Origin Materials, Inc. Reports Financial Results for First Quarter 2023
- Origin 1 expected to start-up in Q2 2023
- Strategic partnerships with Indorama Ventures and SCGP
- Revenue of $1.7 million in Q1 2023
- Total signed offtake agreements and capacity reservations exceed $9.3 billion
- No negative takes identified
– Origin 1 On-Track to Start-Up in Q2 2023, In-line with Prior Guidance –
– Origin 2 Front-End Design, Construction Planning, and Financing Progressing –
– Announced Strategic Partnerships with Indorama Ventures to Accelerate Mass Production of Bio-Based Materials and SCGP to Explore Licensing Origin Technology for Asia-Based Plant –
– Maintains 2023 Revenue and Adjusted EBITDA Outlook –
“In the first quarter, the Origin team continued to execute on our mission to enable the world’s transition to sustainable materials. At our first commercial plant, Origin 1, we remain on track for a Q2 start-up with work onsite continuing and strong progress being made in plant commissioning and supply chain activation. For Origin 2, front-end design, construction planning, and financing are progressing, and we expect to provide an update during our Q2 earnings call in August. We were excited to announce new and expanded strategic partnerships and initiatives with Indorama Ventures, SCGP, Hyosung, and Minafin Group, complementing our existing relationships and initiatives with industry leaders and further validating the efficacy of our technology platform and business model. We were also pleased to make our first announcement of a potential Origin technology licensing agreement which we are exploring with SCGP, a leading multinational consumer packaging solutions provider. Finally, we strengthened our Board with the appointment of Craig Rogerson and Tony Tripeny, two new world class directors, who bring a wealth of chemicals industry executive experience. We would also like to thank Benno Dorer, who stepped down from the Board on May 8th, for his contributions. Looking ahead, the demand for ‘net zero’-enabling materials remains strong as the world moves aggressively to a zero-carbon future, and we remain focused on developing the commercial and supply chain capabilities necessary to begin delivering product to our customers,” said Rich Riley, Co-Chief Executive Officer of Origin.
Key Company First Quarter and Recent Business Highlights
Origin Materials reported quarterly revenue of
-
Partnership with Indorama Ventures, the world’s largest producer of virgin and recycled PET resins, to accelerate the mass production of bio-based materials. The Companies have signed a memorandum of understanding (“MOU”) to explore initiatives related to the rapid commercialization of low-carbon, bio-based materials. The initiatives to be explored include converting an Indorama Ventures
U.S. facility into a bio-based materials plant and producing samples for use in limited-volume product launches with high-profile brands. -
Partnership with SCGP, a leading multinational consumer packaging solutions provider, to explore licensing Origin technology for an
Asia -based plant. The companies have signed a joint development agreement (“JDA”) to explore licensing Origin technology in anAsia -based facility owned by SCGP, with testing of eucalyptus feedstock underway targeting applications in food packaging, logistics, automotive, and construction. -
Partnership with Hyosung Advanced Materials, a
Korea -based industrial materials company, to produce batteries, automotive parts, and apparel from carbon-negative materials. As part of the strategic partnership, Hyosung signed a multi-year capacity reservation agreement with Origin Materials. - Expanded partnership with Green Chemistry Division of the Minafin Group, a global fine chemical company, to launch a manufacturing initiative for Origin 1, Origin’s first commercial plant. As part of the manufacturing initiative, CMF (chloromethylfurfural) produced by Origin at Origin 1 will be delivered to Minafin, which will convert CMF into downstream intermediates and products. The initiative expands on the companies’ previously announced strategic partnership to industrialize sustainable chemicals.
- Amended existing agreement with PepsiCo to increase flexibility by expanding the slate of products that may be supplied as well as which plants may supply those products, with final volumes, product mix, and plants to be as mutually agreed upon.
Additional first quarter and recent business highlights include:
- Origin’s Sustainable Carbon Black Blends Meet or Exceed Fossil-Based N660 Performance for Tires and Mechanical Rubber Goods. Bench-scale results validate Origin’s carbon black as a high-performance bio-based tire filler that can be blended into mechanical rubber goods and automotive applications.
- Origin Materials Announces Two New Appointments to Board of Directors. New directors bring wealth of experience in operations, strategy, corporate finance, and M&A across the chemicals and materials science industries.
