ASPN - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Aspen Aerogels Fourth Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator Mr. may conference. you begin Fairbanks, your John

John Fairbanks

housekeeping non-GAAP Thanks, for Press of announcing GAAP as I’m the statement use press XX, quarter afternoon. the management’s before business Thank turning and measures a John on compared to and over Aspen’s would Investors sheet applicable joining of ended reconciliation a year Aspen’s Aspen’s us you of for as and the President most the financial few summary are a financial Aspen financial There balance operating Don Aspen’s the Financial Included and results measures Rob. that the address release statistics summary well to Chief a release I XXXX. December is like in available a for Good Fairbanks, Officer. is operations, key items website, to Aerogels’ Young, summary call conference developments, call. section of www.aerogel.com. CEO. and of

In uncertainties. note beliefs, archived and Please business version regarding including expectations, addition, webcast statement will targets, contain estimates, subject other today year. this one a of risks an section to any for approximately fact. plans not Such our include the and historical forward-looking of discussion outlook, will that statements, website prospects, any statement projections, that Aspen’s Investors is statements are

on press the issued the particularly company’s today files and Aspen also in A list most of be that detail press may Form results found SEC can actual and website. recent the issued Aspen’s be discussed can factors SEC, reports differ materially with in forward-looking from the of Investors Aspen’s Aerogels’ report release release in statements. annual filings in affect Aspen the actual in Company’s XX-K. expressed the those could found results company’s section more today in these with

made company’s XX, today views the of today, statements XXXX. February Forward-looking represent as

future to events update to these or disclaims forward-looking reflect statements any Aspen obligation Aerogels circumstances.

and prepared we with These During Generally measures, accordance of measures, financial comparable measures in These and in Accounting discussion GAAP most Definitions available non-GAAP reconciliations non-GAAP substitute CEO intended considered release. adjusted of GAAP. to is these of call Aerogels. the Accepted call, in financial prepared also Young, financial non-GAAP be I’ll to measures, measures accordance refer will we these to over GAAP. President financial financial including present in of or results a not for today’s U.S. Don with directly to as non-GAAP turn why or not are the now EBITDA. this are measures financial isolation Principles, press the Aspen

Don Young

you, QX joining XXXX Thank I comments you and about will the our for performance by outlook. our for afternoon. us start providing Good our call. earnings business, Thank

XXXX guidance. and review our Next, and provide fiscal QX XXXX John will performance financials

conclude the a We session. my call in will I to prepared remarks. Q&A plan with topics cover four

will review QX three XXXX XXXX indicators. overall, I including First, year performance and the our

the XXXX. Second, indicators introduce current commercial performance and describe environment I for our will

that on explain platform. efficiency we I sustainability Third, relationship from last a through record was improvement the is and includes in quarter-over-quarter leveraging with $X on finish was fourth, raw revenue both our summary to nearly value quarter $XX.X key momentum prepayment full received to our from This to X% second which QX, Total basis. QX revenue and strong Adjusted throughout increases of and down total QX the time XX% at provide was of hampered grew revenue Base BASF, of strategy in I will Project the than more was when year. call. par were in million. global fourth XX% strategic in last on repeated three a our our level, revenue. XXXX to than a fourth X% lagged quarter will our of XXXX. first revenue the QX year despite project year respect EBITDA a in This XX% a outlook higher year-over-year to with revenue our BASF QX million the outlook. earnings significant update Aerogel quarters And resource total for base revenue our address less a and QX revenue strong of than trends last revenue million $XX.X in month. projects especially strong cost technology by expectations chain. of opportunities With with project an revenue our in XXXX line the and materials, the our represented was XXXX, silanes At

continue to put mitigate raw three in work increase place we XXXX, we materials the our I’ll expect to help have to XXXX both performance price offsetting certain of and reduce now to an which We turn for our exposure to issue. indicators.

growth and revenue earnings million in XXXX As our EBITDA, base initiative. EPXX the of X% of $XXX scope projected and in revenue day-in is grew time adjusted between call, our targeted Base than a record of base XX% a good capacity grow small expanding by they the revenue, year from version reminder, are driving day-out in a consistent revenue for $XX million indicator base of the levels. XX%. would last we long-term and initially work, revenue our for that to our from million. of with project We level growth and Base year-to-date a our revenue base X% recurring XXXX goal revenue both in At through revenue XXXX maintenance $XX and growing of more annual stream.

