BioAmber Reports Fourth Quarter and Full Year 2014 Financial Results

MINNEAPOLIS, MN, March 12, 2015 /CNW/ - BioAmber Inc. (NYSE: BIOA), an industrial biotechnology company producing sustainable chemicals including bio-based succinic acid, today announced its financial results for the fourth quarter and year ended December 31, 2014.  Highlights included:

• Substantial progress was made on construction of the 30,000 metric ton capacity commercial plant in Sarnia, and subsequent to the quarter the Company began commissioning the facility
• The Company added a total of 21 new customers in 2014 and signed two significant take-or-pay agreements, including a 15-year commitment to purchase one third of Sarnia capacity annually
• Net cash used in operating activities for the year ended December 31, 2014 was reduced by 22% to $21.5 million, compared to $27.5 million in the year ended December 31, 2013

"We are on the verge of completing our first commercial succinic acid plant within the original budget estimate, a significant achievement and milestone for our company," said Jean-Francois Huc, BioAmber's Chief Executive Officer. "We are ready for operations, with steam and electricity supply already hooked up to the plant, tested and live. All plant operators have been hired and trained, and our key long-term supply agreements for sugar, steam and electricity signed.  In the coming weeks we will complete construction and in parallel start up the plant and qualify our product with customers, with the goal to be in commercial operation in Q3 2015," he added.

Sarnia Highlights

• Construction has progressed well and is expected to be completed in two months; the projected final cost of the plant remains within the original budget estimate of $125 million +/- 10%
• Preparation is complete from an operational standpoint: all operators have been recruited and trained, the plant is connected to fully operational steam and power lines, and long term supply agreements for glucose, steam, electricity and maintenance services have been executed
• Subsequent to the quarter end, the Company initiated commissioning of the Sarnia plant, a process that is anticipated to take approximately 5 months

Other Business Highlights

• BioAmber added 5 new customers in the fourth quarter of 2014
• The Company signed two take-or pay-agreements for Sarnia with Vinmar and PTTMCC Biochem that will ramp up in 2015 and represent 15,000 metric tons of annual sales in 2016 and 2017
• New uses for BioAmber's Bio-SA^TM were validated in the lubricants and paints/coatings markets, and unique flavoring performance for di-sodium succinate was demonstrated in food applications
• The Company ended as planned its toll manufacturing contract with ARD in Pomacle, France

Financial Highlights

• Net cash used in operating activities was reduced by 22% year-over-year, with an average monthly cash burn of under $2.0 million per month in 2014
• The Company closed on a three year, $25 million loan from Tennenbaum Capital Partners and used the proceeds to reimburse the outstanding loan with Hercules Technology Growth Capital
• Cash on hand was $51.0 million as of December 31, 2014

Full Year 2014 Financial Results

Revenues for the year ended December 31, 2014 decreased to $1.5 million from $2.7 million for the same period in 2013.  Sales volume in 2014 was slightly higher than in 2013, but was offset by a decrease in the average sales price that resulted from customers seeking pricing more in line with the prices BioAmber has contractually committed to for future Sarnia supply. The Company continues to manage sales in an effort to preserve its bio-succinic acid inventory levels in advance of the Sarnia plant start-up.

Gross loss in the year ended December 31, 2014 was $4.5 million, compared to a gross loss of $24,000 for the same period in 2013.  The increase was due to lower selling prices combined with an inventory reserve of $2.5 million and higher fixed production costs in 2014 than in 2013. These costs resulted from the transition away from the French demo plant to Sarnia production and pricing.

Research and development expenses for the year ended December 31, 2014 were $15.2 million, a decrease of $1.4 million from the same period in 2013. The decrease was primarily due the completion of the yeast development project with Cargill in 2013, greater in-house management of the patent portfolio, and a reduction of expenses related to our adipic acid platform.  These reductions were partially offset by an increase in payroll costs that resulted from a shift away from the use of external labs to in-house R&D resources.  

Sales and marketing expenses in the year ended December 31, 2014 were $4.5 million, versus $4.7 million in 2013. The decrease was primarily due to a decrease in third-party market study expenses and in incentive remuneration.

