Enzymotec Reports First Quarter 2017 Unaudited Financial Results

MIGDAL HA'EMEQ, Israel, May 17, 2017 (GLOBE NEWSWIRE) -- Enzymotec Ltd. (Nasdaq:ENZY), a developer, manufacturer and marketer of innovative bio-active lipid ingredients and medical foods, today reported financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Financial Highlights

• First quarter net revenues increased 13.4% to $12.0 million, compared to the fourth quarter of 2016, but decreased 14.1%, compared to the first quarter of 2016.
• First quarter net revenues (utilizing the proportionate consolidation method used for segment reporting) increased 26.2% to $17.1 million, compared to the fourth quarter of 2016, and remained stable, compared to the first quarter of 2016.
• First quarter gross margin increased by 3.4% and 23.8% to 70.2%, up from 66.8% and 46.4% in the first quarter and the fourth quarter of 2016, respectively.
• First quarter research and development expenses increased 17.5% and 23.9%, respectively, to $2.2 million, compared to the first quarter and the fourth quarter of 2016.
• First quarter selling and marketing expenses increased 6.3% and 7.8%, to $4.6 million, respectively, compared to the first quarter and the fourth quarter of 2016.
• First quarter Adjusted EBITDA* was $1.5 million, compared to $2.7 million in the first quarter of 2016, and $(1.4) million in the fourth quarter of 2016.
• First quarter GAAP net income was $25,000, or $0.00 per diluted share, compared to GAAP net income of $1.4 million, or $0.06 per diluted share, in the first quarter of 2016, and GAAP net loss of $(4.2) million, or $(0.18) per diluted share, in the fourth quarter of 2016.
• First quarter non-GAAP net income* was $0.8 million, or $0.03 per diluted share, compared to non-GAAP net income of $2.1 million, or $0.09 per diluted share, in the first quarter of 2016 and non-GAAP net loss of $(2.4) million, or $(0.10) per diluted share in the fourth quarter of 2016.

* A reconciliation of non-GAAP financial measures to GAAP financial measures is set forth below.

Recent Business Highlights:

• Appointed Erez Israeli as President and Chief Executive Officer.
• Significant increase in INFAT revenues to $10.1 million (proportionate consolidation method) in the first quarter of 2017, representing a 37.8% increase over the prior year period and 64.0% sequentially.
• Reached patent agreement for krill oil with Neptune Technologies & Bioresources, ending all litigation with Neptune.
• Record quarterly “sales out”, or sales of products to end-users, based on IMS data and VAYA Pharma’s online sales channel. First Quarter “sales out” grew 31% over the first quarter last year and 5% sequentially.
• Growth in VAYA's online pharmacy sales led to inventory destocking by wholesalers of $1.0 million in the first quarter. Wholesaler inventory is now believed to be at conservative levels.
• Completed the clinical phase of two clinical trials, relating to products for the dietary management of Autism Spectrum Disorder and of Attention Deficit Hyperactivity Disorder in adults. Results are expected to be finalized over the course of 2017. Accordingly, quarterly research and development expenses are expected to decrease for the balance of 2017.
• Warning letter issued by the FDA to a service provider alleging Vayarin® is a "new drug"; in addition Vayarin®, Vayacog® and Vayarol® became subject to an FDA Import Alert# 66-41 titled "Detention without Physical Examination of Unapproved New Drugs Promoted in the U.S." as further described in a Report of Foreign Private Issuer on Form 6-K furnished to the U.S. Securities and Exchange Commission on May 10, 2017.