- Earnings call transcript Q3 2022

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Operator

Good morning. Thank you for attending the Aspen Aerogels, Inc. Q3 2022 Financial Results Call. [Operator Instructions] I would now like to turn the conference over to your host, Laura Guerrant, Aspen’s Vice President, Investor Relations and Corporate Communications. Thank you.

Ms. proceed, may You Guerrant.

Laura Guerrant

as Young, There Good Aspen Financial thank third Aerogels non-GAAP business call. are available before a well and accounting that sheet the announcing U.S. address key XXXX. a results use summary summary few section Emily. of the and as a www.aerogel.com. September us statistics quarter quarter is reconciliation operating for Aspen’s press for website, developments release call a over balance financial Ricardo a Including I Officer. accepted conference in Don the today on housekeeping like of us and the most would financial operations, the release fiscal management’s With and and Rodriguez, morning you, financial press are CEO; of Chief Aspen’s you and principles The generally measures results of the joining to to measures GAAP financial XX, is ended President XXXX turning Thank year for Investors or third compared items applicable of to XXXX Don. summary statement

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

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

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

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

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

we These isolation not During in prepared not GAAP. are The accordance of we GAAP financial EBITDA. to measures measures Q&A prepared These this press release. definitions measures, a accordance a GAAP. adjusted the call, a interest considered be session, with limit will we financial the these financial are or you measures with results discussion non-GAAP time. to for And and including are refer your note, financial in financial comparable and of in non-GAAP during two to questions most reconciliations substitute as included at non-GAAP measures intended in why present time, in questions ask measures final of directly that the yesterday’s financial one non-GAAP to these

get will the additional the over we will turn call questions And now initial beyond Don? the back two, Don. get queue, all to If into you please and questions. have I to

Don Young

Ricardo report developments Thanks, and I on outlook. results call. Laura. off and activities, will will earnings kick Good Thank us for business – our a with recent business QX for everyone. discuss our morning, joining you progress things our XXXX financing on and business

with will Q&A a session. We conclude

to XXXX double over guidance revenue the $XXX XXXX from for million. center XXXX to revenue to target to we $XXX $XXX At point time, from first million and Our XXXX to triple XXXX reiterated a to our of revenue had million. XXXX

OEMs in earnings point We could growth guidance the would call, And and our be at to At while XXXX that from revenue period. was raised by the our their maintaining less quarter, quarter. impacted of saw second we we cover supply targets. last to that our the while given was Ricardo automotive ramps challenges time XXXX $XXX chain own any we presentation. by third the supply outset in QX revenue issues, barrier had impacted a influence quarter. our During of center than we revenue time million, expected this which will revenue, some in also his record it of chain thermal anticipated

and of of experiencing approximately $XX production. $XXX of We achieve our market us ramp a as the at revenue million, year revenue million inherent our revenue record thermal of are half be to growth barrier the second for that level the nature nearly in XX%. the overall enable believe will for year OEMs will this of approximately their during fluctuations year the EV We start-up EV the QX

Our customers. barrier gather thermal to continues our activity additional PyroThin we as deepen engagement commercial pace with

parts division supply of sell to to of parts pipeline, and vehicle we one key. German to customer of our production commercial light which to brands, support the vehicle vehicle continue its important an increasing We and number most is notably luxury long-term nameplates product the OEM development revenue

have of to target our revenue will ramping opportunity our and powerful. overall, the to remain we momentum believe anticipate period, next ample $XXX $XXX XXXX to variability While we target of continue revenue We that EV million. the is million the from one reach quarter confident that XXXX long-term during we

variability on industrial the it deep EV OEM is while book a it level. a mitigate the not replacement the energy one-for-one of ramp, can have industrial We revenue highlights the our several side of of And There are the at energy some order business. business. from

LNG in growth strong see to markets. continue We

several America had In LNG as shipments to the of years. we America, rigs shape. continued During orders of Latin Pacific Peru product for unfold and wins drilling conversion North on quarters additional will former the coming received had QX, in that the We deployment LNG takes growth first rapid and LNG in expect projects America assets. projects in for Latin in accelerated we early

in Cryogel petrochemical award the our construction first on our refinery In we East QX. strong business. the demand of we to LNG, and We major material a the large turnarounds for side saw Shell’s presence quarter through in expanding serviced are proud the and facility. where the Penn chemical with U.S., are completed received and support and ADNOC Middle We partner

