--Additional Resin Orders to Support
20-Million Pound Cutlery Award --
-- Company Forecasting Annualized PHA
Revenues to More Than Triple by End of Q2 2025 --
-- Pro-Rata Warrant Dividend Transaction
Provides Balance Sheet Deleveraging Opportunity --
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 second quarter ended June
30, 2024.
Stephen E. Croskrey, Chief Executive Officer of Danimer,
commented, “We completed the second quarter in line with our
expectations considering the temporary impact of Starbucks’
reapportionment of their Nodax-based straw business between our
converter partners. We believe these headwinds will continue into
the third quarter, but at a lesser degree than experienced during
the second quarter. It is important to reiterate that we have
retained 100% of this business, and we remain on track to continue
to grow our PHA business during 2024.”
Mr. Croskrey continued, “Our 20-million-pound cutlery award
continues to progress. Our converter partners have received initial
molds for testing, and some have purchased new injection molding
equipment. To date, we have received four commercial orders, with
one order having been delivered and the others expected to ship by
the end of this month. We expect this award to reach full run rate
in mid-2025."
Mr. Croskrey concluded, “Our recently completed pro-rata warrant
dividend transaction has provided a potential new avenue to
deleverage our balance sheet, strengthen our capital structure and
maximize stockholder value. We are pleased that we have been able
to retire $6.1 million of our 3.25% convertible notes as of the
date of this release.”
Second Quarter 2024 Financial Highlights:
- Revenues of $7.6 million in the second quarter of 2024 were
down by $5.3 million compared to revenue of $12.9 million in the
second quarter of 2023. PHA revenue of $5.9 million decreased by
$2.5 million in the quarter as compared with the prior year
quarter. This was primarily due to the reapportionment of
Starbucks’ straw business which led to excess inventory in the
channel with the Company’s converter partners. PLA revenue of $1.4
million decreased by $2.4 million quarter-over-quarter, primarily
due to a loss of orders from customers affected by the conflict in
Ukraine.
- Gross profit of $(6.9) million was in line with $(6.6) million
in the second quarter of 2023. Adjusted gross profit was $(1.8)
million compared to $(1.6) million in the second quarter of
2023.
- Adjusted EBITDA was $(9.9) million in the second quarter of
2024 which improved as compared to $(10.2) million in the second
quarter of 2023.
Capital Structure
At June 30, 2024, the Company reported total debt outstanding of
$393.9 million, which included approximately $45.7 million dollars
of low-interest New Markets Tax Credit loans that the Company
expects will be forgiven beginning in 2026.
As previously disclosed, on April 19, 2024, the Company entered
into a $20 million asset-based lending agreement (ABL) revolving
credit facility that is secured primarily by its accounts
receivable and inventory, subject to borrowing base limitations.
The Company had borrowed $5.2 million against this facility as of
June 30, 2024 and continues to explore additional avenues to manage
its liquidity position and enable it to maintain strategic and
operational flexibility as it executes its growth strategy.
On July 12, 2024, the Company distributed warrants to
stockholders of record as of May 13, 2024, who received one warrant
(“Dividend Warrant”) for each three shares of common stock. Holders
of the Company’s 3.250% convertible senior notes and its pre-funded
common stock purchase warrants as of the record date also received
Dividend Warrants on a pass-through basis. For additional
information on the Dividend Warrant, please see the FAQs on the
Investor Relations section of the Company’s website at
https://ir.danimerscientific.com/.
Outlook
The Company reported second quarter results that were consistent
with its expectations including the impact of the reapportionment
related to the Starbucks straw resin business. The Company
anticipates that these headwinds will continue into the third
quarter but with a much lower impact compared to the second
quarter. As such, the Company is making the following adjustments
to annual guidance:
- Full-year Adjusted EBITDA is now expected to be in the range of
$(30) million to $(35) million.
- Full-year capital expenditures are anticipated to remain in the
previously disclosed range of $8 million to $10 million, which will
support existing commitments related to the Bainbridge greenfield
facility, maintenance expenditures and other capital projects.
- Year-end liquidity, which comprises unrestricted cash and
projected availability under the revolving credit facility, will be
in the range of $15 million to $20 million.
Additionally, the Company is now forecasting annualized PHA
revenues to more than triple by the end of the second quarter of
2025, based solely on demand from existing customer relationships
and their indicated volumes, including the aforementioned
20-million-pound cutlery award.
Webcast, Conference Call and 10-Q Filing
The Company will host a webcast and conference call today,
Thursday August 8, 2024, at 4:30 p.m. Eastern time to review second
quarter 2024 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
1-800-717-1738 or 1-646-307-1865, respectively. Upon dialing in,
please request to join the Danimer Scientific Second Quarter 2024
Earnings Conference Call. The archived webcast will be available
for replay on the Company's website after the call.
About Danimer Scientific
Danimer is a pioneer in creating more sustainable, more natural
ways to make plastic products. For more than a decade, its
renewable and sustainable biopolymers have helped create plastic
products that are biodegradable and compostable and return to
nature instead of polluting our lands and waters. Danimer’s
technology can be found in a vast array of plastic end products
that people use every day. Applications for its biopolymers include
additives, aqueous coatings, fibers, filaments, films and
injection-molded articles, among others. Danimer holds more than
480 granted patents and pending patent applications in more than 20
countries for a range of manufacturing processes and biopolymer
formulations. For more information, visit
https://danimerscientific.com.
