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Origin Materials, Inc. Reports Financial Results Fourth Quarter 2021 – Toys Daily

WEST SACRAMENTO. Calif BUSINESS WIRE)–Origin Materials, Inc. (“Origin,” “Origin Materials,”Or the “Company”) (Nasdaq: ORGN, ORGNW), the world’s leading carbon negative materials company with a mission to enable the world’s transition to sustainable materials, today announced financial results for its fourth quarter and year ended December 31, 2021.

“I am incredibly proud of what the Origin team accomplished in 2021 and encouraged by the strong momentum that we continue to see for our industry-leading technology platform in 2022 as the world moves aggressively to a zero-carbon future. We remain well-capitalized, on budget, and on track for completion of Origin 1 by the end of 2022. Origin 2 remains on track to be operational by mid-2025. We announced that we have selected Geismar, Louisiana for Origin 2’s location, subject to finalization of economic incentives, and are announcing today the selection of Hunt, Guillot & Associates as the project’s owner’s engineer. After the close of the fourth quarter, we were also pleased to announce new strategic partnerships with Mitsui & Co., Ltd. and Minafin Group, both of which will increase our exposure to a multitude of consumer and industrial end-markets while also expanding our international footprint in Asia and Europe. The demand for ‘net zero’-enabling materials remains strong, and our efforts to commercialize the business have resulted in increased offtake agreements and capacity reservations from our customers and partners to $5.6 billion. This has more than quintupled since our announcement to become a public company in February 2021,”Rich Riley, Origin’s Chief Executive Officer, said:

Highlights from Q4 of Key Companies

Origin Materials has increased its capacity reservations and signed offtake to $5.6 billion, up from $4.2 billion in November 2021. The Company also created new and expanded customer relationships.

Partnership with MitsuiTo develop advanced carbon-negative chemicals and materials for the automotive, chemicals, electronics, packaging, and textiles industries. Through this partnership, Origin has access to more markets in Japan and around the world. Partnership with Minafin Group to industrialize high-value specialty chemicals based on Origin’s carbon-negative materials for applications in the pharmaceutical, agricultural, cosmetics and personal care, and automotive industries.

These partnerships complement Origin’s existing partnerships and customer relationships with industry leaders including Danone, Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, Kolon Industries, PrimaLoft and Solvay.

Construction Update and Financing update: Origin 1 and Origin 2 Financing

The Company maintains the previously revealed Origin 1 & Origin 2 capital budgets, construction timelines and construction timelines are all on schedule. Origin believes that Origin 1 or 2 capital projects could be fully funded from its cash reserves as well as traditional sources of financing. The State of Louisiana will provide a $400 million limit for Origin 2 Private Activity Bond volume allocations. This is subjected to finalization. Private Activity Bonds are exempt bonds, which are exempt from taxes and authorized by local governments to fund qualified projects with private capital. Origin expects to receive more than $100,000,000 in pending incentives from both the state of California and local governments.

Origin continues to consult financial institutions that specialize funding capital projects like Origin 2. The Company is pleased to confirm that the financing assumptions for Origin 2 are feasible and reasonable. The $400 million Private Activity Bond allocation made by the State of Louisiana is a solid foundation for financing Origin 2. This is combined together with certain 2021 Infrastructure Investment and Jobs Acts.“IIJA”()Origin 2 could be able to finance its debt with completely tax-exempt bonds through provisions. Origin continues to collaborate with top financial institutions in traditional private financing, federal loan programmes, and with the U.S.D.A. Department of Energy.

Origin 1 is expected to be completed mechanically by 2022. The ENCON evaporator module systems were installed and bolted during the fourth quarter, three months ahead the Company’s April 2021 plan. As previously disclosed, the key production modules were lifted and installed in October 2021, six months ahead of the Company’s plan announced in April 2021. Pipe fabrication began earlier in the year, six months before the April 2021 deadline. Further de-risking this schedule.

Origin 2 is expected to be operational by mid-2025. In collaboration with Worley Limited, Deloitte Consulting, and Fisher International, the Company has chosen Geismar in Louisiana for Origin 2. This decision is subjected to the finalization and approval of economic incentives. The site is home to significant sustainable wood residues, exceptional rail, waterway and other logistics, and is within easy reach of potential petrochemical partners. In addition, Origin has selected Hunt, Guillot & Associates as its owner’s engineer for Origin 2. Origin is currently working to design the front end and expects that detailed engineering can begin in 2023.

