Revenue increased 20% year-over-year to $62.9
million
Record REO production of 13,742 metric tons, a
28% increase year-over-year
Record NdPr production of 478 metric tons, a
76% sequential increase
NdPr sales volumes nearly tripled sequentially
to 404 metric tons
Fort Worth metal production in commissioning
with deliveries on track for year-end
MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”)
today announced financial and operational results for the three
months ended September 30, 2024.
“The MP team delivered record production of rare earth
concentrate and NdPr oxide in the third quarter,” said James
Litinsky, Founder, Chairman, and CEO of MP Materials. “Despite
continued weak market pricing, increased NdPr sales volumes drove a
return to year-over-year revenue growth. We are also pleased with
our progress on scaling midstream production and reducing costs,
providing line of sight to positive refining gross margins early
next year.”
Third Quarter 2024 Financial and Operational
Highlights
For the three months
ended
September 30,
2024 vs. 2023
(unaudited)
2024
2023
Amount Change
% Change
Financial Measures:
(in thousands, except per share
data)
Revenue
$
62,927
$
52,516
$
10,411
20
%
Net loss
$
(25,516
)
$
(4,276
)
$
(21,240
)
497
%
Adjusted EBITDA(1)
$
(11,168
)
$
15,551
$
(26,719
)
N/M
Adjusted Net Income (Loss)(1)
$
(19,634
)
$
7,026
$
(26,660
)
N/M
Diluted EPS
$
(0.16
)
$
(0.02
)
$
(0.14
)
700
%
Adjusted Diluted EPS(1)
$
(0.12
)
$
0.04
$
(0.16
)
N/M
Key Performance Indicators:
Rare earth concentrate
(in whole units or dollars)
REO Production Volume (MTs)
13,742
10,766
2,976
28
%
REO Sales Volume (MTs)
9,729
9,177
552
6
%
Realized Price per REO MT
$
4,425
$
5,718
$
(1,293
)
(23
)%
Separated NdPr products
NdPr Production Volume (MTs)
478
50
428
856
%
NdPr Sales Volume (MTs)
404
—
404
N/A
NdPr Realized Price per KG
$
47
N/A
N/A
N/A
N/M = Not meaningful.
N/A = Not applicable as there was no sales
volume during the three months ended September 30, 2023.
(1)
See “Use of Non-GAAP Financial Measures”
below for the definitions of Adjusted EBITDA, Adjusted Net Income
(Loss) and Adjusted Diluted EPS. See tables below for
reconciliations of non-GAAP financial measures to their most
directly comparable GAAP financial measures.
Revenue increased 20% year-over-year to $62.9 million, driven by
sales of separated NdPr, which began in the fourth quarter of 2023,
as well as a 6% increase in rare earth oxide (“REO”) in concentrate
sales volumes, partially offset by a 23% decrease in the realized
price of REO. The increase in REO sales volume was mainly due to
higher REO production volumes, which increased 28% year-over-year,
reflecting higher mineral recoveries and operational efficiencies
achieved as part of our ongoing efforts to expand upstream
capacity. The change in realized price reflects a continued soft
pricing environment for rare earth products.
Adjusted EBITDA declined by $26.7 million year-over-year to
$(11.2) million, driven mainly by higher cost of sales due to
initial separated product production, as well as slightly higher
general and administrative expenses. Cost of sales was impacted by
production costs related to refined product sales, which were not
present in the prior year period and which are initially elevated
on a per-unit basis given the early stage of ramping the Stage II
facilities to normalized production levels. The increase in cost of
sales was partially offset by a reduction of an inventory reserve
of $2.7 million recorded in the quarter. Selling, general, and
administrative expenses were impacted by higher employee headcount,
in part to support our downstream expansion, legal expenses, and
costs related to the implementation of a new enterprise resource
planning system, a portion of which are non-cash.
Adjusted Net Income (Loss) decreased by $26.7 million
year-over-year to $(19.6) million, mainly due to the lower Adjusted
EBITDA as well as higher depreciation expense resulting from an
increase in capital assets placed into service over the last year.