adjusted for as performance end revenue each EBITDA, growth at in the of and to quarter. year-to-date relates The measured indicator XXXX second

we earnings would not adjusted projected or achieve During that in our call, in revenue last growth total we XXXX. EBITDA

set increase confidence in deliver revenue and active a pipeline, our anticipated to accomplish of prospects of in strong adjusted our stage we objectives revenue positive EBITDA. solid ability project The including However, near-term have return the excess us subsea, XXXX petrochemical our in XX% for and on our that would revenue XXXX QX base strengthened LNG growth our XXXX objectives. QX to price and to and

have already received In the we subsea projects compares subsea in favorably in delivery orders for delivered in XXXX. XXXX, which all in $X.X fact, million million to we of $XX.X

to EPXX performance The initiative. relates third the XXXX indicator

for by EPXX implement remains cost end XXXX. million to of improvements Our low Upon aerogel Providence, and million will way completing translates capital has revenue to our goal our XX capacity $XX to year. – square in million approach million goal XX approximately project by profitability. to per we of We XXXX on $XXX resources of EPXX capacity million The to square EBITDA made plan target. $XX from capacity the our million year. capacity and We increased reducing $XXX Island blankets reach that East million process our on the in XX $XXX EPXX range feet facility feet to expanding XXXX, approximately technology potential adjusted EPXX, of of square We progress approximately or the to focus our product in XXXX. manufacturing by our increase to Rhode manufacturing the to feet, well driving the million significant to end per our costs variable XX%

to an XXXX performance capacity introduce expansion We is commercial the projects for the anticipated today XXXX and of during indicators. second overview our remaining complete EPXX environment expect provide XXXX. topic My to to

investment will enhanced commercial are in sales the XX% confident environment programs of marketing products, our growth in projected our personnel, and We or new XXXX. and support more that revenue

revenue a LNG the increase We volume from and a markets. improve continue positive petrochemical as net in and expect our to continued We subsea, maintenance price total project impact to and from benefit project day-out of and XXXX near-term XXXX anticipated our pipeline. and revenue in day-in more XXXX in growth project work, with that percentage a believe wins will robust

in compared to XX% projections and full in return While is for to to and reach years we revenue we levels work growth EBITDA for do will strong of expect excess for year. improvement the our signals total a change a do for not projects in adjusted market year. This expect basis positive of historical revenue XXXX, the XXXX account trends for XX% recent the the project

Our three growth will performance revenue indicators first, for be, adjusted EBITDA. XXXX and positive XX%

of revenue. a leading market. our the a into comprising new revenue of formation with partnership XX% platform additional project aimed technology aerogel leveraging Second, total at an company, And third,

We will our performance these during quarterly our three indicators progress review earnings on calls.

January, The next-generation, under to relationship third topic announced an partnership development with In to today joint our non-combustible amendment products, strategic we of developed BASF our building relates agreement supply BASF. agreement. initial with to commercialization high performance, our our expands include that the

position. commercial In addition, for during January. received million has $X strengthened enhanced support financial the provides second our a pre-payment and agreement that amendment technical efforts and additional The we our supply in resulted

might over we John to Our per EPXX to key across new Aspen markets. revenue fourth from and and order the create between topic markets potential partnership elite aerogel million $XXX element a the grow technology and with first markets adjacent business provides monetize million in aerogel of approaching in adjusted $XX the to year. Providence which strategy, platform the a our and The elements adjacent leverage the core are model to to to how with new capacity platform two strategy, is including initiative, other manufacturing I to expanded core before and East our and million important our technology is turn annual to our There it EBITDA is review partners. final potential fill for is our $XX facility, with BASF

technology element of additional leverage is new the aerogel to platform strategy our businesses. The creating second by

started penetrate work commercial of first promising to jump the we market energy have our BASF, process materials building our as infrastructure. We begin with with outside

for Our efficiency. and combination products energy non-combustible, common performance safety are on BASF perfect sense focus and with building a high a

adjusted reset EBITDA in We the company. a to implementing In XXXX, in accomplishing on delivering total XXXX revenue our summary, XXXX. technology we that business financial and is see potential process into partnership that and elite of that adjusted a drive with profit objectives will believe valuation enhancing growth in work to can to having new long-term is for in to markets, of XX% and commercial reemerge we the a invest said, breakout in generates realizing that shareholder platform the replicate technology our returns the to we core with to technical, key I new our aerogel and as business partners want is significant As markets in build potential We the template in The more positive or believe strong opportunities profitability by in to are advancements, invest and as imperative we our by cash infrastructure position BASF we adjacent to substantial and EBITDA. generate to to energy leverage be goal other XXXX. these significant XX% revenue project have markets. maximizing value. growing comprise The we which meaningfully lead unlock focused additional that in to

