LOOP - Earnings call 3 2024 | Loop Industries, Inc.

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Operator

Hello, everyone, and thank you for standing by. The Loop Industries Third Quarter 2024 Corporate Update Call will begin shortly. Thank you for your patience. Please stand by.

gentlemen. and ladies morning, Good Thank you standing by. for to Industries Quarter Third Call. Update Corporate XXXX Welcome Loop conference recorded call is XXXX, This Instructions] [Operator being press evening, XX, accompanying last and today, release, this issued conference was January XXXX. the XX, January

disclaimer Industries Relations. is Fady Financial like the conference turn I about Kevin would call and Officer, of VP over Chief Executive to the Loop now our Daniel Chief to read statements. On Communications Officer; O'Dowd, today Solomita; Mansour, and the Kevin forward-looking Investor to

Kevin O'Dowd

Thank operator. you,

we started, company's meeting expectations, plans, laws. among within operating future of Before get you to, let that financial the current securities will the events, results me and today's industry's the These remind related things, statements forward-looking trends statements include that position. forward-looking other affect meaning may

and risks expectations. and uncertainties from and future materially differ results involve statements Such may these activities

related these quarterly release. with of the yesterday Forward-Looking press Copies Factors concerning department. and sec.gov statements information and available documents or Relations the report of Additional XX-K, at and annual and in our contained from XX-Q are yesterday's uncertainties filed Risk on the latest Investor from section is Statements SEC risks these our report our

call time, ahead, Loop over At turn Officer Daniel to I'd Executive this Industries. Solomita, Chief like Daniel. to go the of Please

Daniel Solomita

to XX, ] (sic) Ulsan event. our that Korea. Infinite technology to the ceremony was in ARC Loop an through. Quarter order. of morning, highlights to Fiscal CEO XXXX. there be several joining you in Industries [ a Loop Solomita, I'll November had I I us Third Founder an for on guess start chronological for presence. highlight everyone. was We XXXX and able the of took quarter, to Thank Earnings I'm place Good today appreciate and the at be honor present go It for Call at interesting South XX, the Loop XXXX the your Daniel Industries. November groundbreaking

Prime South in lot The event half groundbreaking interested attended, purchasing for XXXX. milestone Innovation, of Infinite fiber PET be ARC completed in well Loops of of were Han event Ulsan well, start significant It there of as a Minister Duck-soo. of GC, a the was Loop customers to Ulsan. several and ARC's made for ceremony as It and in polyester technology. to where a as facility, Corporation, senior members SK part Korea, be 'XX Loops the a attended by project, will Technology the was SK very the the first resin through SK well in anticipated marks The the was

the I million yesterday Of million separate guess of was non-dilutive what million, three of Loop. French partnership of fund with manager was non-dilutive Loop Management, comes that million comes capital announcement capital tranches. biggest our for the directly to in Reed a strategic $XX milestones in the for $XX Industries, one $XX $XX

first co-invest tranche That to is in million, Europe. nonrefundable to is is Reed allow nonrefundable. portion with The which $XX us

of $XX raise total There's which repaid but shareholders capital, a the to Industries non-dilutive, able important. is our bit That's the global $XX key be rate. for non-dilutive This money portion us. a tranches for Loop Loop is I $XX million, of interest at technology. each -- for always Industries non-dilutive XX% that stress for years, can't first to rollout to that to little commercialization today, tranche, word globally our million will second being That's comes -- difficult, which X third markets they technology the use million current a extremely for not are the is $XX way and capital. we've the been really our towards for rollout something been the million we enough, is plans, striving that raising is which a with are capital the for loan more in capital of diluting

of And this financing the package is financing a is beginning package. the we part of have. foundational our This

said other but entities with past, As the additional we really have it. in is foundational ongoing have this of we discussions capital, part a for

be really between XX-XX of in we exciting Industries Europe Loop joint it partnership and part Loop other will that, Reed, Reed have this an which venture $XX this be with will called million which be Europe, joint a The venture is additional also through a management. and we'll creating

Europe a finance sustainable company venture and Europe. and plastics Loop's regulations joint demand up able because the plastics. been projects Europe technology. packaging and Loop of set across using There's leading the on recycling is in government for Europe is additional huge in to way sustainable develop This really to be technology

And the so a growth that's engine company. huge for

Again, build And the Europe. this Industries, Loop of having amount so protects that we we at put the a value up Reed to don't shareholders co-invest all continually with to plants. equity coming these shareholder be partner dilute of these parent into projects to of have needs such alongside reduces us, every one as able to in company, Loop to the have

