– Completed Factory Acceptance Test for 1st PET
Cap Manufacturing System, Production Timing on Track –
– Test Attended by Multiple Prospective
Customers Totaling >100 Billion in Annual Caps Consumption –
– Targeting Eight or More CapFormer Systems
Online by End of 2025, Expected to be Sufficient to Enable Positive
EBITDA –
– Reaffirms Expectation of Run-Rate EBITDA
Positive 1st Half 2026, No Additional Equity Capital Required –
– Maintains 2024 Revenue and Net Cash Burn
Guidance –
Origin Materials, Inc. (“Origin,” “Origin Materials,” or the
“Company”) (Nasdaq: ORGN, ORGNW), a technology company with a
mission to enable the world’s transition to sustainable materials,
today announced financial results for its third quarter ended
September 30, 2024.
“This quarter we achieved a milestone on our journey to
profitability: the successful Factory Acceptance Test of our first
CapFormer System,” said Rich Riley, Co-Chief Executive Officer of
Origin. “Our proprietary system for manufacturing what we believe
to be the world’s first and only commercially viable PET caps
performed well – demonstrating over 98% manufacturing efficiency
during the acceptance test. Our successful test was attended by
multiple prospective customers with total cap consumption in excess
of 100 billion caps per year. We are on track for commercial
production by year end, at which time we will continue to engage in
customer qualification as we scale our caps output. Revenue is on
track to begin ramping up in the first quarter of 2025. Customer
momentum is strong: Alongside our announced $100 million MOU, our
PET caps are in the hands of multiple prospective customers engaged
in testing and qualification, offering a strong pipeline of
potential buyers who can purchase billions of caps as our systems
come online throughout next year and beyond.”
Origin Co-CEO and Co-Founder John Bissell added: “We believe we
can sell as many caps as we can produce once commercial production
is online. And this quarter our Factory Acceptance Test
demonstrated we can make Origin PET caps at full commercial speeds
with high efficiency. Origin PET caps are premium products, and we
are proud to lead the now commercially-viable category of PET
closures, enabling superior performance and sustainability. Our
current manufacturing plan calls for bringing eight or more
CapFormer Systems into production by the end of 2025. While we
believe those eight systems alone could enable positive EBITDA, we
expect to add systems regularly for the foreseeable future to keep
pace with the anticipated steep growth curve of the indicative
market demand. As such, our expectation is to achieve positive
EBITDA results on a run-rate basis by the first half of 2026.”
Company Third Quarter and Recent Business Highlights
Origin Materials reported quarterly revenue of $8.2 million
generated by the Company’s supply chain activation program. The
Company also made significant progress in commercializing its caps
and closures business.
- We announced the CapFormer System and its successful Factory
Acceptance Testing. We believe Origin’s CapFormer System is the
world’s first and only commercially viable manufacturing system for
PET caps, offering a breakthrough for recycling circularity and
packaging performance. We revealed novel applications of
thermoforming, finishing and post-processing, and other design
elements, and our test validated performance specifications with
over 98% manufacturing efficiency.
- Today we are announcing our plan to bring at least eight
CapFormer Systems into production by 2025. We estimate the
initial eight CapFormer Systems will produce, in total, between 8
and 12 billion caps per year when fully operational. The actual
production will depend on factors such as line throughput and
product mix. We expect to continue to add systems for the
foreseeable future to keep pace with indicative market demand.
- We are engaged with multiple potential customers in PET cap
qualification, and we are excited to support qualification runs for
all our new prospective customers. Customer feedback has been
positive and momentum continues to build alongside our announced
MOU, which totals billions of PET caps and is expected to generate
over $100 million in revenue during the initial two-year term, with
revenue expected to begin in the first quarter of 2025, ramping
significantly in 2026. As part of qualification, prospective
customers have been attending Origin trials and are engaged with
technical development work and the journey to commercial
production. Our successful Factory Acceptance Test was attended by
multiple prospective customers with total cap consumption in excess
of 100 billion caps per year.
For furanics and Origin’s biomass conversion technology, we
continue to perform development work. We expect the focus of Origin
investor communication to be Origin’s path to profitability, namely
its caps and closures business, and we will provide investors with
furanics updates as appropriate when we have substantive news to
report. As previously announced, and consistent with the company’s
focus on becoming EBITDA positive in the first half of 2026, we are
operating Origin 1, our biomass conversion plant in Sarnia,
Ontario, ‘on demand’ with reduced staffing. This approach preserves
our ability to generate product at small volumes sufficient to
explore scale-up with strategic partners while reducing our current
overall cash burn. As we establish a strong economic foundation
through our PET caps and closures business, we expect to be ideally
situated to drive deals regarding our biomass technology and
furanics platform.
Results for Third Quarter 2024
Cash, cash equivalents and marketable securities were $113.4
million as of September 30, 2024.
