MBII - Earnings call transcript Q2 2020 | Marrone Bio Innovations Inc

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Operator

Good day, ladies and gentlemen, and welcome to the Marrone Bio Innovations Second Quarter 2020 Earnings Conference Call. Today's conference is being recorded. And at this time, I'd like to turn the conference over to Linda Moore, General Counsel.

Linda Moore

Good afternoon, everyone, and thank you for joining our call. Welcome to the 2020 second quarter earnings conference call for Marrone Bio Innovations.

are Officer, Helash; Kevin today and Jim call Commercial Chief Hammill. the CEO, CFO, Kevin Boyd; On

circumstances the If can you or call would or materially risks or based Important developments expectations those projections, under would There regarding that in like company forecasts may statements. of please XX, actual company respects Commission, and vary expectations, uncertainties strategies materialize, refer Such to or June material remind posted and elsewhere ended of and may and anticipated. implied report management’s factors uncertainties, current concerning forward-looking any are statements statements by future or reflect management's guidance as quarterly performance reports company has of Exchange or cause this estimate. the After no that on on other that I those forward-looking Bio or Slide company’s obligation regarding CEO, actual with offer filed of more from our will discussed that these XXXX, you some other the different this call disclaims call. these point assumptions call and and the contained a for results question-and-answer expressed events the this well on beliefs, in of conference hopes, Factors differences now are website. potential time Helash. the may fiscal the heading, future, Risk Kevin to by statements those be and to expressly be session. or will Innovations Securities Form Any should control over revise incorrect, in update risks events on contain our after will circumstances. intentions results that heading prove the X, as or that conference or the we future of management future date ended characterizations management’s that any quarter management’s remarks, cause assumptions Marrone The the company’s from in number other Such or are a effects their represents one in for release statements year any earnings the annual management our may developments XX-K involve turn may in statements guidance assurance beliefs today. report under or to company. Should Kevin? on to a the the could XX-Q which affecting arise be hold the including I to the Form XXXX beyond

Kevin Helash

pleasure join to opportunity about Thank organization chosen lead this honor you, the I'm Linda. to to It's and the call CEO. level the excited new its to next company's a success. as be of

affected these grateful equally Today's growth to life's of growers demand trajectory. my the point to biological way, played agriculture the support you a need, that X, momentum from opportunity team ensure passion biologicals as has agriculture, financial solutions. preferred factors our day to for their If the are during to stems challenging supplier Slide I'm supply recognition COVID-XX global Long world this underscored has individual to food pandemic have our I'm and environmentally focused us safe, that trust industry and times. for to the been results and our partners channel our to in the created brings producing an the the career turn in macro lift modern delivering they they the of customers A high-quality very and the our and manner. tools before changing affecting proud on role access food industry our a in our and sustainable dynamic, for tables. was and have lives, affordable,

commercial in X, a As phase new Slide as entering you the on is biologicals. company a leader see

commercial path our ways direction. and the maximize I expanding potential accelerate with of in into of by definition, growth Two, of in crop, whether think One, velocity at base terms by is same velocity, time. which three business. expand the can new We markets, by value by them our proven develop feed in we we to by products add illustrated mind through is clear, my type partnerships. three, introduce as with strategic or on that value, Slide geography or acquisitions of in-house gain whether new And product. them and returns immediate The X. profitability

will accelerating team our with be focus the on to and reach. expansion on want I the in in future, the to continue I base on our global offer value-creating we products themselves. leverage broadening plans Jet-Ag As how the the investment acquisitions that I return similar pipeline will to brand near-term. in near work greatest while that partnerships, business, extensions Pro or present hone our anticipate synergistic and Farm and

for unrelenting with only opportunities accretion, established driving and income cash on operation evaluate Underscoring channel eye provide a intellectual on and has this key focus financial near-term performance, be these will to proven and they an We of access if flow. property. robust from all excellence,

If X, all clearly topline, for success. metrics you would gross the to margins, profit Slide important we and are growing turn our gross

that flow. do to positive through lens. strong direct cash And growth. and to work turn I we a bottom have to expenses metrics view bring line we still spend must every profitable line we in and that a other operating bias relationship have clear generate to dollar However, have

across and path segments in market, and fragmented gain importance to industry. and capabilities is the has and company order opportunity exciting The biologicals company and and expect the service matter want of as its a underscore gross with emerge CAGRs grower. in The leader wallet that a access historical And depth Breadth in the and its at as has technological shelf moment. grows, my Channel of to fully profitability. advancing a revenue growth lower looked as to the the share deliver prowess. honor those the leverage share is significantly lead both. with absolute our phase of resources you is and distribution a I with and the operating than rate space. spent I highest important opportunity We've significant in scale and have however, we'll at the spending expenses, operating build It the global has space grow some profit. crowded expenses good a plant with break our grow, infrastructure, footprint. capacity through time time we the biological to come on on a an As company to news and product have clear that and out clear building basis to to this company, to full to scope line