Reed, us. So bringing co-invest they with in

developing projects So in extensive XX% have. They from equity across of in financing the management all Europe. of experience they banking Reed. has Their infrastructure their needed relationships and bring also comes that team

for crucial having really forward. is so that us relationship moving And

Loop of the the engineering parent company. from all the comes the licensing to projects, of and All fees, annual Industries, royalty come the back fees, that

to not do back So Loop Loop, come parent into Europe. the company. They go they

model where less we top, which but much So for Industry have but the type up coming still Europe, of the beneficial to that's shareholders. investment, the hugely more some royalty at plant streams advantage to all the to level, investment huge a shareholders, get Loop is we Loop of moving asset-light an in

said, creates partnership expand Europe, I we getting Loop more Like tremendous but continually project several projects that increased the a France already in customers from we're Europe allows Europe, in demand capital, across the amount in Non-dilutive a Europe. we've our products discussed, into in European So have we other much for this it where value us of countries there different think are market. partnership shareholders. in for to quicker

it's very exciting So us. for

That like part key start. was our package. the of is development. the financing And that's the foundational I This obviously said,

well. in going have other rounding already other We and in financing strategic we've have very and package. for well, the customers those the partners soon spoken discussions are out past, -- expect that we Those we're discussions advanced finalized as to very

So I brings to think excited and Reed this partnership very it about is management everyone that what Loop.

is and products, stringent pharmaceutical smaller market interesting recycled showcases for into content be requirements to increasingly able our packaging, certified resin Another PET to brings milestone, pharmaceutical Loop's milestone, European table. for to it of little the Loops a was what but a the standards, bit really which Technology pharmaceutical have packaging, another

So that's that this piece another quarter. interesting happened

polyester for We've seen our monomers. but and increased also demand resin not PET fiber, only for globally,

demand as start right Loop There's the forward So selling produces. in the huge mono today, world terephthalate a move to The as glycol. dimethyl well to that there's DMT our Those interesting now. two the and shortage shortage Loop are of selling monomers, be DMT, MEG, products it's PET. a for possibility able very ethylene and a

revenue. to dimension more Loop's just brings generate this facilities another ability build So and more to

development. So that's exciting another

of demand tremendous a seeing products. different all globally for we're So our

with through the for go of overview think the the quarter. numbers to financials in-depth I'll I that, to hand over Fady it

Fady Mansour

thrilled the comments. echo the Dan. Thank excited partner, you and rate. the announcement hot very I much, the your Yes, the of We're about press, financing off the with amount flexibility

foundational that So clearly was we saw there's needed. the more to element come, but this

not, the for we've information open. quarter, If to financial the you you through that if discussion. Going lead the posted let through the please me website, have that presentation

in the for The reducing costs. has XX, significant drop We're costs, P&L my just at how we costs. We're very reduce targets being with X ended months On a guns but the smartly for operating exceeded not going in expenses. blazing. it company November reducing methodical

you caption the the take QX the caption, bucket. obviously, quarter by in we've the them seen reduction R&D if a G&A of seen disposal XX% And Becancour. in had onetime corresponding for a We've on accounting XXXX gain XX% reduction land a bucket. of So

If you our went onetime tune of operating to XX%. gain, strip expenses the away that down

been targets. that reducing offer. the who smartly exceeded my we the on that So with have but of integrity product preserving internal the I'm also team costs, thrilled focused

So was a our in And right the total we will to now, recoverable if be take that we you stock-based of run about Ulsan to pass of I comp, $XXX,XXX rate, P&L, $XXX,XXX, then, our settle we refer the account Depreciation spent burn FID run did another but cash P&L, rate statement $XXX,XXX. for tune $X.X we the is the project, our net the in terms million, which about remember, rate for about non-cash guided of quarter. expenses $X.X expense we million. what of towards amount when once the the as is the subtract which

$X.X cash run net for quarter. Our was rate the million

averages million provided that about with to last that exactly you So in be I line to month, forecast per quarter. the $X.X all

in rate streamlining to In now a our P&L. rate cash of our month. focus looking towards the million that burn But nothing by million productivity our cash now terms given at was the on and flows, early dovetailing line expenses, with statement of on higher $X.X the burn Obviously, cash little in core we're year. $X

we to now have cash. liquidity the about On suffice is account going of XX next have right right the us. issue an we Obviously, the we now, for look But to the through. goes collect balance FID sheet, $XX.X of statement once not million months. for That's

the is negotiation attracting within the the build to little We continue success which while. thing to in have short announcement to most we the were plenty yesterday's the stakeholders, get ] cash upon throes the finalize through while. over [ next financing of deep important the the And and of

