Li-Cycle Reports First Quarter 2024 Operational and Financial Results
Li-Cycle Holdings Corp. (NYSE: LICY) reported its first quarter 2024 operational and financial results, highlighting collaborations with the U.S. Department of Energy, new strategic agreements with top EV companies, a $75 million investment from Glencore, restructuring for cost savings, and a cash and cash equivalents balance of $109.1 million at the end of the quarter.
Collaboration with the U.S. Department of Energy for financing documentation to secure a loan of up to $375 million.
Enhanced commercial relationships with top electric vehicle companies in Europe.
Strengthened partnership through a $75 million senior secured convertible note investment from Glencore.
Implemented a Cash Preservation Plan with organizational restructuring and workforce reductions to generate up to $10 million in annual savings.
Ended the first quarter with a healthy cash and cash equivalents balance of $109.1 million.
Cost of sales decreased by 12% compared to the same period in 2023, primarily due to lower nickel and cobalt prices.
Selling, general & administrative expenses increased to $31.7 million, driven by non-recurring professional fees and severance costs.
Net loss increased to $136.7 million compared to $36.5 million in 2023, primarily due to higher other expenses.
Adjusted EBITDA loss was approximately $27.4 million, driven by higher revenue and lower cost of sales, offset by higher SG&A expenses.
Other expense was $92.5 million, compared to other income of $2.7 million in the same period last year.
Highlights
-
Continued to work closely with the
U.S. Department of Energy on key technical, financial and legal workstreams to advance toward definitive financing documentation required for a loan for gross proceeds of up to ;$375 million -
Advanced commercial relationships, including entering into new or expanded strategic agreements with three of the largest electric vehicle (EV) companies in
Europe ; -
Closed the
senior secured convertible note issued to Glencore to strengthen long-term partnership and enhance Li-Cycle’s liquidity position;$75 million -
Continued Cash Preservation Plan with change to centralized organizational structure and workforce reductions expected to generate savings of up to
annually;$10 million - Progressed work on Rochester Hub project review, including advancing work with the local market to refine cost estimates; and
-
Ended the first quarter with a cash and cash equivalents of
.$109.1 million
“During the first quarter of 2024, we advanced our comprehensive review of the Rochester Hub go-forward plan and continue to work closely with the
Financing and Liquidity
Li-Cycle completed key initiatives during the quarter to enhance its liquidity position, including important interim financing steps as part of its overall funding strategy. The Company has also continued to work closely with the
On February 7, 2024, the Company received approval from the German state of
On March 25, 2024, an affiliate of Glencore completed its
On March 26, 2024, the Company announced a strategic decision to transition from its regional management structure to a centralized model to better position Li-Cycle for future success and increase efficiencies. Li-Cycle also reduced its workforce as part of its Cash Preservation Plan. These steps are expected to generate approximately
Rochester Hub Project
Li-Cycle progressed the comprehensive review of its Rochester Hub project, including advancing work with the local market to refine go-forward cost estimates for the mixed hydroxide precipitate (MHP) approach. The Company had previously confirmed the technical viability of the MHP process through an internal technical review. The MHP process involves the production of two key products: battery-grade lithium carbonate and MHP, which contains nickel, cobalt, and manganese. Both of these key products have established markets and are critical for the battery supply chain.
Commercial Highlights
The Company strengthened its global commercial partnerships during the first quarter, which provided further validation of Li-Cycle’s sustainable recycling technology and makes us well-placed to be a preferred global recycling partner.
In
In
Review of Q1 2024 Financial Results
Total revenue includes revenue from product sales, recycling services and non-cash fair market value (FMV) pricing adjustments. Revenue from product sales and recycling services, which excludes fair market value pricing adjustments, were
Cost of sales decreased
Selling, general & administrative (SG&A) expenses increased to
Other expense was
Net loss was
Adjusted EBITDA1 loss was approximately
The Company incurred capital expenditures of
Balance Sheet Position
As of March 31, 2024, Li-Cycle had cash and cash equivalents of
Webcast and Conference Call Information
On Friday, May 10, 2024, at 8:30 a.m. Eastern Time, Company management will host a webcast and conference call to provide a business update including a review of these results. The related presentation materials for the webcast and conference call will be made available on the investor section of the Li-Cycle website: https://investors.li-cycle.com/overview/default.aspx
Investors may listen to the conference call live via audio-only webcast or through the following dial-in numbers:
Domestic: (800) 343-5419
International: (203) 518-9731
Participant Code: LICYQ124
Webcast: https://investors.li-cycle.com
A replay of the conference call/webcast will also be made available on the Investor Relations section of the Company’s website at https://investors.li-cycle.com.
