CLXT - Earnings call transcript Q3 2019

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Calyxt Third Quarter 2019 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, November 6, 2019.

At this time, I would like to turn the conference over to Chris Tyson, Managing Director of MZ North America, Calyxt’s Investor Relations firm. sir. ahead, go Please

Chris Tyson

good time like Calyxt to update call. XXXX and all third thank for business conference results taking join and afternoon. you, to I’d you quarter Thank us for

Jim host Travis and Senior Development Vice the Officer; Technology and Blome, Your Chain Chief are Chief Officer; and Chief Frey, Chief Bill Sahoo, Manoj Sales company’s Officer; President Marketing. Executive Officer; Supply of Financial Koschak, Business Blanks, today Keith

X:XX the press today PM release at detailing this A the calyxt.com. Eastern crossed is website, wires on results available and afternoon these company’s

of the remind goals future operational begin call financial made we actual and risks could formal of a that those the number that may associated to Please future from and and Before materially for a results differ presentation, in company’s industry I’d to on uncertainties cause regarding results the described everyone prospects, like webcast, are call. list risks. those the refer and to subject filings including and statements to forward-looking SEC be

also you a presented should is and financial release measure. adjusted accordance In of this Reference the are disclosure financial regarding this with non-GAAP measure. additional in non-GAAP be financial includes GAAP. addition and not find Calyxt discussion EBITDA, in press to non-GAAP filings the website, for be each on a of that Calyxt’s substitute posted with SEC, which will results measure should considered its measures presentation GAAP to considered a This

link section our the Relations call conference of is This is www.calyxt.com/investors. available at this being in webcast Finally, webcast. website Investor

Blome. Calyxt’s to over like is yours. I’d call time, to this floor Chief Jim Executive Officer, the the Jim, At turn

Jim Blome

financial joining and quarter thank for conference you call. you, results today third us Chris Thank for Calyxt XXXX

Calyxt those you the would I today. healthier might you love who the a choice. for agriculture-focused technology to listening of like brief making consumer-centric, food begin, committed company company, first and we in to time for is food of be a our overview give Before a

excited leveraging consumers food food deliver sustainable technology ingredients forward look to first-mover to our and our long-term healthier cutting-edge to We’re shareholders. for create and advantage value and I to

of products develop mimic healthier, editing plant are gene We traceable sustainable cutting-edge food customer. to agricultural breeding field and nature by process applying that techniques and to through science the other from

product validation oil human our Food derived first Calyxt February high the Drug On front, XXXX, from no is a review, gene the completed our had food oleic with in To animal After or the soybean. FDA, ingredients the Calyno food soybean. questions edited consultation of grams our In be knowledge, several and FDA and concerning food food for oleic launched service to further the Administration, we attractive that and high in US. trans serving, soybean particularly commercialized content oil, per in food fat with product, undergo our applications. a a fat such reduced and first benefits make Calyno, saturated review commercial the it oleic unique high March, X manufacturing

for weather grain grain storage in amplify proprietary growth soybean. support, for transportation chain, agronomy power services; Calyxt than by soybeans; class Landus will Midwest to assist our and us distribution, oleic with risk with out distribution, more as seed with trajectory, we geographic growth in world support, which as high their storage XXX Iowa, our the built in acreage robust have to Calyno’s transportation footprint partnering adding supply grow a and and To well Dakotas Agtegra services agronomy the farmers Upper seed with diversity

contracted a meaningful it planted XX,XXX acres believe US enables important XXX,XXX we footprint, some be milestone our the to access United geographic of addition contracted the believe acres where targeted achieve acres expect are the from of is for soybean supplier Landus have because we to our an considered the of XXX,XXX we XX% in States up XXXX, geographies the food and acres grown We to With in Calyxt largest located, XXXX. to manufacturers. to

we past Going to our forward, annually, to expect continue consistent double our history. acres with

are advance pipeline the and we our we I’m are including innovation through developing, of five our to will launching projects continuing in we current how with varieties new be XXXX. excited about soybeans the

