SAN DIEGO - Cibus Inc. (NASDAQ:CBUS), an agricultural technology company, has unveiled a series of restructuring and cost reduction initiatives aimed at streamlining its operations. The company expects these measures to yield approximately $10 million in annualized cost savings and reduce its cash use by about 20% once fully implemented by early 2025.
The initiatives include a reduction in force (RIF), which is anticipated to incur one-time charges of around $0.35 million for accrued vacation and severance in the fourth quarter of 2024. This move aligns with Cibus's strategic shift toward commercializing its gene-editing technology for major row crops, such as canola, rice, soybean, corn, and wheat.
Rory Riggs, Co-Founder, Chairman, and CEO of Cibus, stated that the restructuring is essential for the company's transition from research and development to the first commercial stage of gene editing in agriculture. He also acknowledged the contributions of the affected employees and committed to supporting them through this transition.
Cibus's focus remains on advancing its herbicide-resistant traits in rice and developing traits for pod shatter reduction in canola and disease tolerance in other crops. The company also continues to pursue partner-funded projects and advance its soybean platform.
The restructuring efforts are part of Cibus's realigned organization, which aims to optimize the business and cost structure in line with its commercial priorities. The company's current portfolio includes six traits, three of which are in commercial development and four that are multi-crop traits associated with weed management and disease resistance.
This announcement is based on a press release statement, and the forward-looking statements within it are subject to risks and uncertainties that could cause actual results to differ materially. These include the company's need for additional funding, the effectiveness of its intellectual property protection, regulatory developments, market conditions, and other factors detailed in the "Risk Factors" section of Cibus's Annual Report on Form 10-K filed with the SEC on March 21, 2024.
In other recent news, Cibus, Inc. has reported a series of significant developments. The company has implemented a strategic realignment that includes a reduction of its workforce by 26 employees, as part of its cost-cutting measures aimed at preserving capital. This action is expected to incur a one-time cost of approximately $350,000 in the fourth quarter of 2024.
Cibus has also announced the appointment of Carlo Broos as Interim Chief Financial Officer, following the departure of Wade King. Broos, who has been with the company since 2011, brings extensive experience in finance, accounting, and audit to his new role.
The company has made a public offering of 3,000,000 shares, which brought in extra capital, and resulted in Roth Capital Partners and A.G.P./Alliance Global Partners (NYSE:GLP) partially exercising an option to purchase an additional 289,953 shares. Following these developments, Canaccord Genuity adjusted its price target for Cibus to $20, down from $21, while maintaining a Buy rating.
The company is also focusing on advancing its late-stage activities, particularly the launch of its first three traits in crop programs. These recent developments are part of Cibus's ongoing efforts to streamline operations and concentrate resources on priority objectives.
InvestingPro Insights
As Cibus Inc. (NASDAQ:CBUS) embarks on its restructuring journey, InvestingPro data and tips provide additional context to the company's financial situation and market performance.
According to InvestingPro data, Cibus's market capitalization stands at $92.07 million, reflecting its current position in the agricultural technology sector. The company's revenue for the last twelve months as of Q2 2024 was $2.96 million, with an impressive revenue growth of 816.72% over the same period. This substantial growth aligns with the company's transition from research and development to commercialization, as mentioned in the article.
However, an InvestingPro Tip indicates that Cibus is "quickly burning through cash," which may explain the necessity for the announced cost-cutting measures. The company's operating income for the last twelve months was -$74.12 million, resulting in an operating income margin of -2503.38%. This significant negative margin underscores the importance of the $10 million in annualized cost savings that Cibus aims to achieve through its restructuring initiatives.
Another relevant InvestingPro Tip notes that the "stock price movements are quite volatile." This is evident in the reported price total returns, with a 1-year return of -80.89% and a 6-month return of -75.91%. These figures highlight the challenges Cibus faces in the market and may reflect investor uncertainty about the company's path to profitability.
For readers interested in a more comprehensive analysis, InvestingPro offers 8 additional tips for Cibus, providing a deeper understanding of the company's financial health and market position.
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