About Li-Cycle Holdings Corp.
Li-Cycle (NYSE: LICY) is a leading global lithium-ion battery resource recovery company. Established in 2016, and with major customers and partners around the world, Li-Cycle’s mission is to recover critical battery-grade materials to create a domestic closed-loop battery supply chain for a clean energy future. The Company leverages its innovative, sustainable and patent-protected Spoke & Hub Technologies™ to recycle all different types of lithium-ion batteries. At our Spokes, or pre-processing facilities, we recycle battery manufacturing scrap and end-of-life batteries to produce black mass, a powder-like substance which contains a number of valuable metals, including lithium, nickel and cobalt. At our future Hubs, or post-processing facilities, we plan to process black mass to produce critical battery-grade materials, including lithium carbonate, for the lithium-ion battery supply chain. For more information, visit https://li-cycle.com/.
1 Adjusted EBITDA is not a recognized measure under
Results of Operations Summary1
|
Three months ended March 31, |
|||||||||||
$ millions, except per share data |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
Financial highlights |
|
|
|
|||||||||
Revenue |
$ |
4.2 |
|
$ |
3.6 |
|
$ |
0.6 |
|
|||
Cost of sales |
|
(16.8 |
) |
|
(19.1 |
) |
|
2.3 |
|
|||
Selling, general and administrative expense |
|
(31.7 |
) |
|
(22.7 |
) |
|
(9.0 |
) |
|||
Research and development |
|
0.1 |
|
|
(0.9 |
) |
|
1.0 |
|
|||
Other income (expense) |
|
(92.5 |
) |
|
2.7 |
|
|
(95.2 |
) |
|||
Income tax |
|
— |
|
|
(0.1 |
) |
|
0.1 |
|
|||
Net loss |
|
(136.7 |
) |
|
(36.5 |
) |
|
(100.2 |
) |
|||
Adjusted EBITDA1 loss |
|
(27.4 |
) |
|
(37.9 |
) |
|
10.5 |
|
|||
Loss per common share - basic and diluted |
|
(0.76 |
) |
|
(0.21 |
) |
|
(0.55 |
) |
|||
Net cash used in operating activities |
$ |
(29.1 |
) |
$ |
(22.4 |
) |
$ |
(6.7 |
) |
|||
|
|
|
|
|||||||||
As at |
March 31, 2024 |
December 31, 2023 |
Change |
|||||||||
Cash and cash equivalents |
|
|
||||||||||
Cash and cash equivalents balance2 |
$ |
109.1 |
|
$ |
70.6 |
|
$ |
38.5 |
|
1 |
|
Adjusted EBITDA is a non-GAAP financial measure and does not have a standardized meaning under |
2 |
|
Excludes restricted cash of |
Non-GAAP Financial Measures
Adjusted EBITDA (loss)
Li-Cycle reports its financial results in accordance with accounting principles generally accepted in
Li-Cycle defines adjusted EBITDA (loss) as earnings (loss) before depreciation and amortization, interest expense (income), income tax expense (recovery) adjusted for items that not considered representative of ongoing operational activities of the business and items where the economic impact of transactions will be reflected in earnings in future periods. Adjustments relate to fair value loss on financial instruments, debt extinguishment loss and certain non-recurring expenses. Foreign exchange (gain) loss is excluded from the calculation of Adjusted EBITDA. The following table provides reconciliation of net loss to Adjusted EBITDA (loss).
