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Danimer Scientific Announces Second Quarter 2023 Results
August 10, 2023
4 Min Read
Image: Danimer Scientific
BAINBRIDGE, Ga.--Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the “Company”), a leading next-generation bioplastics company focused on the development and production of highly engineered biodegradable materials, today announced financial results for its second quarter, ended June 30, 2023.
Danimer announced, in a separate release also issued after the close of market today, the acceptance of its Part II Application by the U.S. Department of Energy (DOE) under the Title XVII Loan Guarantee. The Company has been invited into the confirmatory due diligence and term sheet negotiation process that, upon successful completion could lead to funding from the U.S. Department of the Treasury’s Federal Financing for construction of its greenfield manufacturing facility in Bainbridge, Georgia.
Stephen E. Croskrey, Chairman and Chief Executive Officer of Danimer, commented, “During the second quarter, we made progress in a number of areas. We are very pleased to have moved into the next phase of the financing process with the Department of Energy. We also are excited to have launched new programs that grow and diversify our portfolio of customers and end-use applications. We expect to close this year with momentum in our business and a renewed ability to keep pace with a range of future opportunities for growth. We believe we will enter next year having demonstrated that we are the clear leader in the fast-growing market for responsible alternatives to petroleum-based materials.”
Mr. Croskrey continued, “We are very pleased, after more than three years of careful development work on three new end-use applications, to now have commercialized protective films, shrink wrap and produce bags. We are also excited to play a key role in the rapid commercial launch of compostable coffee-pods. This is a very large category currently dependent on petroleum-based materials which pending EU legislation, if passed, would prohibit from use.”
Mr. Croskrey concluded, “We continue to push forward on other meaningful commercial initiatives. As we await final selections for straw and cutlery programs for customers in the quick service restaurant space, we are making excellent progress in the development of aqueous and extruded coatings for paper cups and for thermoformed cup lids. We believe that our unique ability to offer customers this combination of four key end-use applications will make for a powerful, comprehensive and extremely valuable solution that addresses single-use plastic waste for customers across the food service industry.”
Second Quarter 2023 Financial Highlights:
Revenues grew to $12.9 million in the second quarter of 2023 both compared to $12.7 million in the year-ago quarter of 2022 and compared to first quarter 2023 revenues of $11.9 million.Growth was entirely attributable to product revenue, which was $12.2 million in the second quarter as compared to $11.6 million in the same period of last year, driven by stronger sales of PHA-based resins, which increased 10% compared to prior year and 69% sequentially, partially offset by a modest decline in PLA-based resin sales.Service revenue were $0.7 million in the second quarter as compared to $1.1 million in the second quarter of last year, an expected decline that reflects the successful completion of development work for certain customers, that has now progressed to commercialization.
Gross profit was $(6.6) million compared to $(2.2) million in the second quarter of 2022. Adjusted gross profit was $(1.6) million compared to $(0.5) million in the second quarter of 2022. The reduction in adjusted gross profit primarily reflects increased fixed production costs associated with greater capacity.
Net loss for the second quarter was $(39.2) million compared with $(30.4) million in the prior year period.
Adjusted EBITDA in the second quarter of 2023 improved to $(10.2) million as compared to $(12.9) million in the second quarter of 2022. As in recent previous quarters, this improvement was attributable to a comprehensive program of expense control measures implemented across many areas of the business.
Capital Structure
At June 30, 2023, the Company reported a total debt balance of $377.8 million, which included the Company’s convertible senior notes, its recent senior secured term loan and $45.7 million of low-interest New Markets Tax Credit loans that the Company expects will be forgiven beginning in 2026. The Company noted that, including $14.5 million of restricted cash, effective liquidity at the end of the second quarter was $105.2 million. The Company remains comfortable with its liquidity position and it has the strategic and operational flexibility required to execute its growth strategy.
Outlook
The Company noted that its second quarter and first half results have been consistent with its expectations, and it remains confident in its competitive position and its expectations for growth. At the same time, given a possible shift in the timing of certain significant new program awards and associated first shipment delays, the Company now believes that a bias toward the low end of its previously communicated range for 2023 full-year Adjusted EBITDA of $(23) million to $(31) million is prudent. The Company continues to anticipate full-year capital expenditures in the range of $26 million to $31 million.
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