ASPN - Earnings call transcript Q4 2021

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Operator

Good afternoon. Thank you for attending the Aspen Aerogels Inc. Fourth Quarter 2021 Earnings Call. [Operator Instructions] I would now like to turn the conference over to your host, Laura Guerrant, with Aspen Aerogels. Thank you.

Ms. proceed, may You Guerrant.

Laura Guerrant

of release April reconciliation Strategy Good Aspen a the results thank financial Aerogels am Don Vice call. on Lauren. With operations, December Chief of of and non-GAAP of of will Corporate of us the announcing the over call the he www.aerogel.com. be today summary us results operating for for housekeeping statistics the I are The President role Aspen’s Guerrant, Fairbanks, the fiscal John. President and and Laura financial I’d Aspen’s measures address ended Relations and turning compared Rodriguez. evening press you, and you and press in fourth applicable available sheet as financial balance XXXX. a and developments Communications. and is Young, of CEO; joining conference to GAAP our measures Investor for quarter Thank release of like year John a are Ricardo management’s before Aspen’s business full Included a Officer Ricardo financial most upon X. John’s summary and the year use items is that retirement CFO Officer, statement to as few XX, key Financial website section summary is There Investors a well Aspen’s Chief to assuming XXXX

conversation slide highlight to that like I’d have our to website addition, we today. deck In uploaded our will accompany that a

historical year. webcast any beliefs, and and These website targets, of of at regarding will risks uncertainties. our fact. the website. find section will for statement business a Please forward-looking that statement An projections, on forward-looking plans discussion estimates, that is today’s are deck statements to expectations, not today can including subject statements, any other prospects, be outlook, You note include our our approximately X Investors archive the

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

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

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

refer this U.S. including prepared measures Accepted be in accordance to financial call, to measures not John. in with adjusted in financial release. Generally to EBITDA. most and accordance comparable During for a these or are call I measures John? as and prepared results will isolation we intended GAAP. present substitute included directly or GAAP. in financial These measures, The considered non-GAAP Principles, turn non-GAAP why with are not Accounting reconciliations these are to over the financial GAAP the definitions now of non-GAAP a non-GAAP we today’s financial measures of discussion will press measures financial These

John Fairbanks

our the level, our XXXX summary the drivers. will high discuss same results a XXXX to results XXXX our a share At Thanks, call Ricardo. financial before outlook Laura. outlook and provide I our and Don turning XXXX of and over

of generating each we growth revenue markets. in our First, are principal

the gaining building are electric and the Spaceloft we infrastructure rapid from European PyroThin growth products. our We a adoption market market, materials associated in barriers sustainable energy in recovery, stages with we line solid are in share experiencing of with the vehicle benefiting thermal of are our the initial market, the post-COVID

finance, This manage and assets spending expand defend barrier the to development team technology to investment information to investing out operational, and barrier are people, aerogel our to design anticipated we This battery research our to our and and fabrication manufacturing our capital and and aerogel the our aerogel includes production, in general our e-mobility commercial operations supporting to enhance and our capital carbon management planned resources thermal supporting strong opportunities. carbon and materials also includes our silica teams testing business, IP facilities. in construct our and our to second increased portfolio expenditures growing personnel our resources Second, battery business. support legal growth expand build investment thermal technical, plant, fabrication opportunity, rapidly material

our commensurate are investments these of that with scale opportunity. the confident EV We’re

million total growth of energy a market in in revenue in composed in XXXX, million. $XX.X Focusing increase was the $XXX.X to $XX.X infrastructure on versus EV of in revenue increase million $XX.X initial $X.X barrier revenue revenue, million and market. increased This million materials sustainable in XXXX thermal building $X.X million by the

our million due our between output of raised $X depressed range, outlook three which some the production and end have and reminder, by shortages. the issues, material COVID-related revenue issues these year. higher. that estimate revenue Without our been during would fourth have upper during Our was the X staffing been raw as could times XXXX quarter a we to We in

are far raw of improvement we thus the and material experiencing quarter during XXXX. availability in an Importantly, first staffing both

XXXX. Accordingly, in growth a or net resources increased in operating and XXXX, to were XX% per increase expenses, The both driven or by growth our cost million, versus million in to in by XXXX the Turning beyond. expenses EBITDA by in loss XX% adjusted million, and $XX in material by versus negative XXXX. increased costs by expenses $XX.X $X.X per XXXX. And million $X.XX costs of negative to expenses in share $XX.X $XX.X to or revenue or for manufacturing million XXXX share $X.XX prepare XX% in during and net million people $XX.X compared or $XX.X and was and XXXX loss million investment

loss other gain items not as any included and $X.X do compensation reminder, we our debt. a core extinguishment are define amortization, of of In XXXX, on indicative adjusted items these that a performance. before or other million stock-based we taxes, believe As expense net operating depreciation, income EBITDA interest,

I’ll sales to equity to million capacity. $XX.X sheet $XX.X Capital ATM through for with We XXXX. part aerogel $XX balance $XX.X flow our reflected adjusted a equity in during of and the facility million designs second included million of decrease of expenditures manufacturing year used for carbon million, Next, our activities offset borrowings with Koch $X.X and facility. financing cash the Cash credit proceeds turn cash, working XXXX placement negative investment. of by our ended from million facility and million of and operations $XXX.X in our private $XX.X partners of expand by EBITDA and million our of $XX.X our capital in June investments $XX.X engineering year included from strategic our shareholders’ under provided million. no of million revolving Cash

our to We at our XXXX $XX.X available million year full-year facility also had will outlook. revolving now under credit turn end. I

growth materials in growth market We of $XX in million thermal XXXX, in our sustainable the a recovery building tripling market. continuation energy and PyroThin year, global the associated expect barrier post-COVID for continued infrastructure the of with the demand continued revenue the European revenue to

to for XXX As a to between outlook XXXX. between to of million result, $XXX XXXX XX% we’re year and XX% growth the equivalent our compared revenue setting and

and e-mobility we As to our investment in continue is growing on Accordingly, outlook capitalize rapidly resources full-year our personnel to increase opportunities. initial as to plan discussed follows. earlier, XXXX

