– 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 $4.2 Billion –
Origin Materials, Inc. (“Origin,” “Origin Materials,” or the
“Company”) (Nasdaq: ORGN, ORGNW), the world’s leading carbon
negative materials company, today announced financial results for
its third quarter ended September 30, 2021.
“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 April 2021. As the
world moves more aggressively to a zero-carbon future, customer
demand remains strong, and our efforts to commercialize the
business have resulted in increased offtake agreements and capacity
reservations from our customers and partners to $4.2 billion. This
is more than a 300% increase since our announcement to become a
public company in February 2021. We were pleased to announce our
recent strategic partnership with Kolon Industries, Inc., a global
leader in chemicals and materials, as well as our sustainability
partnership with the Drive+ network, which includes 11 of the
world’s largest automakers working to accelerate the
decarbonization of the auto industry. We remain well-capitalized,
on budget, and on track for completion of Origin 1 by the end of
2022 and for Origin 2 to be completed by mid-2025,” said Rich
Riley, Co-Chief Executive Officer of Origin.
Key Company Q3 Highlights
Origin Materials has increased signed offtake agreements and
capacity reservations to $4.2 billion from $3.5 billion in August.
The Company also implemented new and expanded partnerships and
customer relationships, including:
- 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 and Toyota 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
October 2021, six months ahead of the Company’s plan announced in
April 2021. Origin expects piping fabrication to begin by the end
of Q1 2022, three months ahead of its prior target of end of Q2
2022. Additionally, ENCON evaporator module installation is
expected to be completed by the end of Q4 2021, three months ahead
of schedule, as the Company previously expected to receive the
module by the end of Q1 2022.
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,
Deloitte Consulting and Fisher International to select the site for
Origin 2, which Origin expects to choose by the end of 2021 with an
announcement of selected site in Q1 2022, in line with prior
guidance. The Company has short-listed three locations for final
diligence and negotiations and has acquired an option to purchase
one of the sites. Origin remains focused on recruiting additional
talent to its engineering and site selection project management
teams as planning for Origin 2 is underway.
Results for Third Quarter 2021
Cash, cash equivalents and marketable securities were $460
million as of September 30, 2021.
Operating expenses for the third quarter were $7.1 million
compared to $2.0 million in the prior year period.
Adjusted EBITDA loss was $(5.7) million for the third quarter
compared to a loss of $(1.9) million in the prior-year period.
Net income was $27.9 million for the third quarter compared to a
net loss of $(3.1) million in the prior-year period.
Shares outstanding as of September 30, 2021 were 136.8 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 is maintaining previous guidance for Adjusted
EBITDA loss but is updating its capital spending outlook, and now
expects:
- Adjusted EBITDA loss of up to $25 million, consistent with
prior outlook
- Capital spending is expected to be approximately $45 million
compared to the prior outlook of up to $111 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.
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
November 11, 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 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 11:59 p.m. Eastern Time on November
25, 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 an ~$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. For more information,
visit www.originmaterials.com.
Non-GAAP Financial Information
To supplement the Company’s financial results presented in
accordance with generally accepted accounting principles in the
United States ("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, (vii) professional fees related to completed
mergers, and (viii) 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’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 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)
September 30, 2021
(Unaudited)
December 31,
2020
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
$
—
Canadian Government Research and
Development Program Liability
$
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, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of September 30, 2021 and December 31, 2020
$
—
$
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 136,754,685 and 70,266,925, issued
and outstanding as of September 30, 2021 and December 31, 2020,
respectively
$
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
Origin Materials, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(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
Origin Materials, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(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 Canadian Government Research
and Development Program
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 restricted cash
held in foreign currencies
(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
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, (vii) professional fees related to completed
mergers, and (viii) other income, net.
Three months ended September
30,
Nine months ended September
30,
(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)
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