Danimer Scientific, Inc. (NYSE:DNMR) Q3 2022 Results Conference Call November 8, 2022 5:00 PM ET Company Participants Steve Croskrey - CEO Mike Hajost - CFO Conference Call Participants Jon Tanwanteng - CJS Securities Laurence Alexander - Jefferies Thomas Boyes - Cowen & Company Operator Thank you for standing by. This is the conference operator. Welcome to the Danimer Scientific, Inc. Third Quarter 2022 Earnings Conference Call. As a reminder, all participants are in a listen-only mode and the conference i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: 001-39280 | --- | --- | --- | |----------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company reported sales of $12.7 million for Q2 2022, down from $14.5 million in the prior year, primarily due to lower PLA sales and R&D revenue, partially offset by an increase in PHA sales [34] - PHA-based resin sales increased by 84.5% to $7.7 million, now representing 61% of total revenues compared to 29% in the prior year quarter [35] - The gross loss for Q2 2022 was approximately $2.2 million, compared to a gross profit of $2 million in the prior year [36] - Adjusted EBITDA was a loss of $12.9 million for Q2 2022, compared to a loss of $2.7 million in the prior year [39] Business Line Data and Key Metrics Changes - PHA revenue grew by approximately 85% year-over-year, now constituting a significant portion of total revenue [12] - The company experienced a shift in product mix towards PHA, with PLA sales negatively impacted by customer operations in Ukraine [35] Market Data and Key Metrics Changes - The company noted increased interest in biodegradable solutions due to new legislation banning traditional plastics in regions like Canada, India, and California, which serves as a positive tailwind for the industry [22] - Supply chain bottlenecks and inflation are impacting customer timelines for product launches, but several significant launches are expected starting in Q4 2022 and into 2023 [24][25] Company Strategy and Development Direction - The company aims to expand capacity through organic production and third-party manufacturing, with a successful commissioning of Kentucky Phase II operations [9][13] - Strategic priorities include leading with innovation, growing customer partnerships, securing cost-effective inputs, and enhancing team capabilities to support growth [10][12] - The company is focused on transforming the plastics market and believes it is well ahead of the competition with a clear path to profitability [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year outlook and highlighted productive customer conversations and business development efforts [7] - The company expects adjusted EBITDA for 2022 to be in the range of negative $45 million to negative $35 million, with a focus on getting the PHA business to profitability [41][45] - Management acknowledged challenges with PLA sales and the impact of rising costs and supply chain uncertainties on capital expenditures [43][44] Other Important Information - The company is evaluating alternatives for financing its capital needs and has been invited to submit a part two application for a loan guarantee under the DOE program [14] - The Kentucky facility now has an annual nameplate capacity of up to 65 million pounds, with higher-than-expected fermentation yields [28] Q&A Session Summary Question: Trends in PHA volumes and pricing - Management indicated that PHA volumes and revenue remained stable from Q1 to Q2, with stable pricing observed [50] Question: Progress on customer conversion equipment supply issues - Management noted that customers have made progress, although not fully online yet [51] Question: Current utilization rate of the Kentucky facility - Management stated that the facility is running at levels consistent with original capacity, with a focus on bringing additional capacity online to achieve profitability [53][54] Question: Update on funding for the greenfield facility - Management confirmed flexibility in funding the project, with no specific line in the sand but a focus on ensuring financing is in place before committing additional funds [56] Question: Update on biodegradable product development - Management reported progress in developing biodegradable lids and forks, with ongoing discussions about store trials [59] Question: Canola prices and alternative feedstocks - Management shared that canola prices have increased, with locked-in prices for the second half of the year and first half of 2023, while also discussing ongoing work with soybean and pennycress as alternative feedstocks [62][66]

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements for Q2 2022, detailing cash, operating losses, and capital expenditures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Q2 2022, including balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Cash and cash equivalents decreased to **$140.4 million** by June 30, 2022, due to capital expenditures, with total assets slightly declining Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $140,388 | $286,487 | | Total current assets | $202,043 | $340,358 | | Property, plant and equipment, net | $408,885 | $316,181 | | Total assets | $790,717 | $838,597 | | **Liabilities & Equity** | | | | Total current liabilities | $30,611 | $43,475 | | Long-term debt, net | $262,032 | $260,934 | | Total liabilities | $318,862 | $338,332 | | Total stockholders' equity | $471,855 | $500,265 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2022 reported a **$30.4 million net loss**, a reversal from prior year, due to lower revenue, higher costs, and increased operating expenses Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2022 (in thousands) | Q2 2021 (in thousands) | Six Months 2022 (in thousands) | Six Months 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $12,703 | $14,471 | $27,446 | $27,652 | | Cost of revenue | $14,934 | $12,460 | $30,999 | $24,185 | | **Gross (Loss) Profit** | **($2,231)** | **$2,011** | **($3,553)** | **$3,467** | | Loss from operations | ($32,120) | ($21,076) | ($62,809) | ($32,359) | | Gain (loss) on remeasurement of private warrants | $2,012 | $58,740 | $7,007 | ($21,957) | | **Net (Loss) Income** | **($30,445)** | **$39,248** | **($56,831)** | **($55,486)** | | Diluted