We propylene the the oxide execute plant also on The continued QX for largest are drivers protection asset in during wins long-term Lyondell. world simplified to these logistics. value for and

industrial pipe-in-pipe similarly on five strong high are note in TechnipFMC in seeing recent our efficiency, is value outlook Spaceloft backlog revenue, and five with awards safety. resiliency segment These $XX.X Canada. drivers fueled our and in and last from grow. We for continues activity industrial, space is and Europe, Asia represent levels by energy subsea our of energy projects in to million this The SubseaX, approximately One Allseas. strong

our strategy aerogel optionality to set markets. and revenue with stage the of into diverse With to overall are XXXX to and a this megatrend, EV revenue the committed growth industrial in the position of a with We our large and target. EV benefit XXXX to during dynamic This the leverage we energy flexibility megatrend. of of $XXX early our example strong an are grow building technology revenue target active million million business good our is manage a platform $XXX

for chain, to in capital has our past At make facility have and all continue under level, challenges Georgia. projects, the project macro Plant X, a by inflationary aerogel construction months cost progress been We X our of been not on and supply XX manufacturing Plant marked immune.

manufacturing of managing aerogel proactively the and pressures of so doing first-class in losing facility us phase hit the our our order million. the goal revenue $XXX schedule to build are target sight cost enables to project We initial in XXXX mitigate of without to that

also a important prototyping bring current significant play with scale into believe robust performance X and safety. capacity able positions development and a X battery have pipeline us online design Plant and designed convert awards allow us we OEM OEMs. to in to as We to are to role new and as We incremental Plant our

As we growth approach financial to taking our the past have and we the are an markets, is financing true plan. as all-of-the-above especially current in in said

company in strategic on serve the who again. prospective indicated course, we continued strengthen in business and and make As coke sources focus as equity investments the done we add to markets platforms centerpiece believe investor who has of in sheet. the and we capital, explore group debt to investors know of potential interest strategic our an as or doing balance have past having of investor the will We strategic and strategy a so has our the business validation its our to have

of to challenge, market believe financing in be close While conditions round a near-term. the continue we will we a

Plant to potential engaged with government strategic debt capital public as In of sources investors the X. addition XXXX equity markets, and programs are potential we for and

as materials Energy Bipartisan Our not for the first funded. the was Department battery application of Infrastructure grant for part of Act U.S. advanced

announce before is end that companies to billion that granted largely the additional an were awards We administration quote the the second to cell. the believe believe grant in we As funding XXXX. opportunities are quarter inside $X of likely

We that electrification that amount U.S.-based a to be expect dedicated significant the to economy. will dedicated funding manufacturers of

are as chains to areas The focused the sustainability in such safety. projects programs an target energy programs battery in materials. and exploring and We address American also especially supply related DoE U.S., that performance of for critical other of on storage are effort manufacturing in resiliency the

long-term capital all-of-the-above take and the very strategy. finally, And can and work calls. to to approach pursuit quarterly is I ESG we during that like programs candidate execute are we believe DoE our us such for practice raising time continue our our our good highlighting with of a necessary are While unpredictable, would consistent earnings the to

It culture a has have to aerogel explore we corporate responsibility inclusive our on we goal to with mission culture the safety striving also believe impact respect the for environmental our our and two fit sustainability For our that is the It celebrate with a communities, decades, highest the processes. at of of a to committed to products of for success core to our a and been environment. creating natural create integrity. customers’ employees diverse its the new a positive performance and of are by and We to make standards us technology pursues past platform of and uses linked improving business. is our

quarter, published forward third look our page, strategy. to inaugural the Ricardo ESG launched ESG our We During your over and a web I ESG our report now Aspen overall to will provide call feedback. overview Rodriguez. the comprehensive highlights turn of which

Ricardo Rodriguez

in very electrification for which into start revenues, accelerates. remains will move year-over-year. X to and on barriers thermal risk strong We year. growth financial demand translates the second to million I long of as EV with quarter. revenues the Don. in you, into booking we delivered highlights and no third $XX.X Slide medium Energy demand our our industrial the Thank XX% the term next Starting on see were orders half of QX,

speeds row. combined for barrier near-term line aerogel COX quarters us annual that we’ve to in delays faster shortages growth ramp-up longer implement from EV would with quarterly and revenue have Absent three apartment roll in recent driving $X the a been thermal Our disruptions, plant shutdown believe these we revenue by million. prevented and lengths rate volume increased continuing

million thermal barrier increased quarter by to revenues the prior over XX% Our XX-fold over EV year-over-year. $XX.X and

industrial previous already most quarter. process To plant This in million lower COX and impact already investments storage of schedule July year to those the We our energy with the XX changes by limiting site to our national quarter The X XX% the XX for prescheduled XX/X. aerogel have various and shutdown faster transportation that last rolled and QX this were starting own the us benefits least this lengths. further third worth interruptions frequency COX our manage from and are than and operates $XX.X XX prevented XX% our shortage aerogel segment quarter longer COX was a and implemented than These shut by it’s revenues the month. We’ve to effectively contributed that shortage. Our line these July impact, production same realizing affected Island lower we trailers. annual down implemented that of to illustrate production our plant the in from in this increasing measures days operation supply with yielding various by on of at production ensure for remembering Rhode in reduce capacity benefits stable national speeds days.