Revenue for the third quarter was $8.2 million compared to $7.1
million in the prior-year period, generated by the Company’s supply
chain activation program.
Operating expenses for the third quarter were $32.5 million
compared to $12.9 million in the prior-year period, an increase of
$19.5 million consisting primarily of $15.2 million in non-cash
impairment charges, a $2.4 million increase in depreciation
expenses driven by Origin 1 coming online during the fourth quarter
of 2023, and a $1.7 million increase in general and administrative
expenses. Consistent with our focus on caps and closures and asset
light furanics strategy, management has decided not to utilize the
Geismar, Louisiana site, resulting in a non-cash impairment of
assets charge of $12.3 million and $2.9 million for the write-down
of other current assets to fair market value of purchased
materials. A significant portion of costs incurred during the third
quarter of 2023 were capitalized as part of the development of
Origin 1, whereas the costs to operate and maintain the plant are
included in general and administrative expenses in 2024.
Net loss was $36.8 million for the third quarter compared to net
income of $30.9 million in the prior-year period. The third quarter
of 2023 included a $22.8 million non-cash gain in fair value of
common stock warrants liability and an $18.8 million non-cash gain
in earnout liability driven primarily by the decline in the
Company’s stock price that quarter as compared to a $2.3 million
non-cash loss in fair value of common stock warrants liability and
a $2.9 million non-cash loss in earnout liability in the third
quarter of 2024, reflective of the Company’s stock price increase
during the quarter.
Adjusted EBITDA loss was $12.0 million for the third quarter
compared to $9.5 million in the prior-year period. The $2.5 million
increase is primarily due to higher general and administrative
expenses.
Shares outstanding as of September 30, 2024 were 145.9 million
including 3.0 million shares that are subject to forfeiture based
on share price performance targets previously disclosed in our
filings.
For a reconciliation of non-GAAP figures to the applicable GAAP
figures, please see the table captioned ‘Reconciliation of GAAP and
Non-GAAP Results' set forth at the end of this press release.
Full Year 2024 Outlook
Based on current business conditions, business trends and other
factors, the Company is maintaining the following guidance for 2024
revenue and net cash burn:
- Revenue of $25 million to $35 million.
- Net cash burn between $55 million and $65 million.
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
November 14, 2024, 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 quarterly
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 +1-844-481-2515 (domestic) or +1-412-317-0644
(international). A telephonic replay will be available
approximately three 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 10193212. The
replay will be available until 11:59 p.m. Eastern Time on November
21, 2024.
About Origin Materials, Inc.
Origin is a technology company with a mission to enable the
world’s transition to sustainable materials. Our innovations
include PET caps and closures that bring recycling circularity and
enhanced performance to a ~$65 billion market, specialty materials,
and our patented biomass conversion platform that transforms carbon
into sustainable materials for a wide range of end products. 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, (ii) depreciation and amortization, (iii)
impairment of assets, (iv) investment (income) expenses, net, (v)
interest expenses, (vi) change in fair value of derivatives, (vii)
change in fair value of common stock warrants liability, (viii)
change in fair value of earnout liability, (ix) other expenses
(income), net and (x) income tax expenses.
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 Adjusted EBITDA, please see the table
captioned “Reconciliation of GAAP and Non-GAAP Results” set forth
at the end of this press release.
The Company is unable to reconcile forward-looking net cash burn
information provided in this press release to the increase or
decrease in cash, cash equivalents, and restricted cash, the most
closely comparable U.S. GAAP financial measures, without
unreasonable efforts. Net cash burn is defined as the decrease in
cash, cash equivalents, and restricted cash adjusted for purchases,
sales and gains or losses on marketable securities. The information
necessary to prepare the reconciliations are not available on a
forward-looking basis and cannot be accurately predicted. These
include, among other things, gains or losses on marketable
securities, which are inherently unpredictable. The unavailable
information could have a significant impact on the calculation of
the comparable GAAP financial measure.
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,” “project,”
“potential,” “seem,” “seek,” “target,” “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’s business strategy, anticipated 2024
revenue generation and cash burn, anticipated customer demand,
recycling circularity and performance benefits of the caps and
closures, revenue potential, near-term revenue potential of caps
and closures, including anticipated caps revenue ramp-up to begin
in the first quarter of 2025, the projection that Origin will
achieve positive EBITDA results by the first half of 2026, the
estimated output of Origin’s CapFormer Systems, pace and
anticipated timing of bringing caps and closures manufacturing
systems online, anticipated revenue generated from such systems,
estimated total addressable market, anticipated benefits of and
demand for Origin’s potential products, ability to convert the MOU
and other potential customer interest into revenue, commercial and
operating plans, product development plans and announcements of
such plans, and anticipated growth and projected financial
information. From time to time, the Company discloses approximate
levels of customer demand based on information received from
current and potential customers as to amounts of product they wish
to purchase at a certain price over a certain term in the future.
