ASPN Aspen Aerogels Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2024

 

 

ASPEN AEROGELS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-36481	04-3559972
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
30 Forbes Road Building B
Northborough, Massachusetts				01532
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (508) 691-1111

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ASPN		The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On February 12, 2024, Aspen Aerogels, Inc. announced its financial results for the fourth quarter and fiscal year 2023, which ended December 31, 2023, and also discussed business developments. A copy of the press release containing such announcement is attached hereto as Exhibit 99.1.

The information set forth in the press release, except for the information set forth under the heading “2024 Financial Outlook” and under the heading “About Aspen Aerogels, Inc.,” together with the forward-looking statement disclaimer at the end of the press release, is incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

The information set forth under the heading “2024 Financial Outlook” and under the heading “About Aspen Aerogels, Inc.,” together with the forward-looking statement disclaimer at the end of the press release, is incorporated by reference into this Item 7.01 of this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release issued by Aspen Aerogels, Inc. on February 12, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

The press release may contain hypertext links to information on our website. The information on our website is not incorporated by reference into this Current Report on Form 8-K and does not constitute a part of this Form 8-K.

The information contained in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Aspen Aerogels, Inc.
Date:	February 12, 2024	By:	/s/ Ricardo C. Rodriguez
		Name:	Ricardo C. Rodriguez
		Title:	Chief Financial Officer and Treasurer

 

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Exhibit 99.1

 

Aspen Aerogels, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results and Recent Business Highlights

 

For Immediate Release

$84.2 million quarterly revenue enabled gross margins of 35% and adjusted EBITDA of $9.1 million

NORTHBOROUGH, Mass., February 12, 2024 — Aspen Aerogels, Inc. (NYSE: ASPN) (“Aspen” or the “Company”), a technology leader in sustainability and electrification solutions, today announced financial results for the fourth quarter and full year 2023, which ended December 31, 2023, and discussed recent business developments.

 

Total revenue for the fourth quarter of 2023 was $84.2 million, compared to $59.6 million in the fourth quarter of 2022. Net loss was $0.5 million, compared to a net loss of $9.6 million in the fourth quarter of 2022. Net loss per share was $0.01, compared to a net loss per share of $0.20 in the fourth quarter of 2022.

 

Total revenue for the full year 2023 was $238.7 million, compared to $180.4 million in 2022. Net loss for the year was $45.8 million, compared to a net loss of $82.7 million in 2022. Net loss per share for the year was $0.66, compared to $2.10 in 2022.

 

Fourth Quarter 2023 Financial Highlights

Full Year 2023 Financial Highlights

($ in millions, except per share amounts)
Metric	Initial 2023 Outlook (2/15/2023)	Full Year 2023 Results	Improvement vs Midpoint
Revenue	$200 to $250	$238.7	$13.7
Adjusted EBITDA	$(60) to $(50)	$(22.9)	$32.1
Net (Loss)	$(102) to $(92)	$(45.8)	$51.2
Net (Loss) Per Share	$(1.46) to $(1.31)	$(0.66)	$0.72
CAPEX	$350 to $400	$175.5	$199.5

 

A reconciliation of net loss to non-GAAP Adjusted EBITDA is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measure is also included below under the heading "Non-GAAP Financial Measures."

 

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Recent Business Developments

“Our team has effectively delivered on the main execution milestones that we targeted for 2023 while building a company that can rapidly scale to profitability. We believe that further diversifying our EV Thermal Barrier customer base will drive our growth beyond 2024 and validate our recent investments in this segment. Energy Industrial demand is strong, and the successful launch of our supplemental supply is enabling the team to deliver the current and growing demand,” commented Don Young, Aspen’s President and CEO. "We believe that our Q4 results show that we are on the right path towards now building a $650 million revenue capacity business that can deliver 35% gross profit and 25% adjusted EBITDA margins.”

 

2024 Financial Outlook

Aspen issues its 2024 full year outlook as follows:

 

The Company's 2024 outlook assumes depreciation and amortization of $30 million, stock-based compensation expense of $14 million, interest expense of $9 million and weighted average shares outstanding of 76.5 million for the full year.

 

A reconciliation of net loss to non-GAAP Adjusted EBITDA for the 2024 financial outlook is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measure is also included below under the heading “Non-GAAP Financial Measures.”

