Danimer Scientific Announces Fourth Quarter and Full Year 2023 Results
BAINBRIDGE, Ga. , March 28 /Businesswire/ - 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 fourth quarter and full year, ended December 31, 2023.
Stephen E. Croskrey, Chairman and Chief Executive Officer of Danimer, commented, “While 2023 was a challenging year for the Company, we are greatly encouraged by the successes we had and we believe we remain well ahead of the competition in both deep understanding of the biodegradable plastics industry and the available production capacity to meet current and future customers’ needs. We are excited for the year ahead and focused on leveraging our global market-leadership position in PHA-based materials to drive value to our customers, partners and shareholders.
Croskrey continued, “We maintain a strong belief that we will significantly grow our business in 2024 as we continue to fulfill our mission to eliminate plastic pollution from petroleum-based plastics through the adoption and use of PHA-based materials as biodegradable alternatives in a variety of end markets. Our recently completed equity offering transaction enhances our operational liquidity runway and should enable us to support this expected growth.”
Fourth Quarter 2023 Financial Highlights:
- Revenues were $10.9 million in the fourth quarter of 2023 compared to revenue of $15.3 million in the fourth quarter of 2022. While PHA revenue increased by $0.9 million in the quarter as compared with the prior year quarter, loss of shipments to customers affected by the conflict in Ukraine reduced the quarter-over-quarter PLA revenue by $4.9 million, leading to a net reduction in product revenue of $4.0 million.
- Gross profit was $(6.4) million compared to $(2.7) million in the fourth quarter of 2022. Adjusted gross profit was $(1.2) million compared to $2.0 million in the fourth quarter of 2022.
- Adjusted EBITDA was $(10.7) million in the fourth quarter of 2023 compared to $(8.6) million in the fourth quarter of 2022.
Full Year 2023 Financial Highlights:
- Revenues were $46.7 million for the full year of 2023 compared to $53.2 million in the prior year. PHA-related sales grew by 6 percent over the prior year and represented 69 percent of 2023 product revenues. PLA-based product sales declined $6.1 million from the prior year, which as noted above was primarily due to the conflict in Ukraine.
- Gross profit for 2023 was $(27.0) million compared to $(10.4) million for the prior period. Adjusted gross profit was $(6.5) million in 2023 compared to $2.0 million in 2022, primarily driven by higher fixed cost per unit absorption.
- Adjusted EBITDA was $(39.0) million for the full year of 2023 compared to $(45.0) million for the full year of 2022. The year over year improvement in Adjusted EBITDA primarily reflects the Company’s comprehensive program of expense control measures.
- Unrestricted cash and cash equivalents at December 31, 2023 was $59.2 million, which does not include $14.3 million of restricted cash that is mainly held for future interest payments under the Company’s existing $130 million Senior Secured Term Loan.
- Full-year capital expenditures were $27.7 million, consistent with the Company’s most recent guidance of $27 million to $29 million.
Capital Structure
At December 31, 2023, the Company reported total debt outstanding of $382.8 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.
On March 20, 2024, we executed an equity offering which provided the Company with over $13 million in additional liquidity. This event improves the Company’s liquidity position and enables it to maintain strategic and operational flexibility as it executes its growth strategy. The Company noted that the effect of this transaction is not reflected in its December 31, 2023, financial statements.
Outlook
Michael Hajost, Danimer’s Chief Financial Officer, commented, “We are intently focused on revenue growth, which we expect to accelerate during the second half of 2024. As a result, we expect improvement in operating margins and operating cash flow as we move through the year.
For the full year 2024, the Company today provided the following guidance:
- Full-year Adjusted EBITDA is expected to be in the range of $(22) million to $(32) million. The improvement in Adjusted EBITDA compared to the $(39.0) million reported for 2023 is expected to result primarily from revenue growth in PHA-based resins and the related benefits of scale captured by the Company’s Kentucky manufacturing operations. In addition, the Company’s on-going initiatives to improve efficiency and reduce costs are expected to have a favorable year-over-year impact on both R&D and SG&A expenses.
- Full-year capital expenditures are anticipated to be in the range of $8 million to $10 million, to support existing commitments related to the Bainbridge greenfield facility, maintenance expenditures and other capital projects.
- The Company's unrestricted cash balance is expected to be in the range of $20 to $25 million at the end of fiscal 2024. This ending cash balance range is driven by the Adjusted EBITDA range, as a proxy for cash flow, the capital expenditures range, the known cash interest for the year based on the Company's current debt structure, the net cash received from the recent equity issuance and significant expected improvements in working capital.
