Marrone Bio Innovations, Inc. Reports 2017 First Quarter Results

DAVIS, Calif.–(BUSINESS WIRE)– Marrone Bio Innovations, Inc. (the “Company” or “we”) (NASDAQ:MBII), a
leading provider of bio-based pest management and plant health products
for the agriculture, turf and ornamental and water treatment markets,
today announced results for the first quarter ended March 31, 2017.

First Quarter Results

The Company reported that GAAP revenues grew by 56% to $4.2 million for
the first quarter of 2017 as compared to $2.7 million in the first
quarter of 2016.

First quarter 2017 product shipments¹ grew by 66% to $6.5
million as compared to $3.9 million in the first quarter of 2016. The
Company noted that this is the second consecutive quarter it has
recorded record product shipment levels.

The Company’s ongoing growth reflects a number of important sources of
strength, including increased grower adoption of the Company’s products,
expanded labeling of certain products, growth in the Company’s customer
base and growth in certain international markets.

Dr. Pam Marrone, Chief Executive Officer, commented, “We have achieved
another quarter of excellent growth, with a new record of product
shipments and solid improvement in gross margin. We believe that we are
well positioned to continue to capture a powerful, technology-driven
opportunity and to stand out as a high growth company in the relatively
mature agricultural products market.”

Dr. Marrone continued, “Since the close of the first quarter, we have
strengthened our balance sheet with the completion of a secondary
offering with estimated net proceeds of $8.2 million and in March, the
closing of a working capital line for up to $7.0 million. These new
sources of capital have provided the support and flexibility we need to
continue our growth in the near term.”

Dr. Marrone continued, “Our portfolio approach to product development
has enabled broad-based growth with significant continued opportunities
for each of our products. Increasingly, we expect to leverage our
customer relationships and the growing power of our brand to market
solutions to meet a wider range of unmet pest and disease challenges.”

The Company’s reported net loss for the first quarter of 2017 improved
to $7.6 million, compared to a net loss of $9.3 million in the first
quarter of 2016. This progress primarily reflects the strong level of
year-over-year revenue and margin growth.

The Company’s gross margin of 45.1% in the first quarter of 2017 was a
dramatic improvement as compared to a gross margin of 15.0% reported for
the first quarter of 2016. First quarter product costs included $108,000
of unabsorbed costs related to capacity utilization at our manufacturing
plant as compared to the 2016 first quarter’s level of such costs of
$222,000, reflecting continued progress in capacity utilization.

Dr. Marrone concluded, “We are excited and energized by the ramping
momentum in our business. We are focused on what we believe to be a
powerful, unique opportunity for sustainable, bio-based solutions. Our
products enhance yield and therefore profitability for farmers, while
improving global environmental sustainability. We have confidence that
2017 will prove to be a pivotal year in the history of our Company and
we are excited to have the ongoing opportunity to create meaningful
value for our customers, our communities and our shareholders.”

Recent Business Highlights

• First shipments of Haven anti-transpirant
• Closing of up to $7.0 million working capital line with LSQ
• Closing of a secondary offering with $8.2 million estimated net
  proceeds
• Agreement for MBI to be master distributor of Jet-Ag
  sanitizer/fungicide from Jet Harvest Solutions
• Semi commercial trials with bio-stacked seed treatments
• Strategic distribution agreement with Nufarm for Grandevo in Australia
  and New Zealand
• Strategic distribution agreement with Agri-Star for Grandevo and
  Venerate in Mexico
• Strategic Partner Albaugh launch of seed treatment product with the
  Company’s technology
• Receipt of California registration of Grandevo WDG

Conference Call and Webcast Details

As previously announced, the Company will host a conference call today
at 4:30 p.m. ET to discuss the results of the quarter, followed by a
question and answer session for the investment community. A live webcast
of the call can be accessed on the Marrone Bio Innovations investor
relations website at investors.marronebio.com.
To access the call, dial toll-free 1-800-231-9012 or 1-719-457-2641
(international). The participant passcode is 3138201.

To listen to a telephonic replay of the conference call, dial toll-free
1-844-512-2921 or 412-317-6671 (international) and enter passcode
3138201. The replay will be available beginning at 7:30 p.m. ET on May
11, 2017 and will last through 11:59 p.m. on May 18, 2017. The webcast
will also be available for replay at investors.marronebio.com.

