NORTHBOROUGH, Mass.,
Feb. 20, 2020 /PRNewswire/
-- Aspen Aerogels, Inc. (NYSE: ASPN) ("Aspen") today announced financial results for
the fourth quarter and full year 2019, which ended December 31, 2019, and discussed recent business
developments.
Total revenue for the fourth quarter was $46.5 million compared to $35.7 million in the fourth quarter last year.
Fourth quarter net loss was $1.0
million compared to a net loss of $14.1 million in the fourth quarter of 2018. Net
loss per share for the fourth quarter was $0.04 compared to $0.59 in the fourth quarter last year.
Total revenue for the full year was $139.4 million compared to $104.4 million in 2018. Net loss for the year was
$14.6 million compared to
$34.4 million in 2018. Net loss per
share for the year was $0.60 compared
to $1.45 in 2018. Net loss during the
fourth quarter and full year 2018 included an impairment charge of
$7.4 million, or $0.31 per share, on pre-construction and related
costs for the proposed manufacturing facility in Statesboro, Georgia.
Adjusted EBITDA for the fourth quarter was $2.6 million compared to $(3.2) million in the fourth quarter of 2018.
Adjusted EBITDA for the full year was $(0.2)
million compared to $(11.5)
million in 2018. 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."
Fourth Quarter Highlights
- Total revenue grew 30% to a record $46.5
million
- Gross profit more than doubled to a record $11.3 million
- Gross margin improved by 800 basis points to 24%
- Adjusted EBITDA increased by $5.8
million to $2.6 million
2019 Summary and Recent Business Developments
"We are extremely pleased with the results we achieved during
2019. Total revenue growth for the year of 34% was driven by strong
demand in our core North American petrochemical and refinery
markets, and significant growth in project related revenue in the
subsea market, in the Middle East
and from the PTT LNG Nong Fab receiving terminal project. The
combination of our strong revenue growth and the impact of our bill
of material cost reduction initiatives drove an increase in our
full year gross margin to 19% from 12% in 2018. As a result, we
experienced substantial improvement in both net loss and Adjusted
EBITDA versus 2018," said Don Young,
President and CEO of Aspen.
"We also made great progress on our program to leverage the
unique properties of our aerogel technology platform within the
electric vehicle market. During the past three months, we signed
evaluation agreements with Evonik Industries AG and SKC Co., Ltd.
to accelerate development of our proprietary carbon aerogels to
improve the performance and cost of lithium-ion batteries for
electric vehicles. We have also engaged with several automotive
OEMs to explore the role our traditional silica aerogel materials
can play in impeding thermal runaway in lithium-ion batteries in
electric vehicles. Notably, our recent patent enforcement win
against Guangdong Alison Hi-Tech Co. in the German courts again
reinforces the strength of our patent portfolio supporting our
customer and partner relationships," continued Mr. Young.
2020 Financial Outlook
Aspen reaffirms its 2020 full
year outlook as follows:
- Total revenue is expected to range between $138.0 million and $148.0
million
- Net loss is expected to range between $5.7 million and $9.7
million
- Adjusted EBITDA is expected to range between $5.0 million and $9.0 million
- Net loss per share is expected to range between $0.22 and $0.37
Our 2020 outlook assumes depreciation and amortization of
$10.3 million, stock-based
compensation expense of $4.0 million, interest expense of
$0.4 million, and weighted
average shares outstanding of 26.2 million for the full
year.
"After significant growth in 2019, we expect our revenue growth
rate to moderate in 2020 due principally to our expectation that
subsea revenue will be closer to our historical average of
$11.0 million in 2020 versus
$17.0 million in 2019. We also expect
to see little to no growth from the PTT LNG Nong Fab receiving
terminal project during 2020 as we complete the second half of the
$35 to $40
million order during the year. In addition, we have decided
to wind down our government research services activities in 2020
that contributed approximately $2.4
million in revenue in 2019. This decision reflects our
desire to focus our R&D resources on improving the
profitability of our existing business and leveraging our aerogel
technology into new markets," said Mr. Young.
