ASPN - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Aspen Aerogels Q4 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to conference like today, your now Fairbanks. John would hand to the speaker I

John Fairbanks

afternoon. for to Aspen's Thank the Good turning that Corneshia. Thanks, you address to Aspen's conference A housekeeping before I'm President I'd Officer. CEO. like Aspen call joining call. John Young, Financial Fairbanks, over Chief the few items Don Aerogels for us and

to a non-GAAP financial Aspen's release and business Investors compared as announcing financial well of use Aspen's the results most measures, reconciliation press website, GAAP management's The as of on applicable is the measures developments, www.aerogel.com. available of section

Included December and summary statement a XX, XXXX. in quarter operating of sheet key is of the balance and financial summary the press summary statistics release ended operations, year a for a and

website webcast an of the version archived section this year. In addition, for Investors one will contain approximately Aspen's of

today that discussion outlook, business forward-looking our risks statement other expectations, that a are and forward-looking subject uncertainties. projections, to statements including regarding plans estimates, beliefs, note will targets, prospects, historical fact. is any any statement These include Please not and statements,

may Aspen's actual today, in that company's most differ files Aspen could particularly more the results Annual in SEC, the in from found in these those results company's issued recent forward-looking of statements. affect Aerogels' Aspen on actual be the reports can factors press expressed XX-K. release A in list materially detail Form discussed with the Report

SEC filings and Aspen's the today can be issued with section release the press of found also Company's website. in Investors

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

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

a be refer discussion with GAAP substitute U.S. non-GAAP release. in measures to of not adjusted measures isolation, measures as included accounting financial press reconciliations or generally will prepared are to and definitions these we present directly in financial the these or considered These non-GAAP comparable to call, including most financial with financial in we results are measures prepared intended GAAP. and The EBITDA. accepted principles, non-GAAP a non-GAAP measures not for are accordance GAAP. financial These this today's accordance measures, of financial in why During

I'd restricted the shares issued to shares satisfy related statutory to not long-term Aspen obligations that officers want our the Xs units by withheld are note Section by next unissued. under connection of equity remain market I to will vesting to also will two over file with stock incentive into RSUs. company sold in withholding our these weeks, report like program, the the XX the vesting and that tax of to emphasize of are that the Form

the Aerogels. turn and to now President Aspen Don of I'll CEO Young, over call

Don Young

and XXXX, John. you, by for Thank business call. afternoon. I our overview start strategy. for of earnings an our you joining us Good Thank QX, providing will

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

We session. will the conclude call with a Q&A

leveraging cover and opportunities, four I topics global to efficiency review Technology the to strategy of sustainability and remarks. indicators. XXXX my in performance prepared will I discuss our several address resource including our the our Aerogel Platform. promoting plan will year through overall, I QX

include by driven discussion, two to of electric the also projected only As growth comments energy the vehicles. to business, but core I strategic will part our initiatives of related rapid infrastructure not

for raised introduce for the will $XX financing our million. finally, recent I I discuss we And rationale Next, our will performance equity indicators XXXX. where

million. record to margin the for record reach experienced and QX XXXX. fourth of revenue that significant a the built year $XX.X quarter XX% gross the XX% expansion in a growth Revenue increased upon grew and million is Our to performance quarter in we $XXX.X third

additional positive and first EBITDA profit the second quarter created we momentum growth exceptional expansion year-over-year, XXXX. the for again improved and and margin growth to commercial to EBITDA significant and adjusted of in this half. in over doubled QX operational margin year fourth million required delivered nearly our $XX the expanded the Overall, breakeven. from gross by gross adjusted With gross we half and to EBITDA Importantly, XX% adjusted expansion, revenue in we the margin

review I'll performance XXXX our now indicators.

were: three partnership Our second, third form and Platform Technology to a first, achieve company revenue new our Aerogel at total EBITDA; initial leading market. constitute revenue; XX% an a performance than project indicators XX% of adjusted positive growth revenue to leveraging more aimed to additional into and with

performance year growth year to the to in XXs targets for was and XXXX which the achieve revenue fourth reach substantially respect we during established both project our revenue, XX% and In for performance to to the revenue. gross addition, of overall. second XXXX indicator, With margins related exceeded we the for a half objectives the

reached project norm returned revenue historical revenue XX% XX% growth to Total XX% and to range. the in its

return Our beyond. on and XXXX formation contributed teams project-related our XXXX, XXXX, regional of in sales working concert a team significant continued to investments and dedicated a growth global in our with we expect project-focused revenue in

our to performance. margin win With related two to bill and Gross solid three the for material reduction have of reached implementing one miss. we QX which one despite XX% quarter EBITDA, to third our our respect would two realized initiative, to adjusted gross margin in QX margin gross added performance XXXX near objectives points and delay

be confident, just approach initiative our profitability to remain As the positive however, a XXXX. the and place EBITDA. deliberate result We third missed to fully we will in in that initiative, contributing QX adjusted of

