Earnings call transcript Q4 2022

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Operator

Good afternoon, ladies and gentlemen. Thank you for attending today's MP Materials Fourth Quarter and Full Year 2022 Financial Results. My name is Tia, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for question-and-answer at the end [Operator Instructions]

I would now like to pass the conference over to your host, Martin Sheehan, Head of Investor Relations with MP Materials.

proceed. may You

Martin Sheehan

Litinsky, and and Materials’ Operator, conference everyone. to and are Welcome With Officer; Chief Thank Rosenthal, Corbett, Michael quarter good Chief and MP Founder Jim Materials MP fourth today Operating earnings Chairman full the and me Executive Officer; you, Chief from day, Founder, Ryan year call. Officer. XXXX Financial

Factors and contain that expectations actual differ today’s earnings reminder, in SEC relating statements our a assumptions company’s forward-looking and cause filings. today’s in discussion various may will caveats. are the results that materially future statements As subject from presentation, to events are and to to release these included

GAAP earnings presentation. Any financial appendix in some to In addition, slide Reconciliations included release to we adjusted be today’s our in this measures EBITDA have found in measures means and financial EBITDA. can directly the today’s to today discussion non-GAAP comparable reference presentation. the most

earnings available Finally, the presentation website. are our on release and slide

that, the With call Jim. Jim? I over to turn will

Jim Litinsky

and Martin, joining us all thank for today. you Thanks,

then Q&A. and Let optimization on our an for return overview magnetics brief financials with call. with begin and will review a the on Pass. of Michael will highlights Stage me II of KPIs, our and will closing Mountain open comments, up we'll it an I I'll some update business the III Stage and then year. our today's update Ryan with start then provide

And year. and restore our substantial a rare made and on in unwavering company, mission supply been So the our early let's we get part far started as to the United progress in to Since this the of our in Slide of on public full mission XXXX States. chain in in MP so we X. two-plus years founding XXXX have

outstanding our executed. which delivery teams uptimes. taking and Operationally, feed in this lots mine again future on to mineral continued and was owners. We tandem, improvement stayed focused like relentless, the at in XXXX. our record of thinking drive into requires volumes working outperformed rate engineering operations while I shipped also ultimately, unsung Maintenance in produced and ore heroes in reflected challenges, anticipating team teams mill. increasing and and ones The updated Stage the Execution Mining ore plan. recoveries level

So stayed and and to had job, excellent Great thank entire the you. MP team, safe, we we year. another

The is in team XX% price increase a and realized year. For generated NdPr XX% adjusted revenue prior million cash better oxide just margin I XX% in concentrate increase therefore, improved of volumes for The XXXX, of and the business. normalized our pricing product nicely the a Stage EBITDA. versus resulted combination a flow in and flow. by free the record I the That $XXX Stage produced the in cash I Stage business

our significantly profitability, Stage business, refining moves The believe most therefore, significant year, flow will business of our reduce value. II Stage which We more Stage expenditures downstream generated long-term expand to the improve downstream of mission volatility these than our our investments I towards enterprise cash for magnetics. our achieve entire transformational consisted III of our and the and capital

important resources so Our needed to the opportunity, amazing. is self-generating to exciting such and pursue, ability while an do

set net to and rising of cash and continue it importantly, capital and with a $XXX cost capital In at opportunity gross More are MPs like over roughly sheet platforms environment, a we high fortress cash $X.X in return bifurcating scarce. means, a capital structure economic of billion maintain our on year-end. with balance million

steps fourth our recently. Stage quarter. roasted began the quarter, execute, in first late We team complex concentrate and commissioning in But has Stage producing as am I proud must started II third critical commissioning in what process. the always say, I assets the and II achieved the These we were of

also We and the design lead with Pass, front-end rare progress procurement. on Mountain heavy separations engineering at long continued project advanced the

from the was a States live of you, of heaviest grant receive remind Defense, last Department were himself the project To President the announced is honored by one the where which the million $XX we United February. to

broke Next, Stage efforts magna entire alloy at accelerating. early magnetics Motors are in Recall our XXXX, facility GM supply of signed our that, Worth Ultium ground magnetic definitive support we the General with We agreement to initial NdPr XXXX. and their platform. the reached an agreement EV Fort III in and end supply also on to

this in begin late We have delivering made year, magnets rapid progress, goal to by to alloy XXXX. remains GM followed our and

an we Sumitomo with earlier serve now magnets on the finally, and exclusive for them neo market with in distributor of this is outside Japan as China. is of products And largest will producer the oxide metals supply China, agreement NdPr week, And and important of development NdPr we will this beneficial believe Corporation. Stage position two and Japan. announced largest Sumitomo the thus, sales. a collaborate as agreement refined other outside of rare products. We our we for distribution of

many we the of Texas inaugural will our XXXX, busy. have our ESG of environmental the Nevada California, of were shortly. safety mission view including market III, our support have other success positive in and XXX in, I publishing extension and All jobs in more There on and been creation of stories and the throughout new Stage over record, report. company the of

year me over run the Ryan? through for to our Ryan let the to first, financials turn call and quarter. But

Ryan Corbett

We'll X. company. operations turn slide was Jim. to as year of the Jim And strong highlighted, XXXX Thanks, another for very

the Our row concentrate. at continue our remaining The production a XX,XXX in to perform with year for record XX% row. in second REO uptimes of fourth operations the and metric to a tons increased teams maintenance roughly year in a for volumes

on increase our recoveries. to throughput near our improvement majority We mineral incremental is there our believe, assets. the In during production improve our X% increase addition, focus volumes for a generally optimizing REO shipped commissioning while continue shipments, is to The the was II a but as over concentrate room shipments time. Stage in we our have in here, term, over year, reminder, We timing of the tons the a due tracked XXXX. generally of concentrate record XX,XXX of

