Origin Materials, Inc. Reports Financial Results for Second Quarter 2022
Origin Materials reported strong demand for its carbon-negative materials, increasing contracted offtake agreements and capacity reservations to $8.1 billion, up from $7.4 billion in May 2022. The company maintains its 2022 Adjusted EBITDA outlook for a loss of up to $36 million and capital expenditure estimate of up to $175 million. Origin 1 construction remains on track with a budget of $125 million to $130 million, while Origin 2 financing is fully funded with anticipated state incentives exceeding $100 million. The company continues to expand partnerships within diverse markets, including beauty and automotive.
- Significant increase in contracted offtake agreements and capacity reservations to $8.1 billion.
- Origin 1 construction on track with budget of $125-$130 million.
- New partnerships established with Kuraray and Revlon, enhancing market reach.
- Maintains Adjusted EBITDA and capital expenditure guidance for 2022.
- Adjusted EBITDA loss for Q2 was $6.9 million, worsening from a loss of $3.0 million in Q2 2021.
- Net income decreased to $46.9 million in Q2, down from $62.5 million in the prior-year period.
- Operating expenses increased to $8.7 million from $6.7 million year-over-year.
– Origin 1 Construction Timeline On Track and Capital Budget Unchanged –
– Origin 2 Construction Timeline, Budget, and Financing Unchanged –
– Customer Demand is Strong and Broad Based, Increased Contracted Offtake Agreements and Capacity Reservations to
– Maintains 2022 Adjusted EBITDA and Capital Expenditure Outlook –
“The Origin team continues to execute on its mission to enable the world’s transition to sustainable materials. We remain well-capitalized and on track for completion of Origin 1 by the end of 2022 with preparations for commissioning and start-up underway. For Origin 2, the previously disclosed capital budget, construction timeline, and financing are unchanged. We were pleased to announce new strategic partnerships and initiatives with Kuraray, Revlon, Intertex World Resources, and ATC Plastics. These partnerships and initiatives further increase our exposure to consumer and industrial end-markets including cosmetics, packaging, plastics, and automotive. The Kuraray partnership will focus on a diverse set of polymer applications aimed at reducing the climate impact of a wide array of specialty chemicals and materials. The Revlon initiative represents an exciting opportunity to partner with an iconic global brand to develop and bring to market sustainable
Key Company Second Quarter Highlights
-
Partnership with Kuraray, a leading manufacturer of specialty chemicals and fibers to commercialize advanced
carbon negative materials for diverse polymer applications. As part of the strategic partnership, Kuraray signed a capacity reservation agreement withOrigin Materials .
-
Initiative with Revlon, a leading global authority and beauty trendsetter in the world of color cosmetics and hair care to develop advanced
carbon negative materials for next generation cosmetics packaging. As part of the initiative, Revlon signed a memorandum of understanding to reserve commercial volumes of Origin PET.
-
Partnership with Intertex World Resources, a leading value-added distributor of synthetic rubber,
carbon black, process oils and rubber chemicals to bring sustainablecarbon -negativecarbon black made using Origin Materials’ patented technology platform to the rubber compounding industry. As part of the partnership, Intertex signed an offtake agreement withOrigin Materials to purchasecarbon black.
-
Partnership with ATC Plastics, a leading global manufacturer of black color concentrates, to bring sustainable
carbon -negativecarbon black made using Origin Materials’ patented technology platform to the automotive and material handling industries. As part of the partnership, ATC Plastics agreed to purchasecarbon black fromOrigin Materials .
In addition, the Company amended and expanded its existing relationship with Danone. These strategic initiatives complement Origin’s existing partnerships and customer relationships with industry leaders including Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, Kolon Industries, PrimaLoft, Solvay, Mitsui & Co., Ltd.,
Additional second quarter highlights include:
-
Origin Materials Wins EPA Green Chemistry Challenge Award for 2022 in Partnership with
University of California, Davis .Origin Materials and UC Davis together won the EPA’s prestigious 2022 Green Chemistry Challenge Award in the category of Specific Environmental Benefit – Climate Change.