the assembly of been and percentage Next, XX Monterrey design a to higher to which percentage In up by driven our a barrier larger enable most transferred production will expenses. of EV a over higher expenses be made our in we points of to I’ll that million than the barrier delivered from for Rhode where out This with phased levels Island in site scrap in delta has want of growth fact higher quarter main term. Island the that Material July our our more we volumes. summary was still that the to XX points provide volume EV sales, these thermal thermal complex be higher continue $XX.X Rhode as is part transition from Mexico in with QX, processes future. effectively we in profitable long

As we fixed quarter-over-quarter, temporarily quarter as X affecting this the ending addressing issues, nameplates XX% initiative margins August, supplying negative slowdown This volumes. our slowed at of production automotive versus own gross completed costs. negative XX% demand beginning currently vehicle at customers increasing to improving from we’re our prior the by thermal on their the absorb that are barrier prevented ability in

describe These be elements being manufacturing will all processes. million cost the and million costs raw supplies, expenses XX materials sales. required was approximately consistently made these confident, able of fixed to capitalize insurance, it rent, We accelerates all reducing path soon the production Conversion revenue sales convert that the year, to costs, fixed, of and challenging into include inspection. goods, optimize to on less during continue utilities, we were demand $XX.X our $XX.X With points direct we are expected up through as quarter overhead, however, than percentage as finished overhead of absorption. factory costs of improved of which to transition percentage as and towards labor, next

modest process higher aerogel of per and $X.X clear ability productivity; carbon silica lengths barrier productivity drive two, R&D efforts QX further enable by increase by benefits the loss line making aligns include QX around new along systems increased This lastly, increase with expenses, installation quarter. Accordingly, beyond our to of and goals to net in focused technical $XX.X quarter in QX of quarter-over-quarter $X.XX implementation or to productivity million efforts; business loss efforts. remain thermal million the these of negative was EV in per same our are the throughput the with through role year. of we faster longer three delivering an chemical reformulation silicon in $XX net to increased my things: overall of OpEx improvements. QX manage aerogel confident anode which through million These waste However, delivering our $X.X to our our $X.X of and more or $XX.X formulations. our and million in XXXX. aerogel-based awards key million in sales $X.XX EBITDA negative through share Operating lower versus and efforts, a methods share compared revenue that precisely milestones $X.X over million drive that Adjusted are R&D and that and expenses increases remarks profitability development enabled new versus our in tangible on speeds and costs. million. from modest rates our This leverage our the sure prior were streamline become one, development XXXX last These developments

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

accounts sheet. decrease cash operations $XX.X million of balance Cash that EBITDA $XX.X center. for part of efforts work, Capital an a $XX.X quarterly our and pit reflected upgrades payable of operations, of lab of our in the and as operational X’s formation R&D million adjusted flow cash quarter the Plant construction million. million reflects to in thermal advanced $XX.X assembly included turn material needs I’ll Next, used higher-volume a increase carbon expenditures in the the million our battery barrier construction, barrier their of for during of aerogel site extract the our equipment $XX negative initial and thermal

revenue provided have included through of $XX.X and the QX million growth remain X quarter we in credit range $XX.X per Plant million our Cash QX facility in million. the to and enable and $XX.X revolving cash, expenses $XX.X deliver of price revenues proceeds ATM a ended shareholders’ $XXX.X on activities incurred borrowings to with by million. million negative $XX at We under in loss geared $XX.XX adjusted of gross equity offering of average share. XXXX, $XX.X range $XXX.X of million million capital transactions $XXX financing net towards the from $XXX.X end no of We a progress of and million in during for track our the remains our XXXX, million million EBITDA As in of net of it.

factors, expenditures million quarter various board. to as we to of are expected Delivering as year raw external and to chain for barriers capital across $XX Island. investments revenues in COX customers’ as over is the and facility the optimize work such $XXX aerogel further our during our maintain batting, their $XXX the labor our for of and stated volumes such between to local vehicle silanes, market, supply Our million our the the and range Rhode materials abilities fourth main commitments subject particularly production million thermal

market risks We to and production continued our have to supplying nationwide are plans. the silanes COX execute revenue to post Recent managing that and our near-term and our chain we’re batting ensured the proactively ramp. highest supply tight shortages risks labor