|
Three months ended March 31, |
|||||||
Unaudited - $ millions |
|
|
2024 |
|
|
|
2023 |
|
Net loss |
$ |
(136.7 |
) |
$ |
(36.5 |
) |
||
Income tax |
|
— |
|
|
(0.1 |
) |
||
Depreciation and amortization |
|
4.2 |
|
|
1.9 |
|
||
Interest expense |
|
11.5 |
|
|
1.1 |
|
||
Interest income |
|
(0.6 |
) |
|
(5.0 |
) |
||
EBITDA (loss) |
$ |
(121.6 |
) |
$ |
(38.6 |
) |
||
Debt extinguishment loss |
|
58.9 |
|
|
— |
|
||
Restructuring fees1 |
|
11.5 |
|
|
— |
|
||
Fair value loss on financial instruments2 |
|
23.8 |
|
|
0.7 |
|
||
Adjusted EBITDA (loss) |
$ |
(27.4 |
) |
$ |
(37.9 |
) |
1 |
Restructuring charges include: expense related to the workforce reduction approved by the Board on March 25, 2024 which provided certain executives and non-executives with contractual termination benefits as well as one-time termination benefits; Special Committee retainers; professional fees, including legal fees incurred as a result of the three shareholder suits, and the mechanic’s liens filed following the construction pause at the Rochester Hub; and expenses related to the implementation of the Cash Preservation Plan. |
|
2 |
Fair value gain on financial instruments relates to convertible debt. |
Cautionary Notes - Forward-Looking Statements and Unaudited Results
Certain statements contained in this press release may be considered “forward-looking statements” within the meaning of the
These forward-looking statements are provided for the purpose of assisting readers in understanding certain key elements of Li-Cycle’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of Li-Cycle’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and is not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability.
Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Li-Cycle, and are not guarantees of future performance. Li-Cycle believes that these risks and uncertainties include, but are not limited to, the following: Li-Cycle’s inability to economically and efficiently source, recover and recycle lithium-ion batteries and lithium-ion battery manufacturing scrap, as well as third party black mass, and to meet the market demand for an environmentally sound, closed-loop solution for manufacturing waste and end-of-life lithium-ion batteries; Li-Cycle’s inability to successfully implement its global growth strategy, on a timely basis or at all; Li-Cycle’s inability to manage future global growth effectively; Li-Cycle’s inability to develop the Rochester Hub as anticipated or at all, and other future projects including its Spoke network expansion projects in a timely manner or on budget or that those projects will not meet expectations with respect to their productivity or the specifications of their end products; Li-Cycle’s history of losses and expected significant expenses for the foreseeable future as well as additional funds required to meet Li-Cycle’s liquidity needs and capital requirements in the future not being available to Li-Cycle on acceptable terms or at all when it needs them; risk and uncertainties related to Li-Cycle’s ability to continue as a going concern; uncertainty related to the success of Li-Cycle’s Cash Preservation Plan and related past and expected near-term further significant workforce reductions; Li-Cycle's inability to attract, train and retain top talent who possess specialized knowledge and technical skills; Li-Cycle’s failure to oversee and supervise strategic review of all or any of the Li-Cycle’s operations and capital project and obtain financing and other strategic alternatives; Li-Cycle’s ability to service its debt and the restrictive nature of the terms of its debt; Li-Cycle's potential engagement in strategic transactions, including acquisitions, that could disrupt its business, cause dilution to its shareholders, reduce its financial resources, result in incurrence of debt, or prove not to be successful; one or more of Li-Cycle's current or future facilities becoming inoperative, capacity constrained or disrupted;, or lacking sufficient feed streams to remain in operation; the potential impact of the pause in construction of the Rochester Hub on the authorizations and permits granted to Li-Cycle for the operation of the Rochester Hub and the Spokes on pause; the risk that the
Li-Cycle assumes no obligation to update or revise any forward-looking statements, except as required by applicable laws. These forward-looking statements should not be relied upon as representing Li-Cycle’s assessments as of any date subsequent to the date of this press release.