other We are also peanuts, canola, potatoes, peas, exploring wheat. projects hemp, in and oats, soybeans

innovation All in of industry. our as platform reaffirms position activity this leader our an and

to Turning results. XXXX third our quarter

food achieved We our company progress with financial oleic commercial Sysco’s metrics reaffirmed product XXXX. our front. Bill soybean revenue customer happy on in growing during later will that fast our report I base penetration on by continue the Koschak, the expand solid history highest and QX guidance of million, for make CFO, to network. driven high call, our service am other to within some primarily quarterly revenue including $X we

position an for this gaining is in Marketing. commercial a on Our the and on a support building food of to service in of company’s President and bases, opportunities Sales Vice responsible will growth sales commercial Keith front to appointment he is we team driving of were pleased leadership created and expand give momentum, update Keith the customer September, Blanks Senior with to the and food focus our newly manufacturing moment. with

development on Development and and the plant-based With call. platforms elaborate Calyxt efforts Officer, Chain strategic of his role continue addition, will Sahoo our proteins network chain to initiatives across Chief all Manoj will these later assumed Supply this this of Manoj the of and and supply collaborations expand wellness, grower focusing sustainability. in of on Business

the I’d this, our for over Frey Technology to update. With Travis? like call Officer, innovation Travis to hand Chief an

Travis Frey

an I May and was primarily because this drawn clear opportunity, to [indiscernible] everyone. organization from and in and I perspective technology, of talent the poised Jim, our freedom to forward. to IP incredible R&D unmatched is operate Calyxt joined team you, to our Thank move that afternoon, the lead good to

very world-renowned scientific technology from attractive of Within gene - editing, of to its organization, been depth process as Voytas, the consists at opportunity part well-respected my Calyxt. of a with our a one that very talent Officer, here alongside Chief the Dan scientists been team in well. exists R&D The XX attractive have My work pioneer I inception. have also is impressed talent that of nearly including some people, most the Science

This the fuels and for our at passion that about innovative of excited future. here engine knowledge Calyxt I’m depth

the to by natural an traditional can use technology exclusive our a and compared have We benefits breeding a plant health We valued to consumers methods. in fraction plants breed license selectively its deliver platform. to TALEN it based powers on in of time innovation genome

and with and proteins wellness, ideas exploration As benefits we associated development, that sustainability. review have we focused plant-based for ideas R&D on are

we across oats, ideas several wheat, potatoes. soybeans, In alfalfa, crops, we nine our addition brought development exploring have to peas, in are our hemp, will to closing previously disclosed our including into canola adjustability candidates, and which bring peanuts, of also date, products product an is life seed on commercialization with alfalfa, cycle another second to the launch expected party collaboration improved a and product, market. through who in are XXXX To

We will collect the technology sale a of monetizing royalty the price seed, platform. on our

about the similar chain own I’m with organization. as We working our it we done others a along with products high through and Identity bring market or pipeline, I’m to intend in Preserved our inside to other manner supply expand soybeans. excited to have oleic and outside

enable XXXX. our through believe field we we early XXXX, fiber our improved beyond new weather enabling moving expect with. crush risk which five growing we diversification that in expansion areas closer zone, varieties will work to geographic of current product and growing wheat We Within High high high plants introduce is product to launch line, wheat soybean fiber progress testing. our expected to our also its as continue oleic to as

technology, but Finally, I’m very R&D that with pleased just achievements. elements the other of our robust patent portfolio our covers talent not

We and build Calyxt’s of expect to portfolio to and with pursuit new continue continued in potential patent license agreements. filings

Senior President now Keith discuss of Sales your our updates Blanks, for you product key will and market Vice opportunities. new Thank time. and Marketing,

Keith Blanks

been across of markets today space Thank marketplace you, excited has and customer the the sales Calyxt expertise over knowledge be multiple uses all far at performance roles career several months channels. to here the and to several spectrum about Travis. talk potential Calyno vegetable have its segments. and Calyxt exceeded expectations gotten and that a joined broad across of drive two I of very leverage have of know to to little Calyno in across its and my product very a long I’ve for I’m well. to Calyno.