"Importantly, we expect the growth rate in the remainder of our
business to range from the mid-single digits to the mid-teens
during the year. We will also target our commercial efforts during
2020 to continue to build our project pipeline with the aim of
ensuring solid project related growth in 2021 and beyond. In
addition, we will remain laser focused on improving our
profitability. We expect that our ongoing initiatives to reduce raw
material costs will help to improve our gross margin to the mid-20s
for the full year from 19% during 2019. As a result, we again
expect to deliver strong year-over-year improvements in both net
loss and Adjusted EBITDA in 2020," continued Mr. Young.
"Consistent with our financial performance over the past three
years, we expect between 40% and 45% of our 2020 revenue will be
generated during the first half of the year. As a result, we
anticipate the projected improvement in net loss and Adjusted
EBITDA will be concentrated in the second half of the year,"
concluded Mr. Young.
A reconciliation of non-GAAP Adjusted EBITDA to net loss for the
2020 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."
Aspen Aerogels may incur charges, realize gains or losses, incur
financing costs or interest expense, or experience other events in
2020 that could cause actual results to vary materially from this
outlook. In addition, the timing of projects may have a significant
impact on quarterly and annual revenue and profitability and can be
difficult to predict.
Conference Call Notification
A conference call with Aspen
management to discuss fourth quarter and fiscal 2019 results and
recent business developments will be held at 5:00 pm EST on February
20, 2020. During the call, management will respond to
questions concerning, but not limited to, Aspen's financial performance, business
conditions and industry outlook. Management's discussion and
responses could contain information that has not been previously
disclosed. The conference call will be available live as a
listen-only webcast and will be hosted at the Investors section of
the Aspen's website,
www.aerogel.com. In addition, shareholders and other interested
parties may call 833-287-0799 (toll free, U.S. & Canada only) or +1 647-689-4458
(international) and reference conference ID "3737734" to
participate in the conference call.
Following the live event, an archived version of the webcast
will be available on Aspen's
website for convenient on-demand replay for at least a year.
A copy of this press release is posted in the Investors section
on Aspen's website.
Non-GAAP Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States of America ("GAAP"),
Aspen provides additional
financial metrics that are not prepared in accordance with GAAP
("non-GAAP"). The non-GAAP financial measure included in this press
release is Adjusted EBITDA. Management uses non-GAAP financial
measures, in addition to GAAP financial measures, as a measure of
operating performance because the non-GAAP financial measures do
not include the impact of items that management does not consider
indicative of Aspen's core
operating performance. In addition, management uses Adjusted EBITDA
(i) for planning purposes, including the preparation of
Aspen's annual operating budget,
(ii) to allocate resources to enhance the financial performance of
its business, and (iii) as a performance measure under its bonus
plan.
Management believes that these non-GAAP financial measures
reflect Aspen's ongoing business
in a manner that allows for meaningful comparisons and analysis of
trends in its business, as they exclude expenses and gains not
reflective of Aspen's ongoing
operating results or that may be infrequent and/or unusual in
nature. Management also believes that these non-GAAP financial
measures provide useful information to investors in understanding
and evaluating Aspen's operating
results and future prospects in the same manner as management and
in comparing financial results across accounting periods and to
those of peer companies. These non-GAAP measures may not be
comparable to similarly titled measures presented by other
companies.
The non-GAAP financial measures do not replace the presentation
of Aspen's GAAP financial results
and should only be used as a supplement to, not as a substitute
for, Aspen's financial results
presented in accordance with GAAP. In this press release,
Aspen has provided a
reconciliation of Adjusted EBITDA to net loss, the most directly
comparable GAAP financial measure. Management strongly encourages
investors to review Aspen's
financial statements and publicly-filed reports in their entirety
and not rely on any single financial measure.
About Aspen Aerogels, Inc.
Aspen is the global leader in
aerogel technology. The company's mission is to enable its
customers and partners to achieve their own objectives around the
global megatrends of resource efficiency and sustainability.
Aspen's Cryogel® and
Pyrogel® products are valued by the world's largest
energy infrastructure companies. Aspen's Spaceloft® products provide
building owners with industry-leading energy efficiency including
options for a safe, non-combustible fire rating. The company's
strategy is to partner with world-class industry leaders to
leverage its aerogel technology platform into additional markets.
