UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code: |
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(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:
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Trading |
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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. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2022, Danimer Scientific, Inc. (“Danimer”) issued a press release announcing its financial results for the third quarter ended September 30, 2022. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The press release contains the following non-GAAP measures: “Adjusted EBITDA”, “Adjusted EBITDAR” “Adjusted Gross Profit”, and “Adjusted Gross Margin”. Danimer believes that each of Adjusted EBITDA, Adjusted EBITDAR, Adjusted Gross Profit, and Adjusted Gross Margin are useful to investors in evaluating Danimer’s performance because each measure considers the performance of Danimer’s operations, excluding decisions made with respect to capital investment, financing and other non-recurring charges. 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. The non-GAAP measures are reconciled to comparable GAAP financial measures within the press release. Danimer cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, Danimer’s reported GAAP results. Additionally, Danimer notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.
The information in this Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing of Danimer, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.
Item 7.01 Regulation FD Disclosure
Attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference is the form of presentation to be used by Danimer in presentations for certain of its stockholders and other persons. The information in this Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing of Danimer, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.
Item 9.01 Financial Statements and Exhibits.
d) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 thereunto duly authorized.
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Danimer Scientific, Inc |
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Date: |
November 8, 2022 |
By: |
/s/ Michael A. Hajost |
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Michael A. Hajost |
Danimer Scientific Announces Third Quarter 2022 Results
BAINBRIDGE, GA – November 8, 2022 – 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 financial results for its third quarter, ended September 30, 2022.
Stephen E. Croskrey, Chairman and Chief Executive Officer of Danimer, commented, “Our third quarter results were in-line with our expectations, with PHA-based product sales up 26% year-over-year, representing 51% of total revenue and 59% of products revenue. I am proud of our team’s commitment to executing our strategic priorities as we advance our multi-faceted growth strategy to transform the plastics market. We are deepening relationships with existing customers and engaging with a growing number of new potential customers to capture the increasingly strong interest for our biodegradable solutions. We remain focused on accelerating our growth trajectory as we prepare for several significant expected customer product launches in the months ahead. Based on expected customer demand momentum, we believe our existing operations can provide us with sufficient cash flow to run the business effectively as volumes grow. In our view, customer commitments to sustainability and regulatory tailwinds overshadow inflation and supply chain constraints and continue to support a robust outlook for Danimer and our planned capacity additions in coming years.”
Croskrey continued, “We also recorded a non-cash goodwill impairment charge in the third quarter because the book value of our equity significantly exceeded our market capitalization. Our goodwill originated from the Novomer acquisition in August 2021, but I want to note that the impairment determination considers the entire Danimer business and is a required accounting adjustment that does not reflect a change in our view of the value and future of Danimer Catalytic Technologies.”
Third Quarter 2022 Financial Highlights
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(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 this release. |
Capital Structure and Cash Balance
In July 2022, Danimer was invited to submit a Part II Application for a loan guarantee under the U.S. Department of Energy (DOE) Title XVII Loan Guarantee Program. If successful, the loan guarantee from the DOE would help fund the Company’s capacity expansion, as further detailed in the Company’s press release issued on July 5, 2022.
At September 30, 2022, the Company reported total debt outstanding of $287.5 million, net of $10.4 million of unamortized debt issuance costs, which included approximately $45.7 million dollars of low-interest New Markets Tax Credit loans that the Company expects will be forgiven between 2026 and 2029. At September 30, 2022, cash and cash equivalents were $99.1 million.
Outlook
Danimer remains focused on making disciplined investments in its operational platform and infrastructure that will allow it to capture significant opportunities for its products in coming years.
Based on results through September 2022 and increased visibility through year end, the Company is narrowing its Adjusted EBITDA outlook for the full year 2022, which it now expects to be in the range of $(45) million to $(40) million, compared to $(22.6) million in 2021. The Company now expects full year capital expenditures to be in the range of $165 million to $170 million, inclusive of capitalized interest and internal labor and overhead, with a year-end cash balance to be in the range of $60 million to $65 million.