we back I this all the from liquidity it's from perspective, fort perspective. walking funding a both from down the the the castle. office holding So perspective, in build while both Ulsan call

far, exceeded we've expectations. so And my

say million. would going that forward, be rate, to $X.X burn and million the $X I Looking it's between cash still

if get We the X-month do a run running $X.X X- do, benefit claims, have million Obviously, is and and at. we of legal look it lumpy million XX-month to at be month. to could to horizon, and accruals we're by have $X going but, what you rate

to initiatives where give and all going productivity expenses, the rightsizing need over We X be, us us bring reflected We're that's it expenses. to downsizing. rightsized to right enough we never and we've of call to of So liquidity years. I

With to to answers So XXXX. that, early over I'll questions to it we're turn questions, Kevin. and good

Operator

first [Operator do our Sweeney Gerard Instructions] have from Partners. from We ROTH Capital question, comes

Gerard Sweeney

if the nice reading I'm way the a it, of -- XXX% Reed with -- requirements mind, you do XX/XX handle Europe? Loop ability investment your couple My JV, to, going understanding a JV, Just obviously, for you Is is investment, they're in creating or which Sorry... that you as you're don't facilities the questions one to Reed. so the congratulations. this invest guys. the wanted the equity to for of well? It's around With a have

Daniel Solomita

Yes.

Europe's split between projects XX/XX So within of will XXX% the the the two Loop be owning we Europe. equity build of a the That's company companies.

cash for million to XX/XX. to They're execute putting $XX in paying the the get ground. on So Loop $XX licensing, Any Europe off done need that Industries be us -- which in of would the plants, able Reed's but contributions Loop going the be be first to equity owns the projects whatever permitting, XX%. to for owns XX%, projects, million the the one we is own after

Gerard Sweeney

you. got I

just a up just if -- correct? Reed number, JV $XXX was contribute other million, this Loop million, and for know the say million of making because just with I that requirement Yes. would equity if with say, $XX $XXX the JVs the plant JV, so. that contribution potentially each So let's was

Daniel Solomita

is Loop royalty to the project After fees, everything is Industries, parent the million that of of $XX all exhausted, comes XX-XX. the company. the And fees, all else from everything engineering the goes

fees between European back million to that are a fees company, royalty the in So partnership. $XX to parent year, roughly comes not $X Loop licensing million the Industries,

Gerard Sweeney

They that? don't claims any on have

Daniel Solomita

whatsoever. None

Gerard Sweeney

Yes. it. got -- then And

they plants or Now ability to any on timing, Or input are size negotiations, sort that terms in costs? regard? Reed of of in acquired partner will -- of have

Daniel Solomita

else. to is going Loop everything the and of all way size obviously, the it's our Yes, technology, the be leading on the -- of plants

expect the be a to of to are company. Reed, with the But We going take good that's have the we European partnership the working We Loop to there. project by -- obviously. we'll a up obviously CEO head to nominated planning relationship the lead Loop

infrastructure Loop, So of we a projects most developing from in comes But Reed Europe. amount in the of financing the large have the all directive and does marketplace. experience relationships on tremendous bring

of Board how how company. the Loop, Reed That's from we for in was of learned about our learned principle The That's technology. partner SUEZ France. many on learned about years, the our he

him for a I've had years. relationship So with many

So for been technology a Loop's in he's many big many, believer years.

to element partnership. waste bring collection That's they going waste to our experience, of where So an side. can and side team are Reed's valuable the especially the on be management tremendously

Gerard Sweeney

And just that lack of was call well investments sort term? it. question Reed's was a was of Got my experience better going as in these -- of fund. to projects for the of the As making I'm to infrastructure of, sort in just the also curious of next size as I type current size the it,

Daniel Solomita

it's it with experience think projects a billion. Europe. fund, infrastructure EUR in $XX The that think, I infrastructure was with in -- has principal Meridiam, is large experience the They have X.X a I The manager Yes. team closing Europe. billion out was -- management formerly

the from Veolia. of dollar think of a cost was Suez Suez acquisition I multibillion

So relationships table of infrastructure Europe, is nature. us projects. they're in of all and things important project their the They hugely which debt bring that to financing, finance large to also financing used with banking for

technology. us. yes, very Loop has great So helpful to going be it's very, for

We it. say have -- try to not

Europe best technology do, we capital, us. million world else to this always going helpful We side. financing always to relationships had. we've Reed, the to table up partnership what that banking tremendously only we think in the also in of where with be technology And bring to and everything the The the to not need the banking $XX have catch in non-dilutive the been they the side we and side has but is