Moving some Stage will transition as moment. II lumpiness in which to a we will I forward, discuss be products, there

XXXX, chart, macro NdPr On supported you'll our by see the that top EV primarily $XX,XXX, Despite rare the price market. REO Chinese in volatility earth realized course strong right per pricing. contained for the to penetration XX% increased demand driven ton over of continued the feedstocks

focuses fairly expenses XXXX and graph, Lastly, commissioning, our a Despite inflation Stage on right of increased II over X%. significant our on production in were flat production a our concentrate. we Note business. the increase enough operational maintain as when efficiencies purely our bottom ton to XXXX, in for ramp to KPI, some this fairly excluding ahead able the costs, cost reported, concentrate little per that

as products. evolve the So our course of XXXX, these we downstream ramp KPIs over we will

Moving to seven. slide

On to the XXXX. higher adjusted of XX% in EBITDA in you see shipment realized impact both top right the XX% left, left our P-times higher driven where volumes. Q pricing, slightly revenues And you the points EBITDA we prices bottom million, our increased the margin adjusted shown to percentage that on given That higher will XX% on effect X increased top $XXX.X and significant also see will year. graph, the get is increased from leverage by the operating

critical demonstrate right, on leverage full diluted $X.XX discuss leverage bottom cost operating share. significant And finally, benefits and over take enviable which the producer but get XXX% this IRA EPS, of our our tax earnings adjusted both better as and I position but some the only the of structure, of per bill. strong that which our impacted advantage some transition increased strong as the impact year, Stage will QX, we materials, tax will a discrete of creates to on to domestic of also the items for II

quarter fourth slide on eight Moving to operational KPIs. and our

that volumes again, timing in shipments. which left the last fourth will that driven remained maintenance sequential strong in was production You production. have X% up X% the regular metric fourth Sales simply we versus the a the the in XX,XXX of left of quarter, in XX% tons year Keep REO. X% in year's the mind shutdown the and versus quarter bottom top driver last sequentially, decline by of at one-week see on early our quarter, increased

We mentioned two be would X,XXX about little a would or tons, weeks circuits, quarter II Stage ultimately occur diverting that under quarters. which last the of we several inventory metric into over

process began was So our while this in impact to the material sales in the quarter. the we fourth quarter, not

a we begin progresses. as concentrate in of roasted sale have in moment, will significant will expect Michael to we but QX some circuits our do charging discuss QX, available more As for

XXXX. QX $X,XXX, was unfavorable dollar. at realized on About albeit, compared year-over-year the foreign to the the both right, can of weakened in solid to yuan XXXX Moving due see exchange QX the and versus pricing, top was down as half to changes decline you very

and lockdown the COVID NdPr on Chinese addition, for the reduced likely slightly. In demand Chinese impact economy

Looking year, the in The price time. with long-term forecast substantially. and today's in enough fairly price NdPr three so trajectory of the over per that market low a of pricing or demand this move of is reasons earths important of next NdPr a are of to decade keep over over at growth the It's last modest for is up producing so This the our the $XX. kilogram output. favorable given confident a demand from the supply note NdPr the one fairly in the volatility are approximately the can $XXX high business changes of times and indicator to rare of world we clearly very challenge demand

positive in feedstock decline. prices have as of variability the discount recent I driven by quarters up in and prices going selling went take This the higher prices as refiners NdPr the concentrate in direction some implied we opposite in the note leverage intermediate to an to that saw is ended part in overseas. we realized

NdPr this moved which this price also course we separated there the products, concentrate note generally realized our pricing it's impacted are as sales the year once will rise own any will to of as growth of important While selling always, market timing as decline of And, and prices over decline. in period. our effect or under-perform average our given shipments, outperform volume course, and in they the that be is

payroll driven by including right bottom of increased higher the our of we will and impact the production the talked as and headcount maintenance to an living which timing adjustments, the operations cost XX% of costs year-over-year Stage see the sequentially, cost to Moving as metric quarter, quarter. expenses, per ton II of you employee increase during XX% support expansion last that in well graph, about

power well beginning of demand. the until comparison at which CHP II we fuel by also running to The plant higher as year-over-year the costs was the sub-optimally as impacted full of year, our get recommissioning Stage is

II Stage crushing maintenance costs, our the costs factors mining per quarter, impacted but in and fleet across driven our primarily ton roughly events I facilities, production the Excluding $X,XXX timing the discussed related by we by Stage as which view discrete. same were of just the

to Flipping X. slide

of top quarter-over-quarter revenues in increase left, XX% XX% the the impacted were the our by the a realized to shipping the in by in more than volumes On declined fourth shown last decline significant previous decline offset pricing. slide. year, a as X% on realized more revenue our compared price sequential quarter was Similarly,

I $XX flowed right lower healthy very The while the adjusted million we although of realized quarter. through were, And produce XX% free also And Stage margins, pricing a to not declined million graph, top page, in mainly XX%. our adjusted realized a $XX still lower in on the EBITDA which cash due EBITDA flow. on to year-over-year, solid normalized the pricing, nonetheless,

last XX% you and adjusted over fourth that the see were our on XX% two right, sequentially. quarter diluted year's driven EPS by will Importantly, These bottom factors. changes increased

the The on cash investment higher the balance. short-term first rate our impact was of and interest strong environment

versus million appendix or income release. of net deck our $XX find P&L, on of In These year ago. line zero press slide in a the virtually quarter, show nearly generated other which the our income our totals the we up of in can interest you

benefit into addition timing in of the end intangible tax The effective was apply to indeed a was assets us large tax in including would which of assets change tax the place full fourth from recognized in and basis, quarter. this benefit coming in initially year in we did benefits in a The for excess service generally new forecasted but the recognized had deductions, permanent income of drove we on material for second service. tax depreciation providing tax temporary not the bonus up foreign in depletion the year GAAP rate, purposes which derived We benefit quarter. factor XXXX

