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 its financial results for the first quarter ended
March 31, 2022.
Stephen E. Croskrey, Chairman and Chief Executive Officer of
Danimer commented, “During the first quarter we progressed further
on our journey to deliver leading biodegradable packaging solutions
for a variety of in-demand customer applications. PHA revenues
nearly doubled year-over-year, driving total revenues up 12% to
$14.7 million. We were also able to continue negotiating various
development and supply agreements with customers. Of note is the
recent announcement of the expansion of our partnership with Kemira
to commercialize barrier coatings for paper products such as coffee
cups. We were also pleased to further scale production at Phase I
of our Kentucky facility while ensuring Phase II construction
advanced in accordance with our plan to bring the facility online
and begin to scale up by the end of the second quarter. As we move
through 2022, our continued expansion of production capacity,
application development expertise, contracted revenue streams and
future efficiencies of scale should continue to shape our bright
path forward as an increasing number of companies evaluate
solutions to maintain their ESG commitments using our superior
biodegradable alternatives.”
First Quarter 2022 Financial Highlights
- Revenues increased 12% to a first-quarter record of $14.7
million compared to the first quarter of 2021, primarily driven by
strong growth in product revenue due to higher PHA-based product
sales. PHA-based product sales nearly doubled year-over-year,
expanding to 52% of total revenue compared to 29% in the first
quarter of 2021.
- Gross profit was $(1.3) million compared to $1.5 million in the
first quarter of 2021. Adjusted gross profit1 was $2.6 million
compared to $3.9 million in the first quarter of 2021. Adjusted
gross margin1 was 17.5% for the first quarter of 2022 and was 29.2%
in the first quarter of 2021. The decrease in margin was primarily
driven by lower PLA-based product sales at a lower margin for that
product and lower services revenue, partially offset by higher
PHA-based product sales at improved margins.
- On a sequential basis, adjusted gross margin increased
significantly compared to the fourth quarter 2021, which was
largely attributable to a higher portion of PHA-based product sales
from the more efficiently produced and lower cost inventory
associated with higher capacity utilization from the Phase I
Kentucky operation. The Company expects the average cost per unit
of products sold to improve as the remainder of older, higher-cost
inventory works through the channel. Adjusted gross profit excludes
the PLA additives inventory reserve, stock-based compensation,
depreciation, and rent expense, among other items.
- Net loss of $26.4 million included a $5.0 million non-cash gain
related to the remeasurement of the Company’s private warrants for
the first quarter of 2022.
- Adjusted EBITDA1 was $(10.6) million in the first quarter of
2022 compared to $(2.3) million in the first quarter of 2021,
primarily due to the decline in gross profit as well as an increase
in headcount and salaries to support future expansion plans. The
first quarter of 2022 also included approximately $1.3 million of
R&D and operating expenses related to Novomer, now referred to
as Danimer Catalytic Technologies, which the Company did not incur
in the prior year period.
- Adjusted EBITDAR1, which excludes rent expense primarily
associated with the Company’s Kentucky facility and one of the
Company's production facilities in Georgia, was $(9.7) million,
compared to $(1.6) million in the prior year quarter.
(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 the release.
Capital Structure and Cash Balance
At March 31, 2022, the Company reported total debt outstanding
of $261.7 million, net of $10.1 million of unamortized debt
issuance costs, and includes approximately $21.0 million dollars of
low-interest New Markets Tax Credit loans that the Company expects
will be forgiven in 2026. At the end of the first quarter, cash and
cash equivalents were $210.0 million.
Outlook
Danimer continues to focus on making disciplined investments in
its operational platform and infrastructure that will allow it to
capture the significant opportunity for its products. The Company
expects full year 2022 will be another year of investment, with an
intense focus on getting its PHA-based business to
profitability.