I’ll a John the call financial results. to our turn Now over for review of

John Fairbanks

Don. Thanks,

XXXX was other $X.XX million per compared share fourth are net running Fourth loss start our EBITDA $XX.X results and not of net operating income ago. EBITDA adjusted $XX.X fiscal level. compensation $X.XX $X.X for million quarter total reported XXXX. negative $X.X Let’s net quarter positive fourth or by depreciation, to year. $XX.X or quarter of the at amortization, expense from for loss revenue share indicative declined Fourth our performance. compared that the $X.X summary Fourth do last or a per core interest, of We believe loss year by a X% taxes, we define through quarter million million to as million in items financial stock-based was quarter adjusted million to and a

loss refinery during accounts for booked uncollectible related XXXX million net reflected $X.X to receivable we a EBITDA project adjusted a and Our the fourth in Brazil. quarter reserve for for revenue

quarter impact In no net write-off the for off million the on EBITDA asset Statesboro, reflected loss charge, for addition, the pre-construction facility. of Georgia during adjusted costs $X.X impairment period. our Statesboro the write a had

while was or negative net million For year. was million. share million for $X.X of the for revenue $X.XX year receivable of I’ll net our loss declined million, for Again, EBITDA assets, million or both last provide $X.X additional reflected components Statesboro reserve million the EBITDA million the detail million only XXXX, $XXX.X negative compared versus per loss total to accounts adjusted a of $XX.X receivable and the ago. accounts year, $XX.X Net the the year results. on loss in for a now XXXX per reflected $X.X Adjusted reserve. the $X.XX X% $X.X full uncollectible to year write-off $XX.X share the

discuss revenue. of Fourth $XX.X revenue First, comprised million revenue quarter of total I’ll Research and Services of was $XXX,XXX. product revenue

$X.X million. $XXX.X of revenue Research Services revenue product revenue For the year, total comprised million of was of and

During This quarter, quarter revenue project a the by This XX% in revenue, Asia. or the million South fourth increase driven our year. by total revenue million $X.X the or or petrochemical and petrochemical versus total million in decline decreased to principally X% was fourth offset due million conclusion $XX.X in $XX.X to particularly $X largely in project. Asia $XXX,XXX by revenue, decrease a of the refinery led decline in by strong XX% was base last growth markets,

During to XX.X blankets, due decrease mix of by subsea shipments decreased foot, aerogel priced by selling and the year. million $X.XX higher X% feet the this total square our in X%, fourth decreased quarter, average modest principally per square price to a of products

petrochemical market project decrease by in due was total $X.X This total revenue by in the base and and by $XX.X part revenue the revenue, or South year, Asian conclusion in subsea Asia a XX% full offset X% or refinery our decline $X.X the by market. increase decreased the growth driven in materials For XXXX. led building million petrochemical a markets versus revenue in in or the project, of to and in X% million million

total feet, products. average partially decrease square our by million offset our increase, favorable ASP XXXX, shipments This foot. $X.XX XXXX increase to our in price X% the per square the in by increased XXXX, price versus of reflected subsea of mix a by XX.X impact higher priced For X% decreased selling

by based growth XX% building total versus in the our XXXX particularly XXXX million market; projected subsea expectation and is revenue in our million, markets XX% range refinery volume Our of growth representing to of and in the growth the outlook $XXX on continued anticipates an an in This increase experienced and core LNG petrochemical minus increase the raw $XXX that of in price in the XXXX. during per or between and project price revenue, selling materials and January the costs increase average to $X.XX selling increase square approximately enacted is we plus year our increase $X.XX. will in offset average XXXX to XX% markets in for by XXXX. price. in our ASP increase foot, We in driven The significant material project

of XX% discuss or profit quarter Next, last during the profit profit. of fourth $X.X XXXX Gross revenue or principally price. volume raw the decline $X.X and by million and increased in XX% quarter gross cost $X.X revenue of gross were selling lesser of in margin to I’ll the was points of year. decrease a million of X driven fourth the extent, materials versus shipment gross and percentage Decrease in million

additional project we XXXX, for prices reminder, we increase XXXX increase we generated price a in We selling XXXX As had a XX% instituted quarter an in our of the margin been January of full that the – increase if approximately price average that XXXX. in million effect would estimate by our gross will $X mid-XXs. gross have profit in fourth

