Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the
“Company”), a leading next generation bioplastics company focused
on the development and production of biodegradable materials,
announced today its preliminary financial results for the fourth
quarter and full year ended December 31, 2021.
Stephen E. Croskrey, Chairman and Chief Executive Officer of
Danimer commented, “I am proud of the focused execution by our team
and our many accomplishments during 2021 as we conclude our first
full year as a public company. During the fourth quarter, we
progressed further on our journey to deliver leading solutions for
biodegradable packaging and other products which contribute to
addressing the global plastic waste crisis, and we continued to
ramp up customer deliveries to produce record fourth quarter and
full year 2021 revenue.”
Mr. Croskrey continued, “As we move forward, growing commercial
scale production of PHA remains the core focus of our business, and
I am confident we are on the right path to capture a growing share
of PHA demand in the years ahead. Our innovative Nodax-based
straws, sold through our converter partners, can already be found
in numerous retailers and restaurants across the country such as
Bonefish Grill, Burgerville, CVS, Dunkin Donuts, Target, Tropical
Smoothie Café, Walmart, and numerous others. We have been able to
accomplish this by developing biodegradable products that leverage
our unmatched application development expertise, and we have
increasingly found that customers are looking for complete
biodegradable systems as alternatives to the traditional plastic
products they sell, which only increases the magnitude of our
long-term opportunity in the years ahead. We have a large
addressable market to serve and are excited to bring additional
production capacity online in 2022 and beyond.”
ALL AMOUNTS DISCUSSED IN THIS EARNINGS RELEASE ARE
PRELIMINARY AND UNAUDITED
Fourth Quarter 2021 Financial Highlights
- Revenues increased 47% to a record $17.7 million compared to
the fourth quarter of 2020, primarily driven by strong growth in
product revenue due to the scale up of PHA production for Phase 1
of the Kentucky facility brought online in 2020. PHA-based product
sales nearly quadrupled year-over-year, expanding to 50% of total
revenue compared to 19% in the fourth quarter of 2020.
- Gross profit was $(2.4) million compared to $1.2 million in the
fourth quarter of 2020. Adjusted gross profit1 was $0.4 million
compared to $3.5 million in the fourth quarter of 2020. Adjusted
gross margin1 was 2.3% for the fourth quarter of 2021 compared to
28.9% in the fourth quarter of 2020, primarily due to PHA-based
product sales becoming a larger portion of our revenue. PHA-based
product sales currently have a lower gross margin due to elevated
fixed-cost absorption as production scales up at the Kentucky
facility. The Company expects the average cost per unit at its
existing facilities to improve as PHA production continues to
increase and efficiency measures are implemented. Adjusted gross
profit excludes stock-based compensation, depreciation and rent
expense.
- Net loss of $12.4 million included a $21.3 million non-cash
gain related to the remeasurement of the Company’s private warrants
for the fourth quarter of 2021.
- Adjusted EBITDA1 was $(10.2) million in the fourth quarter of
2021 compared to $(2.3) million in the fourth quarter of 2020,
primarily due to decline in gross profit as well as an increase in
headcount and salaries to support future expansion plans. The
fourth quarter of 2021 also included incremental expenses related
to being a public company of $1.0 million, as well as approximately
$1.2 million of R&D and operating expenses related to Novomer,
which the Company did not incur in the prior year period.
- Adjusted EBITDAR1, which excludes rent expense primarily
associated with the Company’s Kentucky facility and one of the
Company's production facilities in Georgia, was $(9.3) million,
compared to $(1.3) million in the prior year quarter.
Full Year 2021 Financial Highlights
- Revenues increased 24% to a record $58.7 million compared to
the prior year, driven by strong growth in product revenue due to
the scale up of PHA production for Phase 1 of the Kentucky facility
brought online in 2020.
- Gross profit was $0.9 million, compared to $11.5 million in the
prior year. Adjusted gross profit1 was $11.0 million compared to
$16.6 million in the prior year. Adjusted gross margin1 was 18.6%
for the full year 2021 compared to 35.1% in the full year 2020,
primarily due to PHA-based product sales becoming a larger portion
of our revenue. PHA-based product sales currently have a lower
gross margin due to elevated fixed-cost absorption as production
scales up at the Kentucky facility.
- Net loss of $60.1 million included a $27.8 million non-cash
gain related to the remeasurement of the Company’s private warrants
in 2021.