Origin 1 and Origin 2 Financing and Construction Update
Origin 1, the Company’s first commercial manufacturing plant, located in
For Origin 2, the Company continues to make progress on front-end design, construction planning, and financing. The Company has also made progress developing new products and applications that may be incorporated into the design of the plant, including FDCA, PEF, and biofuels. The Company expects to provide an update on new product offerings and construction plans for the Origin 2 plant in August 2023.
In January, Origin announced that the Louisiana State Bond Commission unanimously passed a resolution granting its final approval of the issuance of up to
Origin also continues to work with leading financial institutions on other forms of traditional private financing and federal loan programs, including through the United States Department of Agriculture and Department of Energy, and to pursue other local, state, and federal incentives programs to optimize the financing of Origin 2, including certain 2021 Infrastructure Investment and Jobs Act and 2022 Inflation Reduction Act provisions. The Company continues to expect that Origin 2 can be fully funded from a combination of existing cash on hand, previously indicated traditional project financing, and potential strategic partnerships. Given Origin's ongoing global technology licensing effort and an active governmental affairs team, the Company anticipates strategic partnerships and federal incentives programs to play a meaningful role in the financing of Origin 2.
Results for First Quarter 2023
Cash, cash equivalents and marketable securities were
Revenue for the first quarter was
Operating expenses for the first quarter were
Net income was
Adjusted EBITDA loss was
Shares outstanding as of March 31, 2023 were 143.3 million including 4.5 million shares held by a certain stockholder that are subject to forfeiture based on share price performance targets previously disclosed in our filings.
Full Year 2023 Outlook
Based on current business conditions, business trends and other factors, the Company is maintaining the following guidance for revenue and Adjusted EBITDA for fiscal year 2023:
-
Revenue of
to$40 million $60 million -
Adjusted EBITDA loss of
to$50 million $60 million
For a reconciliation of a non-GAAP figure to the applicable GAAP figure, please see the table captioned ‘Reconciliation of GAAP and Non-GAAP Results' set forth at the end of this press release. These expectations do not consider, or give effect to, among other things, unforeseen events, including changes in global economic conditions.
Webcast and Conference Call Information
Company management will host a webcast and conference call on May 10, 2023, at 5:00 p.m. Eastern Time, to discuss the Company's financial results.
Interested investors and other parties can listen to a webcast of the live conference call and access the Company’s first quarter update presentation by logging onto the Investor Relations section of the Company's website at https://investors.originmaterials.com/.
The conference call can be accessed live over the phone by dialing 1-855-327-6837 (domestic) or +1-631-891-4304 (international). A telephonic replay will be available approximately two hours after the call by dialing 1-844-512-2921, or for international callers, +1-412-317-6671. The conference ID for the live call and pin number for the replay is 10021507. The replay will be available until 11:59 p.m. Eastern Time on May 17, 2023.
About Origin Materials, Inc.
Headquartered in
Non-GAAP Financial Information
To supplement the Company’s financial results presented in accordance with generally accepted accounting principles in
Non-GAAP financial measures are not defined under
The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable
The Company is unable to reconcile forward-looking Adjusted EBITDA information provided in this press release to net income, the most closely comparable
For more information on this non-GAAP financial measure, please see the table captioned “Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.
