Loop Industries Reports Fourth Quarter and Full Year Fiscal 2024 Results and Provides Updates on Business Developments
Loop Industries reported its fourth quarter and fiscal year 2024 financial results, highlighting several strategic business developments. On May 1, 2024, Loop signed a 50/50 joint venture agreement with Ester Industries to establish an Infinite Loop™ manufacturing facility in India, with an estimated $165 million investment projected to generate high returns. The company is also progressing well in financing negotiations with Reed Management for European commercialization and considering a monomer facility in Ulsan, South Korea with SK Geo Centric. A notable product launch includes the Cloudeasy Cyclon shoe made with Loop’s recycled polyester fiber. Despite a revenue increase in Q4, 2023 overall saw a net loss of $21.09 million due to higher R&D and reduced gains from asset sales. Research and development expenses decreased by $5.97 million, while general and administrative expenses dropped by $10.44 million year-over-year. Loop plans to hold a corporate update call on May 30, 2024 at 8:30 AM ET to discuss these updates in more detail.
- Revenue increased to $45,000 in Q4 2024 from $12,000 in Q4 2023.
- Research and development expenses decreased by $5.97 million year-over-year.
- General and administrative expenses decreased by $10.44 million year-over-year.
- Signed a 50/50 joint venture agreement with Ester Industries for a $165 million investment in India.
- Financing negotiations with Reed Management are progressing well.
- Launched Cloudeasy Cyclon shoe with recycled polyester, enhancing product portfolio.
- Net loss for Q4 2024 increased to $5.09 million from a net income of $5.42 million in Q4 2023.
- Annual revenue decreased to $153,000 in 2024 from $173,000 in 2023.
- Total expenses for the fiscal year were $21.24 million, nearly unchanged from $21.47 million the previous year.
- Significant decrease in cash and cash equivalents to $6.96 million from $30.59 million year-over-year.
- Inventory write-down of $817,000 in Q4 2024.
Insights
The financial results presented reveal a mixed performance for Loop Industries. Revenue for the fiscal year ended February 29, 2024, was
Research and development (R&D) expenses saw a significant decrease of
The net loss decreased slightly to
In the short term, cost management appears effective. However, long-term viability remains uncertain due to low revenue growth and continuous losses. Stakeholders should monitor cash flow closely and consider the potential need for additional financing.
The partnership announcements and joint ventures (India JV, SKGC and MoU with Reed) reflect Loop Industries' strategic push towards global market expansion, particularly in low-cost regions like India and high-potential markets in Asia and Europe. The India JV with Ester, with a projected capital investment of
The collaboration with SKGC and the proposed facilities in South Korea emphasize capturing the Asian market's demand for recycled DMT and MEG. These initiatives could capitalize on the region's industrial growth and environmental regulations favoring recycled materials. Furthermore, the ongoing financing negotiations with Reed showcase potential European market penetration and the firm's asset-light, royalty-based model, aligning with global commercialization goals.
However, these expansion plans hinge on successful financing and execution. Investors should consider the potential delays and financial risks associated with large capital investments and regulatory approvals in foreign markets. Long-term success will depend on the timely completion of these facilities and their ability to generate expected returns.
Loop Industries' focus on developing a circular plastics economy through its Infinite Loop™ technology is noteworthy. The joint ventures aiming to establish manufacturing facilities in India and potentially in South Korea highlight the company's commitment to sustainability and addressing the global plastic waste crisis.
The plans to produce lower carbon footprint recycled DMT and MEG align with growing environmental regulations and consumer demand for sustainable products. The collaboration with On for the Cloudeasy Cyclon shoe demonstrates practical application and market adoption of Loop’s technology. This enhances the company's environmental credibility and positions it as a leader in the sustainable materials industry.
However, the environmental benefits will only materialize if the facilities operate efficiently and at scale. Investors should consider the potential environmental impact assessments, regulatory hurdles and the readiness of Loop's technology for large-scale production. The long-term environmental impact and how it translates into financial performance will be important for stakeholders.