For and traceable, which our grown is you story, food it to of making service, new applications, XX% $XX American is market. soybean oleic market those Calyno, to opportunity, wide locally billion of oil, our variety industrial the food a addressing proprietary ranging suitable high from a combined North manufacturing, uses, of

X.X trans acid much oleic as XX% soybean fat fats and high conventional times oil serving. saturated soybean oil contains as Our with X grams of almost less per oleic

frying stability and life. times benefits has our three segments. life for neutral less variety versus All wide finished applications. to flavor product type oils. polymerization It Calyno by and taste these performance quality also superior clean a conventional to and provides It improve of performance very across leads multiple Calyno absorption cleanup. including oil oil of and also make and improved benefits also less across a versatile and competitive increases shelf performance This

our To validate compared premium what view compared to we parties validated those These marketplace. to Calyno parties and oils our third other of perform engaged other oil performance commodity Calyno’s third testing the to in have also on saw, we oils.

foodservice, that entering a a the will very to product value with meaningful to industrial higher We confident food manufacturers when and that performance. are oils looking companies marketplace achieve proposition deliver compelling

update I’d customer activity. on provide like now to our an

to to world’s commercial now took its Calyno the launch XX customers. launch Subsequent short now year. stocks sells its a first them. and one and Midwest to that immediately those customer food plus earlier since service is in occurred three sale with our chain count Sysco’s this Sysco, distribution sale, of companies, after months of above The interest largest Calyno restaurant

generating We multi-unit service our food other with restaurant with and testing chains. momentum are oil also are distributors other

or variety actively are market more than performance manufacturing companies a of this for better explore, including bars, nutritional Calyno’s feedback has Calyno cereals, and multinational and remain performance. oil, testing food segment, that the sample specific initial granola In of evaluate with XX and in applications more. segment, we been In to working in exceeds these supplements expectations our with we applications large CPG companies with equal

service our and quickly bring on sales of in a growth we opportunities educate led our and drive for us manufacturers. product has to food resources agile see small, with Sysco marketing and trial sales food Our oil the group and

standpoint, Calyno’s high have applications, high and life life with of proposition a polymerization. reduced built we our leveraging the shelf extending taste, performance fry are exceptional longer cleanup versatility and and around operations value marketing in including From products

and development I excited to during off hand Supply the Manoj chain closing, our I’m and of am and high confident supply to sales our will In Sahoo, Chain oil discuss and Calyxt be Development now I leading marketing Officer, to about quarter. quality business activities the the team. Business

Manoj Sahoo

you, Preserved and the our Keith. of to parties collaborations once team. to cash. additional And welcome Keith the build focus on Adding two supply and optimization objectives: third source our again, an Identity in out Thank streams to me allows team revenue and with chain; bringing new second, driving thus, of first, major

The Calyxt third fantastic a quarter execution. for of in terms was quarter

third crush quarter, our till the and out the was date, multiple which resulting successfully the were largest including we During of executed oleic at bushels the of on soybean crushes, meal end subsequently XXX,XXX high sold quarter. over

sold of best soybean poultry. QX is our being the As result, a dairy was and by sector, followed high pork meal Most quarter. our oleic to

total pace are available all progress scaling looking our guidance. crop. We storage. with from Iowa’s in announced in the quarter and to crushing chain and market, soybean quarter revenue completed this million-acre for We meet around our to of grain chain especially Calyxt’s on expand and the focused agreement supply Landus have soybean order which in up of purchase supply quarter, feed We the the XX% into product Preserved XXXX of network to is fourth an XXXX seed significant Identity sustain crop sell to in XX made distribution the US

in added XX% During growing the crush period, our plant regions. we and increased locations by storage our another the targeted elevator number of