Now, call to the success commercial Boyd the and in I'd second saw on over financial Hammill, like turn the Kevin are who and Jim details more first-half. and we going Jim? quarter provide to to

Jim Boyd

in entire quarter XX.X%. margins quarter company's the above highest and the in Thank you, consecutive record the the year-over-year our would to to XX%, environment. of that and team a seventh gross a On I had year all history. XXXX.We revenue have the at eighth are And Kevin. revenue of but in recorded a add achieved difficult first-half, equal our million consecutive high of for my they $XX.X not only Revenues for roughly thanks our quarter quarter growth, we customers of level, any

sales of would Global second rose our $XX.X of and family you base continued If further in were in to strong, market business, seed led XX% Farm's Slide million the Pro treatment to of turn expansion addition expansion. international with treatments. crops particularly X, revenues seed penetration our by from coupled quarter the row

second XX% first-half to by the markets. the for to in gross whole led company's strong These of our to seed sales and the net led a with EBITDA Second also $X.X million. improved a dynamics million, XX% also Similar first-half, and which $X.X of quarter XX.X%. Adjusted $X.X XXXX. in crop in in with profit margins million as in the reflected highest contribution the of high compared XX% Gross drove history portfolio, improvement a quarter expansion XX% our dynamics rose across value loss, favorable the margins revenues was treatment XX.X% with were million mix. of the increase row in $XX the loss

first-half to the to and a improvement decrease our a loss, of improvement $X.X loss net XX% net adjusted profit. operating gross of saw keep a The on to revenues an expenses To $X.X in also we million, loss sharp Kevin's X% want focus of to ratio EBITDA, a point, million. and in earlier a

the convergence direction, through a accelerate growing charge quarter well the revenues to is coincided only Slide breakeven. secured U.S. at pandemic, we reduced Operating where by strategy the to X first-half point somewhat operating at together, serve PPP to our this X%, Operating profits last they can non-recurring non-cash four by acquisition. season. also as lower were were of the taken from but both a to of growth non-cash including first-half a at continuing million and XX% from our at while years. a investing start right ensure as moving Expenses which identify have have on expenses increased loan, Pro and addition we of customers, the the and XXXX, and gross a accelerate the in EBITDA the include Our is amortization CAGR, XXXX costs, significantly the our illustrates $X.X The in the manage items. CAGR. profitability. the comparing expenses expenses and of agricultural employees From and profit opportunities relationship gross to spring COVID-XX XX% CAGR year of with revenues increased, Farm,

gross in Additional over with agreement at which also loan the cash $XX and in to Cash starting the also our line cost PPP unrestricted were I million the $X.X reflected the of first million. transaction end keep in in of The additional a if $X.X the exercised next warrant full provides million proceeds, implemented watch of and second of We two amount also exercised cash This at in equivalents and operating on was the are by and quarter. measures restructuring million, close cash improved May. those hand, by XX% an quarter, in realized at full operations second are warrants the the quarter in $XX.X years. million revenue second first-half million, year. saving also used of in warrants $X.X proceeds mostly growth the our end the in XX% were quarter completed at on cash profit. in improved and in the and due $X.X the with

toward the the growth, drive remainder to that yet about the sheet reflected are tighten warrants financing may we in balance our potential conditions the are provides optimistic fiscal us balance for this and have move with ongoing and year. breakeven. have year, The spending as of the effects agricultural so flexibility, Assuming results in our far taken we this the we sheet exercised, believe pandemic macro measures remain We prepared sector. on strengthen

We growth expect our in with annual target the revenue of gross to mid-XX% margins and international in year, line in with the drive the expansion range. additional second-half

As the for That growth Long-term, multiple and commercial Hammill said, our track we to we in are value. now, profitability U.S. industry, Kevin on saw XXXX is turn of percentage ag greater over in accelerate higher our to the year's through to are insights call I'd revenue on end. deliver prospects. common we as pulling like and to XXXX, his first-half. revenues shareholder slightly levers occurred in a the

Kevin Hammill

Jim. Thanks,

back of I this incredible to work and are think remarkable everyone but of during ensuring to year we in been first place food on safety industry. the have pandemic, and the in in strategy starting XXXX. for the reflect As roots we agricultural a tenacity the in by creativity six privilege achieved I The of our customers them. supply. thanked support our be taken in help done the year, in our first-half the this their commercial results can't put It's months It's

internal international our extending the BioUnite we as by: showed next new our third, growth and portfolio, like come our If and first, such These products. including insecticide the you creation Pro value pipeline, acquisitions presence, Slide that our analysis program, unlock with nematicide. driving and second, X, of material from accelerating advance generation Farm, could to by expanding may of through growth our the turn treatment accretive would seed reach or existing

and opportunities to grow chemistry, biology or have as as lower will performance either well of existing expand We first base also the business remains the goods our in increased markets. cost that further BioUnite market manufacturing market share or cornerstone is which through of The penetration. improvement formulation new strategy, ability power combines with I thriving, the brand the of that and of through extensions, share. note

represents of crops our in cover Our portfolio sales. projected roughly crop of products annual and specialty bioprotection two-thirds

our We that countries. anticipate the will change But sales from roughly of and in with last year, international strategy XX this coming first-half including biggest year. A We is the global full new XX with seed year, reflects to full that pillar Latin of in growth international is by presence, America. XX% range, last treatment greater and to have Europe seen work This our is a distributors This expanding more the in Over U.S., XX% both year. it to the of end mix breadth international. shift distribution XX-XX and worldwide, now business. XX% cornerstone than U.S. grow strategy our split compares we our outside agreement second our depth. first-half year A the

