loss of $207,000 for the year ended December 31, 2017 as compared to a gain of $176,000 for the year ended December 31, 2016. The foreign exchange loss was mainly driven by the variation of the foreign exchange rate relative to the Canadian dollar and Bridging Finance loan, that was fully repaid in January 2017.

Financial charges (income), net comprised of an income of $9.5 million for the year ended December 31, 2017 as compared to $0.8 million for the year ended December 31, 2016. This variation of $8.7 million is mainly due to the non-cash mark-to-market adjustment change on the IPO warrants, the June 2009 Warrants, the April 2011 Warrants, the January 2017 Warrants and the August 2017 Warrants. It is also due to a decrease in interest and end of term charges on long-term debt due to the full repayment of the Bridging loan in January 2017. This decrease is partially offset by the issuance costs associated with the January 2017 and the August 2017 Warrants classified in liabilities.

A non-cash impairment charge of $78 million was recorded on the company's assets mainly attributed to the Sarnia facility.

The Company recorded a net loss of $102.2 million of which $98.2 million was attributable to BioAmber shareholders, or a loss of $2.34 per share for the year ended December 31, 2017, compared to a net loss of $28.4 million of which $22.5 million was attributable to BioAmber shareholders, or a loss of $0.78 per share for the preceding year.

About BioAmber

BioAmber (OTCPK: BIOA) is a renewable materials company. Its innovative technology platform combines biotechnology and catalysis to convert renewable feedstock into building block materials that are used in a wide variety of everyday products including plastics, paints, textiles, food additives and personal care products.  For more information visit www.bio-amber.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties about BioAmber, including but not limited to statements with respect to BioAmber's plans to consummate its proposed underwritten offering of common stock and warrants. BioAmber may use words such as "anticipate," "believe," "could," "continue," "estimate," "expect," "intend," "may," "should," "will," "would," "plan," "projected" or the negative of such words or other similar words or phrases to identify such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things, whether or not BioAmber will be able to generate sufficient cash flows and obtain the additional financing necessary to continue as a going concern and to grow its business, develop its products and respond to competitive pressures, the impact of the termination of BioAmber's  joint venture with Mitsui & Co. Ltd. on its ability to maintain and expand its operations at its Sarnia, Ontario facility, market and other conditions, the satisfaction of customary closing conditions related to the underwritten offering of common stock and warrants,  BioAmber's business and financial condition, and the impact of general economic, industry or political conditions in the United States or internationally. For additional disclosure regarding these and other risks faced by BioAmber, see disclosures contained in BioAmber's public filings with the SEC, including the risks discussed under the heading "Item 1.A Risk Factors" in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, and under the heading "Risk Factors" of the prospectus supplement for this offering. You should consider these factors in evaluating the forward-looking statements included in this press release and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and BioAmber undertakes no obligation to update such statements as a result of new information.

Editor's Details

Mike Wood
PharmiWeb.com
www.pharmiweb.com
editor@pharmiweb.com

Last updated on: 31/03/2018

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