XXXX material of benefit of year the third to of two we We the first also the implemented expect bill full and initiatives impact that during second reduction XXXX. from during quarters

a our an Technology market. a additional into new was indicator performance Platform Aerogel aimed leading company XXXX leveraging at final form with partnership The to

the discussed market a year, ourselves patented throughout more leveraging I than decade battery aerogel we by the and materials As in work proprietary of creating technology. positioned carbon

of of to vehicles. batteries, with effort range aerogels density goal the drive electric in attributes unique ultimate the enabler expanding Our the on a advantage energy our of of centers full the taking improve carbon lithium-ion key

value our lithium-ion number batteries and and for During evidenced IT We our companies. characterized and XXXX, our carbon optimized results by initial EV manufacturers aerogels were active successful as shared We effort to our industry with leaders. of engagement a potential aerogels team portfolio. battery with carbon our demonstrate expanded in our

objective use technical could Our one target more progress and partners area much to as in battery of further or this who efforts has materials for our was validate the building attract development materials. us to BASF done

innovative in carbon in evaluation aerogel chemicals German our we an released potential Aspen described company billion anode Industries, XX, nanoparticles Evonik's specialty to materials. $XX signed of November, assess As Aspen's business with on January update agreement an silicon-based Evonik the in incorporating

billion a the SKC carbon with part use of potential in of explore battery. conglomerate the a to market. Group, In is a vehicle agreement for lithium-ion manufacture in SKC addition, silicon-rich joint entered Aspen's January electric XXXX the SK leader development in and into anode aerogels evaluation and batteries lithium-ion Korean $XXX sale of Aspen a of

work with eager battery are our we technology within and continue to as and Evonik validate potential our materials the the We accelerate SKC market. of adoption aerogel

these with to to improve our is and partners batteries. objective and continue cost, of target optimize to the lithium-ion carbon safety durability initial Our performance, aerogel materials

engage vehicle companies our aerogel emerging realize other to of full market. continue in electric industry-leading us will technology the to potential help We with the

of further Our goal business to and value is the attractive to technology demonstrate our platform. another aerogel-based build

manufacturers to the we our EV materials battery posed a Separate address from then has are carbon a megatrend in a propagates creating an additional several runaway, technology, a module resulting by EV reaction battery energy with The and of heat also initiative hazard. The cell module opportunity aerogel an pack utilizing engaged to lithium-based fire. release significant initiates thermal to that holds cells phenomenon market cell a the in for sudden from neighboring where challenge our chain for a us. unstoppable ultimately failing

either event accident. of during the in charging happens or an typically runaway Thermal

that catastrophic aerogel thermal manufacturers As greater to batteries EV of electric increase batteries response to drive caused to event blankets manage more from runaway. runaway. the thermal In amounts EV more are store to the silica-based provide our manufacturers flexibility by energy strive inquiries potential vehicle manufacturers, to to for several become vulnerable we optimizing range, yet

well our is optimization Such within wheelhouse.

can for East Island. infrastructure year for at or see core could XXXX, initial of could and protection existing energy in materials manufacturing revenue It a decade. Rhode fire one, our we five assets passive assets time We three our the from which providing of been importantly, adoption produce over in have the grow into And Providence, technology. periods. We is products substantially

that To we potential this in be put million intellectual property. suggests in our points manufacturing produced opportunity market estimate Aspen. is larger a business product as of five than the in using perspective, opportunity that and short aerogel runaway the share or percentage could $XXX relatively our large current again, our silica time. thermal market protected as by XXXX existing illustration And revenue This for energy equal assets leverages of and of be technology, could period our infrastructure

gross revenue business We EBITDA overall, In to considering breadth our our demonstrate we growth, creation partnerships of platform. executed margin metrics, new value XXXX by the expansion, and performed adjusted strategy improvement of to our well technology opportunities and development. continue related and exciting effectively and most

potential yet will our business sound prudent. respect and we We believe enhance that and value. guidance profitability significantly John presentation. to We in however know With our XXXX, XX effectively to our we update financial have January in introduced the perform guidance the his more reaffirm to and which is

follows. outside we of wanted indicators performance mind to leading In guidance. XXXX. The are our to addition our expectations goal XXXX as are indicators set we stretch into exceed as build point performance and considered that XXXX, this is targets With additional momentum our to in for