Note until tax some shifts. our book in and impact, rate as drive we that service, this they investment program. teens our high mix expect of tax geographic the timing certain rates our assets cash in Absent complete continue entering remain to and the to materially volatility

Turning in to Slide normalized of XXXX. Stage I generated free We cash million XX. $XXX flow

As earlier, the CapEx the of covered growth material more of as $XXX million year, building in investments engineering Very little payments. the well Stage spend mentioned timing shell, the Stage equipment Jim remains which that relating XXXX than calls, prior during in with covered Stage as III II significant the to costs. discussed and II overflow early of as in mostly completion for

powder progress all cash Importantly, to on this us our we've mission. flow of even keep our our year strong allowed tremendous made has dry as

our with supporting XXXX as we an to We million about roughly primarily growth for this projects. Stage perspective, some year growth line III have about in $XXX a XXXX with be expected time, will addition capital transition be expect other From talked year. in earnings CapEx to in

As facilities, we continue you seeing. we used the the market revenue to ramp to are work will cost to concentrate profile separation and with the sell into

relates delaying profile in recognition added customers. ahead to will shifted of sales scaling some commissioning be the build Texas sales us because of as will And with lower detail our our to be with channel run the Motors. second a But as loaded, to we These continue volumes to until making production course, expect annual product to rate of and come it and revenue end and results, progress time Stage a process, profitability. would II of I half General in qualify our more margin product in the part back be to recognize Michael our the separated discuss begin initially also products begin deliver in of initial actual there sales the sales to metal will we out year to moment.

separated the prioritize Importantly, make we right in the support and continue will production decades people investments for product Mountain processes and to our in long come. to term Pass to XXXX

we for our away. not for products In headcount addition, Stage with to spending grow far revenue magnetic and III expect

thrilled the spending a moment into make Regarding invest flagged ramps. we investments and Tuesday about the discussed we'll cash expect plans that in geographic are agreement broadening to facilitate we announced and flow, Stage our our ago, to we as distribution with to have capital as Japan X working we On sales our already continue note, Sumitomo oxide reach markets grow.

on the With update to more Michael call that, I'll over progress. turn for a Michael? Stage II our detailed

Michael Rosenthal

fulfilling Thanks, Ryan and commissioning challenges. of operation productive It without of has course, not its though, been months in a few

experienced job improvement I the mill. weather. able during done external and the commissioning at But operational headwinds construction, we considerable and the On focused quarter, excellent mineral teams an recovery we Stage front, remaining have continued achieve our from to were in

pre-commissioning the at legacy now and Stage pre-commissioning II. and use. Circuit progress in also We prior completing estimate. good was remaining commissioning exceeded uptime for of work initial upgrade included are conservative below This slightly circuits that our year the made already but activities

timetable, a the resolved, be and that certain that few time are great dryer issues number roaster, unknown a challenges that identifiable We issues the speaking, quarter which proportion instrumentation resolved, first that also process XX. worked with previewed shown quarter, completed of easily unexpected this nuisance of new our filter, a picture small known, have operating is greatest easily readily on of out expected large and certain playing issues concentrate last headache. will number resolution generated slide as then a over out of proving reliability is Broadly a

primary is are initial The many the all, equipment process and bugs the it great quite well, of we running Through mirror. in rear-view made progress.

desired and Even as we produce with equipment, experiment to able roasted tuned consistently our concentrate the we are meets that specifications.

cost have throughput. online, the critical majority initial more the competitiveness sold. of con as roasted to flow will this invested it leach or testing the yield the making is subsequent cerium But targeting. brought Initially, circuits our we suggests product achieve production sheet oxide. towards and will vast that in This The are be directed the rejection and of be should that

a handful at through remaining run but we that coming steam able are are we are the issues our to continue commissioning over balance of the calciner, addressing as to of the II full the rates desired months, There we attack run before will we full had these into assets. Stage

II includes leach the and quarter, step is all assets. have Stage will of most As we This we end putting circuit. first critical of some on But, that under newly new remaining course, alongside others. processes. the legacy process installed operated be conditions, along commissioning are into approach next operation the than further The equipment commenced equipment

flow, new The already impregnated process leach will being recommissioning the completed and the separation additions legacy circuit. commissioned. solution currently then purification legacy pass equipment their through have Continuing while activities, are

troubleshooting As NdPr process circuits period slide with portion a when begins last in rebalancing a The be leach, new the flow. be can we finishing, seen to XX. which feed of will expect the on and of

that a step It and two will non-linear process. one a will series back. is reiterate steps be commissioning forward and I is of

on production production As providing it our target, additional yet we quarter, the to commercial on but not oxide would updates pertains expect in look to of call. forward scale first the NdPr we QX our ramp earnings ramp

and uptime. overcome others ramp but run and take not rate be quickly It with timing to but any production And reliability of the achieve remember of one ramp will run reach troubleshot and is our desired Certain the production. run commissioned others determine longer rates and circuits important towards start-up rate Certain will of circuit to that up problems, throughput. production. struggle does will final the easily,

remain all, our All target. we in however, confident in

II be than planning Stage operation. of putting years are into ever We to four of more excited

expect a we challenge and I our XXXX extent to than communicating proud production time team any look and to forward us confident XXXX, subsequent extremely of since and progressing While greater calls. in remain to our ramp

I'll turn it to that, Jim. With back

Jim Litinsky

Thanks, Michael.

