– Customer Demand is Strong and Broad Based,
Increased Contracted Offtake Agreements and Capacity Reservations
to $7.4 Billion –
– Origin 1 Construction Timeline On Track and
Capital Budget Increased by $15 to $20 Million Due to Rising
Inflation and Challenging Supply Chain Environment –
– Origin 2 Construction Timeline, Budget, and
Financing Unchanged –
– Maintains 2022 Adjusted EBITDA Forecast Loss
of $36 Million and Updates Capital Expenditure Outlook to up to
$175 Million –
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, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220509006047/en/
“We continue to execute on our plan and make progress on our
mission to enable the world’s transition to sustainable materials.
We remain well-capitalized, on track for completion of Origin 1 by
the end of 2022, and the previously disclosed capital budget,
construction timeline, and financing for Origin 2 are unchanged. We
were pleased to announce new strategic partnerships with LVMH and
Mitsubishi Chemical Holdings Group. These partnerships further
increase our exposure to consumer and industrial end-markets
including perfumes and cosmetics packaging and automotive. The LVMH
partnership, in addition to being a new category expansion, will
provide Origin with further access to European and international
markets as we deliver sustainable packaging solutions across a
family of renowned brands. The Mitsubishi Chemical Holdings Group
partnership, which expands Origin’s international footprint in
Asia, represents a significant opportunity in carbon black, a new
product category for Origin. Approximately 70% of the world’s
carbon black is used as a reinforcing filler in tires and the
global market for carbon black is projected to reach $26 billion by
2025.1 The demand for ‘net zero’-enabling materials remains strong,
and our efforts to commercialize the business have resulted in
increased offtake agreements and capacity reservations from our
customers and partners to $7.4 billion, a more than sevenfold
increase since our announcement to become a public company in
February 2021,” said Rich Riley, Co-Chief Executive Officer of
Origin.
Key Company First Quarter Highlights
Origin Materials has increased its total signed offtake
agreements and capacity reservations to $7.4 billion as of today,
up from $5.6 billion in February 2022. The Company also implemented
new and expanded partnerships and customer relationships,
including:
- Partnership with LVMH Moët Hennessy Louis Vuitton, the global
leader in luxury goods, to bring carbon negative materials to the
perfumes and cosmetics industry. As part of the strategic
partnership, LVMH has signed a multi-year capacity reservation
agreement with Origin Materials.
- Partnership with Mitsubishi Chemical Holdings Group, to develop
advanced carbon-negative materials for tires, by converting
hydrothermal carbon ("HTC") into high-performance analogs of
specialty carbon black materials. The partnership will leverage
Mitsubishi Chemical Corporation’s global supply chain strength,
access to Japanese and international markets, and technical
innovation capabilities.
These partnerships complement Origin’s existing partnerships and
customer relationships with industry leaders including Danone,
Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas
Chemical, Kolon Industries, PrimaLoft, Solvay, Mitsui & Co.,
Ltd., and Minafin Group.
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. Due to rising inflation and a more
challenging supply chain delivery environment, Origin has updated
its capital budget for Origin 1 and now expects a $15 million to
$20 million increase from its prior outlook. The total capital
budget for Origin 1 is now expected to be in the range of $125
million to $130 million, up from the original $110 million capital
budget when Origin first announced its go-public transaction in
February 2021. The additional capital budget includes an
appropriate contingency reserve and will be fully funded from the
Company’s cash on hand.
During the first quarter, the Company hired additional members
of the Origin 1 operations leadership team and started the process
for hiring additional operations staff. Additional major equipment
has been delivered onsite and set including the brine tanks
associated with the ENCON evaporator module system. Piping and
steel fabrication, which was started nearly 6 months ahead of the
schedule announced in April 2021, is underway and on track, and the
Company has started installing fabricated steel pipe racks in the
field and interconnecting the plant’s key production modules.
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
is 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 also continues to work with leading
financial institutions on other forms of traditional private
financing and federal loan programs, including through the U.S.D.A.
and Department of Energy. In February, the State of Louisiana,
pending finalization, awarded a Private Activity Bond volume cap
allocation of $400 million to the Company for its selection of
Geismar, LA as the site of Origin 2. The Company also expects to
receive more than $100 million in pending state and local
incentives for Origin 2.
Results for First Quarter 2022
Cash, cash equivalents and marketable securities were $427.7
million as of March 31, 2022.
Operating expenses for the first quarter were $7.6 million
compared to $5.4 million in the prior year period.
Adjusted EBITDA loss was $6.5 million for the first quarter
compared to a loss of $4.6 million in the prior-year period.
Net income was $7.3 million for the first quarter compared to a
net loss of $53.6 million in the prior-year period.
Shares outstanding as of March 31, 2022 were 141.4 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 2022 Outlook
Based on current business conditions, business trends and other
factors, the Company is maintaining Adjusted EBITDA and updating
capital spending for fiscal year 2022 resulting from an increase in
the capital budget of Origin 1:
- Adjusted EBITDA loss of up to $36 million
- Capital spending is now 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
May 9, 2022, 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 10019030. The
replay will be available until 11:59 p.m. Eastern Time on May 23,
2022.
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, 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 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.