Calyxt seed our covering rail model logistics business largest important the be supply crop plants partner head country and chain and part in integrated model Preserved is to up scaling two agronomy, Our reliable our seed enables start crush cooperatives imports, treatment, customers. distribution, an elevator of storage, Calyxt’s of of a to Identity with the

season. is of fall wet harvest acres The progressing in well the of spite XXXX

The As observed our of growers have largely harvest in who deliveries. completed for contracted of today, more are XX% with expectations. their than delivery yields line

Jim stated, acres. acreage our at goal XXX,XXX As XXXX remains contracted

as we we have As than contracted of of happy XX,XXX and today, for more And contracted October report XX, XX,XXX continued that momentum, had I we to than that for the am XXXX. acres more XXXX. acres have

up of an grower. more growers XXX signed average than XXX nearly at per have acres We

XX%. rate Our close to is already retention

committing high versus return average Our XXXX to growers program XX% our acres XXXX. in to are oleic additional

average is of a Calyxt XX% of oleic and Calyxt varieties, is addition, our soybean trust to span earn which In efforts that of high of grower double an year. This product almost committing a is approximately their short adoption great our to reflects time. such achievement and for to in last acres farmers’

now strength to them. food companies. food XXX,XXX Jim channels milestone to We diversifies expansion US our and customers ability spring for a reliable service also supply our acre of and capitalize penetration five as underlying these confidence remarks to manufacturing echo varieties and inspires makes to will base. launch I thus, in relationships, We it the supply this oleic see food farmer related in high from five intend and our partner more offer is states. grower growers our growers an mentioned soybean our and current to base distribution us with contracted in this value on potential the chain, increase in want believe our have Geographic expand opening future we and mark his our new to supporting next we XXXX important that and geographically believe existing that acres,

I to would business shift development. like now to

pillars technology pillars, and to are streams create said: focusing is revenue These platform plant-based our new strategy Travis Our leverage and proteins; efforts our around sustainability. wellness; innovation three as proprietary solve in prospective from also to develop are partners precision applying who breeding collaborations technology interested needs. unmet points Calyxt’s to products in by pain TALEN feedback plant rooted specific while or

align members customer since trends three an XXX,XXX direct health well. importance Forum XX% pool, more than of In initiatives. products have Consumer and example, the Goods of XXXX, reformulated new these industry with as to To to highlight addition wellness pillars give

for Nielsen growing fast sown goods messaging fastest data pack on suggests consumer are the that sustainability brands. claims moving

at Sustainability, protein consumers Center more healthier of Wellness based consumption and Lastly, the increasingly environment and friendly. plant a view as

For example, there than investment Global been since food Food in has estimates XXXX. $XX more plant-based brands Institute that billion

alfalfa we example strong mention palm like are sustainable more in, healthier I In engaged alternatives to of provide another we would industry and a have addition to interest shown actively the to wherein oil. frequently, collaboration a collaborators project food collaboration in

who domestically is and US highly effective ability by food oil X last palm USDA and to like applications seek According ingredients performance to functionality We can replacement brands palm sourced companies analogs, where develop over unique. of message. performance their statistics, meat billion pounds a year a we for was consumed sustainability oil’s confectionery is comparable baking, believe palm differentiate such solution. and in and cost healthier sought after with A

driven This collaborators like size by by TALEN the these this plans commercialization upfront bring Calyxt we up projects collaboration our for monetize example, our followed to each fees opportunity and is of and to and platform, products. what an upon solution. the royalties plant milestone with access breeding payments precision of

cycle gives accelerated consumer innovation is and the years us driven three ability product to in for industry’s five unmet solve up and keep Our the an fashion the with needs trends. to

I’ll off our Chief third to give Officer, Koschak, quarter hand Financial Bill? who now financials. an on update Bill our will

