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METABOLIX, INC. Reports Operating Results (10-Q)

July 27, 2012 | About:
10qk

10qk

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METABOLIX, INC. (MBLX) filed Quarterly Report for the period ended 2012-06-30.

Metabolix, Inc. has a market cap of $67.4 million; its shares were traded at around $1.9301 with and P/S ratio of 47.3. Metabolix, Inc. had an annual average earning growth of 3.9% over the past 5 years.

Highlight of Business Operations:

The Company engaged in various transactions with Tepha, Inc., a related party, and recorded $59 and $94 of license and royalty revenue during the three months and six months ended June 30, 2012, respectively. During the three and six months ended June 30, 2011, the Company recorded license and royalty revenue from Tepha, Inc. of $92 and $393, respectively. As of June 30, 2012 and December 31, 2011, the Company had no outstanding receivables due from Tepha.

Total revenue was $923 and $191 for the three months ended June 30, 2012 and 2011, respectively. During the three months ended June 30, 2012, we recognized $461 of government grant revenue compared to $99 for the respective period in 2011. Grant revenue for the three months ended June 30, 2012 primarily consisted of $366 in revenue earned from the Renewable Enhanced Feedstocks for Advanced Biofuels and Bioproducts (REFABB) grant awarded by the U.S. Department of Energy in mid-2011. No revenue was recorded from this grant in the second quarter of 2011. We also recognized $373 of product revenue from sales of biopolymer inventory, including some excess raw materials, acquired in March 2012 from our terminated Telles joint venture with ADM. There was no product revenue recorded by Metabolix during the three months ended June 30, 2011 since sales of biopolymer prior to the termination of the joint venture were recorded by Telles. As we implement sales terms in Q3 2012 that will allow a limited right of return on future product sales for a 60 day period, we anticipate that we will defer revenue until the expiration of that 60 day period. Following the impact of these new sales terms in the period of adoption, we expect revenue will increase as we continue to commercialize Mirel and the product gains market acceptance.

Total revenue was $40,245 and $517 for the six months ended June 30, 2012 and 2011, respectively. During the six months ended June 30, 2012, we recognized $38,885 of previously deferred revenue related to our Telles joint venture with ADM that terminated effective February 8, 2012. This deferred revenue, which was previously expected to be recognized over a future estimated ten year period as we met our contractual performance obligations, became immediately recognizable upon termination when no further performance obligations remained. Grant revenue was $839 and $124 for the six months ended June 30, 2012 and 2011, respectively. The increase of $715 primarily consisted of $681 in revenue earned from the REFABB grant awarded by the U.S. Department of Energy in mid-2011. No revenue was recorded from this grant in the first half of 2011. During the six months ended June 30, 2012 we recognized $134 of license fee and royalty revenue from related parties compared to $393 for the respective period in 2011. The decrease of $259 was primarily attributable to a royalty earned under a licensing agreement with Tepha, Inc. during the first quarter of 2011. We also recognized $387 of product revenue from sales of Mirel biopolymer inventory acquired in March 2012 from our terminated Telles joint venture with ADM. There was no product revenue during the six months ended June 30, 2011.

Cost of product revenue was $492 for the six months ended June 30, 2012. Included in cost of product revenue is $135 related to inventory shipped to customers and $357 for freight, shipping supplies and warehouse costs for more than five million pounds of polymer and raw material owned by the Company as of June 30, 2012. We anticipate warehousing costs will decline during 2012 as we sell product and achieve cost reductions through consolidation of inventory at less expensive locations.

Selling, general, and administrative expenses were $7,836 and $7,983 for the six months ended June 30, 2012 and 2011, respectively. The decrease of $147 was primarily related to a decrease in employee compensation and related benefit expenses, offset by an increase in consulting and professional fees. Employee compensation and related benefit expenses were $4,488 and $4,799 for the six months ended June 30, 2012 and 2011, respectively. The decrease of $311 was primarily due to reduction of headcount in response to the termination of the Telles joint venture. Consulting expense increased to $468 from $379 for the six months ended June 30, 2012 and 2011, respectively. The increase of $89 was primarily due to increases in the utilization of European consultants to support sales and for the implementation of new accounting systems to support biopolymer commercial operations. Professional fees increased to $1,438 from $1,393 for the six months ended June 30, 2012 and 2011, respectively. The increase of $45 was primarily due to legal fees incurred in connection to the termination of Telles and increased patent costs.

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