-- Cites Improved Visibility into Near-Term
Demand --
-- Reiterates Full Year 2023 Guidance on
In-Line Quarterly Results --
Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the
“Company”), a leading next generation bioplastics company focused
on the development and production of highly engineered
biodegradable materials, announced today financial results for its
first quarter, ended March 31, 2023.
Stephen E. Croskrey, Chairman and Chief Executive Officer of
Danimer, commented, “We completed the first quarter in line with
our expectations. Since the close of the quarter, we have gained
increased visibility into a small number of new commercial
opportunities that, if captured in full, would require the lion’s
share of our remaining capacity. This includes resins for straws
and cutlery, two important categories. Additionally, we were
pleased to launch, in conjunction with TotalEnergies Corbion, a new
PHA-based resin for single-use coffee pods, an additional
significant opportunity. We have growing confidence in our
strategic and competitive position and continue to expect to finish
2023 on a strong pace.”
Danimer commented that it continues to await notification
regarding next steps and timing following the submission of its
Part II Application to the U.S. Department of Energy (DOE) under
the Title XVII Loan Guarantee Program intended to fund the
completion of its greenfield manufacturing facility in Bainbridge,
Georgia.
Mr. Croskrey concluded, “The harm plastic waste does to our
environment is a large, complex and global issue that Danimer, its
partners, and its customers are working to help solve. The volume
of the calls for ecologically responsible alternatives to
single-use plastics, whether from consumers, from advocacy groups,
or from regulatory mandates, continues to increase. We are proud to
be working closely with some of the world’s leading brands to
demonstrate that we have a better, more responsible way
forward.”
First Quarter 2023 Financial Highlights:
- Revenues were $11.9 million in the first quarter of 2023
compared to $14.7 million in the first quarter of 2022. A $2.1
million reduction in product revenue was primarily the result of an
unfavorable but now concluded shift in the timing of PHA-based
resin sales to a large customer, partially offset by modest growth
in sales of PLA-based resin. Services revenue of $0.8 million
compared to $1.5 million in the year-ago quarter reflected the
completion of long-term funded R&D projects over the course of
the year with customers now moving to commercialize those
investments.
- Gross profit was $(6.3) million compared to $(1.3) million in
the first quarter of 2022. Adjusted gross profit was $(1.0) million
compared to $2.0 million in the first quarter of 2022. The
reduction in adjusted gross profit, which now includes rent
expense, primarily reflects the impact of the timing shift of
revenues as well as increased fixed production costs associated
with greater capacity.
- Net loss for the first quarter was $(36.6) million compared
with $(26.4) million in the prior year period.
- Adjusted EBITDA in the first quarter of 2023 improved to $(8.9)
million as compared to $(10.6) million in the first quarter of 2022
due to successful expense controls across many areas of the
business.
Capital Structure
At March 31, 2023, the Company reported total debt outstanding
of $380.2 million, which included approximately $45.7 million of
low-interest New Markets Tax Credit loans that the Company expects
will be forgiven beginning in 2026 and debt associated with the
senior secured term loan closed on March 17, 2023. The Company
noted that effective liquidity at the end of the first quarter was
$114.0 million, including $12.0 million of restricted cash that has
since become unrestricted. The Company remains comfortable with its
liquidity position and that it has the strategic and operational
flexibility required to execute its growth strategy.
Outlook
The Company noted that its first quarter results were consistent
with its prior expectations and reiterated the following
guidance:
- Full-year Adjusted EBITDA in the range of $(23) million to
$(31) million. The improvement in Adjusted EBITDA compared to the
$(45.0) million reported for 2022 is expected to result primarily
from revenue growth in PHA-based resins and the related benefits of
scale captured by the Company’s Kentucky manufacturing operations.
In addition, the Company’s initiatives to improve efficiency and
reduce costs are expected to have a favorable full-year impact on
both R&D and SG&A expenses.
- Full-year capital expenditures are anticipated to be in the
range of $26 million to $31 million, primarily to support existing
commitments related to the Bainbridge greenfield facility. The
Company noted that it would expect to modify this spending estimate
in the event financing is achieved later this year, particularly
the U.S. Department of Energy (DoE) Title XVII Loan Guarantee
Program. Other capital projects within the year include projected
facility maintenance, completion of our Rinnovo® demonstration
plant and spending related to information systems initiatives.
