Origin Materials Reports Third Quarter 2024 Financial Results and Progress on CapFormer System
Origin Materials, Inc. (Nasdaq: ORGN, ORGNW), a leader in sustainable materials technology, announced its financial results for the third quarter of 2024, highlighting key milestones in its journey toward profitability. The Company reported a revenue of $8.2 million for the quarter, driven by its supply chain activation program, and provided updates on its innovative CapFormer System for manufacturing PET caps, which the Company believes to be the world’s first commercially viable system for producing PET closures.
Factory Acceptance Test Success
Origin Materials successfully completed the Factory Acceptance Test (FAT) for its first CapFormer System, a critical step in the commercial production of PET caps. The test demonstrated over 98% manufacturing efficiency, meeting performance specifications. This achievement is significant as the CapFormer System offers a breakthrough in the recycling circularity and packaging performance of PET caps, a category that has the potential to revolutionize the industry.
The FAT event was attended by multiple prospective customers with a combined annual cap consumption exceeding 100 billion units. This strong interest from potential clients underscores the growing demand for sustainable packaging solutions and demonstrates the potential scale of Origin’s technology. Commercial production is on track to begin by the end of 2024, with revenue expected to ramp up in 2025.
Plans for Expansion and Profitability
John Bissell, Co-CEO and Co-Founder of Origin Materials, highlighted the Company’s ambitious plans for expansion. “We believe we can sell as many caps as we can produce once commercial production is online,” Bissell stated. The Company aims to have at least eight CapFormer Systems operational by the end of 2025. These systems, when fully operational, are projected to produce between 8 and 12 billion caps annually. The Company expects that these eight systems will be sufficient to achieve positive EBITDA, with growth continuing through the addition of more systems to meet market demand. Origin is targeting positive run-rate EBITDA by the first half of 2026.
Third Quarter Financial Results
For the third quarter of 2024, Origin reported revenue of $8.2 million, a slight increase from $7.1 million in the same period last year, driven by the Company’s supply chain activation program. However, operating expenses for the quarter rose to $32.5 million, compared to $12.9 million in the prior-year period. The increase was primarily due to non-cash impairment charges totaling $15.2 million, including the impairment of assets at Origin’s Geismar, Louisiana site, as well as higher depreciation costs associated with the ramping up of Origin 1, the Company’s biomass conversion plant.
The net loss for the third quarter was $36.8 million, a significant decline from the prior year’s net income of $30.9 million, which had included non-cash gains related to the valuation of common stock warrants and earnout liabilities. The adjusted EBITDA loss for the third quarter was $12.0 million, compared to a loss of $9.5 million in the third quarter of 2023.
Despite these losses, the Company ended the quarter with cash, cash equivalents, and marketable securities totaling $113.4 million, providing a solid financial foundation to support its continued growth.
Looking Ahead: 2024 Full-Year Guidance
For the full year 2024, Origin Materials is maintaining its revenue guidance of $25 million to $35 million, with expected net cash burn ranging between $55 million and $65 million. The Company expects that its focus on the CapFormer System and PET cap production will enable it to meet its long-term financial goals, including achieving EBITDA-positive results in 2026.
Webcast and Conference Call
Origin Materials will host a webcast and conference call on November 14, 2024, at 5:00 p.m. Eastern Time to discuss its third-quarter results and business outlook. Interested parties can listen to the call live by visiting the Company’s Investor Relations website, and a replay will be available afterward.
Conclusion
Origin Materials’ successful Factory Acceptance Test for its CapFormer System, combined with its plans for scaling up production, puts the Company on track to transform the PET cap industry and achieve profitability by 2026. With strong customer interest and a clear path to commercialization, Origin is poised to become a leader in sustainable materials and circular packaging solutions.
