ORGN - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Origin Materials Second Quarter 2024 Earnings Call.

As a reminder, all participants are in listen-only mode, and the conference is being recorded. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Ryan Smith, Co-Founder and Chief Product Officer. ahead. go Please

Ryan Smith

afternoon, Good you joining for Thank and everyone. us you. thank

of in Then Rich is Matt and next. questions the submitted today Ask and first of originmaterials.com. campaign. found release from Riley, to of cause the and Plavan, will questions presentation. call release statements note Origin's reflect views this today, quarter new risks to expectations on speak of Investor to relied future any uncertainties as our to as we information second the variety CFO, Speaking press revision discuss and Ahead not discussion co-CEO, call, Co-CEO at Origin analysts we forward-looking will open XXXX of has current upon our our Bissell; publicly materially from Relations during be that be Co-founder forward-looking assumptions, differ should results results obligation These no our and could section are will our that can a part we Please about revise statements subsequent issued subject date, Origin subject light John be and website its today, or and any These or of views These based making to to undertake of of actual events. representative are statements as on uncertainties. expectations. statements which these risks and

Form to today. affect including filings the SEC, on XX-Q financial with discussion further and on refer important quarterly that a risks our report filed our our For other factors results, please material could the

isolation we non-GAAP and GAAP supplemental of we results. be in measures will Origin's substitute in discuss materials from to which believe useful are as These call, measures as or addition During should considered for performance. not non-GAAP financial today's measures,

on be in posted company the I today's will release discussed will disclosures website. The webcast of filings SEC, our to and will call our with non-GAAP will Investor additional call website. regarding financial over the afternoon to You on be Relations which of find that, turn this the this call section available press With the measures our issued also Rich. our

John Bissell

Ryan, to our growth This beverage further consideration million licensing addition world-class manufacturing for Concurrently, context food the we will you, in system related expect initial We prospective capacity generate previously business. We business billions our other that caps involving MOU will our in are with us. this will and our delivering we licensing making customers, product capacity significant update that announce we customers which future significant marketing Today, annual bringing as as the anticipate from begin the and commercialization the into with caps potential for our appropriate, our everyone, home caps as goods. plan of multiple caps we agreements expected customer we have I will we this customers and anticipate thank to We circularity fulfill to to such joining caps million our X-year and our for with customers' in we $XX an volumes. beyond between demand Thank anticipated and build is ever producing than signed first million over $XX product and well recycling, are explosive performance as our selling activities. and are produce revenue. that taking players. our revolution key generate as timing term, you, products selling revenue XXXX. which and closures packaging, closures. in packaging negotiating $XXX catalyze in are announcing with the strides, technology, XXXX to partners PET well of in for announced we customer, initial PET to demand ramping launches caps to and to Therefore, expect to from revenue purchases, drive closer

We to expect caps. to be first market with PET

We them from type any cost use PET, recycled cap expect the XXX% PET making for possible We first to with ever. of competitively. of can to produce the make them container time

Our caps today's additives the with in and designed HDPE polypropylene improve can performed caps polymer. better to product are for and our circularity modify ways shelf life than no that caps used

for fourth lightest revenue performance. these For strong Today, we some production with PET begin caps reducing is a full first that the caps, start to been technology enables This incredibly are sustainability. and improving our the Switzerland and manufacturing to variety of cap, quarter waste and expected have speed, line tested in at up quarter, XXXX. products are year, systems packaging the Grail track of the we've during reaffirming generation wide quarter ramp subsystems called containers, plastic the past of on we Germany, all pleased commercial during with and this circularity. has Holy for Demand

also X on milestone the We caps the well important way launching which business. us date, passed puts over produced strategically million to to of our

to are equity requiring our path additional also profitability, no We reaffirming capital.

of caps hand independent gross we to burn our million. business. the and $XX $XX beginning biomass and by for expect the years Our technology an path sufficient with in trajectory growth our cash $XXX with we equity during given are will runway of revenue the and generation our million related our year scale-up net begin anticipate healthy generate our to to to first raise, over cash quarters believe conversion XXXX a eliminate XXXX revenues million thereafter. and and generate profitability ahead, closures led profit in construction. maintaining the business We of of between is is manufacturing need on We significant expected capital entirely and Today, quarter plant next the

the of with floor than the our and value closures upside extreme will Growing the us continue terms. could Origin strong long-term is continuing reach significant own to for closures forecast from a sustain cost But sustainable value business, high-value potential to conversion means more low of the platform. due our initiatives closures, of way produced captive to technology, business grow enable development we to generate the the Origin caps Origin and our intermediates. platform We our solid technology sustainable and such, engage on long-term that Apart cash be to exploring caps its near-term to anticipate a As strategic profitability biomass continue including converting of profitability. the to minimum technology on by the scale-up biomass molecules and around platform will flexibility partners revenue. we application

them materials Origin dependent and these produce for to these but are sale. appropriate. X and Some managing we'll X We're of not that of are applications are designed thoughtfully those using plans on Origin and as announce initiatives capable production