Cautionary Note on Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Origin Materials’ business strategy, estimated total addressable market, anticipated synergies from partnerships, access to financing sources, budget and timelines for Origin 1 and Origin 2, anticipated benefits of and demand for our potential products and platform, ability to convert capacity reservations and offtake agreements into revenue, commercial and operating plans, product development plans and announcements of such plans, anticipated growth and projected financial information and ability to realize the anticipated benefits of any partnerships discussed in the press release. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the management of Origin Materials and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Origin Materials. These forward-looking statements are subject to a number of risks and uncertainties, including that Origin Materials may be unable to successfully commercialize its products; the effects of competition on Origin Materials’ business; the uncertainty of the projected financial information with respect to Origin; disruptions and other impacts to Origin’s business as a result of outbreaks such as the COVID-19 pandemic, Russia’s military intervention in
ORIGIN MATERIALS, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except share and per share data) |
March 31, 2023
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
86,954 |
|
|
$ |
107,858 |
|
Restricted cash |
|
490 |
|
|
|
490 |
|
Marketable securities |
|
176,971 |
|
|
|
215,464 |
|
Accounts receivable |
|
1,479 |
|
|
|
— |
|
Other receivables |
|
6,444 |
|
|
|
4,346 |
|
Inventory |
|
328 |
|
|
|
— |
|
Derivative asset |
|
477 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
3,891 |
|
|
|
3,341 |
|
Total current assets |
|
277,034 |
|
|
|
331,499 |
|
Property, plant, and equipment, net |
|
190,669 |
|
|
|
154,183 |
|
Operating lease right-of-use asset |
|
2,625 |
|
|
|
2,779 |
|
Intangible assets, net |
|
150 |
|
|
|
160 |
|
Other long-term assets |
|
12,992 |
|
|
|
5,079 |
|
Total assets |
$ |
483,470 |
|
|
$ |
493,700 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
7,922 |
|
|
$ |
10,384 |
|
Accrued expenses |
|
5,686 |
|
|
|
8,414 |
|
Operating lease liability, current |
|
624 |
|
|
|
619 |
|
Other liabilities, current |
|
731 |
|
|
|
51 |
|
Derivative liability |
|
61 |
|
|
|
344 |
|
Total current liabilities |
|
15,024 |
|
|
|
19,812 |
|
|
|
|
|
||||
Earnout liability |
|
29,894 |
|
|
|
42,533 |
|
Canadian Government Research and Development Program liability |
|
7,194 |
|
|
|
7,185 |
|
Assumed common stock warrants liability |
|
24,106 |
|
|
|
30,872 |
|
Notes payable |
|
5,189 |
|
|
|
5,847 |
|
Operating lease liability |
|
2,092 |
|
|
|
2,249 |
|
Other liabilities, long-term |
|
8,829 |
|
|
|
8,297 |
|
Total liabilities |
$ |
92,328 |
|
|
$ |
116,795 |
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
14 |
|
|
|
14 |
|
Additional paid-in capital |
|
374,010 |
|
|
|
371,072 |
|
Retained earnings |
|
31,541 |
|
|
|
21,772 |
|
Accumulated other comprehensive loss |
|
(14,423 |
) |
|
|
(15,953 |
) |
Total stockholders’ equity |
|
391,142 |
|
|
|
376,905 |
|
Total liabilities and stockholders’ equity |
$ |
483,470 |
|
|
$ |
493,700 |
|
ORIGIN MATERIALS, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||
(Unaudited) |
||||||||
|
|
Three months ended March 31, |
||||||
(In thousands, except share and per share data) |
|
2023 |
|
2022 |
||||
Revenues |
|
$ |
1,704 |
|
|
$ |
— |
|
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
|
|
960 |
|
|
|
— |
|
Operating expenses |
|
|
|
|
||||
Research and development |
|
|
5,075 |
|
|
|
2,337 |
|
General and administrative |
|
|
7,656 |
|
|
|
5,071 |
|
Depreciation and amortization |
|
|
288 |
|
|
|
148 |
|
Total operating expenses |
|
|
13,019 |
|
|
|
7,556 |
|
Loss from operations |
|
|
12,275 |
|
|
|
7,556 |
|
Other (income) expenses |
|
|
|
|
||||
Interest income |
|
|
(3,014 |
) |
|
|
(1,833 |
) |
Change in fair value of derivatives |
|
|
(760 |
) |
|
|
834 |
|
Change in fair value of warrants liability |
|
|
(6,766 |
) |
|
|
1,774 |
|
Change in fair value of earnout liability |
|
|
(12,872 |
) |
|
|
(15,227 |
) |
Other expenses (income), net |
|
|
1,368 |
|
|
|
(450 |
) |
Total other income, net |
|
|
(22,044 |
) |
|
|
(14,902 |
) |
Net income |
|
$ |
9,769 |
|
|
$ |
7,346 |
|
Other comprehensive income |
|
|
|
|
||||
Unrealized gain (loss) on marketable securities, net of tax |
|
$ |
1,410 |
|
|
$ |
(4,575 |
) |