Turning facility. our to This picture recent manufacturing of Texas aerial magnet slide a is XX.

activity, of You can that is most and building, now place see construction that complete. taking shell given a of lot the the is inside action

utility up November, installed, the of key Since with finishing talked in we been last electrical public gas, has and shortly. most water infrastructure

of installed. We some systems, equipment of now the being are HVAC including which lead long procurement see continues. also to equipment long are arrive, the lead beginning And the production other

fully also hires place, research more key by enhanced with of team. functioning have lab as a We come now expand magnet continue number to in the . a recent and to we

Our should Worth all magnetics by into team to be Fort the facility able move summer. late new

in space closely of the the connects see lab the sizable the factory. look right picture office you If top and you will at facility, where into

is goal of world. make this the most Our cutting-edge to center in magnetics the efforts site the

There dramatic consumers. EV and search reiterate to To models update the conclude adoption XX.X would Reduction United of the sales contraction, to prepared remain bullish I more climbed a you an the and on market like States, the I Europe, our EVs rapidly XX% trailed million the on on increase is that than global like in back business. in XXXX, action to new and In passenger units. China global the available profound accelerating outlook remarks, been Act for policies has market a inflation despite approximately and and of overall has which

several that are of EVs in driving mind one applications bear just downstream And growth.

neodymium consumer to demand even for and turbines, strong see power When all a analysts growth out you robotics, in increase together, growth NdPr. threefold corresponding opportunity looking tools. with predicting for in and wind magnet and electronics put XXXX, also this We

XX is the that world producers A years. today. of needs equivalent mind online the passes dozen NdPr in over of more threefold world next likely Pass in Keep in of the rare largest Mountain than X increase coming mountain the the mean would demand earth

permitting to to such still viable and of bring processes, Assuming ore supply and multiyear multiple take market. bodies would dollars that economically were cleared identified years billions it

we strategy, therefore, balance the leverage in-place sector. create in our coupled though to macro pricing, that for will convinced And even enable remain are, to extremely Therefore, value. fortress huge us tailwinds usually of aspects valuable. are with additional assets short-term drive sheet, MP's economy there all our integration vertical our volatility will our platform

up that, Operator? open Q&A. for it With let's

Operator

of first begin Please [Operator now the will line We Davidson. proceed. with Q&A Instructions] from comes session. D.A. Matt question The Summerville the

Matt Summerville

at wasn't talk in couple that would that oxide aware follow-up. I X and roasted A what the available And does be market? output, you actual might Stage add I we intermediary about of i.e., between output of process then step value Thanks. particular the sort of I product Stage that frame? looking what to how priced be questions. sale. for guess have that an is there time concentrate how form kind I quantity of much over Can a in And

Ryan Corbett

and Ryan. can it's a take talk Matt, roasted about have it and for we'll Hey, progress. then little what con means that, bit our Sure. I Mike us and

relates way available regular it material the incremental from the price I material getting going to fact, of about you've terms in selling the As quarter the a economics so. terms in over of roasted not the vis-à-vis sales not in what or it's to concentrate, roasting seen volumes And difference step. would think is concentrate departure a through next the be cost there's in of

and bit are over time. [ph] to about volumes a that talk Mike, the we begin to But charging As for products. incremental mentioned, a what short stop relatively -- be the process? roasted on little benizoxide this of we to you preparing production for con all downstream should want and way circuits means is we the do

Michael Rosenthal

con cost Sure. may step most of Thanks, competitiveness separation roasted the our Ryan. the be ensuring assets. finishing and Producing important in single high-quality

Stage the itself a is But So is a point aim. product as of The in the not con itself production critical important transition -- II. on very roasted

con a on give yields expense that energy targeting. yields improving mentioned critical ranges that leach, the part be reducing getting going maintenance They're get And process our of remarks, for the and out testing as the minor well. prepared the savings as and us confidence rejecting to of are and which separation feed any that in is I But is purification that NdPr high and really also recovery of into we in we'll really initial cerium, we're of when quality this the goes the from reagent the savings that proceed that the that important stages. to roasted

but important say, important to an sales it's So not long-term plan. product,

Matt Summerville

Stage And we Understood. much just follow-up, when Stage on in And feeling guess you opportunity? your you prepared reasons thinking the II. mentioned at then attack go as incremental about maybe a I, taking Timing-wise, mineral should be coming of be could domain we how guys of upside you're pause can and that? looking this more that around recovery generated confident but a point remarks how one out your obvious to at as more about I you're in on output knowledge that for based that XXXX relative renting you

Michael Rosenthal

This is Michael. I'll take that as well.

or opportunity mentioned the process I do significant do to we optimism a flotation way improve beneficiation that of before. lot and in things the there's think of I've in have process that. this We the past our results

towards of a irrespective the have dedicated work team team, that to to of We effort. continued We've progress that Stage growing II.

by hindered just progress. implementation by that. we're of with not impacted distraction, ahead but be pressing the overall Maybe that's So the could some

exactly think But at greater incremental progress. there's incremental We timing. some can't I we And steps, be the progress. there'll point, predict hope

significant Hopefully, improvement addresses your improvement. it more have is that just Some mostly. could of question and incremental that small some we a is process investments believe

Matt Summerville

you Thank guys. Yes.