The you have a to and Farm Sales revenues Latin to largest including program the as component initial tracking success, year, net in Farm in Pro an major Slide in been some income market. Overall, quarter strong, operations second of there regions, to as has If from of tap the we that would and world's to had in be is U.S. the forecasted. this begin XX. this and later trial Pro this acquisition we Europe were year, we is aggressive cash turn with underway accretive growing will America

such the of testing soybean we cereal demonstration, At treatment The trials in Brazil, Out with into insecticide anticipate reaching between corn. crops, nematicide as acquisition, we're grains. of UBP just Pro XX synergies beyond potential Additionally, is play total our cross-selling corn portfolios. to for time out. and and Farm’s starting the our combined are canola and seed other in the

successful are opportunities. part growth introductions mid-term any both and near we advancing New have product of to be and strategy,

be internal our manufacturing in Europe, have offer year. growers' both regulatory two we range for and and nematicide. performance methods, a in the productivity trials field in been insecticide such from strong of in-furrow application candidates They United And will test testing seed of applied market potential reach. plan are which Both near-term We improve submissions, we Latin as additional and prepare and are possible. have both can our of generation treatment. pipeline, next second-half the America Initial in to the States of foliar, as enhanced across and

advancing the invest major Slide While work, our the the out, in crop our EPA pipeline, little row gain row shown roughly this and field also opportunity further approval. we bioherbicide of growth our to is those MBI-XXX/XXX, is portfolio become necessary We one-third our with markets continue year. of a part crop XX. on and noble to sales will a testing, the packages story, formulation and our markets Across as well key as the believe market of projected represent have size regulatory

It's working new trials across health product. It's health. a our plant States. tested with integrated entry used is that and on lead product opportunity adoption have EPA Last ease the market. summer tank for conventional we approval and product we're portfolio, summary, to in the of is proof which this fungicide fungicide strategy the It choice. soybean in use the Pacesetter wheat. XX announced into the emergent approved, for ever will is and Pro entry sell offerings. containing industry. market biologicals being growth implementing expands our and fronts. We combination Regalia. premix full for crops. in and exclusive premix will which have in the been will are is an foliar ability in a commercial This new year applied partner United mixed ingredients synergistic with we our program progress hits week, our [ph] Once Pacesetter, immediate are active U.S. plant row that our Vive, multiple market, offering, be pest in growers other in with in of with It we available management our another the opportunity strategy in seeking corn, BioUnite California commercial the that farms. an delivering, a into or and a our In it products the Pacesetter this BioUnite to Farm with we're BioUnite It's first has is with rights improve

results agriculture. pandemic, quarter's shifting were market the by uncertain This delivered created and across headwinds despite international trade global environment, a dynamics and

to bring world. the and remarks, globally, footprint questions. turn back to row of finished are we to about his Kevin the the business, the continue optimistic our call in expand for closing the to the our now we grow tools productivity crops open second-half particularly As growers like ability year, base call to before I'd we to around Helash

Kevin Helash

a us ahead agriculture on their gross today is velocity chart continuing newcomer here you, I'll well. as has balance team best me. one curve are the Thank and me profit industry customers has revenue, That we success. experience greatest taken growth, far of team I'd operating across of front Slide statements, you've everyone speak of and advance channel and bias investment. of across ask behind that evaluating food opportunities clarity add XX. more other this I'm provide will the results entered are the I ones return snapshot on in profitability. This ratio. with operating ultimate on superior us ensure with for and to contribute than key believe and I with We've learning annual The to I the for commercial an Unlike hard of thanks to I to that customers to accelerate accelerate will metrics the that say and territory kudos as lie focus our our In growth customer support growers to coupled And agriculture company said, and velocity, we the for is know showed the like with Kevin, opportunities our our year. us. This and to the on turn perseverance have over allow flow as even to the bring you to turn the the for Kevin. closing, with our metrics opportunities team to work with Operator? Jim team, a instinctively financial steep on begin to times. you well session. I exceptional the this customers what the the value products, the our Jim to to discipline find that sheet At and the operational Q&A vision in for a for shareholders. my call during tables its the introduced the our and and exciting me new time, I toward to income partners delivered Farming the a in the driven expenses, would my when so on of be years leadership working analyzing cash trajectory expense chart confirmed It a and where first-half. the entire I'd earlier and deliver will on focus greater to pandemic. operator business. I believe

Operator

first hear National [Operator we'll sir. Klieve you, Thank Ben Security. from And Instructions] with