then back to volume not of forecasting everyone, an in presented with vehicle on Slide approximate OEM, that that remind are our earnings have headquarters the been Don, is actively awarded brief we in location. for call In The a undergoing size the the testing that provide OEM. update millions We of and these to is quoting determines like chart, OEMs their earlier during circle activities I’d turning their X. is active Before version by the business, whether slide this or to call. Sandler map this QX on Piper commercial placement circle the business of XXXX, the color

can Asia in – activity reinforces that customers technical will also see into strategy entered American the discussions our thermal capabilities. has largest also turn be Don. prototyping its development advanced on You test with that, quoting and that them The invest Europe the our has in of in a the over and the team stages deep call XXXX. volume that in Europe In right basis QX, continues relevant to successfully an PyroThin with to additional With demonstrate eagerness with thermal started happy to propagation and and customers’ materials solution. I’m have to runaway we back provided global the OEM to

Don Young

you, Thank Ricardo.

would we I turn session, to Before reiterate the to points. two important like Q&A

cash our flow value and execute both businesses challenging Q&A First, energy confident to reach markets, fund And our We and our XXXX revenue Emily, our during backdrop appreciate industrial to we continued your Session financial us favorable plan despite second, positive become shareholders. will will Question-and-Answer EV the to and a targets. support. XXXX for the create we strategy, XXXX turn provide for that our session. are let’s

Operator

question Thank comes from Instructions] line Craig-Hallum. Our today open. line you. the [Operator Eric, first is Stine your of Eric with

Eric Stine

and Don Ricardo. Hi,

Don Young

you? Eric, are how

Eric Stine

thanks. Doing well,

And – And So stick Slide area an that seems blue so that. you’re the in to great love first you’ve I circles all, had see pretty added I’m quoting is looks to blue I’d mean, month. recent since where this like But be these and It to updated mean, Tesla. dates, for launch stage. with the now X. you’ve curious, of expected to it’s the kind that. sort to those last just I mean been that for Just I you’ve over you going of their you are in expectation thing? when think launches, could as platform movement and of trying that plans of OEMs stage cold have an on do moving that actual their awards? dial see you from it’s some maybe really what got of specific thoughts

Ricardo Rodriguez

and moment, to on just a around between meant the say be remarks going $XXX that $XXX our maybe my it Sure, that quick correction which activity iteration make I’ll range CapEx I evidence and to prototype sourced progress million being to of with because we’re I before on sight what is volume higher Eric. million that And in the is our has worked those there really million, through they and But CapEx range. that answering I actually we line volume the the mean, your And to we’ve one, actually as us, Europe in the it being for to the I a are increased. that on I yes, read is pressure we’ve in designs question believe applications Europe, now the $XXX what the answer end. of of and teams. parts that’s remarks in And that clearer specific closer is level getting the parts sent of why prototyping got of are mean, Don’s notable. eyed for. of put of progress

will making year, And And so potential next continue progress. I a seeing that that award. think start we’re into convert to going

Don Young

and intensity Eric, what much add and sort remind the the you of if of will, prototype tweaks, specifics just to pattern the us I and of Ricardo European very would with of it of OEMs engagement The said. I in these where we they General award earlier Motors it their a were of and have. those And development the that wins companies battery platforms the various think of function Toyota. nameplates with also is with our

clearly, this a quite we’re So confidence position good of pattern that that us and we in with several them. recognize gives

Eric Stine

it. Got

out fair mean others, presentation, be the German that it’s could Europe I called Asia say it North as in it mean, that confidence whether mean, So the you I – there, well? or OEM that when XXXX America but one is you see with to I potentially, or sounds like

Don Young

Absolutely.

Eric Stine

going – someone be on can you clearly, slide down map if the and in as and Do plays you it strategic second Okay. confidence about all mean, as have insulation seems that I these the case. that that’s on or potentially space? to be how financing, have one map you from you I can it think would understandable this provide? circles of more But limited what the me, And into maybe road. this clarity and say a for seem broad may in think you to lot Any a to

Ricardo Rodriguez

careful We’d answering Eric. to just be that, like

Let’s I this just not stage before, all engagement. just to of above, to be that just use say want if to the evasive, of be phrase can, we’ve a in used sort we of careful but

Eric Stine

I but a I it give so. thought understandable, anyway, shot would No,

Okay, thank you.

Ricardo Rodriguez

Appreciate so it. Thanks much.

Operator

Our comes Colin Rusch next go Colin. question ahead, from Please Oppenheimer. with

Colin Rusch

guys. Thanks so much,

from with So full want it to those space going like revenue from to the year. that coming coming revenue have coming to is looks and just be the to million is numbers guidance, much from, space about assume going year that and in right I of the EV is industrial of now? visibility you’re the larger you for $XX get that bulk to the understand where that incremental all how

Ricardo Rodriguez

Yes.

