– Origin 1 Construction Timeline On Track and
Capital Budget Unchanged –
– Origin 2 Construction Timeline, Budget, and
Financing Unchanged –
– Customer Demand is Strong and Broad Based,
Increased Contracted Offtake Agreements and Capacity Reservations
to $8.1 Billion –
– Maintains 2022 Adjusted EBITDA and Capital
Expenditure 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 second quarter ended June 30, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220803005911/en/
“The Origin team continues to execute on its mission to enable
the world’s transition to sustainable materials. We remain
well-capitalized and on track for completion of Origin 1 by the end
of 2022 with preparations for commissioning and start-up underway.
For Origin 2, the previously disclosed capital budget, construction
timeline, and financing are unchanged. We were pleased to announce
new strategic partnerships and initiatives with Kuraray, Revlon,
Intertex World Resources, and ATC Plastics. These partnerships and
initiatives further increase our exposure to consumer and
industrial end-markets including cosmetics, packaging, plastics,
and automotive. The Kuraray partnership will focus on a diverse set
of polymer applications aimed at reducing the climate impact of a
wide array of specialty chemicals and materials. The Revlon
initiative represents an exciting opportunity to partner with an
iconic global brand to develop and bring to market sustainable
carbon-negative materials for next generation cosmetics packaging.
The Intertex and ATC Plastics partnerships further build on our
recent momentum in carbon black, a promising new product category
for Origin. The demand for ‘net zero’-enabling materials remains
strong as the world moves aggressively to a zero-carbon future. Our
efforts to commercialize the business have resulted in increased
offtake agreements and capacity reservations from our customers and
partners to $8.1 billion, a more than eightfold increase since our
announcement to become a public company in February 2021,” said
Rich Riley, Co-Chief Executive Officer of Origin.
Key Company Second Quarter Highlights Origin Materials
has increased its total signed offtake agreements and capacity
reservations to $8.1 billion as of today, up from $7.4 billion in
May 2022. The Company also implemented new and expanded
partnerships and customer relationships, including:
- Partnership with Kuraray, a leading manufacturer of specialty
chemicals and fibers to commercialize advanced carbon negative
materials for diverse polymer applications. As part of the
strategic partnership, Kuraray signed a capacity reservation
agreement with Origin Materials.
- Initiative with Revlon, a leading global authority and beauty
trendsetter in the world of color cosmetics and hair care to
develop advanced carbon negative materials for next generation
cosmetics packaging. As part of the initiative, Revlon signed a
memorandum of understanding to reserve commercial volumes of Origin
PET.
- Partnership with Intertex World Resources, a leading
value-added distributor of synthetic rubber, carbon black, process
oils and rubber chemicals to bring sustainable carbon-negative
carbon black made using Origin Materials’ patented technology
platform to the rubber compounding industry. As part of the
partnership, Intertex signed an offtake agreement with Origin
Materials to purchase carbon black.
- Partnership with ATC Plastics, a leading global manufacturer of
black color concentrates, to bring sustainable carbon-negative
carbon black made using Origin Materials’ patented technology
platform to the automotive and material handling industries. As
part of the partnership, ATC Plastics agreed to purchase carbon
black from Origin Materials.
In addition, the Company amended and expanded its existing
relationship with Danone. These strategic initiatives complement
Origin’s existing partnerships and customer relationships with
industry leaders including Nestlé Waters, PepsiCo, Ford Motor
Company, Mitsubishi Gas Chemical, Kolon Industries, PrimaLoft,
Solvay, Mitsui & Co., Ltd., Minafin Group, LVMH Beauty, and
Mitsubishi Chemical Holdings Group.
Additional second quarter highlights include:
- Origin Materials Wins EPA Green Chemistry Challenge Award for
2022 in Partnership with University of California, Davis. Origin
Materials and UC Davis together won the EPA’s prestigious 2022
Green Chemistry Challenge Award in the category of Specific
Environmental Benefit – Climate Change.
- Origin Materials Earns USDA Certified Biobased Product Label
for Additional Carbon Negative Materials. The certification affirms
that Origin’s furandicarboxylic acid (“FDCA”), purified
terephthalic acid (“PTA”), and para-xylene (“pX”), when produced at
full commercial capacity, are expected to be 100% biobased,
allowing Origin to display a unique USDA label highlighting this
designation. This certification adds to Origin’s previously
announced USDA Certified Biobased Products, which include
chloromethyl furfural (“CMF”) and hydrothermal carbon (“HTC”).