 

Ricardo C. Rodriguez, Chief Financial Officer and Treasurer noted, “We’re increasingly optimistic about our EV customers’ ability to ramp up production in 2024 and see meaningful upside potential to our outlook. In the meantime, we remain focused on gearing the business for sustained profitability that isn’t dependent on outsized revenue growth. We will continue managing our fixed cost base within clear targets, right-timing capital investments, and increasing our focus on cash conversion. The last quarter of 2023 gave us a glimpse of what our asset base can deliver, and our team is energized to drive additional scale in 2024.”

 

Aspen may incur, among other items, additional charges, realize gains or losses, incur financing costs or interest expense, or experience other events in 2024, including those related to the planned capacity expansion, supply chain disruptions, or further cost inflation, that could cause actual results to vary materially from this outlook. See Special Note Regarding Forward-Looking and Cautionary Statements below.

 

Conference Call and Webcast Notification

A conference call with Aspen management to discuss fourth quarter and fiscal 2023 results and recent business developments will be held Tuesday, February 13, 2024 at 8:30 a.m. EST. During the call, management will respond to questions concerning, but not limited to, Aspen's financial performance, business conditions, and financial outlook. Management's discussion and responses could contain information that has not been previously disclosed.

 

Shareholders and other interested parties may call +1 (833) 470-1428 (domestic) or +1 (929) 526-1599 (international) and reference conference ID "939782" to participate in the conference call. In addition, the conference call and an accompanying slide presentation will be available live as a listen-only webcast hosted at the Investors section of Aspen's website, www.aerogel.com.

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Following the live event, an archived version of the webcast will be available on Aspen's website for convenient on-demand replay for at least a year. A copy of this press release is posted in the Investors section on Aspen's website.

 

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America ("GAAP"), Aspen provides an additional financial metric that is not prepared in accordance with GAAP ("non-GAAP"). The non-GAAP financial measure included in this press release is Adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, as a measure of operating performance because the non-GAAP financial measure does not include the impact of items that management does not consider indicative of Aspen's core operating performance. In addition, management uses Adjusted EBITDA (i) for planning purposes, including the preparation of Aspen's annual operating budget, (ii) to allocate resources to enhance the financial performance of its business, and (iii) as a performance measure under its bonus plan.

Management believes that this non-GAAP financial measure reflects Aspen's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in its business, as it excludes expenses and gains not reflective of Aspen's ongoing operating results or that may be infrequent and/or unusual in nature. Management also believes that this non-GAAP financial measures provides useful information to investors in understanding and evaluating Aspen's operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. This non-GAAP measure may not be comparable to similarly titled measures presented by other companies.

The non-GAAP financial measure does not replace the presentation of Aspen's GAAP financial results and should only be used as a supplement to, not as a substitute for, Aspen's financial results presented in accordance with GAAP. In this press release, Aspen has provided a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. Management strongly encourages investors to review Aspen's financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

 

About Aspen Aerogels, Inc.

Aspen is a technology leader in sustainability and electrification solutions. The Company's aerogel technology enables its customers and partners to achieve their own objectives around the global megatrends of resource efficiency, e-mobility and clean energy. Aspen's PyroThin® products enable solutions to thermal runaway challenges within the electric vehicle ("EV") market. Aspen Battery Materials, the Company's carbon aerogel initiative, seeks to increase the performance of lithium-ion battery cells to enable EV manufacturers to extend the driving range and reduce the cost of EVs. The Company's Cryogel® and Pyrogel® products are valued by the world's largest energy infrastructure companies. Aspen's strategy is to partner with world-class industry leaders to leverage its Aerogel Technology Platform® into additional high-value markets. Headquartered in Northborough, Mass., Aspen manufactures its products at its East Providence, R.I. facilities. For more information, please visit www.aerogel.com.