Also impacting the comparison was higher interest expense, mainly
due to the newly issued 2030 convertible notes, as well as slightly
lower interest income. These changes were partially offset by a
higher income tax benefit primarily due to a higher pre-tax loss in
the current quarter.
Net income (loss) decreased by $21.2 million year-over-year to
$(25.5) million, primarily due to the factors driving the lower
Adjusted Net Income (Loss) discussed above, partially offset
primarily by lower start-up costs in the current quarter.
Diluted earnings per share (“EPS”) decreased by $0.14
year-over-year to a diluted loss per share of $(0.16), in line with
the change in net income (loss) discussed above. Adjusted Diluted
EPS decreased by $0.16 to $(0.12) in line with the decrease in
Adjusted Net Income (Loss) discussed above. Diluted EPS and
Adjusted Diluted EPS were also impacted by a lower average share
count in the current quarter, which was lower primarily due to the
repurchase of 13.0 million and 2.2 million shares in March and
August of 2024, respectively.
MP MATERIALS CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share and per
share data, unaudited)
September 30,
2024
December 31,
2023
Assets
Current assets
Cash and cash equivalents
$
284,434
$
263,351
Short-term investments
582,056
734,493
Total cash, cash equivalents and
short-term investments
866,490
997,844
Accounts receivable
14,549
10,029
Inventories
116,699
95,182
Government grant receivable
7,846
19,302
Prepaid expenses and other current
assets
11,599
8,820
Total current assets
1,017,183
1,131,177
Non-current assets
Property, plant and equipment, net
1,230,517
1,158,054
Operating lease right-of-use assets
9,004
10,065
Inventories
19,825
13,350
Equity method investment
8,962
9,673
Intangible assets, net
7,970
8,881
Other non-current assets
6,825
5,252
Total non-current assets
1,283,103
1,205,275
Total assets
$
2,300,286
$
2,336,452
Liabilities and stockholders’
equity
Current liabilities
Accounts and construction payable
$
21,711
$
27,995
Accrued liabilities
66,224
73,939
Deferred revenue
50,000
—
Other current liabilities
8,854
6,616
Total current liabilities
146,789
108,550
Non-current liabilities
Asset retirement obligations
5,856
5,518
Environmental obligations
16,506
16,545
Long-term debt, net
937,634
681,980
Operating lease liabilities
6,016
6,829
Deferred government grant
19,836
17,433
Deferred income taxes
98,541
130,793
Other non-current liabilities
4,568
3,025
Total non-current liabilities
1,088,957
862,123
Total liabilities
1,235,746
970,673
Commitments and contingencies
Stockholders’ equity:
Preferred stock ($0.0001 par value,
50,000,000 shares authorized, none issued and outstanding in either
period)
—
—
Common stock ($0.0001 par value,
450,000,000 shares authorized, 178,439,486 and 178,082,383 shares
issued, and 163,189,704 and 178,082,383 shares outstanding, as of
September 30, 2024, and December 31, 2023, respectively)
18
17
Additional paid-in capital
948,687
979,891
Retained earnings
342,644
385,726
Accumulated other comprehensive income
296
145
Treasury stock, at cost, 15,249,782 and 0
shares, respectively
(227,105
)
—
Total stockholders’ equity
1,064,540
1,365,779
Total liabilities and stockholders’
equity
$
2,300,286
$
2,336,452
MP MATERIALS CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the three months
ended September 30,
For the nine months
ended September 30,
(in thousands, except share and per
share data, unaudited)
2024
2023
2024
2023
Revenue:
Rare earth concentrate
$
43,053
$
52,472
$
107,555
$
212,139
NdPr oxide and metal
19,179
—
34,037
—
Other revenue
695
44
1,277
101
Total revenue
62,927
52,516
142,869
212,240
Operating costs and expenses:
Cost of sales (excluding depreciation,
depletion and amortization)
57,266
22,217
134,323
69,137
Selling, general and administrative
21,525
19,561
64,226
57,829
Depreciation, depletion and
amortization
19,344
16,751
55,939
37,076
Start-up costs
1,627
7,336
4,287
16,125
Advanced projects and development
2,051
2,873
8,143
9,586
Other operating costs and expenses
654
1,314
1,415
6,578
Total operating costs and expenses
102,467
70,052
268,333
196,331
Operating income (loss)
(39,540
)
(17,536
