Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_______________________________

 

FORM 8-K

_______________________________

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 07, 2024

_______________________________

 

ASPEN AEROGELS, INC.

(Exact name of Registrant as Specified in Its Charter)

_______________________________

 

Delaware			001-36481	04-3559972
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)

30 Forbes Road Building B
Northborough, Massachusetts	01532
(Address of Principal Executive Offices)	(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: [phone]

 

(Former Name or Former Address, if Changed Since Last Report)

_______________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ASPN		The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 7, 2024, Aspen Aerogels, Inc. announced its financial results for the second quarter of 2024, which ended June 30, 2024, and also discussed business developments. A copy of the press release containing such announcement is attached hereto as Exhibit 99.1.

 

The information set forth in the press release, except for the information set forth under the heading “2024 Financial Outlook” and under the heading “About Aspen Aerogels, Inc.,” together with the forward-looking statement disclaimer at the end of the press release, is incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.

 

Item 7.01 Regulation FD Disclosure.

 

The information set forth under the heading “2024 Financial Outlook” and under the heading “About Aspen Aerogels, Inc.,” together with the forward-looking statement disclaimer at the end of the press release, is incorporated by reference into this Item 7.01 of this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press Release issued by Aspen Aerogels, Inc. on August 7, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

The press release may contain hypertext links to information on our website. The information on our website is not incorporated by reference into this Current Report on Form 8-K and does not constitute a part of this Form 8-K.

 

The information contained in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			Aspen Aerogels, Inc.
Date:	August 7, 2024	By:	/s/ Ricardo C. Rodriguez
		Name:	Ricardo C. Rodriguez
		Title:	Chief Financial Officer and Treasurer

 

 

Exhibit 99.1 

 

 

For Immediate Release

 

Aspen Aerogels, Inc. Reports Second Quarter 2024 Financial Results and Recent Business Highlights

 

Record quarterly revenues of $117.8 million, up 25% QoQ and 145% YoY

Delivered $16.8 million of quarterly net income and $28.9 million of quarterly Adjusted EBITDA

Increased 2024 revenue and profitability outlook for the second consecutive quarter

 

NORTHBOROUGH, Mass., August 7, 2024 — Aspen Aerogels, Inc. (NYSE: ASPN) (“Aspen” or the “Company”), a technology leader in sustainability and electrification solutions, today announced financial results for the second quarter of 2024, and discussed recent business developments.

 

Total revenue for the second quarter of 2024 was $117.8 million, compared to $48.2 million in the second quarter of 2023. Net income was $16.8 million, compared to a net loss of $15.4 million in the second quarter of 2023. Net income per share (diluted) was $0.21, compared to a net loss per share (diluted) of $0.22 in the second quarter of 2023.

 

Adjusted EBITDA for the second quarter of 2024 was $28.9 million, compared to $(10.8) million in the second quarter of 2023. A reconciliation of net income (loss) to Adjusted EBITDA 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 & Quarterly Performance

 

·

Company revenue of $117.8 million, up 25% quarter-over-quarter (QoQ) and 145% year-over-year (YoY)

-

Thermal Barriers: $80.8 million of revenue, up 24% QoQ and 540% YoY

-

Energy Industrial: $36.9 million of supply constrained revenue, up 27% QoQ and 4% YoY

·

Energy Industrial segment remains on path to deliver over $150 million of revenue in 2024; shipped $28.3 million of revenue from our external manufacturing facility in Q2, an increase of 94% QoQ. Carbon capture projects are beginning to present additional market opportunities.

·

Delivered gross margins of 44%, a 7-percentage point improvement QoQ and 26-percentage point improvement YoY

·

Net income of $16.8 million, an $18.7 million improvement QoQ and $32.2 million improvement YoY

·

Adjusted EBITDA of $28.9 million (25% margin), a $16.0 million or 124% improvement QoQ and $39.8 million improvement YoY

·

Operating income of $20.0 million, a $17.6 million improvement or 720% QoQ and $37.0 million improvement YoY

·

Cash generated from operations of $6.8 million in the quarter

·

Ended second quarter of 2024 with cash and equivalents of $91.4 million

 

“This quarter’s results demonstrate the significant operating leverage of our business model as we continue to utilize a higher percentage of our current capacity and effectively execute our strategy,” commented Don Young, Aspen’s President and CEO. "We saw strong revenue and profitability growth across both of our business segments. Our Thermal Barrier segment revenues continue to accelerate as our customers ramp production to capture demand. The supply for our Energy Industrial business is increasing, as we nearly doubled our revenues from our external manufacturing facility. We remain confident in our ability to capture the significant excess demand in this segment.”