$XX of and We million, between negative EBITDA million adjusted share. revenue negative between year. This between $XXX loss a between total million XX.X average of of per of for and $X.XX and $XX expect loss XXX EPS a $X.XX of million, assumes weighted a XX.X outstanding loss outlook net $XX.X and shares of the million, EPS

outlook stock-based of compensation assumes interest and of million, $X.X depreciation XXXX of expense million. $X.X $X.X this addition, million expense In

for expenditures between We year $XXX also the million the capital of expect Plant to project. and incur during X principally XXX

shared thank years company’s of and Don, call want fellow our the talented, at particularly great is over building completely to express XXXX. privilege committed The a opportunity. to hardworking it’s Before that to his and the turning team been the rich want Aspen for a to Aspen my with success. Don with company, I to since employees work I Aspen into goal over leadership

I of truly It’s not an I been In we And and CFO, succeed to financial with addition, will the coming in analysts. has stress years. to and Don. I’m will our combination IPO helm since retirement. how at Aspen I now remarkably Ricardo. to you work want XXXX. turn my our automotive talented I the is Don thank right skip as it all a with With and am over He investors impressed the confident want in experience Ricardo honor beat after will to finally, to ensure and

Don Young

the this met valuable will to who you to course, our progress replace Aspen, call. Thank John, us X John people the the XXXX years. everyone. describe years, strong an sustainability. convinced XXXX, session. in When evening, CFO to him just I a the retirement automotive a and has longer-term On has John openness, Aspen, another help call today’s John, end in culture a I create Aspen are a first Tier Thanks, and has Q&A the over example assessment of core. To I will already said upon who and Officer, business efforts played John transparency John. Good at our Ricardo Well, with company member the last welcome will a QX elements keep become thank of provide of three highly Ricardo of deep joining give our quarter. Chief I I our key I and behalf as will of that our a honor, team and of our building Ricardo opportunity. at Ricardo thermal instrumental our like John. achieving barrier goals. would have of this at to culture in to company conclude role opportunity and to us all Rodriguez, has Ricardo Strategy is many vast a of call commit turbocharging John’s technology the of our fairness. we a an Today, we leader us detailed and talented valuable a first foundation. for at towards team. XX earnings for Aspen you, near-term background join as become

The we from Platforms. at is from Strategic the notes We as follows working in of first recent confidence have XXXX. The of and the equity convertible point is various entities key investment importantly, June equity of Industries. with extension relationships vote cover common investment comprised million the and KSP’s investment $XX million Koch appreciate KSP $XXX made Koch and to the

execution EV million value our resources more X growth a of of balance over our $XXX OEMs. scaling The a KSP next capital The have the planning, example we of creation raising to end fast-growing are past, the than I and the our to of and in de-risking fund we at capital for engineering and described immediate we business Plant provide from leveraging As strong Koch year $XX to be most several the additional critical foundation the as relates of goal supplier our project. with year parts initiatives. as cash significant investment million ramp

key from revenue cover The to first again time, XXXX update XXXX. set to one to XXXX we double that double point At is and we that ago. XXXX to shared revenue targets targets second year an to approximately from growth to the

to million double XXXX are $XXX target XXXX, to are We target the reiterating now from to XXXX upgrading to and XXXX we XXXX. revenue triple to in approximately revenue from the

triple what are the on We and revenue which automotive the well existing XXXX, these according based is that estimated The revenue discussed business our order of year now that thermal we low in programs. revenues gross will American the programs as for our automotive be delivering PyroThin assumes customers our our on OEMs. PyroThin the customers return the Like these barrier taking and we levels, made negotiated business the we whom expectation to Furthermore, the from and continued to from to industrial XXXX achieve production estimate and XXXX into ago. other XXXX and existing doubling we business program pre-pandemic in XXXX growth quoting will thermal multiples program business industrial generated during of one to that XX In the into The parts year revenue target. XXXX XXXX estimate anticipated of from way expand additional we We of EV upgraded Tier targets. X progress the PyroThin battery activity awarded active PyroThin barrier with derived platforms PyroThin represents Asia-based We program to work XXX% reach and define that XXXX awards revenue awarded for revenue to to is our two penetration volume from pricing. than anticipate in space. estimated awarded and convert from customers. term we we have for revenue to expected larger in significant double-digit ramp forecasts will we account awarded suppliers, from North the OEMs. target revenue of XX% are highly prototyping targeted past that our XXXX other

The in and expected Plant We with be X central Plant accelerating revenue automotive point is university support Statesboro of to larger expectations third today in our a battery Savannah demand and approximately Statesboro We growing initially focuses for billion. build announced plan $X.XX capacity Georgia. than ecosystem. on town X key near plan. of of anticipated, to a considerably the expanding and plans port and X our that city Plant will

