Origin Materials, Inc. Reports Financial Results for Third Quarter 2022
Origin Materials (Nasdaq: ORGN, ORGNW) reported third-quarter 2022 results, maintaining a strong cash position of $362.2 million. The company is on track for mechanical completion of Origin 1 by year-end 2022, with a capital budget of $125 million to $130 million. Total contracted offtake agreements and capacity reservations have surged to $9.0 billion, up from $8.1 billion in August 2022. However, net income fell to $8.3 million, down from $27.9 million in the prior year, and adjusted EBITDA loss increased to $8.4 million.
- Total contracted offtake agreements increased to $9.0 billion, a 9x growth since going public.
- Origin 1 mechanical completion expected by year-end 2022, leading to plant start-up in Q1 2023.
- Net income decreased to $8.3 million from $27.9 million year-over-year.
- Adjusted EBITDA loss widened to $8.4 million compared to a loss of $5.7 million in the prior quarter.
– Origin 1 On Track for Mechanical Completion by Year-End 2022, 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
“I am incredibly proud of our team’s continued progress and execution on our mission to enable the world’s transition to sustainable materials. We remain well-capitalized and on track for mechanical completion of Origin 1 by year-end 2022, a considerable accomplishment despite the pandemic and related supply-chain headwinds. For Origin 2, the previously disclosed capital budget, construction timeline, and financing are unchanged. As the world moves aggressively to a zero-carbon future, we continue to see robust demand for our industry-leading technology as well as increasing regulatory support for sustainable solutions that can address the world’s environmental challenges. Our efforts to commercialize the business have resulted in increased offtake agreements and capacity reservations from our customers and partners to
Key Company Third Quarter Highlights
In addition, the Company has previously announced that it won the 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, and plant commissioning complete by the end of Q1 2023 with start-up beginning shortly thereafter. The Company also maintains its previously disclosed capital budget for Origin 1 of
During the third quarter, the Company continued to strengthen its Origin 1 operations leadership team and operations staff. The Company has made progress assembling the piping and electrical systems. All major equipment has been delivered including power distribution building, control room, storage tanks and hydrothermal carbon ("HTC") recovery equipment. The Company substantially completed the construction of the HTC building, which houses equipment used in the separation of HTC, and completed the biomass building, which will store sustainable wood residues, and installed the storage tanks.
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 continues to be 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 continues to work with leading financial institutions on other forms of traditional private financing and federal loan programs, including through the
Results for Third Quarter 2022
Cash, cash equivalents and marketable securities were
Operating expenses for the third quarter were
Net income was
Adjusted EBITDA loss 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 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 1-888-999-3182 (domestic) or +1-848-280-6330 (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 11152434. 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 agreements 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) |
2022 (Unaudited) |
|
2021 |
|||||
ASSETS |
|
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
102,965 |
|
|
$ |
46,637 |
|
|
Restricted cash |
|
505 |
|
|
|
490 |
|
|
Marketable securities |
|
258,733 |
|
|
|
397,458 |
|
|
Other receivables |
|
3,537 |
|
|
|
2,612 |
|
|
Derivative asset |
|
1,826 |
|
|
|
202 |
|
|
Prepaid expenses and other current assets |
|
5,237 |
|
|
|
3,774 |
|
