Origin Materials, Inc. Reports Financial Results for Fourth Quarter 2022
Origin Materials, the leader in carbon negative materials, announced significant milestones, including the mechanical completion of its first commercial plant, Origin 1, with commissioning expected in Q2 2023. The Louisiana State Bond Commission approved financing of up to $1.5 billion for the construction of Origin 2. Origin also formed a strategic partnership with Avantium to mass-produce sustainable FDCA and PEF. The company projects revenue for 2023 between $40 million and $60 million, with an adjusted EBITDA loss expected between $50 million and $60 million.
- Mechanical completion of Origin 1 enables production of sustainable materials.
- Financing of up to $1.5 billion approved for Origin 2 construction.
- Partnership with Avantium to accelerate production of sustainable chemicals.
- Increased offtake agreements and capacity reservations reaching $9.3 billion.
- Adjusted EBITDA loss of $31 million for 2022, worsening from previous year's loss of $20 million.
- Operating expenses rose to $38.9 million in 2022 from $26.9 million the year prior.
– Origin 1 Mechanically Complete, Completion of Commissioning & Start-up Expected in Q2 2023 –
– Origin 2 Front-End Design, Construction Planning, and Financing are Progressing with Update to be Provided Mid-2023, Louisiana State Bond Commission Approves Significant Financing Milestone –
–
– Provides 2023 Revenue and Adjusted EBITDA Outlook –
“I am incredibly proud of what the Origin team accomplished in 2022 and our continued achievements this year. The mechanical completion of Origin 1, our first commercial plant, is a significant milestone as we continue to execute on our mission to enable the world’s transition to sustainable materials. Despite pandemic and related supply-chain headwinds, completion of commissioning and start-up are expected to be in Q2 2023, reflecting the remarkable depth of talent on our project team. Origin 1 will play a key application development role by producing CMF, HTC, and other intermediates in volumes that will allow customers to qualify products and applications beyond PET. For Origin 2, front-end loading, construction planning, and financing are progressing with an update to be provided mid-2023. In January, we announced the
Key Company Fourth Quarter and Recent Business Highlights
- Origin Materials Announces Mechanical Completion of Origin 1 Manufacturing Plant. As part of mechanical completion, the plant’s critical mechanical systems have been successfully installed and commissioning has begun.
-
Origin Materials Announces Louisiana State Bond Commission Approval of Financing for Origin 2.
The Bond Commission's final approval could enable the debt financing of Origin 2 using entirely tax-exempt bonds. -
Partnership with Avantium N.V., a leading technology company in renewable chemistry, to accelerate the mass production of FDCA and PEF for advanced chemicals and plastics. The partnership will produce FDCA from Origin’s
carbon negative biomass-to-chemicals platform and Avantium’s YXY® Technology and represents a potential breakthrough in the commercialization of cost-competitive, lowcarbon PEF, a polymer with an attractive combination of performance characteristics for packaging.
These strategic initiatives 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.,
Origin 1 and Origin 2 Financing and Construction Update
As disclosed in January, Origin 1, the Company’s first commercial manufacturing plant, is mechanically complete, in-line with the previously disclosed timeline, with completion of plant commissioning and start-up expected in Q2 2023.
During the fourth quarter, the Company continued to strengthen its Origin 1 operations leadership team and operations staff. As part of mechanical completion, the plant's critical mechanical systems have been successfully installed and commissioning has begun. Work onsite continues and, following start-up, Origin 1 is expected to enable customers to qualify products and applications beyond PET and to begin to address customer demand for the Company’s renewable materials.
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 Company continues to make progress on front-end design, construction planning, and financing for Origin 2. The Company has also made progress developing new products and applications which may be incorporated into the design of the plant, such as FDCA, PEF, as well as biofuels from an “oils and extractives” stream co-produced alongside CMF and HTC, which has not been included in previous plans. The Company expects to provide an update on new product offerings and construction plans for the Origin 2 plant in mid-2023.