Forward‐Looking Statements
Please note that this press release 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 expectations for the full year 2024 capital expenditures,
Adjusted EBITDA and liquidity, and statements regarding expected
PHA revenue growth, as well as statements regarding the exercise of
Dividend Warrants using 3.250% convertible senior notes to pay the
exercise price. Forward-looking statements are made based on
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 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; the outcomes of any litigation
matters; the impact on our business, operations and financial
results from the ongoing conflicts in Ukraine and the Middle East;
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. The Company assumes 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
June 30,
December 31,
(in thousands, except share and per share data)
2024
2023
Assets: Current assets: Cash and cash equivalents
$
40,254
$
59,170
Accounts receivable, net
10,928
15,227
Other receivables, net
580
652
Inventories, net
26,277
25,270
Prepaid expenses and other current assets
5,907
4,714
Contract assets, net
2,928
3,005
Total current assets
86,874
108,038
Property, plant and equipment, net
434,257
445,153
Intangible assets, net
76,415
77,790
Right-of-use assets
19,163
19,160
Leverage loans receivable
31,446
31,446
Restricted cash
14,167
14,334
Other assets
4,218
2,210
Total assets
$
666,540
$
698,131
Liabilities and Stockholders' Equity: Current liabilities:
Accounts payable
$
2,880
$
5,292
Accrued liabilities
4,781
4,726
Unearned revenue and contract liabilities
850
1,000
Current portion of lease liability
3,723
3,337
Current portion of long-term debt, net
6,976
1,368
Total current liabilities
19,210
15,723
Long-term lease liability, net
21,461
21,927
Long-term debt, net
386,910
381,436
Warrant liability
3,914
5
Other long-term liabilities
1,017
1,020
Total liabilities
$
432,512
$
420,111
Stockholders' equity: Common stock, $0.0001 par value;
200,000,000 shares authorized: 116,608,522 and 102,832,103 shares
issued and outstanding at June 30, 2024 and December 31, 2023,
respectively
$
12
$
10
Additional paid-in capital
738,061
732,131
Accumulated deficit
(504,045
)
(454,121
)
Total stockholders’ equity
234,028
278,020
Total liabilities and stockholders’ equity
$
666,540
$
698,131
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except share and per share data)
2024
2023
2024
2023
Revenue: Products
$
7,246
$
12,174
$
17,201
$
23,270
Services
382
691
651
1,521
Total revenue
7,628
12,865
17,852
24,791
Costs and expenses: Cost of revenue
14,531
19,433
31,066
37,642
Selling, general and administrative
6,752
16,844
13,621
35,543
Research and development
5,109
7,709
10,451
14,784
Loss on sale of assets
565
-
565
170
Total costs and expenses
26,957
43,986
55,703
88,139
Loss from operations
(19,329
)
(31,121
)
(37,851
)
(63,348
)
Nonoperating income (expense) Gain (loss) on remeasurement of
warrants
5,742
1,083
5,841
(33
)
Interest, net
(9,072
)
(9,162
)
(17,910
)
(12,548
)
Loss on loan extinguishment
-
(102
)
-
(102
)
Total nonoperating expense:
(3,330
)
(8,181
)
(12,069
)
(12,683
)
Loss before income taxes
(22,659
)
(39,302
)
(49,920
)
(76,031
)
Income taxes
(2
)
61
(4
)
151
Net loss
$
(22,661
)
$
(39,241
)
$
(49,924
)
$
(75,880
)
Basic net loss per share
$
(0.19
)
$
(0.38
)
$
(0.45
)
$
(0.74
)
Weighted average shares outstanding
116,465,086
101,938,376
110,114,660
101,917,585
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows
Six Months Ended
June 30,
(in thousands)
2024
2023
Cash flows from operating activities: Net loss
$
(49,924
)
$
(75,880
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
14,969
14,752
(Gain) loss on remeasurement of warrants
(5,841
)
33
Amortization of debt issuance costs
5,821
3,485
Stock-based compensation
1,169
27,974
Warrant issuance costs
867
-
Loss on disposal of assets
565
170
Accounts receivable reserves
437
(948
)
Inventory reserves
(313
)
464
Amortization of right-of-use assets and lease liability
(83
)
(237
)
Deferred income taxes
-
(155
)
Other
-
1,046
Changes in operating assets and liabilities: Accounts receivable
3,863
5,939
Other receivables
74
38
Inventories, net
(694
)
2,383
Prepaid expenses and other current assets
(751
)
1,130
Contract assets
(185
)
(959
)
Other assets
70
(120
)
Accounts payable
(2,078
)
(2,377
)
Accrued liabilities
227
600
Other long-term liabilities
(4
)
636
Unearned revenue and contract liabilities
(150
)
875
Net cash used in operating activities
(31,961
)
(21,151
)
Cash flows from investing activities: Purchases of property, plant
and equipment and intangible assets
(3,770
)
(23,041
)
Net cash used in investing activities
(3,770
)
(23,041
)
Cash flows from financing activities:
Proceeds from issuance of common
warrants, net of issuance costs
8,883
-
Proceeds from issuance of common
stock, net of issuance costs
4,658
-
Proceeds from long-term debt
11,326
130,000
Principal payments on long-term
debt
(7,227
)
(11,744
)
Cash paid for debt issuance
costs
(1,095
)
(33,295
)
Proceeds from employee stock
purchase plan
118
129
Employee taxes related to
stock-based compensation
(15
)
(61
)
Net cash provided by financing activities
16,648
85,029
Net (decrease) increase in cash and cash equivalents and restricted
cash
(19,083
)
40,837
Cash and cash equivalents and restricted cash-beginning of period
73,504
64,401
Cash and cash equivalents and restricted cash-end of period
$
54,421
$
105,238
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures
“Adjusted EBITDA”, “Adjusted gross profit” and "Adjusted gross
margin". Danimer management views these metrics as a useful way to
look at the performance of its operations between periods and to
exclude decisions on capital investment and financing that might
otherwise impact the review of profitability of the business based
on present market conditions.
