CLXT - Earnings call transcript Q1 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Calyxt, Inc.

First Quarter, 2021 Earnings Conference Call.

During today's presentation all parties will be in a listen-only mode.

conference is open X, being the Instructions] questions XXXX. presentation, conference This recorded the will for be [Operator Following today, May over Calyxt's Investor At turn Firm. Vice would I Relations of to conference President America, this Executive Chris North like MZ Tyson, time, the to ahead, go Please sir.

Chris Tyson

you call. for Thank quarter Calyxt's good thank XXXX would time taking financial like I and for to conference first you, to results afternoon. all join us

of today Dr. hosts Board. today the Koschak, Bill release Ribeill, these A company's the Your available Chair detailing Chief Financial press the Yves wires Executive Officer; calyxt.com. after and are results on website, crossed market is closed

of be measures results Before should a accordance additional Reference in made GAAP. for This differ disclosure not net financial financial for described at are calyxt.com, gross includes with you from those and goals a these should Calyxt's to prospects considered risks and I'd website considered presented loss, per that presentation, on adjusted future EBITDA. are each results the loss that of substitute find results GAAP a that All presentation industry may will be regarding actual in SEC SEC, forward-looking non-GAAP. the uncertainties measures the we call. be call margin, including of to release and the and on posted these addition non-GAAP company's statements future the share subject with In non-GAAP to everyone measures. are number financial associated and could and to discussion filings financial formal regarding net press risks. materially its list which to is refer of like operational to company's the begin and in and webcast, also cause remind Please a filings those

turn webcast. Relations this the section I would link on of The to this is is Bill like time, Calyxt's Financial Koschak. to Finally, webcast Chief available At calyxt.com. call Officer, being call conference over the Investor

Bill Koschak

for Thank you, quarter Chris, and call. conference thank today you joining our first us for

of has industry our substantially in indicates soybean trait next-generation our to The of Reiter, execution Chief by accomplishments improvement by months product premium have trait exceeded her with high I'd acid made Calyxt product. expanded among Preliminary expected done, in on she This like is performance of congratulating achievement the first team first to scientists, oil this oleic four with Business to oil. testing premium targets par oil, XXXX Sarah oil oleic next-generation Officer. promotion contributions you of from acid several our forward continued oleic, analysis the Sarah, sunflower that soybean since in of ultra-low working segment. line. linolenic composition on transition significant has begin of XXXX. low our linolenic combined our included soybean expected great any heart-healthy I highest premium She of soybean high levels October look levels with and role. joined and to the is Initial great of Well a

excited profile, for ready results should by fatty planting these increased desirable expect improved soon commercial of terms high acid as are trait be and We life and as in This polymerization. shelf XXXX. reduced stability, performance

oils. to premium other to introduce seeking their are we a premium through commercialization, as trait and elite seeds commodity For partner soybean to companies alternative with this soybean compelling

crop for enable breed to fully non-domesticated to is demonstrating in been hemp ability manner Our hemp It the capabilities in a hemp to traits. used and transform. hemp in transformed particularly order can genome, selectively be have to adapted and Historically, improvements deliver the unlock has a that scientists engineer and difficult hemp hemp. modern, as the broad-acre new team production. establishment to stable characteristics hurdles by the scientists tools overcome hemp to select and our Using presented enabling broad-acre is a breeders technical we'll to of valuable The contribute we developed technology that crop. our hemp plant transformation may transformation

crop, development. expect accomplishment and now we who can both We modernizing hemp and cosmeceuticals, accelerate benefit nutraceuticals for are growers and deliver more. the foods, this traits that to consumers hemp plant-based increasingly By looking material, sustainable

the experts we biochemistry expected quarter, of Head SAB The of the more to is initial Associate a sale quarter XXXX. new available at and First platform. identification John affiliate high-value first Scientific of grain Innes reports grain sold remaining shortly to Professor have finally, with ours. Engineering Voytas. BASF. projected plant these made as crop products is during Stanford; innovation Centre; of Board Also appointments on Paul traits XXXX. seed and we of focus with grains for today, customer And to to will our The using commercial of Molecular from Co-Founder, after agreement Board. include our planting our to than of Dan Sattely, be the Bernasconi, plant-derived for sold soon ADM and development we Chemical SAB appointees an ADM commercialization as world-renowned throughout a a of of by chaired proprietary And Biology Advisory former XXXX our at end, also Anne [ph] Other of as an the Directors be XX% Osbourn to Elizabeth executed

