Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the
“Company”), a leading next generation bioplastics company focused
on the development and production of biodegradable materials,
announced today its financial results for the second quarter ended
June 30, 2022.
Stephen E. Croskrey, Chairman and Chief Executive Officer of
Danimer commented, “Our customer conversations and business
development efforts are moving forward. Our leadership position in
research and development for PHA-based resins is strengthening our
existing relationships while also creating new interest in our
best-in-class biodegradable offerings. In June, we successfully
started commissioning Phase II of our Kentucky Facility, which is
performing better than our initial expectations. As we think beyond
Kentucky, we were very pleased to have recently announced our major
milestone with the Department of Energy in support of our capacity
expansion.”
Mr. Croskrey continued, “Interest in our solutions is higher
than it’s ever been and we currently expect several significant
customer product launches in the fourth quarter 2022 and into 2023.
In the near term, many of our existing and potential customers are
facing supply chain bottlenecks, inflation and overall economic
uncertainty that impact the timing of orders and deliveries. We are
excited to continue working closely with our customers to capture
the immense long-term opportunity to transform the plastics
market.”
Second Quarter 2022 Financial Highlights
- Revenues in the second quarter were $12.7 million. PHA-based
product sales were up 85% from the comparable period in the prior
year, expanding to 61% of total revenue compared to 29% in the
second quarter of 2021.
- Gross profit was $(2.2) million compared to $2.0 million in the
second quarter of 2021. Adjusted gross profit1 was $0.2 million
compared to $4.1 million in the second quarter of 2021. The
decrease in adjusted gross profit was primarily driven by lower
R&D gross profit and lower PLA volumes at a lower
year-over-year margin, partially offset by higher PHA volumes at an
improved margin compared to the prior year period.
- Net loss of $30.4 million included a $2.0 million non-cash gain
related to the remeasurement of the Company’s private warrants for
the second quarter of 2022.
- Adjusted EBITDA1 was $(12.9) million in the second quarter of
2022 compared to $(2.7) million in the second quarter of 2021,
primarily due to the decline in gross profit as well as prior
increases in headcount and salaries to support expansion plans. The
second quarter of 2022 also included approximately $1.2 million of
R&D and operating expenses related to Danimer Catalytic
Technologies, which the Company did not own in the comparable prior
year period.
- Adjusted EBITDAR1, which excludes rent expense primarily
associated with the Company’s Kentucky Facility and one of the
Company's production facilities in Georgia, was $(12.0) million,
compared to $(2.6) million in the prior year second quarter.
(1)
An explanation of non-GAAP
measures disclosed in this release and a reconciliation of these
non-GAAP results to comparable GAAP measures are included in the
“Non-GAAP Financial Measures” section of the release.
Capital Structure and Cash Balance
At June 30, 2022, the Company reported total debt outstanding of
$264.3 million, net of $9.7 million of unamortized debt issuance
costs, and includes approximately $21.0 million dollars of
low-interest New Markets Tax Credit loans that the Company expects
will be forgiven in 2026. At June 30, 2022, cash and cash
equivalents were $140.4 million.
In July 2022, Danimer was invited to submit a Part II
Application for a loan guarantee under the U.S. Department of
Energy (DOE) Title XVII Loan Guarantee Program. If successful, the
loan guarantee from the DOE would help fund the Company’s capacity
expansion, as further detailed in the Company’s press release
issued on July 5, 2022.
Outlook
Danimer remains focused on making disciplined investments in its
operational platform and infrastructure that will allow it to
capture the significant opportunity for its products in coming
years.
For the full year 2022, the Company reaffirms its outlook for
Adjusted EBITDA to be in the range of $(45) million to $(35)
million, compared to $(22.6) million in 2021. The Company now
expects full year capital expenditures to be in the range of $175
million to $185 million, inclusive of capitalized interest and
internal labor and overhead, with a year-end cash balance in excess
of $60 million.