EV the materials quarters for partnership drive We and gross EPS; at of million our facility through million quarter XX%; or partnerships in least $XX for revenue want continue two opportunity runaway order the to year EBITDA; above to market; from profitability thermal East through our with least expanded or manufacturing to at revenue with the to an industry generate Providence for mid-XXs with and to capacity achieve additional gross the the SKC technology double-digit at our with expand positive margin generate to have least margin complete validate $XXX leaders. for adoption with growth; of revenue have carbon expansion in initial battery or new a gain EPXX aerogel continue adjusted Evonik one

creation during for XXXX. performance translate achievement another likely value these in Aerogels the XXXX Aspen set and for stage additional strong would The year of to objectives very

will We each these on indicators performance quarter. out report

Before I we In similar impact did raw planned want in of China averaged quarter what for materials Aspen on on, and million per not $X the from move We approximately XXXX. revenue purchase discuss have coronavirus a China I may have from XXXX. Aerogels. XXXX to number

impact commercial this point on At our the a carefully. we are profound current and raw source not to China studying materials opportunities as plan. in of future is expect XXXX expanded of have that time we situation something a do

know you aligned balance that February opportunities. equity The our a on As strengthen financial resources such and are the of rationale we raised more raise is XX million. clear: equity $XX strategic our offering our completed secondary size the for with closely to sheet

We have a Bank. Valley operated recent Silicon with balance line sheet in lean working with and a years capital

prudent We will our continue to profitability. to drive are make consistent decisions that with

operating XXXX be we which plan $X prepayment in anticipates PTT includes repaying nearly cash million investing in that will development. neutral million flow million and free expenditures and and remaining Our in approximately capital $X of the $X its research LNG

for our working. strength reset Platform to in leverage the the valuation remains use unlock of to market company. in is potential that the energy generate to new strategy The to Technology meaningfully markets cash goal our Aerogel demonstrated and infrastructure our This investment

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

John Fairbanks

million like I'd $XX.X revenue grew Fourth Don. and by to fourth level. quarter the $XX.X XXXX net of from net share $X.XX fourth $XX.X Thanks a $X.XX our million running Fourth $X quarter results a XX% financial million XXXX. quarter million to through reported per of record share fiscal per in start at total or loss by was last compared a year. the to or summary quarter for loss

depreciation, taxes, adjusted expense ago. believe negative adjusted income compared performance. indicative or we We stock-based as before and million of a EBITDA to $X.X year not define was EBITDA operating do quarter million positive amortization loss $X.X that compensation other our items core are Fourth interest, net

Net adjusted a million. to share the million For $XX.X million the year or loss $X.XX record a was $X.XX share XXXX or ago. total of per year of million compared revenue And a XX% $XX.X year. for loss $XXX,XXX last of net per $XXX.X full grew loss EBITDA was year to a in versus a loss $XX.X

I'll now on provide components results. our detail additional the of

I'll First, discuss revenue.

quarter core million During quarter, $XX.X the fourth in the strong versus revenue Europe. the LNG revenue our our and PTT shipments States to This to XX% in Nong project markets markets Middle energy renewed fourth $XX.X increase Fab million total the refinery by driven growth was East in $XX.X last continued million increased and year. in and or United in petrochemical exceedingly by growth

XX% Total price products per aerogel increased square quarter the increased increase price both feet mix ASP of selling increase of XX% to shipments during XX.X square and average by by blankets to XXXX The our sold. foot. million favorable our in $X.XX a and reflected

growth contract Fab For significant North the the East total markets $XX million America, strong in XXXX. revenue full our by growth driven project solid and subsea revenue. PTT deliveries the by year, upturn in in petrochemical project; increased increase versus or work; modest Europe; LNG revenue services in in to Nong XX% This a core was and refinery and Middle

XX% selling This by square XX% per XXXX square again ASP by in increase to million increased price versus XXXX increase. XXXX increased our shipments Total price while XX.X reflected our foot. average feet, $X.XX for

growth XXXX level XXXX. moderate the our achieved expect we during revenue from to rate XX%

and XXXX our million. revenue XXXX the run in that will that $XX as wind This year. to of range the $XX subsea rate closer revenue million average Our remainder year, achieved see $XX projected mid the million from our services we'll historical of will to complete the half Fab business we project the PTT in contributed outlook the our second single-digits $XX of no project our $XXX to in $X.X growth is LNG on we'll to versus anticipates the from revenue XXXX of the of based expectation range that during Nong $XXX total million be that government XXXX, growth during little research the million the to million activity down mid-teens that million the in

activity want resources I ASP new services to our per we business the decision driven increase January average year foot project wind for XXXX. improving to research to reflects square in enacted our increase $X.XX the or into This down that in by is also our of will X% minus principally markets. that $X.XX. highlight and by Technology price plus our We the selling profitability Aerogel approximately increase to existing R&D leveraging our desire the on our government focus price

