– Origin 1 Mechanically Complete, Completion of
Commissioning & Start-up Expected in Q2 2023 –
– Origin 2 Front-End Design, Construction
Planning, and Financing are Progressing with Update to be Provided
Mid-2023, Louisiana State Bond Commission Approves Significant
Financing Milestone –
– Announced Strategic Partnership with Avantium
to Accelerate Mass Production of FDCA and PEF for Advanced
Chemicals and Plastics –
– Provides 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 fourth quarter and year ended December 31,
2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230223005852/en/
“I am incredibly proud of what the Origin team accomplished in
2022 and our continued achievements this year. The mechanical
completion of Origin 1, our first commercial plant, is a
significant milestone as we continue to execute on our mission to
enable the world’s transition to sustainable materials. Despite
pandemic and related supply-chain headwinds, completion of
commissioning and start-up are expected to be in Q2 2023,
reflecting the remarkable depth of talent on our project team.
Origin 1 will play a key application development role by producing
CMF, HTC, and other intermediates in volumes that will allow
customers to qualify products and applications beyond PET. For
Origin 2, front-end loading, construction planning, and financing
are progressing with an update to be provided mid-2023. In January,
we announced the Louisiana State Bond Commission final approval of
up to $1.5 billion in tax-exempt bonds for the construction of
Origin 2, providing further positive momentum for project
financing. We were pleased to announce a new partnership with
Avantium, a leading innovator and developer of sustainable
chemistry, on a project with far-reaching impact for
next-generation chemicals and materials FDCA and PEF. The demand
for ‘net zero’-enabling materials remains strong as we draw closer
to initial commercial production to begin to meet over $9.3 billion
in total customer demand, a more than ninefold increase since our
announcement to become a public company in February 2021,” said
Rich Riley, Co-Chief Executive Officer of Origin.
Key Company Fourth Quarter and Recent Business
Highlights
Origin Materials has increased its total signed offtake
agreements and capacity reservations to $9.3 billion, up from $9.0
billion in November 2022. The Company also announced the following
milestones:
- Origin Materials Announces Mechanical Completion of Origin 1
Manufacturing Plant. As part of mechanical completion, the plant’s
critical mechanical systems have been successfully installed and
commissioning has begun.
- Origin Materials Announces Louisiana State Bond Commission
Approval of Financing for Origin 2. The Bond Commission's final
approval could enable the debt financing of Origin 2 using entirely
tax-exempt bonds.
- Partnership with Avantium N.V., a leading technology company in
renewable chemistry, to accelerate the mass production of FDCA and
PEF for advanced chemicals and plastics. The partnership will
produce FDCA from Origin’s carbon negative biomass-to-chemicals
platform and Avantium’s YXY® Technology and represents a potential
breakthrough in the commercialization of cost-competitive, low
carbon PEF, a polymer with an attractive combination of performance
characteristics for packaging.
These strategic initiatives 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., Minafin Group, LVMH Beauty, Revlon,
Mitsubishi Chemical Group, Kuraray, Intertex World Resources, and
ATC Plastics.
Origin 1 and Origin 2 Financing and Construction
Update
As disclosed in January, Origin 1, the Company’s first
commercial manufacturing plant, is mechanically complete, in-line
with the previously disclosed timeline, with completion of plant
commissioning and start-up expected in Q2 2023.
During the fourth quarter, the Company continued to strengthen
its Origin 1 operations leadership team and operations staff. As
part of mechanical completion, the plant's critical mechanical
systems have been successfully installed and commissioning has
begun. Work onsite continues and, 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.
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 Company continues to make progress on front-end design,
construction planning, and financing for Origin 2. The Company has
also made progress developing new products and applications which
may be incorporated into the design of the plant, such as FDCA,
PEF, as well as biofuels from an “oils and extractives” stream
co-produced alongside CMF and HTC, which has not been included in
previous plans. The Company expects to provide an update on new
product offerings and construction plans for the Origin 2 plant in
mid-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 its existing cash on hand, previously indicated
traditional project financing, and potentially strategic
partnerships. As Origin has an ongoing global technology licensing
effort and an active governmental affairs team, the Company
anticipates potentially strategic partnerships and federal
incentives programs to play a meaningful role in the financing of
Origin 2.