- Adjusted EBITDA1 was $(22.6) million, compared to $(3.2)
million in the prior year, primarily attributable to the decline in
gross profit as well as an increase in headcount and salaries to
support future expansion plans. The full year 2021 also included
incremental expenses related to being a public company of $4.6
million, as well as approximately $1.9 million of R&D and
operating expenses related to Novomer, which the Company did not
incur in the prior year.
- Adjusted EBITDAR1, which excludes rent expense primarily
associated with the Company’s Kentucky facility and Georgia
production operations, was $(20.1) million, compared to a gain $0.4
million in the prior year.
(1)
An explanation of non-GAAP measures
disclosed in this release and a reconciliation of these non-GAAP
results to comparable GAAP measures are included in the “Non-GAAP
Financial Measures” section of the release.
Liquidity and Capital Resources
At December 31, 2021, the Company reported total debt
outstanding of $261.3 million net of $10.6 million of unamortized
debt issuance fees and cash and cash equivalents of $286.5 million.
The Company had 100,687,820 common shares outstanding as of
December 31, 2021.
Business Outlook
The Company expects to continue to build out the operational
platform and infrastructure needed to support its production
capacity expansion and sales growth objectives. The Company expects
its Kentucky facility to have a favorable impact to full year 2022
Adjusted EBITDA as it increases capacity and drives operational
efficiencies at the expanded facility.
Webcast, Conference Call and 10-K Filing
The Company will host a webcast and conference call on Monday,
February 28, 2022, at 5:00 p.m. Eastern time to review fourth
quarter of 2021 results, discuss recent events and conduct a
question-and-answer session. The live webcast will be available at
www.danimerscientific.com in the Investor Relations section. The
conference call will also be accessible by dialing 1-877-407-9208
(Domestic) and 1-201-493-6784 (International). A replay of the
webcast will be available on the Company’s website.
The 2021 annual reporting cycle was the first time the Company
was required to comply with Section 404(b) of the Sarbanes-Oxley
Act and the accelerated Form 10-K filing deadline for Large
Accelerated Filers. During its evaluation process, the Company
identified certain material weaknesses in its internal control over
financial reporting. The Company believes that any misstatements
resulting from these control deficiencies have been corrected prior
to releasing these preliminary financial results. But as a result
of these findings, the Company needs additional time to complete
the compilation of information and finalization of its assessment
of the effectiveness of internal control over financial reporting
for its consolidated financial statements and related disclosures
to be filed as part of the Annual Report on Form 10-K for 2021. To
this end, the Company will file a Form 12b-25 with the Securities
and Exchange Commission in order to extend the due date of its 2021
Annual Report on Form 10-K for 15 days, as permitted by Rule 12b-25
under the Securities Exchange Act.
About Danimer
Danimer is a pioneer in creating more sustainable, more natural
ways to make plastic products. For more than a decade, its
renewable and sustainable biopolymers have helped create plastic
products that are biodegradable and compostable and return to
nature instead of polluting our lands and waters. Danimer’s
technology can be found in a vast array of plastic end products
that people use every day. Applications for its biopolymers include
additives, aqueous coatings, fibers, filaments, films and
injection-molded articles, among others. Danimer now holds more
than 430 granted patents and pending patent applications in more
than 20 countries for a range of manufacturing processes and
biopolymer formulations. For more information, visit
www.DanimerScientific.com.
