Loop Industries(US:LOOP)2022-07-14 15:58Financial Data and Key Metrics Changes - The net loss for Q1 2023 increased to $18 million, up from $12.2 million in Q1 2022, primarily due to increased G&A expenses of $7.9 million, partially offset by lower R&D expenses of $1.4 million [13][14] - G&A expenses increased mainly due to stock-based compensation expenses of $8.4 million, with $7.74 million related to a performance milestone for restricted stock units [13][14] - Excluding the one-time performance milestone, the adjusted loss for the quarter would have been $10.3 million [14] Business Line Data and Key Metrics Changes - The company has seen an uptick in customer demand driven by government regulations for recycled content in packaging [7][8] - A five-year anchor agreement was signed with Danone for the Becancour facility, and the launch of the evian Loop bottle in South Korea is expected to be the first chemically recycled packaging sold in stores [8][9] - A supply agreement was established with a Swiss shoe manufacturer for 100% recycled polyester resin, indicating increased interest from fiber companies [9] Market Data and Key Metrics Changes - The North American project in Becancour is advancing with detailed engineering and financing plans, targeting to break ground later this year [11] - The South Korean project with SK Geo Centric is progressing well, with land purchased and site preparation underway [11] Company Strategy and Development Direction - The partnership with SK Geo Centric and SUEZ aims to build the first Infinite Loop manufacturing facility in Europe, with ground-breaking scheduled for 2023 [6][11] - The company is focused on commercializing its technology to address global challenges surrounding plastic waste and sustainability [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that increased government regulatory requirements for recycled plastics are supporting demand for recycled PET and polyester fiber [15] - The economic outlook for the project remains strong despite inflationary pressures, with high demand for sustainable materials [35] Other Important Information - The cash balance at the end of the quarter was $32.4 million [14] - The company is working on securing feedstock agreements in both Europe and North America, with a wide pool of certified suppliers [25][24] Q&A Session Summary Question: Key developments for the Becancour project - Management indicated that detailed engineering is progressing and expects to have 100% of the facility contracted before breaking ground [20][22] Question: Feedstock planning and agreements - Management confirmed that each project has its own feedstock strategy, with contracts in place for North America and partnerships in Europe [23][25] Question: Timeline for financing completion - Management stated that discussions for financing are ongoing and have not changed dramatically despite market conditions [34][35] Question: Visibility from the Terrebonne facility for projections - Management emphasized that the operational data from the Terrebonne facility provides confidence in scaling up for the Becancour project [38][40] Question: Revenue from products sent to prospective customers - Management clarified that material sold for R&D purposes is netted in the R&D line, while products intended for sale will be booked as revenue [46][52] Question: Expected operating expenses and equity contributions - Management anticipates lower operating expenses moving forward, targeting a range of $5 million to $6 million per quarter [58][59]