Origin Materials, Inc. Reports Financial Results for Third Quarter 2021
Origin Materials, Inc. (Nasdaq: ORGN, ORGNW) has successfully completed the installation of key production modules at Origin 1, six months ahead of schedule. Customer demand is strong, with contracted offtake agreements and capacity reservations increasing to $4.2 billion, a more than 300% surge since going public. Financial results for Q3 2021 show a net income of $27.9 million compared to a net loss of $(3.1) million the prior year. The company maintains an Adjusted EBITDA loss guidance of up to $25 million and expects capital spending around $45 million.
- Contracted offtake agreements rose to $4.2 billion from $3.5 billion.
- Net income increased to $27.9 million from a net loss of $(3.1) million in Q3 2020.
- Installation of key production modules completed six months ahead of schedule.
- Capital spending expectations reduced to $45 million from $111 million.
- Operating expenses rose to $7.1 million from $2.0 million in the prior year.
- Adjusted EBITDA loss increased to $(5.7) million from $(1.9) million year-over-year.
– Origin 1 Key Production Module Installation Completed –
– Reaffirming Origin 1 and 2 Capital Budget, Production Timeline and Financing –
– Customer Demand is Strong and Broad Based, Increased Contracted Offtake Agreements and Capacity Reservations to
“We continue to make progress on our mission to enable the world’s transition to sustainable materials and are pleased to have completed the installation of the key production modules at Origin 1, six months ahead of the plan we announced in
- Partnership with Kolon Industries to industrialize advanced carbon-negative chemicals and materials.
-
Partnership with Drive+, a platform of automotive suppliers which is in close collaboration with Drive Sustainability, a group of 11 of the world’s largest automotive manufacturers, including
Volkswagen ,Daimler , Ford, Stellantis andToyota Motor Europe among others, aiming at further developing sustainability along the automotive supply chain. -
Partnership with Alliance to End
Plastic Waste , which includes industry leaders across the plastics value chain, working towards a common goal of developing, deploying and scaling solutions to help end plastic waste in the environment.
These partnerships complement Origin’s existing partnerships and customer relationships including with industry leaders like Danone, Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, PrimaLoft and Solvay.
Origin 1 and Origin 2 Financing and Construction Update
Since selecting Worley Limited as an engineering partner in Q3 2021, Origin has updated its original payment schedule for Origin 1 after incorporating detailed feedback from equipment suppliers and contractors, while reaffirming the Origin 1 capital budget and schedule. Additionally, Origin is reaffirming the previously disclosed Origin 2 capital budget and production timeline. Leading financial institutions that have expertise in financing similarly sized capital projects continue to confirm to the Company that its financing assumptions for Origin 2 are reasonable and executable. Origin reaffirms its expectations that the capital projects for Origin 1 and Origin 2 can be fully funded from its existing cash on hand and previously indicated traditional project financing sources.
Although the timing of capital expenditures will be incurred later than Origin’s original projections, Origin 1 remains on track for completion by the end of 2022. The lifting and installation of previously fabricated key production modules was completed in
Similarly, Origin 2 remains on track for completion by mid-2025. As announced previously, the Company has appointed Worley as its FEL1 engineering partner. Origin is also working with Worley,
Results for Third Quarter 2021
Cash, cash equivalents and marketable securities were
Operating expenses for the third quarter were
Adjusted EBITDA loss was
Net income was
Shares outstanding as of
Full Year 2021 Outlook
Based on current business conditions, business trends and other factors, the Company is maintaining previous guidance for Adjusted EBITDA loss but is updating its capital spending outlook, and now expects:
-
Adjusted EBITDA loss of up to
, consistent with prior outlook$25 million -
Capital spending is expected to be approximately
compared to the prior outlook of up to$45 million , due to refinement of the payment schedule since selecting an engineering partner. This has no impact on the construction timelines of both Origin 1 and 2, or total capital expenditures, which remain on track.$111 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 third 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 10016941. 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.
