First Quarter 2024 Earnings Presentation May 7, 2024
This presentation (“Presentation”) is for informational purposes only. This Presentation shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful. No representations or warranties, express or implied, are given in, or in respect of, this Presentation. To the fullest extent permitted by law in no circumstances will Danimer Scientific, Inc. (the “Company”) or any of its subsidiaries, stockholders, affiliates, representatives, directors, officers, employees, advisers, or agents be responsible or liable for a direct, indirect, or consequential loss or loss of profit arising from the use of this Presentation, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. Industry and market data used in this Presentation have been obtained from third-party industry publications and sources as well as from research reports prepared for other purposes. The Company has not independently verified the data obtained from these sources and cannot assure you of the data’s accuracy or completeness. This data is subject to change. In addition, this Presentation does not purport to be all-inclusive or to contain all of the information that may be required to make a full analysis of investigations as an investor may deem necessary. FORWARD-LOOKING STATEMENTS Please note that in this Presentation, 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 2024 capital expenditures and Adjusted EBITDA. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. The Company cautions 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 Presentation include, but are not limited to, the overall level of consumer demand on its 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 its 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 its 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, its information systems; the ability of its 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; its ability to properly maintain, protect, repair or upgrade its information technology systems or information security systems, or problems with its 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; its 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 Presentation are based upon information available to the Company as of the date of this Presentation and speak only as of the date hereof. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this presentation. USE OF PROJECTIONS This Presentation contains projected financial information with respect to the Company. Such projected financial information constitutes forward-looking information and is for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such financial information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties. See “Forward-Looking Statements” above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this Presentation, and the inclusion of such information in this Presentation should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. FINANCIAL INFORMATION; NON-GAAP FINANCIAL MEASURES Some of the financial information and data contained in this Presentation, such as Adjusted EBITDA, and Adjusted Gross Profit has not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. A reconciliation of these non-GAAP financial measures to the closest GAAP measure is included in the Appendix to the Presentation. You should review the Company’s audited financial statements prepared in accordance with GAAP, which are included in its Annual Report on Form 10-K filed with the SEC. Forward-looking non-GAAP financial measures are presented without reconciliations to GAAP measures because the GAAP financial measures are not accessible on a forward-looking basis, and reconciling information is not available without unreasonable effort due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results. TRADEMARKS This Presentation contained trademarks, service marks, trade names, and copyrights of, the Company, and other companies, which are the property of their respective owners. The information contained herein is as of May 7, 2024 and does not reflect any subsequent events. Forward-Looking Statements and Non-GAAP Financial Results 2
FAST FACTS Founded in 2004 (went public in 2020) 480 patents & pending patent applications 15 partnerships with major brands and distributors 238 Teammates 2018 and 2020 recipient of PLASTICS Innovation in Bioplastics Award Locations in Georgia, Kentucky and New York Manufacturer and developer of PHA biopolymers and PHA-based biodegradable resins marketed under the NODAX® brand. Provider of responsible and sustainable alternatives to petroleum-based plastics across many end-use applications. 3
Lead Evaluation Pre-Commercial Launch Material Selection Trials R&D / Product Development Certification Work Market Testing Regulatory Initial Sample New leads are screened by sales first, then a joint committee with R&D & sales if necessary; many do not make it past this stage 1 – 5 Years 6 Months – 2 Years 3 - 6 Months Sales Cycle 1 – 5 Years 4
Material Selection ~ 89 customers currently in “Material Selection” zone. Material selection zone is an iterative process, not necessarily a linear process. Sales Cycle (continued) Material Selection Trials R&D / Product Development Certification Work Market Testing Regulatory Initial Sample 5
Provides unique opportunity to deleverage our balance sheet and reset our capital structure. 1 for 3 Pro-Rata Dividend – Record Date May 13, 2024 1 warrant for each 3 shares outstanding Expect approximately 46.7 million warrants would be issued to eligible participants $5.00 Exercise Price – Cash or Face Value of Convertible Notes Upon issuance, 200 warrants may be exercised at $5.00 each with $1,000 of cash OR Starting July 26, 2024, 200 warrants may be exercised at $5.00 each with one $1,000 par convertible note Our Convertible Notes Last Traded At 10.85% Of Par on April 11, 2024 Inclusion of one-half Bonus Share – Effective $3.33 share price If half of Dividend Warrants are exercised by Noteholders - ~$117M of debt would be retired for 35 million shares If all Dividend Warrants are exercised by Noteholders - ~$234M of debt would be retired for 70 million shares Dividend Warrant transaction is dependent upon shareholder approval of increase in the number of authorized shares of common stock at July 9th Annual Meeting For additional information, please see the FAQs available at our website: https://ir.danimerscientific.com Proposed Pro-Rata Dividend Warrant Transaction 6 No Offer or Solicitation This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A Form 8-A registration statement and prospectus supplement describing the terms of the Warrants will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Holders of the Company’s Common Stock should read the prospectus supplement carefully, including the Risk Factors section included and incorporated by reference therein. This communication contains a general summary of the Warrants. Please read the warrant agreement when it becomes available as it will contain important information about the terms of the Warrants.
Q1 2024 Financial Summary Q1’24 sales overall decreased compared to Q1’23 driven by higher PHA sales of $3.2M, which did not fully offset lower PLA sales of ($4.3M) where were lower due to the impact of the Ukraine conflict. Increased adjusted gross loss primarily impacted by lower sales as compared to prior year first quarter. Lower total R&D and SG&A spending reflects successful, comprehensive cost control initiatives. Q1 2024 Comments Financial Summary 7
Adjusted EBITDA guidance towards the lower end of previously announced range of $(22) million to $(32) million. Capital expenditures guidance range of $8 million to $10 million. Year-end liquidity, which comprises our unrestricted cash and projected availability under the revolver will be in the range of $25 million to $30 million. Guidance reflects anticipated timing of revenues associated with customer product launches. 8 Fiscal 2024 Guidance Summary PHA-Based Resin Sales PLA Profit Contribution Total Gross Margin SG&A & R&D As % of Sales 2024E Adj EBITDA of ($32) – ($22) Million PHA Gross Margin Near-Term Path to Profitability Change vs 2023A
Appendix
Adjusted EBITDA Reconciliation 10
Adjusted Gross Profit Reconciliation 11
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