contribution in average during revenue $XX.X the XX% XX% increase a gross profit. or from Next volume, last contracts selling gross part than largely decline million by gross expenses price manufacturing doubled year. I'll increase quarter revenue in and discuss was XX% XX% million in a and the quarter service Fourth $X.X year. research to in offset profit profit in more by an or increase of of fourth driven this in Improvement from slight

material price the by increased in revenue increase XX% For was selling this volume or in or the expenses year, gross manufacturing year. part costs average Improvement $XX.X XX% driven and the profit of revenue million offset of XX% was versus in and million last year. in gross $XX.X profit increase increase by in an largely XX%

quarterly second project during the year. year gross XXXX margins volume. XXXX, the on margin we as first high to the will quarterly the high the half in but the expect In we run to XX% for our significantly full our margin nearing mid from and teens half vary could reach in XXs of forward mid-XXs gross years, based this of year, Looking in to gross past the the to light, revenue

utilization gross initiatives output the bill margin progresses the included growing favorable expectation over Expected material driven cost revenue margin course impact the of of outlook. and the levels in from combination a and is our our increase by as year. of reduction XXXX in profit gross gross increasing year This and capacity of is

impairment Fourth I'll Next versus quarter were $XX.X expense facility. preconstruction XXXX million included operating charge a operating million discuss million Statesboro for our of in expenses costs XXXX. Operating proposed the expenses. $XX.X Georgia in $X.X

quarter flat the versus Excluding charge, our expenses of were impairment this quarter XXXX XXXX. fourth operating XXXX fourth

battery XXXX. operating For million full operating million in in XXXX. increase operating $XX.X excluding Again This drive an expense in revenue the XXXX year, charge, X% million XXXX investment $X.X increase our $XX.X increased XX% an increase versus million the sales in and expenses research initiative and our expenses versus and in the total in the related to development in marketing materials in in or $XX.X growth, in incentive impairment improvement to support revenue by compensation were reflected of expenses growth adjusted during EBITDA and year.

high at expenses million our that low Looking end to end between support and expected grow forward includes business to operating between in and sales guidance to range revenue our again new investments in growth of our our X% expectation $XX the initiatives. million drive marketing development reflects in and to XXXX, $XX XX% expenses our battery, the increase and research guidance Projected the guidance at of for will materials other range. year operating and of

Next I'll the working flow associated record fourth expenditures revenue. reflected sheet resulting discuss XXXX. of cash for down Capital investment from principally $X.X balance XXXX. totaled in increased Cash used million during increase operations in million accounts our year $X.X an from capital the million, quarter our for with in receivable in $X.X year and

of $XX.X credit our importantly, current million $X.X from assets BASF And We $X.X of borrowings million we additional year-end. During $X.X $X revolving the facility, under at net million under credit million access of cash, million. our year, aggregate also facility available of and in received shareholders' revolving our of repaid the ended million, we had prepayments equity revolving $XX.X credit million $XX to XXXX on facility. with

and million. million from loss expected our range I'll And range expected million. Adjusted between $XXX revenue to per $X.XX expected $X to financial is is $X between million now and Total $XXX $X.X and outlook between a million range loss a between is $X.XX for full expected XXXX. EBITDA EPS range year summarize to loss of million. is of and share. to $X.X Net

weighted million $XX.X of of XXXX outlook shares also $XXX,XXX. $X stock-based XX.X assumes and depreciation interest for million compensation of EPS assumes average expense outstanding million, of guidance amortization year. The the and

the selling minus year, full average square plus gross For we per in and the foot margin $X.XX an $X.XX. price or of expect mid-XXs the

increase and will in operating facility manufacturing budget in support our million capital to targets. of XXXX capacity efficiency Our enhance $X.X our Providence East EPXX achieve projects to to

our proceeds XX strengthened a February on balance last net offering the of As issuance of week, through through common we we sheet $XX.X shares our X,XXX,XXX raising by million announced secondary of stock.

issue have to we place materials chose to growth significant We opportunities and energy electric infrastructure, ensure markets. shares principally support in vehicle to financial the building resources in our the

extend to with its Valley on place plan our XX backstop credit for also ensure Silicon We we a revolving prior in facility April capital to to Bank working requirements. maturity have

most minus full context range in flow plus out hand set of Don credit will importantly, and million to cash borrowings cash equity-related during addition be proceeds $XX.X cash million mentioned, $XX.X XXXX we the minus on or essentially within free the and expect projections, $X or our EBITDA breakeven in year in facility. approximately In adjusted no Factoring revolving on outstanding our exit our as free outlook. million expect plus XXXX with million flow the of net we and XXXX $X