- Loop and Ester Industries Ltd. ("Ester") sign agreement to form a 50/50 India joint venture and establish an Infinite Loop™ manufacturing facility in India
- Financing negotiations with Reed Management SAS ("Reed") continuing to progress well
- Loop and SK Geo Centric ("SKGC") exploring opportunity to construct monomer facility in Ulsan
- Loop and On launch the Cloudeasy Cyclon shoe manufactured utilizing the Infinite Loop™ technology
Loop Management to hold update call at 8:30 AM ET on May 30, 2024
MONTREAL, QC / ACCESSWIRE / May 29, 2024 / Loop Industries, Inc. (Nasdaq:LOOP) (the "Company," "Loop," "we," "us," or "our"), a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing
Infinite Loop™ India Joint Venture
On May 1, 2024, Loop signed an agreement with Ester to form a 50/50 India joint venture ("India JV"). The India JV plans to establish an Infinite Loop™ manufacturing facility in India to produce lower carbon footprint recycled dimethyl terephthalate ("DMT"), recycled mono-ethylene glycol ("MEG") and specialty polymers using the Infinite Loop™ technology. Loop believes this unique product offering complements Loop's strategy to produce PET plastic and polyester and addresses the large and underserved US
Loop and Ester anticipate that total capital investment for the first India facility is estimated at approximately US
This partnership with Ester reflects a strategic focus going forward to concentrate equity investments and capital allocation in global low-cost manufacturing environments and gravitate towards an asset-light model based on royalties in geographical regions with higher capital investment and manufacturing costs.
Global Commercialization Update - Asia
On April 27, 2023, Loop and SKGC entered into a joint venture agreement to deploy Loop's depolymerization technology in the Asian market through multiple commercial manufacturing facilities. The planned Infinite Loop™ commercial manufacturing facility, in Ulsan, South Korea, was planned to break ground in the first half of 2024. The timing of the facility is currently under review by the partners while they evaluate opportunities to reduce capital costs and carry out discussions with the Korean government for subsidies related to the facility. Loop and SKGC are also evaluating the opportunity to build a monomer facility in order to capitalize on the large and growing market and attractive economics for DMT and MEG, including lower capital investment requirements for such a facility.
Memorandum of Understanding ("MOU") with Reed
On January 16, 2024, Loop announced that it had signed a non-binding MOU with Reed, a newly-formed European investment firm focused on high impact and technology-enabled infrastructure. Pursuant to the MOU, Loop and Reed intend to form a strategic long-term partnership through the establishment of a 50/50 joint venture to commercialize Loop's technology in Europe and for Reed to provide financing which would be utilized to fund the global commercialization of the Infinite Loop™ Technology (the "Proposed Transaction").
Since the signing of the MOU, Reed has invested significant resources in undertaking and completing extensive operational, technical, ESG, and legal due diligence. Loop and Reed continue to negotiate binding agreements with respect to the Proposed Transaction, and each party continues to work towards obtaining financing to fulfill its funding obligations with respect to the Proposed Transaction. The Company understands from Reed that its funding negotiations are progressing well and that it now expects to obtain its required funding via a transformative transaction, which by its nature has been a more extensive process than previously contemplated and which would also require regulatory approval. While entry into binding agreements would remain subject to the satisfaction of certain closing conditions, Loop and Reed are hopeful that they will enter into such binding agreements imminently, and close the Proposed Transaction by the end of the second quarter of the fiscal year ending February 28, 2025.
Loop x On Shoes Cloudeasy Cyclon Launch
On May 21st, 2024, Loop announced its collaboration with On, the Swiss sportswear brand, and unveiled the launch of the Cloudeasy Cyclon shoe, which features an upper crafted from yarn made with Loop's
CEO Comment
Daniel Solomita, Founder and CEO of Loop, commented on the recent updates, saying: "Our partnership with Ester reflects our emphasis on allocating capital in low-cost countries. By establishing the Infinite Loop™ India joint venture, we expect to leverage India's favorable economic conditions to produce virgin quality, recycled monomers and specialty polymers with significant cost efficiencies, which we believe will enable Loop to achieve attractive economic returns while serving a broader range of customers. Simultaneously, our planned partnership with Reed is expected to provide for attractive financing to meet our deployment. We believe this project will provide significant returns on capital and value creation for our shareholders. Also, we are excited for the potential to be undertaking this project with a strategic partner with which we share a common vision for the future and are fully aligned."
Corporate Update Call
Senior Management of Loop will host a corporate update call, followed by a question-and-answer session, which can be accessed via the dial-in numbers below. Slides supporting Senior Management's remarks will be available via the Investors section of Loop's website at http://loopindustries.com/en/investors/overview.