EV just on become recently. barrier volumes the the thermal for have QX think side I clear

highest barrier productivity eager so and of relatively the we’re EV eager products the products. mentioned the his of we’re for really, leaning thermal there, really have sight the here. deliver think then I really remarks, that other expecting as aerogel And And heavily Don the around customers in got rest, million I million there $XX clear we mean to – $XX the we’ve and space. to on got on a line strong the facility really backlog we’ve to is the – out

still that’s energy that’s $XXX going in segment, we we’ve – continued industrial as the to that, end and through working and do what production to so gives to us of for were started QX, our what’s XXXX. allocating year million the the way confidence the into And we aerogel

Don Young

script, side. think into this Ricardo point I said XXXX his – we’re orders energy XXXX at on taking well the at as in industrial into this

in COX, materials, comes going So issues have disruptions efforts been his said be period. don’t chain but belt – it put during a made has some sure we raw down also only suspenders forward. not and challenging productivity, for nationally our got for place to any we’ve improvements, QX. so in we’ve of with And Ricardo avoiding in around some particular, supply that We’ve which as to us, remarks, significant

Colin Rusch

margin about how about Okay. you adjustments then evolution a year? the got, That’s And cost the through margin cadence super helpful, you amount improvement more of guys chain detail fair you’ve of should have measures balance out be get just and next it, those with provided we but thinking year, which supply guys. on as this the of importantly, gross some gross of the that thinking here into

Ricardo Rodriguez

Yes. barrier it’s improvement I side. to turn EV make think going we’re on heavily our to positive I dependent plans year. mean the we still deviating we deliver still from thermal here, the work – volume But the very next like not $XX as nature And look we’re to that of to parts mean, QX, what a I and million in see we’re good now using really just QX these them. over QX, processes given the and that

possible, feel turn our of enough and revenue that hard as demonstrate $XX us confident we we’re to gives to that positive as deliver So that soon that I as really path. million, base the pushing

Colin Rusch

Okay. Great, thanks, guys.

Don Young

Thank you. Colin.

Operator

Potter Sandler. today with Piper Please question from Alex. next comes Alex Our ahead, go

Alex Potter

Thanks. Great.

versus first you revised last What which color main $XXX if my quarter. are wondering delaying on can of has downward you just CapEx what adjustment? down question million, guide, What’s that $XXX driver to Ricardo, is million you some So increased of the qualitatively on efficiency? CapEx? I’m Are changed? give finding is the areas

Ricardo Rodriguez

originally at the it we when are expenses it, progress actually slowed, as our were it the expecting scrutinizing really planning – given the then estimates just the while that beginning raise were It’s it’s hasn’t has June down than efforts. here. to hitting and capital as we’re then hit bulk these we at At some looking every through comes projects, year our efficiency, overcommit books, here. but of to of the for year other not we the thing it’s timing ultimately of and scope the the working versus were to they our And of retiming time, more Sure. comes in slower and really all not obviously single same when us really the us

Alex Potter

maybe also It guess, just on appears, Okay. a appreciate very capital, obviously, of can be topic. the And I then, around incremental I to That’s helpful. this material topic. sensitivity sources

at cash look currently which you If I’m how Is left exists, the is remember you I the X not in as as the your CapEx with is to much big to next it wondering capital X months guidance? guidance on expense balance path well can’t ATM. as it raise for in Or on continue necessary CapEx to access for have to capital, the order necessary? this your a you

Don Young

will in our Alex, to it’s we that and course have some activities to our Plant the on the require Don. that on execute X raise We going capital a anticipate to near-term on and support capital we other stay strategy. that we believe have and of –

sheet their I strong time. period important who having OEMs looking have us are is a some parts the of to automotive designed to platforms a also into to think of balance over long

we are it With there believe this reasons so will in to to we $XXX-and-some ATM, that? started near-term. several we good we you for fortify quarter the the do Again, have us that. that And million to the respect do and do with, intend

Ricardo Rodriguez

around $XX got We’ve million.

Don Young

Remaining on that, Alex, yes.