net And the improvement of three financial in expect the to our expectations general will and performance loss be the during XXXX during year. quarterly investors time first provide our guidance plan to to with generated over the half provide concentrated second to of half it's don't time view XX% specific be year. with revenue between from the routine we XX% a EBITDA past on year. our a basis, the Consistent in and will projected we our the we think adjusted years, important Although of

at increase we gross basis our quarter the our principal of of expect time points expect as earnings remainder our to bill for we will addition, discussed margin the of the XXXX, material year. which In second at the costs XXX XXX third to call, reduce quarter we beginning implement the the initiatives to of by of third of

in quarter XXXX of line we As our XXXX. will with first profit that revenue expect profile result, the first and remain a quarter roughly

expect full and the XXXX achieve gross However, in we year outlook. our EBITDA final growth strong to of over the and year deliver to year-over-year three profit adjusted quarters

I'd now to turn call back like Corneshia Q&A. for to the

Operator

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

Eric Stine

Hi, hi, Don, John.

John Fairbanks

Hey, Eric.

Don Young

you? Eric, how are

Eric Stine

a to quickly. that's just Obviously wanted start I runaway opportunity. solution. figure urgency It problem like to OEMs that the sense so sounds with Hey, pretty thermal big out some a together come

just process So said then next thing whole look in came kind we you steps of that optimizing how that you're should your of And application. just for for? curious product the – together maybe

Just see? what are that you're to some of the benefits performance starting

Don Young

space, with we facilities, to materials the ExxonMobils and worked in better of we Yes actually them, Eric. material. we to it midst our the them somewhat optimizing material, test that our with and as were with pace aware in manufacturers EV you, our their of handful on energy experimenting them closely we are issues, able time became the unbeknownst had time And initially. to material a understand Thank provide us levers of the more same rapid the have the with world we infrastructure spend a better and explain spend the to of

in activities a a improved optimistic to optimized problem. to the product point. midst back we gone full-scale significantly at the that test we're going several And this We've solution And we're of them with have on.

space I in fire $X As as consistent nearly We've exactly of this to providing and is what our with the been energy in installed energy we passive exactly, so refer long in infrastructure infrastructure the do. this is do material my a protection said technology. very space remarks, and what We've we we prepared for much what billion time.

them we with in closely the to runaway. and think we're play fast role thermal and for going solution a working we're So

Eric Stine

that's in team, and place if XXXX to just I for gain know No. don't side, looks for project Maybe great. would for be but I like your what be maybe That's for on time really but guess means what curious pipeline? some maybe meant it just discuss for I willing turning the traction. you're starting to know LNG And the it it potentially? that XXXX I'm wouldn't pipeline what to then,

Don Young

Yeah.

project-focused we know, about only not we team size years place, it, the expand the the you our put of more – the in in pipeline their in right engineering to mission preferred and quality that of by and but And of position. ago more mean, of are As just now the specifications project projects two the it. fact from quality, is a in I start these and

that to they added that identified contractors, So expanded of people our and making I see asset working project companies, the share now two with and with the is the opportunities of we ourselves of on pipeline, with of progress, with think business. a that opportunity have fair early over to reflection $XXX just really positioning the million. the We EPC owners win which team they're the

We've the to think done groundwork projects respect the particular, in facilities small world. for three With We've around around in laid LNG the work now dozen we've world. I done continued success. maintenance

to opportunities. installation. best we've And now we'll PTT the winning the are value reputation easy we're we and as project of again think, We of EPC project owners and that we LNG a dozen thermal continue to a radar in way of with based that your of value is couple resonating grows. continue There speed that groundwork screen. win are comprised projects. to to part very follow all are ease performance, – We our well, laid only both on is the is our more the companies. projects proposition -- in and project but effectively win and midst frankly will the projects pretty We're that delivering a asset great proposition And the delivering very PTT them. the on And particular is pipeline good of not our

So that that's business. where we are on

Eric Stine

just maybe for one And me. last Okay.

curious the and mean, You some visibility know of laid of would goals have in. confidence at a as I And the confidence on there's purpose I lot lot high stretched in are have a performance in? confident six what that's this the I one margin you the said but work that that list you think stretch But into that goal ones you And them some are goals. what that are of gross of you look a ones out indicators. level to that, do? you're