)
(125,464
)
15,909
Interest expense, net
(6,646
)
(1,396
)
(16,248
)
(4,147
)
Gain on early extinguishment of debt
—
—
46,265
—
Other income, net
11,320
14,456
36,061
41,970
Income (loss) before income
taxes
(34,866
)
(4,476
)
(59,386
)
53,732
Income tax benefit (expense)
9,350
200
16,304
(13,166
)
Net income (loss)
$
(25,516
)
$
(4,276
)
$
(43,082
)
$
40,566
Earnings (loss) per share:
Basic
$
(0.16
)
$
(0.02
)
$
(0.26
)
$
0.23
Diluted
$
(0.16
)
$
(0.02
)
$
(0.44
)
$
0.22
Weighted-average shares
outstanding:
Basic
164,149,348
177,231,717
168,002,773
177,034,068
Diluted
164,149,348
177,231,717
172,066,214
193,632,662
MP MATERIALS CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the nine months
ended
September 30,
(in thousands, unaudited)
2024
2023
Operating activities:
Net income (loss)
$
(43,082
)
$
40,566
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation, depletion and
amortization
55,939
37,076
Accretion of discount on short-term
investments
(23,669
)
(17,334
)
Gain on early extinguishment of debt
(46,265
)
—
Stock-based compensation expense
18,623
19,041
Amortization of debt issuance costs
2,864
2,650
Lower of cost or net realizable value
reserve
15,085
—
Deferred income taxes
(16,240
)
13,156
Other
1,957
1,091
Decrease (increase) in operating
assets:
Accounts receivable
(4,520
)
19,676
Inventories
(42,851
)
(25,498
)
Government grant receivable
11,456
—
Prepaid expenses, other current and
non-current assets
(2,390
)
(1,437
)
Increase (decrease) in operating
liabilities:
Accounts payable and accrued
liabilities
(1,303
)
8,601
Income taxes payable
—
(21,163
)
Deferred revenue
50,000
—
Deferred government grant
4,086
—
Other current and non-current
liabilities
3,182
55
Net cash provided by (used in) operating
activities
(17,128
)
76,480
Investing activities:
Additions to property, plant and
equipment
(144,768
)
(188,927
)
Purchases of short-term investments
(1,150,609
)
(705,241
)
Proceeds from sales of short-term
investments
131,776
461,042
Proceeds from maturities of short-term
investments
1,195,202
769,907
Proceeds from government awards used for
construction
96
1,050
Net cash provided by investing
activities
31,697
337,831
Financing activities:
Proceeds from issuance of long-term
debt
747,500
—
Payment of debt issuance costs
(16,149
)
—
Payments to retire long-term debt
(428,599
)
—
Purchase of capped call options
(65,332
)
—
Repurchases of common stock
(225,068
)
—
Principal payments on debt obligations and
finance leases
(1,738
)
(2,101
)
Tax withholding on stock-based awards
(4,577
)
(6,476
)
Net cash provided by (used in) financing
activities
6,037
(8,577
)
Net change in cash, cash equivalents and
restricted cash
20,606
405,734
Cash, cash equivalents and restricted cash
beginning balance
264,988
143,509
Cash, cash equivalents and restricted
cash ending balance
$
285,594
$
549,243
Reconciliation of cash, cash
equivalents and restricted cash:
Cash and cash equivalents
$
284,434
$
547,668
Restricted cash, current
811
1,228
Restricted cash, non-current
349
347
Total cash, cash equivalents and
restricted cash
$
285,594
$
549,243
Reconciliation of GAAP Net
Income (Loss) to
Non-GAAP Adjusted
EBITDA
For the three months
ended September 30,
For the nine months
ended September 30,
(in thousands, unaudited)
2024
2023
2024
2023
Net income (loss)
$
(25,516
)
$
(4,276
)
$
(43,082
)
$
40,566
Adjusted for:
Depreciation, depletion and
amortization
19,344
16,751
55,939
37,076
Interest expense, net
6,646
1,396
16,248
4,147
Income tax expense (benefit)
(9,350
)
(200
)
(16,304
)
13,166
Stock-based compensation expense(1)
5,453
6,298
18,623
19,041
Initial start-up costs(2)
1,493
7,082
3,918
15,474
Transaction-related and other costs(3)
1,428
1,642
6,108
7,124
Accretion of asset retirement and
environmental obligations(4)
234
227
695
681
Loss on disposals of long-lived assets,
net(4)(5)
420
1,087
720
5,897
Gain on early extinguishment of
debt(6)
—
—
(46,265
)
—
Other income, net(7)
(11,320
)
(14,456
)
(36,061
)
(41,970
)
Adjusted EBITDA
$
(11,168
)
$
15,551
$
(39,461
)
$
101,202
(1)
Principally included in “Selling, general
and administrative” within our unaudited Condensed Consolidated
Statements of Operations.