Ricardo Rodriguez

not obviously capital how cautious we it’s the main opportunistic use being And here. that. and on And source of we’re

Alex Potter

the it. in steeped I one last first here. talk if in of I supply had not Okay. chain. squeeze Great. you maybe the is And that really This about COX can shortage. Can time heard one I’m

nowhere. order give crept It quarters to it or like factors two can on mitigating seems that. what address are up quarter next something you in you extent resurface this But from taking some color sort out Obviously, of that? additional it’s like could like sounds to of now? any So

of this So Thanks. part parts or how energy is the risk chain business? in supply that big other industrial the of of a

Ricardo Rodriguez

supply Yes. the summer quite get in we it COX understand take being from the we’ve on country, able of it’s that it’s hasn’t I the in And over the news throughout over of it. a able beverage the a mean just get and folks then country anywhere gone and really dry we we had is in And to it. being the how to a site actually the spread basically And buffer really away. Northeast shortage of get it amount not relying bit increase been really control the as there. more space, do regional with have chain. it here suppliers started in to than on rather What eye not still

the out the it prevented recapturing. really didn’t that heavy U.S. place come since all in of storage I to invest we’ve nowhere. in a we’re flagging the been the the national on started we a put QX affected installing the our an More in own to issue in one and really manner. of but us additional We’ve sources issue timely stem just as opportunity understand so main actions users also get is to us, all dropping And that been given But the actually doing mitigation fall, it’s were right it COX a less able of demand alleviated by from so as really mean, it for that And contamination risk really it. just there of capacity for for is and structurally, site.

particularly, QX, the bulk make improvements. of plant aerogel. shut plant timing, For was Ideally, when been down would down to the for But exactly we the right. came our more days really, the ready have this we timed us, after the the in restarted issue

Don Young

comment. last one just And

we As sources percentage a we COX effort greater, recycle our R&D selection, – the has COX vast also for much site And more X, our Southeast did our has Plant much use. of the robust of Alex, supply.

alluded pull improve of have to that. in, to, as as the continue supply we future, well. closer chain to sort We we upon think a I self-generate our to as in continue And Ricardo opportunities little

so force quarter. the And an out in And been This But in while. I potential issue while. for a it full obviously, a has focused came issue on think lot team lot – third this where been our again, for going robust it doing And a has Southeast at the our of a is again, as say, set of I much suppliers. more #X from a is, Plant directions. different we’ve

Alex Potter

That’s super it on. helpful, guys. Thanks. I pass will

Don Young

Alex. Thanks,

Operator

please Chris, go question Our B. ahead. Chris next from with Riley. comes Souther

Chris Souther

strategic at an we kind taking talk Koch and call. Maybe still just looking you sense for with for there if raise potentially get my a start, ATM. of mentioned another I just additional XXXX? wanted round is loan Thanks Hey. near-term DoE to – we Are capital about to could you between from when the other loan investments the for and now that of baking next need sizing of come in? you as as kind think million about Yes. in the part $XXX how just DoE And year? are guys you puzzle potentially ahead then, maybe of might should if we cash approval that

Don Young

Yes.

on comment DoE. with just me Let our work

Plant a inside battery of a ago. there in that have of our as will was there script, that not was we of QX of XXXX, there it candidate set in sort that in specific that. I And my As in who the to anticipate there grant set range the of understand said, of of, focus included be our second that are a Many some set application the as inherent the sort X we we activities. of of good chemistry themes will about program. said a took in We – weeks again, cell, are companies greater place And billion, We in for electrification awards were a and couple that I believe in $X manufacturing. were and the of a awards. on be were support

you on will, effort. well, So, to that are – focused very presenting if we in

Chris, is to count Although, it on it. hard

throughout to facility taking that bringing the we approach a an our to to capital continue I and adequate of have taking call that are we don’t sure be to we so And have, execute to want to X sure strategy but an XXXX up are approach Plant online. it be building nice

in XXXX So, support the to of growth year. that in our it’s contributing beginning

yes, a – will phrase, are other will the the been as terrific we they on and continue strategic continue focused, In we has to Koch the above are terms but very we to well. all of be markets we of debt equity again, and will be investors. not and overuse – we focused of ours, capital, supporter believe

we round our to a the able we will close of that will this. be in again, continue capitalization we we of to that keep of broad have the And the out work with to We up near-term. company are opportunity enormous us. front So, believe pretty a view taking of financing in here

Chris Souther

it. Got

Okay. Yes, all makes that sense.

had were for ago in a on for applying that was out though. you that kind that Is ballpark it the you more million weeks fact? $XXX announced kind grant think a called of of be this two last would of in I the applying week you was that coming round or of what

Don Young

Correct.

Chris Souther

roadmap, about kind EV just be transitioning just beyond having around the comment folks. press Okay. with that XXXX of there of I of same plans. in Toyota, just piece upside. reports you we XXXX think sense Could with a been are over okay. you are you guys the then potentially thinking – the have overall kind Toyota if reading the have customer? those could win baked what then customer being visibility Cool. And helpful just guys around on maybe multiple past we might Anything so with some that have bZXX, that bZ, press platform for things maybe would XXXX matching maybe seeing have up talked am maybe and that for releases or Toyota for bigger volumes curious around of And it. volumes, from you the week I about on progress and Got their reviewing larger a get talking

Don Young

have Toyota referring of some and have dispatches the of course, are Japan same Well, to. that read coincidentally, you team we among a others. with And in this actually same the we – visiting week

would what say with And are to privy and be mean say engaged remain I that we and technically are I to don’t is Toyota will it we that close think to anything – I is… commercially just them.