Adjusted EBITDA is defined as net income or loss plus net
interest expense, income taxes, depreciation and amortization, as
adjusted to add back certain charges or gains that Danimer may
record each period such as remeasurement of warrants, stock-based
compensation expense, as well as non-recurring charges such as (i)
asset disposal gains or losses as well as other significant gains
or losses such as debt extinguishments and impairment of goodwill;
(ii) legal settlements; or (iii) other discrete non-recurring
items. Danimer believes these items are not considered an indicator
of ongoing performance. Adjusted EBITDA is not a measure of
performance defined in accordance with GAAP. The measure is used as
a supplement to GAAP results in evaluating certain aspects of
Danimer’s business, as described below.
Adjusted gross profit is defined as gross profit plus
depreciation, stock-based compensation and other nonrecurring
items.
Adjusted gross margin is defined as adjusted gross profit
divided by total revenue.
Danimer believes that each of Adjusted EBITDA, Adjusted gross
profit and Adjusted gross margin is useful to investors in
evaluating the Company’s performance because each measure considers
the performance of the Company’s operations, excluding decisions
made with respect to capital investment, financing and other
non-recurring charges as outlined in the preceding paragraph.
Danimer believes these non-GAAP metrics offer additional financial
information that, when coupled with the GAAP results and the
reconciliation to GAAP results, provides a more complete
understanding of its results of operations and the factors and
trends affecting its business.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin
should not be considered as an alternative to net income or loss as
an indicator of its performance or as alternatives to any other
measure prescribed by GAAP as there are limitations to using such
non-GAAP measures. Although Danimer believes that Adjusted EBITDA,
Adjusted gross profit and Adjusted gross margin may enhance an
evaluation of its operating performance based on recent revenue
generation and product/overhead cost control because it excludes
the impact of prior decisions made about capital investment,
financing and other expenses, (i) other companies in Danimer’s
industry may define Adjusted EBITDA, Adjusted gross profit and
Adjusted gross margin differently than Danimer does and, as a
result, they may not be comparable to similarly titled measures
used by other companies in its industry, and (ii) Adjusted EBITDA,
Adjusted gross profit and Adjusted gross margin exclude certain
financial information that some may consider important in
evaluating Danimer’s performance.
Danimer compensates for these limitations by providing
disclosure of the differences between Adjusted EBITDA, Adjusted
gross profit and Adjusted gross margin and GAAP results, including
providing a reconciliation to GAAP results, to enable investors to
perform their own analysis of Danimer’s operating results. Because
GAAP financial measures on a forward-looking basis are not
accessible, and reconciling information is not available without
unreasonable effort, reconciliations to GAAP financial measures are
not provided for forward-looking non-GAAP measures. For the same
reasons, the Company is unable to address the probable significance
of the unavailable information, which could be material to future
results.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDA to Net Loss (Unaudited)
Three Months Ended June
30,
2024
2023
(in thousands)
Net loss
$
(22,661
)
$
(39,241
)
Interest, net
9,072
9,162
Depreciation and amortization
7,438
7,173
(Gain) loss on remeasurement of warrants
(5,742
)
(1,083
)
Transaction and other related
807
-
Strategic reorganization and related
738
28
Litigation and other legal related
280
37
Stock-based compensation
199
13,666
Income taxes
2
(61
)
Loss on extinguishment of debt
-
102
Adjusted EBITDA
$
(9,867
)
$
(10,217
)
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended June
30,
2024
2023
(in thousands) Total revenue
$
7,628
$
12,865
Cost of revenue
14,531
19,433
Gross profit
(6,903
)
(6,568
)
Depreciation
5,105
4,934
Stock-based compensation
3
2
Adjusted gross profit
$
(1,795
)
$
(1,632
)
Adjusted gross margin
(23.5
%)
(12.7
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808243882/en/
Investor Relations and Media Blake Chamblee Phone:
770-337-6570 ir@danimer.com
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