XXXX Year-over-year the increased or For unfavorable the $XX.X principally $XX.X decrease revenue an XX.X% was gross gross shipment year. volume, of in decline last $X million versus percentage points and of million margin of driven XX.X% X or profit materials of gross mix by of in was and products cost the million sold. raw profit year, revenue of

guidance. in our gross gross revenue combination of expectation increase Looking by on we be levels. in Expected price and could profit gross approximately years, the and for in projected the depending the output forward impact quarterly XXXX This margins XXXX, the expect to gross to to utilization increase. our margin is [indiscernible] full margin quarterly the XX% of mid-XXs, is mid gross revenue year. a run margin driven capacity included from [Indiscernible] XXXX increase and

a million the the Fourth engineering charge accounts of write-off past technology The the engineering manufacturing cost Next, over the material operating Georgia and reserve facility increasingly last I’ll $X.X three for write-off accounts improvements project. expenses. million second impairment our principally Brazilian the $X.X in and the Petrobras our the was the based of included purchased million for determination bankruptcy million a cost the refinery XXXX project. with uncollectible firm manufacturing for versus Write-off reflects the have year, of from made $X.X were pre-construction expenses of $XX.X the the that associated Brazilian receivable operating of quarter discuss facility, for years us Statesboro, likely designs that receivable on obsolete. Statesboro existing

operating fourth Excluding write-offs, were quarter year $X.X our the to at expenses two flat last million.

$XX.X For were by during declined the $XX.X Again, million million expenses two to operating write-offs, or excluding operating full year. million X% $XX.X the expenses year, versus the in XXXX. million $X.X

Looking impact personnel forward, grow than and for projected write that and the to compensation. to XXXX more expense expense increase develop investment XX% increase to in This approximately of $XX impact reflects our growth the operating opportunities business the will in operating our during expenses, our and guidance annualized year. slightly excluding sales breakout offs, new of XXXX budgeted our by the includes in infrastructure energy million markets, incentive XXXX and drive research a in expectation

I’ll our million XXXX. XXXX. reflected Capital offset Next, capital $XX.X in investment working for during Cash and cash year partially operations, $X.X in adjusted for million, totaled sheet by million the cash our expenditures in $X.X of million, of used $X.X balance flow million, discuss down EBITDA from by provided year. $X.X the negative reduced

million to XXXX we $XXX aggregate a facility $X.X the available outlook for assumes our BASF prepayments million, loss range year-end. Total Adjusted interest equity assumes turn revolving an financial expected shares range had between is revenue on the XXXX. we and to facility $XX.X our year, guidance Net XX.X loss and million of $X weighted $XX.X costs share. under This expense to between million $X.X credit to $XXX is EPS to of million breakeven compensation million. million, I’ll outlook of and million We access now of expected and to $XX.X and between a $X.XX cash, million additional for million. amortization outstanding between average year $X.XX $XX.X from and also million, EPS assets of per depreciation million. full loss in of of enforcement of is also and of is year. credit importantly, our at expected revolving a million, with $XXX,XXX. of This $XX.X During of shareholders’ ended EBITDA positive $X net XXXX $XXX,XXX, range received patent $XX.X range the and $X.X million. stock-based current expected

year, expect of per square price gross we selling full plus and the margin For minus XX% of a $X.XX $X.XX. approximately or average foot,

XXXX, we and focus During continue maintain on our will strengthen sheet capital to controlling our expenditures, flexibility. financial balance

of few budget million comprised that EPXX XXXX. and initiated a of million $X.X we capital $X million to XXXX Our of in complete capital projects is maintenance-related $X.X projects

cash expect within the an XXXX level, the credit adjusted set and of between to facility. range we revolving out to year $X of and million XXXX our in Turning context no our full under aggregate exit borrowings outlook, on outstanding cash million $X with in EBITDA hand

mentioned, to guidance. we’ve is $X XXXX Don amended an year-end BASF, agreement support help This received additional products building and cash million prepayment with XXXX $X of prepayment in in included associated January our in manufacturing our As technologies. million next-generation supply the development

quarterly to guidance the our it’s general view we routine we provide important Although don’t to provide specific year. time expectations our time during on with to basis, a investors think to from plan a

versus square expect XXXX, During shipped, we feet of first double-digit XXXX. terms in first the quarter of the growth to of achieve quarter volume

