Aspen Aerogels provides business update, accelerated capital investments driven by EV thermal barrier demand.
Aspen Aerogels, Inc. (NYSE: ASPN) (“Aspen” or the “Company”), a technology leader in sustainability and electrification solutions, provided an update on recent developments with its business, as well as an update on its financial outlook for fiscal year 2022 as a result of these developments.
Recent Developments
- Increased visibility to expected order volume for 2022 from General Motors and Toyota is driving an updated outlook in thermal barrier revenues from $18.0 million to a range of $52.0 million to $62.0 million, a potential threefold increase in demand versus original expectations.
- The energy industrial demand book is also strong and accelerating; Aspen’s recent investments and productivity improvements position it to deliver 2022 revenues in this segment in the range of $128.0 million to $138.0 million.
- To prepare for anticipated continued revenue growth, Aspen is advancing progress on the construction of its second aerogel manufacturing facility in Statesboro, Georgia (“Plant II”), with over half of the site work completed and commissioning of Phase I of the facility expected in Q4 2023.
- Aspen has also leased, and is in the process of equipping, its planned high-volume thermal barrier facility in Mexico to assemble its thermal barrier products for various EV OEM customers. This facility, which is intended to enable the growth in thermal barrier volumes in the second half of 2022 and beyond, has started training personnel and assembling parts.
- Aspen has also accelerated capital expenditures to execute its growth plans through 2025. These capital expenditures include productivity improvements to its aerogel manufacturing facility in Rhode Island, Phase I of Plant II, and all related thermal barrier assembly facilities and equipment. Aspen believes that the anticipated cost of these capital projects will be in the range of $650.0 million to $750.0 million. However, further cost inflation and/or supply chain disruptions, as well as potential changes in the scope of the facilities, could lead to increases in that range. Engineering changes and other factors could also decrease the amount of capital expenditures incurred by Aspen.
Donald R. Young, President and CEO, stated:
Our updated outlook for the year reflects an acceleration in demand and penetration in the EV market, coupled with solid energy industrial growth.
“We are increasing our investment levels for the year in advance of the significant expected growth within our PyroThin® thermal barrier business. These investments are focusing on Phase 1 of Plant II; a high-volume thermal barrier assembly operation in Mexico; and enhancing the technical, commercial and operational teams that support our thermal barrier business.”
“Leveraging higher volumes, coupled with the impact of these investments, advances our path to profitability and sets the stage for reaching our revenue and profitability goals over the next several years.”
As a result of these recent developments, Aspen is today also providing the following update on its financial outlook for 2022:
2022 Financial Outlook
Aspen’s 2022 full year outlook has been updated to reflect the following.
- Total revenue is expected to range between $180.0 million and $200.0 million, as compared to the previous range of $145.0 million and $155.0 million; $34.0 million to $44.0 million of the increase in the revenue outlook is driven by additional thermal barrier volumes.
- Net loss is expected to range between $79.8 million and $86.8 million, as compared to the previous range of $66.7 million and $70.7 million, driven by increased materials costs and increased manufacturing and operating expenses necessary to support the additional thermal barrier volumes.
- Adjusted EBITDA is expected to range between $(55.0) million and $(62.0) million, as compared to the previous range of $(42.0) million and $(46.0) million driven by the increase in expected net loss.
- Net loss per share is expected to range between $2.20 and $2.40, as compared to the previous range of $1.88 and $1.99.
- Capital expenditures in 2022 are expected to range between $250.0 million and $300.0 million, as compared to the previous range of $250.0 million and $275.0 million. These expectations reflect the advancing progress of Phase I of Plant II and the acceleration of investments for high-volume thermal barrier assembly in Mexico.
The Company’s 2022 outlook assumes depreciation and amortization of $9.7 million, stock-based compensation expense of $8.2 million, interest expense of $6.8 million and weighted average shares outstanding of 36.2 million for the full year.
Aspen may incur, among other items, additional charges, realize gains or losses, incur financing costs or interest expense, or experience other events in 2022, 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.
Ricardo C. Rodriguez, Senior Vice President and CFO, added:
The higher than expected demand for thermal barriers from General Motors and Toyota is enabling us to accelerate planned transitions in our operating plan and pave our path to profitability.
“Our target gross profit margins are coming into focus as the absorption of fixed costs improves and our conversion costs decrease as a percentage of sales.” Mr. Rodriguez concluded, “In many ways our plans for 2022 now look very much like our original plans for 2023 coming into this year.”
A reconciliation of non-GAAP Adjusted EBITDA to net loss for the 2022 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.”
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 a technology leader in sustainability. The company’s aerogel technology enables its customers and partners to achieve their own objectives around the global megatrends of resource efficiency, e-mobility and clean energy.
Aspen’s PyroThin® products enable solutions to thermal runaway challenges within the electric vehicle market. The company’s carbon aerogel program seeks to increase the performance of lithium-ion battery cells to enable EV manufacturers to extend the driving range and reduce the cost of electric vehicles.
Aspen’s Spaceloft® products provide building owners with industry-leading energy efficiency and fire safety. The company’s Cryogel® and Pyrogel® products are valued by the world’s largest energy infrastructure companies.
Aspen’s strategy is to partner with world-class industry leaders to leverage its Aerogel Technology Platform™ into additional high-value markets. Headquartered in Northborough, Mass., Aspen manufactures its products at its East Providence, R.I. facilities.
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Aspen Aerogels, Inc. Provides Business Update, NORTHBOROUGH, Mass., June 6, 2022