 

Updated 2024 Financial Outlook

 

Aspen updated its 2024 full year outlook as follows:

 

($ in millions, except per share amounts)
Metric	Prior 2024 Outlook		Current 2024 Outlook	Δ Prior
Revenue YoY Growth	>380 59%		>390 63%	10
Net Income	>2		>7	5
Adjusted EBITDA	>55		>60	5
Earnings Per Share (Diluted)	>0.03		>0.09	0.06

 

 

 

The Company's 2024 outlook assumes depreciation and amortization of $30 million, stock-based compensation expense of $14 million, other (income) expense and income tax expense of $9 million, and diluted weighted average shares outstanding of 79.3 million for the full year.

 

Ricardo C. Rodriguez, Chief Financial Officer and Treasurer noted, “We remain ready to capture additional revenues as our automotive OEM customers win their  fair share of the market and as we increase our Energy Industrial product supply. Providing additional context to our updated outlook, we continue planning objectively around the production track record of our OEM customers, the tightening global emissions regulatory environment, and an EV market that favors recently launched models, many of which are equipped with PyroThin®. We believe that delivering results as demand presents itself, versus attempting to calculate outsized upside expectations, makes the most sense.”

 

A reconciliation of net income to Adjusted EBITDA for the 2024 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 may incur, among other items, additional charges, realize gains or losses, incur financing costs or interest expense, or experience other events in 2024, 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. See “Special Note Regarding Forward-Looking and Cautionary Statements” below.

 

ATVM Department of Energy Loan Status Update

 

Late last year, we announced that the U.S. Department of Energy Loan Programs Office invited Aspen into the formal due diligence and term sheet negotiation stage of the process. The Company continues to progress with the Department of Energy during this process. In June 2024, after a public notice period, the Department of Energy released a Final Environmental Assessment and issued a “Finding of No Significant Impact.” While the DOE's determination is not an assurance that the DOE will issue a loan, the Company remains deeply engaged with the Loan Programs Office and its advisors and continues to believe that Aspen is a strong candidate to partner with the DOE Loan Programs Office in this program.

 

Last Twelve-Month Financial Comparison

 

A comparison of key financial metrics for the trailing twelve-month periods ended June 30, 2023 and 2024:

 

($ in millions)
Metric	LTM Q2 2023	LTM Q2 2024	Delta	% Improvement
Revenue	190	357	167	88%
Gross Profit % Margin	21 11%	130 36%	109	506%
Net Income (Loss) % Margin	(71) (38%)	1 0%	72	102%
Adjusted EBITDA % Margin	(52) (28%)	44 12%	96	183%
Operating Income % Margin	(74) (39%)	9 3%	83	112%
Total CAPEX	241	111	(130)	54%

 

Conference Call and Webcast Notification

 

A conference call with Aspen management to discuss second quarter 2024 results and recent business developments will be held on Thursday, August 8, 2024 at 8:30 a.m. ET. During the call, management will respond to questions concerning, but not limited to, Aspen's financial performance, business conditions, and financial outlook. Management's discussion and responses could contain information that has not been previously disclosed.

 

Shareholders and other interested parties may call [phone] (domestic) or [phone] (international) and reference conference ID "517793" to participate in the conference call. In addition, the conference call and an accompanying slide presentation will be available live as a listen-only webcast hosted at the Investors section of Aspen's website, www.aerogel.com.

 

 

 

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 an additional financial metric that is not prepared in accordance with GAAP ("non-GAAP"). The non-GAAP financial measure included in this press release is Adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, as a measure of operating performance because the non-GAAP financial measure does 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 this non-GAAP financial measure reflects Aspen's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in its business, as it excludes 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 this non-GAAP financial measures provides 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. This non-GAAP measure may not be comparable to similarly titled measures presented by other companies.