Bill Koschak

joining our team call. you, Thank to welcome [ph]. for Thanks, our and everybody, Manoj,

thank handled Finance full Head supporting [indiscernible], and and is pause even for Investor now for I’d to too to and both of continue, Simon is Calyxt Cellectis’ time I organizations well Strategy, Cellectis, and both support back who [indiscernible] Before transiting Simon. who has like Harnest, so our Relations much

engage contact every Chris’ of Chris at on website. at will is directly, Simon. in full focused missed, with is ensure Investor you, handle Cellectis. response. role end our we you and Group, would Relations he presence prompt release MZ the have to the Simon’s his Tyson, as will the him Calyxt. to decision represented him be information for made best Thank impact just to Simon, out IR Please press by and a We wish reach and and all

of quarter XXXX demonstration milestones. good was third execution of of operational a The

the in quarter. value grain reflects $X.X inventories to that manufacturers. primarily of fourth also commercialization. stage of net food crush We by the We continued of end and of in we’re higher quarter. bushels of XXX,XXX this out sold of over $X in to increased the record sold testing costs of activity, early distribution service and through of Cost momentum the plan as the were cost revenue increased goods reflecting meal a scaling realizable currently the oil our experiencing food at products generating sales crushing million, million, Our driven the to with sold period adjustment

are R&D addition $X.X reversal benefits costs to XXXX. third quarter million that stock XXXX of an were XXXX which million tax quarter $XXX,XXX primarily expenses of in of prior compensation increase $XXX,XXX and longer of third is comparability due no year-over-year. the increase in included of incurred The in expense, third personnel. earlier to realizable also R&D the compared expenses the grain expenses $X.X commercialization in expense we this of noncash million a affects R&D our payroll quarter to R&D of the $X.X year, for of the

XXXX. compensation fees third the paid quarter a quarter third expense was increase and as all $X.X are of in nearly reduction $XXX,XXX. by services SG&A million, provided XXXX. personnel $XXX,XXX completed of the of higher Cellectis expenses partially increased in and XX, fees as previously personnel we costs fee the an by to million management professional of have that of professional in internalization to The of increases offset The in September Cellectis were we million costs by driven the costs of compared noncash XXXX stock increase $X.X $X.X in

$XX share of guidance a compared of higher in XXXX and basic of loss XXXX. first financial noncash to per $X.XX loss line quarter Net month. The million $X.XX million million, per in XXXX by share our third costs diluted with compensation the in or $XX.X driven announced increase a XXXX. $X.X quarter Net million products $X.XX third previously launching $X for per net basic the and loss cash in quarter expense and substantially associated used with of third diluted million to was the $X.X loss of or of million was was

largely results a items million within to for in provides business cost our which of certain believe may a independent significantly also of that facilitates and defined measure, million were reductions costs expenses discrete about in with our by by quarter adjusted of offset and interest, it of noncash of financial third the in in non-GAAP adjusted between third $X.X operational by supplement this depreciation was gains financial officer measure and XXXX, we and introduced cost, and tax a mentioned comparison longer We’ve driven R&D measure items results the is performance the loss we make earlier, EBITDA income a EBITDA quarter accordance contracts EBITDA, to losses transition useful Section with adjusted also loss, for excludes $X.X our that’s stock-based increased supplemental our grain realizable frequently We because define investors quarter XXXX from no loss introduced prepared in XXXX. XX occurring net as as excluding performance. not personnel It in the of GAAP. GAAP. business for that This tax increases items, commercialization unaudited and expense, I that payroll expenses or adjustments purchase periods vary amortization compensation, are where our then that benefits noncash information

XXXX. to XXXX. administrative equivalents compared third million platform December of in trajectory cash usage am and investing to general largely scale In cash million the pleased the quarter $XX.X September our $XX.X as of of with completed conclusion, in We’ve I Cash as XX, organization. XX, required our XXXX, totaled and

in will lines. product safety and supply grow to pipeline be We food in as chain, quality sales, we collaboration in future soybean projects support expect investments our our our growth and R&D in

per $X We to in in are fund anticipated usage million mid will XXXX. guidance I $X year Taking revenue into million cash to and our our our position $X reiterating month. of $X.XX operations forward, million XXXX into account going prior to be fiscal believe usage cash sufficient million

turn With to that, I’d Jim. back the like call to

Jim Blome

will Bill. see customer acceptance soybean In of Thank year and remainder us of summary, you, marketing driving the the increased our oil.

