Metabolix, Inc., Q3 2009 Earnings Call Transcript

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2009-10-29 18:05:21.0

Tags: U.S. Bancorp Piper Jaffray Inc., Cash Flow, Call Transcript, Earnings, Metabolix Inc., Operational Accounting, Personal Finance, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Michael Cox from Piper Jaffray.

Michael Cox - Piper Jaffray

In terms of looking past the completion of the facility I was hoping to ask a couple of questions about the production ramp. I understand it is difficult to provide specific guidance around which day you will begin production, but as we look at 2010 as a whole is it possible at this point to begin to talk about volume expectations or at least the number of different customers that will receive product next year?

Joe Hill

I think it is a little premature to talk about volume expectations and we have been pretty consistent with that through out just in the fact that we would like to begin to get the product to market and in the hands of customers and then at that point we’ll be able to be much clearer and more precise on our projections.

We have been saying in terms of number of customers we have been doing a fair amount of work on prioritizing our lead stream. As many of you know we have probably 3,000 plus leads right now of people interested in using Mirel and over the last few quarters we have really focused on about 100 or so that we will give priority product to, at least initially on Clinton start up.

The vision right now and we will certainly update you as we go into commercialization is to have some 40 or 50 base customers for Clinton 1 that would provide a nice diverse mix of end use applications and processing technologies with enough growth embedded in that customer base to see us through for a foundation for expanding the business. That is how we’re thinking about it right now and I’m sure as we get up and running and get some experience we will be able to give some of the guidance on ramp up rate.

Michael Cox - Piper Jaffray

On the cash burn could you maybe provide a little bit of color on once commercialization begins, considering you will shift those expenses over should we expect cash flow break even say in 2010, is that a realistic expectation?

Joe Hill

We aren’t giving specific guidance as to what the net cash flow will be for 2010, but we have been saying that after production starts up and we get through a transition period with the manufacturing facility in 2010 there will be a shift of expenses for the sales and marketing expense on the product, development expense of about $5 million per quarter and will shift from the Metabolix cash flow into the Telles cash flow.

 

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