General and administrative expenses for the year ended December 31, 2014 increased to $10.7 million, from $9.8 million for the same period in 2013. The increase was primarily due to an increase in stock-based compensation due to stock option cancellations in the second quarter of 2014 and additional cost related to compliance and other costs associated with being a public company.

Foreign currency losses in the year ended December 31, 2014 were $151,000 as compared to a loss of $306,000 for the same period in 2013.  The decrease stemmed from lower Canadian dollar cash balances in 2014 that were partly offset by a weaker Canadian versus US dollar during the period.

During the year ended December 31, 2014, the Company incurred net financial charges of $11.7 million as compared to an income of $7.4 million in the same period in 2013. The net financial charges in the year were mainly the result of $4.8 million of interest expense and end of term charge accretion on the loan from Hercules Technology Growth Capital, which was fully repaid in December 2014, compared to $1.8 million in 2013, and a $7.2 million of non-cash charge related to changes in the fair market value of the warrants issued in connection with the Company's initial public offering, compared to a gain of $10.3 million recorded in 2013. The warrants are revalued at each reporting period resulting in a non-cash amount being recorded in the statement of operations for as long as the warrants remain outstanding. 

The Company recorded a net loss attributable to BioAmber Inc. shareholders of $46.4 million, or a loss of $2.32 per share, for the year ended December 31, 2014, as compared to a net loss of $33.2 million, or a loss of $2.13 per share, for the same period in 2013.

The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the year ended December 31, 2014 was $34.7 million, or a loss of $1.74 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $33.6 million, or a loss of $2.16 per share, for the same period in 2013.  Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the year ended December 31, 2014, the impact of the change in fair value of the warrants issued in connection with the IPO, the loss from the extinguishment of debt, a non-cash reserve taken on the recorded value of inventory, and the non-cash expense resulting from the cancellation of certain employee stock options.  For the year ended December 31, 2013, it excludes the impact of the change in fair value of the warrants issued in connection with the IPO, the intangibles and long lived assets impairment charges, the accelerated vesting of certain employee stock options from the IPO, and the non-cash gain from the extinguishment of debt.  Please refer to Annex A: "Non-GAAP Financial Information—Adjusted Net Loss Attributable to BioAmber Inc. Shareholders" for more information regarding this non-GAAP financial metric.

Webcast and Conference Call Information

BioAmber will discuss these results on a live audio webcast, which will be available on the Internet to investors, members of the news media and the general public at 4:30 p.m. Eastern Time on March 12, 2015. To access the webcast of the conference call, go to the company's website, www.bio-amber.com.   Audio of the teleconference is also available by dialing: 

North American callers:  [phone]
International callers: [phone]

Teleconference replays will be available through March 19, 2015:

Domestic: 1-888-390-0541
International: 416-764-8677
Passcode: 498791#

A replay of the webcast will also be available approximately two hours after the conclusion of the live webcast on BioAmber's website, for a period of 30 days.

About BioAmber

BioAmber (NYSE: BIOA) is an industrial biotechnology company producing sustainable chemicals. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into sustainable chemicals for use in a wide variety of everyday products including plastics, resins, food additives and personal care products.  For more information visit www.bio-amber.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to the projected capital costs and scheduled completion of the Sarnia facility under construction, the commissioning and start up schedule, the beginning of our commercial operations and future sales projections for our Bio-SA facility including the take-or-pay agreements with Vinmar International and PTTMCC Biochem.   All statements other than statements of historical fact contained in this press release are forward-looking statements.  These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions.  Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond BioAmber's control.  BioAmber's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors.  Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur and the timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements.  All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  For additional disclosure regarding these and other risks faced by BioAmber, see disclosures contained in BioAmber's public filings with the SEC including, the "Risk Factors" section of BioAmber's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the Quarter ended September 30, 2014.

