Aspen Aerogels "right-timing" Statesboro plant construction

Aspen Aerogels has slowed the construction of Plant II located in the Bruce Yawn Commerce Park in Statesboro, GA. Don Young, President and CEO of Aspen, addressed the reasoning for the "right timing" of the plant in their first quarter investors call.

Aspen announced in February of 2022 their selection of Statesboro to invest a minimum of $325 million to build Plant II in the Bruce Yawn Commerce Park. The plan included creating more than 250 jobs with plant operations beginning in late 2023.

To date, Aspen has invested more than $200 million on the construction of the Statesboro plant. To locate here, Aspen was offered an incentive package, including tax abatement, to encourage them to select Statesboro for their new plant. There are claw backs built into the contract that protect the Development Authority if for some reason Aspen does not complete their end of the agreement, such as capital investment or numbers of jobs created.

Local officials are confident that Aspen will complete the plant construction and open the facility. Obviously that is not going to happen in late 2023 as initially announced.

One of those officials who supports their decision to adjust the construction timeline is Benjy Thompson, CEO, Development Authority of Bulloch County.

"Based on the significant automotive OEM (Original Equipment Manufacturer) contracts that Aspen Aerogels had confirmed during our negotiations, combined with Aspen’s commitments to create at least 250 new jobs and invest at least $325 Million in Bulloch County – including the significant spend already in place at Bruce Yawn Commerce Park – the Development Authority of Bulloch County supports Aspen’s adjusted construction timeline. In addition, our agreements with Aspen include claw backs of the incentives that were provided to Aspen if they fail to meet their commitments,” Thompson said.

Below you can read the first quarter financial results presented to investors in May. On August 2nd, they released their second quarter financial results, which show improvements over first quarter. That report is included below as well.

Stock analysts continue to recommend Aspen's stock as a buy.

062923-aspen-right-timing-graph — Courtesy of Aspen

Aspen Aerogels, Inc. First Quarter 2023 Financial Results and Recent Business Highlights

From the 1st quarter investors call:

"Aspen is off to a strong start for the year," commented Don Young, Aspen's President and CEO. "First quarter gross margins reflect the actions that the team is taking to drive towards profitability." Mr. Young added, "2023 is an important commercial year for us, as we expect additional decisions on a significant number of key OEM programs. The new European commercial truck award is a significant achievement and demonstrates the demand for our Pyrothin^® products in the emerging commercial EV market. We continue to strengthen our technical and commercial relationships with key customers and are optimistic about our commercial outlook in 2023 and beyond."

Mr. Young noted, "It is important for Aspen to right-time our investment in Plant II to align with our customers and their expected volumes. By leveraging our current plant in Rhode Island and our new aerogel supply arrangements, we believe that we can provide a target revenue capacity of approximately $550 million in 2024. We believe this strategy will enable us to maintain our 2023 and 2024 revenue growth targets while reducing OPEX and CAPEX, generating positive cash flow, preserving our existing capital, and supplying both our EV and Energy Industrial customers."

Click Here to view the Q1 2023 presentation.

Total revenue for the first quarter of 2023 was $45.6 million, compared to $38.4 million in the first quarter of last year. Net loss was $16.8 million, compared to a net loss of $19.5 million in the first quarter of last year. Net loss per share was $0.24, compared to a net loss per share of $0.59 in the first quarter last year.

Adjusted EBITDA for the first quarter of 2023 was $(13.9) million, compared to $(14.7) million in the first quarter of last year. A reconciliation of non-GAAP Adjusted EBITDA to net loss is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measure is also included below under the heading "Non-GAAP Financial Measures."

First Quarter Highlights and Recent Business Developments

Total revenue grew 19% year-over-year, and net loss was reduced by $2.7M, or 14% year-over-year
PyroThin^® thermal barrier revenues of $11.7 million, up 53% year-over-year
Improving margins, with a quarterly gross margin of 11%, a 1,600bps improvement year-over-year, as well as maintaining OPEX flat quarter-over-quarter
Ended first quarter of 2023 with cash and equivalents of $208 million
Awarded PyroThin^® thermal barrier contract for European electric vehicle ("EV") commercial truck program with start of production expected in early 2024
Consistent with our strategy and track record of defending our intellectual property rights, filed patent infringement actions against Beerenberg Services AS and related companies seeking injunctive relief and monetary damages
Aspen's East Providence, Rhode Island plant will primarily serve EV OEM customers with PyroThin^® thermal barriers, with additional capacity from planned contract manufacturing supply for Energy Industrial customers
Right-timing the construction of our planned second aerogel manufacturing facility in Bulloch County, Georgia ("Plant II") to align with the expected ramp of our EV customers
Maintaining revenue growth targets while accelerating near-term profitability and preserving capital

2023 Financial Outlook
Aspen updates its 2023 full year outlook as follows:

Total revenue is expected to range between $200 million to $250 million
Net loss is expected to range between $101.9 million and $91.9 million
Adjusted EBITDA is expected to range between $(60) million and $(50) million
Net loss per share is expected to range between $1.46 and $1.31
CAPEX is reduced from a range of $350-400 million to a range of $100-150 million, including $49.4 million invested in the first quarter

The Company's 2023 outlook assumes depreciation and amortization of $22.3 million, stock-based compensation expense of $11.0 million, interest expense of $8.6 million and weighted average shares outstanding of 70.0 million for the full year.