(2)
Included in “Start-up costs” within our
unaudited Condensed Consolidated Statements of Operations and
excludes any applicable stock-based compensation, which is included
in the “Stock-based compensation expense” line above. Relates to
certain costs incurred in connection with the commissioning and
starting up of our initial separations capability at Mountain Pass
and our initial magnet-making capabilities at Fort Worth prior to
the achievement of commercial production. These costs include labor
of incremental employees hired in advance to work directly on such
commissioning activities, training costs, costs of testing and
commissioning the new circuits and processes, and other related
costs. Given the nature and scale of the related costs and
activities, management does not view these as normal, recurring
operating expenses, but rather as non-recurring investments to
initially develop our separations and magnet-making capabilities.
Therefore, we believe it is useful and necessary for investors to
understand our core operating performance in current and future
periods by excluding the impact of these start-up costs. To the
extent additional start-up costs are incurred in the future to
expand our separations and magnet-making capabilities after initial
achievement of commercial production (e.g., significantly expanding
production capacity at an existing facility or building a new
separations or magnet manufacturing facility), such costs would not
be considered an adjustment for this non-GAAP financial
measure.
(3)
Principally included in “Advanced projects
and development” within our unaudited Condensed Consolidated
Statements of Operations, and pertains to legal, consulting, and
advisory services, and other costs associated with specific
transactions, including potential acquisitions, mergers, or other
investments.
(4)
Included in “Other operating costs and
expenses” within our unaudited Condensed Consolidated Statements of
Operations.
(5)
Amounts for the three and nine months
ended September 30, 2023, principally related to demolition costs
incurred in connection with demolishing and removing certain
out-of-use older facilities and infrastructure from the Mountain
Pass site to accommodate future expansion in rare earth
processing.
(6)
Pertains to the gain recognized on the
repurchase of $480.0 million aggregate principal amount of our
0.25% unsecured senior convertible notes due 2026 (the “2026
Notes”) in March 2024.
(7)
Principally comprised of interest and
investment income.
Reconciliation of GAAP Net
Income (Loss) to
Non-GAAP Adjusted Net Income
(Loss)
For the three months
ended September 30,
For the nine months
ended September 30,
(in thousands, unaudited)
2024
2023
2024
2023
Net income (loss)
$
(25,516
)
$
(4,276
)
$
(43,082
)
$
40,566
Adjusted for:
Stock-based compensation expense(1)
5,453
6,298
18,623
19,041
Initial start-up costs(2)
1,493
7,082
3,918
15,474
Transaction-related and other costs(3)
1,428
1,642
6,108
7,124
Loss on disposals of long-lived assets,
net(4)
420
1,087
720
5,897
Gain on early extinguishment of
debt(5)
—
—
(46,265
)
—
Other
—
(1
)
—
(42
)
Tax impact of adjustments above(6)
(2,912
)
(4,806
)
4,816
(12,684
)
Adjusted Net Income (Loss)
$
(19,634
)
$
7,026
$
(55,162
)
$
75,376
(1)
Principally included in “Selling, general
and administrative” within our unaudited Condensed Consolidated
Statements of Operations.