Looking beyond 2022, the Company expects its PHA-based revenues
to drive a significant increase in the Company’s overall
profitability. The Company remains confident in its ability to
execute against its objectives with a prudent focus on
profitability and cash management.
Webcast, Conference Call and 10-Q Filing
The Company will host a webcast and conference call on Tuesday,
August 9, 2022, at 5:00 p.m. Eastern time to review second quarter
of 2022 results, discuss recent events and conduct a
question-and-answer session. The live webcast of the conference
call can be accessed on the Investor Relations section of the
Company’s website at https://ir.danimerscientific.com. For those
unable to access the webcast, the conference call will be
accessible domestically or internationally, by dialing
1-877-407-9208 or 1-201-493-6784, respectively. Upon dialing in,
please request to join the Danimer Scientific Second Quarter 2022
Earnings Conference Call. The archived webcast will be available
for replay on the Company's website after the call.
About Danimer Scientific
Danimer is a pioneer in creating more sustainable, more natural
ways to make plastic products. For more than a decade, its
renewable and sustainable biopolymers have helped create plastic
products that are biodegradable and compostable and return to
nature instead of polluting our lands and waters. Danimer’s
technology can be found in a vast array of plastic end products
that people use every day. Applications for its biopolymers include
additives, aqueous coatings, fibers, filaments, films and
injection-molded articles, among others. Danimer holds more than
430 granted patents and pending patent applications in more than 20
countries for a range of manufacturing processes and biopolymer
formulations. For more information, visit
www.DanimerScientific.com.
Forward‐Looking Statements
Please note that in this press release we may use words such as
“appears,” “anticipates,” “believes,” “plans,” “expects,”
“intends,” “future,” and similar expressions which constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, statements
regarding our expectations for full year 2022 capital expenditures,
Adjusted EBITDA and cash balances. Forward-looking statements are
made based on our expectations and beliefs concerning future events
impacting the Company and therefore involve a number of risks and
uncertainties. We caution that forward-looking statements are not
guarantees and that actual results could differ materially from
those expressed or implied in the forward-looking statements.
Potential risks and uncertainties that could cause the actual
results of operations or financial condition of the Company to
differ materially from those expressed or implied by
forward-looking statements in this release include, but are not
limited to, the overall level of consumer demand on our products;
general economic conditions and other factors affecting consumer
confidence, preferences, and behavior; disruption and volatility in
the global currency, capital, and credit markets; the financial
strength of the Company's customers; the Company's ability to
implement its business strategy, including, but not limited to, its
ability to expand its production facilities and plants to meet
customer demand for its products and the timing thereof; risks
relating to the uncertainty of the projected financial information
with respect to the Company; the ability of the Company to execute
and integrate acquisitions; changes in governmental regulation,
legislation or public opinion relating to our products; the
Company’s exposure to product liability or product warranty claims
and other loss contingencies; disruptions and other impacts to the
Company’s business, as a result of the COVID-19 global pandemic and
government actions and restrictive measures implemented in
response; stability of the Company’s manufacturing facilities and
suppliers, as well as consumer demand for our products, in light of
disease epidemics and health-related concerns such as the COVID-19
global pandemic; the impact on our business, operations and
financial results from the ongoing conflict in Ukraine; the impact
that global climate change trends may have on the Company and its
suppliers and customers; the Company's ability to protect patents,
trademarks and other intellectual property rights; any breaches of,
or interruptions in, our information systems; the ability of our
information technology systems or information security systems to
operate effectively, including as a result of security breaches,
viruses, hackers, malware, natural disasters, vendor business
interruptions or other causes; our ability to properly maintain,
protect, repair or upgrade our information technology systems or
information security systems, or problems with our transitioning to
upgraded or replacement systems; the impact of adverse publicity
about the Company and/or its brands, including without limitation,
through social media or in connection with brand damaging events
and/or public perception; fluctuations in the price, availability
and quality of raw materials and contracted products as well as
foreign currency fluctuations; our ability to utilize potential net
operating loss carryforwards; and changes in tax laws and
liabilities, tariffs, legal, regulatory, political and economic
risks. More information on potential factors that could affect the
Company's financial results is included from time to time in the
Company's public reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
All forward-looking statements included in this press release are
based upon information available to the Company as of the date of
this press release, and speak only as of the date hereof. We assume
no obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release.