 

Special Note Regarding Forward-Looking and Cautionary Statements

This press release and any related discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements, including statements relating to Aspen’s 2024 financial outlook. These statements are not historical facts but rather are based on Aspen’s current expectations, estimates and projections regarding Aspen's business, operations and other factors relating thereto, including with respect to Aspen’s 2024 financial outlook. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook," “assumes,” “targets,” “opportunity,” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements include statements regarding, among other things, Aspen’s expectations about capacity, revenue, revenue capacity, backlog, costs, expenses, profitability, cash flow, gross profit, gross margin, operating margin, net loss, Adjusted EBITDA, Adjusted EBITDA margin and related decreases, improvements, timing, variability or trends; beliefs about higher than expected demand from the EV market and how it may enable a path to profitability, expectations about improvement in ability to absorb fixed costs and reduction of conversion costs as a percentage of sales and the same leading to target revenue capacity and gross margins and Adjusted EBITDA margins; Aspen’s expectations regarding the planned second manufacturing plant in Georgia (“Plant II”), the extended construction and commissioning timeframe for Plant II, Aspen’s efforts to manage the construction of Plant II to align with our expectations of demand from EV customers, and the use of contract manufacturers to meet demand from Energy Industrial customers; beliefs about the general strength, weakness or health of Aspen’s business; acceleration in demand; beliefs about current or future trends in the energy, energy infrastructure, chemical and refinery, LNG, sustainable building materials, EV thermal barrier, EV battery materials or other markets and the impact of these trends on Aspen’s business; beliefs about the strength, effectiveness, productivity, costs, profitability or other fundamentals of Aspen’s business; beliefs about the role of Aspen’s technology and opportunities in the electric vehicle market; beliefs about Aspen’s ability to provide and deliver products and services to electric vehicle customers; beliefs about content per vehicle, revenue, costs, expenses, profitability, investments or cash flow associated with Aspen’s electric vehicle opportunities, including the EV thermal barrier business; beliefs about revenue growth and profitability; beliefs about the performance of PyroThin® including its ability to mitigate the propagation of thermal runaway in electric vehicles; beliefs about Aspen’s ability to expand the market for PyroThin®, to achieve design wins, to commence shipments of

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production parts, and to become an industry standard solution for thermal runaway management; beliefs about Aspen’s thermal barrier design, prototype, quoting and assembly activities; and expectations about the cost of the capital projects, including Plant II; and beliefs about the Company’s pending application with the DOE seeking a loan

pursuant to the DOE LPO's ATVM. All such forward-looking statements are based on management’s present expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, the following: inability to execute the growth plan, inability to continue construction of Plant II and to do so at a cost consistent with Aspen’s estimates and aligned with Aspen’s expectations of demand from our EV customers; the right of EV thermal barrier customers to cancel contracts with Aspen at any time and without penalty; any costs, expenses, or investments incurred by Aspen in excess of projections used to develop pricing under the contracts with EV thermal barrier customers; Aspen’s inability to create customer or market opportunities for, including PyroThin®; any other battery performance and safety products, battery materials or for other new products developed from Aspen’s aerogel technology; any disruption or inability to achieve expected capacity levels in any of the three existing production lines in East Providence, RI or the Mexico assembly facility or at any contract manufacturer; any failure to enforce any of Aspen’s patents; the general economic conditions and cyclical demands in the markets that Aspen serves; and the other risk factors discussed under the heading “Risk Factors” in Aspen’s Annual Report on Form 10-K for the year ended December 31, 2022 and filed with the Securities and Exchange Commission (“SEC”) on March 16, 2023, as well as any updates to those risk factors filed from time to time in Aspen’s subsequent periodic and current reports filed with the SEC. All statements contained in this press release are made only as of the date of this press release. Aspen does not intend to update this information unless required by law.

 

Investor Relations & Media Contacts:

Neal Baranosky

Phone: (508) 691-1111 x 8

nbaranosky@aerogel.com

Georg Venturatos / Jared Gornay

Gateway Group

ASPN@gateway-grp.com

Phone: (949) 574-3860

 

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ASPEN AEROGELS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)

 

		December 31,				December 31,
		2023				2022
		(In thousands)
Assets
Current assets:
Cash and cash equivalents		$	139,723			$	281,335
Restricted cash			248				1,226
Accounts receivable, net			69,995				57,350
Inventories			39,189				22,538
Prepaid expenses and other current assets			17,176				7,236
Total current assets			266,331				369,685
Property, plant and equipment, net			417,227				259,223
Operating lease right-of-use assets			17,212				11,990
Other long-term assets			2,278				2,518
Total assets		$	703,048			$	643,416
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	51,094			$	54,728
Accrued expenses			22,811				16,003
Deferred revenue			2,316				5,846
Operating lease liabilities			1,874				2,368
Total current liabilities			78,095				78,945
Convertible note - related party			114,992				103,580
Operating lease liabilities long-term			21,906				13,456
Total liabilities			214,993				195,981
Stockholders’ equity:
Total stockholders’ equity			488,055				447,435
Total liabilities and stockholders’ equity		$	703,048			$	643,416

 

 

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ASPEN AEROGELS, INC.