For the full year 2022, the Company is introducing its outlook
for Adjusted EBITDA to be in the range of $(45) million to $(35)
million, compared to $(22.6) million in 2021. The Company expects
its Kentucky facility to have a favorable year-over-year impact and
to turn profitable as it increases its PHA-based revenues and
drives operational efficiencies. The improved profitability from
PHA-based revenues is expected to be more than offset by lower
PLA-based revenue, a full year of prior SG&A and R&D
investments to support growth, as well as a full year of
consolidated costs from Danimer Catalytic Technologies acquired in
August 2021. The Company expects full year capital expenditures to
be in the range of $190 million to $200 million, inclusive of
capitalized interest and internal labor and overhead, and have a
year-end cash balance in excess of $50 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,
May 10, 2022, at 5:00 p.m. Eastern time to review first quarter of
2022 results, discuss recent events and conduct a
question-and-answer session. The live webcast will be available at
www.danimerscientific.com in the Investor Relations section. The
conference call will also be accessible by dialing 1-877-407-9208
(Domestic) and 1-201-493-6784 (International). A replay of the
webcast will be available on the Company’s website.
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
www.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
and Adjusted EBITDA. 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 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 (Unaudited)
March 31,
December 31,
(in thousands, except share and per share
data)
2022
2021
Assets:
Current assets:
Cash and cash equivalents
$
210,045
$
286,487
Accounts receivable, net
18,825
17,149
Other receivables, net
1,378
3,836
Inventories, net
28,230
24,573
Prepaid expenses and other current
assets
4,059
4,737
Contract assets
4,305
3,576
Total current assets
266,842
340,358
Property, plant and equipment, net
364,635
316,181
Intangible assets, net
83,578
84,659
Goodwill
62,663
62,649
Right-of-use assets
19,179
19,240
Leverage loans receivable
13,408
13,408
Restricted cash
480
481
Loan fees
1,452
1,397
Other assets
228
224
Total assets
$
812,465
$
838,597
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable
$
17,076
$
20,790
Accrued liabilities
14,042
18,777
Unearned revenue and contract
liabilities
-
214
Current portion of lease liability
3,337
3,337
Current portion of long-term debt, net
218
357
Total current liabilities
34,673
43,475
Private warrants liability
4,583
9,578
Long-term lease liability, net
22,554
22,693
Long-term debt, net
261,459
260,934
Deferred income taxes
723
1,014
Other long-term liabilities
526
638
Total liabilities
$
324,518
$
338,332
Stockholders' equity:
Common stock, $0.0001 par value;
200,000,000 shares authorized: 100,760,215 and 100,687,820 shares
issued and outstanding at March 31, 2022 and December 31, 2021,
respectively
$
10
$
10
Additional paid-in capital
633,213
619,145
Accumulated deficit
(145,276
)
(118,890
)
Total stockholders’ equity
487,947
500,265
Total liabilities and stockholders’
equity
$
812,465
$
838,597
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended March
31,
(in thousands, except share and per share
data)
2022
2021
Revenue:
Products
$
13,216
$
11,024
Services
1,527
2,157
Total revenue
14,743
13,181
Costs and expenses:
Cost of revenue
16,065
11,725
Selling, general and administrative
22,236
10,120
Research and development
7,131
2,619
Total costs and expenses
45,432
24,464
Loss from operations
(30,689
)
(11,283
)
Nonoperating income (expense):
Gain on remeasurement of private
warrants
4,995
(80,697
)
Interest, net
(992
)
(148
)
Loss on loan extinguishment
-
(2,604
)
Other expense, net
9
(2
)
Total nonoperating income (expense)
4,012
(83,451
)
Loss before income taxes
(26,677
)
(94,734
)
Income taxes
291
-
Net loss
$
(26,386
)
$
(94,734