-
Origin Materials Earns USDA Certified Biobased Product Label for Additional
Carbon Negative Materials. The certification affirms that Origin’s furandicarboxylic acid (“FDCA”), purified terephthalic acid (“PTA”), and para-xylene (“pX”), when produced at full commercial capacity, are expected to be100% biobased, allowing Origin to display a uniqueUSDA label highlighting this designation. This certification adds to Origin’s previously announced USDA Certified Biobased Products, which include chloromethyl furfural (“CMF”) and hydrothermalcarbon (“HTC”).
-
Origin Materials Joins Russell 2000® and 3000® Indexes.
Origin Materials joined the small-cap Russell 2000® Index and the broad-market Russell 3000® Index as part of the 2022 Russell indexes annual reconstitution, effective at the market open onJune 27, 2022 .
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. The Company also maintains its previously disclosed capital budget for Origin 1 of
During the second quarter, the Company continued to strengthen its Origin 1 operations leadership team and operations staff. Additional major equipment has been delivered onsite including piping modules, which the Company installed alongside its key production modules, storage tanks, and a filter press which will be used in the separation of HTC. The Company began constructing the site’s HTC building, which houses equipment used in the separation of HTC, and its biomass building, which will store sustainable wood residues.
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 Second Quarter 2022
Cash, cash equivalents and marketable securities were
Operating expenses for the second 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 its previously updated capital spending estimate for fiscal year 2022:
-
Adjusted EBITDA loss of up to
$36 million -
Capital spending is 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 second 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 10019413. 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, ability to enter new end-markets, ability to develop new product categories, 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
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data) |
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
79,056 |
|
|
$ |
46,637 |
|
Restricted cash |
|
490 |
|
|
|
490 |
|
Marketable securities |
|
327,082 |
|
|
|
397,458 |
|
Other receivables |
|
2,989 |
|
|
|
2,612 |
|
Derivative asset |
|
695 |
|
|
|
202 |
|
Prepaid expenses and other current assets |
|
2,735 |
|
|
|
3,774 |
|
Total current assets |
|
413,047 |
|
|
|
451,173 |
|
Property, plant, and equipment, net |
|
82,273 |
|
|
|
57,185 |
|
Operating lease right-of-use asset |
|
3,214 |
|
|
|
1,782 |
|
Intangible assets, net |
|
190 |
|
|
|
215 |
|
Other long-term assets |
|
62 |
|
|
|
62 |
|
Total assets |
$ |
498,786 |
|
|
$ |
510,417 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
4,608 |
|
|
$ |
2,451 |
|
Accrued expenses |
|
3,449 |
|
|
|
973 |
|
Operating lease liability, current |
|
624 |
|
|
|
280 |
|
Other liabilities, current |
|
869 |
|
|
|
380 |
|
Derivative liability |
|
— |
|
|
|
103 |
|
Total current liabilities |
|
9,550 |
|
|
|
4,187 |
|
|
|
|
|
||||
Earnout liability |
|
79,343 |
|
|
|
127,757 |
|
|
|
6,667 |
|
|
|
6,762 |
|
Assumed common stock warrants liability |
|
35,831 |
|
|
|
52,860 |
|