Operator

Cowen. proceed. question Thank line with Deckelbaum comes you. Please of the David from The next

David Deckelbaum

question Ryan this and I Michael. you Jim, taking Congrats, appreciate guys my afternoon.

Jim Litinsky

Happy you. to it. Thank

David Deckelbaum

that into premium consuming operations all off in here? inherent of that then, oxide Should around the the agreement, sold I have give sort sell First, to of sale there the but trying I if available you you on consumed now. wanted for X volumes Sumitomo of that you just could the of would you a for any agreement. in know to as think would we to terms this sort landmark Stage Obviously, start expect be relative what And be it's guidance understand, potential on about would pricing not NdPr China? could would an early,

Ryan Corbett

magnetic I is outside It's way to to largest important Japan. about agreement with that. and our you of is mentioned, know, to David. relatively also a think Sure, excited proven this market center an China. in I'll This The Obviously, a we're get Sumitomo, as about market as take way it's distribution pretty deal which our the agreement. is in Japan, efficient you Ryan. step,

it's I that sourcing. growing pretty diversity clear a think for there's need Japan in

what so, demand-supply the production could their and to and to of fair an our And in is there's more see be confident desire some of there. for we market. assume with going coming grow our We imbalance outside expected view a amount demand

it's talked a first exciting step we overall, So player time. an an the as in us with about, opportunity, market, expand certainly for major hopefully, to the relationship over

you've in minute the I'd heard certainly part your of just a ago, from believe thing picture our in economics market. say I demand us other the think question, as the on we

transact And so, market-based we do on expect prices. to

our in end control. importantly, so to offered customers are I'd And the Japan the in that say terms remain

model. We haven't locked ourselves into any particular

that for business. do we'll And so continue from to the what's best perspective,

David Deckelbaum

have I for you. maybe a kind And a of follow-up Ryan. Thanks,

think of your benefits. perhaps your would ago, the prepared of what might the the in remarks be on know treasury kind in the being of side terms and eligible the realized? talked you You what defined IRA I is line on you about under days a would think XX give sense XXC. us be of What expansion at you benefits that when those on see for you would timing credit tax this production capital certainly XXC? point spent eligible projects Can

Jim Litinsky

David, Hey Jim. it's

as going is of -- stuff to to the and like stuff all There well. the there's So period preliminary. government have It's be you of a submitting. we're out watching are still you with XXC coming then

guide to to sort And thoughts kind that. Obviously, any very predictions as how it or watching of about you we're thinking still make closely. so, it's specific we're of early or

Ryan Corbett

The XX this only thing I'd add on -- yes.

Just XXS. real quick on

David Deckelbaum

you XXS, Ryan, It's that? wanted

Ryan Corbett

difference The versus credit being production a based on there being different Yes. obviously capital. tax

straightforward, and we the everything think see, we into is clear a qualifies XXx clearly from there more we producing the a and so that product framework. guidance And I will be believe bit

start our we so by default And production, to we we ramp as oxide as those that products. produce expect benefiting from

David Deckelbaum

Sounds Thanks you. guys. good

Operator

The from you. the next Corinne Deutsche line of comes question Thank Bank. Blanchard Please with proceed.

Corinne Blanchard

Thank good for afternoon. my question. taking Hey, you

transition Just could maybe maybe know of the but what sales the trying cadence from for obviously and go mentioned I if and year. consensus, year. feel guidance, of you with going I production, how XQ the end EBITDA the price flat at give a don't minimus we and to you maybe you do understand comfortable be margin And better defined through straight towards lower the having think maybe

the So for frame to just our year? trying cadence

Ryan Corbett

Sure. is say would Corinne, that take expect I that begin you Ryan. us the prepared that. our I'll is transition in we expectation, out should remarks obviously, to What our was laid this to into a we as oxide be when year. back the P&L. online bit the in of bring Obviously, the between production half we're versus sales little of recognizing gap sales there'll those a

wanted we so And that to importantly make distinction.

way of the we your the business, think we feel, I profile is, modeled the all one at we the flagged as have to margin folks rate. out results to look as reasons point, what several roasting you than the we've get our we're concentrate, after results we look eventual confident more and out, run will ever like laid our from as to yields Michael and seen certainly, that

a thing XXXX to important this just and is over mind is we've said over year. the again, But transition keep in

at of our the get oxide we the cost same coming expect can't to out profile once out you So kilogram rate. run come first as that's kilogram

to the concentrate color. that roasted transition, Stage gives team But ready we'll say into year. further you the from concentrate the hopefully, bit operators in commercial production business certainly, we've of as continue that background. of that the a online, and perspective, make production got while So we and build get our for get business I'd the and we little X

So those of and are production and takes sort from sales puts perspective. the a

Corinne Blanchard

where Great. I and market six, did go pricing but terms like sorry, it any next think if could commentary it XX of in provide over then itself, like also, maybe the And kind the on China months? you missed you of

Jim Litinsky

Sure. take Corinne. I'll Hey, that.

