– Origin 1 On-Track to Start-Up in Q2 2023,
In-line with Prior Guidance –
– Origin 2 Front-End Design, Construction
Planning, and Financing Progressing –
– Announced Strategic Partnerships with
Indorama Ventures to Accelerate Mass Production of Bio-Based
Materials and SCGP to Explore Licensing Origin Technology for
Asia-Based Plant –
– Maintains 2023 Revenue and Adjusted EBITDA
Outlook –
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 first quarter ended March 31, 2023.
“In the first quarter, the Origin team continued to execute on
our mission to enable the world’s transition to sustainable
materials. At our first commercial plant, Origin 1, we remain on
track for a Q2 start-up with work onsite continuing and strong
progress being made in plant commissioning and supply chain
activation. For Origin 2, front-end design, construction planning,
and financing are progressing, and we expect to provide an update
during our Q2 earnings call in August. We were excited to announce
new and expanded strategic partnerships and initiatives with
Indorama Ventures, SCGP, Hyosung, and Minafin Group, complementing
our existing relationships and initiatives with industry leaders
and further validating the efficacy of our technology platform and
business model. We were also pleased to make our first announcement
of a potential Origin technology licensing agreement which we are
exploring with SCGP, a leading multinational consumer packaging
solutions provider. Finally, we strengthened our Board with the
appointment of Craig Rogerson and Tony Tripeny, two new world class
directors, who bring a wealth of chemicals industry executive
experience. We would also like to thank Benno Dorer, who stepped
down from the Board on May 8th, for his contributions. Looking
ahead, the demand for ‘net zero’-enabling materials remains strong
as the world moves aggressively to a zero-carbon future, and we
remain focused on developing the commercial and supply chain
capabilities necessary to begin delivering product to our
customers,” said Rich Riley, Co-Chief Executive Officer of
Origin.
Key Company First Quarter and Recent Business
Highlights
Origin Materials reported quarterly revenue of $1.7 million
generated by joint development agreements and the Company’s supply
chain activation program, with total signed offtake agreements and
capacity reservations in excess of $9.3 billion. As of February
2023, Origin Materials’ commercial strategy has evolved from demand
generation to revenue generation and the development of higher
margin products, and as such the Company does not plan to provide
quarterly updates to its total signed offtake agreements and
capacity agreements but will provide updates as appropriate. The
Company also implemented new and expanded partnerships and customer
relationships, including:
- Partnership with Indorama Ventures, the world’s largest
producer of virgin and recycled PET resins, to accelerate the mass
production of bio-based materials. The Companies have signed a
memorandum of understanding (“MOU”) to explore initiatives related
to the rapid commercialization of low-carbon, bio-based materials.
The initiatives to be explored include converting an Indorama
Ventures U.S. facility into a bio-based materials plant and
producing samples for use in limited-volume product launches with
high-profile brands.
- Partnership with SCGP, a leading multinational consumer
packaging solutions provider, to explore licensing Origin
technology for an Asia-based plant. The companies have signed a
joint development agreement (“JDA”) to explore licensing Origin
technology in an Asia-based facility owned by SCGP, with testing of
eucalyptus feedstock underway targeting applications in food
packaging, logistics, automotive, and construction.
- Partnership with Hyosung Advanced Materials, a Korea-based
industrial materials company, to produce batteries, automotive
parts, and apparel from carbon-negative materials. As part of the
strategic partnership, Hyosung signed a multi-year capacity
reservation agreement with Origin Materials.
- Expanded partnership with Green Chemistry Division of the
Minafin Group, a global fine chemical company, to launch a
manufacturing initiative for Origin 1, Origin’s first commercial
plant. As part of the manufacturing initiative, CMF
(chloromethylfurfural) produced by Origin at Origin 1 will be
delivered to Minafin, which will convert CMF into downstream
intermediates and products. The initiative expands on the
companies’ previously announced strategic partnership to
industrialize sustainable chemicals.
- Amended existing agreement with PepsiCo to increase flexibility
by expanding the slate of products that may be supplied as well as
which plants may supply those products, with final volumes, product
mix, and plants to be as mutually agreed upon.
Additional first quarter and recent business highlights
include:
- Origin’s Sustainable Carbon Black Blends Meet or Exceed
Fossil-Based N660 Performance for Tires and Mechanical Rubber
Goods. Bench-scale results validate Origin’s carbon black as a
high-performance bio-based tire filler that can be blended into
mechanical rubber goods and automotive applications.
- Origin Materials Announces Two New Appointments to Board of
Directors. New directors bring wealth of experience in operations,
strategy, corporate finance, and M&A across the chemicals and
materials science industries.
Origin 1 and Origin 2 Financing and Construction
Update
Origin 1, the Company’s first commercial manufacturing plant,
located in Sarnia, Ontario, is mechanically complete, in-line with
the previously disclosed timeline, with completion of plant
commissioning and start-up expected in Q2 2023. Work onsite
continues with strong progress on plant commissioning and supply
chain activation. Following start-up, Origin 1 is expected to
enable customers to qualify products and applications beyond PET
and to begin to address customer demand for the Company’s renewable
materials. During the first quarter, the Company continued to
strengthen its operations leadership, including hiring its director
of manufacturing.