Looking beyond 2022, the Company expects its PHA-based revenues to drive a significant increase in the Company’s overall profitability. The Company remains confident in its ability to execute against its objectives with a prudent focus on profitability and cash management.
Webcast, Conference Call and 10-Q Filing
The Company will host a webcast and conference call on Tuesday, November 8, 2022, at 5:00 p.m. Eastern time to review third quarter of 2022 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 1-855-327-6837 or 1-631-891-4304, respectively. Upon dialing in, please request to join the Danimer Scientific Third Quarter 2022 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 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 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 2022 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.
Contacts:
Investors
ir@danimer.com
Phone: 229-220-1103
Media
Anthony Priwer
apriwer@daltonagency.com
Phone: 615-515-4892
Danimer Scientific, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
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September 30, |
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December 31, |
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(in thousands, except share and per share data) |
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2022 |
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2021 |
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Assets: |
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Current assets: |
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Cash and cash equivalents |
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$ |
99,127 |
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$ |
286,487 |
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Accounts receivable, net |
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17,426 |
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17,149 |
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Other receivables, net |
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1,377 |
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3,836 |
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Inventories, net |
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35,201 |
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24,573 |
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Prepaid expenses and other current assets |
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5,080 |
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4,737 |
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Contract assets, net |
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4,379 |
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3,576 |
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Total current assets |
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162,590 |
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340,358 |
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Property, plant and equipment, net |
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436,875 |
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316,181 |
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Intangible assets, net |
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81,491 |
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84,659 |
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Goodwill |
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- |
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62,649 |
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Right-of-use assets |
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19,083 |
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19,240 |
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Leverage loans receivable |
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31,446 |
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13,408 |
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Restricted cash |
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1,663 |
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481 |
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Loan fees |
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- |
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1,397 |
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Other assets |
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227 |
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224 |
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Total assets |
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$ |
733,375 |
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$ |
838,597 |
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Liabilities and Stockholders' Equity: |
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Current liabilities: |
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Accounts payable |
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$ |
4,324 |
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$ |
20,790 |
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Accrued liabilities |
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20,407 |
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18,777 |
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Unearned revenue and contract liabilities |
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2,000 |
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214 |
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Current portion of lease liability |
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3,337 |
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3,337 |
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Current portion of long-term debt, net |
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1,501 |
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357 |
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Total current liabilities |
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31,569 |
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43,475 |
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Private warrants liability |
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964 |
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9,578 |
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Long-term lease liability, net |
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22,265 |
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22,693 |
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Long-term debt, net |
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285,969 |
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260,934 |
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Deferred income taxes |
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246 |
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1,014 |
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Other long-term liabilities |
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641 |
