Origin Materials, Inc. Reports Financial Results for First Quarter 2022
Origin Materials reported a significant increase in contracted offtake agreements, now totaling $7.4 billion, driven by strong customer demand and new partnerships with LVMH and Mitsubishi Chemical. The company is on track to complete Origin 1 by the end of 2022, although the capital budget for this project has risen by $15 to $20 million due to inflation and supply chain challenges. The 2022 Adjusted EBITDA forecast remains unchanged at a loss of $36 million, and capital expenditures are updated to $175 million.
- Contracted offtake agreements increase to $7.4 billion from $5.6 billion.
- New partnerships with LVMH and Mitsubishi Chemical expand market reach.
- Origin 1 construction on track for completion by end of 2022.
- Capital budget for Origin 1 increased by $15 to $20 million due to inflation.
- Adjusted EBITDA forecast maintains a loss of $36 million for 2022.
– Customer Demand is Strong and Broad Based, Increased Contracted Offtake Agreements and Capacity Reservations to
– Origin 1 Construction Timeline On Track and Capital Budget Increased by
– Origin 2 Construction Timeline, Budget, and Financing Unchanged –
– Maintains 2022 Adjusted EBITDA Forecast Loss of
“We continue to execute on our plan and make progress on our mission to enable the world’s transition to sustainable materials. We remain well-capitalized, on track for completion of Origin 1 by the end of 2022, and the previously disclosed capital budget, construction timeline, and financing for Origin 2 are unchanged. We were pleased to announce new strategic partnerships with LVMH and
Key Company First Quarter Highlights
-
Partnership with LVMH Moët Hennessy Louis Vuitton, the global leader in luxury goods, to bring carbon negative materials to the perfumes and cosmetics industry. As part of the strategic partnership, LVMH has signed a multi-year capacity reservation agreement with
Origin Materials . -
Partnership with
Mitsubishi Chemical Holdings Group , to develop advanced carbon-negative materials for tires, by converting hydrothermal carbon ("HTC") into high-performance analogs of specialty carbon black materials. The partnership will leverage Mitsubishi Chemical Corporation’s global supply chain strength, access to Japanese and international markets, and technical innovation capabilities.
These partnerships complement Origin’s existing partnerships and customer relationships with industry leaders including Danone, Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, Kolon Industries, PrimaLoft, Solvay, Mitsui & Co., Ltd., and
Origin 1 and Origin 2 Financing and Construction Update
The Company maintains that the previously disclosed Origin 1 construction timeline is on track, with mechanical completion expected by the end of 2022. Due to rising inflation and a more challenging supply chain delivery environment, Origin has updated its capital budget for Origin 1 and now expects a
During the first quarter, the Company hired additional members of the Origin 1 operations leadership team and started the process for hiring additional operations staff. Additional major equipment has been delivered onsite and set including the brine tanks associated with the ENCON evaporator module system. Piping and steel fabrication, which was started nearly 6 months ahead of the schedule announced in
A new video marking construction progress for Origin 1 is embedded into this press release and is also available on Origin’s Investor Relations site: https://investors.originmaterials.com/.
The previously disclosed Origin 2 capital budget and construction timeline are unchanged. Front end design of the plant is underway with detailed engineering set to begin in 2023. The Company maintains that its financing assumptions for Origin 2 are reasonable and achievable, with Origin 2 fully funded from its existing cash on hand and previously indicated traditional project financing sources. Origin also continues to work with leading financial institutions on other forms of traditional private financing and federal loan programs, including through the
Results for First Quarter 2022
Cash, cash equivalents and marketable securities were
Operating expenses for the first quarter were
Adjusted EBITDA loss was
Net income was
