Danimer Scientific(US:DNMR)2021-03-30 02:16Financial Data and Key Metrics Changes - Revenues for the full year 2020 grew 46% to $47.3 million, compared to $32.3 million in the prior year, driven by higher sales of PLA and PHA based resins [24][26] - Full year gross profit increased to $11.5 million compared to $11.1 million in the prior year, with adjusted gross profit rising to $16.6 million from $14 million [27] - Adjusted EBITDA loss was $3.2 million, compared to a loss of $1.6 million in the prior year, primarily due to higher operating expenses [30] Business Line Data and Key Metrics Changes - PHA based resins accounted for 10% of revenues in 2020, a significant increase from 1% in 2019, with fourth quarter sales climbing to 19% [26] - R&D and SG&A expenses increased to $16.3 million from $12.5 million in the prior year, mainly due to increased headcount and salaries [29] Market Data and Key Metrics Changes - Bioplastics represent less than 1% of the addressable market, with an estimated 500 billion pounds of potential market opportunity [18][34] - The company plans to have 315 million pounds of nameplate production capacity by 2024, making it the largest producer of PHA globally [19] Company Strategy and Development Direction - The company aims to accelerate top-line growth and expand adjusted EBITDA margins through partnerships and new product development [36] - Plans to double the size of the Greenfield facility to 250 million pounds of finished product capacity annually, with a projected cost of around $700 million [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growing demand for PHA products driven by corporate sustainability commitments and consumer awareness [11][34] - The company expects margins to improve over time as capacity increases and fixed costs are spread out [48] Other Important Information - The company has entered into partnerships with major brands like Mars and Bacardi to develop biodegradable packaging solutions [21][60] - The completion of Phase 1 of the Kentucky facility is expected to significantly ramp up revenue for 2021 [31] Q&A Session Summary Question: Can you provide an updated expectation in terms of profitability? - Management expects margins to improve over time as capacity increases, but anticipates less profitability in the near term due to increased operating expenses from new hires [46][48] Question: How are you pricing to customers given the rising cost of feedstocks? - About half of current contracts have escalators to pass on costs to customers, with impacts from rising canola oil prices expected later in the year [52] Question: Do you have an anchor tenant for the extra volume in the new capacity? - Management confirmed having two new anchor tenants, Mars and Bacardi, with additional customers in the pipeline [59] Question: What has changed regarding the cost of the Greenfield projects? - The increase in estimated costs is attributed to inflation in materials and labor, as well as intentional additions for optimization [66] Question: What is the timeline to reach profitability after construction? - Management models breakeven at roughly a third of the stated capacity [80] Question: What is the expected diluted share count at the end of Q1? - Approximately 88 million shares outstanding, with about 11 million options and $16 million in warrants [85]