Consolidated Statements of Operations

(Unaudited and in thousands, except share and per share data)

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
		(In thousands, except share and per share data)
Revenue		$	84,219			$	59,611			$	238,718			$	180,364
Cost of revenue			54,601				45,277				181,797				175,388
Gross profit			29,618				14,334				56,921				4,976
Operating expenses:
Research and development			4,075				4,197				16,356				16,930
Sales and marketing			8,782				7,848				33,008				28,792
General and administrative			15,378				11,955				56,760				38,499
Total operating expenses			28,235				24,000				106,124				84,221
Loss from operations			1,383				(9,666	)			(49,203	)			(79,245	)
Other income (expense)
Interest expense, convertible note - related party			(2,904	)			(1,007	)			(5,328	)			(5,110	)
Interest income, net			1,002				1,064				6,534				1,617
Income from Employee Retention Credits			-				-				2,186				-
Total other income (expense), net			(1,902	)			57				3,392				(3,493	)
Net loss		$	(519	)		$	(9,609	)		$	(45,811	)		$	(82,738	)
Net loss per share:
Basic and diluted		$	(0.01	)		$	(0.20	)		$	(0.66	)		$	(2.10	)
Weighted-average common shares outstanding:
Basic and diluted			70,018,243				49,200,713				69,439,034				39,363,114

 

Analysis of Cash Flow

The following table summarizes our cash flows for the periods indicated.

 

		Three Months Ended
		March 31, 2023				June 30, 2023				September 30, 2023				December 31, 2023
		(In thousands)
Net cash provided by (used in):
Operating activities		$	(24,651	)		$	(7,680	)		$	(7,502	)		$	(2,779	)
Investing activities			(49,378	)			(66,012	)			(32,279	)			(27,786	)
Financing activities			(364	)			142				126				75,573
Net (decrease) increase in cash			(74,393	)			(73,550	)			(39,655	)			45,008
Cash, cash equivalents and restricted cash at beginning of period			282,561				208,168				134,618				94,963
Cash, cash equivalents and restricted cash at end of period		$	208,168			$	134,618			$	94,963			$	139,971

 

Square Foot Operating Metric

The following chart sets forth Energy Industrial product shipments in square feet associated with recognized revenue.

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
		(In thousands)
Energy Industrial product shipments in square feet			6,055				8,824				28,392				32,589

Reconciliation of Non-GAAP Financial Measures

The following tables present a reconciliation of the non-GAAP financial measure included in this press release to the most directly comparable GAAP measure:

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Reconciliation of Adjusted EBITDA to Net loss

We define Adjusted EBITDA as net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, which occur from time to time and which we do not believe are indicative of our core operating performance.

For the three and twelve months ended December 31, 2023 and 2022:

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
		(In thousands)
Net loss		$	(519	)		$	(9,609	)		$	(45,811	)		$	(82,738	)
Depreciation and amortization			4,561				2,530				15,318				9,222
Stock-based compensation			3,188				2,672				10,954				9,385
Other (income) expense			1,902				(57	)			(3,392	)			3,493
Adjusted EBITDA		$	9,132			$	(4,464	)		$	(22,931	)		$	(60,638	)

For the 2024 full year financial outlook:

 

		Year Ending
		December 31, 2024
		Baseline
		(In thousands)
Net loss		$	(23,000	)
Depreciation and amortization			30,000
Stock-based compensation			14,000
Other (income) expense			9,000
Adjusted EBITDA		$	30,000

 

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v3.24.0.1

Document And Entity Information	Feb. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 12, 2024
Entity Registrant Name	ASPEN AEROGELS, INC.
Entity Central Index Key	0001145986
Entity Emerging Growth Company	false
Entity File Number	001-36481
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3559972
Entity Address, Address Line One	30 Forbes Road
Entity Address, Address Line Two	Building B
Entity Address, City or Town	Northborough
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01532
City Area Code	(508)
Local Phone Number	691-1111
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	ASPN
Security Exchange Name	NYSE

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