it and because it's typically So on ultimately, volatile. we it's commentary is -- just don't any commodity, provide a pricing

means. has the because as in if I New really over China I all been China. the China with of pullback the out well sort the just that would parts. tea given what advance maybe excitement a of there Year leaves Chinese Chinese of always as of as a we look it's to post-COVID settling -- opening an out explosion moving was think as markets there and and growth opening around think sort it then it's New it that particular, is in read of far at the in some recent the the Year be figures months, in And sort been And as expectation tough world and of

is are magnetics my it guess an mean that Adamis the rare in NdPr is market just Intelligence the the not talked by that in by I data about that it short-term for you if today -- it's areas my that's might people report non-critical are of XXXX. -- what referenced for some listen I interested, actually market prepared times things the at very looking that's My probably size if driving remarks, long-term. outlook. research that's pricing you is you research the magnet the to I remember being find who for the -- and And helpful, think in earth And three Corinne, analyst

demand, but wind be general is only rest a auto the the market turbine. will in in the there EVs are high and the look course, under some the you others. if electronics reason things growth it interesting I of overall for consumer or of others, today the that today is and little about or that at growth -- standard What's current areas, some in mentioned of demand what is and the NdPr really XX% which, That

other that in the of might be so much And it short-term. more XX% -- some volatile economy the impacted by be will

compounding heard at, XX% think but ultra-high But say, think that I if the think me many -- before, that you you a is or growth, year the say about and XX%, this then whatever. growing about have if XX%

out times from from in get so. years maybe just the As now XX now, or a three you those to look you decade market areas

the power opening economy. that that areas general that Today, high like like Chinese have or kind also area and my the a are malaise is robotics or growth again, very let in alone other that tools seen is other influence a weird XX% some GDP very that's guess the so may fact of short-term that we've

But critical that even mean by I think are years this out, long-term, and of couple are growing we areas the pricing of all growth long-term for just a or extraordinary. through of

feel that's a confident for that we great so really And us. trend

Corinne Blanchard

color. the for you Thank Great.

Operator

Alba next of proceed. Stanley. line comes Carlos Please Morgan with question De the you. from Thank The

Carlos De Alba

of very A congrats progress. couple Yeah, thank on you and much, the questions.

can volumes give to deal? that or the that this specific would is is be Any Just there -- color Are coming can to you take pay? Sumitomo any any agreement provide there useful. there back agreement, color attached the

around my CapEx. is second And question, then, it

guidance $XXX So for year, to similar XXXX. million this

I or the I in any do $XXX and million overall $XXX number? remember shift has a see you Stage saw III. it still CapEx that How is mentioned remains on Stage was million think, you II balance, you comprehensive been then place, for that that there

Ryan Corbett

hit Hey, Ryan. Carlos, can probably those I both it's of quickly.

In agreement. of pretty a type distribution this terms Sumitomo is of the standard agreement,

And so in with to be end going is pricing volumes consultation based and our customers. market

As desire diversity need in and a about, and for clearly, sourcing. I volumes there's Japanese talked incremental

of confident demand fair So for there. our a there's are amount we upsides

our as distribution ultimately, so time, over you're going referencing types. we're contract I probably have And some agreements, of different ultimately, contract and think to terms existing

market us the at Japanese that's And so efficient point. this most for the sell into way to ultimately,

is As Fort facility of online question, million separation about in at Stage bringing II, your I terms thinking it say all-in the overall well Worth you $XXX as number was which are to an of guide, right, completion the Mountain the there facility Rora heavy would what relates Pass. CapEx that as the

million year I you material And ago, projects, are like to, and from departures of we that everybody guess, no those there that, sort guided than I take almost think what so a materials normal in of you other exactly inflation the seen say, if $XXX things see that we has terms in that would guidance. I from that

we feel still – still we that number. good about So

the we XXXX. about And million so reported in was growth of about million $XXX $XXX another that We're this year. saw for capital CapEx year, this talking you

so on to you communicated that guys. program expect track we be to to we investment the continue And with

Carlos De Alba

right. Thank very All Great. you Ryan. much,

Operator

with Cannaccord. comes Please The proceed. Thank the next from you. line question George of Gianarikas

George Gianarikas

my for Hey, good you afternoon, Thank questions. taking everyone.

China, curious here rare restricting your in production recently, press impact I'm to export according the So reports that to to has begun you the and ability to as United refining. of will earth think whether SEB make certain several magnet magnets technologies States. related And

Jim Litinsky

don't we this no, ability on that impact so will been at all. We've some quite George, our Hey, think Sure. mission for focused time.

is for no in other risk. to of really You what that like to have the that pictures point we've or of directly but there's and question, go, And of way but it of just to single I certainly we counting no your if on anything, And think long up answer how technology at, where got the diversity important to that. anything and see incredible it to importance we're magnetic team. a specific in have reason the a failure chain supply – China out we're we're speaks

have impact should no it us. So on

George Gianarikas

on here an over appreciate would quite every company there to won't thoughts comment. and I'm and mines of the buying really impact you material stake flurry haven't finally Thanks. credit metals. talked I like that it's about an to as of that sector day, is when years whether that's you OEM you last is it announcement earth give there that, rare your there's couple you And yet. or to why we taking seen this noticed larger possibly something the as think some some but seen some I'm follow-up here, And that happening other yet Any – here, it? outright Thanks. have related in a sure haven't been, think comes And seems it curious lithium of or you've a we

Jim Litinsky

as sure. what know, to been I've need where realize supply Warner Great of AOL the auto a while, collide. this these mean, talking Yes, Time for the you moment about that call chain people worlds question. kind I I of

I innings. think it's still early

that beginning So practical it's reality a there is mean, that when far that as this argue, is would think there, sort I here, the I say earths, parties you many process. I just rare out aren't mean, of I as

Lithium widespread is around pretty the globe.

the of who about. that a think GM And some nickel, I definitive are. agreement executed key might our copper, other rare, commodities think with our year ago. the we about players with you So know you But

it's space And so the early. certainly, very GM is now -- and has recognized

conversations of as said repeatedly, And I've had we've lots with OEMs.

air business. answer broader the -- I is build think expect think bigger, I touched it state. to question we Our your deal to is and a the not exclusive, magnetics has But so

that bit today. we have what's is think unique cash we asset a flowing remarkable that I us about a little are

other equity deals, sites greenfield need to of So capital, essentially you get these a that of need in potentially some They financing. lot other capital. have government

type of to And that look offtake/financing you deals so some is and may the deal going see every are deals, different.