The first capacity million, $XXX enough will of XXXX. start-up in our of million II approximately service electric vehicles. two and we At in of time, revenue and Plant industrial approximately million to X.X plants phase approximately the the revenue have late our have will business $XXX date that capacity

we full to EBITDA project XX% utilization we margin be XX%. As approximately level, approach approximately capacity gross our this at and our to be margin

in of and add to we the second first both most X, building necessary to the another This phase from the volume phases. During the phase. to of also cost-efficient critical, the months is as construct us first is approximately timing Plant and approach enables plan support infrastructure The we of capacity awards from XX additional other automotive anticipate kick-off $XXX flexibility revenue potential second platforms million the of battery and for OEMs.

the approximately we reminder, to plants. approximately points XXXX the Plant tripling XXXX revenue capacity first a why of are phase be approximately from to existing billion The targeted have double to X and than of $XXX the can X X, and from to target Plant estimate XXXX plan. $X.X XXXX revenue to million. the As we from reason Upon met adequate $XXX the have across million original phase, of revenue to be expect to to we to the directly Plant both overall of second larger building completion we capacity much meet

the our of to of is our and than speed first trillion of million. make of transition in million, approximately supplier CapEx of capital will the the invest projection to approximately technology will cost with per dollar require and the capital revenue five second X is and for the which project $XXX With we of prior phase vehicles, full potential to auto producers. a to ourselves dollar phase $XXX our ramp Plant less $X.XX, industry project infrastructure revenue We require is increasing capacity. With a are full next than $X.XX scale, on of lower electric track per $X.X the the years growing to rapidly. size EV valued list of positioning be a

of of $XXX more a balance to million business million KSP and than million Our of million year profit able approximately $XXX foundation investment and financial the provide revenue, the EBITDA. approximately for $XXX $XX cash of $X.X generate end billion gross of

will explore next financing We business remainder significant raise of opportunity. the required to to over fund cash additional our the alternatives year

the in our with strategy technology markets and to In into themes. industrial aerogel other high-value platform to continue addition we invest EV our businesses, to leverage sustainability

materials focus with our materials. work on Our silicon-rich is the catalyst initial is Aspen for aerogel carbon the battery anode where

the validation to key performance, share to metrics field. and compare with plan metrics companies third-party and other to we in cost those XXXX, related interesting During

respond collaborations. materials in and for increasing requests to of With the XXXX is well OEMs development investments automotive equipment, for ABM positioned battery evaluation number and from people to and the

efforts a has Finally, our and imperative I would our which companies. and we into for social work the environmental ESG a our will first ESG followed spring, to Accordingly, report, ESG process a XXXX highlighting reorganizing where strategy. we good like during positioning more to the will This begin define have ESG quarterly of ESG by practice be calls. for more formal future. business of earnings report our all progress recap become the begun our in-depth plan publish ESG we

to to scorecards provide investors topics and various rating other call with discussions agencies to is stakeholders for specific a for goal ESG accurate And and Ricardo. in order Our now let foundation deeper to access information. on ESG timely have the over with that, and turn Ricardo? me

Ricardo Rodriguez

be really part team. and I it of the happier appreciate couldn’t being Don. you, Thank

As a pack, them of is more significant can be the out. thermal used the usually given expand to and and battery an formability pack high within the the as materials starts some to to car. including A put used on when in lithium control it the energy to extinguishers The the energy reacts its we think spending fire communicating B cell makes runaway fire to into that design, only in amount Plant water type all energy the mission. out equal that the in can released with temperature, than lithium-ion consumes fire. of of stepping them can to in triggered and such runaways worth a the usage what it’s some of of cell’s our and compelling the destroys battery capacity and Thermal increasing we runaway this execute result invest Don plan cell detail push decomposition back temperature ultimately uncontrolled released thermal in X, PyroThin or the materials that issues such that and the time, by in laid with due various Class everything and propagation nearby the manufacturing of runaway worsen usually A cell. fires and These entire charge it pack. high

or density A gauge key consumers on and issue of include drive feel safety in is architecture or very to This discharging efficient, launch recyclability, and one and charging, system vehicles targets, has is if etcetera, face characterize other. reliable affect assembly, customers’ to safely performance complex weight, like feat within and the decisions. electric easy our persist exercise. its used, consistent families. shoes, agile, really time day layout is time. record that size, we all pack integration increases In safe rates, what issues pack this with the of the It’s test battery is safe where cell their as and vehicle we great and vehicles complex providing EV boring vehicle over our they no every be their pack requirements an and factor, intent all whether the of enabling is ease transition our conditions customers integrate some These making drive. nameplates or ourselves fast system-level The XX and electrification with Things as see charge that that vehicle takes most as full design tends this reliable in battery what acceptable range, an your temperatures in determine chemistry, enjoy integration mass for is crashworthiness, So, density they as range all and drive experience space complexity years. If small, to the a that integrating de-prioritized. of of one energy an the styles of through sorts needs part can These body decisions exciting to diverging it, design car this well. much stand design, that are or vehicle. many unit the of when a over of of of in fast, per considerations the as and integration, energy even better things big, OEM form put

go OEMs thermal systems we with and thermal safety However, addressing runaway both in PyroThin our mile prioritizing most the such barriers. active extra as measures are passive seeing

charge Validating enable. OEMs validation that systems the are and for controls or these NMC prismatic advanced The cell, causing the active can’t of Our as in density time-consuming and value passive silicon module or in defects, of space testing erratic systems highest thermal pouch new standpoint high-energy and prevent features proposition XXX% as protection The multiple processes of challenges requires and given graphite their form that eagerly out times on cycles control the runaway of is to evidence is variants most mixed reach manufacturing in recent point anode advanced solve fires for chemistry. R&D OEM EV strong factors, impacts, alone pack every news their investment type their are to is expensive electrochemical active strategy, hard. of from time. every an failure. focused