including development, Phase projects two X. later-stage We in have eight in

product targeting are the available at begin planting and commercial now least five having XXXX. of candidates We to end between

of development per of was of target product, our being During oil, our content. developed with developed oil is to HOLL we improved strategy. This our under a go-to-market stopped HOLL which oil product being higher cost the pound prior quarter, reduce

go-to-market pursue to our strategy. licensing arrangements baseline and as development trade determined also We

to opportunistically are the XX-Q filed release increase evening. future we when million by from in XX% issued portion products potential or We XXXX for the a $X expected these of alternative increase Today, revenue the soybean Revenue selling intention traits this commercialized driven quarter to requirements are licensors and The and quarter the was royalty the of oleic describing with engage as transition development a those we products XXXX in traits. million This further an intend license Form discussions we XXXX crop meal. of in high-margin XXXX. go-to-market quarter this results, press of of product our we XXXX, reduces arrangements, compared under licensors. as $X.X first currently to grain and capital in when were first high is oil strategy While the sales drive is move current first was by quarter XXXX first streams years. to and of our our in also oil to our soybean

quarter of was by net was the cost in the of quarter sold negative share first XXXX. $X.X gross an of XXXX, in million the in quarter change XXXX, an margin first driven The line $X.X first in for Gross the and compared first the quarter share as soybean as expenses XXXX strategy. a was the following $X.X was margin EBITDA and product an grain in XX% the loss reductions the the improvement or of advancement decrease $X.X $X.X the in first operating reductions personnel the of the XXXX. XX% reductions $X.XX in per Net or of in share the of loss XXXX advancement from expenses loss soybean benefits strategy million million $X.X quarter our loss the or a from million XXXX. the quarter of adjusted million million per driven improvement measure, was of driven first of XXXX, Adjusted XXXX. negative of well crop. was $X.X XXXX, negative X% in million Adjusted driven loss costs was improvement first loss. in of resulting the in first first XX% by of million of from from or in the improvement in million XXXX, The of of from percentage million our quarter negative line of negative of the quarter The The was per improvement XXXX. the as adjusted of share non-GAAP other basis our adjusted on $X.XX of other quarter first change decrease margin, of line Adjusted XX, first in negative from net lower per Adjusted were first and or or million the of March go-to-market the million negative operating $X.XX in million XX% driven or advancement strategy go-to-market $X.X we've of of the and XXXX, XX% the over result cash quarter of improvement of net of The adjusted loss strategy the quarter the XXXX of to XXXX, $X expenses. XX% go-to-market first XX% first of $X.X an first improvement in per was quarter quarter XX% $X or improvement product Total a expenses. to or other gross cost XXXX. reductions operating adjusted go-to-market XXXX. by negative from soybean improvement in improvement line a was quarter $XX Net a reductions net from share $X.X the cost margin from product reductions first quarter soybean XXXX. in product XX% advancement by loss our in in XX% quarter net was $X.XX of an gross quarter compared by was As or XXXX. first

quarter about quarter earnings net improved these GAAP investments equivalents our XXXX. first context capital. measures materials, improvements in of grower deliveries net cash website, driven expense From last below these that in the cash short-term progress believe XXXX Small In year the our we the investments Net the on Protection sales $X.X of risk. include primarily second Subsequent by actions next to of been used half was first cash The in are selling quarter were full $XX.X XXXX. to and by we our comparable staying our Paycheck improvement achieve months and of We to the highlighted the of to measures which demand $XX.X purchases we our best most cash less. important Administration grain, report non-GAAP will of the and of Program a the made Business cash reconciliations track operations was least diversify a XX our cash fund Our and operating has million to first quarter and amount for forgiven. million notified managing short-term credit by or at loss the first result expenses loan the of enough end, measure. XXXX working compared into and the quarter be the on operating invested by and provide and improvement by activities, of annual match posted operating target in significant and counterparty million to XXXX, reducing used $XX we million of of perspective, changes the

We like over to turn XXXX income and the expect amount concluding record Ribeill, for Chair, loan second in Yves interest. Yves? the quarter associated the the remarks. call for Dr. of now the of to accrued our to Executive his full I'd