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638 |
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Total liabilities |
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$ |
341,654 |
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$ |
338,332 |
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Stockholders' equity: |
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Common stock, $0.0001 par value; 200,000,000 shares authorized: 101,388,673 and 100,687,820 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
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$ |
10 |
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$ |
10 |
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Additional paid-in capital |
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662,308 |
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619,145 |
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Accumulated deficit |
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(270,597 |
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(118,890 |
) |
Total stockholders’ equity |
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391,721 |
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500,265 |
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Total liabilities and stockholders’ equity |
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$ |
733,375 |
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$ |
838,597 |
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Danimer Scientific, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(in thousands, except share and per share data) |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue: |
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Products |
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$ |
9,099 |
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$ |
12,397 |
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$ |
33,890 |
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$ |
34,715 |
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Services |
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1,349 |
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972 |
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4,004 |
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6,306 |
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Total revenue |
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10,448 |
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13,369 |
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37,894 |
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41,021 |
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Costs and expenses: |
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Cost of revenue |
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14,503 |
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13,601 |
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45,606 |
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37,786 |
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Selling, general and administrative |
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19,413 |
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26,592 |
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62,042 |
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55,791 |
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Research and development |
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7,947 |
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5,010 |
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24,469 |
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|
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11,604 |
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Loss on sale of assets |
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- |
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- |
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1 |
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|
33 |
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Impairment of long-lived assets |
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63,491 |
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- |
|
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|
63,491 |
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|
|
- |
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Total costs and expenses |
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105,354 |
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45,203 |
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|
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195,609 |
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|
|
105,214 |
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Loss from operations |
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|
(94,906 |
) |
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|
(31,834 |
) |
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|
(157,715 |
) |
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(64,193 |
) |
Nonoperating (expense) income: |
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Gain on remeasurement of private warrants |
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1,607 |
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28,392 |
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8,614 |
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6,435 |
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Interest, net |
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(553 |
) |
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(164 |
) |
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(2,197 |
) |
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|
(516 |
) |
Gain on forgiveness of debt |
|
|
- |
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- |
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|
|
- |
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1,776 |
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Loss on loan extinguishment |
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(1,500 |
) |
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- |
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(1,500 |
) |
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(2,604 |
) |
Other, net |
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|
240 |
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8 |
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|
324 |
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18 |
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Total nonoperating (expense) income: |
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(206 |
) |
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28,236 |
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5,241 |
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|
5,109 |
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Loss before income taxes |
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(95,112 |
) |