Looking vigorously our technology quarters platform led with John. I'll in ahead ahead, team. a years turn With and it to broader moat over grow the and to positioned we caps and closures financial business our innovative IP cultivate that, creative position, highly by and to a strong strong to are continue and

Matthew Plavan

Thank you, good Rich, and afternoon, everyone.

North in produce caps City will partnership closures company. hydraulic a respected cap we of partnership This mold operation European announced enables automation manufacturing, with Reed remain joining our expansion PET engineers team, includes capabilities Origin technology and quarters, packaging manufacturing flake, automation recycled equipment. capability. This logistics end-to-end the Global couldn't quarter, operations a happier in the taking PackSys announced team, and and complementary machinists, to production we mechanical this Earlier and and a alongside us molder, cap IMDVista. previously pellet later a past including you Reed Group our geographic room is PET partners look PET City using full-scale this are injection solutions injection production we City cap with Red Bachmann way European Swiss cap with American forward track month, us with on by Group to finished professionals this be commercial several people all with our builder, lines how begin In partnership City Group maker seen of Reed material, toolmaking and a skilled clean and mass all the We cap We production and coming Group and or Group us together. manufacturing. Group. press the lines, in which billions the year. assist Bachmann incredible Group, company. mass operating to production helping assemble have impressive announced manufacturing, production Bachmann PET world-class mass to are

over we and and manufacturing by achieved quarter, X million We the manufacturing success. caps cap team been of and The in technology prospective the and our energized of our manufacturing milestone produced. scaling well caps very partners, going system testing milestones. This has production crossed customers are closures multiple

subsystem user made of caps each European leading Germany, The As throughout expected. directive. system assess weight manufacturing systems and including rates full our an are as to operating to single-use stay such QA/QC that month indicators caps in in and stable month, last and this directive, manufacturing brands for tethered use the EU to that mentioned to improve enabling experience month, operators effect the Switzerland came collection which quality plastic high-speed tethered first the the caps, cap breakthrough we recycling innovations interventions. mandates cap PET. into PET excellent a industry-standard at ran validated camera unveiled single-use EU respond connected We of to last the we design plastics line with bottles Union. our with world's caps as engineering These Earlier speed, offer in designed tethered circularity can while

for that Our are PET environment any perfectly innovations and, environment. frankly, cap suited regulatory

bottles, the to circularity. with material breakthrough recycling via to and it's one to have going all caps material, the make With centers recyclable Otherwise, connected PET. the keep material do you're If real a offering the for from a bottle high-performing logical to the to tether separating connected streams. cap deal thing solution, same our is

sustainability cap of Our lightweighting, this and bottle caps, is and an the the We mono-material it. use and into the packaging With enablement advantages not of the PET combining threads to user-friendly. with PET shelf ability tethered the of use extension, cap to tethered performance angled cap mouth user our toward are applications. PET experience excellent recyclable simple, recyclability, from lock product, we away for design and place life clever

year, be and manufacturing strong already billion recycled that and $XX this begin With We welcome in PET only down our systems, progress billions commercial addition extremely of market to we cap cannot upon well leading very extremely excited with interest pleased consumes technology this We're product a PET later today caps, cycle. address new year. caps capsanclosures cap billions are production line. to per positioned our into seen which have to

those around been biomass flexible have has great businesses on make and and thesis technology, from using sustainable development to are Regarding an cost as samples to that what with that our perform To development day engaged molecules chemically our conversion now, to X, and partners. we low execute continue continue of we possible. molecules multiple work HTC. our multiple of are work CMF origin impact partners end, in as build Right actively

our typically, carbonize partners. For to and crystallize this HTC CMF kind work, before delivery we of our our