Results for the Fourth Quarter 2021 & the Whole Year 2021

As of December 31, 2021 cash, cash equivalents, marketable securities and cash totaled $444.6 million.

The fourth quarter operating costs were $7.8 million compared to $5.5 million in previous-year periods. The total operating expenses for the year 2021 was $26.9million, which is $11.2million more than the previous-year period.

The fourth quarter adjusted EBITDA lost was $6.6million compared with $3.8 million in the prior-year periods. The adjusted EBITDA loss for the full year 2021 was $20.0million, as opposed to $9.1million in previous-year periods.

The fourth quarter net profit was $5.2million, which is compared with a loss of $23.5million for the previous-year period. The full-year 2021 net profit was $42.1million, which is a decrease of $30.3 million from the previous-year period.

The number of shares outstanding as at December 31, 2021 was 135.6 million, excluding 4.5million shares owned by stockholders that are subject to forfeiture based previously disclosed share price performance targets.

Outlook for the Full Year 2022

Based on current business trends and business conditions, the Company offers the following initial guidance for Adjusted EBITDA and capital expenditure for fiscal year 2022:

Adjusted EBITDA loss of up to $36,000,000 Capital expenditure is expected at $155 millions

The table captioned shows a reconciliation between a non-GAAP figure and the GAAP figure. ‘Reconciliation of GAAP and Non-GAAP Results’This press release contains the following information. These expectations don’t take into account, or give effect, to, among other unforeseeable events like changes in global economy conditions.

Information about Webcasting and Conference calls

The Company’s management will host a conference call via webcast on February 24, 2022, at 5 p.m. Eastern Time. This will allow them to discuss the Company’s financial results.

Interested investors and other parties can listen to a webcast of the live conference call and access the Company’s fourth quarter update presentation by logging onto the Investor Relations section of the Company’s website at https://investors.originmaterials.com/.

You can also access the conference call live by calling 1-855-327-6837 (domestic) or +1-631-8911-4304 for international. You can access the replay via telephonic phone approximately two hours after the call by calling 1-855-327 6837 (domestic), or +1-631-8911-4304 (international). The conference ID and pin number for the replay are 10018099. The replay will be available until March 10, 2020 at 11:59 Eastern Time.

About Origin Materials, Inc.

Origin Materials, headquartered in West Sacramento is the world’s largest carbon negative materials company. Origin’s mission is to enable the world’s transition to sustainable materials. Origin has been working to develop a platform that can convert non-food biomass such as sustainable wood residues into useful materials or capture carbon. Origin has been around for more than a decade. Origin’s patented technology platform can help revolutionize the production of a wide range of end products, including clothing, textiles, plastics, packaging, car parts, tires, carpeting, toysWith a market size of $1 trillion, you can do more. In addition, Origin’s technology platform is expected to provide stable pricing largely decoupled from the petroleum supply chain, which is exposed to more volatility than supply chains based on sustainable wood residues. Origin’s patented drop-in core technology, economics and carbon impact are supported by a growing list of major global customers and investors. For more information, please visit www.origins.com www.originmaterials.com.

Non-GAAP Financial Information

To supplement the Company’s financial results presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), the Company also uses non-GAAP financial measures, including adjusted EBITDA, as supplemental measures to review and assess the Company’s operating performance. Adjusted EBITDA refers to net income or loss adjusted for (i), stock Compensation expense, depreciation, amortization, and (iii), interest cost net of capitalized interest. (v) Change in fair Valuation of Warrants Liability. (vi) Changes in fair Value of Earnout Liability. (viii) Professional fees relating to completed mergers. (viii) Other income net. The Company believes that these non-GAAP financial measures provide useful information about the Company’s operating results, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

Non-GAAP financial metrics cannot be defined in U.S. GAAP. They are not in compliance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing the Company’s operating performance, investors should not consider them in isolation. Additionally, non-GAAP financial information can be calculated differently from other companies’ calculations, so comparability may be limited.

These limitations are mitigated because the Company reconciles non-GAAP financial measures to the most comparable U.S. GAAP Performance metrics. All of these should be considered when evaluating the Company’s performance.

The captioned table provides additional information on this non GAAP financial measurement. “Reconciliation of GAAP and Non-GAAP Results”The following information is included in the press release.