Danimer Scientific,
Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
June 30,
December 31,
(in thousands, except share and per share
data)
2022
2021
Assets:
Current assets:
Cash and cash equivalents
$
140,388
$
286,487
Accounts receivable, net
18,224
17,149
Other receivables, net
1,408
3,836
Inventories, net
32,729
24,573
Prepaid expenses and other current
assets
5,394
4,737
Contract assets, net
3,900
3,576
Total current assets
202,043
340,358
Property, plant and equipment, net
408,885
316,181
Intangible assets, net
82,495
84,659
Goodwill
62,663
62,649
Right-of-use assets
19,133
19,240
Leverage loans receivable
13,408
13,408
Restricted cash
449
481
Loan fees
1,413
1,397
Other assets
228
224
Total assets
$
790,717
$
838,597
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable
$
11,748
$
20,790
Accrued liabilities
10,994
18,777
Unearned revenue and contract
liabilities
2,290
214
Current portion of lease liability
3,337
3,337
Current portion of long-term debt, net
2,242
357
Total current liabilities
30,611
43,475
Private warrants liability
2,571
9,578
Long-term lease liability, net
22,412
22,693
Long-term debt, net
262,032
260,934
Deferred income taxes
483
1,014
Other long-term liabilities
753
638
Total liabilities
$
318,862
$
338,332
Stockholders' equity:
Common stock, $0.0001 par value;
200,000,000 shares authorized: 101,114,861 and 100,687,820 shares
issued and outstanding at June 30, 2022 and December 31, 2021,
respectively
$
10
$
10
Additional paid-in capital
647,566
619,145
Accumulated deficit
(175,721
)
(118,890
)
Total stockholders’ equity
471,855
500,265
Total liabilities and stockholders’
equity
$
790,717
$
838,597
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except share and per share
data)
2022
2021
2022
2021
Revenue:
Products
$
11,575
$
11,294
$
24,791
$
22,318
Services
1,128
3,177
2,655
5,334
Total revenue
12,703
14,471
27,446
27,652
Costs and expenses:
Cost of revenue
14,934
12,460
30,999
24,185
Selling, general and administrative
20,975
19,079
43,211
29,199
Research and development
8,913
3,975
16,044
6,594
Loss on sale of assets
1
33
1
33
Total costs and expenses
44,823
35,547
90,255
60,011
Loss from operations
(32,120
)
(21,076
)
(62,809
)
(32,359
)
Nonoperating income (expense):
Gain (loss) on remeasurement of private
warrants
2,012
58,740
7,007
(21,957
)
Interest, net
(652
)
(203
)
(1,644
)
(352
)
Gain on forgiveness of debt
-
1,776
-
1,776
Loss on loan extinguishment
-
-
-
(2,604
)
Other, net
75
11
84
10
Total nonoperating income (expense):
1,435
60,324
5,447
(23,127
)
(Loss) income before income taxes
(30,685
)
39,248
(57,362
)
(55,486
)
Income taxes
240
-
531
-
Net (loss) income
$
(30,445
)
$
39,248
$
(56,831
)
$
(55,486
)
Basic net (loss) income per share
$
(0.30
)
$
0.44
$
(0.56
)
$
(0.64
)
Diluted net (loss) income per share
$
(0.30
)
$
0.39
$
(0.56
)
$
(0.64
)
Weighted average number of shares used to
compute:
Basic net (loss) income per share
101,047,650
88,806,086
100,888,185
86,760,615
Effect of dilutive instruments
-
12,718,858
-
-
Diluted net (loss) income per share
101,047,650
101,524,944
100,888,185
86,760,615
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Six Months Ended
June 30,
(in thousands)
2022
2021
Cash flows from operating activities:
Net loss
$
(56,831
)
$
(55,486
)
Adjustments to reconcile net loss to net
cash used in operating activities:
(Gain) loss on remeasurement of private
warrants
(7,007
)
21,957
Stock-based compensation
27,983
20,696