Headquartered in Northborough,
Mass., Aspen manufactures
its products at its East Providence,
R.I. facility. For more information, please visit
www.aerogel.com
Special Note Regarding Forward-Looking and Cautionary
Statements
This press release and any related discussion contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties that could cause actual results to be materially
different from historical results or from any future results
expressed or implied by such forward-looking statements, including
statements relating to Aspen's
2020 financial outlook. These statements are not historical facts
but rather are based on Aspen's
current expectations, estimates and projections regarding
Aspen's business, operations and
other factors relating thereto, including with respect to
Aspen's 2020 financial outlook.
Words such as "may," "will," "could," "would," "should,"
"anticipate," "predict," "potential," "continue," "expects,"
"intends," "plans," "projects," "believes," "estimates," "outlook,"
"assumes," and similar expressions are used to identify these
forward-looking statements. Such forward-looking statements include
statements regarding, among other things, Aspen's expectations about revenue, costs,
expenses, profitability, gross margin, net loss, Adjusted EBITDA
and related variations, improvements, records, timing or trends;
beliefs about the general strength or health of Aspen's business; beliefs about current or
future trends in the energy, energy infrastructure, petrochemical,
refinery, building materials, LNG, subsea, core, adjacent, U.S.,
North American, Asian, European, South American, Middle Eastern or
other markets and the impact of these trends on Aspen's business; beliefs about the government
research services business; beliefs about volume, timing, pipeline
or trends of subsea, LNG or other projects, including the PTT LNG
Nong Fab receiving terminal project, and their impact on
Aspen's business; beliefs about
the impact of pricing actions, cost reduction initiatives and the
economics of Aspen's business;
beliefs about Aspen's strategic
initiatives and implementation; beliefs about the potential to
develop new market opportunities from Aspen's aerogel technology platform; beliefs
about the potential of new aerogel products, technologies,
businesses and partnerships, beliefs about the role of our
technology and partnership opportunities in the battery materials
or electric vehicle markets; beliefs about Aspen's relationships with Evonik and SKC,
including the potential for activities associated with evaluation
agreements to lead to any development, commercial or other
arrangements with Evonik or SKC, or to accelerate the development
of new product opportunities in the battery materials or electric
vehicle markets; beliefs about Aspen's engagement with automotive OEMs,
including the potential for the development of commercial
opportunities related to the management of thermal runaway in
lithium-ion batteries in electric vehicles; beliefs about
Aspen's intellectual property
strategy and its implementation; beliefs about the strength of
Aspen's patent portfolio;
expectations about the cost, timing or likelihood of success of
Aspen's patent enforcement actions
and defense of challenges to the validity of its patents; beliefs
about Aspen's ability to continue
to fund patent enforcement or defense actions; beliefs about the
productivity, efficiency or output of Aspen's manufacturing operations; beliefs
about raw materials costs and availability; future operating
performance on an annual or other basis; and accounting and other
assumptions involved in arriving at the expectations. All such
forward-looking statements are based on management's present
expectations and are subject to certain factors, risks and
uncertainties that may cause actual results, outcome of events,
timing and performance to differ materially from those expressed or
implied by such statements. These risks and uncertainties include,
but are not limited to, the following: an inability to create new
product, partnership and market opportunities; any sustained
downturn in the energy industry or energy prices; any sustained
downturn in the petrochemical, refinery, building materials,
subsea, LNG, core, adjacent, U.S., North American, Asian, European,
South American, Middle Eastern or other market; any failure to
increase project-based demand in the subsea, LNG or other markets;
any disruption or inability to achieve expected capacity levels in
any of our three production lines or the manufacturing facility in
which they are located; the failure to receive all regulatory or
other approvals required to operate, maintain or expand our
facilities; any failure of demand for Aspen's products; any failure to achieve
expected price increases or average selling prices for Aspen's products; any significant increase in
the cost of raw materials, utilities or any other manufacturing
consumable; the failure to mitigate the impact of any significant
increase in the cost of raw materials, utilities or other
manufacturing consumable; shortages of raw materials, utilities or
any other manufacturing consumable; the failure to generate
sufficient operating cash flow or to obtain significant additional
capital to pursue Aspen's
strategy; the failure of Aspen's
products to become widely adopted; the competition Aspen faces in its business; any failure to
enforce any of Aspen's patents; any failure to
protect or expand Aspen's aerogel
technology platform; any future finding of invalidity of any patent
in any jurisdiction; any failure to generate sufficient operating
cash flow or to obtain sufficient additional capital to continue to
pursue Aspen's new business,
technology, patent enforcement, or patent defense strategy; any
failure of Aspen's products to
meet applicable specifications and other performance, safety,
technical and delivery requirements; the general economic
conditions and cyclical demands in the markets that Aspen serves; the economic, operational and
political risks associated with sales and expansion of operations
in foreign countries; the loss of any direct customer, including
distributors, contractors and OEMs; compliance with health and
safety laws and regulations; the maintenance and development of
distribution channels; and the other risk factors discussed under
the heading "Risk Factors" in our Annual Report on Form 10-K for
the year ended December 31, 2018 and
filed with the Securities and Exchange Commission ("SEC") on
March 8, 2019, as well as any updates
to those risk factors filed from time to time in our subsequent
periodic and current reports filed with the SEC. All statements
contained in this press release are made only as of the date of
this press release, and Aspen does
not intend to update this information unless required by law.
