– Successfully Completed Public Listing in
June, Resulting in Cash and Cash Equivalent Balance of $471 million
–
– Reaffirming Origin 1 and 2 Capital Budget,
Production Timeline and Financing –
– Increased Contracted Offtake Agreements and
Capacity Reservations to $3.5 billion –
Origin Materials, Inc. (“Origin,” “Origin Materials,” or the
“Company”) (Nasdaq: ORGN, ORGNW), the world’s leading carbon
negative materials company with a mission to enable the world’s
transition to sustainable materials, today announced financial
results for its second quarter ended June 30, 2021.
“I am incredibly proud of what the Origin team has accomplished
so far in 2021, continuing our mission to enable the world’s
transition to sustainable materials. We have taken significant
steps to commercialize the business by broadening our customer base
beyond CPG into apparel, automotive and industrial end-markets,
while also substantially increasing customer demand, strengthening
the leadership team, and making significant capital available to
the business through the combination of Artius Acquisition, Inc.
with Origin. Importantly, we remain on track for the start of
production for Origin 1 and Origin 2,” said Rich Riley, Co-Chief
Executive Officer of Origin.
Mr. Riley added, “Since announcing the business combination with
Artius in February, we have more than tripled our commitments from
our customers and partners. On the operational side, we have made
steady progress against project milestones for Origin 1 and 2 and
are pleased to reaffirm our capital budget and our expectation that
we will be able to fully fund the construction of both plants using
funds from our own balance sheet and previously indicated
traditional project financing sources on our stated timelines. We
do not anticipate any additional equity capital will be required to
finance our current business plan. We continue to expect the
construction of Origin 1 will be completed by the end of 2022 and
Origin 2 will be completed by the middle of 2025.”
Key Company Highlights
Origin Materials has increased signed offtake agreements and
capacity reservations to $3.5 billion from $1 billion in February.
The Company also implemented the following new and expanded
partnerships and customer relationships:
- Launched Net Zero Automotive program with Ford Motor Company
(NYSE: F) focused on industrializing new materials to drive
decarbonization in the automotive industry.
- Partnership with Mitsubishi Gas Chemical to industrialize
advanced carbon negative chemicals and materials for applications
in the automotive, medical, food, information and communication,
energy, and infrastructure sectors.
- Partnership with Solvay to develop advanced carbon negative
materials for the automotive industry.
- Strategic alliance with PrimaLoftto develop carbon negative
insulating fiber for outdoor gear, bedding and apparel. PrimaLoft’s
iconic brand partners include Patagonia, Stone Island, L.L. Bean,
Lululemon, adidas and Nike.
- Partnership with Packaging Mattersto advance carbon negative
packaging solutions, building on an existing 10-year supply
agreement.
- Partnership with AECI Much Asphalt to develop low-carbon
asphalt.
- Partnership with AECI Sans Technical Fiberto develop carbon
negative materials for apparel and automotive applications.
- Strategic alliance with Palantir Technologies (NYSE: PLTR) to
accelerate the world’s transition to net zero carbon with a focus
on decarbonizing the global materials supply chain.
Origin 1 and Origin 2 Financing and Construction
Update
As part of our ongoing project construction review, including
construction costs and timeline to account for the recent increase
in inflation and supply chain disruption, the Company reaffirms the
capital budget for the construction of Origin 1 and Origin 2, and
is confirming its previously disclosed start of production
timelines. Based on preliminary feedback from leading financial
institutions that have expertise in financing similarly sized
capital projects, the Company 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.
Origin has selected Worley, one of the world’s leading
engineering organizations as its engineering partner for both
Origin 1 and front-end engineering partner for Origin 2.
The Company continues to expect the construction of Origin 1 to
be completed before the end of 2022, with commissioning and
production at the plant beginning immediately thereafter. Origin is
pleased to be working with leading capital projects partners Koch
Modular Process Systems, Worley, KSH Solutions, and Jacobs
Engineering Group. As of June 30, 2021, installation of most
foundations for building and process areas was significantly
underway and on track for timely Origin 1 mechanical completion. In
addition, Origin had also completed fabrication of the modules that
contain all the equipment used for the conversion of biomass
feedstock into high value chemicals. By the end of 2021, Origin
expects the modules to be lifted and erected, roughly four months
ahead of schedule.
Origin continues to expect the construction of Origin 2 will be
complete by the middle of 2025. Further, the Company anticipates it
will select the Owner’s Engineer and site by the end of 2021, that
Origin 2’s Front End Loading (FEL)1 and FEL2 project development
stages will be completed in the middle of 2022, and that a
construction contract will be issued before the end of Q1 2023. The
Company is working with Worley, Deloitte and Fisher International
on site selection. Origin expects the engineering, procurement and
construction stage of Origin 2 to begin in the end of 2022 and
proceed through 2025.
Results for Second Quarter 2021
Cash, cash equivalents and marketable securities were $471
million as of June 30, 2021.
Operating expenses for the second quarter were $6.7 million
compared to $1.7 million in the prior year period.
Adjusted EBITDA loss was $3.0 million for the second quarter
compared to a loss of $1.6 million in the prior-year period.