of in customers service the potential food results third-party in the how channels food and development in with further we extensive the with be can our other applied any past. cycle Calyno manufacturing results in pleased are time we testing believe of We than and in and other are

Across surpass milestones industry with growth. are we our our to continue and operational leveraging business, and our lead aggressive in the technology

that other to market, or a with We’re using we of pipeline our create commercial bring collaboration to to intend the through products organization talent companies. our alternatively technology either in

internal we The team leadership continue the business, has to a we foundation as to will hires. and assembled drive great add been fortified strategic

our constructed competitive provides and footprint launch chain reach a have that supply to collaboration expanding We varieties. our and their while leverages new Landus of with advantage, expedite first-mover the

Stanley Protein Chemicals LD first on full forward we for XX, acres contracted on the Micro Summit November the for year to Global our Chemicals next creating We story Main on contract our XXXX. XX to achieve XX. on on and Agriculture with sharing the opportunities and for Alternative Jefferies and at upcoming XXX,XXX December Conference the for launched acres Annual Conference more December I to the & Working in shareholders. Morgan long-term seizing December forward look Calyxt have year value campaign the look expect developing X, Agtegra, Agriculture Citi to Event

With go up questions. that, ahead. Operator, open to the for like call please I’d any

Operator

question comes our Adam Instructions] [Operator Samuelson from Goldman Sachs. with first

Unidentified Participant

Adam. This is actually Jordan for

evaluating Thank the realized if XXXX. on options you. impact, and that for availability ask looking working provide would could were if So second an your can how I yields then wanted color capital and its seed And to on the any, you they financing we any ahead? get crush in crop question for you’re first lowered if XXXX on update be for

Jim Blome

we’re take middle harvesting. first of part you’ll the on part. Jordan, yield, the take and second in I’ll Bill,

The have We’re pleased with at. where data, in position. expected but our gathering that as we’re we’re relative been yields

been has our we for us measure by of continuing. and bright it acres retention see it our and growing in we spot So current that program, acres, a retention. In

Bill Koschak

Jim. Jordan, Thanks, your question. And appreciate

options, that we And would be our plans internally. harvested need get that about call, that’s out, we’ve the financing cash our talked as extensively projections. financed to I on Regarding internal have the being for that based current crop us mid-XXXX, on currently said

We’re to financing always talking people about are with those us, upside and to options be any would what available projections.

Unidentified Participant

All right, thank you. I’ll hand it off.

Operator

Thank you.

Our of from with Ken next state your comes question Zaslow Bank Montreal. question. Please

Ken Zaslow

the expand One expand as you opportunity actually XXX,XXX? to the questions. with Two are the or the is - number geography XXX,XXX is included beyond traits is of in there soybeans, that you the little anything, How And didn’t bit comfortable change with like but that? are I does you play within seem it the what all assumptions varieties. more the basic know a you’re does out? that

Jim Blome

allows just They’re XXX,XXX Thanks, this take traits. to and varieties target the for soil year. into types the not groups Yes. to They’re different that Ken. us into of different geographies. additional jumping That up reason acre more us maturity was soybean

helpful be that So us. will for

seed have growing as last will room for year. we’ll of and production course, We’re that growth cover and we that did other plus replants the seed

that’s So of point. the kind

We’re a not trait. adding new

varieties. adding We’re new

Ken Zaslow

that more go change this talk in like alfalfa, second line have the you you new then that a like direction then was part just out? new Can on sounds wheat? talk Do new? about And time high-fiber is adding that? hemp. the there about Does crop anything and the we capital to all it do these for How which does you’re play crops? the of going any Is to you’re

Jim Blome

that complete of a market question collaboration It’s chain and new like are appreciate the us. did upfront about the also collaboration. Well, complete These nothing Calyxt developing expenses it’s and you’re for we as take thanks, soybeans. preserved directly. taking that partners, I we in where supply identity crops model wheat in that Ken. money through shared projects and other well, we [ph] because for to We’ll will will with be S&W market strategy our where those new utilize that for having restatement hearing their system it that that our as we’ll alfalfa, on

plan. at is It in ready our or our change So time. and go this doesn’t loaded that we’re our base as burn rate it standpoint, to from financials

Ken Zaslow

Great. I appreciate it thank you.