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|
(3,598 |
) |
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|
(152,474 |
) |
|
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(59,084 |
) |
Income taxes |
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|
236 |
|
|
|
11,423 |
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|
|
767 |
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|
|
11,423 |
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Net (loss) income |
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$ |
(94,876 |
) |
|
$ |
7,825 |
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|
$ |
(151,707 |
) |
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$ |
(47,661 |
) |
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Basic net (loss) income per share |
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$ |
(0.94 |
) |
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$ |
0.08 |
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$ |
(1.50 |
) |
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$ |
(0.53 |
) |
Diluted net (loss) income per share |
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$ |
(0.94 |
) |
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$ |
0.08 |
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$ |
(1.50 |
) |
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$ |
(0.53 |
) |
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Weighted average number of shares used to compute: |
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Basic net (loss) income per share |
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101,199,195 |
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98,160,626 |
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|
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100,993,068 |
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|
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90,614,910 |
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Effect of dilutive instruments |
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- |
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5,360,126 |
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|
|
- |
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|
- |
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Diluted net (loss) income per share |
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101,199,195 |
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|
|
103,520,752 |
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|
|
100,993,068 |
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|
|
90,614,910 |
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Danimer Scientific, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
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Nine Months Ended |
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September 30, |
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(in thousands) |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net loss |
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$ |
(151,707 |
) |
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$ |
(47,661 |
) |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Gain on remeasurement of private warrants |
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(8,614 |
) |
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(6,435 |
) |
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Stock-based compensation |
|
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42,398 |
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|
|
35,093 |
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Depreciation and amortization |
|
|
13,172 |
|
|
|
7,489 |
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Inventory reserves |
|
|
609 |
|
|
|
- |
|
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Deferred income taxes |
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|
(767 |
) |
|
|
(11,423 |
) |
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Amortization of debt issuance costs and debt discounts |
|
|
1,601 |
|
|
|
337 |
|
|
Gain on forgiveness of debt |
|
|
- |
|
|
|
(1,776 |
) |
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Amortization of right-of-use assets and lease liability |
|
|
(270 |
) |
|
|
(942 |
) |
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Contract asset reserve |
|
|
1,216 |
|
|
|
- |
|
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Loss on extinguishment of debt |
|
|
1,500 |
|
|
|
1,900 |
|
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Impairment of long-lived assets |
|
|
63,491 |
|
|
|
- |
|
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Other |
|
|
1,249 |
|
|
|
186 |
|
|
Changes in operating assets and liabilities, net of effects of acquisition: |
|
|
|
|
|
|
|
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Accounts receivable, net |
|
|
(1,747 |
) |
|
|
(6,331 |
) |
|
Other receivables |
|
|
2,724 |
|
|
|
(3 |
) |
|
Inventories, net |
|
|
(14,271 |
) |
|
|
(9,471 |
) |
|
Prepaid expenses and other current assets |
|
|
1,749 |
|
|
|
(1,194 |
) |
|
Contract assets |
|
|
(2,019 |
) |
|
|
(1,578 |
) |
|
Other assets |
|
|
(5 |
) |
|
|
40 |
|
|
Accounts payable |
|
|
(4,642 |
) |
|
|
887 |
|
|
Accrued and other long-term liabilities |
|
|
(5,035 |
) |
|
|
(4,338 |
) |
|
Unearned revenue and contract liabilities |
|
|
1,786 |
|
|
|
(2,221 |
) |
|
Net cash used in operating activities |
|
|
(57,582 |
) |
|
|
(47,441 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(133,632 |
) |
|
|
(96,798 |
) |
|
Investment in leverage loans receivable related to NMTC financing |
|
|
(18,037 |
) |
|
|
- |
|
|
Acquisition of Novomer, net of cash acquired |
|
|
(14 |
) |
|
|
(151,179 |
) |
|
Proceeds from sales of property, plant and equipment |
|
|
55 |
|
|
|
340 |
|
|
Net cash used in investing activities |
|
|
(151,628 |
) |
|
|
(247,637 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
||
Proceeds from exercise of warrants, net of issuance costs |
|
|
- |
|
|
|
138,196 |
|
|
Proceeds from long-term debt |
|
|
24,700 |
|
|
|
169 |
|
|
Cash paid for debt issuance costs |
|
|
(1,547 |
) |
|
|
(1,691 |
) |
|
Proceeds from exercise of stock options |
|
|
215 |
|
|
|
2,676 |
|
|
Proceeds from employee stock purchase plan |
|
|
526 |
|
|
|
106 |
|
|
Principal payments on long-term debt |
|
|
(886 |
) |
|
|
(27,086 |
) |
|
Cost related to warrants |
|
|
(55 |
) |
|
|
- |
|
|
Proceeds from issuance of common stock, net of issuance costs |
|
|
79 |
|
|
|
(892 |
) |
|
Net cash provided by financing activities |
|
|
23,032 |
|
|
|
111,478 |
|
|
Net decrease in cash and cash equivalents and restricted cash |
|
|
(186,178 |
) |
|
|
(183,600 |
) |
|
Cash and cash equivalents and restricted cash-beginning of period |
|
|
286,968 |
|
|
|
379,897 |
|
|
Cash and cash equivalents and restricted cash-end of period |
|
$ |
100,790 |
|
|
$ |
196,297 |
|
|
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 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 EBITDAR is defined as Adjusted EBITDA plus rent expense.
