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Verenium hurt by bad corn crop but still strong

While Verenium Corp.’s (Nasdaq: VRNM) bottom line in the third quarter was impacted by adverse weather conditions on the Midwest corn crop, it is still profitable when looking at the year-to-date numbers.

For the quarter ended Sept. 30, San Diego-based Verenium posted a loss of $5.25 million on $10.26 million in revenues, compared with $5.79 million in net income on $18.41 million in revenues for the like period a year earlier.

For the nine months ended Sept. 30, Verenium posted $22.38 million in net income on $43.18 million in revenues, compared with $8.14 million in net income on $46.94 million in revenues for the like period in 2011.

On March 23, 2012, the company entered into an asset purchase agreement with DSM for the purchase of Verenium’s oilseed processing business and concurrently entered into a license agreement, a supply agreement and a transition services agreement with DSM. The aggregate consideration received by the company was $37 million.

"During the third quarter we made some important steps forward with our manufacturing investment program; however, the downtime experienced in manufacturing due to these upgrades combined with the continued unfavorable market conditions in corn ethanol, made this a challenging quarter financially," said James Levine, Verenium president and CEO, in a statement. "Despite the impact on our margins this period, we remain confident that the enhancements we are making now in our manufacturing platform, as well as our high-performance product portfolio, our current product pipeline and our strategy for diversifying our revenue through products for new end markets, will support our growth in the future."

On Oct. 5, 2012, the company entered into a $10 million revolving credit facility with a maturity date of Oct. 5, 2014. This credit facility will allow the company to borrow up to $8.4 million against certain eligible foreign and domestic receivables and will cover an existing $1.6 million letter of credit commitment Verenium’s landlord.

“The revised financial guidance for 2012 we are providing today reflects the continued challenges faced by the corn ethanol industry," added Jeff Black, Verenium CFO. "Despite the decrease to our 2012 guidance we continue to execute against our financial goals in terms of decreased cash burn and operating expenses. Importantly, the credit facility we put in place with Comerica and the equipment financing we drew down during the third quarter were two important steps in addressing our capital needs."

Verenium’s stock was at $2.64-per-share in mid-morning trading Friday. The stock has ranged from $2.14 to $5.66-per-share during the past 52 weeks.

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