Net income was $62.5 million for the second quarter compared to
a net loss of $1.7 million in the prior-year period.
Shares outstanding as of June 30, 2021 were 136.7 million
excluding 4.5 million shares held by a certain stockholder that are
subject to forfeiture based on share price performance targets
previously disclosed in our filings.
Full Year 2021 Outlook
Based on current business conditions, business trends and other
factors, the Company expects to be within its previously provided
guidance:
- Adjusted EBITDA loss of up to $25 million
- Capital spending of up to $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
August 12, 2021, at 5:00 p.m. Eastern Time, to discuss the
Company's financial results.
Interested investors and other parties can listen to a webcast
of the live conference call and access the Company’s first 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 1-855-327-6838 (domestic) or +1-604-235-2082
(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 10015909. The
replay will be available until 11:59 p.m. Eastern Time on August
26, 2021.
About Origin Materials, Inc.
Headquartered in West Sacramento, Origin Materials is the
world's leading carbon negative materials company. Origin’s mission
is to enable the world’s transition to sustainable materials. Over
the past 10 years, Origin has developed a platform for turning the
carbon found in inexpensive, plentiful, non-food biomass such as
sustainable wood residues into useful materials while capturing
carbon in the process. Origin’s patented technology platform can
help revolutionize the production of a wide range of end products,
including clothing, textiles, plastics, packaging, car parts,
tires, carpeting, toys, and more with a ~$1 trillion addressable
market. In addition, Origin’s technology platform is expected to
provide stable pricing largely decoupled from the petroleum supply
chain, which is exposed to more volatility than supply chains based
on sustainable wood residues. Origin’s patented drop-in core
technology, economics and carbon impact are supported by a growing
list of major global customers and investors.
Non-GAAP Financial Information
To supplement the Company’s financial results presented in
accordance with U.S. GAAP, the Company also uses non-GAAP financial
measures, including adjusted EBITDA, as supplemental measures to
review and assess the Company’s operating performance. Adjusted
EBITDA is defined 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, and (vii) other income, net. The Company
believes that these non-GAAP financial measures provide useful
information about the Company’s operating results, enhance the
overall understanding of the Company’s past performance and future
prospects and allow for greater visibility with respect to key
metrics used by the Company’s management in its financial and
operational decision-making.
Non-GAAP financial measures are not defined under U.S. GAAP and
are not presented in accordance with U.S. GAAP. These non-GAAP
financial measures have limitations as analytical tools, and when
assessing the Company’s operating performance, investors should not
consider them in isolation. In addition, calculations of this
non-GAAP financial information may be different from calculations
used by other companies, and therefore comparability may be
limited.
The Company mitigates these limitations by reconciling the
non-GAAP financial measures to the most comparable U.S. GAAP
performance measures, all of which should be considered when
evaluating our performance.
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
Materials’ business strategy, access to traditional financing
sources, budget and timelines to complete Origin 1 and Origin 2,
commercial and operating plans and product development plans. These
statements are based on various assumptions, whether or not
identified in this press release, and on the current expectations
of the management of Origin Materials and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as,
and must not be relied on as, a guarantee, an assurance, a
prediction, or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and
circumstances are beyond the control of Origin Materials. These
forward-looking statements are subject to a number of risks and
uncertainties, including that Origin Materials may be unable to
successfully commercialize its products; the effects of competition
on Origin Materials’ business; disruptions and other impacts to
Origin Materials’ business as a result of the COVID-19 pandemic and
other global health or economic crises; changes in customer demand;
failure to realize the anticipated benefits of the business
combination; failure to access needed capital from traditional
financing sources and those factors discussed in and our Quarterly
Report on Form 10-Q under the heading “Risk Factors,” and other
documents Origin Materials has filed, or will file, with the SEC.
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. There may be
additional risks that Origin Materials presently does not know, or
that Origin Materials currently believes are immaterial, that could
also cause actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect Origin Materials’ expectations, plans, or forecasts of
future events and views as of the date of this press release.
Origin Materials anticipates that subsequent events and
developments will cause its assessments to change. However, while
Origin Materials may elect to update these forward-looking
statements at some point in the future, Origin Materials
specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing Origin Materials’ assessments of any date subsequent
to the date of this press release. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Origin Materials, Inc.