Li-Cycle Holdings Corp. |
||||||||
Unaudited condensed consolidated interim balance sheets |
||||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||||
|
March 31, 2024 |
December 31, 2023 |
||||||
Assets |
|
|
||||||
Current assets |
|
|
||||||
Cash and cash equivalents |
$ |
109.1 |
|
$ |
70.6 |
|
||
Restricted cash |
|
9.6 |
|
|
9.7 |
|
||
Accounts receivable, net |
|
2.9 |
|
|
1.0 |
|
||
Other receivables |
|
1.6 |
|
|
1.9 |
|
||
Prepayments, deposits and other current assets |
|
55.3 |
|
|
56.2 |
|
||
Inventories, net |
|
8.5 |
|
|
9.6 |
|
||
Total current assets |
|
187.0 |
|
|
149.0 |
|
||
|
|
|
||||||
Non-current assets |
|
|
||||||
Property, plant and equipment, net |
|
665.0 |
|
|
668.8 |
|
||
Operating lease right-of-use assets |
|
70.5 |
|
|
56.4 |
|
||
Finance lease right-of-use assets |
|
2.2 |
|
|
2.2 |
|
||
Other assets |
|
7.6 |
|
|
9.6 |
|
||
|
|
745.3 |
|
|
737.0 |
|
||
Total assets |
$ |
932.3 |
|
$ |
886.0 |
|
||
|
|
|
||||||
Liabilities |
|
|
||||||
Current liabilities |
|
|
||||||
Accounts payable |
$ |
118.6 |
|
$ |
134.5 |
|
||
Accrued liabilities |
|
31.8 |
|
|
17.6 |
|
||
Deferred revenue |
|
2.4 |
|
|
0.2 |
|
||
Operating lease liabilities |
|
8.5 |
|
|
4.4 |
|
||
Total current liabilities |
|
161.3 |
|
|
156.7 |
|
||
|
|
|
||||||
Non-current liabilities |
|
|
||||||
Accounts payable |
|
6.6 |
|
|
— |
|
||
Deferred revenue |
|
5.2 |
|
|
5.3 |
|
||
Operating lease liabilities |
|
65.3 |
|
|
56.2 |
|
||
Finance lease liabilities |
|
2.2 |
|
|
2.3 |
|
||
Convertible debt |
|
447.7 |
|
|
288.1 |
|
||
Asset retirement obligations |
|
1.0 |
|
|
1.0 |
|
||
|
|
528.0 |
|
|
352.9 |
|
||
Total liabilities |
$ |
689.3 |
|
$ |
509.6 |
|
||
Commitments and Contingencies |
|
|
||||||
|
|
|
||||||
Equity |
|
|
||||||
Common stock and additional paid-in capital Authorized unlimited shares, Issued and outstanding - 179.1 shares at March 31, 2024 (178.2 million shares at December 31, 2023) |
|
651.6 |
|
|
648.3 |
|
||
Accumulated deficit |
|
(408.3 |
) |
|
(271.6 |
) |
||
Accumulated other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) |
||
Total equity |
|
243.0 |
|
|
376.4 |
|
||
Total liabilities and equity |
$ |
932.3 |
|
$ |
886.0 |
|
||
Li-Cycle Holdings Corp. |
||||||||
Unaudited condensed consolidated interim statements of operations and comprehensive loss |
||||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||||
|
For the three months ended March 31, 2024 |
For the three months ended March 31, 2023 |
||||||
Revenue |
|
|
||||||
Product revenue |
|
1.9 |
|
|
3.1 |
|
||
Recycling service revenue |
|
2.3 |
|
|
0.5 |
|
||
Total revenue |
|
4.2 |
|
|
3.6 |
|
||
Cost of sales |
|
|
||||||
Cost of sales - Product revenue |
|
(15.9 |
) |
|
(19.1 |
) |
||
Cost of sales - Recycling service revenue |
|
(0.9 |
) |
|
— |
|
||
Total cost of sales |
|
(16.8 |
) |
|
(19.1 |
) |
||
Selling, general and administrative expense |
|
(31.7 |
) |
|
(22.7 |
) |
||
Research and development |
|
0.1 |
|
|
(0.9 |
) |
||
Loss from operations |
|
(44.2 |
) |
|
(39.1 |
) |
||
|
|
|
||||||
Other income (expense) |
|
|
||||||
|
|
|
||||||
Interest income |
|
0.6 |
|
|
5.0 |
|
||
Interest expense |
|
(11.5 |
) |
|
(1.1 |
) |
||
Foreign exchange gain (loss) |
|
1.1 |
|
|
(0.5 |
) |
||
Fair value loss on financial instruments |
|
(23.8 |
) |
|
(0.7 |
) |
||