Yves Ribeill

Bill. you, Thank

technological exciting in with which Advisory Sarah opportunities expertise Chief plant-derived near-term will fragrance, technical in and our The to SAB to And SAB XXXX us of advanced leverage several flavoring, ingredients realize The four opportunities Officer and some scientific and in first we'll identify for us through promotion therapeutic, material, developments of we of business Board. of seek breakthroughs, provide for Business new laboratory. both Scientific cosmetic, The may long-term to look The grow our formation included and more. the explore the and directions. colorants partnership. to Reiter months

and product. learning R&D continue metabolites high-value build first innovate from and plant-based to our by products analytics upon identifying of for edited Calyxt unlocking team proprietary the the use advanced and Our systems that platform

harness this genome, congratulation successful the transformation underscores soybean testing of results be favorable I'm relation editing she the pleased including plant role, the big profile. hemp potential with our few especially biological will Day-to-day, contribution more last leading This to of planned and ongoing enabling In corporate I delivery, activities, business and deliver six business including first fatty Reiter to this Sarah trade comments the In close we of transition company, gene development Executive next Business Chair. forward a year. HOLL of our ability all this Officer search. Sarah. about marketing, to also generation future the our I its trade for of product. my promotion strong by this Chief quickly complex in discover, communications, role advancements commercialization organization. she like to a be in to and will so plant-based the with recognition later dedicated Our our responsible would announced team breeding. her solutions. is look am our for on acid the of pathway with advanced sharing Calyxt The We responsible And received understand advancement and finding like months of activities and development product of communications to to her in for supported call, the partners executives. on CEO of public to

variety open the hiring it is growth many that And our making our source addressing ultimate sustainability we soon of new committee, of good health, call, progress the sectors, which the place taking will climate concludes improving has year-end developments search exciting I generates a all This please plant-based said comment are in successful across customer for the we and ensuring I the a products. completion. questions. Operator, of training been There remarks, towards Calyxt. Thank our line of is while and are Our These active change. CEO, for vision and meet are at on environmental Calyxt. you. products too to becoming earnings dream prepared innovative ingredient in as emerging candidates, lead, that needs while power

Operator

comes first of Wainwright. Our the Amit Instructions] line question from [Operator with you Dayal Thank

Amit Dayal

afternoon you, good everyone. Thank

for Just clarify to HOLL Are for you us. begin apply sales only does this with, you stopping other to could if also? seed or products

Bill Koschak

Good afternoon and Amit. good question,

to going HO selling our including go-to-market are to XXXX. intend continue for trait a then strategy. HO move forward, in we move So to products, product we seeds as for And we all

Amit Dayal

side alone towards efforts more versus other of make seed-based efforts What the sort can to to of of sort So of as in of just Sarah transition license-based, head anticipate terms know a BD a your promoted I this you royalty-based model of you sort model? licensing-based we things.

Bill Koschak

as great The continue more the great you'll to of of do us see what - we is of she's a a - think Sarah promotion I done. recognition said same. is

we've especially are to that that inbound releases to a a what tremendous have advancements products in us done well our press we announced pipeline number disclosed got made the in front licensing the as We our of the in hemp. we've We've opportunities as of that of for response hemp. technology, that we've all lot in related of a of accomplishment interest, in the couple

key more previously we that that other are are use. Our if than sustainable want advanced unavailable, from currently up that people, performing the inputs work complicated that were for believe that or markets breeding with to alternatives complex ability in opportunity including developed crop techniques. in transformation including perspective, And crop. us unlocks make The our many to materials it it you transform opens we've and editing other to us, is to advanced plant-based ability advancements and new the

Amit Dayal

XXXX? And other out earliest your sort of is new line understood. you certain is - XXXX product, for for pushing XXXX soybean the time targeted line, that terms to that earlier target dependent Okay, possible than factors, on is or the in planting of is the which it time

Bill Koschak

time will taken for as is you're XXXX accelerate in maybe with until product. it referring XXXX. target stick think but a over what HOLL for I There're could It's by the a in things would I has to. HOLL continue is good that I that our HO coming think been benchmark. XXXX it, some table

Amit Dayal

cash you on us operating of the balance costs, give your you Okay clarity many understood. any And terms et could cetera, how have burn, with quarters in current sheet?