Non-GAAP Financial Measures

The Company uses product shipments, which is not defined by, or
presented in accordance with, generally accepted accounting principles
(“GAAP”), to evaluate various aspects of its business. Product shipments
is a non-GAAP financial measure and should be considered in addition to,
not as a substitute for, product revenues reported in accordance with
GAAP. Product shipments as used in this press release is defined as
product revenues, plus related party product revenues, plus the
incremental amount of deferred revenues accrued during the applicable
period from product shipments. This calculation specifically excludes
changes in deferred revenue related to license revenues and customer
deposits, and is intended to approximate the total value of products
sold and under contract for sale in a given period. Product shipments,
as defined by the Company, may not be comparable to similarly titled
measures used by other companies. The Company’s management uses this
non-GAAP financial measure in order to have comparable results to
analyze sales performance from quarter to quarter. The Company has
chosen to provide this supplemental information regarding its sales in a
given period to investors to facilitate a meaningful evaluation of
actual operating results on a comparable basis with historical results,
including to track product adoption, and to assist investors in their
valuation of the Company. In future periods, the calculation of product
shipments may be different than in this release.

(a) Change in deferred product revenue is defined as the increase in the
amount of deferred product revenues accrued during the applicable
period, less prior deferred product revenues recognized during the
applicable period, excluding the change in deferred revenue associated
with license fees and customer deposits. For the three months ended
March 31, 2017 and 2016, deferred license revenues decreased $58,000 and
$92,000, respectively.

The use of product shipments has certain limitations. The Company’s
presentation of this non-GAAP financial measure may be different from
the presentation used by other companies, and therefore comparability
may be limited. We compensate for these limitations by providing the
relevant disclosure of our product revenues, related party revenues,
deferred revenues and other items both in our reconciliations to the
historical GAAP financial measures and in our consolidated financial
statements, all of which should be considered when evaluating our
performance. Product shipments are used in addition to and in
conjunction with results presented in accordance with GAAP, and should
not be considered as an alternative to product revenues, deferred
revenues, total revenues, operating income, or any other operating
performance measure prescribed by GAAP, nor should these measures be
relied upon to the exclusion of GAAP financial measures. Product
shipments reflects an additional way of viewing our operations that we
believe, when viewed with our GAAP results and the reconciliations to
the corresponding historical GAAP financial measures, provides a more
complete understanding of factors and trends affecting our business than
could be obtained absent this disclosure. Management strongly encourages
investors to review our financial information in its entirety, including
the attached unaudited condensed consolidated financial statements, and
not to rely on a single financial measure.

About Marrone Bio Innovations

Smart. Natural. Solutions.

Marrone Bio Innovations, Inc. (NASDAQ: MBII) strives to lead the
movement to a more sustainable world through the discovery, development
and promotion of biological products for pest management and plant
health. The Company’s effective and environmentally responsible
solutions help customers operate more sustainably while controlling
pests, improving plant health, and increasing crop yields. The Company
has five products for agriculture on the market (Regalia^®,
Grandevo^®, Venerate^®, and Majestene^®
and Haven^TM), and also distributes Bio-tam 2.0^®
for Isagro USA in the western U.S. The Company markets Zequanox^®
for invasive mussels for water markets. Marrone also has a proprietary
discovery process, a rapid development platform, and a robust pipeline
of pest management and plant health product candidates. At Marrone Bio
Innovations, the Company is dedicated to pioneering better biopesticides
that support a better tomorrow for users around the globe. For more
information, please visit www.marronebio.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release regarding
strategy, future operations and plans, including assumptions underlying
such statements, are forward-looking statements, and should not be
relied upon as representing the Company’s views as of any subsequent
date. Examples of such statements include statements regarding future
operating results, the Company’s business strategies, momentum, growth
and positioning in the agricultural pesticide industry, the Company’s
sources of capital and anticipated financing opportunities, the
Company’s plans to leverage customer relationships and the Company’s
ability to create meaningful value for customers, communities, and
shareholders. Such forward-looking statements are based on information
available to the Company as of the date of this release and involve a
number of risks and uncertainties, some beyond the Company’s control,
that could cause actual results to differ materially from those
anticipated by these forward-looking statements, including any
difficulty in obtaining additional financing to meet our business
requirements and service our debt, difficulty in developing,
manufacturing, marketing or selling the Company’s products, any failure
to maintain and further establish relationships with distributors and
other partners, competition in the market for pest management products,
lack of understanding of bio-based pest management products by customers
and growers, and volatility in our stock price. Additional information
that could lead to material changes in the Company’s performance is
contained in its filings with the U.S. Securities and Exchange
Commission. The Company is under no obligation to, and expressly
disclaims any responsibility to, update or alter forward-looking
statements contained in this release, whether as a result of new
information, future events or otherwise.

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