Forward-Looking Statements
Please note that in this press release we may use words such as
“appears,” “anticipates,” “believes,” “plans,” “expects,”
“intends,” “future,” and similar expressions which constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are made based on our expectations and
beliefs concerning future events impacting the Company and
therefore involve a number of risks and uncertainties. We caution
that forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied in
the forward-looking statements. Potential risks and uncertainties
that could cause the actual results of operations or financial
condition of the Company to differ materially from those expressed
or implied by forward-looking statements in this release include,
but are not limited to, the overall level of consumer demand on our
products; general economic conditions and other factors affecting
consumer confidence, preferences, and behavior; disruption and
volatility in the global currency, capital, and credit markets; the
financial strength of the Company's customers; the Company's
ability to implement its business strategy, including, but not
limited to, its ability to expand its production facilities and
plants to meet customer demand for its products and the timing
thereof; risks relating to the uncertainty of the projected
financial information with respect to the Company; the ability of
the Company to execute and integrate acquisitions; changes in
governmental regulation, legislation or public opinion relating to
our products; the Company’s exposure to product liability or
product warranty claims and other loss contingencies; disruptions
and other impacts to the Company’s business, as a result of the
COVID-19 global pandemic and government actions and restrictive
measures implemented in response; stability of the Company’s
manufacturing facilities and suppliers, as well as consumer demand
for our products, in light of disease epidemics and health-related
concerns such as the COVID-19 global pandemic; the impact that
global climate change trends may have on the Company and its
suppliers and customers; the Company's ability to protect patents,
trademarks and other intellectual property rights; any breaches of,
or interruptions in, our information systems; the ability of our
information technology systems or information security systems to
operate effectively, including as a result of security breaches,
viruses, hackers, malware, natural disasters, vendor business
interruptions or other causes; our ability to properly maintain,
protect, repair or upgrade our information technology systems or
information security systems, or problems with our transitioning to
upgraded or replacement systems; the impact of adverse publicity
about the Company and/or its brands, including without limitation,
through social media or in connection with brand damaging events
and/or public perception; fluctuations in the price, availability
and quality of raw materials and contracted products as well as
foreign currency fluctuations; our ability to utilize potential net
operating loss carryforwards; and changes in tax laws and
liabilities, tariffs, legal, regulatory, political and economic
risks. More information on potential factors that could affect the
Company's financial results is included from time to time in the
Company's public reports filed with the Securities and Exchange
Commission, including the Company's Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
All forward-looking statements included in this press release are
based upon information available to the Company as of the date of
this press release, and speak only as of the date hereof. We assume
no obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release.
Danimer Scientific,
Inc.
Condensed Consolidated Balance
Sheets (Preliminary and Unaudited)
December 31,
December 31,
(in thousands, except share and per share
data)
2021
2020
Assets:
Current assets:
Cash and cash equivalents
$
286,487
$
377,581
Accounts receivable, net
17,149
6,605
Other receivables, net
3,836
-
Inventories, net
24,573
13,642
Prepaid expenses and other current
assets
4,737
3,089
Contract assets
3,576
1,466
Total current assets
340,358
402,383
Property, plant and equipment, net
316,181
106,795
Intangible assets, net
84,659
1,801
Goodwill
62,649
-
Right-of-use assets
19,240
19,387
Leverage loans receivable
13,408
13,408
Restricted cash
481
2,316
Loan fees
1,397
-
Other assets
224
111
Total assets
$
838,597
$
546,201
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable
$
20,790
$
10,610
Accrued liabilities
18,777
9,220
Unearned revenue and contract
liabilities
214
2,455
Current portion of lease liability
3,337
3,000
Current portion of long-term debt, net
357
25,201
Total current liabilities
43,475
50,486
Private warrants liability
9,578
82,860
Long-term lease liability, net
22,693
24,175
Long-term debt, net
260,934
31,386
Deferred income taxes
1,014
-
Other long-term liabilities
638
1,250
Total liabilities
$
338,332
$
190,157
Stockholders' equity:
Common stock, $0.0001 par value;
200,000,000 shares authorized: 100,687,820 and 84,535,640 shares
issued and outstanding at December 31, 2021 and December 31, 2020,
respectively
$
10
$
8
Additional paid-in capital
619,145
414,819
Accumulated deficit
(118,890