Date: Thursday, May 30, 2024
Time: 8:30 am Eastern Time
Participant joining details (by Telephone):
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Access Code: 697471
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Fiscal 2024 Financial Results
Results of Operations
Fourth Quarter Ended February 29, 2024
The following table summarizes our operating results for the three-month periods ended February 29, 2024 and February 28, 2023, in thousands of U.S. Dollars.
| Three months ended | ||||||||||||
| February 29, 2024 | February 28, 2023 | Change favorable / (unfavorable) | ||||||||||
Revenues | $ | 45 | $ | 12 | $ | 33 | ||||||
Expenses | ||||||||||||
Research and development | ||||||||||||
External engineering | 786 | 359 | (427 | ) | ||||||||
Employee compensation | 980 | 1,289 | 309 | |||||||||
Stock-based compensation | 66 | 167 | 101 | |||||||||
Plant and laboratory operating expenses | 1,081 | 215 | (866 | ) | ||||||||
Machinery and equipment expenditures | 21 | 83 | 62 | |||||||||
Other | 84 | 100 | 16 | |||||||||
Total research and development | 3,018 | 2,213 | (805 | ) | ||||||||
General and administrative | ||||||||||||
Professional fees | 677 | 704 | 27 | |||||||||
Employee compensation | 459 | 546 | 87 | |||||||||
Stock-based compensation | 216 | (50 | ) | (266 | ) | |||||||
Insurance | 623 | 711 | 88 | |||||||||
Other | 246 | 288 | 42 | |||||||||
Total general and administrative | 2,221 | 2,199 | (22 | ) | ||||||||
Gain on disposition of land | - | (9,980 | ) | (9,980 | ) | |||||||
Depreciation and amortization | 135 | 140 | 5 | |||||||||
Interest and other financial expenses (income) | (182 | ) | 50 | 232 | ||||||||
Interest income | (74 | ) | (6 | ) | 68 | |||||||
Foreign exchange loss (gain) | 18 | (27 | ) | (45 | ) | |||||||
Total expenses | 5,136 | (5,411 | ) | (10,547 | ) | |||||||
Net income (loss) | $ | (5,091 | ) | $ | 5,423 | $ | (10,514 | ) | ||||
Revenues
Revenues for the three-month period ended February 29, 2024 increased
Research and Development
Research and development expenses for the three-month period ended February 29, 2024 increased
General and administrative expenses
General and administrative expenses for the three-month period ended February 29, 2024 increased
Net Loss
The net loss for the three-month period ended February 29, 2024 increased
Fiscal Year Ended February 29, 2024
The following table summarizes our operating results for the years ended February 29, 2024 and February 28, 2023, in thousands of U.S. Dollars.
| Years ended | ||||||||||||
| February 29, 2024 | February 28, 2023 | Change favorable / (unfavorable) | ||||||||||
Revenues | $ | 153 | $ | 173 | $ | (20 | ) | |||||
Expenses | ||||||||||||
Research and development | ||||||||||||
External engineering | 2,353 | 3,273 | 920 | |||||||||
Employee compensation | 4,591 | 6,468 | 1,877 | |||||||||
Stock-based compensation | 542 | 1,337 | 795 | |||||||||
Plant and laboratory operating expenses | 2,318 | 2,581 | 263 | |||||||||
Machinery and equipment expenditures | 1,142 | 4,216 | 3,074 | |||||||||
Tax credits | (318 | ) | (1,199 | ) | (881 | ) | ||||||
Other | 751 | 670 | (81 | ) | ||||||||
Total research and development | 11,379 | 17,346 | 5,967 | |||||||||
General and administrative | ||||||||||||
Professional fees | 2,928 | 4,288 | 1,360 | |||||||||
Employee compensation | 2,343 | 2,475 | 132 | |||||||||
Stock-based compensation | 880 | 8,749 | 7,869 | |||||||||
Insurance | 2,680 | 3,594 | 914 | |||||||||
Other | 1,157 | 1,323 | 166 | |||||||||
Total general and administrative | 9,988 | 20,429 | 10,441 | |||||||||
Gain on disposition of land | - | (16,683 | ) | (16,683 | ) | |||||||
Depreciation and amortization | 535 | 550 | 15 | |||||||||
Interest and other financial expenses | (41 | ) | 189 | 230 | ||||||||
Interest income | (558 | ) | (41 | ) | 517 | |||||||
Foreign exchange gain | (63 | ) | (316 | ) | (253 | ) | ||||||
Total expenses | 21,240 | 21,474 | 234 | |||||||||
Net loss | $ | (21,087 | ) | $ | (21,301 | ) | $ | 214 | ||||
Revenues
Revenues for the year ended February 29, 2024 decreased
Research and Development
Research and development expenses for the year ended February 29, 2024 decreased
General and administrative expenses
General and administrative expenses for the year ended February 29, 2024 decreased
Net Loss
The net loss for the year ended February 29, 2024 decreased
Loop Industries, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands of U.S. dollars, except for share data) | Years Ended | |||||||
| February 29, 2024 | February 28, 2023 | |||||||