Foreign currency translation adjustment, net of tax |
|
|
120 |
|
|
|
885 |
|
Total comprehensive income |
|
$ |
11,299 |
|
|
$ |
3,656 |
|
Net income per share, basic |
|
$ |
0.07 |
|
|
$ |
0.05 |
|
Net income per share, diluted |
|
$ |
0.07 |
|
|
$ |
0.05 |
|
Weighted-average common shares outstanding, basic |
|
|
138,651,062 |
|
|
|
136,825,016 |
|
Weighted-average common shares outstanding, diluted |
|
|
142,454,369 |
|
|
|
141,732,403 |
|
ORIGIN MATERIALS, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
|
Three months ended March 31, |
||||||
(in thousands) |
2023 |
|
2022 |
||||
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
9,769 |
|
|
$ |
7,346 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
288 |
|
|
|
148 |
|
Amortization on right-of-use asset |
|
157 |
|
|
|
121 |
|
Stock-based compensation |
|
2,246 |
|
|
|
918 |
|
Realized loss of marketable securities |
|
775 |
|
|
|
— |
|
Change in fair value of derivatives |
|
(760 |
) |
|
|
834 |
|
Change in fair value of common stock warrants liability |
|
(6,766 |
) |
|
|
1,774 |
|
Change in fair value of earnout liability |
|
(12,872 |
) |
|
|
(15,227 |
) |
Change in fair value of incremental acquisition fee accrual |
|
— |
|
|
|
(45 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
|
(3,577 |
) |
|
|
(179 |
) |
Inventory |
|
(328 |
) |
|
|
— |
|
Prepaid expenses and other current assets |
|
(550 |
) |
|
|
1,215 |
|
Other long-term assets |
|
(7,913 |
) |
|
|
(32 |
) |
Accounts payable |
|
(110 |
) |
|
|
637 |
|
Accrued expenses |
|
117 |
|
|
|
1,495 |
|
Operating lease liabilities |
|
(175 |
) |
|
|
(62 |
) |
Other liabilities, current |
|
680 |
|
|
|
(290 |
) |
Other liabilities, long-term |
|
(48 |
) |
|
|
57 |
|
Net cash used in operating activities |
|
(19,067 |
) |
|
|
(1,290 |
) |
Cash flows from investing activities |
|
|
|
||||
Purchases of property, plant, and equipment, net of grants |
|
(40,963 |
) |
|
|
(10,380 |
) |
Purchases of marketable securities |
|
(1,028,600 |
) |
|
|
(1,255,027 |
) |
Sales of marketable securities |
|
1,000,712 |
|
|
|
1,240,788 |
|
Maturities of marketable securities |
|
67,021 |
|
|
|
37,732 |
|
Capitalized interest on plant construction |
|
— |
|
|
|
(20 |
) |
Net cash (used in) provided by investing activities |
|
(1,830 |
) |
|
|
13,093 |
|
Cash flows from financing activities |
|
|
|
||||
Proceeds from Canadian Government Research and Development Program |
|
10 |
|
|
|
— |
|
Proceeds from exercise of stock options |
|
23 |
|
|
|
34 |
|
Net cash provided by financing activities |
|
33 |
|
|
|
34 |
|
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies |
|
(40 |
) |
|
|
(533 |
) |
Net (decrease) increase in cash and cash equivalents, and restricted cash |
|
(20,904 |
) |
|
|
11,304 |
|
Cash and cash equivalents, and restricted cash, beginning of the period |
|
108,348 |
|
|
|
47,127 |
|
Cash and cash equivalents, and restricted cash, end of the period |
$ |
87,444 |
|
|
$ |
58,431 |
|
Origin Materials, Inc.
Reconciliation of GAAP and Non-GAAP Results
We believe that the presentation of Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.
We define Adjusted EBITDA as net income or loss adjusted for (i) stock-based compensation expense, (ii) depreciation and amortization, (iii) interest income, (iv) change in fair value of derivative, (v) change in fair value of warrants liability, (vi) change in fair value of earnout liability, (vii) other income, net.
|
|
Three months ended March 31, |
||||||
(in thousands) |
|
2023 |
|
2022 |
||||
Net income |
|
$ |
9,769 |
|
|
$ |
7,346 |
|
Stock based compensation |
|
|
2,246 |
|
|
|
918 |
|
Depreciation and amortization |
|
|
288 |
|
|
|
148 |
|
Interest income |
|
|
(3,014 |
) |
|
|
(1,833 |
) |
Change in fair value of derivative |
|
|
(760 |
) |
|
|
834 |
|
Change in fair value of warrants liability |
|
|
(6,766 |
) |
|
|
1,774 |
|
Change in fair value of earnout liability |
|
|
(12,872 |
) |
|
|
(15,227 |
) |
Other income, net |
|
|
1,368 |
|
|
|
(450 |
) |
Adjusted EBITDA |
|
$ |
(9,741 |
) |
|
$ |
(6,490 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230510005852/en/
Origin Materials
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source: Origin Materials, Inc.
FAQ
What is the status of Origin 1?
What strategic partnerships were announced?
What was the revenue in Q1 2023?