Danimer Scientific(DNMR) - 2022 Q1 - Quarterly Report

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]