A reconciliation of non-GAAP Adjusted EBITDA to net loss for the 2023 financial outlook is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measure is also included below under the heading "Non-GAAP Financial Measures."

Ricardo C. Rodriguez, Chief Financial Officer and Treasurer noted, "It's time to be increasingly frugal and consider the implications of a high cost of capital environment on every investment. With a larger Energy Industrial order backlog and a growing list of EV customers, our outlook is brighter. Our near-term focus is generating positive cash flows as soon as possible and eliminating our dependence on additional capital to do that."

Mr. Rodriguez added, "We are slowing down our investments, but not our growth."

ASPEN AEROGELS, INC. REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS AND RECENT BUSINESS HIGHLIGHTS

Aspen Aerogels, Inc. (NYSE: ASPN) ("Aspen" or the "Company"), a technology leader in sustainability and electrification solutions, announced financial results for the second quarter of 2023, and discussed recent business developments.

Click Here to view the Q2 2023 presentation.

Total revenue for the second quarter of 2023 was $48.2 million, compared to $45.6 million in the second quarter of last year. Net loss was $15.4 million, compared to a net loss of $24.1 million in the second quarter of last year. Net loss per share was $0.22, compared to a net loss per share of $0.68 in the second quarter last year.

Adjusted EBITDA for the second quarter of 2023 was $(10.8) million, compared to $(18.3) million in the second quarter of last year. A reconciliation of non-GAAP Adjusted EBITDA to net loss is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measure is also included below under the heading "Non-GAAP Financial Measures."

Recent Business Highlights

Delivered Q2 gross profit margins of 17%, a 20-percentage point improvement over the same period last year
Achieved record level quarterly Energy Industrial gross profit margin of 27%
Decreased year-over-year quarterly net loss by $8.6 million, a 36% reduction on 6% higher revenues
Fulfilled PyroThin^® thermal barrier revenues of $12.6 million in Q2, up 17% year-over-year
Ended second quarter of 2023 with cash and equivalents of $134.3 million

"We remain actively focused on execution and operational excellence," commented Don Young, Aspen's President and CEO. "Our Energy Industrial business is strong, delivering record level quarterly gross profit margins for that segment at 27%. Because demand continues to exceed our current capacity, we are working closely with our aerogel manufacturing partner to accelerate the availability of our supplemental supply in order to best serve our Energy Industrial customers."

Mr. Young noted, "We continue to work closely with several EV OEMs as they finalize the designs of their battery platforms. We believe we have line of sight to several meaningful awards that have potential to drive incremental demand in 2024, and ramp into 2025 and beyond. These awards will broaden our OEM network and provide regional diversity. In the meantime, we anticipate an acceleration of revenue from GM later this year as they begin high volume production of the Silverado, Blazer, Equinox, and BrightDrop electric vehicles."

2023 Financial Outlook

Aspen updated its 2023 full year outlook as follows:

Total revenue is expected to range between $200 million and $250 million
Net loss is expected to range between $85.0 million and $75.0 million, as compared to the previous range of $101.9 million and $91.9 million
Adjusted EBITDA is expected to range between $(55) million and $(45) million, as compared to the previous range of $(60) million and $(50) million
Net loss per share is expected to range between $1.21 and $1.07, as compared to the previous range of $1.46 and $1.31
CAPEX of up to $150 million to enable continued growth in 2024

The Company's 2023 outlook assumes depreciation and amortization of $20.2 million, stock-based compensation expense of $11.1 million, interest income of $1.3 million and weighted average shares outstanding of 70.3 million for the full year.

Ricardo C. Rodriguez, Chief Financial Officer and Treasurer noted, "We're on a path to maximize the value of our existing assets by positioning ourselves for near-term profitability in anticipation of higher demand. We continue to identify operating efficiencies that gear the business to deliver over $550 million of annual revenue capacity, 35%+ gross profit margins, and 25% EBITDA margins as EV thermal barrier demand increases with some key vehicle launches."

Aspen may incur, among other items, additional charges, realize gains or losses, incur financing costs or interest expense, or experience other events in 2023, including those related to the planned capacity expansion, supply chain disruptions or further cost inflation, that could cause actual results to vary materially from this outlook.