Metabolix Inc. (MBLX)
Q4 2010 Earnings Conference Call
March 9, 2011, 4:30 pm ET
James Palczynski – IR
Richard Eno – President and CEO
Joseph Hill – CFO
Oliver Peoples – Chief Scientific Officer and VP, Research
Mike Ericson Brother [ph] – Piper Jaffray
Lucy Watson – Jefferies
Jeff Osborne – Stifel Nicolaus
Ian Horowitz – Rafferty Capital Markets
Previous Statements by MBLX
» Metabolix, Inc. Q1 2010 Earnings Call Transcript
» Metabolix, Inc. Q4 2009 Earnings Call Transcript
» Metabolix, Inc., Q3 2009 Earnings Call Transcript
Thank you, operator. And good afternoon to everyone. Metabolix released fourth quarter and year-end 2010 financial results after the market closed today. If you do not have a copy of the press release, one may be found on the website at www.metabolix.com in the Investor Relations section.
Making the presentation today will be Richard Eno, President and Chief Executive Officer of Metabolix; and Joseph Hill, Chief Financial Officer of the company. They are joined by Oliver Peoples, a co-founder of Metabolix and the company’s Chief Scientific Officer.
Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore undue reliance should not be put upon them. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. We would refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial condition.
With that out of the way, I’d like to turn the call over to Richard Eno, President and CEO of Metabolix.
Thank you, James. I’d like to welcome all of you to the fourth quarter and year-end 2010 earnings conference call for Metabolix. Today, I’ll provide you with a review of the Metabolix vision and update on our ongoing activities. Joe will then take you through the financials.
We continued to make good progress on our commercialization and development activities and have maintained a strong financial position. For those of you new to these calls, Metabolix is an innovation-driven bioscience company, which is focused on bringing environmentally friendly solutions to the plastics, chemicals, and energy industries.
We are developing and commercializing pathways and products that are intended to lessen the world's dependence on oil, reduce CO2 emissions relative to traditional materials, and address critical solid waste issues. We are founded on hard science and have exceptional capabilities in plant science, in fermentation, microbial, and polymer engineering and in product and market development.
We are leaders in producing and upgrading a broad family of materials called PHA. PHA is our energy storage molecules found in nature, which have a number of useful properties. We currently have deployed our PHA technology across three business platforms. First, Mirel, a bio-based and biodegradable plastic currently being commercialized with our partner Archer Daniels Midland through a joint venture called Telles. Second, Industrial Chemicals, initially focused on C4 chemicals. And third, our crop-based activities, which include our programs in oilseeds, switchgrass, and sugarcane.
I’d like to begin with the Telles business, our joint venture for commercializing Mirel. We continued to make good progress in this early growth phase of the business. I will review the overall status of the business, addressing manufacturing, the market including recent customer announcements and expected growth.
As you know, ADM’s Clinton, Iowa polymer plant, the supply source for Mirel bioplastic, is up and running. ADM with Metabolix support is in the process of improving yields, reducing costs, and increasing capacity. This will be an ongoing process and inherent in how we operate the business. We expect the plant will have capacity available ahead of market demand until the 110 million pound per year nameplate design is reached.
Since our last call, we have focused on building strategic levels of inventory of our various product rates at distribution points in both the US and in Europe. This has enhanced our assurance of supply to customers and allows us to more efficiently develop new customers around the world.
The market for bioplastics continues to be very robust, and we have an ongoing stream of inquiries. We are currently working with about 100 targeted prospects reflecting a broad range of processing technologies and markets. With regards to technologies, we are currently developing customers with a near-term focus on injection molding, thermoforming, sheet, and film applications. We also have ongoing developments in longer term technologies in the areas of foam, blow molding, non-wovens, paper coating and latex. These should drive the longer term growth in expansion opportunities for the business.
With regards to markets, we have focused on six target market segments; agriculture and horticulture, compost bags, marine product applications, consumer products, business equipment, and packaging. In aggregate, these market segments reflect over 50 billion pounds of plastic usage per year, and we believe that there is over 2 billion pounds of addressable demand for us in the near-term.
To illustrate our progress since our last call, we have announced five new customers; AL-PACK, Lakeside, Reef, Zoë b, and Tecnaro. Let me take you through these recent announcements and how they relate to our marketing strategy.