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 arrangements into revenue, 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 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;
and those factors discussed in the Annual Report on Form 10-K filed
with the SEC on March 1, 2022 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, 2022
(Unaudited)
December 31,
2021
ASSETS
Current assets
Cash and cash equivalents
$
57,941
$
46,637
Restricted cash
490
490
Marketable securities
369,289
397,458
Other receivables
2,792
2,612
Derivative asset
213
202
Prepaid expenses and other current
assets
2,559
3,774
Total current assets
433,284
451,173
Property, plant, and equipment, net
69,329
57,185
Operating lease right-of-use asset
2,710
1,782
Intangible assets, net
206
215
Other long-term assets
95
62
Total assets
$
505,624
$
510,417
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
3,088
$
2,451
Accrued expenses
2,468
973
Operating lease liability, current
412
280
Other liabilities, current
90
380
Derivative liability
947
103
Total current liabilities
7,005
4,187
PPP Loan
—
—
Earnout liability
112,531
127,757
Canadian Government Research and
Development Program Liability
6,852
6,762
Assumed common stock warrants
liability
54,634
52,860
Stockholder note
5,189
5,189
Related party other liabilities,
long-term
5,776
5,720
Operating lease liability
2,342
1,486
Other liabilities, long-term
2,900
2,946
Total liabilities
197,229
206,907
Commitments and contingencies (See Note
19)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of March 31, 2022 and December 31, 2021
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 141,418,989 and 141,301,569,
issued and outstanding as of March 31, 2022 and December 31, 2021,
respectively
16
16
Additional paid-in capital
362,770
361,542
Accumulated deficit
(49,451
)
(56,797
)
Accumulated other comprehensive loss
(4,941
)
(1,251
)
Total stockholders’ equity
308,394
303,510
Total liabilities and stockholders’
equity
$
505,624
$
510,417
Origin Materials, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended March
31,
(In thousands,
except share and per share data)
2022
2021
Operating Expenses
Research and development
$
2,337
$
1,309
General and administrative
5,071
3,948
Depreciation and amortization
148
115
Total operating expenses and loss from
operations
7,556
5,372
Other (income) expenses
Interest income
(1,833
)
—
Interest expense, net of capitalized
interest
—
280
Change in fair value of derivatives
834
391
Change in fair value of warrants
liability
1,774
48,109
Change in fair value of earnout
liability
(15,227
)
—
Other income, net
(450
)
(581
)
Total other (income) expenses, net
(14,902
)
48,199
Net income (loss)
7,346
(53,571
)
Other comprehensive income (loss)
Unrealized (loss) on marketable
securities
(4,575
)
—
Foreign currency translation adjustment,
net of tax
885
466
Total comprehensive income (loss)
3,656
(53,105
)
Net income (loss) per share, basic
$
0.05
$
(0.86
)
Net income (loss) per share, diluted
$
0.05
$
(0.86
)
Weighted-average common shares
outstanding, basic
136,825,016
62,652,947
Weighted-average common shares
outstanding, diluted
141,732,403
62,652,947
Origin Materials, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
Three Months Ended March
31,
(in thousands)
2022
2021
Cash flows from operating
activities
Net income (loss)
$
7,346
$
(53,571
)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and amortization
148
115
Amortization on right-of-use asset
121
72
Stock-based compensation
918
627
Amortization of debt issuance costs
—
5
Accretion of debt discount
—
14
Change in fair value of derivatives
834
391
Change in fair value of common stock
warrants liability
1,774
—
Change in fair value of preferred stock
warrants liability
—
48,109
Change in fair value of earnout
liability
(15,227
)
—
Change in fair value of incremental
acquisition fee accrual
(45
)
—
Payments on operating lease
liabilities
(62
)
(72
)
Changes in operating assets and
liabilities:
Other receivables
(179
)
20
Prepaid expenses and other current
assets
1,215
(2
)
Other long-term assets
(32
)
—
Accounts payable
637
31
Accrued expenses
1,495
901
Other liabilities, current
(290
)
—
Related party payable
57
—
Net cash used in operating
activities
(1,290
)
(3,360
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment, net of grants
(10,380
)
(741
)
Capitalized interest on plant
construction
(20
)
(52
)
Purchases of marketable securities
(1,255,027
)
—
Sales of marketable securities
1,240,788
—
Maturities of marketable securities
37,732
—
Net cash provided by (used in)
investing activities
13,093
(793
)
Cash flows from financing
activities
Proceeds from stockholders' notes payable,
net of debt issuance costs
—
11,687
Proceeds from Canadian Government Research
and Development Program
—
74
Issuance of common stock
34
55
Net cash provided by financing
activities
34
11,816
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
(533
)
(100
)
Net increase (decrease) in cash and
cash equivalents, and restricted cash
11,304
7,563
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
$
58,431
$
9,437
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) 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 March
31,
(in thousands)
2022
2021
Net income (loss)
$
7,346
$
(53,571
)
Stock based compensation
918
627
Depreciation and amortization
148
115
Interest income
(1,833
)
—
Interest expense, net of capitalized
interest
—
280
Change in fair value of derivative
liabilities
834
391
Change in fair value of warrants
liability
1,774
48,109
Change in fair value of earnout
liability
(15,227
)
—
Other income, net
(450
)
(581
)
Adjusted EBITDA
$
(6,490
)
$
(4,630
)
________________________________ 1 Grand View Research, Inc.
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Origin Materials Investors: ir@originmaterials.com
Media: media@originmaterials.com
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