Ben Klieve

my questions. taking All right. Thanks for

of as any delivered quarter side. row had provide behind on it in domestic performance this. acreage crop market, that planted if wondering to And the really in expected acreage the a in questions up particularly where I come there left could start was can was that expected revenue that strong. context corn you crop on I'm a couple revenue the potentially some the with the the that table of year? row maybe you was at be given been you U.S., didn't corn here. commented nice the we'll also then kind of guess, start congratulations of Jim, First, drivers on was have

Kevin Helash

provide Great those. here. ask and Yes. going it's Kevin Helash Hi, to more on clarity Hammill I'm you to questions for Ben, Kevin

Kevin Hammill

Northwest the Ben. terms where or Farm A quarter really is revenue, acquisition the good BioUnite part and us quarter. that drivers market, remember we the earnings helped Kevin you base growth And specialty was where call, users. BioUnite basically if strategy. Thanks, of in the strategy these back saw has It's U.S. business across in to here the actually including really growth the the Pacific the treatment the second Southeast. And U.S. year. our Okay. well first-half doing second year, non-seed areas that mentioned business And couple base Hammill, base this the business Pro lot here. And the full to is last and define how and delivered over specialty XX% in a of to specialty I full year growth we actually set about up first-half the is all

you we and favorable Looking mix that applications corn And actually, soybean, on for us. at when between soybeans and seed seed. of corn the treatment business reference and actually were had the balance to good

in is, XXXX. will the be we'll overall the applications terms and do now setting up for U.S. a quarter, year. planted being seed what we and that now strong planning the for prepare in harvested application the that's Europe as going in seed next quarter in product of And of be to had portfolio Farm Pro they in second-half we'll Now second be

application U.S. base Europe good upcoming good European summary, corn -- specialty also Farm. has And in in go us for season business. mix with a was good The Pro overall. So we soybean as

Ben Klieve

Got it. Kevin. Thank you,

Kevin Helash

forward across that Kevin's happy add reiterate the and as Ben, growth the just geographies upcoming of which all into very encouraging lines, product we Yes. into the year and is across year. we to to had that for move second-half very see we're all to us comment, I'd

Ben Klieve

And an of context. a couple the controlling couple questions of in in excuse I Helash, that me, commented Got you to good. Very questions And -- have kind it. focus OpEx. Kevin, of on intense about here. prepared guess down Kevin OpEx your I look, moving on a remarks

if XXX can of level it your to And the huge I'm kind there's a an spend changed? spend where of And you mean you what you standpoint. really I your of OpEx say from draw and XXX curious second, in pipeline. on line curious as to. then I'm opportunity no pertains elaborate has First, amount

Kevin Hammill

here, Helash Kevin Yes. again. Kevin,

with So, figured have to as everybody's us. he's -- we Kevin

we make clarify. sure I'll So,

terms quite So, we ratio of terms of now, relative level the we're spend, terms we're to where of comfortable to OpEx our profit. in And about want. at or in revenue I results able gross drive in of being think

So, to expect be getting I'm opening what at smaller. our my I in that is has as operating our I said remarks, business grows, number as significantly But expenses grow. to

we're but we're buy I growing down. of possible. strong dynamic to our for and shareholder us, efficient at focusing environment a In to get portfolio, focus in slowing on driving drive a business can speak, will continuously the terms going our terms biggest forwarding assure bank the on a on value, -- you most on versus carefully, looking us thing that really we fast make where we so great you driving we're we're The area ROI, way pipeline. we very asked we're be the And for that Ben effective evaluating is in the scenario in can question ensuring and focus be it's that that analyzing of focus where for or question should the projects quickly, value to our buck, what going shareholder

Ben Klieve

I quick back queue. jump me I'll other two ones and in then it. good. Very for Got guess,

in did it, might you have the guys First, but from report quarter? revenue the missed I acquisition contributions

Kevin Helash

our excellent Farm sector. again. been Ben, thus your us. don't Kevin me as that results, did by see in say guess, Pro But for And let Helash we We has or -- segment an by far not. acquisition I product

it's the that mentioned, to the expected Hammill been I with so of It and just excellent been Kevin another synergies Farm, full year. Pro accretive addition certainly if business creative a to fully acquire we opportunity think the positive we're year And in the will had see I love and our As be far it we'd do starting base. an has company to the combining to so. really in

Ben Klieve

Okay. Perfect.

it in me. that's here. on I'll queue a quarter back get good for and think congratulations I Again,

Kevin Helash

Ben. Thanks,

Operator

from come will Wainright. question H.C. Next with Sameer Joshi

Sameer Joshi

questions. for How call. first your taking my you afternoon. Good are Thanks Welcome Kevin? to

last your too experience, quarters So, see Should much we between years, just changed about, quarter-over-quarter, of nature a Pro forward? not have has seasonality Farm the going the you acquisition business seasonality expect of to despite and the previous year more of and that?

