Danimer Scientific(US:DNMR)2023-11-15 00:03Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $10.9 million, a slight increase from $10.4 million in Q3 2022, with product revenue rising by 14.9% to $10.5 million compared to $9.1 million last year [26] - PHA-based resin sales grew by 58% year-over-year, while PLA-based resin sales decreased by 51% or $1.8 million due to ongoing issues related to the Ukraine conflict [26] - The company reported a gross loss of $7.7 million for Q3 2023, compared to a gross loss of $4.1 million in the same quarter last year, primarily due to higher depreciation and raw material costs [27] - Adjusted EBITDA loss improved to $9.3 million from $12.9 million in Q3 2022, reflecting improved efficiency and cost control initiatives [29] - Cash and cash equivalents at the end of Q3 2023 were $77.4 million, up from $62.8 million at the end of 2022 [30] Business Line Data and Key Metrics Changes - The growth in product revenue was entirely attributed to PHA-based resin sales, while service revenue fell to approximately $500,000, down $800,000 from the previous year [26][27] - R&D and SG&A expenses, excluding certain items, totaled $6.6 million in Q3 2023, significantly lower than $11.5 million in the same quarter last year [28] Market Data and Key Metrics Changes - The company is experiencing delays in customer program launches, which are affecting short-term financial results and capacity utilization in Kentucky [32] - The cutlery program awarded to the company is expected to require approximately 20 million pounds of resin annually, with first shipments anticipated in the second half of 2024 [11][34] Company Strategy and Development Direction - The company aims to fill existing capacity in Kentucky and expand its plant footprint, with ongoing discussions with the Department of Energy regarding loan terms [22][32] - The recent cutlery program award is seen as a significant validation of the company's PHA-based materials and is expected to open new market opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that customer program timelines have been pushed out, impacting expected utilization rates for the Kentucky facility [37][38] - The company remains optimistic about the long-term demand for PHA-based resins and believes that the recent awards will positively impact future financial performance [34] Other Important Information - The company is working on various partnerships, including with Bacardi and Delta Coffee, to develop innovative biodegradable products [14][17] - The company is also engaged in the development of compostable cups and has made progress in this area, with trials expected by Q1 2024 [20][62] Q&A Session Summary Question: What programs pushed out and their scale? - The cutlery program is approximately six months behind schedule, with initial shipments now expected in Q2 of next year [37][38] Question: Where do operating expenses go from here? - Operating expenses are expected to remain flat to down, with ongoing efforts to identify additional cost savings [39] Question: Update on DOE loan process? - The company is in the due diligence phase with the DOE, expecting funding to come through by early Q3 of next year [40][41] Question: Common themes in customer delays? - Delays are primarily due to technical challenges in product finalization rather than macroeconomic factors [43][44] Question: Relationship with Chevron Phil Chemicals? - Specifics cannot be disclosed due to confidentiality, but there is excitement about the partnership's potential [46] Question: Ramp-up of production for cutlery? - Inventory building for the cutlery program is expected to start in early Q2, with a run rate above 5 million pounds anticipated by the end of next year [50][52] Question: Nodax-based resin for coffee pods? - The company is working with major coffee pod producers in Europe, driven by expected legislation [60] Question: Progress on aqueous coatings for cups? - Progress is going well, with trials expected by Q1 2024 [62]