Revenue | $ | 153 | $ | 173 | ||||
Expenses : | ||||||||
Research and development | 11,379 | 17,346 | ||||||
General and administrative | 9,988 | 20,429 | ||||||
Depreciation and amortization | 535 | 550 | ||||||
Total expenses | 21,902 | 38,325 | ||||||
Other (income) loss : | ||||||||
Gain on disposition of land | - | (16,683 | ) | |||||
Interest and other financial expenses (income) | (41 | ) | 189 | |||||
Interest income | (558 | ) | (41 | ) | ||||
Foreign exchange gain | (63 | ) | (316 | ) | ||||
Net loss | (21,087 | ) | (21,301 | ) | ||||
Other comprehensive income (loss) - | ||||||||
Foreign currency translation adjustment | 71 | (1,045 | ) | |||||
Comprehensive loss | $ | (21,016 | ) | $ | (22,346 | ) | ||
Net loss per share | ||||||||
Basic and diluted | $ | (0.44 | ) | $ | (0.45 | ) | ||
Weighted average common shares outstanding | ||||||||
Basic and diluted | 47,522,483 | 47,418,949 | ||||||
Loop Industries, Inc.
Condensed Consolidated Balance Sheets
(in thousands of U.S. dollars, except per share data) | As at | |||||||
| February 29, 2024 | February 28, 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 6,958 | $ | 29,591 | ||||
Restricted cash | - | 1,000 | ||||||
Sales tax, tax credits and other receivables | 351 | 1,075 | ||||||
Inventories | 102 | 727 | ||||||
Deposits on machinery and equipment | - | 3,395 | ||||||
Prepaid expenses and other deposits | 577 | 636 | ||||||
Total current assets | 7,988 | 36,424 | ||||||
Investment in joint venture | 381 | 381 | ||||||
Property, plant and equipment, net | 10,636 | 2,545 | ||||||
Intangible assets, net | 1,548 | 1,210 | ||||||
Total assets | $ | 20,553 | $ | 40,560 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 2,321 | $ | 2,510 | ||||
Customer deposits | - | 1,012 | ||||||
Current portion of long-term debt | 100 | 62 | ||||||
Total current liabilities | 2,421 | 3,584 | ||||||
Due to customer | 770 | - | ||||||
Long-term debt | 3,220 | 3,240 | ||||||
Total liabilities | 6,411 | 6,824 | ||||||
Stockholders' Equity | ||||||||
Series A Preferred stock | - | - | ||||||
Common stock | 5 | 5 | ||||||
Additional paid-in capital | 171,792 | 170,370 | ||||||
Additional paid-in capital - Warrants | 20,385 | 20,385 | ||||||
Accumulated deficit | (176,970 | ) | (155,883 | ) | ||||
Accumulated other comprehensive loss | (1,070 | ) | (1,141 | ) | ||||
Total stockholders' equity | 14,142 | 33,736 | ||||||
Total liabilities and stockholders' equity | $ | 20,553 | $ | 40,560 | ||||
Loop Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands of U.S. dollars) | February 29, 2024 | February 28, 2023 | ||||||
Cash Flows from Operating Activities | ||||||||
Net loss | $ | (21,087 | ) | $ | (21,301 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 535 | 550 | ||||||
Stock-based compensation | 1,422 | 10,086 | ||||||
Write-down of inventory | 817 | - | ||||||
Discount on due to customer | (238 | ) | - | |||||
Gain on disposition of land | - | (16,683 | ) | |||||
Payment of legal settlement, net | - | (2,262 | ) | |||||
Accretion and accrued interest | 79 | 156 | ||||||
Changes in operating assets and liabilities: | ||||||||
Sales tax and tax credits receivable | 731 | 548 | ||||||
Inventories | (187 | ) | (727 | ) | ||||
Prepaid expenses and other deposits | 87 | (696 | ) | |||||
Accounts payable and accrued liabilities | (193 | ) | (4,563 | ) | ||||
Net cash used in operating activities | (18,034 | ) | (34,892 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Proceeds from disposition of land | - | 22,314 | ||||||
Deposits on machinery and equipment | - | (594 | ) | |||||
Additions to property, plant and equipment | (5,162 | ) | (81 | ) | ||||
Additions to intangible assets | (482 | ) | (360 | ) | ||||
Net cash (used in) provided by investing activities | (5,644 | ) | 21,279 | |||||
Cash Flows from Financing Activities | ||||||||
Customer deposits | (12 | ) | 1,012 | |||||
Repayment of long-term debt | (63 | ) | - | |||||
Net cash (used in) provided by financing activities | (75 | ) | 1,012 | |||||
Effect of exchange rate changes | 120 | (870 | ) | |||||
Net change in cash, cash equivalents and restricted cash | (23,633 | ) | (13,471 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of year | 30,591 | 44,062 | ||||||
Cash, cash equivalents and restricted cash, end of year | $ | 6,958 | $ | 30,591 | ||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Income tax paid | $ | - | $ | - | ||||
Interest paid | $ | 118 | $ | - | ||||
Interest received | $ | 488 | $ | 41 | ||||
About Loop Industries