- Origin Materials Joins Russell 2000® and 3000® Indexes. Origin
Materials joined the small-cap Russell 2000® Index and the
broad-market Russell 3000® Index as part of the 2022 Russell
indexes annual reconstitution, effective at the market open on June
27, 2022.
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. The Company also maintains its
previously disclosed capital budget for Origin 1 of $125 million to
$130 million.
During the second quarter, the Company continued to strengthen
its Origin 1 operations leadership team and operations staff.
Additional major equipment has been delivered onsite including
piping modules, which the Company installed alongside its key
production modules, storage tanks, and a filter press which will be
used in the separation of HTC. The Company began constructing the
site’s HTC building, which houses equipment used in the separation
of HTC, and its biomass building, which will store sustainable wood
residues.
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 Second Quarter 2022 Cash, cash equivalents
and marketable securities were $406.6 million as of June 30,
2022.
Operating expenses for the second quarter were $8.7 million
compared to $6.7 million in the prior-year period.
Adjusted EBITDA loss was $6.9 million for the second quarter
compared to a loss of $3.0 million in the prior-year period.
Net income was $46.9 million for the second quarter compared to
net income of $62.5 million in the prior-year period.
Shares outstanding as of June 30, 2022 were 142.4 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 its previously updated capital
spending estimate for fiscal year 2022:
- Adjusted EBITDA loss of up to $36 million
- Capital spending is 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 August 3,
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 second 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 10019413. The
replay will be available until 11:59 p.m. Eastern Time on August
17, 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 income, (iv)
interest expense, net of capitalized interest, (v) change in fair
value of derivative liability, (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. 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, ability to enter new end-markets,
ability to develop new product categories, 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 Quarterly Report on Form 10-Q
filed with the U.S. Securities and Exchange Commission on May 9,
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)
June 30, 2022
(Unaudited)
December 31,
2021
ASSETS
Current assets
Cash and cash equivalents
$
79,056
$
46,637
Restricted cash
490
490
Marketable securities
327,082
397,458
Other receivables
2,989
2,612
Derivative asset
695
202
Prepaid expenses and other current
assets
2,735
3,774
Total current assets
413,047
451,173
Property, plant, and equipment, net
82,273
57,185
Operating lease right-of-use asset
3,214
1,782
Intangible assets, net
190
215
Other long-term assets
62
62
Total assets
$
498,786
$
510,417
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
4,608
$
2,451
Accrued expenses
3,449
973
Operating lease liability, current
624
280
Other liabilities, current
869
380
Derivative liability
—
103
Total current liabilities
9,550
4,187
Earnout liability
79,343
127,757
Canadian Government Research and
Development Program liability
6,667
6,762
Assumed common stock warrants
liability
35,831
52,860
Stockholder note
5,189
5,189
Related party other liabilities,
long-term
5,848
5,720
Operating lease liability
2,654
1,486
Other liabilities, long-term
2,796
2,946
Total liabilities
147,878
206,907
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of June 30, 2022 and December 31, 2021
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 142,378,934 and 141,301,569,
issued and outstanding as of June 30, 2022 and December 31, 2021,
respectively (including 4,500,000 Sponsor Vesting Shares)
14
16
Additional paid-in capital
364,853
361,542
Accumulated deficit
(2,520
)
(56,797
)
Accumulated other comprehensive loss
(11,439
)
(1,251
)
Total stockholders’ equity
350,908
303,510
Total liabilities and stockholders’
equity
$
498,786
$
510,417
Origin Materials, Inc. Condensed
Consolidated Statements Of Operations And Comprehensive Income
(Loss) (Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(In thousands, except share and per share