Results for Fourth Quarter and Full Year 2022
Cash, cash equivalents and marketable securities were $323.8
million as of December 31, 2022.
Operating expenses for the fourth quarter were $13.0 million
compared to $7.8 million in the prior-year period. Full year 2022
operating expenses were $38.9 million compared to $26.9 million in
the prior-year period.
Net income was $16.0 million for the fourth quarter compared to
net income of $5.2 million in the prior-year period. Full year 2022
net income was $78.6 million compared to $42.1 million in the
prior-year period.
Adjusted EBITDA loss was $9.2 million for the fourth quarter
compared to a loss of $6.6 million in the prior-year period. Full
year 2022 Adjusted EBITDA loss was $31.0 million compared to $20.0
million in the prior-year period, consistent with prior
guidance.
Shares outstanding as of December 31, 2022 were 143.0 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 providing the following guidance for
revenue and Adjusted EBITDA for fiscal year 2023:
- Revenue $40 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
February 23, 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 fourth 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 10021027. The
replay will be available until 11:59 p.m. Eastern Time on March 9,
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 https://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.
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 our potential products, ability to convert
capacity reservations and offtake agreements 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;
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 Quarterly
Report on Form 10-Q filed with the U.S. Securities and Exchange
Commission on November 3, 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.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share and per share
data)
December 31,
2022
December 31,
2021
ASSETS
Current assets
Cash and cash equivalents
$
107,858
$
46,637
Restricted cash
490
490
Marketable securities
215,464
397,458
Other receivables
4,346
2,612
Derivative asset
—
202
Prepaid expenses and other current
assets
3,341
3,774
Total current assets
331,499
451,173
Property, plant, and equipment, net
154,183
57,185
Operating lease right-of-use asset
2,779
1,782
Intangible assets, net
160
215
Other long-term assets
5,079
62
Total assets
$
493,700
$
510,417
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
10,384
$
2,451
Accrued expenses
8,414
973
Operating lease liability, current
619
280
Other liabilities, current
51
380
Derivative liability
344
103
Total current liabilities
19,812
4,187
Earnout liability
42,533
127,757
Canadian government research and
development program liability
7,185
6,762
Assumed common stock warrants
liability
30,872
52,860
Stockholder note
5,847
5,189
Related party other liabilities,
long-term
5,395
5,720
Operating lease liability
2,249
1,486
Other liabilities, long-term
2,902
2,946
Total liabilities
$
116,795
$
206,907
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of December 31, 2022 and December 31, 2021
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 143,034,225 and 141,301,569,
issued and outstanding as of December 31, 2022 and December 31,
2021, respectively (including 4,500,000 Sponsor Vesting Shares)
14
16
Additional paid-in capital
371,072
361,542
Retained earnings (Accumulated
deficit)
21,772
(56,797
)
Accumulated other comprehensive loss
(15,953
)
(1,251
)
Total stockholders’ equity
376,905
303,510
Total liabilities and stockholders’
equity
$
493,700
$
510,417
ORIGIN MATERIALS, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended December
31,
Year Ended December
31,
(In thousands, except share and per share
data)
2022
2021
2022
2021
Operating expenses
Research and development
$
5,424
$
3,519
$
14,141
$
9,124
General and administrative
7,326
4,055
24,095
17,265
Depreciation and amortization
223
181
711
544
Total operating expenses and loss from