ASPEN AEROGELS,
INC.
Condensed
Consolidated Balance Sheets
(Unaudited and in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
2019
|
|
|
2018
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
$
|
3,633
|
|
|
$
|
3,327
|
Accounts receivable,
net
|
|
|
|
|
|
32,254
|
|
|
|
25,565
|
Inventories
|
|
|
|
|
|
8,768
|
|
|
|
7,318
|
Prepaid expenses and
other current assets
|
|
|
|
|
|
1,114
|
|
|
|
1,041
|
Total current
assets
|
|
|
|
|
|
45,769
|
|
|
|
37,251
|
Property, plant and
equipment, net
|
|
|
|
|
|
53,617
|
|
|
|
61,699
|
Operating lease
right-of-use assets
|
|
|
|
|
|
4,032
|
|
|
|
—
|
Other long-term
assets
|
|
|
|
|
|
84
|
|
|
|
73
|
Total
assets
|
|
|
|
|
$
|
103,502
|
|
|
$
|
99,023
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
|
12,596
|
|
|
$
|
12,392
|
Accrued
expenses
|
|
|
|
|
|
8,057
|
|
|
|
3,864
|
Revolving line of
credit
|
|
|
|
|
|
3,123
|
|
|
|
4,181
|
Deferred
revenue
|
|
|
|
|
|
5,620
|
|
|
|
2,629
|
Operating lease
liabilities
|
|
|
|
|
|
1,038
|
|
|
|
—
|
Total current
liabilities
|
|
|
|
|
|
30,434
|
|
|
|
23,066
|
Deferred
rent
|
|
|
|
|
|
—
|
|
|
|
1,218
|
Prepayment
liability
|
|
|
|
|
|
9,786
|
|
|
|
4,485
|
Operating lease
liabilities long-term
|
|
|
|
|
|
4,292
|
|
|
|
—
|
Total
liabilities
|
|
|
|
|
|
44,512
|
|
|
|
28,769
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
|
|
|
58,990
|
|
|
|
70,254
|
Total liabilities and
stockholders' equity
|
|
|
|
|
$
|
103,502
|
|
|
$
|
99,023
|
ASPEN AEROGELS,
INC. Consolidated
Statements of Operations (Unaudited and in thousands, except share and per
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
|
$
|
46,195
|
|
|
$
|
35,145
|
|
|
$
|
136,934
|
|
|
$
|
102,123
|
Research
services
|
|
|
|
|
310
|
|
|
|
534
|
|
|
|
2,441
|
|
|
|
2,238
|
Total
revenue
|
|
|
|
|
46,505
|
|
|
|
35,679
|
|
|
|
139,375
|
|
|
|
104,361
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
|
|
35,056
|
|
|
|
29,807
|
|
|
|
111,759
|
|
|
|
90,660
|
Research
services
|
|
|
|
|
139
|
|
|
|
286
|
|
|
|
1,332
|
|
|
|
1,032
|
Gross
profit
|
|
|
|
|
11,310
|
|
|
|
5,586
|
|
|
|
26,284
|
|
|
|
12,669
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
|
|
2,565
|
|
|
|
1,692
|
|
|
|
8,407
|
|
|
|
6,319
|
Sales and
marketing
|
|
|
|
|
4,545
|
|
|
|
3,513
|
|
|
|
15,557
|
|
|
|
13,794
|
General and
administrative
|
|
|
|
|
5,030
|
|
|
|
6,967
|
|
|
|
16,479
|
|
|
|
19,116
|
Impairment of
construction in process
|
|
|
|
|
—
|
|
|
|
7,356
|
|
|
|
—
|
|
|
|
7,356
|
Total operating
expenses
|
|
|
|
|
12,140
|
|
|
|
19,528
|
|
|
|
40,443
|
|
|
|
46,585
|
Loss from
operations
|
|
|
|
|
(830)
|
|
|
|
(13,942)
|
|
|
|
(14,159)
|