In January, Origin announced that the
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 Fourth Quarter and Full Year 2022
Cash, cash equivalents and marketable securities were
Operating expenses for the fourth quarter were
Net income was
Adjusted EBITDA loss was
Shares outstanding as of
Full Year 2023 Outlook
Based on current business conditions, business trends and other factors, the Company is providing the following guidance for revenue and Adjusted EBITDA for fiscal year 2023:
-
Revenue
to$40 $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
Interested investors and other parties can listen to a webcast of the live conference call and access the Company’s fourth 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 10021027. 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
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 our potential products, ability to convert capacity reservations and offtake agreements 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
CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except share and per share data) |
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
107,858 |
|
|
$ |
46,637 |
|
Restricted cash |
|
490 |
|
|
|
490 |
|
Marketable securities |
|
215,464 |
|
|
|
397,458 |
|
Other receivables |
|
4,346 |
|
|
|
2,612 |
|
Derivative asset |
|
— |
|
|
|
202 |
|
Prepaid expenses and other current assets |
|
3,341 |
|
|
|
3,774 |
|
Total current assets |
|
331,499 |
|
|
|
451,173 |
|
Property, plant, and equipment, net |
|
154,183 |
|
|
|
57,185 |
|
Operating lease right-of-use asset |
|
2,779 |
|
|
|
1,782 |
|
Intangible assets, net |
|
160 |
|
|
|
215 |
|
Other long-term assets |
|
5,079 |
|
|
|
62 |
|
Total assets |
$ |
493,700 |
|
|
$ |
510,417 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
10,384 |
|
|
$ |
2,451 |
|
Accrued expenses |
|
8,414 |
|
|
|
973 |
|
Operating lease liability, current |
|
619 |
|
|
|
280 |
|
Other liabilities, current |
|
51 |
|
|
|
380 |
|
Derivative liability |
|
344 |
|
|
|
103 |
|
Total current liabilities |
|
19,812 |
|
|
|
4,187 |
|
|
|
|
|
||||
Earnout liability |
|
42,533 |
|
|
|
127,757 |
|
Canadian government research and development program liability |
|
7,185 |
|
|
|
6,762 |
|
Assumed common stock warrants liability |
|
30,872 |
|
|
|
52,860 |
|
Stockholder note |
|
5,847 |
|
|
|
5,189 |
|
Related party other liabilities, long-term |
|
5,395 |
|
|
|
5,720 |
|
Operating lease liability |
|
2,249 |
|
|
|
1,486 |
|
Other liabilities, long-term |
|
2,902 |
|
|
|
2,946 |
|
Total liabilities |
$ |
116,795 |
|
|
$ |
206,907 |
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
14 |
|
|
|
16 |
|
Additional paid-in capital |
|
371,072 |
|
|
|
361,542 |
|
Retained earnings (Accumulated deficit) |
|
21,772 |
|
|
|
(56,797 |
) |
Accumulated other comprehensive loss |
|
(15,953 |
) |
|
|
(1,251 |
) |
Total stockholders’ equity |
|
376,905 |
|
|
|
303,510 |
|
Total liabilities and stockholders’ equity |
$ |
493,700 |
|
|
$ |
510,417 |
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
(In thousands, except share and per share data) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
Research and development |
|
$ |
5,424 |
|
|
$ |
3,519 |
|
|
$ |
14,141 |
|
|
$ |
9,124 |
|
General and administrative |
|
|
7,326 |
|
|
|
4,055 |
|
|
|
24,095 |
|
|
|
17,265 |
|
Depreciation and amortization |
|
|
223 |
|
|
|
181 |
|
|
|
711 |
|
|
|
544 |
|
Total operating expenses and loss from operations |
|
|
12,973 |
|
|
|
7,755 |
|
|
|
38,947 |
|
|
|
26,933 |
|
Other (income) expenses |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
|
(2,748 |
) |
|
|
(1,413 |
) |
|
|
(8,825 |
) |
|
|
(1,413 |
) |
Interest (income) expense, net of capitalized interest |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
2,838 |
|
Change in fair value of derivatives |
|
|
2,168 |
|
|
|
(100 |
) |
|
|
443 |
|
|
|
1,326 |
|
Change in fair value of warrants liability |
|
|
(6,378 |
) |
|
|
(2,838 |
) |
|
|
(21,988 |
) |
|
|
4,525 |
|
Change in fair value of earnout liability |
|
|
(21,876 |
) |
|
|
(8,480 |
) |
|
|
(85,437 |
) |
|
|
(75,488 |
) |
Other income, net |
|
|
(132 |
) |
|
|
(160 |
) |
|
|
(1,709 |
) |
|
|
(811 |
) |
Total other income, net |
|
|
(28,966 |
) |
|
|
(12,992 |
) |
|
|
(117,516 |
) |
|
|
(69,023 |
) |
Net income |
|
$ |
15,993 |
|
|
$ |
5,237 |
|
|
$ |
78,569 |
|
|
$ |
42,090 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities |
|
|
2,769 |
|
|
|
(1,712 |
) |
|
|
(8,014 |
) |
|
|
(1,712 |
) |
Foreign currency translation adjustment, net of tax |
|
|
1,373 |
|
|
|
53 |
|
|
|
(6,688 |
) |
|
|
77 |
|
Total comprehensive income |
|
$ |
20,135 |
|
|
$ |
3,578 |
|
|
$ |
63,867 |
|