Cautionary Note: Forward Looking Statements

This press release contains forward-looking statements that comply with federal securities laws. Forward-looking statements are often accompanied with words like “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,”Similar expressions can be used to predict or indicate future events. These statements are not historical statements. These forward-looking statements include, but are not limited to, statements regarding Origin Materials’ business strategy, estimated total addressable market, access to traditional financing sources, budget and timelines to complete Origin 1 and Origin 2, ability to convert capacity reservations and offtake arrangements into revenue, commercial and operating plans, product development plans, anticipated growth and projected financial information and ability to realize the anticipated benefits of any partnerships discussed in the press release. These statements are based on various assumptions. They also include current expectations of Origin Materials management. They do not reflect actual performance. These forward-looking statements are meant to be illustrative only. They should not be considered a guarantee, assurance or prediction of future events or probabilities. Actual events and circumstances can be unpredictable and hard to predict. They will also vary from assumptions. Origin Materials cannot predict many actual events and circumstances. These forward-looking statements are subject to a number of risks and uncertainties, including that Origin Materials may be unable to successfully commercialize its products; the effects of competition on Origin Materials’ business; disruptions and other impacts to Origin Materials’ business as a result of the COVID-19 pandemic and other global health or economic crises; changes in customer demand; and those factors discussed in the Quarterly Report on Form 10-Q filed with the SEC on November 12, 2021 under the heading “Risk Factors,”Origin Materials has filed or will be filing other documents with SEC. If any of these risks are realized or our assumptions are wrong, actual results may differ materially from what is implied by these forward looking statements. Origin Materials might not be aware of additional risks, or believe they are irrelevant. These factors may cause actual results to differ materially with those stated in forward-looking statements. In addition, forward-looking statements reflect Origin Materials’ expectations, plans, or forecasts of future events and views as of the date of this press release. Origin Materials anticipates that future developments and events could cause its assessments to shift. Origin Materials may update these forward-looking statements at its discretion, but Origin Materials disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Origin Materials’ assessments of any date subsequent to the date of this press release. You should not rely on the forward-looking statements in excess.

Origin Materials, Inc.

Consolidated Balance Sheets

(Unaudited)

(In the thousands, except for per-share and share data

December 31,

2021

 

December 31,

2020

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

46,637

 

 

$

1,309

 

Restricted cash

 

490

 

 

 

565

 

Marketable securities

 

397,458

 

 

 

 

Other receivables

 

2,612

 

 

 

48

 

Derivative asset

 

202

 

 

 

 

Grants receivable

 

 

 

 

 

Prepaid expenses, and other assets

 

3,774

 

 

 

83

 

Total current assets

 

451,173

 

 

 

2,005

 

Net property, equipment, or plant

 

57,185

 

 

 

45,104

 

Operating lease right of use for asset

 

1,782

 

 

 

 

Intangible assets, net

 

215

 

 

 

258

 

Other long-term assets

 

62

 

 

 

62

 

Total assets

$

510,417

 

 

$

47,429

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

2,451

 

 

$

2,700

 

Accrued expenses

 

973

 

 

 

593

 

Current operating lease liability

 

280

 

 

 

 

Other liabilities, current

 

380

 

 

 

 

Derivative liability

 

103

 

 

 

1,239

 

Convertible Notes for Stockholders

 

 

 

 

3,232

 

Total current liabilities

 

4,187

 

 

 

7,764

 

 

 

 

 

PPP Loan

 

 

 

 

906

 

Earnout liability

 

127,757

 

 

 

 

Canadian Government Research and Development Program Liability

 

6,762

 

 

 

6,197

 

Convertible preferred stock warrants

 

 

 

 

19,233

 

Common stock warrants are liable

 

52,860

 

 

 

 

Stockholder note

 

5,189

 

 

 

5,189

 

Other liabilities of a related party that are long-term

 

5,720

 

 

 

5,517

 

Operating lease liability

 

1,486

 

 

 

 

Other liabilities, long-term

 

2,946

 

 

 

2,500

 

Total liabilities

$

206,907

 

 

$

47,306

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Preferred stock, $0.0001 par value, 10,000,000 shares authorized; No shares issued or outstanding as of December 31, 2021, or December 31, 2020

 

 

 

 

 

Common stock, $0.0001/value, 1,000,000,000 shares authorized; 135,801,569 and 70,266,925 were issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

 

16

 

 

 

6

 

Additional capital investment

 

361,542

 

 

 

98,620

 

Accumulated deficit

 

(56,797

)

 

 

(98,887

)

Accumulated other comprehensive income (loss).