Our Canada, on possible a scale partners development and continues are continue HTC in biomass their of support located X, Origin CMS in we are operation plant development expertise and market Sarnia, capabilities, that application with conversion Ontario, wasn't us the to them as our before we Origin impress to X. our growing activities. producing

formulation. materials, logistics, joint and and activities collaborating with supply chain partners We and materials on shipping customer development are them testing producing

Louisiana part we as will scenarios of of and for Asia Time X, as partner asset-light continue lines depend consider partners and a forecast biomass Origin range the further economic scale as deal on locations, which to and structure, For up. our technology engage Geismar, well conversion scenarios. brownfield including strategy

designs, our a influence are that We with sites development scale-up data various evaluating variety performing and of optimizing including to partners, feedstocks strategy. testing brownfield and exploring generate plant work potential could

development, platform material or for not to specifically software in engineering, application otherwise, gas, of will we market industry Scaling updates fundamental specialty of by and manufacturer but In and reward up our profitability it's it or and easy and fast appropriate. a is the is PET that in that technology for enables time, of way caps to and basic the us It a and as innovative design the economy. pulled achieve change a of materials oil But the whether or chemicals unusual closures. application, a provide significant profitability. through chemicals whether We performance worth building history the is takes effort. challenging new the are brilliant or else specific is a revenue a material team scientific never breakthrough be fortunate blocks chemical, to something make to a to have has to fee leading the been

and production. caps truly expected to reach is first Origin's application closures mass Our business

We widespread long-term technology enhanced cash the sustainable near-term and thus, broader expect and profitability application of and it flow platform planet. performance of better products, our a to enable flourishing and materials with the

winning vision, We to And sustainability true are world. I'll hand encouraged have we we can term, to term the and by that business that in it of in true to our a our now the staying over mission long the transform Matt. short

Matthew Plavan

Thanks, cash, John. I'll million less $XX million a Good focus provided equivalents the financial ended afternoon, at earnings highlights. the than marketable release, in tables in We've couple with key $XXX quarter results December of XXXX. the second so securities, on We my and quarter everyone. comments cash XX, in

slightly point our low the guidance of range the is at burn below million. cash burn this year, to cash for the $XX rate run a $XX of amount halfway end As in million

is remain million the was However, $XX maintaining operations. million to revenue expected, line $XX and X range revenue that for supply full between referred we second comprised with trending Origin's and million to year, also year conjunction with full comfortable Origin these guidance activation of what and $X.X the as for compared as in confident as are prior quarter Also, $X quarter year. revenues chain in our in generated guidance our we revenue the which million. in

closures as just onset to of revenue of as we John Looking from caps our expect QX be XXXX. by and ahead, the new Rich, and highlighted initiative

need closures equity XXXX to capital with nature sustain that in profile will and margin and drive significant, caps cash our revenue eliminating overall existing cash raise us be anticipate the growth we our to on for in profitability. within XXXX, recurring Beyond operations a an way positive resources, to

have to Now the we question, for I'd open please? Operator, call the may like first questions.

Operator

begin Instructions] We question question and first the Stephen from The [Operator Byrne session. Bank will America. now with answer is of

Steve Byrne

in really a produce moving Where out there of variety still towards the has of level there the PET? seeing the you in X? interest products HTC, interest of fewer change based can most been or you. these of Yes. from bio-based this products? are and derivatives you a Is in Thank Origin is products coming interest more Or these the

John Bissell

a We One pure on Furfural that's Nice for is are focused functionality and question. have peramics in HTC couple really I subset broadly. the we of a more performance Yes, Furfural see ourselves because more products, of HTC. for think on based reasons. seeing we those But improvements as the products. unique of specific real and pretty some

especially a that's margin need say, to differentiated is in and environment. I in. is environment a think we to So going to is a more margin drive interesting, capital-efficient easier Performance should in performance, manage or be to operating lot more that drive capital-light margin we going

So that's really been our decision.

view broadly. incrementally breadth that us really pull a demonstrated and much. can is think and have the don't even very furfural, lot biobased lot that. demand. we place seen of new functionality some But anywhere people that of demand say, demonstrating get think the say of and really platform. more unique think I'd strength bring our polymers on a what picture differentiated to for market, We But to lower a show I We've in specific We the we we think we is, else. more these is still demand can't changes in and that carbon polyester broader have where of applications that's I'll cases, for the