data)
2022
2021
2022
2021
Operating Expenses
Research and development
$
2,649
$
2,339
$
4,985
$
3,648
General and administrative
5,864
4,219
10,935
8,167
Depreciation and amortization
160
121
308
236
Total operating expenses and loss from
operations
8,673
6,679
16,228
12,051
Other (income) expenses
Interest income
(1,936
)
—
(3,768
)
—
Interest expense, net of capitalized
interest
—
2,560
—
2,839
Change in fair value of derivatives
(1,430
)
1,035
(596
)
1,426
Change in fair value of warrants
liability
(18,803
)
(27,265
)
(17,029
)
20,844
Change in fair value of earnout
liability
(33,188
)
(45,497
)
(48,414
)
(45,497
)
Other income, net
(247
)
(43
)
(698
)
(623
)
Total other (income) expenses, net
(55,604
)
(69,210
)
(70,505
)
(21,011
)
Net income
46,931
62,531
54,277
8,960
Other comprehensive income (loss)
Unrealized (loss) on marketable
securities
(4,805
)
—
(9,380
)
—
Foreign currency translation adjustment,
net of tax
(1,693
)
626
(808
)
1,092
Total comprehensive income
40,433
63,157
44,089
10,052
Net income per share, basic
$
0.34
$
0.93
$
0.40
$
0.14
Net income per share, diluted
$
0.33
$
0.63
$
0.38
$
0.13
Weighted-average common shares
outstanding, basic
137,141,655
67,548,052
136,985,440
65,098,310
Weighted-average common shares
outstanding, diluted
142,195,637
78,628,591
142,078,752
70,974,756
Origin Materials, Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended
June 30,
(in thousands)
2022
2021
Cash flows from operating
activities
Net income
$
54,277
$
8,960
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
308
236
Amortization on right-of-use asset
281
138
Stock-based compensation
2,573
4,172
Amortization of debt issuance costs
—
14
Accretion of debt discount
—
2,211
Change in fair value of derivatives
(596
)
1,426
Change in fair value of common stock
warrants liability
(17,029
)
—
Change in fair value of preferred stock
warrants liability
—
20,844
Change in fair value of earnout
liability
(48,414
)
(45,497
)
Change in fair value of incremental
acquisition fee accrual
(150
)
—
Payments on operating lease
liabilities
(193
)
(138
)
Changes in operating assets and
liabilities:
Other receivables
(377
)
(112
)
Grants receivable
—
(17
)
Prepaid expenses and other current
assets
1,038
(29
)
Other long-term assets
—
—
Accounts payable
2,157
(1,880
)
Accrued expenses
2,476
2,899
Other liabilities, current
489
—
Related party payable
128
98
Net cash used in operating
activities
(3,032
)
(6,675
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment, net of grants
(25,045
)
(2,703
)
Capitalized interest on plant
construction
(47
)
—
Purchases of marketable securities
(1,655,200
)
—
Sales of marketable securities
1,647,787
—
Maturities of marketable securities
71,168
—
Net cash provided by (used in)
investing activities
38,663
(2,703
)
Cash flows from financing
activities
Proceeds from stockholders' notes payable,
net of debt issuance costs
—
11,707
Payment of short-term debt
—
(906
)
Proceeds from Canadian Government Research
and Development Program
—
173
Issuance of common stock
268
55
Business combination, net of issuance
costs paid
—
467,530
Net cash provided by financing
activities
268
478,559
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
(3,480
)
(178
)
Net increase (decrease) in cash and
cash equivalents, and restricted cash
32,419
469,003
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
$
79,546
$
470,877
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 June
30,
Six months ended June
30,
(in thousands)
2022
2021
2022
2021
Net income (loss)
$
46,931
$
62,531
$
54,277
$
8,960
Stock based compensation
1,656
3,545
2,573
4,172
Depreciation and amortization
160
121
308
236
Interest income
(1,936
)
—
(3,768
)
—
Interest expense, net of capitalized
interest
—
2,560
—
2,839
Change in fair value of derivative
liabilities
(1,430
)
1,035
(596
)
1,426
Change in fair value of warrants
liability
(18,803
)
(27,265
)
(17,029
)
20,844
Change in fair value of earnout
liability
(33,188
)
(45,497
)
(48,414
)
(45,497
)
Other income, net
(247
)
(43
)
(698
)
(623
)
Adjusted EBITDA
$
(6,857
)
$
(3,013
)
$
(13,347
)
$
(7,643
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005911/en/
Origin Materials Investors: ir@originmaterials.com
Media: media@originmaterials.com
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