Webcast, Conference Call and 10-K Filing
The Company will host a webcast and conference call today, Thursday, March 28, 2024, at 4:30 p.m. Eastern time to review fourth quarter and full-year 2023 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 1-888-886-7786 or 1-416-764-8658, respectively. Upon dialing in, please request to join the Danimer Scientific Fourth Quarter 2023 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 in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding our expectations for the full year 2024 capital expenditures, Adjusted EBITDA and cash balances. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to, the overall level of consumer demand on our products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption and volatility in the global currency, capital, and credit markets; the financial strength of the Company's customers; the Company's ability to implement its business strategy, including, but not limited to, its ability to expand its production facilities and plants to meet customer demand for its products and the timing thereof; risks relating to the uncertainty of the projected financial information with respect to the Company; the ability of the Company to execute and integrate acquisitions; changes in governmental regulation, legislation or public opinion relating to our products; the Company’s exposure to product liability or product warranty claims and other loss contingencies; disruptions and other impacts to the Company’s business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns such as the COVID-19 global pandemic; the impact on our business, operations and financial results from the ongoing conflict in Ukraine; the impact that global climate change trends may have on the Company and its suppliers and customers; the Company's ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, our information systems; the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes; our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems with our transitioning to upgraded or replacement systems; the impact of adverse publicity about the Company and/or its brands, including without limitation, through social media or in connection with brand damaging events and/or public perception; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; our ability to utilize potential net operating loss carryforwards; and changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks. More information on potential factors that could affect the Company's financial results is included from time to time in the Company's public reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.
Danimer Scientific, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
December 31, |
|
December 31, |
||||||
| (in thousands, except share and per share data) | 2023 |
|
|
2022 |
||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
59,170 |
|
$ |
62,792 |
|
||
| Accounts receivable, net |
|
15,227 |
|
|
17,989 |
|
||
| Other receivables, net |
|
652 |
|
|
1,635 |
|
||
| Inventories, net |
|
25,270 |
|
|
32,743 |
|
||
| Prepaid expenses and other current assets |
|
4,714 |
|
|
5,225 |
|
||
| Contract assets, net |
|
3,005 |
|
|
4,687 |
|
||
| Total current assets |
|
108,038 |
|
|
125,071 |
|
||
| Property, plant and equipment, net |
|
445,153 |
|
|
453,949 |
|
||
| Intangible assets, net |
|
77,790 |
|
|
80,941 |
|
||
| Right-of-use assets |
|
19,160 |
|
|
19,028 |
|
||
| Leverage loans receivable |
|
31,446 |
|
|
31,446 |
|
||
| Restricted cash |
|
14,334 |
|
|
1,609 |
|
||
| Other assets |
|
2,210 |
|
|
226 |
|
||
| Total assets | $ |
698,131 |
|
$ |
712,270 |
|
||
| Liabilities and Stockholders' Equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
5,292 |
|
$ |
14,977 |
|
||
| Accrued liabilities |
|
4,726 |
|
|
5,001 |
|
||
| Unearned revenue and contract liabilities | 1,000 |
|
- |
|
||||
| Current portion of lease liability |
|
3,337 |
|
|
3,337 |
|
||
| Current portion of long-term debt, net |
|
1,368 |
|
|
1,972 |
|
||
| Total current liabilities |
|
15,723 |
|
|
25,287 |
|
||
| Long-term lease liability, net |
|
21,927 |
|
|
22,114 |
|
||
| Long-term debt, net |
|
381,436 |
|
|
286,398 |
|
||
| Deferred income taxes |
|
- |
|
|
200 |
|
||
| Other long-term liabilities |
|
1,025 |
|
|
659 |
|
||
| Total liabilities | $ |
420,111 |
|
$ |
334,658 |
|
||
| Stockholders' equity: | ||||||||
| Common stock, $0.0001 par value; 200,000,000 shares authorized: 102,832,103 and 101,804,454 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | $ |
10 |
|
$ |
10 |
|
||
| Additional paid-in capital |
|
732,131 |
|
|
676,250 |
|
||
| Accumulated deficit |
|
(454,121 |
) |
|
(298,648 |
) |
||
| Total stockholders’ equity |
|
278,020 |
|
|
377,612 |
|
||
| Total liabilities and stockholders’ equity | $ |
698,131 |
|
$ |
712,270 |
|
||
Danimer Scientific, Inc. |
||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||
Years Ended December 31, |
|
Years Ended December 31, |
||||||||||||||
| (in thousands, except share and per share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
| Revenue: | ||||||||||||||||
| Products | $ |
10,476 |
|
$ |
14,530 |
|
$ |
44,200 |
|
$ |
48,420 |
|
||||
| Services |
|
469 |
|
|
794 |
|
|
2,484 |
|
|
4,798 |
|
||||
| Total revenue |
|
10,945 |
|
|
15,324 |
|||||||||||