|
Total current assets |
|
372,803 |
|
|
|
451,173 |
|
|
Property, plant, and equipment, net |
|
111,398 |
|
|
|
57,185 |
|
|
Operating lease right-of-use asset |
|
3,023 |
|
|
|
1,782 |
|
|
Intangible assets, net |
|
168 |
|
|
|
215 |
|
|
Other long-term assets |
|
5,080 |
|
|
|
62 |
|
|
Total assets |
$ |
492,472 |
|
|
$ |
510,417 |
|
|
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable |
$ |
7,646 |
|
|
$ |
2,451 |
|
|
Accrued expenses |
|
5,352 |
|
|
|
973 |
|
|
Operating lease liability, current |
|
599 |
|
|
|
280 |
|
|
Other liabilities, current |
|
2,594 |
|
|
|
380 |
|
|
Derivative liability |
|
— |
|
|
|
103 |
|
|
Total current liabilities |
|
16,191 |
|
|
|
4,187 |
|
|
|
|
|
|
|||||
Earnout liability |
|
64,197 |
|
|
|
127,757 |
|
|
|
|
6,269 |
|
|
|
6,762 |
|
|
Assumed common stock warrants liability |
|
37,250 |
|
|
|
52,860 |
|
|
Stockholder note |
|
5,802 |
|
|
|
5,189 |
|
|
Related party other liabilities, long-term |
|
5,328 |
|
|
|
5,720 |
|
|
Operating lease liability |
|
2,494 |
|
|
|
1,486 |
|
|
Other liabilities, long-term |
|
2,911 |
|
|
|
2,946 |
|
|
Total liabilities |
|
140,442 |
|
|
|
206,907 |
|
|
|
|
|
|
|||||
STOCKHOLDERS’ EQUITY |
|
|
|
|||||
Preferred stock, |
|
— |
|
|
|
— |
|
|
Common stock, |
|
14 |
|
|
|
16 |
|
|
Additional paid-in capital |
|
366,332 |
|
|
|
361,542 |
|
|
Retained earnings (Accumulated deficit) |
|
5,779 |
|
|
|
(56,797 |
) |
|
Accumulated other comprehensive loss |
|
(20,095 |
) |
|
|
(1,251 |
) |
|
Total stockholders’ equity |
|
352,030 |
|
|
|
303,510 |
|
|
Total liabilities and stockholders’ equity |
$ |
492,472 |
|
|
$ |
510,417 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
(In thousands, except share and per share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Operating Expenses |
|
|
|
|
|
|
|
|||||||||
Research and development |
$ |
3,732 |
|
|
$ |
1,957 |
|
|
$ |
8,717 |
|
|
$ |
5,605 |
|
|
General and administrative |
|
5,834 |
|
|
|
5,043 |
|
|
|
16,769 |
|
|
|
13,210 |
|
|
Depreciation and amortization |
|
180 |
|
|
|
126 |
|
|
|
488 |
|
|
|
363 |
|
|
Total operating expenses and loss from operations |
|
9,746 |
|
|
|
7,126 |
|
|
|
25,974 |
|
|
|
19,178 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Other (income) expenses |
|
|
|
|
|
|
|
|||||||||
Interest income |
|
(2,309 |
) |
|
|
— |
|
|
|
(6,077 |
) |
|
|
— |
|
|
Interest expense, net of capitalized interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,839 |
|
|
Change in fair value of derivatives |
|
(1,129 |
) |
|
|
— |
|
|
|
(1,725 |
) |
|
|
1,426 |
|
|
Change in fair value of warrants liability |
|
1,419 |
|
|
|
(13,481 |
) |
|
|
(15,610 |
) |
|
|
7,363 |
|
|
Change in fair value of earnout liability |
|
(15,147 |
) |
|
|
(21,511 |
) |
|
|
(63,561 |
) |
|
|
(67,008 |
) |
|
Other income, net |
|
(879 |
) |
|
|
(27 |
) |
|
|
(1,577 |
) |
|
|
(651 |
) |
|
Total other income, net |
|
(18,045 |
) |
|
|
(35,019 |
) |
|
|
(88,550 |
) |
|
|
(56,031 |
) |
|
Net income |
$ |
8,299 |
|
|
$ |
27,893 |
|
|
$ |
62,576 |
|
|
$ |
36,853 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Unrealized (loss) on marketable securities |
$ |
(1,403 |
) |
|
$ |
— |
|
|
$ |
(10,783 |
) |
|
$ |
— |
|
|
Foreign currency translation adjustment, net of tax |
|
(7,253 |
) |
|
|
(1,068 |
) |
|
|
(8,061 |
) |
|
|
24 |
|
|
Total comprehensive income (loss) |
$ |
(357 |
) |
|
$ |
26,825 |
|
|
$ |
43,732 |
|
|
$ |
36,877 |
|
|
Net income per share, basic |
$ |
0.06 |
|
|
$ |
0.20 |
|
|
$ |
0.46 |
|
|
$ |
0.41 |
|
|
Net income per share, diluted |
$ |
0.06 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.39 |
|
|
Weighted-average common shares outstanding, basic |
|
138,061,829 |
|
|
|
136,749,956 |
|
|
|
137,348,180 |
|
|
|
89,244,640 |
|
|
Weighted-average common shares outstanding, diluted |
|
142,197,014 |
|
|
|
141,239,965 |
|
|
|
142,134,560 |
|
|
|
94,029,056 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
Nine Months Ended
|
|||||||
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
Cash flows from operating activities |