)
(58,783
)
Total stockholders’ equity
500,265
356,044
Total liabilities and stockholders’
equity
$
838,597
$
546,201
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations (Preliminary and Unaudited)
Three Months Ended December
31,
Years Ended December
31,
(in thousands, except share and per share
data)
2021
2020
2021
2020
Revenue:
Products
$
16,054
$
9,688
$
50,769
$
40,692
Services
1,674
2,339
7,980
6,641
Total revenue
17,728
12,027
58,749
47,333
Costs and expenses:
Cost of revenue
20,080
10,818
57,865
35,876
Selling, general and administrative
24,212
10,165
80,004
19,343
Research and development
8,666
2,286
20,270
7,851
(Gain) loss on sale of assets
49
-
82
(9
)
Total costs and expenses
53,007
23,269
158,221
63,061
Loss from operations
(35,279
)
(11,242
)
(99,472
)
(15,728
)
Nonoperating income (expense):
Gain on remeasurement of private
warrants
21,332
3,720
27,767
3,720
Interest expense, net
(247
)
(910
)
(763
)
(2,080
)
Gain on forgiveness of debt
-
5,266
1,776
5,266
Loss on loan extinguishment
-
-
(2,604
)
-
Other expense, net
(62
)
(67
)
(44
)
(31
)
Total nonoperating income (expense)
21,023
8,009
26,132
6,875
Loss before income taxes
(14,256
)
(3,233
)
(73,340
)
(8,853
)
Income taxes
1,810
-
13,233
-
Net loss
$
(12,446
)
$
(3,233
)
$
(60,107
)
$
(8,853
)
Basic and diluted net loss per share
$
(0.12
)
$
(0.10
)
$
(0.65
)
$
(0.30
)
Weighted average number of shares used to
compute (1)
Basic and diluted net loss per share
100,360,592
32,154,203
93,078,004
29,570,658
(1) 2020 retroactively restated to give
effect for reverse acquisition
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows (Preliminary and Unaudited)
Years Ended
December 31,
(in thousands)
2021
2020
Cash flows from operating activities:
Net loss
$
(60,107
)
$
(8,853
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain on remeasurement of private
warrants
(27,767
)
(3,720
)
Stock-based compensation
55,270
3,645
Depreciation and amortization
11,674
4,609
Deferred income taxes
(13,233
)
-
Loss on write-off of deferred loan
costs
1,939
-
Amortization of debt issuance costs and
debt discounts
480
1,655
Amortization of right-of-use assets and
lease liability
(1,040
)
514
Gain on forgiveness of debt
(1,776
)
(5,266
)
(Gain) loss on disposal of fixed
assets
82
(9
)
Other
389
-
Interest incurred but not paid
-
809
Changes in operating assets and
liabilities, net of effects of acquisition:
Accounts receivable, net
(10,835
)
(1,600
)
Inventories, net
(9,799
)
(6,604
)
Prepaid expenses and other current
assets
(4,336
)
(2,392
)
Contract assets
(2,110
)
(708
)
Other assets
(75
)
5
Accounts payable
2,048
993
Accrued and other long-term
liabilities
(1,526
)
5,250
Unearned revenue and contract
liabilities
(2,241
)
(2,125
)
Net cash used in operating activities
(62,963
)
(13,797
)
Cash flows from investing activities:
Purchases of property, plant and
equipment
(185,411
)
(38,268
)
Acquisition of Novomer, net of cash
acquired
(151,179
)
-
Proceeds from sales of property, plant and
equipment
422
9
Net cash used in investing activities
(336,168
)
(38,259
)
Cash flows from financing activities:
Proceeds from long-term debt
240,245
4,547
Proceeds from exercise of warrants, net of
issuance costs
138,196
-
Proceeds from Business Combination and
PIPE offering
-
403,702
Purchase of capped call options
(35,040
)
-
Principal payments on long-term debt
(27,162
)
(1,941
)
Transaction costs related to Business
Combination and PIPE offering
-
(21,556
)
Cash paid for debt issuance costs
(10,424
)
(135
)
Employee taxes related to stock-based
compensation
(1,728
)
-
Proceeds from exercise of stock
options
2,899
5,540
Proceeds from issuance of common stock,
net of issuance costs
(890
)
32,518
Proceeds from employee stock purchase
plan
106
-
Net cash provided by financing
activities
306,202
422,675
Net (decrease) increase in cash and cash
equivalents and restricted cash
(92,929
)
370,619
Cash and cash equivalents and restricted
cash-beginning of period
379,897
9,278
Cash and cash equivalents and restricted
cash-end of period
$
286,968
$
379,897
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures
“Adjusted EBITDA”, “Adjusted EBITDAR”, “Adjusted Gross Profit” and
"Adjusted Gross Margin". Danimer management views these metrics as
a useful way to look at the performance of its operations between
periods and to exclude decisions on capital investment and
financing that might otherwise impact the review of profitability
of the business based on present market conditions.
Adjusted EBITDA is defined as net income or loss plus net
interest expense, income taxes, depreciation and amortization, as
adjusted to add back certain charges or gains that Danimer may
record each period such as remeasurement of private warrants,
stock-based compensation expense, as well as non-recurring charges
such as (i) asset disposal gains or losses as well as other
significant gains or losses such as debt extinguishments; (ii)
legal settlements; or (iii) other discrete non-recurring items.
Danimer believes these items are not considered an indicator of
ongoing performance. Adjusted EBITDA is not a measure of
performance defined in accordance with GAAP. The measure is used as
a supplement to GAAP results in evaluating certain aspects of
Danimer’s business, as described below.