 

(1,251

)

 

 

384

 

Total stockholders’ equity

 

303,510

 

 

 

123

 

Total liabilities and stockholders’ equity

$

510,417

 

 

$

47,429

 

Origin Materials, Inc.

CONSOLIDATEMENTS of OPERATIONS AND COMPREHENSIVE INSOME

(Unaudited)

 

Three Months to the End

December 31,

 

Year ended

December 31,

(In thousands, excepting share and per share data

2021

 

2020

 

2021

 

2020

Operating Expenses

 

 

 

 

 

 

 

Research and development

$

3,519

 

 

$

825

 

 

$

9,124

 

 

$

4,138

 

General and administrative

 

4,055

 

 

 

4,523

 

 

 

17,265

 

 

 

6,563

 

Amortization and Depreciation

 

181

 

 

 

174

 

 

 

544

 

 

 

479

 

Total operating expenses and loss

 

7,755

 

 

 

5,522

 

 

 

26,933

 

 

 

11,180

 

 

 

 

 

 

 

 

 

Other expenses (income).

 

 

 

 

 

 

 

Interest income

 

(1,413

)

 

 

 

 

 

(1,413

)

 

 

 

Interest expense, net capitalized interests

 

(1

)

 

 

174

 

 

 

2,838

 

 

 

341

 

Fair value changes in derivatives

 

(100

)

 

 

1,036

 

 

 

1,326

 

 

 

1,088

 

Change in warrants’ fair value liability

 

(2,838

)

 

 

17,370

 

 

 

4,525

 

 

 

18,498

 

Change in fair value of earnout liability

 

(8,480

)

 

 

 

 

 

(75,488

)

 

 

 

Other income, net

 

(160

)

 

 

(568

)

 

 

(811

)

 

 

(805

)

Total other income expenses net

 

(12,992

)

 

 

18,012

 

 

 

(69,023

)

 

 

19,122

 

Net income (loss)

$

5,237

 

 

$

(23,534

)

 

$

42,090

 

 

$

(30,302

)

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities

 

(1,712

)

 

 

 

 

 

(1,712

)

 

 

 

Adjustment for foreign currency translation net tax

 

53

 

 

 

1,804

 

 

 

77

 

 

 

794

 

Total comprehensive income (loss)

 

3,578

 

 

 

(21,730

)

 

 

40,455

 

 

 

(29,508

)

Net income (loss) per share, basic

$

0.04

 

 

$

(0.38

)

 

$

0.42

 

 

$

(0.48

)

Net income (loss) per share, diluted

$

0.04

 

 

$

(0.38

)

 

$

0.40

 

 

$

(0.48

)

Common shares of basic weighted average are still available

 

136,762,136

 

 

 

62,545,275

 

 

 

101,221,781

 

 

 

62,544,933

 

Weighted-average common shares, diluted

 

142,066,042

 

 

 

62,545,275

 

 

 

106,237,754

 

 

 

62,544,933

 

 

 

 

 

 

 

 

 

Origin Materials, Inc.

Cash Flows from Consolidated Statements

(Unaudited)

 

Year ended

December 31,

(in thousands)

2021

 

2020

Cash flows from operating activity

 

 

 

Net income (loss)

$

42,090

 

 

$

(30,302

)

Adjustments to reconcile net earnings to net cash from operating activities:

 

 

 

Amortization and Depreciation

 

544

 

 

 

479

 

Amortization of right to use assets

 

280

 

 

 

 

Stock-based compensation

 

5,767

 

 

 

1,630

 

Amortization of debt cost

 

14

 

 

 

90

 

Discount on the Accretion Debt

 

2,211

 

 

 

101

 

Modification in fair values of derivative liabilities

 

1,326

 

 

 

1,088

 

Change in warrants’ fair value liability

 

4,525

 

 

 

18,498

 

Change in fair value of earnout liability

 

(75,488

)

 

 

 

Operating lease liabilities: Payments

 

(295

)

 

 

 

Changes in operating liabilities or assets

 

