PureCycle Technologies(PCT) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics - The company ended the quarter with just under $264 million in total available liquidity, a decrease of$62.2 million from the prior quarter [43] - Cash and debt securities available for sale decreased by $124.1 million from December 31st due to investments in Ironton, Augusta, and PreP facilities, as well as payments to bondholders [21] - The company secured an additional$62 million of non-dilutive debt financing and is working on closing other equipment financing packages in the next few months [15][44] Business Line Data and Key Metrics - The Ironton facility is now mechanically complete and ready for solvent circulation, with the goal of producing between 45 million to 75 million pounds of ultra-pure recycled resin in 2023 [13][36] - The Augusta project has completed approximately 90% of the ISBL design and has begun work on the OSBL design, with module preparation for construction underway in Beaumont, Texas [42] - The company is advancing joint venture projects in South Korea and Japan, with feasibility studies underway for two locations in Japan [14][19] Market Data and Key Metrics - The company is actively seeking opportunities to amplify its technology in the global polypropylene recycling marketplace, with a focus on commercializing the Ironton plant [14] - The company has initiated engineering work at the Port of Antwerp in Belgium to support the permitting process for a new facility [19] - The company is participating in global industry events and discussions, including the U.S.-Korea Sustainability Summit and Domestic Plastic Recycling Tabletop discussions [38] Company Strategy and Industry Competition - The company is focused on managing cash burn until Ironton is operational and pursuing cost-effective project financing for growth projects [45] - The company is leveraging modular construction techniques to improve efficiency and reduce costs for future projects [28][51] - The company is working to secure feedstock supply agreements globally, with confidence in fulfilling obligations for Ironton and other planned facilities [58][93] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the growth plan and the operational readiness of the Ironton facility, with a focus on long-term operational success [3][16] - The company expects to complete the start-up timeline for Ironton and meet milestones outlined in the recent bondholder agreement [13] - Management highlighted the importance of Ironton as the first step in the company's global expansion, with future projects in Augusta, Europe, and Asia [43][77] Other Important Information - The company has posted videos showcasing its PrEP, purification, and born-digital operations on its website and social media platforms [16] - The company was voted one of the best places to work by Plastic News for the second year in a row [24] Q&A Session Summary Question: Factors affecting the production range of 45 million to 75 million pounds from Ironton in 2023 - The production range depends on the ramp-up speed of the facility, with the plant's performance during solvent circulation and feed introduction providing insights into the ramp rate [26] Question: Lessons learned from Ironton for future expansion - The company has identified areas for construction efficiency improvements, particularly in modularization and design decisions, which will be applied to future projects [28][51][77] Question: Feedstock availability and pricing strategy - The company feels confident about feedstock availability and has built flexibility into its off-take agreements to adjust pricing based on market conditions [57][81] Question: Financing and capital requirements for Augusta - The expected CapEx for the first line in Augusta is around $400 million, with the company having sufficient sources to meet this demand, including potential DBOOM opportunities [60][61] Question: Team readiness and troubleshooting capacity for Ironton startup - The company has refocused internal staff and partnered with external experts to ensure rapid response and troubleshooting during the startup phase [68][72] Question: Feedstock supply confirmation for Ironton - The company has confirmed feedstock availability with suppliers and has processed and unprocessed feedstock on-site ready for purification [110][112] Question: Capacity utilization needed to de-risk Ironton for better capital access - Technical risk is reduced once first pellets are produced, and project economic risk is reduced once the facility demonstrates stable operation at target rates [113]