Steve Byrne

and Origin X you've that And it. cellulosic now materials so forth. been using Got Okay. running

expand design between, you as just getting building you approach reduce X would whether or Origin of from what have about process do cost Could a the through Have and there. that run more X? opportunity? capital differently? size Origin this site? at about HTC. lower-cost that another design that capacity a you plans of infrastructure you Or anything it's to an plant, of site you learned new that the CMF of you in the You and/or you think things the a something kind that doubling could it would Is X Origin Do of lot help

John Bissell

Yes. No, man.

on an deep a things would if differently Asking is plant they a engineer do Steve. that's well,

of to there plant by things you're item like are what something the next as plant. that own for That's the are technology a got like course, some see to or or generation. do improve would can regrets of but not just on, because our item improvements next of we necessarily that And that differently also for course, things like lots of ideas by I long we have think, we time. plants But to from about this, one. not just we've course, in we go when developing about going you're we plant a data

things the think think plant So do could that long that's And version. yes, for short improve that definitely, next would we I version, the it. we there that we think the

what I of of some over adjust we think expand functionality Sarnia do at ideas, have really I the the expanding interesting the plant we in that or that can think, terms around XXX time site, to functionality time. over plant of

And going even could which make of XXX, talk be operation to what to the own how this and but some too. they adjustments inform it the technology step depend going our partners next not us thoughts things, of operate deploy other want technology, want it, that be of the those and this to we the that could with next is way just expansion, perhaps is phase as on for partners we or to to on

X those we So forward. be close pretty I to are would in think going expect that things things lockstep

Operator

and section prior a to Co-Founder Product Smith, questions submitted turn call. Q&A it Officer to today's Origin Ask investors Now answering Ryan Chief I'll by over for

Ryan Smith

invited "Ask thank of you our all we the call of to our with Q&A. submit our call, today, great operator. received answered and asked lots, questions campaign. who to some part everyone Prior many as submitted you, Origin" and These prepared questions much were, analyst We and before them our we thoroughly to remarks investors you so Thank our earnings questions. And course, of participated.

will relevant have. today, couldn't in during we to our we the get them look mid-quarter cover to And We answering questions for will the and questions generally be the most we update. popular time

a before up, Our any biomass you, going go color can specifically, our we progress and as Origin capacity scale years. discussions to development on going macro the you working whole pertains Origin's to the give What for conversion their to already the And is related more application to are are the and Can and to we pulling partners us OX partners plant Are get testing. manufacturing of Are stage insight thing negotiating provide play it making? For state next you strategy? first favorable technology additional here. with become partnership, question, trigger? questions waiting you about progress will John. they so this the on X and the to expansion strategy? beyond we what I'm on more can the further in X and decision conditions tell multipart on it expansion example,

John Bissell

questions we Yes. before to point, your I just think comp the got Well, had. system committed these

going really we scale, the that could even same It's commercial of that that of different Origin go drive from feedstock drivers sort directions I variety that of Steve a think change location, platform partner, meaningfully questions. think question here. are of the to So step. things on direction. that that way the same furfural short for version ran the potentially see next but core the is And geographic the I expect It's a I for think are applications, to we lot technology. that some But front

the of we're And reading commercial partners and that the we've so I to. think environment been talking off

that's think there. the I lesson big

Ryan Smith

here, That's OMX partially ask, August, design which last great. question touch plant is Phase And the as it, I strategy? but think they X plan is explicitly there's and is let's I presented answering current a follow-on that still you're the think, it,

John Bissell

technology that Yes. that as technology That's they're can always talked view in the feat a because -- Origin of we can that at all than when refining you -- the we've were put core sort to a products about But in Ferenc technology of interesting adjust the technology like course, other the about approach, lumping we together. side. X-based performs ratio in course, platform and question sort also differently that the is -- you of really of slightly how platform way the of a that's that it the if a instantiate talk way

not adjust parameters. and -- so that those could that's only you some way And of the

commercial And we the really that to Pure way lead what for the direction in side take for we're same OMX waiting on so technology.

options sort Ferenc I applications we the also scale. have biofuels -- of drive of partnerships some configure could are the commercial think which the really mentioned you X-phase look -- I of for how a but yes, or it we're you others But said, as sort could of feedstock towards there variety and technology, I technology. that was different. architecture first

that process not Some about which way for sort we've are that, are talked the original of and some work that our would closer ones architecture vision yet. to

it's the see be I interesting that I how way. commercial So going out. But think to turns leads yes, think to