BioAmber Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except for shares)
		Three Months Ended  December 31,						Year Ended  December 31,
		2014			2013			2014			2013
			$			$			$			$
Product sales			308			439			1,543			2,665
Cost of goods sold			2,065			424			6,044			2,689
Gross loss			(1,757)			15			(4,501)			(24)
Operating expenses
	Research and development		4,005			3,499			15,156			16,579
	Sales and marketing		679			909			4,482			4,730
	General and administrative		2,450			2,830			10,655			9,757
	Depreciation and amortization		72			53			260			1,165
	Impairment loss		—			—			—			8,619
	Foreign exchange (gain) loss		75			534			151			306
Operating Expenses			7,281			7,825			30,704			41,156
Operating loss			9,038			7,810			35,205			41,180
Amortization of deferred financing costs			74			(138)			292			240
Financial charges (income), net			(5,026)			278			11,737			(7,433)
Gain on debt extinguishment			622			—			171			(314)
Equity participation in losses of equity method investments			—			—			—			15
Other expense (income),net			2			—			(183)			—
Loss before income taxes			4,710			7,950			47,222			33,688
Income taxes			23			34			75			103
Net Loss			4,733			7,984			47,297			33,791
Net Loss attributable to:
	BioAmber Inc. shareholders		4,357			7,828			46,422			33,218
	Non-controlling interest		376			156			875			573
			4,733			7,984			47,297			33,791
Net Loss per share attributable to BioAmber Inc. shareholders - basic		$	0.20		$	0.42		$	2.32		$	2.13
Weighted-average common shares outstanding- basic			21,829			18,469			20,016			15,591

BioAmber Inc.
Consolidated Balance Sheet Information
(unaudited, in thousands)
		As of  December 31, 2014		As of  December 31, 2013
Assets		$		$
Current assets:
Cash and cash equivalents		51,043		83,728
Accounts receivable		477		755
Inventories		1,802		2,415
Prepaid expenses and other current assets		765		7,394
Deferred financing costs		3,005		671
	Total current assets	57,092		94,963
Property and equipment, net		88,665		13,554
Investment in equity method investment		35		710
Intangible assets including goodwill		4,957		4,852
Restricted Cash		647		—
Deferred financing costs		1,044		—
	Total assets	152,440		114,079
Liabilities
Current Liabilities:
Accounts payable and accrued liabilities		17,443		7,111
Income taxes payable		204		1,121
Deferred grants		2,275		3,061
Short-term portion of long term debt		2,978		6,520
	Total current liabilities	22,900		17,813
Long-term debt		34,653		23,210
Warrants financial liability		13,040		5,840
Other long term liabilities		128		82
	Total liabilities	70,721		46,945
Redeemable non-controlling interest		24,190		—
Shareholders' Equity		57,529		67,134
Total Liabilities and Shareholders' Equity		152,440		114,079

BioAmber Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands $)
		Three Months Ended  December 31,				Year Ended  December 31,
		2014		2013		2014		2013
Operating Activities
Net Loss		(4,733)		(7,984)		(47,297)		(33,791)
Adjustments to reconcile net loss to cash:
	Stock-based compensation	1,384		1,269		6,949		6,732
	Depreciation and amortization	72		52		260		1,165
	Warrant revaluation	(7,199)		(560)		7,200		(10,308)
	Accretion of end of term charge on long-term debt	(1,208)		241		(492)		493
	Amortization of deferred financing costs	74		(138)		292		240
	Impairment loss and write-off of fixed assets	—		—		—		8,619
	Change in working capital	(1,050)		2,294		10,640		(421)
	Equity participation in losses of equity method investments	—		—		—		15
	(Gain) loss on debt extinguishment	402		—		(50)		(314)
	Other	11		11		45		45
Net cash used in operating activities		(12,247)		(4,815)		(22,453)		(27,525)
Investing Activities
	Acquisition of property and equipment	(25,540)		(8,181)		(85,014)		(12,788)
	Change in restricted cash	—		—		(678)		—
	Investment in equity method investments	—		—		675		—
	Net cash used in investing activity	(25,540)		(8,181)		(85,017)		(12,788)
Financing Activities
Deferred financing costs		(586)		(71)		(1,077)		(793)
Issuance of long-term debt		28,508		1,102		33,741		26,692
Repayment of long-term debt		(22,154)		—		(25,000)		—
Government grants		6,032		656		10,132		1,141
Net proceeds from issuance of shares or units		29		140		60,858		73,023
Cancellation of shares		—		—		—		(140)
	Net cash provided by financing activities	11,829		1,827		78,654		99,923
Foreign exchange impact on cash		(1,631)		(711)		(3,869)		(954)
Increase/(decrease) in cash		(28,556)		(11,880)		(32,685)		58,656
Cash, beginning of period		78,632		95,608		83,728		25,072
Cash, end of period		51,043		83,728		51,043		83,728