Operator

question Our Please Baumgartner Wells John comes question. with from next your Fargo. state

John Baumgartner

wanted because I the once were to in the topic potatoes was emphasis R&D pipeline the of of initial years think the market, and ago, emphasis HO stick I two with some in kind soybeans go there canola an today noted oats, plant And on curious the I’m a of the the peas varieties. that the And have process. protein. how the others the release emphasis some few you of about on vetting

If edible the how planet, on proceed Has does it the how from - curious, kind plants about you’ve of got of does XX,XXX novel process how here? starting mainstreamed process tweaking an I’m changed process from that kind with think that maybe big and established picture, stage and going gating yet? forward. been crops the you just identifying that to maybe haven’t it vetting crop

Jim Blome

I’m a a had you I of to in IPO that came long successful concept, that nobody’s wheat, sure we and very reporting We that. complete we proof of we it done were But a we doing going it Sure, important were working we a company and John. ago, but soybeans give public make on. of felt to just things Frey. in I’m a supply when our CTO, year our focus the did and that lot do over our as it, narrow to going comments, couple Travis to chain turn was Dr. in list technology, of quarterly

ready sort things. we based at these market talk And bit at projects, need saying by today and to that other celebrating it out again, that. back through move I’ll now kind leave and that We’re let how technical of Dr. Frey we’re back look feasibility, success about on a and

Travis Frey

actually and Thanks, up running. sort soybean the high and unleash of focusing place good John, question. be right that to get get thinking one getting were and scientists they dreaming very, great innovative real this drivers innovating the And the me and wanting very got whole here. It’s engine of to and to great We’ve in at for Jim. here. time that the lot oleic ready been of have created right and that that we’ve varieties a

And so fruition that see to sort of them we’re now allowing through.

was Bill direction. of to Jim a other time and getting It first as our the knowing and go this innovating the we to chain And just demonstrate and to we’re so right and bringing to timing identity. our it in supply when ensure And some on matter these value preserved that plan product was always consumer. our a was had now the and then crops, market lot and in interest of mentioned,

super I to exciting we’re be see, think the future. you’re very products with about the coming excited So to in out new and going

John Baumgartner

And from, mid-XXXX, Bill. just about runway that bit follow-up where for that those sort out cash savings The they’re a being to terms in what operational little extend of cash elaborate can commentary Great. the buckets from? sourced maybe coming savings, where you a they’re of

Bill Koschak

John. Thanks,

You bet.

business expect this so looking need team appreciate budgeting cycle is to our through As what able what were and annual now that it. to it, forward we spent we - grow you this our we at and and working knows we the we’re and can how way here year, project

would So sit through that our we where it’s belt. that, several months of under determined we’ve largely operating with

John Baumgartner

Great, thank you.

Operator

from Instructions] next [Operator Laurence Alexander question comes Jefferies. with Our

Laurence Alexander

in operational granularity change significantly terms significant look I a is say how what’s their market what sense this to experimenting? up? it more you does place and as real order fast trialing of for to the pull customers? your customers scale take point more the How put patterns for And for give long get guess a Could to at end order? Any in on they at little them market them rhythm feedback to opposed So we the cadence through then can at important, minds? bit

Jim Blome

It’s faster a service, food talked that question, we’ve periods. trialing One for bit. on I’m where a a Keith then let trial our great going right, in talk pipeline Laurence, for to and longer a about shorter different food turnover is But ingredients. you’re two the always decision to it’s

of really creating the his he’s he’s in is that’s that. over help that in brief you that what data to turn now So time somebody to us and it to we here. the kind been Keith been and plans with staff have are And tell on what seen I’ll understands it