|
$ |
40,455 |
|
Net income per share, basic |
|
$ |
0.12 |
|
|
$ |
0.04 |
|
|
$ |
0.57 |
|
|
$ |
0.42 |
|
Net income per share, diluted |
|
$ |
0.11 |
|
|
$ |
0.04 |
|
|
$ |
0.55 |
|
|
$ |
0.40 |
|
Weighted-average common shares outstanding, basic |
|
|
138,347,960 |
|
|
|
136,762,136 |
|
|
|
137,563,877 |
|
|
|
101,221,781 |
|
Weighted-average common shares outstanding, diluted |
|
|
142,267,273 |
|
|
|
142,066,042 |
|
|
|
142,146,767 |
|
|
|
106,237,754 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
Year Ended |
||||||
(in thousands) |
2022 |
|
2021 |
||||
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
78,569 |
|
|
$ |
42,090 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
711 |
|
|
|
544 |
|
Amortization on right-of-use asset |
|
582 |
|
|
|
280 |
|
Stock-based compensation |
|
7,235 |
|
|
|
5,767 |
|
Amortization of debt issuance costs |
|
— |
|
|
|
14 |
|
Accretion of debt discount |
|
— |
|
|
|
2,211 |
|
Change in fair value of derivative |
|
443 |
|
|
|
1,326 |
|
Change in fair value of common stock warrants liability |
|
(21,988 |
) |
|
|
(30,510 |
) |
Change in fair value of preferred stock warrants liability |
|
— |
|
|
|
35,035 |
|
Change in fair value of earnout liability |
|
(85,437 |
) |
|
|
(75,488 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Other receivables |
|
(1,734 |
) |
|
|
(2,563 |
) |
Grants receivable |
|
— |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
432 |
|
|
|
(3,652 |
) |
Other long-term assets |
|
(5,017 |
) |
|
|
— |
|
Accounts payable |
|
26 |
|
|
|
(395 |
) |
Accrued expenses |
|
485 |
|
|
|
3,010 |
|
Payment on operating lease liabilities |
|
(572 |
) |
|
|
(295 |
) |
Other liabilities, current |
|
(329 |
) |
|
|
380 |
|
Other liabilities, long-term |
|
502 |
|
|
|
203 |
|
Net cash used in operating activities |
|
(26,092 |
) |
|
|
(22,043 |
) |
Cash flows from investing activities |
|
|
|
||||
Purchases of property, plant, and equipment, net of grants |
|
(83,691 |
) |
|
|
(12,268 |
) |
Purchases of marketable securities |
|
(3,823,407 |
) |
|
|
(2,448,316 |
) |
Sales of marketable securities |
|
3,815,859 |
|
|
|
2,024,089 |
|
Maturities of marketable securities |
|
180,331 |
|
|
|
25,058 |
|
Capitalized interest on plant construction |
|
(245 |
) |
|
|
(201 |
) |
Net cash provided by (used in) investing activities |
|
88,847 |
|
|
|
(411,638 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from stockholders' notes payable, net of debt issuance costs |
|
— |
|
|
|
11,707 |
|
Payment of short-term debt |
|
— |
|
|
|
(906 |
) |
Proceeds from |
|
849 |
|
|
|
543 |
|
Proceeds from exercise of stock options |
|
399 |
|
|
|
74 |
|
Business combination, net of issuance costs paid |
|
— |
|
|
|
467,530 |
|
Net cash provided by financing activities |
|
1,248 |
|
|
|
478,948 |
|
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies |
|
(2,782 |
) |
|
|
(14 |
) |
Net increase (decrease) in cash and cash equivalents, and restricted cash |
|
61,221 |
|
|
|
45,253 |
|
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 |
$ |
108,348 |
|
|
$ |
47,127 |
|
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 |
|
Year ended |
||||||||||||
(in thousands) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net income |
|
$ |
15,993 |
|
|
$ |
5,237 |
|
|
$ |
78,569 |
|
|
$ |
42,090 |
|
Stock based compensation |
|
|
3,516 |
|
|
|
959 |
|
|
|
7,235 |
|
|
|
5,767 |
|
Depreciation and amortization |
|
|
223 |
|
|
|
181 |
|
|
|
711 |
|
|
|
544 |
|
Interest income |
|
|
(2,748 |
) |
|
|
(1,413 |
) |
|
|
(8,825 |
) |
|
|
(1,413 |
) |
Interest expense, net of capitalized interest |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
2,838 |
|
Change in fair value of derivative |
|
|
2,168 |
|
|
|
(100 |
) |
|
|
443 |
|
|
|
1,326 |
|
Change in fair value of warrants liability |
|
|
(6,378 |
) |
|
|
(2,838 |
) |
|
|
(21,988 |
) |
|
|
4,525 |
|
Change in fair value of earnout liability |
|
|
(21,876 |
) |
|
|
(8,480 |
) |
|
|
(85,437 |
) |
|
|
(75,488 |
) |
Professional fees related to completed mergers |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
640 |
|
Other income, net |
|
|
(132 |
) |
|
|
(160 |
) |
|
|
(1,709 |
) |
|
|
(811 |
) |
Adjusted EBITDA |
|
$ |
(9,234 |
) |
|
$ |
(6,615 |
) |
|
$ |
(31,001 |
) |
|
$ |
(19,982 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230223005852/en/
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source:
FAQ
What are the key milestones announced by Origin Materials in February 2023?
What is Origin Materials' projected revenue for 2023?
What were the financial results for Origin Materials in Q4 2022?
How much financing did Origin secure for the construction of Origin 2?