ANNEX A: Non-GAAP Financial Information

Adjusted Net Loss Attributable to BioAmber Inc. Shareholders

The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the year ended December 31, 2014 was $34.7 million, or a loss of $1.74 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $33.6 million, or a loss of $2.16 per share, for the same period in 2013.  Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the year ended December 31, 2014, the impact of the change in fair value of the warrants issued in connection with the IPO, the loss from the extinguishment of debt, a non-cash reserve taken on the recorded value of inventory, and the non-cash expense resulting from the cancellation of certain employee stock options.  For the year ended December 31, 2013, it excludes the impact of the change in fair value of the warrants issued in connection with the IPO, the intangibles and long lived assets impairment charges, the accelerated vesting of certain employee stock options from the IPO, and the non-cash gain from the extinguishment of debt. 

BioAmber presents Adjusted Net Loss Attributable to BioAmber Inc. Shareholders as a supplemental measure of BioAmber's performance. The above items are excluded from BioAmber's Adjusted Net Loss Attributable to BioAmber Inc. Shareholders because these items are non-cash in nature, or because the amount and timing of these items are either unpredictable or not driven by current operating results and renders comparisons with prior periods and competitors less meaningful.  BioAmber believes Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a useful measure for analysts and investors to evaluate BioAmber's future ongoing performance as this measure allows for a more meaningful comparison of BioAmber's projected cash earnings and performance with its historical results from prior periods and to the results of its competitors.  Adjusted Net Loss Attributable to BioAmber Inc. Shareholders corresponds more closely to the cash operating income generated from BioAmber's business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of BioAmber's business.

Adjusted Net Loss Attributable to BioAmber Inc. Shareholders has certain limitations in that it does not take into account the impact of certain expenses to BioAmber's consolidated statements of operations.  In evaluating Adjusted Net Loss Attributable to BioAmber Inc. Shareholders, you should be aware that in the future BioAmber may incur expenses similar to the adjustments in this presentation. BioAmber's presentation of Adjusted Net Loss Attributable to BioAmber Inc. Shareholders should not be construed as an inference that BioAmber's future results will be unaffected by unusual or non-recurring items. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is not a measurement of BioAmber's financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.

BioAmber Inc.
Non-GAAP Financial Information
(unaudited, in thousands)
		Three Months Ended  December 31,				Year Ended  December 31,
		2014		2013		2014		2013
Net loss attributable to BioAmber Inc. Shareholders		4,357		7,828		46,422		33,218
Deduct:
	Warrants Revaluation and issuance costs	(7,199)		(560)		7,200		(9,177)
	Intangible and long live asset impairment	—		—		—		8,369
	Accelerated vested options from IPO	—		—		—		724
	Loss (gain) on extinguishment of debt	622		—		171		(314)
	Inventory Reserve	556		—		2,454		—
	Additional charge for cancellation of stock options	—		—		1,853		—
Adjusted Net Loss attributable to  BioAmber Inc. shareholders		10,378		8,388		34,744		33,616
Adjusted net loss per share attributable to BioAmber Inc. shareholders - basic		0.48		0.45		1.74		2.16
Weighted-average of common shares outstanding- basic		21,829		18,469		20,016		15,591

SOURCE BioAmber Inc.

BioAmber Investor Contact : Mike Hartmann, Executive Vice President, 514-844-8000 Ext. 120