Gerard Sweeney

but... like Got see bit It or then diligence any ninth -- due in the I to sort more. And agree little sounds you're higher for just the Yes. a sounded it. hurdles of couldn't major inning, I what hurdles, want are any -- but closing? like more it

Daniel Solomita

at on to set felt teams company a and announce a working The there on We're to up That's are in the already enough the venture, documents, set why this closing. the have very to you closing Europe. put we partnership comfortable out document you comfortable the of all up have step. joint

the it -- expected. why that would March So March think happen. have approximately all of those the are date of to is we take is That's middle closing steps when until

there. But Europe, to we have incorporate in a company partner

is companies that insurmountable. on are but that a no working of work have This want quite to together. bit great something to a both there's So do feel end, that hurdles we And do we both relationship.

about really working we're so we're And who excited about the partnership and with.

Gerard Sweeney

Got it.

quick Just questions of switching a plant. on gears on the couple SK

update, to then helps, get to a -- make Reed clarity had this wanted there finalized just then then which are is to on wanted just cost investment Just curious, like certainly timing costs an more maybe front, I'm side you obviously, the looks and that but have I and will be... bit. little And on pushed get project some some back some that

Daniel Solomita

finance. Short

of financing financing financing is I that the the it's entire in package. part our foundational but We're we government with package, the working last part strategic the is are package. said partner, our quarter, filing some with our Reed. Reed foundational working of and the customers. we not believe So a which It's

the first done the So the is and part partner. strategic Reed with

finalizing. financing Now the the in customers. the the finalize with governments rest We're of advanced and package to we're discussions

rather able uncomfortable be raising valuation, to is little tapping low our a markets would to of equity governments, really So always capital so be than be goal do doing. partners I'd at strategic and -- Loop bit which a customers, the

partner package you facility we always is Time on said. report In company that And execute us, Being to step always being -- we against clock. have plan, financing little you is but plays months, a a Public confident company multi-strategic got underway for to were Public us. first we our our case, something. we're on the bit that against what the to able very plan, but is forward. That's that X executing execute of on always well as moving in this our so we're said,

project. costs guess, to part, South costs a mainly crystallizing. Ulsan project in little Ulsan, an cost, the We've was increase labor are due the Korea. Second of bit for in The cost I seen in

now of a right Ulsan So is activity. hotbed

there's world is believe So electric I projects of Ulsan. the a Ulsan. the petrochemical built our factory in billion $X in Ulsan. car Saudi Hyundai being industry, largest a lot in building battery in In building is Aramco complex

plays time could of And when you're built. are the bit bit. the these being projects the so amount fighting on challenge construction It and more it little little that we manpower timing planning schedules can't But nothing expensive manage. when also because for because projects, labor, resources you're a out a of

I covers over XX% to cost remind also the of it's people important think facilities. the that of SK

absorbed, any projected of are project absorbed SK. the by it is the of overruns So over of XX%

for any responsible of of Loops So less than XX% those increases.

for the drivers are increases. those main So, the

We technology in of haven't increases any equipment. related Korea. labor side our our really seen It's proprietary or on any

Operator

Reichman [Operator from from question Instructions] next Mark Capital Markets. Noble Our comes

Mark Reichman

is you plan facilities, Ulsan. terms I with at cetera. And in that of Do financing I all, additional pretty much split mean, your you're that XX-XX you to Starting The develop kind when Ulsan kind equity as at your you expect the XX with a the licensing template portion. question projects? of a have going and strategic develop then agreement, is look Reed, satisfying like template and future XX-XX et to of forward. change

Daniel Solomita

competencies bringing And projects. competencies, a relationships. customer are in plant. for XX, provider, way complement that in years. going it, core and technology we're we've but the that These the technology next be our partners trying plants partnerships are these the bringing XX being that are to large smaller around built creating are which the in infrastructure -- equity us, So for also value the experience be by core mix It's owning have our between there, to

in as experience, We partners the that operating of that, chemical experience. SK, brings such construction bring in who the can complement plant

us where in can bring that's Reed to in complement then So as obviously able and where we the bring in financing plastic. tremendously. complements partners being on they the bring waste SUEZ, they side, us capital such

that's XX/XX company through licensing template fees, of SK. generating charge be definitely and of revenue with XX-XX the fees going the for is licensing core development our the becomes Loop, And we that It's more specifically to another template parent the the Asia the revenue -- complementary. So to all projects. split and the

So SK about out -- multiple plan and Vietnam a is Asia. about partnership across We've South these SK the has talked Loop talked talked Japan well. as all interesting. to about together, We've China. build very facilities, has Ulsan, Korea we've and of