Kevin Helash

It's here. I'm to Thank Kevin Hammill. I'm question hand over on part to you, going answer Sameer. Kevin it Helash going my your and to

So, seasons its volume you're of right, in mix. Sameer, product nature agriculture has difference There and is terms and quarter-over-quarter. by

a our to we broadens we market still the of first-half our footprint gross both the us, addition it the ways margin will stronger gross support our reach. but that which the Kevin year and Southern our more second-half certainly certainly strong For a We I'd like and little which will the a of bit us terms continue performance see flow in of American first-half to continue stronger even there, South and And serve year. of will but of foothold building to got it Farm, get does out the revenue or the and throughout Hemisphere, be in out, terms part go year, in to profit, in certainly The year. Pro Hammill? a say of second-half. even

Kevin Hammill

what little the to year. crop is question an happening little best answer happened the a way agree international that row But the maybe Kevin good Yes, you, Pro a flavor and this see gives Hammill. give in presence, more we Helash. is And a of Farm penetration think and I the this bit Kevin what's in This second-half of of Sameer, the us acquisition thanks. bit market. quarter, quarters of smoother in helps with second I us

with our strategy second made in business. quarter, Farm base driven our we're that the we've really So, Pro our BioUnite investments and by specialty

specialty to our over to fungicide last this that the year XXXX. saw that -- that year. business Farm, happened on full across growth we headwinds. first-half as seed second be where insecticide Then I market and they're applied is they year base Europe, mentioned what we XX% the in saw the -- we So, grow portfolio starting to And in board, full business despite growth product had in planned in apply first-half in Pro and will the

So, XXXX. specialty Pro and in second quarter Europe Farm business of

second-half bit move between to of forward U.S. business. of this international base have a and treatment mix year, our USA of our the specialty business we sales, going seed we're As a our business, to

treatment to Southeast specialty U.S. in the this finishing crops are will mentioned, I U.S. that and the most opportunity we'll half seed be Southwest and and planted in treating be MBI in be be start both we'll transitioning in and in main with harvest So In domestic in business, the applications will this Farm as international in in plantings products. XXXX. second-half, The and foliar being up America, Latin be business, our U.S. harvested we'll Pro seeds then will

U.S. second-half the with business, a again, Farm of and platforms specialty will Pro be America, strong our domestic products. Latin mix in our So of primarily sales focused treatment seed international,

Sameer Joshi

products the you're with diversification. regions of time, that your growing out, north evening basically as same revenues. Basically, as south, a variety for in variety a Thanks at of Understood. and well

on are to what news that work recent to expected of first the the What to flavor you And is be the product of -- working give the expect is some about us out? or is planning will products on? of scale down there? that Vive, Moving can come what pipeline

Kevin Helash

here again. you. Sameer, Kevin It's Helash Yes. thank

I the hit being the and tell has. that projects our company an you about here, pipeline new one in the very the of can portfolio, you on that into today, company So excited that I'm very insider current

at work to In fact, to we on have once. and and time all products focus on we resources have more

team to in days cheapest those potential, time can value. upon. all create the doing And terms our terms the the look market the what of is ROI, in will of shareholder pipeline refreshing most next going here is all to and be ROI market to idea the focus So of on we bring XX us what most to that what obviously, then to we're the fastest, our market, the we're The bring going in the of path metrics. XX, reset

ask you what the have I'll some Kevin, to to level. our coming market. more we near-term high in give in very a that's color pipeline terms So, of

Kevin Hammill

Hammill this Sameer, again. differently. Yes. Everyone defines really pipeline Kevin is

define, three ways. really in I I how Here's define it

product Pacesetter soybean penetrate using geographies. This corn First, global crops about on the there's earlier introductions or great example has that U.S. also new the potential new other to A talked market. into to markets. was into and we go

share In new expansion. market and The greater our our We second to define generation next of the product nematicides. this third pipeline final growers, will is or crop and brand of way brand offerings. herbicide and this our pipeline offerings. the is this believe way define great increase great I ROI, ease advanced novel I products. allowing our deliver example increased use us longer-term A of of insecticides to is example extensions A is

generation next the our is revenue pipeline our And medium-term revenue summary, to year in generate is then our important believe, in throughout, introductions. deliver mid-term, offering. So, both We is to herbicide product next and set and long-term. through our products the novel in short-term, pipeline longer-term new

So got different those in products phases, the three each we phases. of

Sameer Joshi

for Understood. that. Thanks

and on XXX of earlier, as Just regards Ben's it and question one XXX. clarification sort follow-up

In terms any did the of process approval it means? COVID development process Was the the hurdles? delayed by or any present

Kevin Helash

with leave please. I'll Yes. one that Kevin, you

Kevin Hammill

Yes.

properly. So, a this side XXX bit if I or Sameer, asking, understand there make impact that testing COVID on to I But sure you're signal My Is the think question correct? little XXX, was year? this blurred.

Sameer Joshi

correct. That’s Yes.