(2)
Included in “Start-up costs” within our
unaudited Condensed Consolidated Statements of Operations and
excludes any applicable stock-based compensation, which is included
in the “Stock-based compensation expense” line above. Relates to
certain costs incurred in connection with the commissioning and
starting up of our initial separations capability at Mountain Pass
and our initial magnet-making capabilities at Fort Worth prior to
the achievement of commercial production. These costs include labor
of incremental employees hired in advance to work directly on such
commissioning activities, training costs, costs of testing and
commissioning the new circuits and processes, and other related
costs. Given the nature and scale of the related costs and
activities, management does not view these as normal, recurring
operating expenses, but rather as non-recurring investments to
initially develop our separations and magnet-making capabilities.
Therefore, we believe it is useful and necessary for investors to
understand our core operating performance in current and future
periods by excluding the impact of these start-up costs. To the
extent additional start-up costs are incurred in the future to
expand our separations and magnet-making capabilities after initial
achievement of commercial production (e.g., significantly expanding
production capacity at an existing facility or building a new
separations or magnet manufacturing facility), such costs would not
be considered an adjustment for this non-GAAP financial
measure.
(3)
Principally included in “Advanced projects
and development” within our unaudited Condensed Consolidated
Statements of Operations, and pertains to legal, consulting, and
advisory services, and other costs associated with specific
transactions, including potential acquisitions, mergers, or other
investments.
(4)
Included in “Other operating costs and
expenses” within our unaudited Condensed Consolidated Statements of
Operations. Amounts for the three and nine months ended September
30, 2023, principally related to demolition costs incurred in
connection with demolishing and removing certain out-of-use older
facilities and infrastructure from the Mountain Pass site to
accommodate future expansion in rare earth processing.
(5)
Pertains to the gain recognized on the
repurchase of $480.0 million aggregate principal amount of our 2026
Notes in March 2024.
(6)
Tax impact of adjustments is calculated
using an adjusted effective tax rate, which excludes the impact of
discrete tax costs and benefits, to each adjustment. The adjusted
effective tax rates were 33.1%, 28.5%, 29.8% and 26.7% for the
three and nine months ended September 30, 2024 and 2023,
respectively.
Reconciliation of GAAP Diluted
Earnings (Loss) per Share to
Non-GAAP Adjusted Diluted
EPS
For the three months
ended September 30,
For the nine months
ended September 30,
(unaudited)
2024
2023
2024
2023
Diluted earnings (loss) per
share
$
(0.16
)
$
(0.02
)
$
(0.44
)
$
0.22
Adjusted for:
Stock-based compensation expense
0.04
0.03
0.11
0.10
Initial start-up costs
0.01
0.04
0.02
0.08
Transaction-related and other costs
0.01
0.01
0.04
0.04
Loss on disposals of long-lived assets,
net
—
0.01
—
0.03
Gain on early extinguishment of debt
—
—
(0.27
)
—
Tax impact of adjustments above(1)
(0.02
)
(0.03
)
0.03
(0.07
)
2026 Notes if-converted method(2)
—
—
0.18
—
Adjusted Diluted EPS
$
(0.12
)
$
0.04
$
(0.33
)
$
0.40
Diluted weighted-average shares
outstanding(3)
164,149,348
177,231,717
172,066,214
193,632,662
Assumed conversion of 2026 Notes(3)
—
—
(4,063,441
)
—
Assumed conversion of restricted
stock(4)
—
582,144
—
—
Assumed conversion of restricted stock
units(4)
—
438,803
—
—
Adjusted diluted weighted-average
shares outstanding(3)(4)
164,149,348
178,252,664
168,002,773
193,632,662
(1)
Tax impact of adjustments is calculated
using an adjusted effective tax rate, which excludes the impact of
discrete tax costs and benefits, to each adjustment. The adjusted
effective tax rates were 33.1%, 28.5%, 29.8% and 26.7% for the
three and nine months ended September 30, 2024 and 2023,
respectively.