Depreciation and amortization
8,588
4,311
Inventory reserves
597
-
Deferred income taxes
(531
)
-
Loss on write-off of deferred loan
costs
-
1,900
Amortization of debt issuance costs and
debt discounts
1,152
207
Gain on forgiveness of debt
-
(1,776
)
Amortization of right-of-use assets and
lease liability
(173
)
(806
)
Contract asset reserve
1,216
-
Other
872
66
Changes in operating assets and
liabilities, net of effects of acquisition:
Accounts receivable, net
(2,166
)
(3,229
)
Other receivables
2,692
(235
)
Inventories, net
(10,838
)
(4,011
)
Prepaid expenses and other current
assets
1,434
(1,520
)
Contract assets
(1,540
)
(1,552
)
Other assets
(5
)
40
Accounts payable
(2,693
)
1,967
Accrued and other long-term
liabilities
(2,220
)
(3,537
)
Unearned revenue and contract
liabilities
2,077
(1,633
)
Net cash used in operating activities
(37,393
)
(22,641
)
Cash flows from investing activities:
Purchases of property, plant and
equipment
(108,850
)
(51,906
)
Acquisition of Novomer, net of cash
acquired
(14
)
-
Proceeds from sales of property, plant and
equipment
55
340
Net cash used in investing activities
(108,809
)
(51,566
)
Cash flows from financing activities:
Proceeds from exercise of warrants, net of
issuance costs
-
138,202
Proceeds from long-term debt
-
169
Cash paid for debt issuance costs
(279
)
(1,684
)
Proceeds from exercise of stock
options
197
2,375
Proceeds from employee stock purchase
plan
296
92
Principal payments on long-term debt
(88
)
(27,075
)
Cost related to warrants
(55
)
-
Proceeds from issuance of common stock,
net of issuance costs
-
(890
)
Net cash provided by financing
activities
71
111,189
Net (decrease) increase in cash and cash
equivalents and restricted cash
(146,131
)
36,982
Cash and cash equivalents and restricted
cash-beginning of period
286,968
379,897
Cash and cash equivalents and restricted
cash-end of period
$
140,837
$
416,879
Supplemental cash flow information:
Cash paid for interest, net of interest
capitalized
$
481
$
242
Cash paid for operating leases
$
1,771
$
1,589
Supplemental non-cash disclosure:
Inventory consumed in constructing
property, plant and equipment
$
2,084
$
-
Changes in accounts payable and accrued
liabilities related to purchase of PP&E
$
(11,797
)
$
5,983
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures
“Adjusted EBITDA”, “Adjusted EBITDAR”, “Adjusted Gross Profit” and
"Adjusted Gross Margin". Danimer management views these metrics as
a useful way to look at the performance of its operations between
periods and to exclude decisions on capital investment and
financing that might otherwise impact the review of profitability
of the business based on present market conditions.
Adjusted EBITDA is defined as net income or loss plus net
interest expense, income taxes, depreciation and amortization, as
adjusted to add back certain charges or gains that Danimer may
record each period such as remeasurement of private warrants,
stock-based compensation expense, as well as non-recurring charges
such as (i) asset disposal gains or losses as well as other
significant gains or losses such as debt extinguishments; (ii)
legal settlements; or (iii) other discrete non-recurring items.
Danimer believes these items are not considered an indicator of
ongoing performance. Adjusted EBITDA is not a measure of
performance defined in accordance with GAAP. The measure is used as
a supplement to GAAP results in evaluating certain aspects of
Danimer’s business, as described below.
