NORTHBOROUGH, Mass.,
April 30, 2020 /PRNewswire/
-- Aspen Aerogels, Inc. (NYSE: ASPN) ("Aspen") today announced financial results for
the first quarter of 2020, which ended March
31, 2020, and discussed recent business developments.
Total revenue for the first quarter was $28.4 million compared to $27.9 million in the first quarter last year.
First quarter net loss was $3.2
million compared to a net loss of $6.0 million in the first quarter of 2019. Net
loss per share for the first quarter was $0.13 compared to $0.25 in the first quarter last year.
Adjusted EBITDA for the first quarter was $0.5 million compared to $(2.6) million in the first quarter of 2019. A
reconciliation of non-GAAP Adjusted EBITDA to net loss 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."
First Quarter Highlights
- Product revenue grew 6% to $28.3
million
- Gross profit grew 61% to $6.0
million
- Gross margin improved by 800 basis points to 21%
- Adjusted EBITDA increased by $3.0
million to $0.5 million
Recent Business Developments
"First quarter product revenue growth of 6% was driven by
continued strong demand in our core U.S. petrochemical and refinery
markets and significant growth in project related revenue from the
PTT LNG Nong Fab receiving terminal project, partially offset by a
decrease in project-based revenue in the subsea and Canadian
markets. The combination of our product revenue growth, our 2019
and 2020 price increases, our bill of material cost reduction
initiatives and strong manufacturing productivity drove an increase
in our first quarter gross margin to 21% from 13% in 2019. As a
result, we experienced solid improvement in both net loss and
Adjusted EBITDA versus 2019," said Don
Young, President and CEO of Aspen.
"We also continued to make solid progress on our strategy to
leverage the unique properties of our aerogel technology platform
within the electric vehicle market. Our work with several
automotive OEMs to explore the role our traditional silica aerogel
materials can play in impeding thermal runaway in lithium-ion
batteries appears increasingly promising. In addition, we achieved
a number of milestones in development efforts with our existing
partners, SKC Co., Ltd. and Evonik Industries AG, to optimize our
proprietary carbon aerogels to improve the performance and cost of
lithium-ion batteries for electric vehicles," continued Mr.
Young.
2020 Financial Outlook
"Despite the ongoing COVID-19 pandemic, Aspen Aerogels remains
open for business. We have not yet encountered any significant
disruption to our supply chain, manufacturing operations or our
ability to deliver to our customers. However, due to the general
uncertainty in the markets for our products resulting from the
COVID-19 pandemic and the potential impact of significant
volatility in the global oil markets, we are withdrawing our prior
2020 financial outlook," stated Mr. Young.
"As evidenced by our first quarter performance, we remain
confident that Aspen's underlying
business fundamentals and operational effectiveness are strong. We
also remain committed to fully implementing our strategy. We are
sustaining all planned R&D investments, advancing our electric
vehicle programs with the support of our partners, and implementing
our next generation product and process technologies to improve our
profit potential," continued Mr. Young.
"We have also taken a number of actions during 2020 to bolster
our financial resources to backstop against any potential COVID-19
related disruptions. During the first quarter, we raised a net
$14.8 million from our public stock
offering, extended our line of credit through April 2021, and strategically increased our
inventory balances by $4.7 million.
In addition, our Rhode Island
subsidiary was approved during April
2020 for a $3.7 million PPP
loan under the CARES Act. As a result of these actions, we believe
we have the balance sheet and liquidity necessary to operate in
this challenging business environment," said Mr. Young.
"In addition, in mid-March, we instituted wage decreases for
executives and managers, eliminated annual pay raises for all
employees, minimized discretionary expenses and reduced our planned
2020 capital expenditures. Our board of directors also elected to
forgo cash compensation during the current period of business
uncertainty. We are also prepared to temporarily curtail operations
in our East Providence plant if
necessary to ensure the safety of our employees or to align
capacity with demand," continued Mr. Young.
"We will continue to monitor all aspects of our business and are
committed to take the actions necessary to enable Aspen Aerogels to
successfully execute its strategy. We believe the actions we've
taken to date are prudent and will position Aspen Aerogels to
navigate through the current uncertain environment and to thrive
when business conditions improve," concluded Mr. Young.
Conference Call Notification
A conference call with Aspen
management to discuss first quarter 2020 results and recent
business developments will be held at 5:00
pm EDT on April 30, 2020.
During the call, management will respond to questions concerning,
but not limited to, Aspen's
financial performance, business conditions and industry outlook.
Management's discussion and responses could contain information
that has not been previously disclosed. The conference call will be
available live as a listen-only webcast and will be hosted at the
Investors section of the Aspen's
website, www.aerogel.com. In addition, shareholders and other
interested parties may call 833-287-0799 (toll free, U.S. &
Canada only) or +1 647-689-4458
(international) and reference conference ID "4439345" to
participate in the conference call.