Ricardo Rodriguez

beyond goes That the headline.

Don Young

it the really yet it but shift I headline, I shift, a maybe all when and think to were down, all a I – more think the headlines yes, go committed think beyond – but it. bigger Goes boil to be when you

Ricardo Rodriguez

And revenue also been we how on right just really plan, nameplate have only including XXXX factors that answer the to your our question now, that are into we awarded.

Don Young

Yes.

Chris Souther

Yes. it. Got

guys. Thanks Okay.

Don Young

Thanks Chris.

Operator

comes Cowen. question next from Our go Osborne Please ahead, Jeff Jeff. with

Jeff Osborne

just morning. talked curious batteries. you an still I work was Two Good in One, using PyroThin if maybe you case Don. products about the I past, that’s that format had quick for application cylindrical that? for in questions, Yes. or think might found the your if challenges

Ricardo Rodriguez

the still That’s case.

Jeff Osborne

Is to the or it. there at level more sell anything pack no? to do Got

Ricardo Rodriguez

mean cells. for and using I prismatic folks Yes. pouch are that

we are with pouch cells. prismatic and chemistries. this more seeing definitely compatible idea so we the right that of are that whole And along mean everybody are using form reconsidering I something factor but now – folks is with And

Don Young

we Ricardo those I on one to without see, go think Jeff, LFP chemistries speaking speak think working etcetera. chemistries, to OEM, companies sometimes with chemistries, generally, perhaps to as I and meaning any mentioned, also along different factors form

to it’s of so side our in And that on some and pouch those programs, prismatic where interesting be of strengths engaged again, the lie.

Jeff Osborne

customers, if in is to XXXX? just be X, or with Got have also chart seen it announced in batteries? GM conversations stationary references because included in around I automobiles is, dialogue that for your think it. potential And you And clear, that you Slide so, stationary is Are just batteries. specifically that

Ricardo Rodriguez

as also the are in modules. Ultium refers we modules, the Ultium particularly and But Ultium you understand, mentioned batteries platform volumes. we vehicle So, the stationary to on only Slide X light that are using

Jeff Osborne

– then question helpful, that’s had And just it. I Got last the Ricardo.

in quantify and you impact times well you Can As rules. speeding either what the is potential any percentages shutdown of or that? several that the annual the the the as of up July margin or is mentioned potential as way or exercise to elongation throughput, the there frame revenue impact

Ricardo Rodriguez

Yes.

with same fixed around without else productivity So, and changes product all mix, improvement, additional throughput that’s just any the XX% equal expenses. being uninterrupted in

Jeff Osborne

you. That’s I very clear. all Thank That’s have.

Don Young

Jeff. you, Thank

Operator

Genuity. George comes next Our Please with George. go Canaccord from Gianarikas ahead, question

George Gianarikas

and ask I like Toyota, again, would morning you morning. Good thanks for taking because to how my Hi. – questions. about Good doing? are

kind curious whether their considering referenced of a thermal what can thoughts Thank of some as share you know there? I about management. you are the to you. complete they redesign of just what on articles So, am And any

Ricardo Rodriguez

detail Yes, into a really, not there, it’s we to of go the hard evade front don’t to just unfortunately, it, but news ton want to here.

Don Young

articles had included kind is of thermal concepts, I past. Toyota the have their as interesting. an on redesign as that of some – just would have think fact they in say think that the in said management have I think that and they the important would I I I focus has But George,

Ricardo Rodriguez

more trend And – the more also it’s yes, better, it, that so of and worth overall I think… mentioning

George Gianarikas

And ‘XX as well. opportunity, the that many question that have you the you might beyond, conversations market? future share know, to about the stationary mean or how I focus I don’t energy, Around Understood. Can want regards I previous on ‘XX? be how a with details to opportunity storage any had

Don Young

Well, energy on and with we recently platform – this. they stationary conversations are made this respect to – have – announcement that battery we their in had industry, we regard. have And they storage. they are and their using of more the had General Motors, stated course, the Ultium their as basis for across have using

are we that. so in the middle of and sort And literally of figuratively

is for that as that And a so positive out. build they us

the engaged has to-date. We been been have And focus, of them of course, business the with around Ultium. EV side our on

we able that share point So, any again, on their this we at to insights don’t have extra be strategy. would

of this mitigating engaged runaway of in Of course, EV. same the with other them. they as thermal an apply have the of have A lot certainly this companies case do direction dangers also, in been and in we worked ideas

George Gianarikas

Thanks.

