--Additional Resin Orders and Deliveries
Continue to Support 20-Million Pound Cutlery Award –-
-- 100% Compostable Skittles® Bag Made with
Nodax® PHA Featured at NFL Game --
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, 2024.
Richard N. Altice, Interim Chief Executive Officer of Danimer,
commented, “We completed the third 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 are behind us, and
it is important to reiterate that we have retained 100% of this
business. We remain on track to continue to grow our PHA business
into fiscal 2025.
“Our significant cutlery award continues to progress as we work
toward the 20-million-pound annual run rate that we anticipate
reaching in mid-2025. Consistent with the end customer’s ramp plan,
we have received orders for over 250,000 pounds of cutlery resin
and film resin to date. The end customer has invested significant
capital in cutlery molds for each of our converter partners in
support of the program scale-up and testing is proceeding well.
“We are excited about the soft launch of 100% compostable
Skittles packaging made with our Nodax PHA resin. This packaging
was featured at a Seattle Seahawks NFL game in October 2024. This
long-standing development partnership with Mars Wrigley is a great
example of how our biodegradable resins can help combat the
end-of-life problem of petroleum-based plastics.
“While we remain focused on executing these commercial
opportunities, we are mindful of managing our indebtedness levels
and near-term constraints on liquidity as we enter our anticipated
significant commercial ramp over the next twelve months. We are
focused on preserving liquidity and analyzing a variety of
transactions to strengthen our capital structure.”
Third Quarter 2024 Financial Highlights:
- Revenues of $8.6 million in the third quarter of 2024 were down
by $2.3 million compared to revenue of $10.9 million in the third
quarter of 2023. PHA revenue of $6.6 million decreased by $1.8
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 significant disruptions in order patterns of
the Company’s converter partners. PLA revenue of $1.3 million
decreased by $0.6 million quarter-over-quarter, primarily due to
decreased customer demand.
- Gross profit of $(7.3) million was in line with $(7.7) million
in the third quarter of 2023. Adjusted gross profit was $(2.3)
million compared to $(2.6) million in the third quarter of
2023.
- Net loss was $(21.8) million in the third quarter of 2024 which
improved as compared to $(40.2) million in the third quarter of
2023.
- Adjusted EBITDA was $(8.9) million in the third quarter of 2024
which improved as compared to $(9.3) million in the third quarter
of 2023.
Capital Structure
At September 30, 2024, the Company reported total debt
outstanding of $387.9 million, which included approximately $45.7
million of low-interest New Markets Tax Credit loans that the
Company expects will be forgiven beginning in 2026.
The Company has taken actions to reduce its operating costs
across all areas of the business, including reductions in
discretionary spending, reduced labor costs through employee
headcount rationalization, postponement of capital expenditures and
the temporary suspension of operations at the Danimer Catalytic
Technologies business. The Company has also heightened its focus on
collections of accounts receivable and has launched an initiative
to reduce on-hand inventory levels.
In light of the substantial leverage position, the Company
continues to analyze a variety of transactions and mechanisms
designed to reduce debt and/or provide additional liquidity.
Outlook
The Company reported third quarter results that were consistent
with its expectations including the impact of the reapportionment
related to the Starbucks straw resin business. As such, the Company
is providing the following guidance for the remainder of the fiscal
year:
- Adjusted EBITDA through the third quarter is ($27.4) million.
We expect fourth quarter Adjusted EBITDA to be in the range of
($7.0) million to ($7.5) million resulting in a full year Adjusted
EBITDA total of ($34.4) million to ($34.9) million which is within
the previously disclosed guidance range of $(30) million to $(35)
million.
- We expect full-year capital expenditures will be between $8
million and $9 million, within the previously disclosed guidance
range of $8 million to $10 million. This range will support
existing commitments related to the Bainbridge greenfield facility,
maintenance expenditures and other capital projects.
- Given ongoing efforts to analyze a variety of transactions and
mechanisms designed to provide additional liquidity, the Company is
not providing a year-end liquidity outlook at this time.