 

The non-GAAP financial measure does 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 income (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 and electrification solutions. 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 ("EV") market. Aspen Battery Materials, the Company's carbon aerogel initiative, seeks to increase the performance of lithium-ion battery cells to enable EV manufacturers to extend the driving range and reduce the cost of EVs. 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. Aspen is headquartered in Northborough, Mass. 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 2024 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 2024 financial outlook. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook," “assumes,” “targets,” “opportunity,” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements include statements regarding, among other things, Aspen’s beliefs and expectations about capacity, revenue, revenue capacity, backlog, costs, expenses, profitability, cash flow, gross profit, gross margin, operating margin, net income (loss), Adjusted EBITDA and related increases, decreases, trends or timing, including with respect to Aspen’s beliefs and expectations about the EV market and how it may enable a path to profitability; Aspen’s target revenue capacity and gross margins; Aspen’s efforts to manage the construction of the planned second manufacturing plant in Georgia to align with our expectations of demand from EV customers, and the use of our external manufacturing facility to meet demand from Energy Industrial customers; current or future trends in the energy, energy infrastructure, chemical and refinery, LNG, sustainable building materials, EV thermal barrier, EV battery materials or other markets and the impact of these trends on Aspen’s business; the strength, effectiveness, productivity, costs, profitability or other fundamentals of Aspen’s business; beliefs about the role of Aspen’s technology and opportunities in the electric vehicle market; beliefs about Aspen’s ability to provide and deliver products and services to electric vehicle customers; beliefs about content per vehicle, revenue, costs, expenses, profitability, investments or cash flow associated with Aspen’s electric vehicle opportunities, including the EV thermal barrier business; the performance and market acceptance of Aspens’ products; and Aspen’s pending application with the DOE seeking a loan pursuant to the DOE LPO's ATVM. 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: inability to execute Aspen’s growth plan, inability to continue construction of Plant II and to do so at a cost consistent with Aspen’s estimates and aligned with Aspen’s expectations of demand from our EV customers; the right of EV thermal barrier customers to cancel contracts with Aspen at any time and without penalty; any costs, expenses, or investments incurred by Aspen in excess of projections used to develop pricing under the contracts with EV thermal barrier customers; Aspen’s inability to create customer or market opportunities for its products; any disruption or inability to achieve expected capacity levels in any of its manufacturing or assembly facilities; any failure to enforce any of Aspen’s patents; the general economic conditions and cyclical demands in the markets that Aspen serves; and the other risk factors discussed under the heading “Risk Factors” in Aspen’s Annual Report on Form 10-K for the year ended December 31, 2023 and filed with the Securities and Exchange Commission (“SEC”) on March 7, 2024, as well as any updates to those risk factors filed from time to time in Aspen’s 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. Aspen does not intend to update this information unless required by law.

 

Investor Relations & Media Contacts:

 

Neal Baranosky

Phone: [phone] x 8

[e-mail]

 

Georg Venturatos / Ralf Esper

Gateway Group

[e-mail]

Phone: [phone]

 

 

 

ASPEN AEROGELS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)

 

		June 30,				December 31,
		2024				2023
		(In thousands)
Assets
Current assets:
Cash and cash equivalents		$	91,381			$	139,723
Restricted cash			394				248
Accounts receivable, net			116,928				69,995
Inventories			53,030				39,189
Prepaid expenses and other current assets			26,804				17,176
Total current assets			288,537				266,331
Property, plant and equipment, net			437,973				417,227
Operating lease right-of-use assets			18,671				17,212
Other long-term assets			3,448				2,278
Total assets		$	748,629			$	703,048
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	57,246			$	51,094
Accrued expenses			19,684				22,811
Deferred revenue			3,095				2,316
Finance obligation for sale and leaseback transactions			1,254				—
Operating lease liabilities			2,151				1,874
Total current liabilities			83,430				78,095
Convertible note - related party			121,074				114,992
Finance obligation for sale and leaseback transactions long-term			3,224				—
Operating lease liabilities long-term			23,074				21,906
Total liabilities			230,802				214,993
Stockholders’ equity:
Total stockholders’ equity			517,827				488,055
Total liabilities and stockholders’ equity		$	748,629			$	703,048

 

 

 

 

 

ASPEN AEROGELS, INC.