net (loss) income per share | ($0.30) | $0.39 | ($0.56) | ($0.64) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity decreased to **$471.9 million** by June 30, 2022, primarily due to a **$56.8 million net loss** partially offset by stock-based compensation - The accumulated deficit grew from **$(118.9) million** at the beginning of the year to **$(175.7) million** by the end of Q2 2022, reflecting the net loss of **$56.8 million** incurred during the period[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$37.4 million**, while investing activities more than doubled to **$108.8 million** for facility expansions Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($37,393) | ($22,641) | | Net cash used in investing activities | ($108,809) | ($51,566) | | Net cash provided by financing activities | $71 | $111,189 | | **Net (decrease) increase in cash** | **($146,131)** | **$36,982** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed accounting policies and financial item disclosures, including the Novomer acquisition, debt composition, and ongoing legal proceedings - On August 11, 2021, the company acquired Novomer, Inc. for **$153.9 million** in cash, integrating it as Danimer Catalytic Technologies to produce Rinnovo PHA[22](index=22&type=chunk) - Due to COVID-related delays on an R&D project, a partner cancelled the arrangement, leading the company to record a **$1.2 million** reserve against the outstanding contract asset in Q2 2022[56](index=56&type=chunk) - As of June 30, 2022, total long-term debt was **$264.3 million** (net), with **$240 million** in 3.25% Convertible Senior Notes due 2026 as the largest component[41](index=41&type=chunk)[42](index=42&type=chunk) - The company is subject to consolidated class action lawsuits and shareholder derivative lawsuits, as well as a non-public, fact-finding inquiry from the SEC, with no estimable potential loss[65](index=65&type=chunk)[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2022 financial performance, highlighting decreased revenue, a gross loss from product mix, increased operating expenses, and capital expansion needs [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2022 total revenue decreased to **$12.7 million**, resulting in a **$2.2 million gross loss** and a **$32.1 million loss from operations** due to product mix and higher costs - PHA-based products constituted **61% of total revenue** in Q2 2022, up from **29%** in Q2 2021, reflecting a strategic shift towards lower-margin, pre-scale production[95](index=95&type=chunk) - The decline in gross profit was primarily due to the sales mix shift to lower-margin PHA products, lower R&D revenue, and higher per-unit costs for PLA products due to lower volume[96](index=96&type=chunk) - The increase in R&D expense was driven by costs from the newly acquired Danimer Catalytic Technologies (**$2.4 million**), a **$1.2 million** reserve for a cancelled contract asset, and higher consulting and personnel costs[97](index=97&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity relies on **$140.4 million cash** and debt, with significant capital expenditures for facility expansion requiring additional financing - As of June 30, 2022, the company had **$140.4 million** in cash and cash equivalents[112](index=112&type=chunk) - The company has invested **$136 million** in its Greenfield Facility, but its completion requires additional financing[112](index=112&type=chunk) - On August 5, 2022, the company terminated its Credit Agreement with Truist Bank, anticipating a **$1.4 million** loss on early debt extinguishment in Q3 2022[112](index=112&type=chunk)[68](index=68&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from commodity price fluctuations for raw materials, particularly canola oil, impacted by the Ukraine conflict - The company is exposed to price volatility in raw materials, with the Russian invasion of Ukraine specifically impacting canola oil prices, a key feedstock for PHA production[123](index=123&type=chunk)[89](index=89&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2022, due to previously identified material weaknesses in internal control - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of the end of the period[125](index=125&type=chunk) - The ineffectiveness is due to previously disclosed material weaknesses, and remediation plans are currently being implemented[125](index=125&type=chunk)[127](index=127&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against class action and derivative lawsuits and cooperating with an SEC inquiry, unable to estimate potential losses - The company is involved in four consolidated class action lawsuits alleging materially false and misleading statements between October 2020 and May 2021[65](index=65&type=chunk) - The company has been responding to information requests from the SEC as part of a non-public, fact-finding inquiry that began in May 2021[65](index=65&type=chunk)[67](index=67&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from those disclosed in the 2021 Annual Report on Form 10-K - No material changes in risk factors were reported from those disclosed in the 2021 Form 10-K[131](index=131&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the reporting period [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) The company terminated its Credit Agreement with Truist Bank on August 5, 2022, expecting a **$1.4 million loss** on early debt extinguishment - The company terminated its Credit Agreement with Truist Bank on August 5, 2022, and expects to incur a **$1.4 million** loss on early debt extinguishment in Q3 2022[132](index=132&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including the Truist Credit Agreement payoff, CEO/CFO certifications, and XBRL data

Danimer Scientific, Inc. (NYSE:DNMR) Q1 2022 Earnings Conference Call May 10, 2022 5:00 PM ET Company Participants Russ Zukowski - VP, Corporate Finance Stephen Croskrey - CEO Michael Hajost - CFO Conference Call Participants Jon Tanwanteng - CJS Securities Laurence Alexander - Jefferies Thomas Boyes - Cowen & Company Operator Greetings, and welcome to the Danimer Scientific First Quarter 2022 Conference Call. At this all participants are in a listen-only mode. A question-and-answer session will follow the ...