Don Young

look outside definition ones almost to to the are I of speak say by we're team. our six, of going that is guidance. are Well, so guidance are need I would – John, extra that who the of up, think Double-digit our growth effort ones the that outside by revenue set of contemplating half definition delivering with fact a government bit dig our project the think a contract by subsea the almost normalized work. year us. more those around I well, that business, shedding R&D is of other component a big our hole little non-growth All a PTT for things a

growth. were put impossible, some It's if do we're think to have it effort. wouldn't – it terrific going to it's double-digit take that but we to to create real I have going So things, a down

the on this the to or of of our that. the to as of think and expansion maturity we year work. one, of to we positive margin The a these doing that our effectiveness take from we've to If think – drive a gross margin shot profitability. implementation and and company, we EPS. one going of programs, a really view the company, continue good perform focus got good profitability we've I it's on drive we're That's point I our did to last two of love sign had quarters perhaps of growth

focused It's good XXXX, XXXX, there. we're on shape raw the we the project, great fast-moving of the first bit We do a already and hand. – about the I material very up focusing companies: And ally. think opportunity. thermal I we've on well by In having companies informally. working remaining part conversations I about initiative, principally initiatives. leading We've EPXX of battery job XX%. got did or the that, Evonik, SKC now We're with we're situation. right? the we're excited groups of The this And believe to working aerogel it. the on several And little expand in in again, closely right talked working in a got the formally facility issue. That's carbon our a runaway closely EPXX we'll part that quite of expanding with number the continue of we're the side on

So I'm them. excited about

some – extra the say middle them take I the would fairway I'd to effort. down of of say are really and an kind going of them some are So of

Eric Stine

Thanks Okay. a lot.

Don Young

Eric. you, Thank

Operator

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

Chip Moore

Hey, good evening guys.

Don Young

How you? Chip, are

John Fairbanks

Chip Hi,

Chip Moore

back aerogel piloting fairly sounds follow-up could It think could things sounds to traditional XXXX, activity thermal blankets? it like I in your moving you if this like wondering Hey, the for is rapidly. be opportunity runaway more but

On the for notorious hand, sometimes slowly. are other have rather moving -- OEMs

should how we end? about think or that any announcements milestones So on key

Don Young

Yes.

-- This across-the-board in and the smaller groups. our and very any we've manufacturers. that with at We and is team think will come generate indication or handful of I problem. noticeable of dollars indicator adoption great a would this with that we're producer. again our a referring I focus doing is and being in This a initial revenue an with the work say that is -- XXXX started not we're denominated design than likely universal But that. rolling think process a these may is out small in one more the all, problem what into with that beyond. XXXX on I millions designed revenue much got of but to as And adoption not in

the be beyond. so indicators And I will adoption I and the noticeable XXXX. revenue in be for revenue And think progress hopefully of and progress would XXXX big initial what -- -- revenue idea think

Chip Moore

infrastructure any us helpful. That's traditional And of you end versus market? on there energy give sort insight margin your potential can

Don Young

like with I'd par same to now, margins. on proposition it and you with this it. We're it at from the on manufacturing obviously infrastructure our price assets. be think being think accordingly. par working just For our being going on them as expectations think point, using to about of as our We just let's I are we'll But value energy

John Fairbanks

in $XXX million material capacity towards $XX help we in benefit assets. our million towards it plant. East us potential the will is It plant. drive us It economics will -- it existing that EBITDA of in that and produce on Providence the drive the from But the is incremental can

excited about So opportunity. we're very the

Don Young

point a know EBITDA you Providence $X.XX and down to incremental drop just revenue we for every dollar this from And revenue reminder adjusted the incremental $X.XX as East a That's of good line. John. Chip

pretty we kind from those -- are good pretty this when talk of -- continuing So those about drive to solid profitability. margins

Chip Moore

one Yes. me. from just No Back That's And commercial more absolutely. efforts. Thanks. to perfect.

of at plus I bit PTT potential think XXXX? It's you on more $XXX identified talked Thanks. in team. confidence you can some in a million but least resources early, about talk opportunities, backfilling the about little

Don Young

time we a with a to revenue more Thanks period long we kind think we also the to project you. and industry in get refining of project range. mean XXXX XX% business. we'll -- And announce revenue beyond. don't course the in that I to And sure that XXXX through Yes. norm be the look we're want petrochemical drop continue some that Thank LNG to but the we have that broadly of over Chip. project of in went and we wins ability XX% of got the in space grow area in we've part our

kind the that which percentage revenue maintenance that we've And back sustain to we've got end XXXX -- in think our is single side since our at Pyrogel place and know of and in we now And as revenue. you a from kind every Cryogel introduced double-digits grown I of flip year that total the XXXX. resources of of

the in got pieces we've think we again, place. So,

Chip Moore

Thanks. right. All

Don Young

you. Thank

Operator

comes And Riley the B. from question FBR. your next Curran from of Thomas line

Thomas Curran

Good evening.

Don Young

Tom. Hey

John Fairbanks

Hi Tom.

