Origin 1 Key Production Module Installation Completed –
– Reaffirming Origin 1 and 2 Capital Budget, Production Timeline and Financing –
– Customer Demand is Strong and Broad Based, Increased Contracted Offtake Agreements and Capacity Reservations to $4.2 Billion –
Origin Materials, Inc. (“Origin,” “Origin Materials,” or the “Company”) (Nasdaq: ORGN, ORGNW), the world’s leading carbon negative materials company, today announced financial results for its third quarter ended September 30, 2021.
“We continue to make progress on our mission to enable the world’s transition to sustainable materials and are pleased to have completed the installation of the key production modules at Origin 1, six months ahead of the plan we announced in April 2021. As the world moves more aggressively to a zero-carbon future, customer demand remains strong, and our efforts to commercialize the business have resulted in increased offtake agreements and capacity reservations from our customers and partners to $4.2 billion. This is more than a 300% increase since our announcement to become a public company in February 2021. We were pleased to announce our recent strategic partnership with Kolon Industries, Inc., a global leader in chemicals and materials, as well as our sustainability partnership with the Drive+ network, which includes 11 of the world’s largest automakers working to accelerate the decarbonization of the auto industry. We remain well-capitalized, on budget, and on track for completion of Origin 1 by the end of 2022 and for Origin 2 to be completed by mid-2025,” said Rich Riley, Co-Chief Executive Officer of Origin.
Key Company Q3 Highlights
Origin Materials has increased signed offtake agreements and capacity reservations to $4.2 billion from $3.5 billion in August. The Company also implemented new and expanded partnerships and customer relationships, including:
Partnership with Kolon Industries to industrialize advanced carbon-negative chemicals and materials.
Partnership with Drive+, a platform of automotive suppliers which is in close collaboration with Drive Sustainability, a group of 11 of the world’s largest automotive manufacturers, including Volkswagen, Daimler, Ford, Stellantis and Toyota Motor Europe among others, aiming at further developing sustainability along the automotive supply chain.
Partnership with Alliance to End Plastic Waste, which includes industry leaders across the plastics value chain, working towards a common goal of developing, deploying and scaling solutions to help end plastic waste in the environment.
These partnerships complement Origin’s existing partnerships and customer relationships including with industry leaders like Danone, Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, PrimaLoft and Solvay.
Origin 1 and Origin 2 Financing and Construction Update
Since selecting Worley Limited as an engineering partner in Q3 2021, Origin has updated its original payment schedule for Origin 1 after incorporating detailed feedback from equipment suppliers and contractors, while reaffirming the Origin 1 capital budget and schedule. Additionally, Origin is reaffirming the previously disclosed Origin 2 capital budget and production timeline. Leading financial institutions that have expertise in financing similarly sized capital projects continue to confirm to the Company that its financing assumptions for Origin 2 are reasonable and executable. Origin reaffirms its expectations that the capital projects for Origin 1 and Origin 2 can be fully funded from its existing cash on hand and previously indicated traditional project financing sources.
Although the timing of capital expenditures will be incurred later than Origin’s original projections, Origin 1 remains on track for completion by the end of 2022. The lifting and installation of previously fabricated key production modules was completed in October 2021, six months ahead of the Company’s plan announced in April 2021. Origin expects piping fabrication to begin by the end of Q1 2022, three months ahead of its prior target of end of Q2 2022. Additionally, ENCON evaporator module installation is expected to be completed by the end of Q4 2021, three months ahead of schedule, as the Company previously expected to receive the module by the end of Q1 2022.
Similarly, Origin 2 remains on track for completion by mid-2025. As announced previously, the Company has appointed Worley as its FEL1 engineering partner. Origin is also working with Worley, Deloitte Consulting and Fisher International to select the site for Origin 2, which Origin expects to choose by the end of 2021 with an announcement of selected site in Q1 2022, in line with prior guidance. The Company has short-listed three locations for final diligence and negotiations and has acquired an option to purchase one of the sites. Origin remains focused on recruiting additional talent to its engineering and site selection project management teams as planning for Origin 2 is underway.
Results for Third Quarter 2021
Cash, cash equivalents and marketable securities were $460 million as of September 30, 2021.
Operating expenses for the third quarter were $7.1 million compared to $2.0 million in the prior year period.
Adjusted EBITDA loss was $(5.7) million for the third quarter compared to a loss of $(1.9) million in the prior-year period.
Net income was $27.9 million for the third quarter compared to a net loss of $(3.1) million in the prior-year period.
Shares outstanding as of September 30, 2021 were 136.8 million excluding 4.5 million shares held by a certain stockholder that are subject to forfeiture based on share price performance targets previously disclosed in our filings.
Full Year 2021 Outlook
Based on current business conditions, business trends and other factors, the Company is maintaining previous guidance for Adjusted EBITDA loss but is updating its capital spending outlook, and now expects:
Adjusted EBITDA loss of up to $25 million, consistent with prior outlook
Capital spending is expected to be approximately $45 million compared to the prior outlook of up to $111 million, due to refinement of the payment schedule since selecting an engineering partner. This has no impact on the construction timelines of both Origin 1 and 2, or total capital expenditures, which remain on track.
For a reconciliation of a non-GAAP figure to the applicable GAAP figure please see the table captioned ‘Reconciliation of GAAP and Non-GAAP Results' set forth at the end of this press release. These expectations do not consider, or give effect to, among other things, unforeseen events, including changes in global economic conditions.
Webcast and Conference Call Information
Company management will host a webcast and conference call on November 11, 2021, at 5:00 p.m. Eastern Time, 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 third quarter update presentation by logging onto the Investor Relations section of the Company's website at https://investors.originmaterials.com/.
The conference call can be accessed live over the phone by dialing 1-855-327-6837 (domestic) or + 1-631-891-4304 (international). A telephonic replay will be available approximately two hours after the call by dialing 1-844-512-2921, or for international callers, +1-412-317-6671. The conference ID for the live call and pin number for the replay is 10016941. The replay will be available until 11:59 p.m. Eastern Time on November 25, 2021.
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