Marrone Bio Innovations Inc (NASDAQ:MBII) CEO Kevin Helash published a letter to shareholders Wednesday, informing them that the company expects its fiscal 2020 results to be in-line with expectations.
“There is a rhythm to agriculture that is predictable even in unpredictable times,” Helash wrote. “The first half of the year starts strong, as Southern Hemisphere row crops mature and move toward harvest. In the Northern Hemisphere, orchards are being pruned and prepped for bud set and pollination. Row crop farmers are finalizing seed and input selections, cautiously optimistic right now as crop prices have been recovering with better global trading patterns.”
The plant health solutions company previously projected revenue growth in line with its four year compound annual growth rate (CAGR) of 25% or more, with gross margins in the mid-50s. The company plans to report FY 2020 earnings in March this year.
“As the leading supplier of biological ag solutions, our commercial activities follow this same seasonal pattern,” Helash added. “When we reported our FY 2020 third-quarter earnings, we forecast that the second half of the year would be smaller than the first half, with our fourth quarters generally being the smallest in terms of revenue given seasonality.
During FY 2020, Marrone’s acquisition of Finland-based nutrient and biostimulant company Pro Farm Technologies OY helped the company make “significant strides” and form partnerships that create a path to value from new products over the next 5-10 years, Helash wrote.
The company’s Marrone Michigan Manufacturing (MMM) facility is gearing up for expansion that Helash says will allow the company to bring additional production in-house, improve gross margins and reduce working capital.
“Long-term, our success is tightly linked to the diversification of our portfolio, whether it be the products we sell, the crops we serve or the geographies we reach,” Helash wrote. “We made gains in all three areas in FY 2020. I would highlight that we made a step change in our geographic mix in FY 2020 that will serve as a solid platform from which to expand internationally in FY 2021 and beyond.”
Contact Andrew Kessel at email@example.com
Follow him on Twitter @andrew_kessel