Kevin Hammill

through opportunity And like high little XXX. In Yes. getting call, regulatory focus in our actually recombinant recombinant that. primary submission last now, XXX. found talked [ph molecule, so, we with bit this Right on performing this we another of was doing about

this the of So of continuing forward. go our submission, rate XXX terms performance work as of in to then novelty we proceed with we're also regulatory and with

focus of that is major So, and now. XXX the XXX right

Sameer Joshi

Okay, I'll thanks. of offline. my take rest Thanks. the questions

Kevin Helash

Thank you, Sameer.

Operator

question from Canaccord. Burleson Next with comes Bobby

Bobby Burleson

I couple Kevin of A for here, is Hi. Helash. Kevin's think this so

would you're try that would in under consider to So, I but rationalize of seems that you investment there's or trimming? to going holes anything lot on anything maybe and plug Is was think there going It like forward? you'd more just focus like terms that you a curious, calling some your to obviously, execution wind portfolio costs. down

Kevin Helash

how Kevin will internal tell but little can pipeline with the relatively Bobby high been new, here. managed. level impressed I'm Helash bit a talk so I'm very that I has Yes, you of I Again,

of have I our to products -- our our formulation use excellent changers being can easier working work think providing potential existing them really the formulations to some been terms by products, game that make margin on opportunity they've acres us. allow us on get on that that the customers. of we so for faster, the be better, company do done cheaper, for expand focusing and And has more and in aspect

would going So, get et on, will discipline, And But line lots that is to that we definitely be working that rigor something well to be that place better fun that working and because that many cetera, we or those you us, there's have acquire it's are And sure a we we fully external collaborate, as expect entrenched off bat. for some to projects right in are internally. do products But comes look on be embedded product along. license, a going bunch careful, to I get we're don't we right I and we lot we what a when options say, need ones. you at I don't that Bobby in would going kill the can make others the the got to of obviously, have forward. from a we continuously the have projects that takes evaluating some say,

and that I on really get to we'll going So, the things excited about am forward. future work

Bobby Burleson

would across R&D to OpEx Is synergies SG&A with How staying product as there. particularly already of distinction and potential? front, started disciplined there And a have on portfolio just and on you lean SG&A, the on leverage know I on R&D generally going forward? selling. and lot you SG&A the R&D you've the the Great. on leverage, draw between your you a tried be somewhat touched guys

Kevin Helash

Bobby, that's a great question.

here think -- Helash profitability I it’s about Kevin so. driving when So,

better? SG&A, forward. potential. bottom we're to top move why be with OpEx, here. we everything looking to a about mean, lots this Can revenue, of I'm from say think I course, Of margin, is I all company supply chain, happy right, do we'll you that's working those as at and capital,

is them move ratios drive to efficiency, make better Our direction. continue all our to right job in of the

say from a aspects of my to business look to at in I'd happy our me, look all and class will company sure top say in team going perspective, in so, are is terms making of to at our we a with running sector. we're I'm And everything we continue everything and

Bobby Burleson

one me. one from just then And Great. last

thinking needs. CapEx Just about

out You production and think that. planning help debt environment guys, raise you a you're a I to pretty to fund need plant dynamic upgrade there. might little a It's

to the Are Just board, fluid opportunities I'm that of your kind across if have needs CapEx way? of that you costs, kind is to relative maybe kind wondering there if planned? any of formula save that

Kevin Helash

start on have to us answer our a I'm to our product with Boyd warrant we in an cash I'll question EBITDA through bit But enough need to for to at adjusted give of point this get to believe we we meet raise to plan, capital in Bobby, do and time, basis. going the breakeven Jim detail. that it over your hand to more you, terms question,

Jim of Boyd I'm And So OpEx. get that that to in clarify out case speaking turn. includes I'll

again CapEx, is at. that In that overall something terms of we're looking

expanding to We quarter. where get I've what by have I'll more I'd next say, is out you and Jim, you, capacity add clarity topic discussed. And more for going over to thus on that, our we I'm options plant manufacture, of that have products on hand to ran it that being multiple we'll far. because color. my some to experience it the over

Jim Boyd

have at. correct in to million Bob and that its to that the Venerate looking addition Majestene Well, a do $X Yes. plant we bring we've been

to looking it. ways at make alternative We are also

that, to are forward plant debt been sources the it not be and if it's go borrow us to clear if that also we with have but money to for there talking appears needed going So that we to expansion. many available could actually we sources, we

Bobby Burleson

decent about of in terms sounds there's amount It a how flexibility that? like you of go

Jim Boyd

there think I is. Yes,

to looking it. this and hard very the but think, to creative, always our desired try to not how we I at we running business, try And we $X about only if to really million goals. really, be we're seeing meet spend have

Bobby Burleson

you. Thank Great. Okay.

Kevin Helash

Yes. Bobby, with Jim's would the scrutiny will echo before very, intense going that, through we comment I we very trigger. a that project pull last be

Bobby Burleson

Thanks, I Jim. appreciate Kevin. Thanks, that.

