News Column

Marrone Bio of Davis launches financial probe; stock is hammered

September 3, 2014

By Dale Kasler, The Sacramento Bee



Sept. 03--Davis biotech firm Marrone Bio Innovations Inc. today said it has launched an internal probe of its finances after uncovering documents that called into question the reporting of some 2013 revenues.

The maker of eco-friendly pesticides, widely regarded as one of the Sacramento region's most promising young tech companies, also said its previously reported financial results for the first six months of 2014 "should no longer be relied upon."

The news sent Marrone Bio's stock reeling. The share price fell to $3.65, down $2, in morning Nasdaq trading.

In a short press release, the company said its audit committee of the Board of Directors launched an in-house investigation "after management learned of documents calling into question the recognition of revenue in the fourth quarter of 2013 for an $870,000 transaction." Because of that issue, the company also said its earnings reports for the first two quarters of 2014 might no longer comply with generally accepted accounting principles.

Marrone gave no additional details. Company founder and Chief Executive Pam Marrone said she couldn't discuss the matter, adding, "I'm hamstrung by lawyers."

In the fourth quarter of last year, the company reported a loss of $10 million on revenue of just under $6 million. In the first six months of this year, Marrone said it lost $20.6 million on revenue of $6.4 million.

The company has been consistently unprofitable because of the costs typically associated with a tech startup that has to obtain regulatory approvals for its products. However, investors were disappointed with the second quarter results. Revenue fell because bad weather cut into demand by farmers.

Marrone sold stock to the public a little more than one year ago. The company was founded in 2006.

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Source: Sacramento Bee (CA)


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