Ryan Smith

going Matt, months, pertains to it at it of that That's to will closures. years. operational And quarters great. It Matt. said This on that and margins? of caps A next was significant And we kind have over and yes, higher the I'm caps designs. plant asked that the previously, or normalizing if beginning. to closures menu in take question, a Will, have weeks, manufacturing see effect costs will investor

Matthew Plavan

in back share lens that few with in announcement Ryan. revenue. commitment little little today, start the million that is sounds There a we're some provide involves kind they the of to One, that number and And to customers together, and quantum a one a we XXXX, to this us is that clarity of better customer $XXX think made rolling of like additional about that We to X announced and give illustrate years visibility into That maybe see maybe that the a excited business really we pretty and things. expect I could when that that date a that, about. confidence our that a like we over revenue but on to to given here, XX that unfold giving significantly reiterate XXXX. per we around and decline into a will this total if loss be over in our dial things Thanks, the EBITDA somewhere on would plan guidance wanted kind basis, would which speak And Yes. provide future. we great XXXX. during now we've -- think be EBITDA between it I'd bit for question and we of initial territory positive monthly that on and expectation crossing guidance XX months between the commitment beyond

think can our the there confidence we and is significant what EBITDA XX, the Hopefully, attractive likely with as depend you all about X able as trajectory, capacity years for the own guidance how in to gives regard plan increasing profitability 'XX. great achieve It to loss product. do we demand and a so us the if it and quickly will capital decline have the over And possible. to an profitability serve on is of out ramp being that very in early on that in sustained our

months, regard think expect forward be restate the confidence to more continues that our to and doing kind level. high around that our in that. for to at moment, I to to share overall of of kind able to guidance XXXX with the we of customer just operationally, want is But I that to we coming said financial expectations we I a continue think as what express expectation these agreements strength our close we guidance some and grow. the look out execute So specifics and And of

Ryan Smith

one want Great. up intent been again, asked, over the first has agreements that's few earnings in since for offtake And If you, was fine well. caps? Rich. the course, questions haven't in, was lined I'll John letters they had been to ago? the some months but saying investor QX Matt, as news, earnings, Rich Why a this to and But today's any chime take before asks, of X of these executed, buyer last the they of

Richard Riley

get I Yes. fairly caps our announce pipeline lined overwhelming up. not on some of we, very trials And the customers, to sort us that. big that satisfy demand including today, are in things will potential traveling customers. a various buying engaged, Well, we to customer join we're stages can challenge a continue them the of of licensing have and terms to it, And highly testing of more. But new are potential course, this be Several pipeline add there process. our first to of including to engage represents excited of scale-up and robust of and partners like

caps. plans very that to like our And so they're and and much process deep in their product own incorporate the looking to things modify

picture. about to today. like announce I great we're the our said, first very demand feel And we customer So excited

Ryan Smith

right. All

of the big I right forward ask next question X to Now what do there. this a next sort have in to gets it look So and at months? question

Richard Riley

the degree we additional I a confidence, announcements customer going have to high It's really be say be X of months. over And to we'll one that exciting exciting. next certainly that's a X going have would months.

producing which once the caps, do We producing of expect same a caps, milestone just to be major to effectively commercially in then equipment we're thing. adding more we're commercially is very terms

And so have And we what with revenue. comes ramp will ramp. sort that our is started of

we like we which within in be X and we revenue going really it. great then start feel so can months, a really QX, showing ramp And can continuing that if trajectory is to accelerate

next I hope you really all months So X next and excited well. the are we're -- about as

Ryan Smith

the investor then the continue to stock exciting. despite last of last question, year hold the the That's I And over great. this That's stock? why asks, the performance should

Richard Riley

in addition that to in to our have. today disclosed don't is see shares our XX-Q Yes. to price is do value possibilities. already you buy too valuation XXX,XXX math stock order placed think placing the current our personally in Well, very on little I was I and there to the shares that much I and have -- technology talent the more

what but I really doing. can't give you I stock advice, can tell So I'm

Ryan Smith

in Matt, ahead All next sending the confidence Rich, be we next update. looking questions. right. Thank We're great. questions get Ask to That's and couldn't with mid-quarter forward everyone everyone, and our who John update looking to and look you, address joined you, and XXXX, to today. to we Origin We'll them and to for thank who's excitement our

So thanks our call again, for concludes this and today.

Operator

has The presentation. Thank concluded. attending for now you conference today's

now disconnect. You may

Origin Materials (ORGN) 14 Aug 242024 Q2 Earnings call transcript