Webcast, Conference Call and 10-Q Filing
The Company will host a webcast and conference call today, May
10, 2023 at 5:00 p.m. Eastern time to review first quarter 2023
results, discuss recent events and conduct a question-and-answer
session. The live webcast of the conference call can be accessed on
the Investor Relations section of the Company’s website at
https://ir.danimerscientific.com. For those unable to access
the webcast, the conference call will be accessible domestically or
internationally, by dialing 1-888-886-7786 or 1-416-764-8658,
respectively. Upon dialing in, please request to join the Danimer
Scientific First Quarter 2023 Earnings Conference Call. The
archived webcast will be available for replay on the Company's
website after the call.
About Danimer Scientific
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 holds more than
480 granted patents and pending patent applications in more than 20
countries for a range of manufacturing processes and biopolymer
formulations. For more information, visit
https://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 include, without limitation, statements
regarding our expectations for full year 2023 capital expenditures,
Adjusted EBITDA and cash balances. 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 on our business, operations and
financial results from the ongoing conflict in Ukraine; 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 Report 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
March 31,
December 31,
(in thousands, except share and per share
data)
2023
2022
Assets:
Current assets:
Cash and cash equivalents
$
101,991
$
62,792
Restricted cash, current
17,613
-
Accounts receivable, net
16,086
17,989
Other receivables, net
1,561
1,635
Inventories, net
31,745
32,743
Prepaid expenses and other current
assets
4,186
5,225
Contract assets, net
5,312
4,687
Total current assets
178,494
125,071
Property, plant and equipment, net
455,132
453,949
Intangible assets, net
80,115
80,941
Right-of-use assets
19,147
19,028
Leverage loans receivable
31,446
31,446
Restricted cash
14,071
1,609
Other assets
226
226
Total assets
$
778,631
$
712,270
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable
$
6,218
$
14,977
Accrued liabilities
7,147
5,001
Deferred revenue
1,313
-
Current portion of lease liability
3,337
3,337
Current portion of long-term debt, net
6,719
1,972
Total current liabilities
24,734
25,287
Private warrants liability
1,328
212
Long-term lease liability, net
22,036
22,114
Long-term debt, net
373,484
286,398
Deferred income taxes
107
200
Other long-term liabilities
1,326
447
Total liabilities
$
423,015
$
334,658
Stockholders' equity:
Common stock, $0.0001 par value;
200,000,000 shares authorized: 101,938,376 and 101,804,454 shares
issued and outstanding at March 31, 2023 and December 31, 2022,
respectively
$
10
$
10
Additional paid-in capital
690,893
676,250
Accumulated deficit
(335,287
)
(298,648
)
Total stockholders’ equity
355,616
377,612
Total liabilities and stockholders’
equity
$
778,631
$
712,270
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations
Three Months Ended March
31,
(in thousands, except share and per share
data)
2023
2022
Revenue:
Products
$
11,096
$
13,216
Services
830
1,527
Total revenue
11,926
14,743
Costs and expenses:
Cost of revenue
18,209
16,065
Selling, general and administrative
18,699
22,236
Research and development
7,075
7,131
Loss on sale of assets
170
-
Total costs and expenses
44,153
45,432
Loss from operations
(32,227
)
(30,689
)
Nonoperating income (expense)
Gain (loss) on remeasurement of private
warrants
(1,116
)
4,995
Interest, net
(3,386
)
(992
)
Other, net
-
9
Total nonoperating income (expense):
(4,502
)
4,012
Loss before income taxes
(36,729
)
(26,677
)
Income taxes
90
291
Net loss
$
(36,639
)
$
(26,386
)
Basic and diluted net loss per share
$
(0.36
)
$
(0.26
)
Weighted average number of shares used to
compute:
Basic and diluted net loss per share
101,896,326
100,728,366
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows
Three Months Ended
March 31,
(in thousands)
2023
2022
Cash flows from operating activities:
Net loss
$
(36,639
)
$
(26,386
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock-based compensation
14,065
13,750
Depreciation and amortization