Consolidated Statements of Operations

(Unaudited and in thousands, except share and per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
		(In thousands, except share and per share data)
Revenue		$	117,770			$	48,158			$	212,271			$	93,744
Cost of revenue			66,192				39,751				125,550				80,251
Gross profit			51,578				8,407				86,721				13,493
Operating expenses:
Research and development			4,565				3,964				9,054				8,063
Sales and marketing			9,521				8,127				17,824				15,840
General and administrative			17,506				13,360				34,719				25,542
Impairment of equipment under development			—				—				2,702				—
Total operating expenses			31,592				25,451				64,299				49,445
Income (loss) from operations			19,986				(17,044	)			22,422				(35,952	)
Other income (expense)
Interest expense, convertible note - related party			(3,043	)			(211	)			(6,081	)			(486	)
Interest income (expense)			741				1,832				264				4,219
Total other income (expense)			(2,302	)			1,621				(5,817	)			3,733
Income (loss) before income tax expense			17,684				(15,423	)			16,605				(32,219	)
Income tax expense			(866	)			—				(1,622	)			—
Net income (loss)		$	16,818			$	(15,423	)		$	14,983			$	(32,219	)
Net income (loss) per share:
Basic		$	0.22			$	(0.22	)		$	0.20			$	(0.47	)
Diluted		$	0.21			$	(0.22	)		$	0.19			$	(0.47	)
Weighted-average common shares outstanding:
Basic			76,336,811				69,249,281				76,049,852				69,206,249
Diluted			78,981,383				69,249,281				78,749,199				69,206,249

 

Analysis of Cash Flow

 

The following table summarizes our cash flows for the periods indicated.

 

		Three Months Ended
		March 31, 2024				June 30, 2024
		(In thousands)
Net cash provided by (used in):
Operating activities		$	(17,749	)		$	6,843
Investing activities			(25,863	)			(24,827	)
Financing activities			5,259				8,141
Net (decrease) increase in cash			(38,353	)			(9,843	)
Cash, cash equivalents and restricted cash at beginning of period			139,971				101,618
Cash, cash equivalents and restricted cash at end of period		$	101,618			$	91,775

 

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.

 

 

 

For the three and six months ended June 30, 2024 and 2023:

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
		(In thousands)
Net income (loss)		$	16,818			$	(15,423	)		$	14,983			$	(32,219	)
Depreciation and amortization			5,986				3,503				11,772				6,207
Stock-based compensation			2,971				2,710				7,677				4,977
Other expense (income)			2,302				(1,621	)			5,817				(3,733	)
Income tax expense			866				-				1,622				-
Adjusted EBITDA		$	28,943			$	(10,831	)		$	41,871			$	(24,768	)

 

For the trailing twelve months ended June 30, 2024 and 2023:

 

		Last Twelve Months
		June 30,
		2024				2023
		(In thousands)
Net income (loss)		$	1,391			$	(71,423	)
Depreciation and amortization			20,883				11,268
Stock-based compensation			13,654				10,239
Other expense (income)			6,158				(2,504	)
Income tax expense			1,622				-
Adjusted EBITDA		$	43,708			$	(52,420	)

 

For the 2024 full year financial outlook:

 

		Year Ending
		December 31, 2024
		Current				Prior
		(In thousands)
Net income		$	7,000			$	2,000
Depreciation and amortization			30,000				30,000
Stock-based compensation			14,000				14,000
Other expense, net and income tax expense			9,000				9,000
Adjusted EBITDA		$	60,000			$	55,000

 

 

 

 

Cover	Aug. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 07, 2024
Entity File Number	001-36481
Entity Registrant Name	ASPEN AEROGELS, INC.
Entity Central Index Key	0001145986
Entity Tax Identification Number	04-3559972
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	30 Forbes Road
Entity Address, Address Line Two	Building B
Entity Address, City or Town	Northborough
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01532
City Area Code	(508)
Local Phone Number	691-1111
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	ASPN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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