Stockholder note |
|
5,189 |
|
|
|
5,189 |
|
Related party other liabilities, long-term |
|
5,848 |
|
|
|
5,720 |
|
Operating lease liability |
|
2,654 |
|
|
|
1,486 |
|
Other liabilities, long-term |
|
2,796 |
|
|
|
2,946 |
|
Total liabilities |
|
147,878 |
|
|
|
206,907 |
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
14 |
|
|
|
16 |
|
Additional paid-in capital |
|
364,853 |
|
|
|
361,542 |
|
Accumulated deficit |
|
(2,520 |
) |
|
|
(56,797 |
) |
Accumulated other comprehensive loss |
|
(11,439 |
) |
|
|
(1,251 |
) |
Total stockholders’ equity |
|
350,908 |
|
|
|
303,510 |
|
Total liabilities and stockholders’ equity |
$ |
498,786 |
|
|
$ |
510,417 |
|
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss)
(Unaudited)
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands, except share and per share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Expenses |
|
|
|
|
|
|
|
||||||||
Research and development |
$ |
2,649 |
|
|
$ |
2,339 |
|
|
$ |
4,985 |
|
|
$ |
3,648 |
|
General and administrative |
|
5,864 |
|
|
|
4,219 |
|
|
|
10,935 |
|
|
|
8,167 |
|
Depreciation and amortization |
|
160 |
|
|
|
121 |
|
|
|
308 |
|
|
|
236 |
|
Total operating expenses and loss from operations |
|
8,673 |
|
|
|
6,679 |
|
|
|
16,228 |
|
|
|
12,051 |
|
|
|
|
|
|
|
|
|
||||||||
Other (income) expenses |
|
|
|
|
|
|
|
||||||||
Interest income |
|
(1,936 |
) |
|
|
— |
|
|
|
(3,768 |
) |
|
|
— |
|
Interest expense, net of capitalized interest |
|
— |
|
|
|
2,560 |
|
|
|
— |
|
|
|
2,839 |
|
Change in fair value of derivatives |
|
(1,430 |
) |
|
|
1,035 |
|
|
|
(596 |
) |
|
|
1,426 |
|
Change in fair value of warrants liability |
|
(18,803 |
) |
|
|
(27,265 |
) |
|
|
(17,029 |
) |
|
|
20,844 |
|
Change in fair value of earnout liability |
|
(33,188 |
) |
|
|
(45,497 |
) |
|
|
(48,414 |
) |
|
|
(45,497 |
) |
Other income, net |
|
(247 |
) |
|
|
(43 |
) |
|
|
(698 |
) |
|
|
(623 |
) |
Total other (income) expenses, net |
|
(55,604 |
) |
|
|
(69,210 |
) |
|
|
(70,505 |
) |
|
|
(21,011 |
) |
Net income |
|
46,931 |
|
|
|
62,531 |
|
|
|
54,277 |
|
|
|
8,960 |
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) on marketable securities |
|
(4,805 |
) |
|
|
— |
|
|
|
(9,380 |
) |
|
|
— |
|
Foreign currency translation adjustment, net of tax |
|
(1,693 |
) |
|
|
626 |
|
|
|
(808 |
) |
|
|
1,092 |
|
Total comprehensive income |
|
40,433 |
|
|
|
63,157 |
|
|
|
44,089 |
|
|
|
10,052 |
|
Net income per share, basic |
$ |
0.34 |
|
|
$ |
0.93 |
|
|
$ |
0.40 |
|
|
$ |
0.14 |
|
Net income per share, diluted |
$ |
0.33 |
|
|
$ |
0.63 |
|
|
$ |
0.38 |
|
|
$ |
0.13 |
|
Weighted-average common shares outstanding, basic |
|
137,141,655 |
|
|
|
67,548,052 |
|
|
|
136,985,440 |
|
|
|
65,098,310 |
|
Weighted-average common shares outstanding, diluted |
|
142,195,637 |
|
|
|
78,628,591 |
|
|
|
142,078,752 |
|
|
|
70,974,756 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Six Months Ended
|
||||||
(in thousands) |
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
54,277 |
|
|
$ |
8,960 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
308 |
|
|
|
236 |
|
Amortization on right-of-use asset |
|
281 |
|
|
|
138 |
|
Stock-based compensation |
|
2,573 |
|
|
|
4,172 |
|
Amortization of debt issuance costs |
|
— |
|
|
|
14 |
|
Accretion of debt discount |
|
— |
|
|
|
2,211 |
|
Change in fair value of derivatives |
|
(596 |
) |