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 additional
financial metrics that are not prepared in accordance with GAAP
("non-GAAP"). The non-GAAP financial measure included in this press
release is Adjusted EBITDA. Management uses non-GAAP financial
measures, in addition to GAAP financial measures, as a measure of
operating performance because the non-GAAP financial measures do
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 these non-GAAP financial measures
reflect Aspen's ongoing business
in a manner that allows for meaningful comparisons and analysis of
trends in its business, as they exclude 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 these non-GAAP financial
measures provide 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. These non-GAAP measures may not be
comparable to similarly titled measures presented by other
companies.
The non-GAAP financial measures do 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 the global leader in
aerogel technology. The company's mission is to enable its
customers and partners to achieve their own objectives around the
global megatrends of resource efficiency and sustainability.
Aspen's Cryogel® and
Pyrogel® products are valued by the world's largest
energy infrastructure companies. Aspen's Spaceloft® products provide
building owners with industry-leading energy efficiency including
options for a safe, non-combustible fire rating. The company's
strategy is to partner with world-class industry leaders to
leverage its aerogel technology platform into additional markets.
Headquartered in Northborough,
Mass., Aspen manufactures
its products at its East Providence,
R.I. facility. 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
2020 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 2020 financial outlook.
Words such as "may," "will," "could," "would," "should,"
"anticipate," "predict," "potential," "continue," "expects,"
"intends," "plans," "projects," "believes," "estimates," "outlook,"
"assumes," 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 revenue, costs,
expenses, profitability, gross margin, net loss, Adjusted EBITDA
and related variations, improvements, records, timing or trends;
beliefs about the general strength or health of Aspen's business; beliefs about current or
future trends in the energy, energy infrastructure, petrochemical,
refinery, building materials, LNG, subsea, core, adjacent, U.S.,
North American, Asian, European, South American, Middle Eastern or
other markets and the impact of these trends on Aspen's business; beliefs about volume,
timing, pipeline or trends of Canadian, subsea, LNG or other
projects, including the PTT LNG Nong Fab receiving terminal
project, and their impact on Aspen's business; beliefs about the impact of
pricing actions, cost reduction initiatives and the economics of
Aspen's business; beliefs about
Aspen's strategic initiatives and
implementation; beliefs about Aspen's R&D investments; beliefs about the
potential to develop new market opportunities from Aspen's aerogel technology platform; beliefs
about the potential of new aerogel products, technologies,
businesses and partnerships, beliefs about the role of our
technology and partnership opportunities in the battery materials
or electric vehicle markets; beliefs about Aspen's relationships with SKC Co., Ltd. and
Evonik Industries AG, including the potential for activities
associated with evaluation agreements to lead to any development,
commercial or other arrangements with SKC Co., Ltd. or Evonik
Industries, or to accelerate the development of new product
opportunities in the battery materials or electric vehicle markets;
beliefs about Aspen's engagement
with automotive OEMs, including the potential for the development
of commercial opportunities related to the management of thermal
runaway in lithium-ion batteries in electric vehicles; beliefs
about the productivity, efficiency, effectiveness or output of
Aspen's manufacturing operations;
beliefs about Aspen's supply chain
including raw materials availability and costs; beliefs about
Aspen's ability to produce and
deliver products to customers; beliefs about the coronavirus
pandemic, COVID-19 and about global oil market volatility and their
impact on Aspen's operating
performance; beliefs about Aspen's
next generation technologies and their impact on Aspen's profit potential; beliefs about the
sufficiency of Aspen's financial
resources and liquidity; beliefs about the availability of PPP
loans and any forgiveness thereof; beliefs about Aspen's ability to execute its strategy;
future operating performance on an annual or other basis; and
accounting and other assumptions involved in arriving at the
expectations. 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: an
inability to create new product, partnership and market
opportunities; any sustained downturn in the energy industry or
energy prices; any sustained downturn in the petrochemical,
refinery, building materials, subsea, LNG, core, adjacent, U.S.,
North American, Asian, European, South American, Middle Eastern or
other market due to the coronavirus pandemic, COVID-19 or any other
factor; any failure to sustain project-based demand in the subsea,
LNG or other markets; any disruption or inability to achieve
expected capacity levels in any of our three production lines or
the manufacturing facility in which they are located, including due
to the coronavirus pandemic, COVID-19 or any other factor; the
failure to receive all regulatory or other approvals required to
operate, maintain or expand our facilities; any failure of demand
for Aspen's products; any failure
to achieve expected price increases or average selling prices for
Aspen's products; any significant
increase in the cost of raw materials, utilities or any other
manufacturing consumable; the failure to mitigate the impact of any
significant increase in the cost of raw materials, utilities or
other manufacturing consumable; shortages of raw materials,
utilities or any other manufacturing consumable due to the
coronavirus pandemic, COVID-19 or any other factor; the failure to
generate sufficient operating cash flow or to obtain significant
additional capital to pursue Aspen's strategy; the failure of Aspen's products to become widely adopted; the
competition Aspen faces in its
business; any failure to enforce any of Aspen's patents; any failure to protect or
expand Aspen's aerogel technology
platform; any future finding of invalidity of any patent in any
jurisdiction; any failure to generate sufficient operating cash
flow or to obtain sufficient additional capital to continue to
pursue Aspen's new business,
technology, patent enforcement, or patent defense strategy; any
failure of Aspen's products to
meet applicable specifications and other performance, safety,
technical and delivery requirements; the general economic
conditions and cyclical demands in the markets that Aspen serves; the economic, operational and
political risks associated with sales and expansion of operations
in foreign countries; the loss of any direct customer, including
distributors, contractors and OEMs; compliance with health and
safety laws and regulations; the maintenance and development of
distribution channels; and the other risk factors discussed under
the heading "Risk Factors" in our Annual Report on Form 10-K for
the year ended December 31, 2019 and
filed with the Securities and Exchange Commission ("SEC") on
March 6, 2020, as well as any updates
to those risk factors filed from time to time in our 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.