Shares outstanding as of
Full Year 2022 Outlook
Based on current business conditions, business trends and other factors, the Company is maintaining Adjusted EBITDA and updating capital spending for fiscal year 2022 resulting from an increase in the capital budget of Origin 1:
-
Adjusted EBITDA loss of up to
$36 million -
Capital spending is now expected to be up to
$175 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
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 10019030. The replay will be available until
About
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
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, access to traditional financing sources, budget and timelines to complete Origin 1 and Origin 2, ability to convert capacity reservations and offtake arrangements into revenue, commercial and operating plans, product development 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
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Condensed Consolidated Balance Sheets |
|||||||
(In thousands, except share and per share data) |
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
57,941 |
|
|
$ |
46,637 |
|
Restricted cash |
|
490 |
|
|
|
490 |
|
Marketable securities |
|
369,289 |
|
|
|
397,458 |
|
Other receivables |
|
2,792 |
|
|
|
2,612 |
|
Derivative asset |
|
213 |
|
|
|
202 |
|
Prepaid expenses and other current assets |
|
2,559 |
|
|
|
3,774 |
|
Total current assets |
|
433,284 |
|
|
|
451,173 |
|
Property, plant, and equipment, net |
|
69,329 |
|
|
|
57,185 |
|
Operating lease right-of-use asset |
|
2,710 |
|
|
|
1,782 |
|
Intangible assets, net |
|
206 |
|
|
|
215 |
|
Other long-term assets |
|
95 |
|
|
|
62 |
|
Total assets |
$ |
505,624 |
|
|
$ |
510,417 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
3,088 |
|
|
$ |
2,451 |
|
Accrued expenses |
|
2,468 |
|
|
|
973 |
|
Operating lease liability, current |
|
412 |
|
|
|
280 |
|
Other liabilities, current |
|
90 |
|
|
|
380 |
|
Derivative liability |
|
947 |
|
|
|
103 |
|
Total current liabilities |
|
7,005 |
|
|
|
4,187 |
|
|
|
|
|
||||
PPP Loan |
|
— |
|
|
|
— |
|
Earnout liability |
|
112,531 |
|
|
|
127,757 |
|
|
|
6,852 |
|
|
|
6,762 |
|
Assumed common stock warrants liability |
|
54,634 |
|
|
|
52,860 |
|
Stockholder note |
|
5,189 |
|
|
|
5,189 |
|
Related party other liabilities, long-term |
|
5,776 |
|
|
|
5,720 |
|
Operating lease liability |
|
2,342 |
|
|
|
1,486 |
|
Other liabilities, long-term |
|
2,900 |
|
|
|
2,946 |
|
Total liabilities |
|
197,229 |
|
|
|
206,907 |
|
|
|
|
|
||||
Commitments and contingencies (See Note 19) |
|
|
|
||||
|
|
|
|
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STOCKHOLDERS’ EQUITY |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
362,770 |
|
|
|
361,542 |
|
Accumulated deficit |
|
(49,451 |
) |
|
|
(56,797 |
) |
Accumulated other comprehensive loss |
|
(4,941 |
) |
|
|
(1,251 |
) |
Total stockholders’ equity |
|
308,394 |
|
|
|
303,510 |
|
Total liabilities and stockholders’ equity |
$ |
505,624 |
|
|
$ |
510,417 |
|
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended
|
||||||
(In thousands, except share and per share data) |
|
2022 |
|
|
|
2021 |
|
Operating Expenses |
|
|
|
||||
Research and development |
$ |
2,337 |
|
|
$ |
1,309 |
|
General and administrative |
|
5,071 |
|
|
|
3,948 |
|
Depreciation and amortization |
|
148 |
|
|
|
115 |
|
Total operating expenses and loss from operations |
|
7,556 |
|
|
|
5,372 |
|
|
|
|
|
||||
Other (income) expenses |
|
|
|
||||
Interest income |
|
(1,833 |
) |
|
|
— |
|
Interest expense, net of capitalized interest |
|
— |
|
|
|
280 |
|
Change in fair value of derivatives |
|
834 |
|
|
|
391 |
|
Change in fair value of warrants liability |
|
1,774 |
|
|
|
48,109 |
|
Change in fair value of earnout liability |
|
(15,227 |
) |
|
|
— |
|
Other income, net |
|
(450 |
) |
|
|
(581 |
) |
Total other (income) expenses, net |
|
(14,902 |
) |
|
|
48,199 |
|
Net income (loss) |
|
7,346 |
|
|
|
(53,571 |
) |
|
|
|
|
||||
Other comprehensive income (loss) |
|
|
|
||||
|
|
|
|
||||
Unrealized (loss) on marketable securities |
|
(4,575 |
) |
|
|
— |
|
Foreign currency translation adjustment, net of tax |
|
885 |
|
|
|
466 |
|
Total comprehensive income (loss) |
|
3,656 |
|
|
|
(53,105 |
) |
Net income (loss) per share, basic |
$ |
0.05 |
|