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’s business strategy, estimated total addressable market, access to traditional financing sources, budget and timelines to complete Origin 1 and Origin 2, commercial and operating plans, product development plans, anticipated growth and projected financial information. 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 |
$ |
459,288 |
|
|
$ |
1,309 |
|
Restricted cash |
$ |
490 |
|
|
$ |
565 |
|
Other receivables |
$ |
262 |
|
|
$ |
48 |
|
Grants receivable |
$ |
16 |
|
|
$ |
— |
|
Prepaid expenses and other current assets |
$ |
3,862 |
|
|
$ |
144 |
|
Total current assets |
$ |
463,918 |
|
|
$ |
2,066 |
|
Property, plant, and equipment, net |
$ |
49,951 |
|
|
$ |
45,104 |
|
Intangible assets, net |
$ |
225 |
|
|
$ |
258 |
|
Total assets |
$ |
514,094 |
|
|
$ |
47,428 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
1,783 |
|
|
$ |
2,700 |
|
Accrued expenses |
$ |
1,135 |
|
|
$ |
593 |
|
Derivative liability |
$ |
— |
|
|
$ |
1,239 |
|
Stockholder convertible notes payable |
$ |
— |
|
|
$ |
3,232 |
|
Total current liabilities |
$ |
2,918 |
|
|
$ |
7,764 |
|
|
|
|
|
||||
PPP Loan |
$ |
— |
|
|
$ |
906 |
|
Earnout liability |
$ |
136,199 |
|
|
$ |
— |
|
|
$ |
6,485 |
|
|
$ |
6,197 |
|
Redeemable convertible preferred stock warrants |
$ |
— |
|
|
$ |
19,233 |
|
Assumed common stock warrants liability |
$ |
55,698 |
|
|
$ |
— |
|
Stockholder note |
$ |
5,189 |
|
|
$ |
5,189 |
|
Related party other liabilities, long-term |
$ |
5,669 |
|
|
$ |
5,517 |
|
Other liabilities, long-term |
$ |
2,984 |
|
|
$ |
2,500 |
|
Total liabilities |
$ |
215,142 |
|
|
$ |
47,306 |
|
|
|
|
|
||||
Commitments and contingencies (See Note 18) |
|
|
|
||||
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
||||
Preferred stock, |
$ |
— |
|
|
$ |
— |
|
Common stock, |
$ |
13 |
|
|
$ |
6 |
|
Additional paid-in capital |
$ |
360,566 |
|
|
$ |
98,620 |
|
Accumulated deficit |
$ |
(62,035) |
|
|
$ |
(98,888) |
|
Accumulated other comprehensive income |
$ |
408 |
|
|
$ |
384 |
|
Total stockholders’ equity |
298,952 |
|
|
122 |
|
||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit |
$ |
514,094 |
|
|
$ |
47,428 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In thousands, except share and per share data) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Operating Expenses |
|
|
|
|
|
|
|
||||||||
Research and development |
$ |
1,957 |
|
|
$ |
1,190 |
|
|
$ |
5,605 |
|
|
$ |
3,313 |
|
General and administrative |
5,043 |
|
|
737 |
|
|
13,210 |
|
|
2,040 |
|
||||
Depreciation and amortization |
126 |
|
|
102 |
|
|
363 |
|
|
306 |
|
||||
Total operating expenses and loss from operations |
7,126 |
|
|
2,029 |
|
|
19,178 |
|
|
5,659 |
|
||||
Other (income) expenses |
|
|
|
|
|
|
|
||||||||
Interest expense, net of capitalized interest |
— |
|
|
54 |
|
|
2,839 |
|
|
167 |
|
||||
Change in fair value of derivative liability |
— |
|
|
67 |
|
|
1,426 |
|
|
52 |
|
||||
Change in fair value of warrants liability |
(13,481) |
|
|
1,024 |
|
|
7,363 |
|
|
1,128 |
|
||||
Change in fair value of earnout liability |
(21,511) |
|
|
— |
|
|
(67,008) |
|
|
— |
|
||||
Other income, net |
(27) |
|
|
(68) |
|
|
(651) |
|
|
(237) |
|
||||
Total other (income) expenses, net |
(35,019) |
|
|
1,077 |
|
|
(56,031) |
|
|
1,110 |
|
||||
Net income (loss) |
27,893 |
|
|
(3,106) |
|
|
36,853 |
|
|
(6,769) |
|
||||
Other comprehensive income (loss) |
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of tax |
(1,068) |
|
|
(3,613) |
|
|
24 |
|
|
(1,010) |
|
||||
Total comprehensive income (loss) |
26,825 |
|
|
(6,719) |
|
|
36,877 |
|
|
(7,779) |
|
||||
Net income (loss) per share, basic |
$ |
0.20 |
|
|
$ |
(0.05) |
|
|
$ |
0.41 |
|
|
$ |
(0.11) |
|
Net income (loss) per share, diluted |
$ |
0.20 |
|
|
$ |
(0.05) |
|
|
$ |
0.39 |
|
|
$ |
(0.11) |
|
Weighted-average common shares outstanding, basic |
136,749,956 |
|
|
62,545,275 |
|
|
89,244,640 |
|
|
62,544,818 |
|
||||