Kevin Helash

Bobby. Thanks,

Operator

Laurence from And Jefferies, Alexander. have next we

Adam Bubes

parts shifts path taking could you then if if was more around talk expectations that touch the uncertain? Hi, I bridge this step back, your versus EBITDA of Adam a for Bubes is breakeven? And can on maybe wondering, you environment on Laurence today. current to about certain just the the

Kevin Helash

Kevin here. of catch repeat it. I didn't it's Helash quite Hi, just you Adam, sort question? Can your second

Adam Bubes

the and coronavirus more shift that past does just dependent And of talk about of if bridge your just versus Yes, bridge? breakeven expectations that could more maybe there? to breakeven, you the bridge market levels certain are what to the parts parts

Kevin Helash

Thanks, Yes. Correct. Adam.

We're top production happy you're agriculture China affect we the attention expect food or prioritized the paying the to the or the to around the world, on around virus single of to breakeven, country make India market. to think COVID-XX that and our Europe very the in world, in industry talking of of of path the working supply of and importance terms to certainly extremely say do every are to can industry list, is importance of has due impact we close America. I our agriculture to the So is or Everybody chain in whether North been sure working. hard food that that

to important happen, more see anything think world creating of can't food actually. that very positive. is I'm So, is And very that because I me happy obviously for the to

we're year, place. attention dynamic environment supply XXXX as paying But we'll to happen, But it measures precautionary major very we're any ability a We taking lots to grow. and the to like. impact continue the material is in second-half our be that be to to of for think forward. customers close Adam. may see it's We're and going we prepared manufacturing, to ensure our our that of need and well-positioned knows, need -- chain, we I or But to time, of at be as a So, supply whether don't the in 'XX happened. aware changes, disruptions we feel in it, this to everybody

outlook relatively so it for us comfortable sitting to here add I'll standpoint. Hammill feeling over today in from the some think pass I our a And plan. around But, we're to revenue Kevin comments and

Kevin Hammill

international really business, Thanks, Hammill. see our of business, about in go second-half a earlier and bit business. little Yes. seed treatment the as continued our is I forecasting Kevin the you Helash. mix growth this we business core second-half that the to into and our on U.S.-based the terms This from our Kevin of talked three do pillars specialty in the U.S. revenues

the see transitioning we the U.S., business. U.S. domestic harvests our in Southwest in growth So, in new plant those will space drive based some specialty continued and to Southeast up really finishing

the XXXX. seed domestic treatment side Our then [ph] business that's be recombinant is both in Latin portfolio. will of the start the seed things, America, And from and foliar business planted both they treating harvested, finally, in international will and from being MBI then line

the second-half platforms different should this growth the strong continue So and regions mix sales year. in across our of

Adam Bubes

ratio And moving you on upcoming the of very cost forward, the cadence question think color next kind then How my little the last could more as just of quarter. should moving that's around that sales accelerate? around about just Great, helpful. SG&A, wondering if a we give on expense

Kevin Helash

Boyd, Yes, will Kevin and our Helash here. comment, with Jim the I hand make a over CFO. it

is first So, looking operating the in benchmark at ratio to Adam, our believer to thing continue out revenue, I'm big drive that expense we objective and is ourselves. Obviously, to ratios a to the down. put

do our can ways. expenses, I'd OpEx. very as to and/or careful we're you how do you I'd your of manage revenue both. operating in it two going to and be we you But grow Obviously, So, say, like your terms ideally, lower

lower think part Going bit I is a of that is of the versus forward, first-half. the second the year terms about year revenue in the way

which OpEx number that coming the a business, normal, ratio decline but So, bit to it Jim? relatively down. keep the seek is to the want I a number. because directionally, to we're basis at that and improve our little but think on of forward, is I in going year-over-year to moving second-half it year, probably gets somewhat variable, of going to continue Quarter-by-quarter, looking

Jim Boyd

and obviously the profit we control do over operating question, more sort have revenues, guess line in COVID-XX. than your Adam. line for of I'll Thanks of both I address improving gross questions. our over light Yes. We or expenses margin of especially

that we that open those always to-date. rather, we're those to opportunities we extent has than we manage all. if tightly to greater I looking reduce or are And opportunities we expenses. And would saw impacting to it the for could think that do COVID us

we have that. And without laying Our levers them when tweak and them off the a big discretion longer-term or are field we But bit. as mentioned. we growth can you we down do up projects, can most tweak our people in trials R&D we do or sacrifice

to try revenues in we line to mentioned. operating Kevin in as maintain in keeping So expenses a that good balance and of with in our ratio investment future, the

Adam Bubes

helpful. Great. a Thanks lot. super That's

Kevin Helash

Thank Adam. you,

Operator

with Nathan we Next Capital. Aegis have Weinstein

Nathan Weinstein

Jim. first they guys end about health financial question. first-half for Thank come the your and question, and farmers, I market, through the My we've looking of on pretty Kevin also a Kevin, XXXX? the the distribution unprecedented partners quarter. taking How just are strong of Hi, after you my mean. Congrats