Keith Blanks

food correct. a the slower. is a sometimes marketplace, but folks of bit we’re we’re the level. Food inception performing ingredient What at to cycle faster at of right pace. this very product is Jim’s high move seeing in little a that service we’re moves The kind new the where trend

up. testing phases moving the so And are

through been we’re just testing So seeing the a that. positive and activity nine some lot in results weeks I’ve here, more

customers in could situations, So I with some like will some go it and and their larger, more move obviously measures normal. faster, sophisticated controls their then think through

Laurence Alexander

you are finished this get of And to just needs that any of down stage? I started the hit is, regulatory that are sort customers nail Or anything because hurdles the sort regulatory is outstanding product? it there to then That be secondly, it’s gets guess out your embedded I there have triggered in completely just asked of periodically, purchasing after once products?

Travis Frey

this I’ll take one. is Laurence, that Travis.

right So usage sales focused in the because all and of the has and now. only that we’re on focused just our US, been US, we’re on now really right

got US. to thought going great here it haven’t at we and lot of grow that. first We’ve and a about further any a a base the than So leave room lot

Laurence Alexander

the once that products. stage second to clear, US, in embedded you’re triggered of Right. no be there’s gets Is that kind customer But the correct? in just

Travis Frey

we’ve completed, the Once we’ve advisory already which gone period, no. all. No, through that’s

Laurence Alexander

you. Thank Perfect.

Operator

Fargo. from question with comes John next Baumgartner Wells our Instructions] [Operator

John Baumgartner

Thanks the least follow-up. quarter-to-quarter, the it the do support about P&L. rate sounds R&D, factors that about one-off gotten to how pretty the back for been to we I think you’ve run XXXX lumpy had QX, come then of if wanted like far, as for QX R&D, and guess, the at so think a number the Bill, about When that’s in year-on-year we thinking to increase business? well even maybe just

Bill Koschak

Yes.

out the both exactly are drove remarks. my in release and the right, There So you’re factors comparability we John. called that number a that of

expect I a think the that behind and run than stock I other get that provide us we you to there. comp, fourth quarter should - cleaner rate will be when

our be percentage. would important very a We’re looking ours That of it in manage company is try a as and look like having big obviously growth. a at portion expense, to we R&D and it

spending. We’re as of It’s total looking it percentage a a percentage not to more keep our of sales.

next on want see would our SG&A an to we comment you’d make that I worked for than we have continue this don’t growth number investments specific level budget, in for of in you his be to will with Travis next As plans R&D. would a in area year. but year, on a higher it year,

I in investing that finished I off taper that taper in to G&A the would platform, is to growth as off, remarks. said we’ve my as expect As

The I us. it largely the would comparability, is on that thing last say behind

that’s number However, there’s X.X was or full I $X.X think expense you some there year what pushed But do comparability on affect we I the quarter. the last million quarter. on you will is next year. million that affect math behind another through another can we it just the quarter, X.X in of so will a QX comparability. got is did for the then We’ve for math that grain the fourth because number that said us, $X.X -

John Baumgartner

you. thank Okay,

Operator

At this session. his over time, to I’d the call Jim our concludes back this remarks. Blome to like Mr. for closing now turn question-and-answer

Jim Blome

us Thanks on for Yes, our call everyone to you. joining thank today.

themselves all and have day. of to And hard-working We of MZ to weren’t be questions all management our Investor would who We people the not a And to you. a without want Relations today’s or your push on happy lastly, firm, address if answer from further to here each we I thanks sincere of you. call, Group, Calyxt take at do feel give to dedicated our to us able could them. mission time please contact to it free who all

look next So on we Operator? providing to updates call. forward our more

Operator

today’s Thank conference. disconnect. Thank concludes This All you. parties may you your for all participation.

Cibus (CBUS) 10 Nov 192019 Q3 Earnings call transcript