Webcast, Conference Call and 10-Q Filing
The Company will host a webcast and conference call today,
Tuesday November 19, 2024, at 10:00 AM Eastern time to review third
quarter 2024 results and discuss recent events. 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 1-800-445-7795 or 1-785-424-1699,
respectively. Please use Conference ID: DSQ324 for entrance into
the meeting. Upon dialing in, please request to join the Danimer
Scientific Third 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. 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;
our ability to maintain sufficient liquidity by realizing near-term
revenue growth and related cash returns and preserving cash until
such cash returns, if any are obtained; the effect on our borrowing
facilities of an event of default, including if an Annual Report on
Form 10-K contains a Report of Independent Registered Public
Accounting Firm that includes disclosure regarding going concern;
our ability to maintain our exchange listing; 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
September 30, December 31, (in thousands,
except share and per share data)
2024
2023
Assets: Current assets: Cash and cash equivalents
$
22,187
$
59,170
Accounts receivable, net
11,745
15,227
Other receivables, net
125
652
Inventories, net
26,043
25,270
Prepaid expenses and other current assets
5,395
4,714
Contract assets, net
4,377
3,005
Total current assets
69,872
108,038
Property, plant and equipment, net
430,231
445,153
Intangible assets, net
75,762
77,790
Right-of-use assets
19,163
19,160
Leverage loans receivable
31,446
31,446
Restricted cash
14,116
14,334
Other assets
3,180
2,210
Total assets
$
643,770
$
698,131
Liabilities and Stockholders' Equity: Current liabilities:
Accounts payable
$
4,542
$
5,292
Accrued liabilities
6,131
4,726
Unearned revenue and contract liabilities
914
1,000
Current portion of lease liability
3,724
3,337
Current portion of long-term debt, net
6,021
1,368
Total current liabilities
21,332
15,723
Long-term lease liability, net
21,418
21,927
Long-term debt, net
381,874
381,436
Warrant liability
6,315
5
Other long-term liabilities
1,238
1,020
Total liabilities
$
432,177
$
420,111
Stockholders' equity: Common stock, $0.0001 par value;
600,000,000 shares authorized: 120,771,640 and 102,832,103 shares
issued and outstanding at September 30, 2024 and December 31, 2023,
respectively
$
13
$
10
Additional paid-in capital
737,464
732,131
Accumulated deficit
(525,884
)
(454,121
)
Total stockholders’ equity
211,593
278,020
Total liabilities and stockholders’ equity
$
643,770
$
698,131
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations
Three Months Ended September 30, Nine Months Ended
September 30, (in thousands, except share and per share data)
2024
2023
2024
2023
Revenue: Products
$
7,972
$
10,454
$
25,173
$
33,724
Services
658
494
1,309
2,015
Total revenue
8,630
10,948
26,482
35,739
Costs and expenses: Cost of revenue
15,945
18,685
47,011
56,327
Selling, general and administrative
6,861
16,555
20,482
52,098
Research and development
4,580
6,883
15,031
21,667
Loss on sale of assets
65
64
630
234
Total costs and expenses
27,451
42,187
83,154
130,326
Loss from operations
(18,821
)
(31,239
)
(56,672
)
(94,587
)
Nonoperating income (expense) Gain (loss) on remeasurement of
warrants
(206
)
132
5,635
99
Interest, net
(9,631
)
(8,584
)
(27,541
)
(21,132
)
(Gain) loss on loan extinguishment
6,821
-
6,821
(102
)
Total nonoperating expense:
(3,016
)
(8,452
)
(15,085
)
(21,135
)
Loss before income taxes
(21,837
)
(39,691
)
(71,757
)
(115,722
)
Income taxes
(2
)
(468
)
(6
)
(317
)
Net loss
$
(21,839
)
$
(40,159
)
$
(71,763
)
$
(116,039
)
Basic net loss per share
$
(0.18
)
$
(0.39
)
$
(0.63
)
$
(1.14
)
Weighted average shares outstanding
119,713,087
102,025,684
113,337,922
101,953,827
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows
Nine Months Ended September 30, (in thousands)
2024
2023
Cash flows from operating activities: Net loss
$
(71,763
)
$
(116,039
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
22,345
22,005
Gain on remeasurement of warrants
(5,635
)
(99
)
Amortization of debt issuance costs
8,951
6,209
Stock-based compensation
1,693
42,227
Warrant issuance costs
867
-
Loss on disposal of assets
630
234
Accounts receivable reserves
610
(1,462
)
Inventory reserves
513
540
Amortization of right-of-use assets and lease liability
(124
)
(278
)
(Gain) loss on loan extinguishment
(6,821
)
102
Deferred income taxes
-
(199
)
Other
-
941
Changes in operating assets and liabilities: Accounts receivable
2,873
7,029
Other receivables
528
555
Inventories, net
(1,287
)
5,475
Prepaid expenses and other current assets
(239
)
1,816
Contract assets
(759
)
(1,244
)
Other assets
76
(119
)
Accounts payable
(638
)
(2,061
)
Accrued liabilities
1,588
1,893
Other long-term liabilities
217
706
Unearned revenue and contract liabilities
(85
)
438
Net cash used in operating activities
(46,460
)
(31,331
)
Cash flows from investing activities: Purchases of property, plant
and equipment and intangible assets
(7,486
)
(25,722
)
Proceeds from disposals of property, plant and equipment
1,167
18
Net cash used in investing activities
(6,319
)
(25,704
)
Cash flows from financing activities: Proceeds from issuance of
warrants, net of issuance costs
8,888
-
Proceeds from issuance of common stock, net of issuance costs
4,517
-
Proceeds from long-term debt
20,716
130,000
Principal payments on long-term debt
(17,594
)
(12,437
)
Cash paid for debt issuance costs
(1,097
)
(33,296
)
Proceeds from employee stock purchase plan
176
282
Employee taxes related to stock-based compensation
(28
)
(61
)
Net cash provided by financing activities
15,578
84,488
Net (decrease) increase in cash and cash equivalents and restricted
cash
(37,201
)
27,453
Cash and cash equivalents and restricted cash-beginning of period
73,504
64,401
Cash and cash equivalents and restricted cash-end of period
$
36,303
$
91,854
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 September 30,
2024
2023
(in thousands)
Net loss
$
(21,839
)
$
(40,159
)
Interest, net
9,631
8,584
Depreciation and amortization
7,376
7,253
(Gain) loss on loan extinguishment
(6,821
)
-
Transaction and other related
1,197
-
Stock-based compensation
744
14,324
Strategic reorganization and related
522
382
Loss (gain) on remeasurement of warrants
206
(132
)
Litigation and other legal related
101
28
Income taxes
2
468
Adjusted EBITDA
$
(8,881
)
$
(9,252
)
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended September 30,
2024
2023
(in thousands) Total revenue
$
8,630
$
10,948
Cost of revenue
15,945
18,685
Gross profit
(7,315
)
(7,737
)
Depreciation
5,049
5,086
Stock-based compensation
3
2
Adjusted gross profit
$
(2,263
)
$
(2,649
)
Adjusted gross margin
(26.2
%)
(24.2
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241119474813/en/
Investor Relations and Media Blake Chamblee Phone:
770-337-6570 ir@danimer.com
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