 

 

Other receivables

 

(2,563

)

 

 

1,007

 

Grants receivable

 

 

 

 

87

 

Prepaid expenses, and other assets

 

(3,652

)

 

 

53

 

Current increase in other liability

 

380

 

 

 

 

Accounts payable

 

(395

)

 

 

1,203

 

Accrued expenses

 

3,010

 

 

 

349

 

Payable to a related party

 

203

 

 

 

256

 

Operational activities are funded with net cash

 

(22,043

)

 

 

(5,461

)

Cash flows from investments

 

 

 

Purchases of equipment, property, and plants after grants

 

(12,268

)

 

 

(1,786

)

Purchases of marketable security

 

(2,448,316

)

 

 

 

Marketable securities sales

 

2,024,089

 

 

 

 

Maturities of marketable securities

 

25,058

 

 

 

 

Capitalized interest on plant-building projects

 

(201

)

 

 

(268

)

Net cash can be used to invest in activities

 

(411,638

)

 

 

(2,054

)

Cash flows from financing activities

 

 

 

Stockholders’ notes payable net of debt issuance costs

 

11,707

 

 

 

3,166

 

Short-term debts can be paid

 

(906

)

 

 

 

Proceeds from Canadian Government Research and Development Program

 

543

 

 

 

2,662

 

Common stock issuance

 

74

 

 

 

1

 

Business combination net of issuance cost

 

467,530

 

 

 

 

Financing activities generate net money

 

478,948

 

 

 

5,829

 

The effects of foreign currency fluctuations on cash and cash equivalents, and restricted cash in foreign currency currencies

 

(14

)

 

 

(52

)

Net increase or decrease of cash and cash equivalents, along with restricted cash

 

45,253

 

 

 

(1,738

)

Cash and cash equivalents, and restricted cash at both the beginning and the end of the period

 

1,874

 

 

 

3,612

 

End of the period Cash, cash equivalents, and restricted cash

$

47,127

 

 

$

1,874

 

 

 

 

 

Origin Materials, Inc.

Reconciliation of GAAP and Non-GAAP Results

Adjusted Earnings After Interest, Taxes and Depreciation (Adjusted EBITDA) provides additional information about our operating profits. It adjusts for noncash items as well as non-routine items we expect to decrease. We believe that Adjusted EBITDA provides us a measure for operating profit. It is used for business evaluations and budgeting decisions, as well as comparing our performance with other companies using comparable measures.

Adjusted EBITDA is net income or loss after adjustments (i), stock compensation expense and depreciation and amortization and (iii), interest net of capitalized interest, (v), change at fair worth in derivative liabilities, (vi), warrants liability change at fair price and (viii), professional fees relating to completed mergers and (ix), other income net.

 

 

Three months ending December 31st

 

Year ended December 31,

(in thousands)

 

2021

 

2020

 

2021

 

2020

Net income (loss)

 

$

5,237

 

 

$

(23,534

)

 

$

42,090

 

 

$

(30,302

)

Stock-based compensation

 

 

959

 

 

 

1,552

 

 

 

5,767

 

 

 

1,630

 

Amortization and Depreciation

 

 

181

 

 

 

174

 

 

 

544

 

 

 

479

 

Interest income

 

 

(1,413

)

 

 

 

 

 

(1,413

)

 

 

 

Interest expense net of capitalized interest

 

 

(1

)

 

 

175

 

 

 

2,838

 

 

 

341

 

Modification in fair value for derivative liabilities

 

 

(100

)

 

 

1,036

 

 

 

1,326

 

 

 

1,088

 

Change in warrants’ fair value liability

 

 

(2,838

)

 

 

17,370

 

 

 

4,525

 

 

 

18,498

 

Change in fair value of earnout liability

 

 

(8,480

)

 

 

 

 

 

(75,488

)

 

 

 

Professional fees are required to complete mergers

 

 

 

 

 

 

 

 

640

 

 

 

 

Other income, net

 

 

(160

)

 

 

(568

)

 

 

(811

)

 

 

(805

)

Adjusted EBITDA

 

$

(6,615

)

 

$

(3,796

)

 

$

(19,982

)

 

$

(9,071

)

 

 

 

 

 

 

 

 

 

 

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Origin Materials, Inc. Reports Financial Results Fourth Quarter 2021 – Toys Daily

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