|
|
1,426 |
|
Change in fair value of common stock warrants liability |
|
(17,029 |
) |
|
|
— |
|
Change in fair value of preferred stock warrants liability |
|
— |
|
|
|
20,844 |
|
Change in fair value of earnout liability |
|
(48,414 |
) |
|
|
(45,497 |
) |
Change in fair value of incremental acquisition fee accrual |
|
(150 |
) |
|
|
— |
|
Payments on operating lease liabilities |
|
(193 |
) |
|
|
(138 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Other receivables |
|
(377 |
) |
|
|
(112 |
) |
Grants receivable |
|
— |
|
|
|
(17 |
) |
Prepaid expenses and other current assets |
|
1,038 |
|
|
|
(29 |
) |
Other long-term assets |
|
— |
|
|
|
— |
|
Accounts payable |
|
2,157 |
|
|
|
(1,880 |
) |
Accrued expenses |
|
2,476 |
|
|
|
2,899 |
|
Other liabilities, current |
|
489 |
|
|
|
— |
|
Related party payable |
|
128 |
|
|
|
98 |
|
Net cash used in operating activities |
|
(3,032 |
) |
|
|
(6,675 |
) |
Cash flows from investing activities |
|
|
|
||||
Purchases of property, plant, and equipment, net of grants |
|
(25,045 |
) |
|
|
(2,703 |
) |
Capitalized interest on plant construction |
|
(47 |
) |
|
|
— |
|
Purchases of marketable securities |
|
(1,655,200 |
) |
|
|
— |
|
Sales of marketable securities |
|
1,647,787 |
|
|
|
— |
|
Maturities of marketable securities |
|
71,168 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
38,663 |
|
|
|
(2,703 |
) |
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 |
|
— |
|
|
|
173 |
|
Issuance of common stock |
|
268 |
|
|
|
55 |
|
Business combination, net of issuance costs paid |
|
— |
|
|
|
467,530 |
|
Net cash provided by financing activities |
|
268 |
|
|
|
478,559 |
|
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies |
|
(3,480 |
) |
|
|
(178 |
) |
Net increase (decrease) in cash and cash equivalents, and restricted cash |
|
32,419 |
|
|
|
469,003 |
|
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 |
$ |
79,546 |
|
|
$ |
470,877 |
|
|
|
|
|
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 |
|
Six months ended |
||||||||||||
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
46,931 |
|
|
$ |
62,531 |
|
|
$ |
54,277 |
|
|
$ |
8,960 |
|
Stock based compensation |
|
|
1,656 |
|
|
|
3,545 |
|
|
|
2,573 |
|
|
|
4,172 |
|
Depreciation and amortization |
|
|
160 |
|
|
|
121 |
|
|
|
308 |
|
|
|
236 |
|
Interest income |
|
|
(1,936 |
) |
|
|
— |
|
|
|
(3,768 |
) |
|
|
— |
|
Interest expense, net of capitalized interest |
|
|
— |
|
|
|
2,560 |
|
|
|
— |
|
|
|
2,839 |
|
Change in fair value of derivative liabilities |
|
|
(1,430 |
) |
|
|
1,035 |
|
|
|
(596 |
) |
|
|
1,426 |
|
Change in fair value of warrants liability |
|
|
(18,803 |
) |
|
|
(27,265 |
) |
|
|
(17,029 |
) |
|
|
20,844 |
|
Change in fair value of earnout liability |
|
|
(33,188 |
) |
|
|
(45,497 |
) |
|
|
(48,414 |
) |
|
|
(45,497 |
) |
Other income, net |
|
|
(247 |
) |
|
|
(43 |
) |
|
|
(698 |
) |
|
|
(623 |
) |
Adjusted EBITDA |
|
$ |
(6,857 |
) |
|
$ |
(3,013 |
) |
|
$ |
(13,347 |
) |
|
$ |
(7,643 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220803005911/en/
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source:
FAQ
What are the second quarter 2022 financial results for ORGN?
How much has Origin Materials increased its contracted offtake agreements?
What is the construction status of Origin 1?
What is the outlook for Origin Materials in 2022?