Adjusted gross profit is defined as gross profit plus depreciation, PLA additive inventory reserve, 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 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 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. 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 EBITDAR and Adjusted EBITDA to Net (Loss) Income (Unaudited)
|
|
Three Months Ended September 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(94,876 |
) |
|
$ |
7,825 |
|
Income taxes |
|
|
(236 |
) |
|
|
(11,423 |
) |
Interest expense, net |
|
|
553 |
|
|
|
164 |
|
Depreciation and amortization |
|
|
4,585 |
|
|
|
3,179 |
|
Gain on remeasurement of private warrants |
|
|
(1,607 |
) |
|
|
(28,392 |
) |
Stock-based compensation |
|
|
14,305 |
|
|
|
15,157 |
|
Impairment of goodwill |
|
|
62,663 |
|
|
|
- |
|
Litigation and other legal related |
|
|
375 |
|
|
|
235 |
|
Transaction related |
|
|
- |
|
|
|
3,051 |
|
Public company transition costs |
|
|
35 |
|
|
|
2,859 |
|
Loss on loan extinguishment |
|
|
1,500 |
|
|
|
- |
|
Other, net |
|
|
(240 |
) |
|
|
(8 |
) |
Adjusted EBITDA |
|
$ |
(12,943 |
) |
|
$ |
(7,353 |
) |
Rent |
|
|
875 |
|
|
|
781 |
|
Adjusted EBITDAR |
|
$ |
(12,068 |
) |
|
$ |
(6,572 |
) |
Reconciliation of Adjusted Gross Profit to Gross Profit (Unaudited)
|
|
Three Months Ended September 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Total revenue |
|
$ |
10,448 |
|
|
$ |
13,369 |
|
Cost of revenue |
|
|
14,503 |
|
|
|
13,601 |
|
Gross profit |
|
|
(4,055 |
) |
|
|
(232 |
) |
Depreciation |
|
|
2,571 |
|
|
|
2,110 |
|
Rent |
|
|
626 |
|
|
|
723 |
|
Stock-based compensation |
|
|
22 |
|
|
|
28 |
|
Adjusted gross profit |
|
$ |
(836 |
) |
|
$ |
2,629 |
|
|
|
|
|
|
|
|
||
Adjusted gross margin |
|
|
-8.0 |
% |
|
|
19.7 |
% |
Third Quarter 2022 Earnings Presentation November 8, 2022
Disclaimer This presentation (“Presentation”) is for informational purposes only. This Presentation shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful. No representations or warranties, express or implied, are given in, or in respect of, this Presentation. To the fullest extent permitted by law in no circumstances will Danimer Scientific, Inc. (the “Company”) or any of its subsidiaries, stockholders, affiliates, representatives, directors, officers, employees, advisers, or agents be responsible or liable for a direct, indirect, or consequential loss or loss of profit arising from the use of this Presentation, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. Industry and market data used in this Presentation have been obtained from third-party industry publications and sources as well as from research reports prepared for other purposes. The Company has not independently verified the data obtained from these sources and cannot assure you of the data’s accuracy or completeness. This data is subject to change. In addition, this Presentation does not purport to be all-inclusive or to contain all of the information that may be required to make a full analysis of investigations as an investor may deem necessary. FORWARD-LOOKING STATEMENTS Please note that in this Presentation, 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 2022 capital expenditures and Adjusted EBITDA. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. The Company cautions 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 Presentation include, but are not limited to, the overall level of consumer demand on its 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 its 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 its 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, its information systems; the ability of its 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; its ability to properly maintain, protect, repair or upgrade its information technology systems or information security systems, or problems with its 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; its 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 Presentation are based upon information available to the Company as of the date of this Presentation and speak only as of the date hereof. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this presentation. USE OF PROJECTIONS This Presentation contains projected financial information with respect to the Company. Such projected financial information constitutes forward-looking information and is for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such financial information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties. See “Forward-Looking Statements” above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this Presentation, and the inclusion of such information in this Presentation should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. FINANCIAL INFORMATION; NON-GAAP FINANCIAL MEASURES Some of the financial information and data contained in this Presentation, such as Adjusted EBITDA, Adjusted EBITDAR and Adjusted Gross Profit has not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. A reconciliation of these non-GAAP financial measures to the closest GAAP measure is included in the Appendix to the Presentation. You should review the Company’s audited financial statements prepared in accordance with GAAP, which are included in its Annual Report on Form 10-K filed with the SEC. Forward-looking non-GAAP financial measures are presented without reconciliations to GAAP measures because the GAAP financial measures are not accessible on a forward-looking basis, and reconciling information is not available without unreasonable effort due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results. TRADEMARKS This Presentation contained trademarks, service marks, trade names, and copyrights of, the Company, and other companies, which are the property of their respective owners. The information contained herein is as of November 8, 2022, and does not reflect any subsequent events.
