Amyris (AMRS) Q2 2012 Earnings Call July 31, 2012 5:00 pm ET Executives Joel Velasco - Senior Vice President of External Relations John G. Melo - Chief Executive Officer, President and Director Steven R. Mills - Chief Financial Officer Analysts Robert W. Stone - Cowen and Company, LLC, Research Division Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division Vishal Shah - Deutsche Bank AG, Research Division Smittipon Srethapramote - Morgan Stanley, Research Division Michael J. Ritzenthaler - Piper Jaffray Companies, Research Division Benjamin J. Kallo - Robert W. Baird & Co. Incorporated, Research Division Pavel Molchanov - Raymond James & Associates, Inc., Research Division Noah Kaye - ThinkEquity LLC, Research Division Presentation Operator
We will also provide certain forward-looking statements about events and circumstances that have not yet occurred and including projections of Amyris' operating activities in 2012 and beyond. Actual outcomes and results may differ materially from those contained in these statements due to a number of risks and uncertainties, including those provided in the company's recent SEC filings available on the SEC website at www.sec.gov. Please refer to these filings for detailed discussions of relevant risks and uncertainties. The company undertakes no responsibility to update the information in this call. The current report on Form 8-K furnished with respect to our press release is available on the company's website in the Investors section under SEC Filings and on the SEC website.I would now turn the call over to John Melo. John G. Melo Good afternoon, and thank you for joining us for our quarterly update. During the second quarter, we continue to make progress on our technology development, our industrial-scale production and the execution of our commercialization plans, consistent with the strategy outlined earlier this year. I'll first share what we've accomplished this past quarter and then provide some additional context for what we will be doing in the upcoming months. Amyris' first large-scale plant located in Brazil, at Paraíso, remains on track and on budget. Paraíso will be mechanically complete this week, with initially -- initial commissioning already started. We deliberately narrowed our current contract manufacturing operations, CMOs, from 3 to 1 CMO, take a while in Decatur, Illinois. We transferred our trained operators from Biomin, our resilient CMO, to support commissioning and operations at Paraíso. We had stable and reliable operations, with no failed runs and performance at scale that is statistically indistinguishable from our last scale performance. We have made improvements to our cost structure, both through OpEx reductions as well as efficiency gains. We are in the final stages of the plant closure of our ethanol trading business, which will reduce our top line revenue and offer more transparency into our renewables business, as Steve will describe later on this call.
Shipments to our customers remain on track across our 2 current commercial products: renewable diesel and squalene. And we are seeing strong interest in other farnesene applications. We have reached an agreement with Total on a revised structure and up to an incremental $82 million of funding, a 3-year funding program for farnesene research and development. We have simplified our joint collaboration to focus on renewable jet fuel and diesel from Biofene while giving Amyris governance over the research program, and Total predictability and security in funding our joint fuels efforts.Finally, we are in active discussion with several other companies with the potential to receive additional funding in the coming quarters. In today's call, I will review our progress in these areas, as well as provide you with an update on our business strategy and funding opportunities. As we outlined in our previous call, we have focused our current production operations one contract manufacturing operation, as we prepare to bring online Amyris' own industrial-scale farnesene production facility at Paraíso. We have met 3 main milestones during the past quarter as a result of our focused approach on technology and manufacturing operations. First, we narrowed our current CMO production platform to the Tate & Lyle facility in Decatur, Illinois. In May, we paused our production in Antibióticos in Spain and transitioned our staff at Biomin in Piracicaba, Brazil to prepare for commissioning of Paraíso. During the quarter, we produced approximately 810,000 liters of farnesene from these CMOs, bringing our year-to-date production to over 1.7 million liters. Over the last 12 months, we have produced approximately 2.5 million liters of farnesene, building inventory to meet near-term customer demand, particularly as we consolidate our CMO operations in Illinois and commission our plant in Brazil. As a result, we will have lower production volumes in the remainder of the year while growing our sales from inventory. Read the rest of this transcript for free on seekingalpha.com