|
|
|
(33,916)
|
Interest expense,
net
|
|
|
|
|
(126)
|
|
|
|
(166)
|
|
|
|
(406)
|
|
|
|
(524)
|
Total interest
expense, net
|
|
|
|
|
(126)
|
|
|
|
(166)
|
|
|
|
(406)
|
|
|
|
(524)
|
Net loss
|
|
|
|
$
|
(956)
|
|
|
$
|
(14,108)
|
|
|
$
|
(14,565)
|
|
|
$
|
(34,440)
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.59)
|
|
|
$
|
(0.60)
|
|
|
$
|
(1.45)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
24,173,248
|
|
|
|
23,832,640
|
|
|
|
24,099,438
|
|
|
|
23,738,852
|
Square Foot
Operating Metric
We price our product
and measure our product shipments in square feet.
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product shipments in
square feet
|
|
|
13,254
|
|
|
|
11,750
|
|
|
|
40,720
|
|
|
|
34,435
|
Reconciliation of Non-GAAP Financial
Measures
The following tables present a reconciliation of
the non-GAAP financial measure included in this press
release to the most directly comparable GAAP measure:
Reconciliation of Adjusted EBITDA to Net Income
(Loss)
We define Adjusted EBITDA as net income (loss) before interest
expense, taxes, depreciation, amortization, stock-based
compensation expense and other items, which occur from time to time
and which we do not believe are indicative of our core operating
performance. These other items include an impairment of
construction in process and related items during the fourth quarter
and full year 2018.
For the three and twelve months ended December 31, 2019 and
2018:
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
(In
thousands)
|
|
Net loss
|
|
$
|
(956)
|
|
|
$
|
(14,108)
|
|
|
$
|
(14,565)
|
|
|
$
|
(34,440)
|
|
Depreciation and
amortization
|
|
|
2,562
|
|
|
|
2,528
|
|
|
|
10,213
|
|
|
|
10,787
|
|
Stock-based
compensation
|
|
|
886
|
|
|
|
888
|
|
|
|
3,771
|
|
|
|
4,302
|
|
Impairment of
construction in process
|
|
|
—
|
|
|
|
7,356
|
|
|
|
—
|
|
|
|
7,356
|
|
Interest expense,
net
|
|
|
126
|
|
|
|
166
|
|
|
|
406
|
|
|
|
524
|
|
Adjusted
EBITDA
|
|
$
|
2,618
|
|
|
$
|
(3,170)
|
|
|
$
|
(175)
|
|
|
$
|
(11,471)
|
|
For the 2020 full year financial outlook:
|
|
Year
Ending
|
|
|
|
December 31,
2020
|
|
|
|
Low
|
|
|
High
|
|
|
|
(In
thousands)
|
|
Net loss
|
|
$
|
(9,700)
|
|
|
$
|
(5,700)
|
|
Depreciation and
amortization
|
|
|
10,300
|
|
|
|
10,300
|
|
Stock-based
compensation
|
|
|
4,000
|
|
|
|
4,000
|
|
Interest expense,
net
|
|
|
400
|
|
|
|
400
|
|
Adjusted
EBITDA
|
|
$
|
5,000
|
|
|
$
|
9,000
|
|
View original
content:http://www.prnewswire.com/news-releases/aspen-aerogels-inc-reports-fourth-quarter-and-fiscal-2019-financial-results-and-recent-business-developments-301008501.html
SOURCE Aspen Aerogels, Inc.