$X.XX remain However, QX reflects expectation with projects price full our subsea below per average year price booked of which with foot quarter our square XXXX $X.XX of and XXXX, from for into XXXX. both we impact square foot fall to base quarter par expectation for we selling expect This average the XXXX and QX our the per pricing. orders the XXXX in our in business, on first carry we

with expect levels. profile As quarter remain first pricing, XXXX a result XXXX we in of this lower will that line our profit

full strong we for call over XXXX year and average achieve EBITDA and year-over-year Q&A. outlook. quarters now the our to back volume, gross to final revenue, adjusted growth to of in expect three Rob deliver the selling I’ll However, turn the profit price, year,

Operator

And Eric line [Operator the Instructions] from from question your Craig-Hallum. first comes of Stine

open. is line Your

Eric Stine

Hi, Don. Hi, John.

Don Young

Hey, Eick.

Eric Stine

the Hey. Maybe provided some there commentary just LNG, starting on with pipeline. you

more I the – does maybe more Is curious projects, where seeing two? you context. some Just how you’re it mean seeing content within are between or something break projects, that down

Don Young

are – this characterize LNG and I they near-term. in we’ve Eric, that would have way our had projects pipeline become We it more

more so – believe And will variety have we a big that we have them or fall one are where just impact. near-term into a of and and XXXX that of two projects

Eric Stine

think of at work context should Got that, called about the already. think out guess, you guidance, it. I how in million this subsea I for you’re I the mean, just we that doing the math, XXXX $XX.X

goal. So you’re your almost halfway to mix project

– you’re I going that in orders doesn’t more to So mean, subsea. get

to leave doesn’t should lot needs you just to difficult think upside or build we that – timing in the very call? is that are in by So whole be what of I to LNG. a trying is as the filled fact mean these that of

Don Young

I sure think make we expectations with there beat. meet can we’re point your or that careful set and latter we that being

would And the the throughout as so to year. revenue our think our I goals meeting important of LNG

only really supports into rather And as also. some and well, will year projects of span these XXXX not that and large XXXX, are but from

some more three size do total, a good talked towards hit of Eric, and end that are projects these pretty maintenance about three –we’ve XX% the will basically projects for So shot fruition $X and lots we’ve it. momentum building math we’re on around that in to work here doing think got or the of And different million at done work and we got And come us so. facilities for world, of XXXX. right. to XXXX did dozen $X talking and I million, to you is and XXXX, But the million sized that about. know, We’ve $X we we’re your good in as that

Eric Stine

you’ve strength does I gave would just market? year. the – now now, seeing the mean in got about I XXXX. the that you’re when number And the seeing in you for how mean, number something order throughout assume or you expect booked that to you’re to the that And persist that on recovery you think then compare recoveries past that, subsea, I

Don Young

we this in purchase projects. We that and the our one typically order the little a area We tend think quarter to get or later. – advance have on is then where a deliver visibility two

so order And is is, it XXXX that solid We we as will we would million in number or I even build another the continue and on for this anticipate way the we’ve two into that getting say projects got suggests. hand, $XX.X year, business XXXX. believe pipeline to strong but continue to and the

So nice there that right us visibility market now reason optimism. has and for for is some

Eric Stine

me, for as one the last maybe update it on that like applications just to some of your have past. turning it maybe product, power other tracking is seems – an that on same gen, the And just in

sit So today? that application where we kind you do as of here view

Don Young

refinery And you to larger The continued XXXX, Pyrogel we exactly kind projects a doing in win small maintenance in mostly same smaller business. scope and work, into size is and started of into time. when then over series built all course and off petrochemical much ‘XX that’s the Cryogel to project out pattern, maintenance work, playing your power as scope smaller We ‘XX, market LNG the scope and orders, work. and we way. the dating and way back – of I suggested of small have Yes, we introduced question,

the there – been one but there’s we’re are mix greenshoots revenue no all order – that’s world. spectacular, there seeing around Our

Eric Stine

Okay, you. thank

Don Young

Thanks, Eric.

Operator

line next your from Chip And of comes Moore Canaccord. question from the

Your line I sopen.