For Origin 2, the Company continues to make progress on
front-end design, construction planning, and financing. The Company
has also made progress developing new products and applications
that may be incorporated into the design of the plant, including
FDCA, PEF, and biofuels. The Company expects to provide an update
on new product offerings and construction plans for the Origin 2
plant in August 2023.
In January, Origin announced that the Louisiana State Bond
Commission unanimously passed a resolution granting its final
approval of the issuance of up to $1.5 billion of tax-exempt bonds
to support construction and commissioning of Origin 2. This amount
is inclusive of and builds on the strong foundation of the
previously announced expected $400 million in Private Activity Bond
(“PAB”) volume cap allocation. Origin's use of solid waste
feedstock to produce carbon negative materials enables the Company
to use these tax-exempt bonds towards financing the Origin 2
project. Bank of America, a global investment bank and financial
services company, has been engaged by Origin to underwrite the
bonds and market them to investors, which could enable the debt
financing of Origin 2 using entirely tax-exempt bonds.
Origin also continues to work with leading financial
institutions on other forms of traditional private financing and
federal loan programs, including through the United States
Department of Agriculture and Department of Energy, and to pursue
other local, state, and federal incentives programs to optimize the
financing of Origin 2, including certain 2021 Infrastructure
Investment and Jobs Act and 2022 Inflation Reduction Act
provisions. The Company continues to expect that Origin 2 can be
fully funded from a combination of existing cash on hand,
previously indicated traditional project financing, and potential
strategic partnerships. Given Origin's ongoing global technology
licensing effort and an active governmental affairs team, the
Company anticipates strategic partnerships and federal incentives
programs to play a meaningful role in the financing of Origin
2.
Results for First Quarter 2023
Cash, cash equivalents and marketable securities were $263.9
million as of March 31, 2023. A meaningful portion of Q1 cash
expenditures were related to the completion of Origin 1 and are
therefore non-recurring.
Revenue for the first quarter was $1.7 million compared to zero
in the prior-year period.
Operating expenses for the first quarter were $13.0 million
compared to $7.6 million in the prior-year period.
Net income was $9.8 million for the first quarter compared to
net income of $7.3 million in the prior-year period.
Adjusted EBITDA loss was $9.7 million for the first quarter
compared to a loss of $6.5 million in the prior-year period.
Shares outstanding as of March 31, 2023 were 143.3 million
including 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 2023 Outlook
Based on current business conditions, business trends and other
factors, the Company is maintaining the following guidance for
revenue and Adjusted EBITDA for fiscal year 2023:
- Revenue of $40 million to $60 million
- Adjusted EBITDA loss of $50 million to $60 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
May 10, 2023, 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 1-855-327-6837 (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 10021507. The
replay will be available until 11:59 p.m. Eastern Time on May 17,
2023.
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. For
over a decade, 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, fuels, 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. 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 income, (iv) change in fair value of
derivative, (v) change in fair value of warrants liability, (vi)
change in fair value of earnout liability, (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.
The Company is unable to reconcile forward-looking Adjusted
EBITDA information provided in this press release to net income,
the most closely comparable U.S. GAAP financial measure, without
unreasonable efforts. The Company is currently unable to predict
with a reasonable degree of certainty the type and extent of
certain items expected to impact net income in the future but not
expected to impact forward-looking Adjusted EBITDA. These include,
among other things, stock-based compensation expense, depreciation
and amortization, interest income, and interest expense, which are
inherently unpredictable. The Company currently expects to continue
to exclude these items in future disclosures of any forward-looking
Adjusted EBITDA and may also exclude other items that may arise.
Information related to these items, which is unavailable at this
time, could have a significant impact on the Company’s U.S. GAAP
net income.
