Solazyme Adds (More) Precision to Tailored Oil Platformhttp://www.fool.com/investing/general/2013/05/09/solazyme-adds-more-precision-to-tailored-oil-platf.aspx Maxx Chatsko
May 9, 2013
Synthetic biology company and renewable oils manufacturer Solazyme (NASDAQ: SZYM) reported earnings after the market closed on Wednesday. Investors worried about a quiet start to the year were reminded that the company remains occupied preparing its three commercial-scale facilities for operations and developing oil profiles. The waiting game isn't quite over for investors, but management announced one major event that should keep investors happy. Here is a recap of recent developments at Solazyme.
More important is the fact that cash on hand grew 60% to $239 million after a successful debt note offering shortly after the beginning of the year. Meanwhile, shareholders' equity fell 10% to $164 million compared to the fourth quarter of 2012. The company's strong financial health equates to the "no news is good news" mantra for investors.
Investors will be on the lookout for further, perhaps larger, customer announcements in the coming quarters. Just remember that there is plenty of time between now and mid-2015. Until then, there should be no worries from the guidance and commercialization aid Solazyme will receive from agri-giants Bunge (NYSE: BG) and Archer Daniels Midland (NYSE: ADM).
Product commercialization outlook
Additionally, Solazyme already had the ability to control saturation along the fatty acid chain, which is noted by the double line (a double bonded carbon) in the picture below. This affects the functionality and specifications of tailored oils.
Now, the company has developed the ability to control the positioning of functional groups along the fatty acid chain.
Why does this new development matter? Solazyme can now eliminate trans fats in its nutritional oils, retain texture of oils without hydrogenation, and control the functionality of oils with even greater precision. Positioning does not necessarily apply to all oils in the company's portfolio, but it will open up a new frontier for what is possible with Solazyme's platform. This is definitely an awesome development for investors, even if it is in the early stages.
In other news, each of the three commercial biorefineries under construction remains on track.