Thomas Curran

of given development the likely does it when those that convert you're seem you'll your the evaluation agreement? at partnerships nonexclusive respectively, stage sort into and opportunities, side of Don of with of the carbon first battery EV most Evonik set on some SKC of aerogels commercial

And revenue much from would be what size time revenue? would for And us frame annual of how could then ink could that the applications commercial time for you two each generate? the those initial deal, you in

Don Young

Yes, I'll answer. give best my

a the aerogels and our actually relationship with our speak us component carbon on of a -- side relationship so of to system. to In more very is Evonik SKC terms of with interesting and supply

to We working see SKC believe us with and you now speak is time that five-year for We and with a believe period leading that that to so other and opportunity the will company, closely space. three- in of sister their revenue us. between this companies

sense towards so technology systems. in working advancing of in our with and to working the designed them being And battery

that And be role technology. the with those a about think way. talk our confidence in I to will our And not will along we play again, while events give the have and will that will team be we I investor think aerogel generators revenue group necessarily, in

they durability to got opportunity very nanomaterials, my that early companies I this fact think improve the space We're track. were to we're The we've a we on have very, producing at real play improve improve new that density, methods notes many as improve the the these broad gave to of the in able work systems. as space the continue in -- for reception us in right energy done good leading look and from these we the to that density, performance, a said battery we've the confidence of

-- eager be? you. could an big energy -- we're it's so measured obviously, sets it enormous well for anything How up that I in beyond our just And infrastructure is it's, that well space produce. it can Well opportunity pretty enormous numbers an hope

big I property. side side, by intellectual runaway So it's That's a period existing protected thermal opportunity. over our a an longer very existing assets on silica time. our our existing the cite technology, utilizing of on opportunity aerogel the again

small received of we're here that take A share in of feedback notes, use per illustration that purposes material of to I beginning just the As some talking numbers for said from amount in order small, the for illustration again I've immediate us I but And in XXXX projections to the a and for as revenue said build opportunity beyond. the in my more EVs you average from course and for over of XXXX of it's of that we've just Again about. million X% terms that to market what purposes them of auto. potential. show revenue magnitude $XXX required space roughly equates

Thomas Curran

would a and the most margin for we'll basis, But the tuned markets range, the infrastructure carbon lowest? for summary average All any us helpful in for for product assume the quantify right. that it eventual application that any know margin expect with batteries? side. from the That aerogel lucrative. just for of you've to profitable you subsea runaway have I I and line on is framing are then least and to is And what most energy could comes that line stay thermal infrastructure. now, of a we would for when likely end -- kind EV then spread the highest John, one product carbon a just guess Cryogel was could Pyrogel weighted you said What for Pyrogel aerogel on

John Fairbanks

-- and right. first got off, that carbon aerogel So you've

with So to come has the combination curve. And in we do markets. it in proposition produced we've and these really the down value material with amount the experience of

XX% actually so experience margins. that's Pyrogel about sell the the more we lowest revenue hot our with cold of to led time XX% So ambient on the the products the comes through making Pyrogel, side. and and cost XX% and highest have side of And comes -- got business or and us we've from

have products business equivalent of but weighted So to thermal out we through building to plays that to margins for would continue material the increasing and in expect that our product margins as the expect progresses. generally our see Cryogel to as have to runaway time those improvement how we'd Spaceloft, average, share time. to move in an We see roughly we'll are

from any I generate associated has incremental revenue existing with it. think assets with most very though that beneficial we economics those importantly

get Don incremental that As the fill plant see as we XX% in we revenue. mentioned, on to XX% profitability -- we differential roughly

aerogel, different Looking it at it's would process. carbon -- a be manufacturing

position that have or have to of traditional how of utilize That's we manufacture let a with don't then -- best and technology the the we the itself, our would battery opportunity And a all we material manufacturer would yet base to obviously, could, relationship. the batteries so we use the in could would license determined. technology might experience be know be really simply in we product which that ultimately to to more manufacturer supplier-customer we commercialize that

eye do to We'll clearly we'll required an well. to that's choose of intensity businesses minimize as it with the future the the try form marketplace. capital by And our

So -- got is that opportunity could I really service ways we think determined, that that be and but forward. that moving multiple ultimately we've business to do

Thomas Curran

Don ahead, please. Go

Don Young

point very, very companies to just doing and wanted we partner -- acutely I lot are takes And that performance that strike we're need just between and so both aware are act. that that these with cost. we Sorry, of again performance the aware to to into is balancing a related -- hitting just work balance cost, was that add again balance of -- that of we that consideration

Thomas Curran

narrow carbon like Right. clarify commercially. And general it in simply sounds on to aerogel just front, the more explore, there's and

to we'll have So stay tuned.

Don Young

to quarter. base standby. typically course it over put do conference create performance absolutely. mindfully that an Yeah, we we at it sense And our off again we're once performance we year investor really or the these something, our of when so the indicators we'll each that indicators, talk work into investor And about a in dialogue the of with consistent

Thomas Curran

taking for my Thanks questions guys.