Adjusted EBITDAR is defined as Adjusted EBITDA plus rent
expense.
Adjusted Gross Profit is defined as Gross Profit plus
depreciation, stock-based compensation and rent expense.
Adjusted Gross Margin is defined as Adjusted Gross Profit
divided by total revenue.
Danimer believes that each of Adjusted EBITDA, Adjusted EBITDAR,
Adjusted Gross Profit and Adjusted Gross Margin is useful to
investors in evaluating the Company’s performance because each
measure considers the performance of the Company’s operations,
excluding decisions made with respect to capital investment,
financing and other non-recurring charges as outlined in the
preceding paragraph. Danimer believes these non-GAAP metrics offers
additional financial information that, when coupled with the GAAP
results and the reconciliation to GAAP results, provides a more
complete understanding of its results of operations and the factors
and trends affecting its business.
Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross Profit and
Adjusted Gross Margin should not be considered as an alternative to
net income or loss as an indicator of its performance or as
alternatives to any other measure prescribed by GAAP as there are
limitations to using such non-GAAP measures. Although Danimer
believes that Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross
Profit and Adjusted Gross Margin may enhance an evaluation of its
operating performance based on recent revenue generation and
product/overhead cost control because it excludes the impact of
prior decisions made about capital investment, financing and other
expenses, (i) other companies in Danimer’s industry may define
Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross Profit and
Adjusted Gross Margin differently than Danimer does and, as a
result, they may not be comparable to similarly titled measures
used by other companies in its industry, and (ii) Adjusted EBITDA,
Adjusted EBITDAR, Adjusted Gross Profit and Adjusted Gross Margin
exclude certain financial information that some may consider
important in evaluating Danimer’s performance.
Danimer compensates for these limitations by providing
disclosure of the differences between Adjusted EBITDA, Adjusted
EBITDAR, Adjusted Gross Profit and Adjusted Gross Margin and GAAP
results, including providing a reconciliation to GAAP results, to
enable investors to perform their own analysis of Danimer’s
operating results.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDAR and Adjusted EBITDA to Net Loss (Preliminary and
Unaudited)
Three Months Ended Dec
31,
Twelve Months Ended Dec
31,
2021
2020
2021
2020
Net Loss
$
(12,446
)
$
(3,233
)
$
(60,107
)
$
(8,853
)
Interest expense, net
247
910
763
2,080
Income taxes
(1,810
)
-
(13,233
)
-
Depreciation and amortization
4,185
1,820
11,674
4,609
Gain on remeasurement of private
warrants
(21,332
)
(3,720
)
(27,767
)
(3,720
)
Stock-based compensation
20,055
3,122
55,908
3,645
Loss on loan extinguishment
-
-
2,604
-
Litigation and other legal related
47
-
1,232
-
Transaction related
199
4,017
3,974
4,265
Public company one-time transition
costs
561
-
4,024
-
(Gain) loss on sale of assets
49
-
82
(9
)
Gain on forgiveness of debt
-
(5,266
)
(1,776
)
(5,266
)
Other expense, net
62
67
44
31
Adjusted EBITDA(1)
$
(10,182
)
$
(2,283
)
$
(22,578
)
$
(3,218
)
Rent
845
981
2,488
3,620
Adjusted EBITDAR(1)
$
(9,337
)
$
(1,302
)
$
(20,090
)
$
402
(1) Totals may not foot due to
rounding
Reconciliation of Adjusted
Gross Profit to Gross Profit (Preliminary and Unaudited)
Three Months Ended Dec
31,
Twelve Months Ended Dec
31,
2021
2020
2021
2020
Total revenue
$
17,728
$
12,027
$
58,749
$
47,333
Cost of revenue
20,080
10,818
57,865
35,876
Gross Profit (1)
(2,351
)
1,209
884
11,457
Depreciation
2,142
1,567
8,041
3,647
Rent
581
666
1,917
1,402
Stock-based compensation
28
36
109
126
Adjusted Gross Profit (1)
$
400
$
3,478
$
10,951
$
16,631
Adjusted Gross Margin
2.3
%
28.9
%
18.6
%
35.1
%
(1) Totals may not foot due to
rounding
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version on businesswire.com: https://www.businesswire.com/news/home/20220228005962/en/
Investors ir@danimer.com Phone: 229-220-1103
Media Anthony Popiel apopiel@daltonagency.com Phone:
404-876-1309
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