(2)
For the nine months ended September 30,
2024, since the 2026 Notes were dilutive for purposes of computing
GAAP diluted loss per share but antidilutive for purposes of
computing Adjusted Diluted EPS, within this reconciliation, we have
included this adjustment to reverse the impact of applying the
if-converted method to the 2026 Notes in the computation of GAAP
diluted loss per share.
(3)
For the nine months ended September 30,
2024, since the 2026 Notes were dilutive for purposes of computing
GAAP diluted loss per share but antidilutive for purposes of
computing Adjusted Diluted EPS, the adjusted diluted
weighted-average shares outstanding exclude the potentially
dilutive securities associated with the 2026 Notes.
(4)
The assumed conversion of restricted stock
and restricted stock units was antidilutive for GAAP purposes for
the three months ended September 30, 2023. For purposes of
calculating Adjusted Diluted EPS, we have added back the assumed
conversion of restricted stock and restricted stock units since
they would not be antidilutive when using Adjusted Net Income as
the numerator in the calculation of Adjusted Diluted EPS.
Conference Call Details
MP Materials will host a conference call to discuss these
results at 2:00 p.m. Pacific Time, Thursday, November 7, 2024. To
join the conference call on a listen-only basis, participants
should dial 1-888-788-0099 and international participants should
dial 1-646-876-9923 and enter the conference ID number: 95013795492
as well as the passcode: 404812. The live audio webcast along with
the press release and accompanying slide presentation, will be
accessible at investors.mpmaterials.com. A recording of the webcast
will also be available following the conference call.
About MP Materials
MP Materials (NYSE: MP) produces specialty materials that are
vital inputs for electrification and other advanced technologies.
MP’s Mountain Pass facility is America’s only scaled rare earth
production source. The Company is currently expanding its
manufacturing operations downstream to provide a full supply chain
solution from materials to magnetics. More information is available
at https://mpmaterials.com/.
Join the MP Materials community on X, YouTube, Instagram and
LinkedIn.
We routinely post important information on our website,
including corporate and investor presentations and financial
information. We intend to use our website as a means of disclosing
material, non-public information and for complying with our
disclosure obligations under Regulation FD. Such disclosures will
be included in the Investors section of our website. Accordingly,
investors should monitor such portion of our website, in addition
to following our press releases, Securities and Exchange Commission
filings and public conference calls and webcasts.
Forward-Looking Statements
This press release contains certain statements that are not
historical facts and are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of the words such as
“estimate,” “plan,” “shall,” “may,” “project,” “forecast,”
“intend,” “expect,” “anticipate,” “believe,” “seek,” “will,”
“target,” or similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding the price and market for rare earth materials,
the continued demand for rare earth materials and the market for
rare earth materials generally, future demand for electric vehicles
and magnets, estimates and forecasts of the Company’s results of
operations and other financial and performance metrics, including
NdPr oxide production and shipments, expected NdPr oxide production
and sales in the fourth quarter of 2024, the Company’s share
repurchase program, the expected cash flows of the early production
of magnetic precursor products in Stage III and associated expected
magnetic precursor products prepayments and timing thereof, the
expected timing for receipt of the 48C tax credits, expected
capital expenditures in Stage II and Stage III, the Company’s
ability to control costs and expenses, the Company’s Upstream 60K
strategy, including statements regarding the timing, costs and
ability to increase REO production, and the Company’s Stage II and
Stage III projects, including the Company’s ability to achieve run
rate production of separated rare earth materials and production of
commercial metal and magnets. Such statements are all subject to
risks, uncertainties and changes in circumstances that could
significantly affect the Company’s future financial results and
business.
