Danimer Scientific Inc (DNMR) Reports Modest Revenue Growth Amidst Challenges in Q3 2023
PHA-based product revenue increased by 58% compared to the previous year.
Net loss improved to $(40.2) million from $(94.9) million year-over-year.
Adjusted EBITDA loss narrowed to $(9.3) million from $(12.9) million in Q3 2022.
Full-year 2023 adjusted EBITDA guidance revised to a range of $(40) million to $(37) million.
On November 14, 2023, Danimer Scientific Inc (NYSE:DNMR) released its 8-K filing, detailing its financial results for the third quarter ended September 30, 2023. The company, a leader in the development and production of biodegradable materials, reported a modest increase in revenue and a significant reduction in net loss compared to the same period last year.
Financial Performance Overview
DNMR's revenue for the third quarter grew slightly to $10.9 million, up from $10.4 million in the year-ago quarter. This growth was primarily driven by a 58% increase in sales of PHA-based products, which now represent 78% of the total revenue. However, the company faced challenges, including a decrease in PLA-based resin sales due to the Ukraine conflict and a reduction in service revenue following the completion of development work for customers transitioning to commercialization.
The gross profit for the quarter was negative at $(7.7) million, compared to $(4.1) million in the third quarter of 2022. Adjusted gross profit also saw a decline to $(2.6) million from $(1.5) million in the prior year, mainly due to increased fixed production costs associated with greater capacity. DNMR's net loss improved to $(40.2) million this year, from a net loss of $(94.9) million last year, which included a non-recurring, non-cash goodwill impairment charge of $62.7 million.
Adjusted EBITDA loss for the quarter improved to $(9.3) million from $(12.9) million in the third quarter of 2022, reflecting the company's efforts in expense control measures.
Capital Structure and Outlook
As of September 30, 2023, DNMR reported a total debt balance of $379.9 million, with cash and cash equivalents and restricted cash totaling $91.9 million. The company has revised its full-year 2023 adjusted EBITDA guidance to a range of $(40) million to $(37) million due to delays in customer product launches and shipments. Capital expenditures for the full year are now expected to be between $27 million and $29 million.
Management Commentary
"We are excited to announce that new business awards associated with a large Quick Service Restaurant program for Nodax-based biodegradable cutlery have been issued to several of our converter partners," said Stephen E. Croskrey, Chairman and Chief Executive Officer of Danimer. He added, "While we are disappointed our near-term financial expectations were not met, we view this as a temporary delay and retain our conviction that we are on the right path toward filling our existing capacity and continuing to make progress on our planned footprint expansion strategy."
Conference Call and Additional Information
A webcast and conference call were held on November 14 to discuss the quarterly results and recent events. Investors and interested parties can access the replay of the webcast on the Investor Relations section of the company's website at https://ir.danimerscientific.com.
For more detailed information on Danimer Scientific Inc's financial performance, including balance sheets and cash flow statements, please refer to the full 8-K filing.
Danimer Scientific Inc remains committed to its mission of developing sustainable biopolymer solutions and is poised to finalize several product launches in 2024, despite the near-term challenges faced in the third quarter of 2023.
Explore the complete 8-K earnings release (here) from Danimer Scientific Inc for further details.
This article first appeared on GuruFocus.