Bill Koschak

bet. You

made what the flows best that we've year. very on said demand. our combine We're the to and focused the expect we next with elements at We to our doing the been we'll with and take XX progress our is fund we on, progress our quarter least that of as million match quarter, managing we've So business with licensing I development - associated we our our through sufficient and cash reducing to operations that continue of believe half from grain $XX.X And anticipate ended been the cash. technology activity of those cash When expenses. continue into developments to you in that inventory that in growers the operating significant XXXX. converting cash, months and to second for trait the we

Amit Dayal

Okay from and one last just me. one

CEO catalysts should your outside for? completing we In be any maybe out milestones terms looking of near-term search, there are of

Bill Koschak

sort my one Yves as perspective, on of let well. From this and weigh in I'll

we large we've wonderful or of into put work a be the legal business is the HOLL to projects signed that partner. and [ph] up an products letters look perspective, us. their think And that we've soybeans getting search milestones memorandums we we case of about them a to to is getting to forward, to companies whatever do As and go term our to of on germplasm, to want important bringing our we development certainly the in that or partners would our intent expect understanding, be trait soybean completing things some with had as for the one. want - that you these had somebody elite is seed which with for look be in one From could that we close - of

for. things those are so look the of that types And I would

things past, in there's - those are still still today. As true we've talked about the

Yves Ribeill

would And said, Bill. you agree with what I

of incoming the The search important the company. obviously in main first CEO the three steps the CEO and are

was is new eventually products presented relatively to And as you. with that partnership the third SAB one we products also coming that what have be some some we disclose probably announce other on we'll announce add I'll able to quickly. to The said, second area being could the to that

Amit Dayal

all have you that's guys. for yes you. Appreciate Understood I that, thank it, thank

Yves Ribeill

you. Thank

Bill Koschak

Thanks, Amit.

Operator

question the line next Bobby comes from question. proceed Canaccord. Burleson your Please Our of with with

Bobby Burleson

for my questions. thanks taking Hi

just kind had first terms the the of guess, have color XXXX, planting that I ranked soybean just, you than the I'm is talking in why is in like in for to And of in it that So And you likely? order of most wheat is different if target one is kind hemp? a risk-adjusted commercial about presentation? your rank and opportunities

Bill Koschak

Bobby, we they're not today. about to they're most is a then The as expect earlier, great terms we announcement perspective closely in - that good perspective, perspective available we listed you priority page hemp confident followed more trait group From than Right, the the and on to soybean. is to the our that the on how are made we a talk HOLL by anything. chose crop the one liability question them from in of to order based from When soybean, well. XXXX have and it

always alfalfa product that. is as then always time wheat - simple our and as been As wheat first listed it's from - that as HO, because it's we've IPO of the things

Bobby Burleson

reductions looking portion the part seed And and you guess, that sales exclusively of optionality, way between eliminating any and any the I remove there additional few great. some there now Okay Are you're opportunities associated the forward. with months you trait at cost were the was licensing optionality, when headcount savings licensing presenting going ago, sale that these plan? a seed

Bill Koschak

a lean run Great really from organization. perspective, our question and we

seed to right. expectation would enough some We a perspective, work our have seed foundational do that we isn't any savings our need right. to licenser, cost over no, trait So the to still get handling from

scale to company time, lean this working what the At that but where because we it's of know avoidance up bigger the So tell, point to and a incur we to same seed would a at to that capital would significant real we has, anything. were cost Also level business. alleviates think that have, really that's into early I the team personnel don't have the we is expect if with is. the we too money turn need large this than

times per going cost perspective forward. the a about from acre think capital COGS that working and essentially avoid one you we If is

the think were moving flow it if is that So trade would on you It basis the we much, the to beauty than cash seed we down going get about free than if to, acre path. of much - model. a per drives sooner

Bobby Burleson

me talking might type you anticipating And in larger with now. announced for then what in last orders or licensing announce? of with we you what about magnitude, If at soybean royalty if and of terms in we look you're with we S&W, opportunity - soybean? HO one and alfalfa of soybean excited what from about Are

Bill Koschak

greater the goes soybean crop order thus is very of its value That obviously expectation. of forage, industry is. much into the described you that segment of the times different that of - performance We'd of are that you what in it's capture XX%-ish when - two. like of magnitude improved something versus given of the high-quality two over, dollar our expect dollar small be current particular the In acid the market compare profile the HOLL many the this from terms that size would alfalfa is the our fatty expectations crop or is to size just crops, far value, quality perspective a from alfalfa [ph]

alfalfa, you that what if perspective, the much from So definitely than think it about is. bigger be opportunity