Accordingly, the Company cautions that the forward-looking
statements contained herein are qualified by important factors that
could cause actual results to differ materially from those
reflected by such statements. These forward-looking statements are
subject to a number of risks and uncertainties, including
fluctuations and uncertainties related to demand for and pricing of
rare earth products; changes in domestic and foreign business,
market, financial, political and legal conditions; changes in
demand for NdFeB magnets; the effects of competition on the
Company’s future business; risks related to the Company’s Upstream
60K strategy, including delays in completion, unexpected costs and
expenses and timing for obtaining regulatory approvals; risks
related to the rollout of the Company’s business strategy,
including Stage II and Stage III, and the timing of achieving
expected business milestones in Stage II and Stage III, including
the Company’s ability to produce commercial metal in 2024; risks
related to the Company’s Stage II operations and the Company’s
ability to achieve run rate production of separated rare earth
materials; risks related to the Company’s long-term agreement with
General Motors, including the Company’s ability to produce and
supply NdFeB magnets; risks related to expected sales of separated
NdPr oxide due to various risks, including demand and pricing for
separated NdPr oxide; risks related to the Company’s ability to
develop magnetic precursor products in Stage III, including
production delays; risks related to the Company entering into
agreements with customers for prepayment of magnetic precursor
products, including NdPr metal; risks associated with the terms of
the new 3% convertible notes due 2030; risks related to the share
repurchase program and whether it will be fully consummated or will
enhance long-term stockholder value; the impact of the global
COVID-19 pandemic, on any of the foregoing risks; risks related to
current and future governmental and environmental laws,
regulations, licenses or legal requirements; and those risk factors
discussed in the Company’s filings with the Securities and Exchange
Commission, including Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and other
documents filed by the Company with the Securities and Exchange
Commission.
If any of these risks materialize or the assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. The Company does not
intend to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this
earnings release may not occur.
Use of Non-GAAP Financial Measures
This press release references certain non-GAAP financial
measures, including Adjusted EBITDA, Adjusted Net Income (Loss),
and Adjusted Diluted EPS, which have not been prepared in
accordance with GAAP. MP Materials defines Adjusted EBITDA as GAAP
net income or loss before interest expense, net; income tax expense
or benefit; and depreciation, depletion and amortization; further
adjusted to eliminate the impact of stock-based compensation
expense; initial start-up costs; transaction-related and other
costs; accretion of asset retirement and environmental obligations;
gain or loss on disposals of long-lived assets; gain or loss on
early extinguishment of debt; and other income or loss. MP
Materials defines Adjusted Net Income (Loss) as GAAP net income or
loss excluding the impact of stock-based compensation expense;
initial start-up costs; transaction-related and other costs; gain
or loss on disposals of long-lived assets; gain or loss on early
extinguishment of debt; and other items that management does not
consider representative of our underlying operations; adjusted to
give effect to the income tax impact of such adjustments. MP
Materials defines Adjusted Diluted EPS as GAAP diluted earnings or
loss per share excluding the per share impact, using adjusted
diluted weighted-average shares outstanding, of stock-based
compensation expense; initial start-up costs; transaction-related
and other costs; gain or loss on disposals of long-lived assets;
gain or loss on early extinguishment of debt; and other items that
management does not consider representative of our underlying
operations; adjusted to give effect to the income tax impact of
such adjustments. In addition, when appropriate, we include an
adjustment to reverse the impact of applying the if-converted
method to our 2026 Notes if necessary to reconcile between GAAP
diluted earnings or loss per share and Adjusted Diluted EPS. When
applicable, adjusted diluted weighted-average shares outstanding
reflect the anti-dilutive impact of our capped call options entered
into in connection with the issuance of our 3.00% unsecured senior
convertible notes due March 2030.
MP Materials’ management uses Adjusted EBITDA, Adjusted Net
Income (Loss), and Adjusted Diluted EPS to compare MP Materials’
performance to that of prior periods for trend analyses and for
budgeting and planning purposes. MP Materials believes Adjusted
EBITDA, Adjusted Net Income (Loss), and Adjusted Diluted EPS
provide useful information to management and investors regarding
certain financial and business trends relating to MP Materials’
financial condition and results of operations. MP Materials’
management believes that the use of Adjusted EBITDA, Adjusted Net
Income (Loss), and Adjusted Diluted EPS provides an additional tool
for investors to use in evaluating projected operating results and
trends. MP Materials’ method of determining these non-GAAP measures
may be different from other companies’ methods and, therefore, may
not be comparable to those used by other companies and MP Materials
does not recommend the sole use of these non-GAAP measures to
assess its financial performance. Management does not consider
non-GAAP measures in isolation or as an alternative or to be
superior to financial measures determined in accordance with GAAP.