Kevin Helash

great question. answer That's the here. terms I don't in know distribution of Helash have doing. our we a and if Nathan, Kevin the are how farmers partners

to healthy answer long-term it I me. this think of I'll is viability Nathan. will The and about way, unquestionably strong, agriculture it, maybe unquestionably be

the industry. this But long-term say a seeing challenge to around eat. the the growers I think people go to a when cross standpoint, always my back from that, impacted of around different certainly customers need to as bump rather world have the than been systemic in we're world I I differently. road, our of I'll my fingers and ours fundamentals

hardships I'm we that out With a an we what industry, any any our certainly So make economy customers. as in call global will that to of financial a and said, of happen. as aware way would I figure being not

function. know, ensure all world provided to around there's we from lots to assistance the government continues of agencies agriculture been As

it support to you our do. Kevin to we whether from the agriculture, we world. in I'll what situation our need been the But stick think going And do terms we we've like any I to and I feedback so, hand many, need don't to continue comments horrible And of them. over or around to get do in mean of impact to fine. our customers, just this aim a think to underplay to for channel that's the you Hammill the we provide to we're many And through of COVID-XX what knitting, I people customers grower. to heard Kevin, distribution it's terms

Kevin Hammill

in want work end that Yes. the on you build I community Helash last did said We distribution done. Kevin of specifically enough what just chain safety grower. there, with few the what the to the This thank But is you Kevin the they've agriculture the incredible ensure over supply. food for the them months asked levels distribution Hammill. about couple at is our to And of of can't

their crops They've growers the daily of really, grow areas. They've marketplace. great been terms but perspective, a supply supply. job of you impact labor, As products you the making sure of distributor From growth would have practice to that there's been food distancing, expect well. place, been the in in upended really the done averages social any some there it, routine daily really making chain, really continuous or for has three our there's we able the grower everything's in they've been of and not things sure well, working more production there, serve of the

as almonds, especially So safety. farm laborers a you're intensive lot to protect and seeing the the one their of workers area crops, the taken in measures that's labor precautionary impacting such

a to labor manage are to to able manage they of sure of lot take sufficient lot have make more make also they sure time Let's the resources a And crops. and those that.

labor intensive issue has So a a high, management our for been growers. very of bit

to specific retail lettuce part good store really a if growers, it the you're to second terms high. it's were business, interesting had selling is the or The you you demand because grocery if success really of in grower, was the

food out growers the to distribution didn't of But fared well. to at that of out assigned -- as you overall, this plan and this the continue is to be segment, this market team. to business that well systems grow business store. the as packaging have to a little their really I getting by in you're the lettuce their products the to find If One the because out setup sales value segment use more terms of serve let products. to because ways they And credit just sides or your quarter. them those of quarter really educate you that have really daily making business. done They how the commending finish And an figure They're and new our really of successful They redo grocery to big the it have had growers routine. We them. their in how that grow, to of selection aware our ways was. to had was the that's bit had industrial or difficult interesting organic saw people we potatoes,

I force in quarter last So, terms our the how commend during sales of performed COVID-XX. they

Kevin Helash

Thank you, Kevin.

I those -- think all well. as thanks that

Nathan Weinstein

was really you. answer. Thank That interesting

could I sounded up maybe like came comment. it that question just answer, So but ask lettuce a your with the during

but saw And or saw know that some shift if in whatever persistence in maybe don't has in that I of early customer You with you sort trends been there preferences. on COVID, change you saw? some

Kevin Hammill

answer to that? you me do Helash, Kevin want

Kevin Helash

go Kevin. ahead Yes,

Kevin Hammill

the now, into for hospitals. of -- let's the French biggest this who the the industrial, actually coming new to product take, you right in take and industry consumers potato new to the industry, if growers ground like through season put is a whereby example, But U.S., reality. Fry in with the potato So preparing restaurants, one planting adjusting of parts are market we're universities, of in

trade Meanwhile, different wars into big a ethanol some on. the that crops in went COVID-XX a the impacted and oil down prices goes really which impacted went was go like seeing it certain to corn, you -- traveling because are our petroleum switch less then core you crop, so and ethanol which everybody like potatoes. And another in way

crop. idiosyncrasies to production crop-by-crop oil to et And in but then that almonds, we their interesting, go dealing at, COVID-XX more hasn't the Corn was almonds So, ethanol cetera. due it's is terms have consumption, to labor with in retail. of labor. a look so potatoes that has been by the you driven impacted from by They're own issues

Kevin Helash

at out are today. you, thank like and leisure we of can speaking you everyone to your of interest your Thank convenience. I Great. but for that we time, Kevin. any your Unfortunately, you ran open I at or to would time assure with

out more So you please reach if questions. have

the goals, and achieve great forward, to sooner. your know second-half will at results As on and believe I not is I everyone, our to these to you I customer have driven you. time we value. quarter culture a if for team. a the shareholder greater third Thank and attention roadmap and deliver we move we'll can with and The Thanks strongly clear, talk advice experience call, results build orientated

Operator

today. call that Once conclude again, ladies your our does Thanks for gentlemen, and participation. for

may You disconnect. now

Marrone Bio Innovations (MBII) 11 Aug 202020 Q2 Earnings call transcript