Bobby Burleson

is you well, their kind in If about maybe this or technology folks of licensing, you've sorts more one get this enticement own is a on ground platform I traits? could license your a talked is some so develop here, expand technology to obviously, there sneak the TALEN's of - opportunity pursuing proving and just as as an a licensing to

Bill Koschak

we're of definitely been be be in we do to and One has strategies open forward. going but will to our have very it, selective how been this,

in pure that drives traits or to our high. be makes of company sense. a It think license licensing technology moving to more I margins we lot a where

think. company a needs much capital working And Our be for profitability to becomes low. us, to I - clearer, path as our

technology, sure, that be is but advancements don't organization. things and the And TALEN TALEN, it would licensing you be develop to important time our as to patents those it than things footprint. leverage as working the we And of all else somebody so, we're could [ph] that today about we push And filing expand to may think could love the less well. - types be of the to

we that array this, the we as have expand ones and of a so there's the to advancements about what patents filed us we making we in broad excites think And we continue that and and that that are upon, about technology that's for our labs.

Bobby Burleson

And are you patents us or area - you're pursuing an epigenetics? that you remind are kind? developments just can not Is any where you guys with or whether anything doing filing of

Bill Koschak

throw one, that not, it's but and we're that about. we've over Yves, my to On view is Bobby not talked it - no, term a I'll

Yves Ribeill

We that prefer at to to but I it's obviously able leave it. a to to respond CTO mean, the But look next question again, time, my indeed. be I good

Bobby Burleson

Okay great, thank you.

Yves Ribeill

Thank you.

Operator

with Our Instructions] Please Jefferies. proceed Alexander your comes Laurence next the from question. question with of line [Operator

Daniel Rizzo

for Laurence. it's on Dan everyone are you? Rizzo How Hi

Bill Koschak

Good, how are you?

Daniel Rizzo

Good, good.

should $X the capital how year quarters we takes shifts? this working basically? how then - if and years or it running the model I what a we as I think I should about quarter So should roughly year expect think that's was we was just strategy in [ph]. the last outflow and mean it maybe million wondering improve off coming as licensing

Bill Koschak

well, right. we of been that I generally year. have tailwind as expect as our It's from a inventory And this cash opposed cash too be work Right, we'd cash to all probably more If than because then think of of I the the we you'll That's that annually, seed royalties year, source be too think so knowing a would we paid working cash. calendar expenses. And the - grain that can to the we use sales been this licensing projection - it's the soon investing if model, won't two be from become in looking all of our that and the receivables perspective, include to been a tell. licensing Dan, annually. paid soon frequently do were look about. the be they a so relevant to than to What for obviously, really forward, see And as look we'll we We'd more activity, get predict variables get that exit work first forward. question very XXXX would only receivables obviously, are we seasonal of to conversion then paid is quarter, in be talked will capital, our to we'll objective, planting of in part like. of transform that to good what we've but user

normalize in how the year, the term, of others I is year. So next sheet that's side remain would in balance of all terms of will, liability of this about the stripping capital time Obviously, noise to as get first the think next today. modeling being how some but it guess, it you and of receivables side the it the would as grain-related create I will activity working the near quarter is flowing

Daniel Rizzo

That's actually I appreciate [ph].

Bill Koschak

the of Maybe at end year. the

Daniel Rizzo

the other the remainder that's year of And that's how Guys, be ADM, going think I so Is the wondering of I really appreciate sales over happen going XX%, kind it the with the out something grain next about to something that should with over evenly was the is drawn we cadence this then, quarter to that to color. or that? year?

Bill Koschak

it by in flow remainder like stick have the how something but We'll terms see Our think what along year. over is of that have should - of over of you that falls the been of course to. what quarter, I the statements looks remainder the year to the

Daniel Rizzo

very you thank much. Right,

Yves Ribeill

you. Thank

Operator

on Instructions] showing Mr. phone Tyson, [Operator the lines. further And I'm no questions

Bill Koschak

you. Thank

like joining, happy be firm, not Relations able on to I'd today. would our contact to Operator? call call, your feel answer our today's concludes Group, or MZ this us we and to So thank were if for Investor please we them. address to free questions everybody

Operator

does great you. have the lines. please conclude Thank you, ask for today. That conference your participation you disconnect Thank your that day. call for and We and you a thank

Yves Ribeill

you. Thank

Cibus (CBUS) 9 May 212021 Q1 Earnings call transcript