The principal limitation of non-GAAP financial measures is that
they exclude significant expenses and income that are required by
GAAP to be recorded in MP Materials’ financial statements. In
addition, they are subject to inherent limitations as they reflect
the exercise of judgments by management about which expense and
income are excluded or included in determining these non-GAAP
financial measures. In order to compensate for these limitations,
management presents reconciliations of such non-GAAP financial
measures to the most directly comparable GAAP financial
measures.
Key Performance Indicators
REO Production Volume is measured in MTs, the Company’s
principal unit of sale for its concentrate product. This measure
refers to the REO content contained in the rare earth concentrate
we produce and, beginning in the second quarter of 2023, includes
volumes fed into downstream circuits for commissioning and starting
up our separations facilities and for producing separated rare
earth products, a portion of which is also included in our KPI,
NdPr Production Volume. REO Production Volume is a key indicator of
the Company’s mining and processing capacity and efficiency.
REO Sales Volume for a given period is calculated in MTs. A
unit, or MT, is considered sold once we recognize revenue on its
sale as determined in accordance with GAAP. REO Sales Volume is a
key measure of the Company’s ability to convert its concentrate
production into revenue. REO Sales Volume includes both traditional
concentrate as well as roasted concentrate.
Realized Price per REO MT for a given period is calculated as
the quotient of: (i) the Company’s rare earth concentrate sales,
which are determined in accordance with GAAP, for a given period
and (ii) the Company’s REO Sales Volume for the same period.
Realized Price per REO MT is an important measure of the market
price of the Company’s concentrate product.
NdPr Production Volume for a given period is measured in MTs,
the Company’s principal unit of sale for its NdPr separated
products. NdPr Production Volume refers to the volume of finished
and packaged NdPr oxide produced at Mountain Pass for a given
period. NdPr Production Volume is a key indicator of the Company’s
separations and finishing capacity and efficiency.
Our NdPr Sales Volume for a given period is calculated in MTs
and on an NdPr oxide-equivalent basis (as further discussed below).
A unit, or MT, is considered sold once we recognize revenue on its
sale, whether sold as NdPr oxide or NdPr metal, as determined in
accordance with GAAP. For NdPr metal sales, the MTs sold and
included in NdPr Sales Volume are calculated on the basis of the
volume of NdPr oxide used to produce such NdPr metal. We utilize an
assumed material conversion ratio of 1.20, such that a sale of 100
MTs of NdPr metal would be included in this KPI as 120 MTs of NdPr
oxide-equivalent. NdPr Sales Volume is a key measure of our ability
to convert our production of separated NdPr products into revenue.
We have a mix of contracts with customers where we sell NdPr as (i)
oxide, (ii) metal, where the amount of oxide required to produce
such metal is variable, and (iii) metal, where we have a guarantee
of the amount produced and sold based on the amount of oxide
consumed. Among other factors, differences between quarterly NdPr
Production Volume and NdPr Sales Volume may be caused by the time
required for the conversion of NdPr oxide to NdPr metal, including
time in-transit, as well as differences in actual versus assumed
yields of oxide to metal in the calculation of NdPr Sales
Volume.
NdPr Realized Price per kilogram (“KG”) for a given period is
calculated as the quotient of: (i) our NdPr oxide and metal sales,
which are determined in accordance with GAAP, for a given period
and (ii) our NdPr Sales Volume for the same period. NdPr Realized
Price per KG is an important measure of the market price of our
NdPr products.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107341825/en/
Investors: IR@mpmaterials.com
Media: Matt Sloustcher media@mpmaterials.com
MP Materials (NYSE:MP)
Historical Stock Chart
From Oct 2024 to Nov 2024
MP Materials (NYSE:MP)
Historical Stock Chart
From Nov 2023 to Nov 2024
