Market Overview

Enzymotec Ltd. Reports Third Quarter 2017 Unaudited Financial Results

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MIGDAL HA'EMEQ, Israel, Nov. 15, 2017 (GLOBE NEWSWIRE) -- Enzymotec Ltd. (NASDAQ:ENZY), a developer, manufacturer and marketer of innovative bio-active lipid ingredients and nutritional products, today reported financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Results

For the third quarter of 2017, net revenues increased 19.8% to $13.7 million from $11.4 million for the third quarter of 2016. For the third quarter of 2017, based on the proportionate consolidation method that is used for segment reporting, net revenues increased 28.0% to $19.5 million from $15.2 million for the third quarter of 2016.

GAAP net income for the third quarter of 2017 amounted to $0.4 million, or $0.02 per diluted share, compared to net loss of $(0.3) million, or $(0.01) per diluted share, for the third quarter of last year.

Non-GAAP net income for the third quarter of 2017 increased to $1.6 million, or $0.07 per diluted share, from $0.6 million, or $0.03 per diluted share, for the third quarter of 2016. A reconciliation of non-GAAP net income to GAAP net income or loss is set forth below.

Adjusted EBITDA for the third quarter of 2017 increased 81.8% to $2.3 million from $1.3 million for the third quarter of 2016. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to GAAP net income or loss is set forth below.

Set forth below is segment information for the three months ended September 30, 2017 and 2016 (unaudited):

    Three Months Ended September 30, 2017
    Nutrition
Segment
  VAYA
Segment
  Total Segment
Results of
Operations
  Elimination(1)   Consolidated
Results of
Operations
    U.S. dollars in thousands
     
     
Net revenues   $ 15,914     $ 3,554       $ 19,468     $ (5,796 )     $  13,672  
Cost of revenues(2)     9,097       686         9,783       (5,658 )       4,125  
Gross profit(2)     6,817       2,868         9,685       (138 )       9,547  
Operating expenses(3)     3,493       4,709         8,202               8,202  
Depreciation and amortization     647       150         797                  
Adjusted EBITDA(4)   $ 3,971     $ (1,691 )     $ 2,280                  


     
    Three Months Ended September 30, 2016
    Nutrition
Segment
  VAYA
Segment
  Total Segment
Results of
Operations
  Elimination(1)   Consolidated
Results of
Operations
    U.S. dollars in thousands
     
Net revenues   $ 13,371     $ 1,839       $ 15,210     $ (3,798 )     $  11,412  
Cost of revenues(2)     7,114       365         7,479       (3,642 )       3,837  
Gross profit(2)     6,257       1,474         7,731       (156 )       7,575  
Operating expenses(3)     2,753       4,410         7,163               7,163  
Depreciation and amortization     511       175         686                  
Adjusted EBITDA(4)   $ 4,015     $ (2,761 )     $ 1,254                  

____________________
(1) Represents the change from proportionate consolidation to the equity method of accounting.
(2) Includes depreciation and amortization, but excludes share-based compensation expense.
(3) Includes depreciation and amortization, but excludes share-based compensation expense and business development related expenses in 2016 and merger and acquisition related expenses in 2017.
(4) Adjusted EBITDA is a non-GAAP financial measure. For a definition and a reconciliation of Adjusted EBITDA to our net income, see "Non-GAAP Financial Measures" below.

Nine Months Ended September 30, 2017 Results

For the nine months ended September 30, 2017, net revenues increased 4.2% to $38.7 million from $37.1 million for the nine months ended September 30, 2016. Based on the proportionate consolidation method that is used for segment reporting, net revenues for the nine months ended September 30, 2017 increased 18.7% to $56.2 million, from $47.3 million for the same period last year.

Net loss for the nine months ended September 30, 2017 amounted to $(1.9) million or $(0.08) per diluted share, compared to net income of $1.3 million, or $0.06 per diluted share, for the same period last year.

Non-GAAP net income for the nine months ended September 30, 2017 decreased 74.9% to $0.9 million, or $0.04 per diluted share, from $3.5 million, or $0.15 per diluted share, for the same period last year. A reconciliation of non-GAAP net income to GAAP net income is set forth below.

Adjusted EBITDA for the nine months ended September 30, 2017 decreased 46.1% to $3.0 million, from $5.6 million for the same period last year. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to GAAP net income is set forth below.

Set forth below is segment information for the nine months ended September 30, 2017 and 2016 (unaudited):

    Nine Months Ended September 30, 2017
    Nutrition
Segment
  VAYA
Segment
  Total Segment
Results of
Operations
  Elimination(1)
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