Weighted-average common shares outstanding, diluted |
141,239,965 |
|
|
62,545,275 |
|
|
94,029,056 |
|
|
62,544,818 |
|
||||
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows (Unaudited) |
|||||||
|
Nine Months Ended
|
||||||
(in thousands) |
2021 |
|
2020 |
||||
Cash flows from operating activities |
|
|
|
||||
Net income (loss) |
$ |
36,853 |
|
|
$ |
(6,769) |
|
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
|
||||
Depreciation and amortization |
362 |
|
|
306 |
|
||
Stock-based compensation |
4,808 |
|
|
78 |
|
||
Amortization of debt issuance costs |
14 |
|
|
130 |
|
||
Accretion of debt discount |
2,211 |
|
|
40 |
|
||
Change in fair value of derivative liability |
1,426 |
|
|
52 |
|
||
Change in fair value of warrants liability |
7,363 |
|
|
1,128 |
|
||
Change in fair value of earnout liability |
(67,008) |
|
|
— |
|
||
Changes in operating assets and liabilities: |
|
|
|
||||
Other receivables |
(214) |
|
|
954 |
|
||
Grants receivable |
(16) |
|
|
87 |
|
||
Prepaid expenses and other current assets |
(3,677) |
|
|
3 |
|
||
Accounts payable |
(1,063) |
|
|
(301) |
|
||
Accrued expenses |
3,173 |
|
|
196 |
|
||
Related party payable |
152 |
|
|
205 |
|
||
Net cash used in operating activities |
(15,616) |
|
|
(3,891) |
|
||
Cash flows from investing activities |
|
|
|
||||
Purchases of property, plant, and equipment, net of grants |
(5,113) |
|
|
(1,404) |
|
||
Net cash used in investing activities |
(5,113) |
|
|
(1,404) |
|
||
Cash flows from financing activities |
|
|
|
||||
Proceeds from notes payable, net of debt issuance costs |
11,707 |
|
|
906 |
|
||
Proceeds of short-term debt |
— |
|
|
501 |
|
||
Payment of short-term debt |
(906) |
|
|
— |
|
||
Proceeds from |
287 |
|
|
1,205 |
|
||
Issuance of common stock |
56 |
|
|
1 |
|
||
Business combination, net of issuance costs paid |
467,530 |
|
|
— |
|
||
Net cash provided by financing activities |
478,674 |
|
|
2,613 |
|
||
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and
|
(41) |
|
|
58 |
|
||
Net increase (decrease) in cash and cash equivalents, and restricted cash |
457,904 |
|
|
(2,624) |
|
||
Cash and cash equivalents, and restricted cash, beginning of the period |
1,874 |
|
|
3,612 |
|
||
Cash and cash equivalents, and restricted cash, end of the period |
$ |
459,778 |
|
|
$ |
988 |
|
|
|
|
|
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 expense, net of capitalized interest, (iv) change in fair value of derivative liability, (v) change in fair value of warrants liability, (vi) change in fair value of earnout liability, (vii) professional fees related to completed mergers, and (viii) other income, net.
|
|
Three months ended |
|
Nine months ended |
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net Income (loss) |
|
$ |
27,893 |
|
|
$ |
(3,106) |
|
|
$ |
36,853 |
|
|
$ |
(6,769) |
|
Stock based compensation |
|
636 |
|
|
60 |
|
|
4,808 |
|
|
78 |
|
||||
Depreciation and amortization |
|
126 |
|
|
102 |
|
|
363 |
|
|
306 |
|
||||
Interest expense, net of capitalized interest |
|
— |
|
|
54 |
|
|
2,839 |
|
|
167 |
|
||||
Change in fair value of derivative liability |
|
— |
|
|
67 |
|
|
1,426 |
|
|
52 |
|
||||
Change in fair value of warrants liability |
|
(13,481) |
|
|
1,024 |
|
|
7,363 |
|
|
1,128 |
|
||||
Change in fair value of earnout liability |
|
(21,511) |
|
|
— |
|
|
(67,008) |
|
|
— |
|
||||
Professional fees related to completed mergers |
|
640 |
|
|
— |
|
|
640 |
|
|
— |
|
||||
Other income, net |
|
(27) |
|
|
(68) |
|
|
(651) |
|
|
(237) |
|
||||
Adjusted EBITDA |
|
$ |
(5,724) |
|
|
$ |
(1,867) |
|
|
$ |
(13,367) |
|
|
$ |
(5,275) |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211111006026/en/
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source:
FAQ
What are the key financial results for Origin Materials in Q3 2021?
What is the current status of Origin 1 and Origin 2 projects?
How much have contracted offtake agreements increased for Origin Materials?