compress a We systems, battery a as in seatbelts. other zones, vehicle customers, and during lifecycle. this the elements prove level of and problem Again, a customers core, battery OEMs in silver are investments work their with and of given the high-strength and passive But problem materials passive their are the more materials still prevention as same inning increasingly priorities for and form crumple doors, that we in looking a safety fire their the conversations that customers They collision this are At all material lightest a place and bullet these lead space, airbags cells and for is alike. a key and a safety. customer and steel rest all to thinnest intend with requires bullet and fuel and ensuring perform we thermal provide for runaway of with approaches. our very of engage control, their the design time. provides with not automatic highest our as to design clear. know There can the beams thermal that for better provide electric want impact-resistant effects system of and keep a also requirements, when we that degradation prevent varying this space to And first fighting becoming to precious function, system weight to vehicle changes worth. pack no in good of avoidance industry critical braking safety emergency systems started in that inside they recent is encouraged a runaway, need traction to work multi-variable and production Tier is by their deliver materials to the We material long part all stop from Xs protection. as or But foresee the way the pack that recover and are are the a without

On They on materials the in can how left, differently gas range inside thermal cell-to-cell you as tend recover. runaway see barriers pack. way and range, PyroThin compression along be a they work to together of very the other this behave simplified – the able thermal and barriers, to can resiliency or under and with be force compressed which then fireproofing fully of pads

would also see it that also the range recovery CPV. and the resistance unit PyroThin. compressibility performance at per X.Xx of material the material vehicle that of deliver PyroThin the and A barrier take content the with You thickness, its the thermal our of pad per optimize or charts an of unit a also the barrier closest per material These heart is R&D of and to how example we show will as twice along mass why can broadening increasing weight, cell-to-cell are thermal of fire acts thickness and of efforts. compression

with Beyond barrier Aerogel of for R&D on processes to fabrication. the and our along thermal that, systems base, for we focus will tooling the continue manufacturing automation scalability

far how CPV. the you currently On right, can about we’re thinking see

you of X supplied a showing of having broad last Tier whether we’re content, we’re started a in first supplier. X Tier innings lies, CPV range this the parts of the production in quarter, vehicle Given where supplying or type our that we’re just

our win on know increasing every sure Our is focusing and understanding supplying by the it’s packs. that vehicle customers’ with we we ounce solely is inside won’t earn as to CPV, need or What that informed for battery inch evolving programs quoting. we by we’re cubic

instead We barrier of are content is PyroThin. on percentage overall the the that focused increasing thermal

partner customers’ vary design that our XX% as making program product evolving in the forward this prioritize a to a understanding customers and with For solutions. with with PyroThin safety. system-level We awards thoughts $XXX, are production and right R&D, will continue the these the and validation, of accretive value and the capabilities thinking chain, us the back to really increasing CPV. will we right and to design, Serving to remarks. around I’m With levels integration play delivering projection, that desire of updates closing our gives to EV changes, look that, evolves. to and to that, initial to in CPV new runaway deliver settles approach will up call assuming happy range accelerating provide our enabling as $XXX with multiple of Don plans we’re Again, we thermal needs his content our summarize turn the strategy

Don Young

you, Ricardo. Thank

Before Q&A, points. key me summarize let we move to

entire value Our technology focus is our significant creating aerogel on with platform.

as in are a and We technology markets large playing leader sustainability.

with for next million, value. create our foundation of to raising – our additional the of technology current and KSP team $XXX over $XX to set investing with the Our leveraging fund received next set which initiatives optimize opportunities. our into million provides talented significant is momentum our a of from cash strong of investment over a markets and balance executing our to in strategy and expand year-end a value capital We the year

to upgrading our our and target to are XXXX We growth reiterating to Xx XXXX million of XXXX. growth Xx XXXX target in XXXX revenue $XXX to from revenue Xx

planned to accelerating of of an $XXX the estimated turn are plan larger generate I Lauren million approximately now back able million billion gross be profit $X.X and call $XXX the Plant session. EBITDA. than approximately will revenue, initially business for better of demand and more to to customer to and capital match the X We to support growing the building efficient to committed and Q&A

Operator

Craig-Hallum. line the Our comes from question please ahead. Eric, Stine you. Thank first Instructions] [Operator of Eric from go

Eric Stine

Thanks details. the all for Hi, everyone.

Don Young

Thanks, Eric.

Eric Stine

Yes.

So you and could the great GM Toyota in presentation. that disclose

awards, in if to activity maybe XX you on between visibility clarity the more volumes it’s are gives lines? things potentially what OEMs kind curious, you could customers going that into shipped down you two of other? breaks that And Just whether to along those shipping next that forward XXXX, give you RFQ the the commercial then how and

Don Young

Eric. thanks Well,

of We that set that just we term through revenue me in these we prototype programs the in those battery gating develop were greater is resource are awarded XX, I are, that being a would would I we those next regards are these of say that generating materials really to And battery as the those customers from platforms. that those customers development going many let the this they ahead I platforms. customers. just additional field platforms – fact say are had potential longer development would the means and platforms. and providing And say much battery we of just expert say more battery of much item their becoming to that the – earlier

And a so that believe and add that will that both to list pace over and are XXXX we onwards. to we do nice we on