So I the believe Asia covered is partnership. SK with well

we this Reed have In us. the obviously, with with will Europe, partnership -- co-investing be one partnership

demand the case have partner. facilities We having owning as could And multiple of we Europe more case. comfortable of then opportunities in be countries, take world, the in for where more the There feel always would but lower some we rest a equity. Reed it by cost

to at is back Loop that of we $X Industries, million to company. all parent per licensing what revenue really, plant million But do sure year flowing is make want to per is the $XX

Mark Reichman

Okay.

or and mean, the multiple side how will see that example, equity portion. of their do you of have a I do you have with the you the -- investors? And that these are you -- about you'll mean, could think -- you be having equity debt you do think -- for debt partner set participating have that? of you looking companies partners? you've Or some the you would up how multiple like SK kind expect much kind so do got do you like, for Could own then I -- you on of Or each thinking kind country or debt and are projects that participates on taking of portion partner them

Daniel Solomita

Asia. of SK, SK the projects debt of financing Asia for in with across So provides all the all

puts on guarantee in corporate So Korea, China, Japan, if their SK the it's debt.

across in debt Loop Reed have not say, of let's the with also responsible relationships their deep banks different brings -- anything Asia. So world. for Europe, the in any is Reed. In for we

waste So you another other access a in debt financing equity can value, shareholders -- they'll any the needed, other petrochemical plastic. instrumental either helping there equity be or projects. in that in company, bring But to we brings bring bring management company can a could -- waste for the that petrochemical we strategic side

more of there. So combination it's a

that is, part would good of sustainability financing paying very infrastructure also to I the are our France plastic and well aspects helping the increasing, it in as and jobs we the governments and active and these creating recycling help in already to France say finance see it. in projects of project

with in amount to discussed facilities. we, have the and are project, So, be government for these a negotiating French significant grants we able our to help French of finance

to a going packages. very financing are in forward governments moving strategic So play the role

Mark Reichman

revenues Okay. XX% operating just fixed question vary at so much? too XX% part the feedstock that country? getting you're And that of look How my XX% cost. is But fees. cost cost the does it second and and structure, vary then licensing in of where kind is, Does of variable X% when by plant you is

Daniel Solomita

That quite in building little high of The building costs will lower labor bit because going are country. rates, say the Korea, that versus, you're labor say, in as to far change. something costs let's rates is mainly is does as are labor CapEx so China, variable vary which so by be much -- which is Ulsan, which I country energy if mainly, CapEx varies energy. something could rates by a

depending that that of costs country, mainly variable again. Fixed costs. are energy on the So the cost affect in labor will

to you're where a less a is country your fixed if labor cheaper much much cheaper. -- will going than cost be So

significant play does facilities. choosing the -- impact So finances a the the region of does that you're

Mark Reichman

Right.

So variability the the has line to on cost, how the have product? price between... on top an revenue you're much on planned can that it be does there that but operating the impact So impact other in getting words,

Daniel Solomita

Yes.

the line, top the So internationally. product selling you're

companies mean that sold it's that be produced, other expecting is be doesn't South Korea, countries. So in Korea. say, into global to going in South sold let's because CPG to to We're the product

is the lowest So cost we to it price the model have operating highest always market. to -- the best look selling have to and

Mark Reichman

got price, a be price a kind -- are then but You a little global localized, more costs and going your to of deck global right?

Daniel Solomita

Exactly.

lower-cost the best And of one into be it produce price. is say, markets so then were models countries. in global or, the to material selling the would And where these driving markets let's regulation

So Europe taxes. take in in is XXXX, leading, if using is the or regulation their certain taxing all packaging you Europe they're leading because Europe percentage the in example, paying of plastics. in the a content that of Europe way really else brands Certain have to virgin be countries recycled petroleum-based are

And things of in drive the up plastics so price Europe. those all of

selling a in producing be for at the top profitability would best the and Europe, facilities so plant the the line And these of low-cost level. country, into

Operator

further We currently questions no have registered.

I remarks. to the to you. to back call would So like hand Kevin, Kevin for closing over

Kevin O'Dowd

Thank participation conference. in your today's you today for

here up team and follow Loop. any can at me our with you your If We you questions, have appreciate time.

disconnect. now may You

Daniel Solomita

day. a Have everybody. you, Thank great

Operator

and Ladies call. today's concludes this gentlemen, for joining. Thank you

disconnect You you. lines. now may Thank your

Loop Industries (LOOP) 17 Jan 242024 Q3 Earnings call transcript