Debt extinguishment loss (Note 14) |
|
(58.9 |
) |
|
— |
|
||
|
|
(92.5 |
) |
|
24.7 |
|
||
|
|
|
||||||
Net loss before taxes |
|
(136.7 |
) |
|
(137.9 |
) |
||
Income tax |
|
— |
|
|
(0.1 |
) |
||
Net loss and comprehensive loss |
|
(136.7 |
) |
|
(138.0 |
) |
||
|
|
|
||||||
Loss per common share - basic and diluted |
$ |
(0.76 |
) |
$ |
(0.21 |
) |
||
Li-Cycle Holdings Corp. |
||||||||
Unaudited condensed consolidated interim statements of cash flows |
||||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
|
|||||||
|
For the three months ended March 31, 2024 |
For the three months ended March 31, 2023 |
||||||
Operating activities |
|
|
||||||
Net loss for the period |
$ |
(136.7 |
) |
$ |
(36.5 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
||||||
Share-based compensation |
|
3.2 |
|
|
3.2 |
|
||
Depreciation and amortization |
|
4.2 |
|
|
1.9 |
|
||
Foreign exchange (gain) loss on translation |
|
(1.3 |
) |
|
0.2 |
|
||
Fair value loss on financial instruments |
|
23.8 |
|
|
0.7 |
|
||
Bad debt expense |
|
— |
|
|
1.0 |
|
||
Inventory write downs to net realizable value |
|
1.8 |
|
|
2.1 |
|
||
Loss on write off of fixed assets |
|
0.1 |
|
|
— |
|
||
Interest and accretion on convertible debt |
|
11.5 |
|
|
1.1 |
|
||
Debt extinguishment loss (Note 14) |
|
58.9 |
|
|
— |
|
||
Non-cash lease expense |
|
(1.1 |
) |
|
(0.1 |
) |
||
|
|
(35.6 |
) |
|
(26.4 |
) |
||
Changes in working capital items: |
|
|
||||||
Accounts receivable |
|
(1.9 |
) |
|
(0.4 |
) |
||
Other receivables |
|
0.3 |
|
|
4.4 |
|
||
Prepayments and deposits |
|
2.1 |
|
|
(3.3 |
) |
||
Inventories |
|
(0.4 |
) |
|
0.5 |
|
||
Deferred revenue |
|
2.1 |
|
|
— |
|
||
Accounts payable and accrued liabilities |
|
4.3 |
|
|
2.8 |
|
||
Net cash used in operating activities |
|
(29.1 |
) |
|
(22.4 |
) |
||
|
|
|
||||||
Investing activities |
|
|
||||||
Purchases of property, plant, equipment, and other assets |
|
(6.2 |
) |
|
(86.3 |
) |
||
Net cash used in investing activities |
|
(6.2 |
) |
|
(86.3 |
) |
||
|
|
|
||||||
Financing activities |
|
|
||||||
Proceeds from convertible debt |
|
75.0 |
|
|
— |
|
||
Payments of transaction costs |
|
(1.3 |
) |
|
— |
|
||
Net cash provided by financing activities |
|
73.7 |
|
|
— |
|
||
|
|
|
||||||
Net change in cash, cash equivalents and restricted cash |
|
38.4 |
|
|
(108.7 |
) |
||
Cash, cash equivalents and restricted cash, beginning of period |
|
80.3 |
|
|
517.9 |
|
||
Cash, cash equivalents and restricted cash, end of period |
$ |
118.7 |
|
$ |
409.2 |
|
||
|
|
|
||||||
Supplemental non-cash investing activities: |
|
|
||||||
Purchases of property and equipment included in liabilities |
$ |
16.7 |
|
$ |
25.4 |
|
||
Decreases of property and equipment and liabilities for credits from suppliers |
$ |
24.4 |
|
$ |
— |
|
||
Supplemental information: |
|
|
||||||
Interest paid |
|
— |
|
|
(0.1 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240510862629/en/
Investor Relations & Media
Louie Diaz
Sheldon D'souza
Investor Relations: investors@li-cycle.com
Media: media@li-cycle.com
Source: Li-Cycle Holdings Corp.
FAQ
What is the stock symbol for Li-Cycle Holdings Corp.?
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Who invested $75 million in Li-Cycle through the purchase of a senior secured convertible note?
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