Eric Stine

Got it.

to mean, work, is you more development, to I the the it So, war mean, I for fair on those in when terms making about that the rather it’s say timing about OEMs? side progress than of about OEM winning within the we it’s think more development more

Don Young

to have a we’re Yes. these strong companies. that bringing Eric, we think solution that we real value

XXX% target those was also my would did that that reiterate Ricardo I that programs. it. feel from for of one XXXX just have revenue comments, PyroThin, estimated from I a job we we our think which awarded nice describing revenue currently of

with that timeframe. we the double. awards, we’re current And we so tripling, our out the position respect XXXX, XXXX estimate estimated to play then revenue approximately a have in of from again, XX% to in this strong that to And in first

to we and Eric, a So, will, But on platforms, just that we’re out position. we given our get will battery able bring revenue mix in strong say let’s that XXXX to we awards XXXX if as builds you confident additional additional timeframe. supplement, we sequence, that are these are right. And into be know,

Eric Stine

absolutely. Yes. No,

On talked past, the topic just in but of you describe how increased if XXXX, maybe you’ve engagement. obviously I of that that know the the of quite bit a that levels you’ve of more or about you could and square have OEMs, three kind kind

year maybe it where did ago? versus So, or that now, a where maybe stands ago did where quarter a it

Don Young

in these that that and OEMs two track the of let automotive parts that we today. to garnered the detailed we’ve one me to prototype And two say awards We’re date received. on are range wide just providing to we’ve a the a wins similar

similar very able to awards, a win be on we’re to So track Eric. additional

confidence additional lot of of mix these EV we’re over announce such XXXX XXXX and round number we’re and out going awards of have, to so course again, we And the a a that that revenue good producers. serving that

Eric Stine

just the And fair or vehicle? Toyota, is that win assuming would with say you’re you platform you’re you that rather it I that one I assuming whole the means than to mean, assume

Don Young

think in good platform. model position we’re single a across and nameplate, beyond of to strong We single go to business its battery that a a Toyota’s amount win a

Operator

please Osborne of line question next the Jeff, from Cowen. comes from Jeff Our proceed.

Jeff Osborne

X Yes, I the non-PyroThin of XX% the curious. you what at information. $XXX. the all is is? Page, On weighted was deck, just content talk about of the what Thanks average $XXX for revenue, can It’s that to

Don Young

to? Ricardo, do you want

Jeff Osborne

curious. or just was non-PyroThin? is XX% revenue as You got I that attributable down for finishing and So, materials advanced the Is battery steps? that to XX% PyroThin

Ricardo Rodriguez

No.

So that’s actually putting. we where revenue are

the the particular of thermal form. look just you at form bookends most looks barrier shaped the and sent layers a our thermal the chart different to Page very we much OEM. of like are actually show what the aerogel pretty if sandwich that simplified basically to – ones left barrier, the So on the most form It’s a configuration advanced is it’s then of the X. But to on materials, of in on multiple similar

CPV, speaking when content assembly. other being barrier to mention materials part these the we thermal referring of when as are that purchase so we’re other integrated And of

Jeff Osborne

helpful. could do also per was Island? initial then wondering dollar relative expectations? attributable where Rhode to square of the you revenue, on Georgia $X.XX savings And Got of touch meter if to the was to for how we cost that just it. relative about I That’s think per

Don Young

John, take want do to that? you

John Fairbanks

that the Yes. want additional to Can a get little you I on $X.XX. detail explain question?

Jeff Osborne

said per Yes. goal dollar that was John, now and $X.XX. of as you it’s of the $X.XX revenue CapEx

per $X.XX came versus expectations then compare year of Rhode your cost relative Island. that where lines if you in curious from a to latest maybe the the was also square And ago? or I So, structure three meter so could

John Fairbanks

Yes.

always And East our of that we’re – in Providence. said it in productive the line is than a the ultimately, it’s design Georgia improved first to ability terms XX% third, multiple really the its our We’ve of our produce line. product. than So plant, more in a deploying function second productive it’s is that more second

– – been able haven’t line in And East third so we to we’ve production we deployed the in Providence XXXX.

our advanced And in significantly period. so development, our time has technology, process our designs, technology that manufacturing our

and of Providence, is it operational cleaner, productive. have utilities plant East of of in operating design seeing worked and use of design, XX% we in as we’re savings terms over our productive lot costs bottlenecks, the Then a costs, we way more Island. more and greener – Rhode through this a just actually its addition, what efficient, about the more of energy in far we’ve sort So

efficient, we just designed of was it’s more a we productive a and the ultimately, had we year than anticipated productivity design, when So more it at – asset, and what looked that it ago. better

Jeff Osborne

helpful. it Got appreciate it. John. That’s I

John Fairbanks

Jeff. you, Thank

Operator

from the next Potter line Piper Sandler. please from go Our of Alex Alex, question ahead. comes

Alex Potter

Okay. Perfect. for help. guys. the all congrats, John. And Thanks, Thanks

I So, couple a of questions I on guess have fabrication.