Chip Moore

are How John. doing? you Hey, Don. Hey,

Don Young

are how Fine, you?

Chip Moore

potential, you little talk more something that XXXX. Good. strengthening a following I the up pipeline guess into it being LNG to when sounds about is But you like as with Is rate combine growth optimistic. XXXX early maintenance the think XX% commentary on about work? sustainable should and your little the tones around we

Don Young

we’ll times bad think Yes, really of and I – look the pieces and in that time, double-digit I to numbers you and that, that over grow our in have XXXX believe to that and continue period do business, of XXXX, to dating XXXX. been times, XXXX back able so and throughout would been good day-out we’ve about have Those been the if way percentages back day-in time.

And drove project more A work, by a sort the had, that work. we’re still driven, what lot opportunities that used of work crude we be to diversity really project and prices project early we’re work seeing of of in is lot there. that our so seeing project and frankly,

and really So we’ll a lot continue to natural been supply of ample But gas us, there’s course build – about different on natural the for of a the projects – trend. driving seeing gas playing of feedstock we’re are and the natural well is that set which that. LNG low cost on petrochemical that we’re would gas into also things natural as gas say into that But using I side as feedstock. written

XX%. across XX% we modest and XX%, revenue historical is revenue. year total something set for at remind confidence XXXX going our was will any to X% it but to and grew project us nice And broader XXXX, through XXXX. just seeing we XXXX, for we’re there’s visibility projects of just even and set not XXXX, XX%, you I when up markets think XXXX QX, gives XXXX. that’s in – we here our was And be significantly more geographies, as in least, from – of numbers that XXXX was I in relatively history, are back in it so are sorts – number XX%, projecting that this Those from three And even in around from XXXX, any that in said our the given my and in of quarters commentary it first of here

well, as the So side on to we against revenue. marked we just think project have grow room of as – total

growth XXXX. We in see development opportunity really using built more and marketing our that our top we’re here XXXX. of also to track expectation those casting, but with and that make making, of sales that lot like some in maintenance research those to will XXXX, projects put on the and a and pay together power So Chip, the in business a us and XXXX and it a facility, for good grow think work we it, sales did the XXXX dividends EPXX, investments that Again, we in team the are investments profitable. we’ve done and XXXX, both we of

Chip Moore

little BASF, building on in the we progress products, commercialization of if you terms year, materials you you’ve new someone little Maybe up had bit update a Absolutely. that hopefully talk on maybe then expand this future with and turn stands. that a maybe about of and already? where can did development prepayment, negotiations of to in signing And more terms

Don Young

Yes.

in and beyond. about. had second product around A some well, interesting million area. We the has terms great supply characteristics BASF, the second we that excited has lot us market the market a in role our believe, European has no opens non-combustibility. more said and of got been generation approvals and the moving believe product, XXXX we of doubt, it well. received again, that agreement in $X the It in in the just – we’re much of and greater first really I begin as other product prepayment team first and that’s generation partner BASF our so for really materials markets as So technical terrific in QX in for which to great that was product which this It’s team we we’ve generation, playing we greater application sales expanded anticipate broadly to sales up and thermal building form a and also very a application,

the is both supporting our and partnership excited that just our a $X in position. work arm So us with shot we’re really BASF in of obviously million terms accelerating financial for the and with

great. that’s So ahead. Go

John Fairbanks

AX the we in materials I the product made Don market. Spaceloft point to as well. us up for new just will markets product applications to product that want help existing emphasize SLENTEX the it it’s building complementary see, to really that within That other open form that

So that are BASF we are about the excited new – product. and we of potential very

Don Young

work. filtration history then focused programs, we’ve around long we And advanced we’ve areas very forms are have of we before, in other of said working research terms storage, energy new that aerogel in and a on government around and of partnerships, in

now partners right we move on handful There them conversations very and to these in have on these universities going two forward. topics. work continue with all to that are working a with areas logical of We’re

elements I with notes platform, to are you all commercial, technical, our the later those financial technology key in model, good that said if we through as that forth BASF my those companies. put this of will, year expect aerogel So monetizing one

Chip Moore

one And the increase. more price on

in I that January, and that been has through? implemented said what’s your gets was that, think it confidence pushed you successfully