Don Young

Thanks George.

Operator

Our Tom. from next comes Tom with Seaport Please Curran Research question Partners. go ahead,

Tom Curran

morning. Good

Don Young

Good morning Tom.

Tom Curran

likely it as financing of of this still Not much be, round be number two that some number it’s left the strategic type then on to pipe. expectation And that two, include one, done, imminent investors? will my most list. would With structured probably

Don Young

approach is – certain be is all of option under – above of to for certainly a interesting and pipe us. the falls The it an umbrella would the

partner, in a strategics, in the much that a regards. Koch could think to very many phraseology, have including been necessarily us. not multiple make helpful strategic argument I though as And even extremely it’s of the one they were we idea that

we that out play will this So, will we I – there just near-term. I And believe again, it anticipate in think the I here leave may. if

Tom Curran

so Fair than sensitive one asking that. are about enough. moment. things my entered more KSP at you constrained and the are I was understand strategic, in clarification, partly I very But including just

Don Young

am believe asked I you And I it. that. you Yes. glad clarified

Tom Curran

you could of I expected at a costs, of came and in then, that expound barriers And Ricardo, XQ, XQ costs for XXXX, for percentage to percentage sales, said would hit if upon your you conversion just And barriers a conversion should for looking you that believe reduction XX% costs thermal revenue where as of of revisit of expect thermal be be conversion target Right. costs to margin gross for drivers revenue? XQ you thermal point? at the what conversion in should thermal barrier as barriers,

Ricardo Rodriguez

They need Yes. to half. be basically cut in

were So, volume do year, we XX% the they Yes, be really, the assuming correct. rate the it barrier improvement in a Mexico. level. through need that in that have September we because quarter in the didn’t math August next towards showing of to a through lot operation be a we have XX% just started And a would volumes that our quarter. we that of that good and during – comes thermal to it portion would as shame path for have I that is kind I already of expecting But that

in revenues thermal are making least. we that from a ideally, And barrier in of hoping cut deliver so here we now XX%. start really as at roughly million have to $XX meaningful half will at we QX that dent year to quarter, work next And a

Tom Curran

Great.

next of revenue, percentage So, in down we should a costs see results? conversion that first quarter’s significant with step as starting

Ricardo Rodriguez

Correct.

the Assuming are volumes there.

Tom Curran

Thank Great. you.

Don Young

Thank Tom. you,

Operator

with Our next Please EF ahead. go Chip comes Moore from question Hutton.

Chip Moore

the taking question. for Thanks

you there to to gross you on in were you to are PyroThin. somewhere the for where QX, think Just and just on in back margin XXXX, move I the Monterrey touched guidance follow-up ramp closer implies wanted

on the of orders for maybe thanks those should factors hit be guess called I bulk that. there? any subsea, to in QX out or So, you expecting we consider other to

Don Young

produced be of some will – of QX. be The it is There XXXX. majority that and will activity delivered during in

Chip Moore

it. Got

in week you [ph] battery an maybe it’s as last us follow-up, more give to update a EMoney materials, you just a then bit going know. And that projects space, advanced announced on can of Okay.

how this until of you get round maybe that how that? something accelerate, think there? Just next Is should investment you financing prioritizing you are about or curious to sort of wait we

Ricardo Rodriguez

the slowed the and seeing and towards three a energy it put just metrics material The impressive demonstrating even a reduce results two a just those what seen here working cell. and built have as outlined quarters density, there brand-new a increased as down made of earlier a process. They have feel in development year. Yes. on we as the around getting confident progress you making cost mean variability on and haven’t we lower we to that lot also the were our then And towards into really lab, are quarter that are higher dependability actually density or as in ago that awarded we meaningful actually up. I have is we path encouraging really get team path we increased

having think as emphasizing we the these be meaningfully the really, things team will these important of towards on for our for a focus demonstrating those inside our So, all really still after demonstrated is of and of as on grant, think those to milestones. year. path all improve a things we here on the I the applying efforts end And before do that, more developments we candidacy about cell

Don Young

for potential cycle focused testing, on produce with reducing internally, enough are if and really quantity now and larger-scale also will, begin life you able variability, as the both well, We to partners. ability to

Chip Moore

Great. Thanks.

Don Young

much. so Thanks

Operator

questions today. have further We no

concluding for End you to back hand will remarks. Q&A I Don, So of

Don Young

appreciate in February. Thank XXXX to forward much. Aerogels results Aspen your our and you fourth quarter Thank you, good Be We have Emily. so a interest and you day. in reporting look well to

Operator

today. concludes everyone This us our for you joining call. Thank

You may now disconnect your lines.

Aspen Aerogels (ASPN) 29 Oct 222022 Q3 Earnings call transcript