7,579
4,259
(Gain) loss on remeasurement of private
warrants
1,116
(4,995
)
Amortization of debt issuance costs
828
572
Accounts receivable reserves
(519
)
595
Inventory reserves
244
1,056
Deferred income taxes
(92
)
(291
)
Amortization of right-of-use assets and
lease liability
(196
)
(77
)
Loss on disposal of assets
170
-
Other
-
17
Changes in operating assets and
liabilities
Accounts receivable
2,422
(2,272
)
Other receivables
74
2,458
Inventories, net
753
(4,713
)
Prepaid expenses and other current
assets
1,039
678
Contract assets
(625
)
(729
)
Other assets
-
(4
)
Accounts payable
(1,256
)
725
Accrued liabilities
2,981
(1,923
)
Other long-term liabilities
878
(111
)
Unearned revenue and contract
liabilities
1,313
(214
)
Net cash used in operating activities
(5,865
)
(17,605
)
Cash flows from investing activities:
Purchases of property, plant and equipment
and intangible assets
(16,400
)
(58,902
)
Acquisition of Novomer, net of cash
acquired
-
(14
)
Net cash used in investing activities
(16,400
)
(58,916
)
Cash flows from financing activities:
Proceeds from long-term debt
130,000
-
Cash paid for debt issuance costs
(33,035
)
(196
)
Principal payments on long-term debt
(5,494
)
(44
)
Proceeds from employee stock purchase
plan
129
209
Proceeds from exercise of stock
options
-
164
Employee taxes related to stock-based
compensation
(61
)
-
Cost related to warrants
-
(55
)
Net cash provided by financing
activities
91,539
78
Net increase (decrease) in cash and cash
equivalents and restricted cash
69,274
(76,443
)
Cash and cash equivalents and restricted
cash-beginning of period
64,401
286,968
Cash and cash equivalents and restricted
cash-end of period
$
133,675
$
210,525
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures
“Adjusted EBITDA”, “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 and
impairment of goodwill; (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 gross profit is defined as gross profit plus
depreciation, stock-based compensation and nonrecurring items.
Adjusted gross margin is defined as adjusted gross profit
divided by total revenue.
Danimer believes that each of Adjusted EBITDA, 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 offer 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 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 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 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 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
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. Because
GAAP financial measures on a forward-looking basis are not
accessible, and reconciling information is not available without
unreasonable effort, reconciliations to GAAP financial measures are
not provided for forward-looking non-GAAP measures. For the same
reasons, the Company is unable to address the probable significance
of the unavailable information, which could be material to future
results.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDA to Net (Loss) Income (Unaudited)
Three Months Ended March
31,
2023
2022
(in thousands)
Net loss
$
(36,639
)
$
(26,386
)
Stock-based compensation
14,943
13,700
Depreciation and amortization
7,579
4,259
Interest (income) expense, net
3,386
992
(Gain) loss on remeasurement of private
warrants
1,116
(4,995
)
Loss on extinguishment of royalty
agreement
549
-
(Gain) loss on sale of assets
170
-
Nonrecurring repair and maintenance
costs
77
-
Litigation and other legal related
57
760
Income taxes
(90
)
(291
)
Inventory reserve
-
1,016
Public company transition costs
-
350
Other, net
-
(9
)
Adjusted EBITDA
$
(8,852
)
$
(10,604
)
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended March
31,
2023
2022
(in thousands)
Total revenue
$
11,926
$
14,743
Cost of revenue
18,209
16,065
Gross profit
(6,283
)
(1,322
)
Depreciation
5,213
2,227
Nonrecurring repair and maintenance
costs
77
-
Stock-based compensation
2
29
Inventory reserve
-
1,016
Adjusted gross profit
$
(991
)
$
1,950
Adjusted gross margin
-8.3
%
13.2
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510005822/en/
Investors James Palczynski Phone: 415-876-8429
ir@danimer.com
Media Anthony Priwer apriwer@daltonagency.com Phone:
615-515-4891
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