I seeing the we value building. lead of -- But it ton variety in to so roads I all of very some this you're ours, you'll of have a GM. And same to deal space. And certainly, the with the franchise yes, a -- the deals that we're think obviously But and we're for see we're think rumors that of proud seeing. of speaks excited big

good that. seeing see really excited think continue to -- it just obviously have happening I we're I'll true. saying it to you're all more that. And And to that and see lot that feels something come by going predicted a of So obviously, I

George Gianarikas

Okay.

Operator

you. Thank

Jim Litinsky

question? Next

Operator

Kallo line The next of question comes proceed. the Baird. Please from Ben with

Ben Kallo

the the lithium guys. the you year signing maximize before I I view value the to Hey, in offtake guys Has the for I want just you lines just coming that agreements? about offtake Along anything agreements. all Jim, that same OEMs with up do materials. your agreements. you think long-term you. volatility saw changed in locking or guess, on But How other this know and

Jim Litinsky

Sure, Ben.

expand I can a I I there's of variety was think on it and think what a connects But I saying into offtake, agreements. -- offtake earlier. little

some just always And of tell the offtake might be to what is versus deals hard seeing, component financing it's recent that think right? so the of offtake that I offtake, is what you a component of –

fortress the the is in maximizing need balance be look can of thing kind in with totally we position the of we we're or as strong structure offtakes think the And value at that to what that sheet any highest don't we that can form agnostic as about view for good right? We as have return as option goes, that financing, I offtake is any far shareholders.

as not. -- very little maybe and so I to on a but this we'll think, maybe I said do in maybe And we'll And think early and continue should I the because but our position. space, have from -- beginning, a good it's the we're in we And of that I've particularly earlier, have, really do that. platform touched

We're where given much solutions. and have provide of things platform situations our come in of in earlier so didn't to kind maybe, some sort exciting of, expectations we out be opportunities, to going and work can

we're so, And in exciting opportunity seeing think, of stage that's I such knows. an sort but growth early us, for an that, the of space who

we're not I say, appreciate I those also to the just would this but before say and odds, I obviously, repeatedly, we'll they telegraph of But happen. -- kind going

we're can or we behind you seams exciting. were to if imagine offtake to pursuing having say, not -- offtake So we're we're this or trying of going going create it's to do just the see that we do the value. best you'll do sort whatever, can conversations, 'Hey, that it And something, announced, to

Ben Kallo

the step to leaching but times, difficult that mentioned people I or if from I we this in opening think, than gets between, statement up. about separation, other? Is but most, the there, wrong, you worry you Michael, more chart said one think And, about do leaching what think you think is the guess. you. couple I separation I the your there in tripped flow a Thank of triroasting

Michael Rosenthal

we optimistic I to important is think the should we parts to. don't easier be to than if excited very be we're We're part say I one to all right, -- all stable. want the that work leaching about need they it's way we would with But ultimately Obviously, way the leach have it be. think the proceeding think other another. I we them do

Ben Kallo

guys. right. All Thanks,

Michael Rosenthal

you. Thank

Operator

next comes Please Lawson Winder line question of of The with Bank you. proceed. America. the Thank from

Lawson Winder

would a very of for and magnets just sounds mean, developing also an Thank center Thanks. one expensive. Nice quarter. cutting-edge I you, in of you gentlemen. challenges exciting Maybe potentially question -- And evening, operator. Fort rate research run center Maybe are cost there like could cutting-edge us center. then running annual in staffing? me. what years be? research idea matter the in a Good Worth, of a very, The research the give very

Jim Litinsky

the Sure. outside in lead China positioned there's is news the of really to Well, nobody good really in Western this world, effort.

areas of might in the that of a of assets. our set unlike lot So competitive be given sort more there world, out

where sort have talent, as this. we can, in like we're scale, unique of of We scale position I to early that say, the begets talent days begets

it's an so, And opportunity. extraordinary

out -- is reached As board. far the right? do that's a the talent we us. that. talent, -- be, incredible place of We'll to are talent to the in as MP to continue getting brought had lot magnetics, on the where We've mean, I We metallurgy news some or good you're if is,

that champion. what I are cost, say looking least is, the And nothing not right we is opportunity. us with would a believe at to when lastly, for And focused earned on we're magnetic research we've you mean, have create to And I say hope to shareholder looking it compared I maniacally that We're value. we project. this a the

oriented is not are is we when research This creating going so that be not valuable these come. enormously to that's we And is about tank. in think to franchise everything do geared that. towards a think like a the research, decades towards And this --

do but is question, that resource penny focused some person But ourselves may take extraordinary that ask So over stuff. organization. from time, will lead confident spend, yield every This time, we Every investment. we because hire, that, commercially very returns a that is I'm great it it question. long that we it's a And right? very

many pay today, they're glad did in very it. so and we'll multiples to off be near we And those -- they'll in impacts I'm comfortable that company many, the in company but the be the going be are -- term, you'll in

Lawson Winder

Jim. Thanks, Okay. Fantastic.

Jim Litinsky

Sure.

