August 10, 2023 Danimer Scientific Announces Q2 Results, New Products

Expanded product portfolio includes new resins for protective films, shrink wrap and produce bags.

BAINBRIDGE, GA – Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the “Company”), a leading next-generation bioplastics company focused on the development and production of highly engineered biodegradable materials, today announced financial results for its second quarter, ended June 30, 2023. 

Danimer announced, in a separate release also issued after the close of market today, the acceptance of its Part II Application by the U.S. Department of Energy (DOE) under the Title XVII Loan Guarantee. The Company has been invited into the confirmatory due diligence and term sheet negotiation process that, upon successful completion could lead to funding from the U.S. Department of the Treasury’s Federal Financing for construction of its greenfield manufacturing facility in Bainbridge, Georgia.

Stephen E. Croskrey, Chairman and Chief Executive Officer of Danimer, commented, “During the second quarter, we made progress in a number of areas.  We are very pleased to have moved into the next phase of the financing process with the Department of Energy. We also are excited to have launched new programs that grow and diversify our portfolio of customers and end-use applications.  We expect to close this year with momentum in our business and a renewed ability to keep pace with a range of future opportunities for growth.  We believe we will enter next year having demonstrated that we are the clear leader in the fast-growing market for responsible alternatives to petroleum-based materials.”

Mr. Croskrey continued, “We are very pleased, after more than three years of careful development work on three new end-use applications, to now have commercialized protective films, shrink wrap and produce bags.  We are also excited to play a key role in the rapid commercial launch of compostable coffee-pods.  This is a very large category currently dependent on petroleum-based materials which pending EU legislation, if passed, would prohibit from use.”

Mr. Croskrey concluded, “We continue to push forward on other meaningful commercial initiatives. As we await final selections for straw and cutlery programs for customers in the quick service restaurant space, we are making excellent progress in the development of aqueous and extruded coatings for paper cups and for thermoformed cup lids.  We believe that our unique ability to offer customers this combination of four key end-use applications will make for a powerful, comprehensive and extremely valuable solution that addresses single-use plastic waste for customers across the food service industry.”

Second Quarter 2023 Financial Highlights:

• Revenues grew to $12.9 million in the second quarter of 2023 both compared to $12.7 million in the year-ago quarter of 2022 and compared to first quarter 2023 revenues of $11.9 million.
• Growth was entirely attributable to product revenue, which was $12.2 million in the second quarter as compared to $11.6 million in the same period of last year, driven by stronger sales of PHA-based resins, which increased 10% compared to prior year and 69% sequentially, partially offset by a modest decline in PLA-based resin sales.
• Service revenue were $0.7 million in the second quarter as compared to $1.1 million in the second quarter of last year, an expected decline that reflects the successful completion of development work for certain customers, that has now progressed to commercialization. 
• Gross profit was $(6.6) million compared to $(2.2) million in the second quarter of 2022. Adjusted gross profit was $(1.6) million compared to $(0.5) million in the second quarter of 2022. The reduction in adjusted gross profit primarily reflects increased fixed production costs associated with greater capacity.
• Net loss for the second quarter was $(39.2) million compared with $(30.4) million in the prior year period.
• Adjusted EBITDA in the second quarter of 2023 improved to $(10.2) million as compared to $(12.9) million in the second quarter of 2022. As in recent previous quarters, this improvement was attributable to a comprehensive program of expense control measures implemented across many areas of the business.

Capital Structure

At June 30, 2023, the Company reported a total debt balance of $377.8 million, which included the Company’s convertible senior notes, its recent senior secured term loan and $45.7 million dollars of low-interest New Markets Tax Credit loans that the Company expects will be forgiven beginning in 2026. The Company noted that, including $14.5 million of restricted cash, effective liquidity at the end of the second quarter was $105.2 million. The Company remains comfortable with its liquidity position and it has the strategic and operational flexibility required to execute its growth strategy.

Outlook

The Company noted that its second quarter and first half results have been consistent with its expectations, and it remains confident in its competitive position and its expectations for growth.  At the same time, given a possible shift in the timing of certain significant new program awards and associated first shipment delays, the Company now believes that a bias toward the low end of its previously communicated range for 2023 full-year Adjusted EBITDA of $(23) million to $(31) million is prudent. The Company continues to anticipate full-year capital expenditures in the range of $26 million to $31 million.

Webcast & Conference Call

A webcast and conference call will be held today, August 8, 2023, at 4:30 p.m. Eastern Time to review the Company’s second quarter results, discuss recent events and conduct a question and answer session. The live webcast of the conference call can be accessed on the Investor Relations section of the Company’s website at https://ir.danimerscientific.com.

For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-888-999-3182 or 1-848-280-6330, respectively. Upon dialing in, please request to join the Danimer Scientific Second Quarter 2023 Earnings Conference Call. The archived webcast will be available for replay on the Company’s website after the call.

About Danimer Scientific
Danimer is a pioneer in creating more sustainable, more natural ways to make plastic products. For more than a decade, its renewable and sustainable biopolymers have helped create plastic products that are biodegradable and compostable and return to nature instead of polluting our lands and waters. Danimer’s technology can be found in a vast array of plastic end products that people use every day. Applications for its biopolymers include additives, aqueous coatings, fibers, filaments, films and injection-molded articles, among others. Danimer holds more than 480 granted patents and pending patent applications in more than 20 countries for a range of manufacturing processes and biopolymer formulations. For more information, visit https://danimerscientific.com.

Forward‐Looking Statements
Please note that in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding our expectations for full year 2023 capital expenditures, Adjusted EBITDA and cash balances. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to, the overall level of consumer demand on our products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption and volatility in the global currency, capital, and credit markets; the financial strength of the Company’s customers; the Company’s ability to implement its business strategy, including, but not limited to, its ability to expand its production facilities and plants to meet customer demand for its products and the timing thereof; risks relating to the uncertainty of the projected financial information with respect to the Company; the ability of the Company to execute and integrate acquisitions; changes in governmental regulation, legislation or public opinion relating to our products; the Company’s exposure to product liability or product warranty claims and other loss contingencies; disruptions and other impacts to the Company’s business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns such as the COVID-19 global pandemic; the impact on our business, operations and financial results from the ongoing conflict in Ukraine; the impact that global climate change trends may have on the Company and its suppliers and customers; the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, our information systems; the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes; our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems with our transitioning to upgraded or replacement systems; the impact of adverse publicity about the Company and/or its brands, including without limitation, through social media or in connection with brand damaging events and/or public perception; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; our ability to utilize potential net operating loss carryforwards; and changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release. 

Contacts:

Investors
James Palczynski
Phone: 415-876-8429
ir@danimer.com

Media
Anthony Priwer
apriwer@daltonagency.com
Phone: 615-515-4891

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