The Company does not discount such indications of customer demand
by the likelihood of their conversion to actual revenue or the time
until such conversion. Some customers may overstate the amount of
product they wish to purchase and one should not assume that demand
figures disclosed by the Company will necessarily translate into
comparable levels of revenue. The forward-looking statements are
based on various assumptions, whether or not identified in this
press release, and on the current plans, objectives, estimates,
expectations, and intentions of the management of Origin and are
not predictions of actual performance and inherently involve
significant risks and uncertainties. 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. These
forward-looking statements are subject to a number of risks and
uncertainties including, but not limited to, the fact that Origin
may be unable to successfully commercialize its products; the
effects of competition on Origin’s business; the uncertainty of the
projected financial information with respect to Origin; disruptions
and other impacts to Origin’s business. Other factors that could
adversely affect the Company’s operations include those discussed
in Origin’s Quarterly Report on Form 10-Q filed with the U.S.
Securities and Exchange Commission (“SEC”) on November 14, 2024
under the heading “Risk Factors,” and other documents Origin has
filed, or will file, with the SEC. These filings, when available,
are available on the investor relations section of our website at
investors.originmaterials.com and on the SEC’s website at
www.sec.gov. If any of these risks materialize or Origin’s
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks of which Origin does not presently know, or
that Origin currently believes are immaterial, that could also
cause actual results to differ from those contained in the
forward-looking statements. Given these risks and uncertainties,
readers are cautioned not to place undue reliance on such
forward-looking statements. Origin undertakes no obligation to
revise or publicly release the results of any revision to these
forward-looking statements, except as required under applicable
law. These forward-looking statements should not be relied upon as
representing Origin’s 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)
September 30, 2024
(Unaudited)
December 31,
2023
ASSETS
Current assets
Cash and cash equivalents
$
56,396
$
75,502
Marketable securities
56,996
82,761
Accounts receivable and unbilled
receivable, net of allowance for credit losses of $730 and $0,
respectively
17,919
16,128
Other receivables
5,183
3,449
Inventory
990
912
Prepaid expenses and other current
assets
3,909
8,360
Total current assets
141,393
187,112
Property, plant, and equipment, net
222,758
243,118
Operating lease right-of-use asset
3,829
4,468
Intangible assets, net
88
121
Deferred tax assets
860
1,261
Other long-term assets
30,627
25,754
Total assets
$
399,555
$
461,834
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
1,308
$
1,858
Accrued expenses
3,161
7,689
Operating lease liabilities, current
305
367
Notes payable, short-term
3,772
1,730
Other liabilities, current
93
918
Derivative liability
49
300
Total current liabilities
8,688
12,862
Earnout liability
4,184
1,783
Canadian Government Research and
Development Program liability
15,309
7,348
Common stock warrants liability
4,254
1,341
Notes payable, long-term
1,730
3,459
Operating lease liabilities
3,944
4,207
Other liabilities, long-term
2,590
8,327
Total liabilities
40,699
39,327
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding as
of September 30, 2024 and December 31, 2023
—
—
Common stock, $0.0001 par value,
1,000,000,000 shares authorized; 145,886,615 and 145,706,531,
issued and outstanding as of September 30, 2024 and December 31,
2023, respectively (including 3,000,000 and 4,500,000,
respectively, of Sponsor Vesting Shares)
15
15
Additional paid-in capital
390,875
382,854
(Accumulated deficit) retained
earnings
(24,605
)
45,570
Accumulated other comprehensive loss
(7,429
)
(5,932
)
Total stockholders’ equity
358,856
422,507
Total liabilities and stockholders’
equity
$
399,555
$
461,834
ORIGIN MATERIALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In thousands,
except share and per share data)
2024
2023
2024
2023
Revenues:
Products
$
8,202
$
6,358
$
22,057
$
14,229
Services
—
782
3
1,513
Total revenues
8,202
7,140
22,060
15,742
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
8,141
6,340
21,654
14,114
Operating expenses
Research and development
5,127
4,927
15,338
15,398
General and administrative
9,347
7,633
30,611
23,908
Depreciation and amortization