ASPEN AEROGELS,
INC. Condensed Consolidated Balance
Sheets (Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
11,786
|
|
|
$
|
3,633
|
|
Accounts receivable,
net
|
|
|
20,455
|
|
|
|
32,254
|
|
Inventories
|
|
|
13,432
|
|
|
|
8,768
|
|
Prepaid expenses and
other current assets
|
|
|
917
|
|
|
|
1,114
|
|
Total current
assets
|
|
|
46,590
|
|
|
|
45,769
|
|
Property, plant and
equipment, net
|
|
|
51,834
|
|
|
|
53,617
|
|
Operating lease
right-of-use assets
|
|
|
3,941
|
|
|
|
4,032
|
|
Other long-term
assets
|
|
|
100
|
|
|
|
84
|
|
Total
assets
|
|
$
|
102,465
|
|
|
$
|
103,502
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,717
|
|
|
$
|
12,596
|
|
Accrued
expenses
|
|
|
3,616
|
|
|
|
8,057
|
|
Revolving line of
credit
|
|
|
—
|
|
|
|
3,123
|
|
Deferred
revenue
|
|
|
4,840
|
|
|
|
5,620
|
|
Operating lease
liabilities
|
|
|
1,069
|
|
|
|
1,038
|
|
Total current
liabilities
|
|
|
18,242
|
|
|
|
30,434
|
|
Prepayment
liability
|
|
|
9,715
|
|
|
|
9,786
|
|
Operating lease
liabilities long-term
|
|
|
4,139
|
|
|
|
4,292
|
|
Total
liabilities
|
|
|
32,096
|
|
|
|
44,512
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
70,369
|
|
|
|
58,990
|
|
Total liabilities and
stockholders' equity
|
|
$
|
102,465
|
|
|
$
|
103,502
|
|
ASPEN AEROGELS,
INC. Consolidated Statements of
Operations (Unaudited and in thousands, except share and
per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
28,307
|
|
|
$
|
26,785
|
|
Research
services
|
|
|
112
|
|
|
|
1,127
|
|
Total
revenue
|
|
|
28,419
|
|
|
|
27,912
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Product
|
|
|
22,399
|
|
|
|
23,478
|
|
Research
services
|
|
|
40
|
|
|
|
716
|
|
Gross
profit
|
|
|
5,980
|
|
|
|
3,718
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
2,227
|
|
|
|
1,928
|
|
Sales and
marketing
|
|
|
3,324
|
|
|
|
3,511
|
|
General and
administrative
|
|
|
3,515
|
|
|
|
4,240
|
|
Total operating
expenses
|
|
|
9,066
|
|
|
|
9,679
|
|
Loss from
operations
|
|
|
(3,086)
|
|
|
|
(5,961)
|
|
Interest expense,
net
|
|
|
(83)
|
|
|
|
(41)
|
|
Total interest
expense, net
|
|
|
(83)
|
|
|
|
(41)
|
|
Net loss
|
|
$
|
(3,169)
|
|
|
$
|
(6,002)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.13)
|
|
|
$
|
(0.25)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
25,194,292
|
|
|
|
23,930,613
|
|
Square Foot
Operating Metric
|
|
|
|
We price our product
and measure our product shipments in square feet.
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Product shipments in
square feet
|
|
|
8,165
|
|
|
|
8,685
|
|
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:
Reconciliation of Adjusted EBITDA to Net Income
(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 months ended March 31, 2020:
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
(In
thousands)
|
|
Net loss
|
|
$
|
(3,169)
|
|
|
$
|
(6,002)
|
|
Depreciation and
amortization
|
|
|
2,563
|
|
|
|
2,532
|
|
Stock-based
compensation
|
|
|
992
|
|
|
|
878
|
|
Interest expense,
net
|
|
|
83
|
|
|
|
41
|
|
Adjusted
EBITDA
|
|
$
|
469
|
|
|
$
|
(2,551)
|
|
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SOURCE Aspen Aerogels, Inc.