Loop Industries is a technology company whose mission is to accelerate the world's shift toward sustainable PET plastic and polyester fiber and away from our dependence on fossil fuels. Loop Industries owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber, including plastic bottles and packaging, carpets and textiles of any color, transparency or condition and even ocean plastics that have been degraded by the sun and salt, to its base building blocks (monomers). The monomers are filtered, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber, thus enabling our customers to meet their sustainability objectives. Loop™ PET plastic and polyester fiber can be recycled infinitely without degradation of quality, successfully closing the plastic loop. Loop Industries is contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.
Common shares of the Company are listed on the NASDAQ Global Market under the symbol "LOOP."
For more information, please visit www.loopindustries.com. Follow Loop on Twitter: @loopindustries, Instagram: loopindustries, Facebook: Loop Industries and LinkedIn: Loop Industries
Forward-Looking Statements
This news release contains "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "should," "could," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or "continue," the negative of such terms or similar words. These forward-looking statements include, without limitation, statements about Loop's market opportunity, its strategies, ability to improve and expand its capabilities, competition, expected activities and expenditures as Loop pursues its business plan, the adequacy of its available cash resources, regulatory compliance, plans for future growth and future operations, the size of Loop's addressable market, market trends, and the effectiveness of Loop's internal control over financial reporting. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond Loop's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with among other things: (i) commercialization of our technology and products, (ii) our status of relationship with partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding relative to our current and future financial commitments, (vi) engineering, contracting, and building our manufacturing facilities, (vii) our ability to scale, manufacture, and sell our products in order to generate revenues, (viii) our proposed business model and our ability to execute thereon, (ix) the ability to obtain the necessary approvals or satisfy any closing conditions in respect of any of our proposed partnerships, (x) our joint venture projects and our ability to recover certain expenditures in connection therewith, (xi) adverse effects on the Company's business and operations as a result of increased regulatory, media, or financial reporting scrutiny, practices, rumors, or otherwise, (xii) disease epidemics and other health-related concerns and crises, which could result in reduced access to capital markets, supply chain disruptions and scrutiny, embargoing of goods produced in affected areas, government-imposed mandatory business closures and any resulting furloughs of our employees, government employment subsidy programs, travel restrictions or the like to prevent the spread of disease, or market or other changes that could result in non-cash impairments of our intangible assets, and property, plant and equipment, (xiii) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xiv) the outcome of any U.S. Securities and Exchange Commission ("SEC") investigations or class action litigation filed against us, (xv) our ability to hire and/or retain qualified employees and consultants, (xvi) other events or circumstances over which we have little or no control, and (xvii) other factors discussed in Loop's Annual Report on Form 10-K for the fiscal year ended February 29, 2024 filed with the SEC and in Loop's subsequent filings with the SEC. More detailed information about Loop and the risk factors that may affect the realization of forward-looking statements is set forth in Loop's filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. Loop assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
For More Information:
Investor Relations:
Kevin C. O'Dowd, Investor Relations
Loop Industries, Inc.
+1 617-755-4602
kodowd@loopindustries.com
Media Inquiries:
Andrea Kostiuk, VP Marketing & Communications
Loop Industries, Inc.
+1 (450) 951-8555
akostiuk@loopindustries.com
SOURCE: Loop Industries, Inc.
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FAQ
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