Business & Real Estate

Sacramento-area biotech firm says revenues less than reported

Pam Marrone, founder and CEO of Davis’ Marrone Bio Innovations Inc., which is struggling with internal audit issues.
Pam Marrone, founder and CEO of Davis’ Marrone Bio Innovations Inc., which is struggling with internal audit issues. Marrone Bio Innovations

Marrone Bio Innovations Inc., the embattled Davis biotech firm, said Thursday that its revenues for parts of 2013 and 2014 were as much as $2 million less than previously reported because of product returns.

The company, which has been threatened with delisting by Nasdaq, also announced that the stock exchange has given Marrone an extension until Nov. 9 to return to compliance with its regulations.

Marrone has been struggling since last fall, when it announced it was launching an internal probe after finding documents “calling into question” $870,000 in reported revenue for the fourth quarter of 2013. That was 15 percent of its revenue for that quarter for Marrone, a maker of eco-friendly pesticides and other products. The disclosure was a serious blow to the company, which went public in 2013 and had been one of the bright lights of the Sacramento area’s tech sector.

In February it revealed that certain former employees misled management about the terms of some sales transactions. Among other things, the employees had granted “inventory protection” rights to some distributors, giving them leeway to return unsold products to Marrone.

In its announcement Thursday, Marrone said certain distributors had exercised those rights and were returning $1.7 million to $2 million worth of goods sold during 2013 and the first six months of 2014.

The company reported revenue of $14.5 million for 2013 and $6.4 million for the first six months of 2014.

It hasn’t reported any financial results since then as it tries to get a handle on its finances. Because it’s been so delinquent on its quarterly reports, it has been threatened with Nasdaq delisting for the past several months.

Marrone shares closed Friday at $1.90, unchanged, in Nasdaq trading.

Dale Kasler: 916-321-1066, @dakasler

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