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,
anticipated synergies from partnerships, access to financing
sources, budget and timelines for Origin 1 and Origin 2,
anticipated benefits of and demand for our potential products and
platform, ability to convert capacity reservations and offtake
agreements into revenue, commercial and operating plans, product
development plans and announcements of such 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 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; the uncertainty of the projected
financial information with respect to Origin; disruptions and other
impacts to Origin’s business as a result of outbreaks such as the
COVID-19 pandemic, Russia’s military intervention in Ukraine, the
impact of severe weather events, and other global health or
economic crises; changes in customer demand; and those factors
discussed in the Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission on February 23, 2023, as amended
April 28, 2023, 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)
March 31, 2023
(Unaudited)
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
86,954
$
107,858
Restricted cash
490
490
Marketable securities
176,971
215,464
Accounts receivable
1,479
—
Other receivables
6,444
4,346
Inventory
328
—
Derivative asset
477
—
Prepaid expenses and other current
assets
3,891
3,341
Total current assets
277,034
331,499
Property, plant, and equipment, net
190,669
154,183
Operating lease right-of-use asset
2,625
2,779
Intangible assets, net
150
160
Other long-term assets
12,992
5,079
Total assets
$
483,470
$
493,700
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
7,922
$
10,384
Accrued expenses
5,686
8,414
Operating lease liability, current
624
619
Other liabilities, current
731
51
Derivative liability
61
344
Total current liabilities
15,024
19,812
Earnout liability
29,894
42,533
Canadian Government Research and
Development Program liability
7,194
7,185
Assumed common stock warrants
liability
24,106
30,872
Notes payable
5,189
5,847
Operating lease liability
2,092
2,249
Other liabilities, long-term
8,829
8,297
Total liabilities
$
92,328
$
116,795
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of March 31, 2023 and December 31, 2022
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 143,267,991 and 143,034,225,
issued and outstanding as of March 31, 2023 and December 31, 2022,
respectively (including 4,500,000 Sponsor Vesting Shares)
14
14
Additional paid-in capital
374,010
371,072
Retained earnings
31,541
21,772
Accumulated other comprehensive loss
(14,423
)
(15,953
)
Total stockholders’ equity
391,142
376,905
Total liabilities and stockholders’
equity
$
483,470
$
493,700
ORIGIN MATERIALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three months ended March
31,
(In thousands, except share and per share
data)
2023
2022
Revenues
$
1,704
$
—
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
960
—
Operating expenses
Research and development
5,075
2,337
General and administrative
7,656
5,071
Depreciation and amortization
288
148
Total operating expenses
13,019
7,556
Loss from operations
12,275
7,556
Other (income) expenses
Interest income
(3,014
)
(1,833
)
Change in fair value of derivatives
(760
)
834
Change in fair value of warrants
liability
(6,766
)
1,774
Change in fair value of earnout
liability
(12,872
)
(15,227
)
Other expenses (income), net
1,368
(450
)
Total other income, net
(22,044
)
(14,902
)
Net income
$
9,769
$
7,346
Other comprehensive income
Unrealized gain (loss) on marketable
securities, net of tax
$
1,410
$
(4,575
)
Foreign currency translation adjustment,
net of tax
120
885
Total comprehensive income
$
11,299
$
3,656
Net income per share, basic
$
0.07
$
0.05
Net income per share, diluted
$
0.07
$
0.05
Weighted-average common shares
outstanding, basic
138,651,062
136,825,016
Weighted-average common shares
outstanding, diluted
142,454,369
141,732,403
ORIGIN MATERIALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March
31,
(in thousands)
2023
2022
Cash flows from operating
activities
Net income
$
9,769
$
7,346
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
288
148
Amortization on right-of-use asset
157
121
Stock-based compensation
2,246
918
Realized loss of marketable securities
775
—
Change in fair value of derivatives
(760
)
834
Change in fair value of common stock
warrants liability
(6,766
)
1,774
Change in fair value of earnout
liability
(12,872
)
(15,227
)
Change in fair value of incremental
acquisition fee accrual
—
(45
)
Changes in operating assets and
liabilities:
Receivables
(3,577
)
(179
)
Inventory
(328
)
—
Prepaid expenses and other current
assets
(550
)
1,215
Other long-term assets
(7,913
)
(32
)
Accounts payable
(110
)
637
Accrued expenses
117
1,495
Operating lease liabilities
(175
)
(62
)
Other liabilities, current
680
(290
)
Other liabilities, long-term
(48
)
57
Net cash used in operating
activities
(19,067
)
(1,290
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment, net of grants
(40,963
)
(10,380
)
Purchases of marketable securities
(1,028,600
)
(1,255,027
)
Sales of marketable securities
1,000,712
1,240,788
Maturities of marketable securities
67,021
37,732
Capitalized interest on plant
construction
—
(20
)
Net cash (used in) provided by
investing activities
(1,830
)
13,093
Cash flows from financing
activities
Proceeds from Canadian Government Research
and Development Program
10
—
Proceeds from exercise of stock
options
23
34
Net cash provided by financing
activities
33
34
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
(40
)
(533
)
Net (decrease) increase in cash and
cash equivalents, and restricted cash
(20,904
)
11,304
Cash and cash equivalents, and
restricted cash, beginning of the period
108,348
47,127
Cash and cash equivalents, and
restricted cash, end of the period
$
87,444
$
58,431
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 income, (iv) change in fair value of
derivative, (v) change in fair value of warrants liability, (vi)
change in fair value of earnout liability, (vii) other income,
net.
Three months ended March
31,
(in thousands)
2023
2022
Net income
$
9,769
$
7,346
Stock based compensation
2,246
918
Depreciation and amortization
288
148
Interest income
(3,014
)
(1,833
)
Change in fair value of derivative
(760
)
834
Change in fair value of warrants
liability
(6,766
)
1,774
Change in fair value of earnout
liability
(12,872
)
(15,227
)
Other income, net
1,368
(450
)
Adjusted EBITDA
$
(9,741
)
$
(6,490
)
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version on businesswire.com: https://www.businesswire.com/news/home/20230510005852/en/
Origin Materials Investors: ir@originmaterials.com
Media: media@originmaterials.com
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