Verenium Corporation (VRNM)
Q2 2012 Earnings Conference Call
August 06, 2012, 17:00 p.m. ET
James Levine - President and CEO
Jeff Black - SVP and CFO
Janet Roemer - EVP and COO
Laurence Alexander - Jefferies & Company
John Roberts - Buckingham Research
Good day ladies and gentlemen, and welcome to Verenium Corporation Second Quarter 2012 Earnings Conference Call. (Operator Instructions)
I’d now like to introduce your host for today’s conference Jeff Black, Chief Financial Officer. Sir, you may begin.
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Thank you, and good afternoon. Thank you for joining Verenium’s second quarter 2012 conference call. I’m Jeff Black, Chief Financial Officer, and with me today are Jamie Levine, our Chief Executive Officer, and Janet Roemer, our Chief Operating Officer.
We plan to do something little different today, so before we get started I’d like to point out that later on in the call Jamie will be going through some slides which can viewed automatically via the webcast downloaded from the investor page of our website or download it as an attachment to the Form 8-K, that we filed today.
Before we begin, I would like to advise you that this discussion will include certain statements that are not historical facts and are forward-looking statements that involve a high degree of risk and uncertainty. These statements relate to matters such as our strategy, future operating plans, markets for our products, including our ability to develop and launch new product and timelines for doing so, including their market size and our ability to access those markets, partnering and collaboration activities, including our ability to entering the any future partnership or collaboration, the benefits of our invent collection, public policy, financing activities, technical, and business outlooks.
The company’s actual results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, those discussed in our filings with the SEC, including, but not limited to, our report on Form 10-K for the year ended December 31, 2011, and in our subsequently filed quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date hereof.
And I will now turn the call over to Jamie.
Good afternoon, and Jeff said the agenda for today’s call is a bit different than our usual quarterly call, in a minute I’ll hand the call over to Janet who will discuss commercial and operational trends and the performance of the second quarter 2012. Then Jeff will provide an overview of our financial results for the first half of 2012 and finally I’ll discuss the details of our growth pipeline we are announcing today.
So, diving in the second quarter began with an important milestone with the repayment of our remaining debt on April 2, and while we are pleased with the outcome, today we are focused on our future which is about unique products, revenue growth and a focus on profitability. Janet and Jeff will speak in a minute about our performance of the second quarter, but I’d like to start by mentioning one important recent milestone which is our move to our new facility.
Over the past two years, the Verenium team has made some important steps forward in our development in commercial activities under challenging condition, in particular although we have limited access to a pilot plan for process development, we have made significant important to our manufacturing processes. The move to our new facility is more than just an administrative event. We now have far greater control over our operations by being in our own space, which we can use to accelerate our efforts and to achieve improved outcomes.
With that I’ll now turn the call over to Janet for an operational update.
Thanks Jamie. Good afternoon everyone, and thank you for joining us. Today I will provide you an update on the performance of our two largest product line animal health and nutrition and grain processing for the second quarter of the year. Summarized developments in our oil fields services product line and then discuss the progress we have made in manufacturing.
I’ll start with revenue from our largest product line animal health and nutrition and our lea product Phyzyme Phytase. Sales of finished product by our partner Danisco Animal Nutrition, a unit of DuPont strengthened in the second quarter. Poultry and pork which are the major markets for Phyzyme Phytase are favorably priced relative to beef and we expect this we will continue to be the case as the year progresses, the demand will likely be tampered by reduced animal production by some producers as margins are squeezed by continued high feed cost.
In addition, we manufactured more Phyzyme Phytase than in the first quarter which further increases our reported revenue for this product line. Also in the quarter an important ruling in Europe revoked a Novozymes patent, which related to manufacturing animal feed containing coded demonstrable enzyme granules. This removed uncertainty in the marketplace and clarified Danisco’s ability to sell the thermal stable version of Phyzyme Phytase in Europe. For a while it had been halted in Denmark under a preliminary injunction. This represents an important victory for customer choice and for Phyzyme Phytase.
Turning to our second largest product line grain processing, revenues decreased in the second quarter. Our results reflect very challenging industry wide condition which has compelled ethanol producers to reduce operating rate and in some cases shut down and response to weak margins, in both the Europe and the U.S.