Danimer’s Strategic Priorities Expand Capacity to Achieve Scale 1 2 3 4 5 6 Lead with Innovation to Address a Broad Range of Customer Needs Grow Customer Partnerships and Product Volume Commitments Secure Cost-Effective Inputs Attain Favorable Unit Economics to Enhance Margins Enhance Team Capabilities to Support Growth Creating highly profitable business to supply growing unmet need for biodegradable polymers, meeting customer standards while addressing the issue of plastic waste Increase internal production capacity Kentucky started Phase II commissioning in June 2022 Fermentation demonstrating better than expected yield Increase third-party manufacturing and license agreements Leverage our core competency of formulation and application development Execute R&D (development agreements) with customers Technology licensing (Kemira) Continue negotiating development and supply agreements with global blue-chip customers that secure future demand Continue to influence global regulatory and legislative initiatives Canola oil fixed price contracts Continue to explore alternative feedstocks Developing in house production capabilities of key raw materials Increase capacity utilization Ramp up production of Rinnovo Reduce utility costs/chemical usage Continuing focus on formulations to optimize value Created world class executive team Added Stephen Martin as Chief Legal Officer and Corporate Secretary Improving efficiencies through ERP
Recent Business Highlights Business Highlights Continued execution of growth strategy to transform the plastics market Raised visibility of bioplastics solutions through participation at White House Summit PHA-based revenues increased by 26% YoY, representing 51% of product revenues Signed a distribution agreement with Formerra, a leader in specialty polymer formulations Increased activity with 5 of the top 10 global quick service restaurants Further strengthened leadership team with appointment of Chief Legal Officer Continued discussions with DOE regarding Part II Application for Loan Guarantee Secured additional forgivable new markets tax credit loan
Customer Partnerships & Business Development Initiatives Distribution agreement with Formerra, formerly Avient, a leader in specialty polymer formulations and distribution across the globe Business Development & Partnerships Two-year partnership to develop innovative home compostable packaging Initial packaging for Skittles is passing all internal tests Commercial Customers & Brands Exclusive license and supply agreement to commercialize PHA based aqueous coatings to be used on paper-based food & beverage applications
Q3 2022 Financial Summary PHA-based revenues increased by 26% YoY, representing 51% of revenue vs 32% in Q3 2021 Adjusted gross profit down YoY due to combination of reduced PLA resin sales and higher fixed costs associated with increased PHA capacity Increase in SG&A and R&D spend includes a full quarter of costs related to Danimer Catalytic Technologies, acquired in August 2021, and increases in staffing to support scale-up Key Messages Financial Summary Note:. Totals may not foot due to rounding.
Financial Outlook 4% PHA PHA Gross Margin Total Gross Margin SG&A & R&D as % of Sales Danimer Catalytic Technologies Profit Contribution Adjusted EBITDA 2022E Adj. EBITDA of ($45) - ($40) Million Expect 2022E Capex of $165 to $170 million(1) and year end cash balance of $60 to $65 million Change vs 2021A Change vs 2022E (1) Includes capitalized interest and internal labor and overhead. Medium Term Path to Profitability
Forward Catalysts Continued focus on driving operational costs down as we scale production Large and growing TAM Believed to be the only PHA product offering at commercial scale production Increasing governmental regulations on single-plastic uses Demand from blue chip multinational customers Increase internal production capacity in addition to third-party manufacturing and license agreements Demand from existing customers expected to grow faster than production capacity Opportunity for rapid expansion to meet market demand Variety of partnership structures could create capital-light model Large Addressable Market Revenue Upside Margin Upside Expand Capacity New Partnerships for Increased Output Danimer is in the early stages of a long-term growth opportunity Global demand vastly increasing for game changing packaging alternatives Customers are some of the largest brand owners in the world with long term commitments to sustainability
Appendix
EBITDA and EBITDAR Reconciliation Note: Totals may not foot due to rounding.
Adjusted Gross Profit Reconciliation Note: Totals may not foot due to rounding.
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