John Fairbanks

Alex. you, Thank

Alex Potter

actually of more sort is in Sure. needle time Did your the what what I put CPV and that selling guide. the know customers are is, the tag it going ask XX-XX that, moves of in percentage percentage pure it if doing in the expect steps? don’t know I overall value-added product material just as really fabrication facility be to you on then do calculation. to CapEx mentioned follow-on Mexico? But be facility percentage your to ever the of out you And that you how a maybe in to of price a through there fabrication of split – time the you your Georgia what

John Fairbanks

I So, of questions. think probably – I those I’d handle mean, both

on an more plant. So, scale it. at first, less It able is much it process deploying fabrication present. was provide have than Mexican what to little facility aerogel manufacturing And we in capital-intensive didn’t we guidance

deploy revenue we maybe So to type advance see facility. the as of to growth, capital, as for in X it XX of that evolves, – we’re months need that able

looking contracts, customers significant we’re looking Then of our prospective So content at did but aerogel to significantly and when that amount a in to there, we’ve per given at, in quotes what from the that range dealt $XXX it vehicle existing us content of as different with, award is looking our this the increases, the we we’ve plant well. that it deploy $XXX capital the at aggregate, as we terms manufacturing will and range, that’s with in wins the in past. scalable the of opportunity

it vehicle of shake likely so And our time. is where is estimate to per best the content out through

a I’d provided We evolve talked do the to this. systems evolve to we and present, I it time. about situations. will all However, it’s through of plus had that we RFI the customers of XX But responses continue to expect think RFQ or provided these say we Ricardo customers at in in other – who function XXXX,

for it’s will we so long-term. where shake And our best estimate it out think

Alex Potter

That helpful. super is Okay.

Don Young

X. to around also the comment. a consider for X add awarded much battery maybe technology talked have the in much increase position that, spot and around case, John’s I coming customer It in I this could even X engineering we X. perspective. be in within us I’ve a with Tier value solution. it battery another very advantage are to us as for And think, pack case, I from strategic we that that – idea it stronger content. in play the – or Tier to here we’re is in one to we the would to our a add in X could And add critical true just mentioned the in very we’re to can puts on. deeply versus ability aerogel and we is in just about Tier the note, date to awards will focused that Yes. his and is – more for from again, if Alex, today, Tier the X a Tier moment performance And us programs, greater the consideration just much that involved we really for year a the are a us as partner is past of safety, that Ricardo roles significantly our in something And a in John’s.

Alex Potter

that Tier all else would type had Tier can, choice the Tier is often as choose you equal, X So X between to say? X, relationship you fair or you if as

Don Young

say, What Ricardo? would you

Ricardo Rodriguez

about now, go letting the as possible right it’s without opportunity as the OEMs Yes. relationship. I mean and it’s I think maximizing really it’s – – supplying technical deep many of

remarks, their I or they whether frankly, right, doing like a were as X X, value doesn’t my in in chain. Tier for So Tier industry a people the nothing mentioned paying

our in we want so value And chain. to just earn position the

the materials looks on current there But that this that us at our five chart able side and will show, Looking to Aerogel, the system, relationship the that’s configuration on XX-XX essence, content the we right. a deep right. technical be a do what we to some Tier the expectations, in OEM like on that a or the on four barrier parts integrating as where that value thermal gladly appreciate with planning split that have just they has is X a materials signaling material add

as we the as as see honestly exclusive OEMs we solving maximizing situation long it opportunity a and first. really don’t So, problems mutually are

Alex Potter

will I on. Great. pass Thanks it guys.

Operator

line from of next please Our ahead. Oppenheimer. go Colin, question Colin comes the Rusch from

Colin Rusch

so needs PyroThin performance where might a bit volume? Guys, the enhanced as Thanks working evolve getting capture much. some to more the the customers you and technology able battery to any these it at closer to meaningful are get on you looking of be the packs, these efforts are formula or within for to recipe real

Don Young

it into very in of very well is installed of well, good learning materials I that how and do over that up very that a very we is you have expert settings be we $X And want that fire that lot we the want material be. logical yes. understanding being we has a understanding expert we – this lot been sets that billion to certainly that’s more phenomenon the us Well, think leverage certain Colin, itself that fact When that own – And to know and learnings. the and of the our know quite a to of play around a protection. answer well we becoming referenced extension those industry to asked within to these systems, are I given question are and with that

of to host we the leading And is path accelerated of Xx ‘XX. a our goal It have of given what our OEMs is engagement so is of EV think ‘XX space. our think in situation. on has in been what to it goal some the be we – and the ‘XX a will I here a and an to confidence reiterate to upgrade revenue Xx It the of growth understanding ‘XX function with a of function us

Colin Rusch

around Great. in to That’s the helpful. begin the are can terms on you your plan And then out? Georgia, we the mature for about build conversations or leverage into in facility equipment finance that of talk how facility it financing as

Don Young

continues can and that And John, raise well true our to on years. and capital we next here being period year have have generating that, years open pretty have do of – we of – over to fund plan. about. count cash this You of additional kind John, own defined the of Obviously, through path here our we you of take want been to to think I the do I course as it opportunities, above over again as kind for move lots you know as the or this us want that to approach very and not that? profitability, mention to X the opportunities we of to we and all a forward talked time you

So form have. that’s – the financing can of best you right,

X focused our year, have what the fund really think But creatively course of we and over plans and X years. here opportunities to Colin. we will we growth on, next smartly that that’s X So, years the are

Operator

line EF from go Moore Chip of Our comes the from Chip, next please ahead. Hutton. question

Chip Moore

Thanks momentum, thanks the It’s and you so. years or the working past with guys. John, on XX congratulations. congrats great and tremendous been for

is Tier to really you look already? to X been worried to capacity, or very now. you Tier up Obviously, is seen I everyone right about circle be think lock to to OEMs Is wanted have you opportunity agnostic. have wins X, that think as that more Just smart something there back discussion, OEM accelerate supply chains