|
$ |
(0.86 |
) |
Net income (loss) per share, diluted |
$ |
0.05 |
|
|
$ |
(0.86 |
) |
Weighted-average common shares outstanding, basic |
|
136,825,016 |
|
|
|
62,652,947 |
|
Weighted-average common shares outstanding, diluted |
|
141,732,403 |
|
|
|
62,652,947 |
|
|
|
|
|
|
|||||||
Consolidated Statements of Cash Flows |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended
|
||||||
(in thousands) |
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities |
|
|
|
||||
Net income (loss) |
$ |
7,346 |
|
|
$ |
(53,571 |
) |
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
148 |
|
|
|
115 |
|
Amortization on right-of-use asset |
|
121 |
|
|
|
72 |
|
Stock-based compensation |
|
918 |
|
|
|
627 |
|
Amortization of debt issuance costs |
|
— |
|
|
|
5 |
|
Accretion of debt discount |
|
— |
|
|
|
14 |
|
Change in fair value of derivatives |
|
834 |
|
|
|
391 |
|
Change in fair value of common stock warrants liability |
|
1,774 |
|
|
|
— |
|
Change in fair value of preferred stock warrants liability |
|
— |
|
|
|
48,109 |
|
Change in fair value of earnout liability |
|
(15,227 |
) |
|
|
— |
|
Change in fair value of incremental acquisition fee accrual |
|
(45 |
) |
|
|
— |
|
Payments on operating lease liabilities |
|
(62 |
) |
|
|
(72 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Other receivables |
|
(179 |
) |
|
|
20 |
|
Prepaid expenses and other current assets |
|
1,215 |
|
|
|
(2 |
) |
Other long-term assets |
|
(32 |
) |
|
|
— |
|
Accounts payable |
|
637 |
|
|
|
31 |
|
Accrued expenses |
|
1,495 |
|
|
|
901 |
|
Other liabilities, current |
|
(290 |
) |
|
|
— |
|
Related party payable |
|
57 |
|
|
|
— |
|
Net cash used in operating activities |
|
(1,290 |
) |
|
|
(3,360 |
) |
Cash flows from investing activities |
|
|
|
||||
Purchases of property, plant, and equipment, net of grants |
|
(10,380 |
) |
|
|
(741 |
) |
Capitalized interest on plant construction |
|
(20 |
) |
|
|
(52 |
) |
Purchases of marketable securities |
|
(1,255,027 |
) |
|
|
— |
|
Sales of marketable securities |
|
1,240,788 |
|
|
|
— |
|
Maturities of marketable securities |
|
37,732 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
13,093 |
|
|
|
(793 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from stockholders' notes payable, net of debt issuance costs |
|
— |
|
|
|
11,687 |
|
Proceeds from |
|
— |
|
|
|
74 |
|
Issuance of common stock |
|
34 |
|
|
|
55 |
|
Net cash provided by financing activities |
|
34 |
|
|
|
11,816 |
|
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies |
|
(533 |
) |
|
|
(100 |
) |
Net increase (decrease) in cash and cash equivalents, and restricted cash |
|
11,304 |
|
|
|
7,563 |
|
Cash and cash equivalents, and restricted cash, beginning of the period |
|
47,127 |
|
|
|
1,874 |
|
Cash and cash equivalents, and restricted cash, end of the period |
$ |
58,431 |
|
|
$ |
9,437 |
|
|
|
|
|
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) interest expense, net of capitalized interest, (v) change in fair value of derivative liabilities, (vi) change in fair value of warrants liability, (vii) change in fair value of earnout liability, (viii) professional fees related to completed mergers, and (ix) other income, net.
|
|
Three months ended |
||||||
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
7,346 |
|
|
$ |
(53,571 |
) |
Stock based compensation |
|
|
918 |
|
|
|
627 |
|
Depreciation and amortization |
|
|
148 |
|
|
|
115 |
|
Interest income |
|
|
(1,833 |
) |
|
|
— |
|
Interest expense, net of capitalized interest |
|
|
— |
|
|
|
280 |
|
Change in fair value of derivative liabilities |
|
|
834 |
|
|
|
391 |
|
Change in fair value of warrants liability |
|
|
1,774 |
|
|
|
48,109 |
|
Change in fair value of earnout liability |
|
|
(15,227 |
) |
|
|
— |
|
Other income, net |
|
|
(450 |
) |
|
|
(581 |
) |
Adjusted EBITDA |
|
$ |
(6,490 |
) |
|
$ |
(4,630 |
) |
________________________________
1
View source version on businesswire.com: https://www.businesswire.com/news/home/20220509006047/en/
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source:
FAQ
What is the total value of Origin Materials' contracted offtake agreements as of now?
What is the adjusted EBITDA loss forecast for Origin Materials in 2022?
How much has the capital budget for Origin 1 increased due to supply chain issues?