)
Basic and diluted net loss per share
$
(0.26
)
$
(1.12
)
Weighted average number of shares used to
compute
Basic and diluted net loss per share
100,728,366
84,708,137
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended
March 31,
(in thousands)
2022
2021
Cash flows from operating activities:
Net loss
$
(26,386
)
$
(94,734
)
Adjustments to reconcile net loss to net
cash used in operating activities:
(Gain) loss on remeasurement of private
warrants
(4,995
)
80,697
Stock-based compensation
13,750
6,665
Depreciation and amortization
4,259
2,100
Inventory reserves
1,056
-
Deferred income taxes
(291
)
-
Loss on write-off of deferred loan
costs
-
1,900
Amortization of debt issuance costs and
debt discounts
572
82
Amortization of right-of-use assets and
lease liability
(77
)
41
Other
612
38
Changes in operating assets and
liabilities, net of effects of acquisition:
Accounts receivable, net
(2,272
)
(3,529
)
Other receivables
2,458
20
Inventories, net
(4,713
)
(3,204
)
Prepaid expenses and other current
assets
678
(1,498
)
Contract assets
(729
)
-
Other assets
(4
)
125
Accounts payable
725
(669
)
Accrued and other long-term
liabilities
(2,034
)
(2,123
)
Unearned revenue and contract
liabilities
(214
)
(119
)
Net cash used in operating activities
(17,605
)
(14,208
)
Cash flows from investing activities:
Purchases of property, plant and
equipment
(58,902
)
(23,893
)
Acquisition of Novomer, net of cash
acquired
(14
)
-
Net cash used in investing activities
(58,916
)
(23,893
)
Cash flows from financing activities:
Proceeds from long-term debt
-
120
Cash paid for debt issuance costs
(196
)
(25
)
Proceeds from exercise of stock
options
164
1,191
Proceeds from employee stock purchase
plan
209
-
Principal payments on long-term debt
(44
)
(27,037
)
Cost related to warrants
(55
)
-
Proceeds from issuance of common stock,
net of issuance costs
-
(815
)
Net cash provided by (used in) financing
activities
78
(26,566
)
Net decrease in cash and cash equivalents
and restricted cash
(76,443
)
(64,667
)
Cash and cash equivalents and restricted
cash-beginning of period
286,968
379,897
Cash and cash equivalents and restricted
cash-end of period
$
210,525
$
315,230
Supplemental cash flow information:
Cash paid for interest
$
420
$
130
Cash paid for operating leases
$
885
$
798
Supplemental non-cash disclosure:
Changes in accounts payable and accrued
liabilities related to purchase of property, plant and
equipment
$
7,251
$
952
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; (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.
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.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDAR and Adjusted EBITDA to Net Loss (Unaudited)
Three Months Ended March
31,
2022
2021
Net loss
$
(26,386
)
$
(94,734
)
Income tax expense (benefit)
(291
)
-
Interest expense, net
992
148
Depreciation and amortization
4,259
2,100
PLA additive inventory reserve
1,016
-
(Gain) loss on remeasurement of private
warrants
(4,995
)
80,697
Stock-based compensation
13,700
6,665
Loss on debt extinguishment
-
2,604
Litigation and other legal related
760
-
Public company transition costs
350
207
Other expense, net
(9
)
2
Adjusted EBITDA (1)
$
(10,604
)
$
(2,311
)
Rent
887
725
Adjusted EBITDAR (1)
$
(9,717
)
$
(1,585
)
(1) May not foot due to rounding.
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended March
31,
2022
2021
Total revenue
$
14,743
$
13,181
Cost of revenue
16,065
11,725
Gross Profit
(1,322
)
1,456
PLA additive inventory reserve
1,016
-
Depreciation
2,227
1,839
Rent
628
530
Stock-based compensation
29
26
Adjusted Gross Profit (1)
$
2,578
$
3,851
Adjusted Gross Margin
17.5
%
29.2
%
(1) May not foot due to rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20220510006303/en/
Investors ir@danimer.com Phone: 229-220-1103
Media Jonathan Houghton jhoughton@daltonagency.com Phone:
615-515-4892
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