Don Young

to that our or very very, the marker from minus the very talked, of just $X that plus we’re shy high confident Yes, – XX% $X.XX, $X.XX. ASPs John taking

ranged, confident very our the The frankly, our We’re et that across year, Chip. increase across cetera. for mix, about price product geographies,

are confident we’re so all the we about sticking the – XX% it And down, boil very you year. for when

Chip Moore

of AR on about? issue, any be Brazil One in concerned the outstanding last other we is there, collections bankruptcy one-off the that one or sort situation should that

John Fairbanks

Brazil and present to capitalized, was is terminated just Nothing. that actually believe and it but lawsuit – in a we in we well was in that contractor a was ran felt they’re was business got that financial a diverted was It just would difficulties. and to tough We a bankrupt. be payments project, our contractor but agreement was for Brazil. history it making at really them. Petrobras won had the the on our account ultimately go to It behalf, likely this Petrobras was us. Any a into court unusual Petrobras against we do hit. for us country one-off Highly with

we why exposure speak that’s reserved it, So no to we other have of. but

Chip Moore

guys. right, lot Great, thanks all a

Operator

next Hannan Needham from your question of Sean Company. comes the And & line from

Your is open. line

Sean Hannan

Yeah, thanks. evening folks. Good

– about specifically, the – been a now? forward? So this folks think that here, get just forward detail of just should be table and going little could we but whole those what if maybe we and on wanted clear, missed and first about and EPXX bit impairment, what and off behind just I’d on that move what see question Georgia track, everything very regarding completely Obviously numbers that’s is here to we should we’ve dead Georgia is thinking

John Fairbanks

go little a Sure, just provide to back I’ll color.

completed the we XXXX, of During design second… that

Sean Hannan

Yes…

John Fairbanks

$X.X right, had but engineering included we those that And million. and delayed in from the back government, an XXXX, incentive Georgia, free we about designs project, us – package we cost would For local land. had

then so the during And –

Sean Hannan

Okay. That’s design dollars. work, during all

Okay.

John Fairbanks

the That’s all it full fall the is. And value. essentially it’s in

not unlikely decided the XXXX, we broke government, were first, February they by our got that we to XXXX local to contracts designs did At in forward. point, we to terminate those unless use them, going the [indiscernible]. right we with ground So a had incentive obviously the package,

and we land. And to they terminate going have to they were wouldn’t the indicated incentives rights so

capacity facility. think, EPXX-related need gains technology, the advancements our land that manufacturing So and some Then exceed significant value importantly, continue and associated of cumulative designs was the of was it technology we pushed to expect we second time since in And make process demand the on. been our secondly, with that I had probably expanded for capacity which XXXX have finally, of the frame will most plot out advancements. the

advance next our into working investment the years, a further bit Over we’re it. of technology couple We putting for to think of expect it. we quite on

from it’s the And obsolete. that increasingly so that the underlies technology plants old perspective, making

going so And it the going made it at in come to forward. from we those use were you three quarter just not fourth when the look decision just us to that factors,

Don Young

that would Sean. I add just very good to description.

in as to process very plants, of future focusing advancements build existing interesting are that some – are in We capital really that really the area. and and – not low on improvements, made only on hard but plant we’ve in the our just well we technology

thing. one that’s So

is, how hard capacity. and but see and we’ll out, and those with of of distribution thing so is, really product those consistent of ideas, the terms partnerships we’re version sort partnerships only development, capital in our it’s not also and next play working second sorts low lines The of here

table that. there that’s a we’re here, to but need what about the we on on is lot focused profitability, now, all right and So low capital to we’re being do very driving

so And focus. our that’s

Sean Hannan

the perspective mean have marketing few is of OpEx may and appropriate what looking we more at number flow that. an say, it’s for dollars of I’m wanted number, to conscious the realizing question number this looking EBITDA? – more I the to a perhaps type at me be a profitability the is G&A in on another How on the how think aggregate, we about back what this that In bit are brings when we we The get could is, Don, through really should about really for revenue to where a levels. look place. you and actually, here? historical better this some at on think expected kind think opportunities of little to revenue sales But we’re that a to if fair that some just factor. XXXX had to are to I for high Just opportunity order a have that margins us right of focus I realized, gets in I some type is XXXX number effort certainly there offset as versus I would’ve is – more OpEx recognize in to than in And that to kind get it that quickly, Okay. XXXX, note, you, the seems not a driving for and looking bit we’re become we number is, XXXX, to John that a have higher of gross EBITDA, year. but tracking to number. be