Don Young

with a we backgrounds in Tier automotive OEMs with with experimenting year team and weekly are companies have very and X are a or regular last basis, as Tier engaged either Xs. from same a as basis the joined products And processes. who there X on we battery with daily of on qualification strong Really we through company X platforms that our have who and whole a deep the engaged we are Well, going people, for with different years host many really different come automotive of companies. very of

to in only role believe platform important we So, our well-positioned in we two not a of with regions. space engagement to item said in gating all good an companies we are leaders play in production three but and is delivering expect I of going And the forward major have is the parts, we number before, the winning development be are the to – itself. these the companies EV this the I think that whom

Chip Moore

on near-term up more next start look we more sort one maybe Statesboro to as just And to Understood. of later year.

year on thoughts next start-up. price You you the look Looks margins had supply the per quarter. that talked that about some just maybe square chain like of picture saw and we bump, constraints nice towards foot this a as this big

John Fairbanks

Yes.

manufacturing bit a in an XXXX, So, seeing we where little manufacturing path significantly increase we and expenses. are in We are of yes, are a resources profitability I those to – see investing question. think in

up we growth our and thermal in in are and handle line will As the with that a targets, facilities XXXX, Xx. significant very in result, XXXX growth barrier setting Xx the operations

expectations outlook. XXXX those in scripts, and would And reflected expenses. the We it digits, because the today be so gross gross those it’s XXXX of high-single depressing that’s of during margins the our in margin but mention addition – our did

dollar profit Mexico, in set are but fabrication hit to beyond. will to – overhead significant margin for up significant up After see incremental roughly revenue for about that will this get revenue. growth that revenue of dollar would profit, generate, that and incremental higher EBITDA of We Monterrey, $X.XX of us in overhead go about we gross a a there, of put an about we XXXX so incremental year, per $X.XX and going operation set our gross adjusted XXXX, in on every we earnings XX%

results, of million second that that of about we of that see the of about plant margins that incremental the a XX%. out – build margin point EBITDA so the at EBITDA to gross we where revenue when adjusted would plant get So, we the about And phase down ultimately $XXX second that’s third XX%, first drop to line. profitability will

significant low improvements is XXXX. up we those out the ‘XX and terms you in profitability point margin we in profitability in gave growth, revenue to and that of will beyond So, ‘XX, see capacity very in our economics With comments.

Operator

line from The next Doug the go from question of Becker Benchmark comes Research. Doug, please ahead.

Doug Becker

Thanks.

expecting at be of $XXX you if free going future You million generating flow of that to through of full significant type be at some mentioned you point? of of parts off the capacity could will just free what revenue throw EBITDA, to talk that capacity, I to wondering fund moving expansion. flow you billion big cash would $X.X from cash was

John Fairbanks

Yes.

out of plant capital our starting – is we second the plant, be so So of two need, build our associated the need – I with would to CapEx Doug, mean it’s over next years construction. couple principally when most are financing the

that’s lot $XXX second which for plant. our phase. with $XXX just significantly would than beyond a investment then level have for be incremental we require the And we kind As fabrication of at aerogel phase, the that, operations, expanding the an a Don alluded million associated million first for constructing of front-loaded, to, CapEx would lower

cash significant of maintenance be available and operating CapEx, would flow. CapEx cash would not drag that less a be free flow on lot so as us to a EBITDA So our adjusted

Doug Becker

there that to expect are a level cash or NOLs? be you Would taxpayer at

John Fairbanks

payments income. adjusted Yes. that block Doug. break just and EBITDA be very cash with those period I But a would we math our generate we significant short mean actually quickly, pretty positive have you profitable net a do when run to for we will I of those the tax quickly, order. described, – pretty And we start have time. can would do incremental we through in margins But NOL

talking be billion NOLs, worth income, and gone $X.X that when net cash about company of a million have would you And a so significant taxpayer are very with being our would at we point. EBITDA, $XXX through we

Operator

Amit, of from Next line Dayal question the Amit Wainwright. please proceed. H.C. comes from

Amit Dayal

Thank you. Congrats the progress. everyone. Congrats on all

Don Young

Thank you.

Operator

Our Canaccord Genuity. [Operator the Jed ahead. line next So Jed, comes question comes go Dorsheimer from from the line next of. Instructions] the of from please question

Jed Dorsheimer

guys. of the bus here. Thanks Hi. Back

So, me. a few questions just for

the so the revenue East is capacity $XXX when addition to is and X $XXX guess expectation from from I that or or in million – on million billion, of we $XXX the the annual including look the Providence, that is the Providence? So, for Slide $X.X million

Don Young

from the includes East That million Providence. $XXX

Jed Dorsheimer

the Got on then plant, $XXX Providence And never done it. million. that’s

that plant of terms the of out of in double it of because seems yield there there like a terms been some been So, change ability has in kind there the has breakthrough? to revenues

John Fairbanks

Yes.

take So, I that. will

we this Jed, was business. So have the that East said thermal – our barrier always before

infrastructure plant to the the The are on combination aerogel million. is just Providence East content we straight has our about million of capacity the energy That’s of the infrastructure aerogel $XXX that as are support So, our energy incorporating that sandwiches we that as in increase selling using been barrier would market. business, a content we thermal described the barrier customers. are the be that plus into that the to aerogel to Ricardo shipping the well materials thermal additional we market, $XXX

We content, customers. plus expenses revenue our aerogel it’s associated. plus up So, do purchase mark the automotive to materials, as well fabrication

combination of And the of so it’s all those.

our productivity we a change business, on It’s in isn’t before basic So, it’s but the top it same capacity nature billable aerogel the items really had a of improvement. it. of additional with

Operator

Chris comes from Chris, please Our of from B. Souther ahead. go next question the line Riley.