|
|
|
|||||
Net income |
$ |
62,576 |
|
|
$ |
36,853 |
|
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
488 |
|
|
|
362 |
|
|
Amortization on right-of-use asset |
|
423 |
|
|
|
— |
|
|
Stock-based compensation |
|
3,719 |
|
|
|
4,808 |
|
|
Amortization of debt issuance costs |
|
— |
|
|
|
14 |
|
|
Accretion of debt discount |
|
— |
|
|
|
2,211 |
|
|
Change in fair value of derivatives |
|
(1,725 |
) |
|
|
1,426 |
|
|
Change in fair value of common stock warrants liability |
|
(15,610 |
) |
|
|
(27,672 |
) |
|
Change in fair value of preferred stock warrants liability |
|
— |
|
|
|
35,035 |
|
|
Change in fair value of earnout liability |
|
(63,561 |
) |
|
|
(67,008 |
) |
|
Change in fair value of incremental acquisition fee accrual |
|
(35 |
) |
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|||||
Other receivables |
|
(926 |
) |
|
|
(214 |
) |
|
Grants receivable |
|
— |
|
|
|
(16 |
) |
|
Prepaid expenses and other current assets |
|
(1,464 |
) |
|
|
(3,677 |
) |
|
Other long-term assets |
|
(5,019 |
) |
|
|
— |
|
|
Accounts payable |
|
5,195 |
|
|
|
(1,063 |
) |
|
Accrued expenses |
|
4,380 |
|
|
|
3,173 |
|
|
Payments on operating lease liabilities |
|
(338 |
) |
|
|
— |
|
|
Other liabilities, current |
|
2,214 |
|
|
|
— |
|
|
Related party payable |
|
221 |
|
|
|
152 |
|
|
Net cash used in operating activities |
|
(9,462 |
) |
|
|
(15,616 |
) |
|
Cash flows from investing activities |
|
|
|
|||||
Purchases of property, plant, and equipment, net of grants |
|
(57,825 |
) |
|
|
(5,113 |
) |
|
Capitalized interest on plant construction |
|
(133 |
) |
|
|
— |
|
|
Purchases of marketable securities |
|
(2,584,027 |
) |
|
|
— |
|
|
Sales of marketable securities |
|
2,587,649 |
|
|
|
— |
|
|
Maturities of marketable securities |
|
124,319 |
|
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
69,983 |
|
|
|
(5,113 |
) |
|
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 |
|
— |
|
|
|
287 |
|
|
Issuance of common stock |
|
371 |
|
|
|
56 |
|
|
Business combination, net of issuance costs paid |
|
— |
|
|
|
467,530 |
|
|
Net cash provided by financing activities |
|
371 |
|
|
|
478,674 |
|
|
Effects of foreign exchange rate changes on the balance of cash and cash equivalents, and restricted cash held in foreign currencies |
|
(4,549 |
) |
|
|
(41 |
) |
|
Net increase in cash and cash equivalents, and restricted cash |
|
56,343 |
|
|
|
457,904 |
|
|
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 |
$ |
103,470 |
|
|
$ |
459,778 |
|
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
|
|
Nine months ended
|
||||||||||||
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
|
$ |
8,299 |
|
|
$ |
27,893 |
|
|
$ |
62,576 |
|
|
$ |
36,853 |
|
Stock based compensation |
|
|
1,146 |
|
|
|
636 |
|
|
|
3,719 |
|
|
|
4,808 |
|
Depreciation and amortization |
|
|
180 |
|
|
|
126 |
|
|
|
488 |
|
|
|
363 |
|
Interest income |
|
|
(2,309 |
) |
|
|
— |
|
|
|
(6,077 |
) |
|
|
— |
|
Interest expense, net of capitalized interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,839 |
|
Change in fair value of derivative liabilities |
|
|
(1,129 |
) |
|
|
— |
|
|
|
(1,725 |
) |
|
|
1,426 |
|
Change in fair value of warrants liability |
|
|
1,419 |
|
|
|
(13,481 |
) |
|
|
(15,610 |
) |
|
|
7,363 |
|
Change in fair value of earnout liability |
|
|
(15,147 |
) |
|
|
(21,511 |
) |
|
|
(63,561 |
) |
|
|
(67,008 |
) |
Professional fees related to completed mergers |
|
|
— |
|
|
|
640 |
|
|
|
— |
|
|
|
640 |
|
Other income, net |
|
|
(879 |
) |
|
|
(27 |
) |
|
|
(1,577 |
) |
|
|
(651 |
) |
Adjusted EBITDA |
|
$ |
(8,420 |
) |
|
$ |
(5,724 |
) |
|
$ |
(21,767 |
) |
|
$ |
(13,367 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103006065/en/
Investors:
ir@originmaterials.com
Media:
media@originmaterials.com
Source:
FAQ
What were Origin Materials' Q3 2022 financial results?
How much cash did Origin Materials have as of September 30, 2022?
What is the status of Origin 1 and Origin 2 construction?
What is the current contracted offtake figure for Origin Materials?