Adjusted EBITDAR is defined as Adjusted EBITDA plus rent
expense.
Adjusted Gross Profit is defined as Gross Profit plus
depreciation, PLA additive inventory reserve, stock-based
compensation and rent expense.
Adjusted Gross Margin is defined as Adjusted Gross Profit
divided by total revenue.
Danimer believes that each of Adjusted EBITDA, Adjusted EBITDAR,
Adjusted Gross Profit and Adjusted Gross Margin is useful to
investors in evaluating the Company’s performance because each
measure considers the performance of the Company’s operations,
excluding decisions made with respect to capital investment,
financing and other non-recurring charges as outlined in the
preceding paragraph. Danimer believes these non-GAAP metrics offer
additional financial information that, when coupled with the GAAP
results and the reconciliation to GAAP results, provides a more
complete understanding of its results of operations and the factors
and trends affecting its business.
Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross Profit and
Adjusted Gross Margin should not be considered as an alternative to
net income or loss as an indicator of its performance or as
alternatives to any other measure prescribed by GAAP as there are
limitations to using such non-GAAP measures. Although Danimer
believes that Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross
Profit and Adjusted Gross Margin may enhance an evaluation of its
operating performance based on recent revenue generation and
product/overhead cost control because it excludes the impact of
prior decisions made about capital investment, financing and other
expenses, (i) other companies in Danimer’s industry may define
Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross Profit and
Adjusted Gross Margin differently than Danimer does and, as a
result, they may not be comparable to similarly titled measures
used by other companies in its industry, and (ii) Adjusted EBITDA,
Adjusted EBITDAR, Adjusted Gross Profit and Adjusted Gross Margin
exclude certain financial information that some may consider
important in evaluating Danimer’s performance.
Danimer compensates for these limitations by providing
disclosure of the differences between Adjusted EBITDA, Adjusted
EBITDAR, Adjusted Gross Profit and Adjusted Gross Margin and GAAP
results, including providing a reconciliation to GAAP results, to
enable investors to perform their own analysis of Danimer’s
operating results. Because GAAP financial measures on a
forward-looking basis are not accessible, and reconciling
information is not available without unreasonable effort,
reconciliations to GAAP financial measures are not provided for
forward-looking non-GAAP measures. For the same reasons, the
Company is unable to address the probable significance of the
unavailable information, which could be material to future
results.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDAR and Adjusted EBITDA to Net (Loss) Income
(Unaudited)
Three Months Ended June
30,
2022
2021
(in thousands)
Net (loss) income
$
(30,445
)
$
39,248
Income taxes
(240
)
-
Interest expense, net
652
203
Depreciation and amortization
4,328
2,211
PLA additive inventory reserve
(520
)
-
Gain on remeasurement of private
warrants
(2,012
)
(58,740
)
Stock-based compensation
14,546
14,031
Litigation and other legal related
801
950
Transaction related
-
724
Public company transition costs
96
397
Loss on sale of assets
1
33
Gain on forgiveness of debt
-
(1,776
)
Other, net
(75
)
(11
)
Adjusted EBITDA (1)
$
(12,868
)
$
(2,730
)
Rent
873
136
Adjusted EBITDAR (1)
$
(11,995
)
$
(2,594
)
(1) May not foot due to rounding.
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended June
30,
2022
2021
(in thousands)
Total revenue
$
12,703
$
14,471
Cost of revenue
14,934
12,460
Gross Profit
(2,231
)
2,011
PLA additive inventory reserve
(520
)
-
Depreciation
2,289
1,951
Rent
626
83
Stock-based compensation
10
28
Adjusted Gross Profit (1)
$
174
$
4,073
Adjusted Gross Margin
1.4
%
28.1
%
(1) May not foot due to rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20220809005940/en/
Investors ir@danimer.com Phone: 229-220-1103
Media Jonathan Houghton jhoughton@daltonagency.com Phone:
615-515-4892
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