Chris Souther

Hi. the includes I platform, That XX% the Subaru. one Yes. with just to on XXXX’s just model confirm visibility GM’s on the Toyota tripling. and plus wanted Thanks.

current closer that XXX%, won way platform full you to think of get presumably with the good to kind a Is the Toyota. So, if about you could visibility?

Don Young

I demonstrate neatly. an you the plays estimate one statistic, pretty Yes. or to thing. will, I that that in reasons that of we why The math two the with – battery additional was – think if out there wins platforms, it mean in one we put other wanted is

Let say that. me just

very in And the so that the achieve with engagement with confident our only just targets, we – additional engaged, ones ability is have a targets parts, we function customers reason a that increasing are are with where the those companies. delivering we these our those additional reason but quoting, are very production whom through a are range of those to from working prototyping, quality to systems, confident are again, detailed we not we two we of engagement

So, we target. to feel we support are position those a and Xx strong in Xx

Chris Souther

are been are shipped any chemistries for any GM, And by other you that or the the revenue can that Great. but NMC, have about variety of eight PyroThin NMC excluding of you that majority battery are those then Okay. talk you year chemistries used Toyota, using last seeing? customers,

Ricardo Rodriguez

even of am and not it’s yes, eight it a mean with that of higher away, I but absolutely take I level. more sure – are Yes, level at you them familiar detail, all

Don Young

are they I Yes. mean parts. really all prototype

of or the indicated prismatic used as much So, well, being NMC pouch too have isn’t either but into mostly with that’s the going up production cells to as what may they remarks. we are aligned chemistry necessarily in going end specific and detail

Operator

Tom Partners. final please question Our Curran from Seaport ahead. the go Research Tom, comes of line from

Tom Curran

certainly not trust. sure, you I least, be Last congratulate on but financially. to want John, I just

Don Young

clean-up. Batting

Tom Curran

XX Aspen go. Batting responsiveness over guidance, clean-up. appreciate past piloting detailed explanations. the lucid really and growth There years, I congrats John, through financially chapter development your every on Right. its you of

So, best of you. to luck

John Fairbanks

Thanks, Tom. it. Appreciate

Tom Curran

would be battery materials at expected to expected energy remaining Of target what total XXXX revenue be of $XXX thermal So, or the between million, your XX% split barriers contribute would annual million, and segment? infrastructure million. the the $XXX $XXX for

John Fairbanks

to of low-double the we just be growth in remember of million. pre-pandemic that our Tom, good was back there. way maybe have industrial to level a range from assumed say $XXX it that digit would we calculate And

or a the So, course you are growth if that X on if very we or that, XX% years, of… those are XX% kind add over putting you comfortable years X rate of with

Don Young

a assets or it’s market. invest in let will Tom, and to little produce them materials And about make to additional battery decision business, Yes. going terms produce license – whether ourselves what to of materials in a be sell we the that others we and materials, some how technology into are Aspen that them those and structured unclear to have we the

we our investment initiatives excited business. assumptions. that that’s it don’t approach, about that so And but but have the know We will in we a what at generate in models, ultimately present we very we think the and development And to and and fund are required estimates, haven’t cost research that think revenue put conservative expenses we revenue, yet. form our but

all And we tried so have on that it basis, exclude to provided from the projections we today.

you, question. that to helped Jeff. answer You Thank

Tom Curran

it from any battery at, No, that to reassuring it’s answer was what to helped I assume but does trying contribution that’s not – revenue you get know both to materials.

Could relationship. of to dedicated kind include us then when you expansion any to with update the their platform-wide thermal have $XXX Asian also help potential the now you indeed of win to would to industrial they automakers, – cover And you expect we own that timing battery an questions confirm with able do be to the expect full legacy been that mystery the than then more might bZXX? able that home Subaru? and to with where business. you between Toyota, So, contract finalizing that just barriers us on And million the our of about platform in pacing of can you are at

Don Young

expectations want want just now and just specific we have right to careful to and be their programs own Let we And specific respectful me you. about companies. be what developments very very about, mindful with – these and of talking

we have those Let later in maybe position is said say that that very others stage bit companies, what strong again, been in from that just for now are time. expertise bringing OEMs year just really our OEM of these That’s a complexity about manage it we were a difficult past, business Ricardo I and awarded technology, the out that and of which the trying we automotive feel but nice being systems have we me any talked this passive around we over playing comes in simultaneously. and it thought being of industry like likelihood these it’s – the over over would will, this we just both situation, and strategy we period really I And challenging being innings, active of job of a with problem. position business feel bringing from awarded describing certainly a the the did – lot that are value it – are we discussions. yes, we the also if agnostic, here, way the anticipate. to the comes have we resource in you into strong to feel see this a I a

about be So, about programs. careful a again, just specific want we talking to little

Operator

is That today. Q&A session end the of the Okay.

now to for remarks. over back So, Don you Young closing I hand will

Don Young

you very everyone, very reporting Aspen Aerogels. results in you, XXXX well. your we in QX look Thank to To much. late We good appreciate evening. Have April. interest forward much. our a Be Lauren, Thank

Operator

you Thank This joining. concludes today’s call. for

your disconnect now may You lines.

Aspen Aerogels (ASPN) 18 Feb 222021 Q4 Earnings call transcript