Financial Performance - Total revenue for Q1 2022 was $14,743,000, a 11.9% increase from $13,181,000 in Q1 2021[15] - Product revenue increased to $13,216,000, up from $11,024,000, while service revenue decreased to $1,527,000 from $2,157,000[15] - The net loss for Q1 2022 was $26,386,000, significantly improved from a net loss of $94,734,000 in Q1 2021[15] - Basic and diluted net loss per share improved to $(0.26) from $(1.12) year-over-year[15] - Gross profit decreased to $(1.322) million, resulting in a gross profit percentage of -9.0%, down from 11.0% in the prior year[98] - Operating expenses rose to $29.367 million, an increase of 130.8% from $12.739 million in the same period last year[98] Cash and Liquidity - Cash and cash equivalents decreased to $210,045,000 from $286,487,000, a decline of 26.5%[12] - Cash and cash equivalents at the end of the period were $210,525,000, down from $315,230,000 at the end of the previous year[18] - Cash and cash equivalents as of March 31, 2022, totaled $210 million, providing adequate liquidity for operations over the next twelve months[106] Assets and Liabilities - Total assets decreased to $812,465,000 from $838,597,000, a reduction of 3.1%[12] - Total liabilities decreased to $324,518,000 from $338,332,000, a decline of 4.1%[12] - Stockholders' equity at the end of Q1 2022 was $487,947,000, down from $500,265,000[12] - Total long-term debt as of March 31, 2022, is $261.459 million, slightly up from $260.934 million at December 31, 2021[11] Investments and Capital Expenditures - The company incurred $58,902,000 in cash used for purchases of property, plant, and equipment during the three months ended March 31, 2022, compared to $23,893,000 in the same period of 2021[18] - Capital expenditures for the Phase II expansion reached $122.3 million, with a total expected investment of $128 million in the Kentucky Facility[106] - The company has open purchase orders totaling $125.7 million related to the Kentucky Facility Phase II expansion and Greenfield plant construction, with delivery expected through August 2024[71] Stock and Compensation - The company recognized $13,750,000 in stock-based compensation for the three months ended March 31, 2022, compared to $6,665,000 in the same period of 2021[18] - For the three months ended March 31, 2022, total stock-based compensation was $13.7 million, compared to $6.7 million for the same period in 2021, reflecting a significant increase[67] - The company recognized $0.5 million in expense related to stock options during the quarter ended March 31, 2022, and recorded a long-term liability of $0.5 million[70] Acquisitions and Partnerships - The acquisition of Novomer, Inc. was completed for $153.9 million in cash, enhancing the company's capabilities in producing bioplastics[23] - Danimer Scientific completed the acquisition of Danimer Catalytic Technologies on August 11, 2021, and excluded it from internal control evaluations for the first year[120] - The company has entered into a partnership agreement with Hyundai to further its mission in biodegradable consumer packaging[94] Operational Challenges - The ongoing COVID-19 pandemic has caused delays in customer trials and product certifications, impacting revenue growth[93] - Supply chain challenges and increased logistics costs have arisen due to the conflict in Ukraine, affecting Danimer's operations[95] - The company reported a charge of $1.0 million to reflect the reduced fair value of raw materials and finished goods due to disruptions in PLA sales linked to the Russia-Ukraine conflict[94] Legal Matters - The company is involved in multiple class action lawsuits alleging violations of federal securities laws, with claims related to misleading statements made during the class period from October 5, 2020, to May 4, 2021[73] - The company has not accrued any losses related to ongoing litigation matters as of March 31, 2022, due to the inability to estimate the likelihood or amount of loss[74] Internal Controls and Reporting - As of March 31, 2022, the principal executive officer and principal financial officer concluded that the disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[120] - Remediation plans have been implemented to address previously identified material weaknesses, which will not be considered remediated until controls operate effectively for a sufficient period[122] - The company maintains disclosure controls designed to ensure timely reporting of required information under SEC rules[120]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39280 DANIMER SCIENTIFIC, INC. (Exact name of Registrant as specified in its Charter) Delaware 84-1924518 (State or other jurisdictio ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common stock, $0.0001 par value per share DNMR New York Stock Exchange FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fr ...