operations
12,973
7,755
38,947
26,933
Other (income) expenses
Interest income
(2,748
)
(1,413
)
(8,825
)
(1,413
)
Interest (income) expense, net of
capitalized interest
—
(1
)
—
2,838
Change in fair value of derivatives
2,168
(100
)
443
1,326
Change in fair value of warrants
liability
(6,378
)
(2,838
)
(21,988
)
4,525
Change in fair value of earnout
liability
(21,876
)
(8,480
)
(85,437
)
(75,488
)
Other income, net
(132
)
(160
)
(1,709
)
(811
)
Total other income, net
(28,966
)
(12,992
)
(117,516
)
(69,023
)
Net income
$
15,993
$
5,237
$
78,569
$
42,090
Other comprehensive income (loss)
Unrealized gain (loss) on marketable
securities
2,769
(1,712
)
(8,014
)
(1,712
)
Foreign currency translation adjustment,
net of tax
1,373
53
(6,688
)
77
Total comprehensive income
$
20,135
$
3,578
$
63,867
$
40,455
Net income per share, basic
$
0.12
$
0.04
$
0.57
$
0.42
Net income per share, diluted
$
0.11
$
0.04
$
0.55
$
0.40
Weighted-average common shares
outstanding, basic
138,347,960
136,762,136
137,563,877
101,221,781
Weighted-average common shares
outstanding, diluted
142,267,273
142,066,042
142,146,767
106,237,754
ORIGIN MATERIALS, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Year Ended December
31,
(in thousands)
2022
2021
Cash flows from operating
activities
Net income
$
78,569
$
42,090
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
711
544
Amortization on right-of-use asset
582
280
Stock-based compensation
7,235
5,767
Amortization of debt issuance costs
—
14
Accretion of debt discount
—
2,211
Change in fair value of derivative
443
1,326
Change in fair value of common stock
warrants liability
(21,988
)
(30,510
)
Change in fair value of preferred stock
warrants liability
—
35,035
Change in fair value of earnout
liability
(85,437
)
(75,488
)
Changes in operating assets and
liabilities:
Other receivables
(1,734
)
(2,563
)
Grants receivable
—
—
Prepaid expenses and other current
assets
432
(3,652
)
Other long-term assets
(5,017
)
—
Accounts payable
26
(395
)
Accrued expenses
485
3,010
Payment on operating lease liabilities
(572
)
(295
)
Other liabilities, current
(329
)
380
Other liabilities, long-term
502
203
Net cash used in operating
activities
(26,092
)
(22,043
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment, net of grants
(83,691
)
(12,268
)
Purchases of marketable securities
(3,823,407
)
(2,448,316
)
Sales of marketable securities
3,815,859
2,024,089
Maturities of marketable securities
180,331
25,058
Capitalized interest on plant
construction
(245
)
(201
)
Net cash provided by (used in)
investing activities
88,847
(411,638
)
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
849
543
Proceeds from exercise of stock
options
399
74
Business combination, net of issuance
costs paid
—
467,530
Net cash provided by financing
activities
1,248
478,948
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
(2,782
)
(14
)
Net increase (decrease) in cash and
cash equivalents, and restricted cash
61,221
45,253
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
$
108,348
$
47,127
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 December
31,
Year ended December
31,
(in thousands)
2022
2021
2022
2021
Net income
$
15,993
$
5,237
$
78,569
$
42,090
Stock based compensation
3,516
959
7,235
5,767
Depreciation and amortization
223
181
711
544
Interest income
(2,748
)
(1,413
)
(8,825
)
(1,413
)
Interest expense, net of capitalized
interest
—
(1
)
—
2,838
Change in fair value of derivative
2,168
(100
)
443
1,326
Change in fair value of warrants
liability
(6,378
)
(2,838
)
(21,988
)
4,525
Change in fair value of earnout
liability
(21,876
)
(8,480
)
(85,437
)
(75,488
)
Professional fees related to completed
mergers
—
—
—
640
Other income, net
(132
)
(160
)
(1,709
)
(811
)
Adjusted EBITDA
$
(9,234
)
$
(6,615
)
$
(31,001
)
$
(19,982
)
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Origin Materials Investors: ir@originmaterials.com Media:
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