John Fairbanks

you we well, in research are in and that are platform been few open and really to the that since missing are the nail on XXXX, two the again XXXX, decision what’s once conscious the XXXX Yes, been we time sales, acknowledge ultimately conscious mix off operating new And to and We’ll actually investments over invest clearly our XXXX to the actually $X those because about technology take those markets. that’s up from so driving levels, have there’s because over head. past that’s conscious Sean, added aerogel million years, XXXX development hit expenses pieces, up and to table, those and period as investments. our

algebra went we still our One essentially raw mitigate, pieces, mix, that increase revenue $XX of $XXX went in about It’s breakeven because pricing. we Essentially can that, used but million $XX with our talk plus $XX increase, we’ve $XXX XX%. it’s to million material plant, will lot price effectively the our costs material of taken and million up depending be changed material costs, a XX%, million fill XX% when and efforts about. is That’s still that revenue, which raw and on changed by talk than we We – between our now the the whole you’re this old up think familiar the to dynamic with. by is ultimately But with the increase cost able changed with $XX higher breakeven. actually in taken that to that breakeven we generate Providence of million, the just increase our about $XX.X being our in East that though, of that other million I million, EBITDA.

but changed, the percentages haven’t the So clearly dollars went up.

Don Young

we’ll And year, and year of good that the first expansion also in progress portion EPXX and just the we Sean, I I our made about – in complete talked would next add capacity XXXX.

profit focused drive and materials here process very as bring believe technology, advancements to in to to on manufacturing would can profitability I we there and we us. enhancing referring XXXX that that think, to was to you are efficiencies what our are satisfying that of We I our to numbers technology more be, bill

Sean Hannan

years. I last a the – that conversation. Prior in here, then few core do about times Okay, as question this work hit the work a had project Recently the big in has really fair off years been you percentage come the coming up you’d in Don, those think and core project on bit. early – that some a of table, you was growth years

given range, lot balance you be, provide should with do in revenues. us we model what strategy fact, volatility for be, help of levels execute in the your should at you think comfort where implement some it and, in perspective of nature of Can get your the What as project a We’re project a in can lend XXXX. us you you around the now perspective that about XX%-ish work a work. clearly there’s because looking that

Don Young

Yes.

are So to the of range but were X-year companies Thermolon to works project do. historical about some to not They look for that we exactly between I if to will before, the same norms our percent our believe ours, work we and talked XX-XX factors XXXX project you move continue and roughly maintenance kinds we XX-plus and XXXX. a at in revenue, themselves. period, in business, similar I of that

here. I We’re to know that already consistency also project success here our on we that more And in XXXX. in need track have

project have or consistent enough. four project quarters quarters, the need big it even not We winning over Just to a six have wins. course good and two quarters or that’s work through of

day in really over in into these $XXX and very of and case studies our of And these and process in million winning so is, – our organization Cryogel the that. we two day as doing team early a installed taking facilities, and year about dedicated to advantage them specifications the ago without kinds Pyrogel in projects that’s getting very changed project One things to we’re a include using and of out. wins

but we it’s this are crude earliest our petrochemical also we – a second thing days in crude or mentioned side. revenue. in LNG price-oriented natural and not think And I side, pretty have oil I more now on earlier consistent breadth So the and with of on our only the the Q&A, gas, part the

the course greater. the have of is to much we years projects over opportunities win So, many

X/X it year coming from to little projects, do have that a lower that XX% that, it we’ve little a than a of be got year will revenue I some to targeting lot than it – our that we’re a and in or of will basis, year be sense years out, XX% range, That believe it think we on year to an cannot or some and revenue, makes be should of years believe ability our year. revenue. of it X% revenue, And our XX% And this ongoing be in in of number I get third but yes, I So that. should me. into be our that out. third higher a needs the and

Sean Hannan

much. addressing so for thanks Okay, all the right, Thanks questions here.

Don Young

Thank you, Sean.

John Fairbanks

you, Thank Sean.

Operator

I Don no questions over this there at call to Mr. the Young. further time, are will And back turn

Don Young

appreciate in look Aspen interest to We forward reporting early Have in Rob. you quarter We results May evening. good you, XXXX. XXXX first our Thank to Aerogels. a your

Operator

call. conference today’s concludes This

You may disconnect. now

Aspen Aerogels (ASPN) 22 Feb 192018 Q4 Earnings call transcript