Condensed Consolidated Balance
Sheets
(In thousands,
except share and per share data)
June 30, 2021
(Unaudited)
December 31,
2020
ASSETS
Current assets
Cash and cash equivalents
$
470,312
$
1,309
Restricted cash
565
565
Other receivables
160
48
Grants receivable
17
—
Prepaid expenses and other current
assets
214
144
Total current assets
471,268
2,066
Property, plant, and equipment, net
48,854
45,104
Intangible assets, net
242
258
Total assets
$
520,364
$
47,428
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
966
$
2,700
Accrued expenses
861
593
Derivative liability
—
1,239
Stockholder convertible notes payable
—
3,232
Total current liabilities
1,827
7,764
PPP Loan
—
906
Earnout liability
157,585
—
Canadian Government Research and
Development Program Liability
6,370
6,197
Redeemable convertible preferred stock
warrants
—
19,233
Assumed common stock warrants
liability
69,180
—
Stockholder note
5,189
5,189
Related party other liabilities,
long-term
5,615
5,517
Other liabilities, long-term
3,109
2,500
Total liabilities
248,875
47,306
Commitments and contingencies (See Note
18)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of June 30, 2021 and December 31, 2020
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 136,748,470 and 70,266,925, issued
and outstanding as of June 30, 2021 and December 31, 2020,
respectively
13
6
Additional paid-in capital
359,928
98,620
Accumulated deficit
(89,928)
(98,888)
Accumulated other comprehensive income
1,476
384
Total stockholders’ equity
271,489
122
Total liabilities, redeemable
convertible preferred stock and stockholders' deficit
$
520,364
$
47,428
Origin Materials, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(In thousands, except share and per share
data)
2021
2020
2021
2020
Operating Expenses
Research and development
$
2,339
$
904
$
3,648
$
2,122
General and administrative
4,219
703
8,167
1,302
Depreciation and amortization
121
100
236
204
Total operating expenses and loss from
operations
6,679
1,707
12,051
3,628
Other (income) expenses
Interest expense, net of capitalized
interest
2,560
50
2,839
113
Change in fair value of derivative
liability
1,035
(12)
1,426
(15)
Change in fair value of warrants
liability
(27,265)
105
20,844
105
Change in fair value of earnout
liability
(45,497)
—
(45,497)
—
Other income, net
(43)
(157)
(623)
(168)
Total other (income) expenses, net
(69,210)
(14)
(21,011)
35
Net income (loss)
62,531
(1,693)
8,960
(3,663)
Other comprehensive income (loss)
Foreign currency translation adjustment,
net of tax
626
5,803
1,092
2,603
Total comprehensive income (loss)
63,157
4,110
10,052
(1,060)
Net income (loss) per share, basic
$
0.93
$
(0.03)
$
0.14
$
(0.06)
Net income (loss) per share, diluted
$
0.63
$
(0.03)
$
0.13
$
(0.06)
Weighted-average common shares
outstanding, basic
67,548,052
62,545,293
65,098,310
62,544,604
Weighted-average common shares
outstanding, diluted
78,628,591
62,545,293
70,794,743
62,544,604
Origin Materials, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in thousands)
2021
2020
Cash flows from operating
activities
Net income (loss)
$
8,960
$
(3,663)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and amortization
236
204
Stock-based compensation
4,172
18
Amortization of debt issuance costs
14
130
Accretion of debt discount
2,211
40
Change in fair value of derivative
liability
1,426
(15)
Change in fair value of warrants
liability
20,844
105
Change in fair value of earnout
liability
(45,497)
—
Changes in operating assets and
liabilities:
Other receivables
(112)
960
Grants receivable
(17)
4
Prepaid expenses and other current
assets
(29)
86
Accounts payable
(1,880)
(536)
Accrued expenses
2,899
396
Related party payable
98
—
Net cash used in operating
activities
(6,675)
(2,271)
Cash flows from investing
activities
Purchases of property, plant, and
equipment, net of grants
(2,703)
(1,267)
Net cash used in investing
activities
(2,703)
(1,267)
Cash flows from financing
activities
Proceeds from notes payable, net of debt
issuance costs
11,707
906
Payment of short-term debt
(906)
—
Proceeds from Canadian Government Research
and Development Program
173
1,055
Issuance of common stock
55
1
Business combination, net of issuance
costs paid
467,530
—
Net cash provided by financing
activities
478,559
1,962
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
(178)
184
Net increase (decrease) in cash and
cash equivalents, and restricted cash
469,003
(1,392)
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
$
470,877
$
2,220
Supplemental disclosure of cash flow
information
Conversion of stockholder convertible
notes payable to common stock
$
20,493
$
—
Reclassification of redeemable convertible
preferred stock warrants to common stock
$
54,267
$
—
Reclassification of contingently issued
equity to liability
$
209,380
$
—
Net assets assumed from business
combination
$
83,330
$
—
Debt discount related to derivative
liability
$
2,196
$
—
Business combination transaction costs,
accrued but not paid
$
748
$
—
Origin Materials, Inc.
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, and (vii) other income, net.
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Net Income (loss)
$62,531
$(1,693)
$8,961
$(3,663)
Stock based compensation
3,545
9
4,172
18
Depreciation and amortization
121
100
236
204
Interest expense, net of capitalized
interest
2,560
50
2,839
113
Change in fair value of derivative
liability
1,035
(12)
1,426
(15)
Change in fair value of warrants
liability
(27,265)
105
20,844
105
Change in fair value of earnout
liability
(45,497)
-
(45,497)
-
Other Income, net
(42)
(157)
(624)
(168)
Adjusted EBITDA
$(3,012)
$(1,598)
$(7,643)
$(3,406)
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version on businesswire.com: https://www.businesswire.com/news/home/20210812005838/en/
Origin Materials Investors: ir@originmaterials.com
Media: media@originmaterials.com
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