Don Young

Thank you, Tom.

Operator

line from Amit comes the Wainwright. of H.C. question Dayal next from Your

Amit Dayal

my the you of price color you. Thank taking are A Thank increases Hi, Most potentially year? prices XXXX. for questions the appreciate asked, touch wanted raise but just opportunity my this call. put in lot that. but on you know been staying to guys. call. I we on you some of see on do I some had or in prices, XXXX, you to again have

John Fairbanks

XX% XX% last took Yes. increase We our more products weighted once took X% price We on of year where we just the roughly year mix across a room again significant across this had heavily basis, side. weighted move. little more between increase hot towards were we a -- and the We last a mix a of lower year. felt after sort the to

of we pushback much we year marketplace. We to increase particularly didn't XXXX. given on And it. having increase significant not get the it's had X years it a X what to in is in line sensitive over last would the more Amit felt little in be back -- the this the we And that a and well were with X% we've received size done

Amit Dayal

opportunity Got bring there may bigger XXXX? say this bit any you the some is to the that in there something but touched mix, revenue that or year revenue -- these of XXXX? little I you've of a it. And projects maybe on is materialize Is in mix that know this early any saw the in that pipeline,

revenues I'm double-digit that the where side? just trying for to delta come versus stretch growth on to target between hit the possibly in and your guidance what you and is could see allow your revenue

Don Young

look couple the in PTT you million. of $X really we closer We to year, ones We strong million, you not Canada. an had not half had we of but something the if project $XX second magnitude projects. of on of They're a And really the QX. margin, $X order a the And a that And in million, million, that at Yes. won $X a will. make if excellent project excellent projects had million, big $X are an Egypt. those difference of

to a beyond. XXXX win project win We that large-scale I anticipating revenue not during and will some us So large, but come to that XXXX leads larger could would in projects, then expect that XXXX revenue. I'm

the but -- that for those scale it of territory in need million do into it, or of the it's million kind pipeline filled one are projects those double-digit really $X that that stretching very projects size. that course $X revenue get it extra motivated in of also has work it. of larger with million, year us the in we that -- yes ones our the we're we're And the win here to over to two -- has So $XX some to are an and

John Fairbanks

put million, line. couple would $X really million of $X And to double-digit. goal mean we the just those over we're get type to projects I us could that a talking million win if $X about

we mentioned, replicate Don as have we can and XXXX. XXXX did we if that in that And again potential. in -- So it could

one are guidance the range, our think technology with -- of things about growth the but comfortable double-digit we company. I very -- this a setting growth aerogel not target at We're we're

the ultimately have electric and as in well. opportunity market the market, building in market in energy materials infrastructure vehicle the We huge

see year in year there us with And plus want our we every to currently a what we're satisfied available want outlook. double-digit sense not more that out. and to than do We we in… Really getting

Amit Dayal

see just And to final quarter. that. aspect maybe happen story. you margin like of most going will margin see of appreciate I to improvements It looks one second or the the related you're question post margin capture the Right. the

of a in rest context we of improvements the a steady of So a dip fourth performance little year? the quarter in front, quarter the margin in stronger expect should on then bit first the and the

John Fairbanks

a much function. It's Absolutely. very Yeah.

was I of year. think last the So -- but mentioned we expenses the three XX% our and in generated the during remainder year our And on XX% are the that revenue and between year. the half really in basis the -- in of first years the second a half incurred of level

revenue the cost but as get progresses. year level, your your you So grows

the lot puts profitability our first of margin so on and half of it a in the pressure year. And

we expect things: first we our very to So really again revenue the we saw year And the XXXX the or is performance first two then benefit of similar in expect of the and I good to of with QX XXXX the material growth as benefit as progresses increasing QX, to, as financial profit to QX a continued dynamic. that and cost that bill be what profile then function initiatives. alluded reduction XXXX. the in solid And of growing quarter quarter continue those from of in

dip full quarter in first And year. expect good margin growth in the guidance our EBITDA with for our solid and so outlook absolutely range, the a range into you should revenue

Amit Dayal

Yeah.

you much. all Thank Good. Okay. I so have. That's

John Fairbanks

Amit. Thanks. you, Thank

Operator

are call over questions. Young remarks. And to I'll further the Don closing turn for no back there

Don Young

of Good at you, We your you appreciate much. Thank first in very Aerogels. reporting to Corneshia. to results interest job quarter We Aspen evening. good a Thank April. end forward our tonight. XXXX you. look Thank you Have the

Operator

call. this And conference does today's conclude

lines. your disconnect all may You

Aspen Aerogels (ASPN) 21 Feb 202019 Q4 Earnings call transcript