2,822
386
7,946
1,021
Impairment of assets
15,170
—
15,170
—
Total operating expenses
32,466
12,946
69,065
40,327
Loss from operations
(32,405
)
(12,146
)
(68,659
)
(38,699
)
Other income (expenses)
Investment income (expenses), net
1,745
(1,130
)
5,447
4,308
Interest expenses
(86
)
—
(313
)
—
(Loss) gain in fair value of
derivatives
(43
)
126
237
620
(Loss) gain in fair value of common stock
warrants liability
(2,285
)
22,815
(2,913
)
27,438
(Loss) gain in fair value of earnout
liability
(2,941
)
18,757
(2,401
)
39,137
Other (expenses) income, net
(517
)
2,603
(1,170
)
1,655
Total other (expenses) income, net
(4,127
)
43,171
(1,113
)
73,158
(Loss) income before income tax
expenses
(36,532
)
31,025
(69,772
)
34,459
Income tax expenses
(231
)
(94
)
(403
)
(223
)
Net (loss) income
$
(36,763
)
$
30,931
$
(70,175
)
$
34,236
Other comprehensive income (loss)
Unrealized gain on marketable
securities
$
690
$
1,593
$
2,210
$
4,507
Foreign currency translation
adjustment
1,828
(4,176
)
(3,707
)
(784
)
Total other comprehensive income
(loss)
2,518
(2,583
)
(1,497
)
3,723
Total comprehensive (loss) income
$
(34,245
)
$
28,348
$
(71,672
)
$
37,959
Net (loss) income per share, basic
$
(0.26
)
$
0.22
$
(0.49
)
$
0.25
Net (loss) income per share, diluted
$
(0.26
)
$
0.22
$
(0.49
)
$
0.24
Weighted-average common shares
outstanding, basic
143,387,618
139,806,045
142,720,941
139,374,106
Weighted-average common shares
outstanding, diluted
143,387,618
142,703,550
142,720,941
142,872,174
ORIGIN MATERIALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September
30,
(in thousands)
2024
2023
Cash flows from operating
activities
Net (loss) income
$
(70,175
)
$
34,236
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization
7,946
1,055
Provision for credit losses
730
—
Amortization on right-of-use asset
392
458
Stock-based compensation
7,776
7,031
Loss (gain), net on disposal of property,
plant, and equipment
16
—
Loss on reserves
639
—
Impairment of assets
15,170
—
Realized loss (gain) on marketable
securities
359
(1,706
)
Amortization of premium and discount of
marketable securities, net
(172
)
3,701
Change in fair value of derivative
(237
)
(620
)
Change in fair value of common stock
warrants liability
2,913
(27,438
)
Change in fair value of earnout
liability
2,401
(39,137
)
Deferred tax benefit
375
—
Changes in operating assets and
liabilities:
Accounts receivable and other
receivables
(4,256
)
(8,130
)
Inventory
(78
)
(821
)
Prepaid expenses and other current
assets
962
(2,703
)
Other long-term assets
(4,873
)
(17,954
)
Accounts payable
(124
)
2,819
Accrued expenses
(3,082
)
1,707
Operating lease liability
(298
)
(529
)
Deferred income
—
1,374
Other liabilities, current
(1,507
)
2,846
Other liabilities, long-term
—
(2,636
)
Net cash used in operating
activities
(45,123
)
(46,447
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment
(5,117
)
(90,113
)
Purchases of marketable securities
(1,518,398
)
(3,092,218
)
Sales of marketable securities
1,456,532
3,057,700
Maturities of marketable securities
86,441
129,081
Net cash provided by investing
activities
19,458
4,450
Cash flows from financing
activities
Payment of notes payable
(4,793
)
—
Proceeds from Canadian Government Research
and Development Program
8,097
—
Proceeds from exercise of stock
options
245
145
Net cash provided by financing
activities
3,549
145
Effects of foreign exchange rate changes
on the balance of cash and cash equivalents, and restricted cash
held in foreign currencies
3,010
(390
)
Net decrease in cash and cash
equivalents, and restricted cash
(19,106
)
(42,242
)
Cash and cash equivalents, and
restricted cash, beginning of the period
75,502
108,348
Cash and cash equivalents, and
restricted cash, end of the period
$
56,396
$
66,106
Origin Materials, Inc.
Reconciliation of GAAP and
Non-GAAP Results
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)
2024
2023
2024
2023
Net (loss) income
$
(36,763
)
$
30,931
$
(70,175
)
$
34,236
Stock-based compensation
2,459
2,380
7,776
7,031
Depreciation and amortization
2,822
386
7,946
1,021
Impairment of assets
15,170
—
15,170
—
Investment (income) expenses, net
(1,745
)
1,130
(5,447
)
(4,308
)
Interest expenses
86
—
313
—
Loss (gain) in fair value of
derivatives
43
(126
)
(237
)
(620
)
Loss (gain) in fair value of common stock
warrants liability
2,285
(22,815
)
2,913
(27,438
)
Loss (gain) in fair value of earnout
liability
2,941
(18,757
)
2,401
(39,137
)
Other expenses (income), net
517
(2,603
)
1,170
(1,655
)
Income tax expenses
231
—
403
—
Adjusted EBITDA
$
(11,954
)
$
(9,474
)
$
(37,767
)
$
(30,870
)
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