Operator

next North Sinha with Please of proceed. The Thank you. question comes Markets. from Abhi Capital line the

Abhi Sinha

Yes. my Hi. for question. Thanks taking

as to it. we ton, I the in production dollar and run the figure, of about this, how upon or think touched missed keep how Ryan better what the I on per CHP XXXX cost wanted just efficient how think And as I if the I we for at get be get looking $X,XXX should that up cost apologize as terms should flow? like forward? we rate you production should move move

Ryan Corbett

provide say, would color Abhi. number. Sure, we but on don't just in what's Yes. to forward-looking What that guidance, give some specific you I

find that this way there, costs metric reported the COGS you Stage expect, producing. II mentioned you'd at as before moment drivers related ago, the into a looking to largest are that even their point we're So at

and power so build the the Stage is as until at certain plant example, we heat And that running expenses you full personnel draw. we've for got mentioned sub-optimally the II team, power combined

the talked significant a things until January and position of little our did we hedge X. come gas bit last portion One about a effect quarter was of that not into

we for were a weather prices there gas California exposed the with good our of and portion on gas prices burn So QX. some all in

was items quarter. and mentioned bit $X,XXX higher we quarter, showed just don't pull little that a normally due see expect that cost the to to The little the related And $X,XXX that what range up so we that pulling closer I in trying I in an than $X,XXX had I are Stage guess, onion standalone costs just that not predominantly the to back more and to out I. to that two were a impact the in bit Stage repeat. -- the

Firstly, just maintenance. timing from really an of impact

biannual take addition, fourth our we about, fleet. our costs talked to crushing the we've in in this our in as maintenance facilities activities incurred we plant some As quarter. on well And mining shutdown relation quarter, as in fourth

once cost just those scale happened what noticeable events kind be of all to those run kind of over in and burden at of these so rate our hit and with captured of frequency the enough look kind time, normal the you more quarter. to of scale at when And are cost. But the generally is

of course is year-over-year adjusted cost year, in the only at look I the that which growth the single-digit you mid if whole over range. Stage So

we as new II to I that. much of will course, Stage think But the the mentioned, continue II, bring members to is a more things like maintenance team board I business. new cost related and closer representative as up bit Stage on heads get to of ramping, we that pick I Stage as

gives that parts on Hopefully, So you you expect. moving some the what and color

Abhi Sinha

Sure. if just Thank could. I then more, you. And one

volumes. about lower getting by could impacted lower grade talked elaborate where and mineral about in like grade terms just being You What's get feed on you're production some recoveries. some and that? of feed adversely was mineral That like I if to that, recoveries. color you wanted

Ryan Corbett

Yeah.

you misheard that. the quarter of I grade improvements have saw feed might part slightly actually recoveries. maybe What in was we but lower in think mineral

sort looking the all moving would when I there you at meaningful really obviously, pieces so overall our put And production cadence. or the not a say together change results, of was material of from

a or so. tackle Michael gave we year the to the improve don't certainly over time, of next have idea and last what recovery we report nice anything material so, change expect material to And levels really nothing here in various we the hopefully, it mineral but particularly there. over hopper believe items won't

Abhi Sinha

have. Thank That's much. all Sure. I you Right. very

Operator

Alexander The last proceed. Thank from of with Please you. line is question Laurence the Jefferies.

Laurence Alexander

Good afternoon.

course you magnet and And the once Just have SG&A of talk you where a once the a next bit that you and year discussing or over been customers would that about this your at you with about years staffing is expectation to can will is, get to over for the the little as return then on take One agreements few to the and current production an how evolve finish capital the move up expect would prices you that -- couple. running potential vertical any market the you've magnet adequate secondly, current to magnet or production, investing? have various you capital on discussion about a baseline be into return integration?

Ryan Corbett

take Sure. I can that.

closer portion say to in growth there'll staffing, at in way So early is online we significant they that be that expect as the for in we hiring numbers, SG&A. a to I in terms the wouldn't But II. bring a III growth the in In all What certainly get find find we'll their to production Stage staffing days, cost. COGS. the of eventually give to would staffing won't attribute Stage I rough -- into way of plans production,

on year another III, board So at folks. we'll Mountain be bring probably probably XX will of people to the Pass, incremental over shy XX it next Stage for XXX

just one that gives particular sense, that all a but item just the of on would hopefully, rough line to caution I So attributing P&L. in you

question, do that to start Jim, on want second On your one? you off

Jim Litinsky

Yeah, sure. that that as time mean and incremental I point I'll blank, -- the separate look a over we have risk Yeah. just very the we III capital. very that sure on has return same platform, but said Laurence, investment Stage to hey have and consistently businesses adjusted we clearly, on benefit businesses attractive that II certainly we're that make at

business to lose going and III -- we pay say, business II as I so not the interest from to capital to like have shifting rob And Stage Stage we're Paul. to Peter no in money the

how we we're verticals. think though, if to about And think to the market about we're should holistically we incremental great platform, deals the fact in that opportunity? how whatever going attractive, -- Stage how be, What a going incremental is commodity about it. allow does can where where a sell think ultimately, okay, price, structure we baseline about of, may it II And think that and we well, to about this that us is have is that opportunity is our the at to we choose

of you've like us say, heard large think importance shareholders. So I -- me utmost we the want to to that we're is that we because reiterate as owners,

value. So charity. We're sure in not in for we driving it growth make business want any the to that is

Laurence Alexander

Thank Okay. you.

Jim Litinsky

Okay.

Operator

Thank remarks. back to for you. the hand I now will management closing it

Jim Litinsky

to Congrats right. team, to it the will Well, you, and work. back great Yeah. quarter year, and a thank great was we All everyone. start get

So have night, everyone. great a

Operator

conference concludes call. today's That Thank you.

disconnect may now lines. your You

MP Materials (MP) 23 Feb 232022 Q4 Earnings call transcript