News Details

Aspen Aerogels, Inc. Reports First Quarter 2018 Financial Results and Recent Business Developments

05/03/2018

NORTHBOROUGH, Mass., May 3, 2018 /PRNewswire/ -- Aspen Aerogels, Inc. (NYSE: ASPN) ("Aspen Aerogels") today announced financial results for the first quarter of 2018, which ended March 31, 2018, and discussed business developments during the quarter.

Total revenue for the first quarter was $23.1 million compared to $23.0 million in the first quarter last year. First quarter net loss was $6.8 million compared to $9.1 million in the first quarter of 2017. Net loss per share for the first quarter was $0.29 compared to $0.39 in the first quarter last year.

Adjusted EBITDA for the first quarter was $(2.4) million compared to $(5.1) million in the first quarter of 2017. 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."

Net loss and Adjusted EBITDA included legal and related expenses associated with Aspen Aerogels' ongoing patent enforcement actions of $0.1 million for the first quarter compared to $2.7 million in the first quarter of 2017.

Recent Business Developments

"During the first quarter, we experienced broad-based growth in our core and adjacent energy markets, most notably in North America, and modest growth in subsea project work. However, total revenue was essentially flat as a result of a decline in sales in Asia resulting from the conclusion of shipments to the South Asia petrochemical project, which comprised over 8% of total revenue in the first quarter of 2017," said Don Young, President and CEO of Aspen Aerogels.

"We benefitted from solid manufacturing yields and strong operational productivity in our East Providence, Rhode Island manufacturing facility during the first quarter. In addition, we experienced a significant decline in legal and related expenses associated with our patent enforcement actions due to the successful results of our actions against two China-based companies at the International Trade Commission in February. As a result, we delivered strong year-over-year improvement in gross profit and Adjusted EBITDA during the quarter," continued Mr. Young.

"We also made solid progress during the quarter with our strategic initiatives to drive revenue growth and profitability in our energy infrastructure business and to leverage our aerogel technology platform to develop breakout opportunities in new markets. We expanded and enhanced our salesforce, created and staffed a new business development group focused on commercializing innovation, kicked-off our EP20 initiative designed to increase the capacity and profit potential of our existing manufacturing assets, and made great progress in our joint development initiative with BASF focused on the building materials market. We also received the first of two advance payments of $2.5 million expected in 2018 from BASF in support of our capacity expansion plans, our process improvement initiatives and our new business development efforts," concluded Mr. Young.

2018 Financial Outlook

Aspen Aerogels updates its 2018 full year outlook as follows:

  • Total revenue is expected to range between $106 million and $116 million, unchanged from prior guidance
  • Net loss is expected to range between $17.6 million and $20.6 million, revised from prior guidance of between $16.9 million and $20.0 million
  • Adjusted EBITDA is expected to range between $(2.0) million and $(5.0) million, unchanged from prior guidance
  • Net loss per share is expected to range between $(0.74) and $(0.87), revised from prior guidance of between $(0.71) and $(0.85)

Our 2018 outlook assumes depreciation and amortization of $10.8 million, stock-based compensation expense of $4.3 million, interest and other expense of $0.5 million, and weighted average shares outstanding of 23.6 million for the full year. In addition, our 2018 outlook reflects an expected $1.1 million to $1.3 million of costs and expenses associated with our ongoing patent enforcement efforts during the year.

A reconciliation of non-GAAP Adjusted EBITDA to net loss for this 2018 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 2018 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 Aerogels management to discuss first quarter results and business developments will be held at 5:00 pm EDT on May 3, 2018. During the call, management will respond to questions concerning, but not limited to, Aspen Aerogels' 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 Aerogels 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) conference ID "8883209" to participate in the conference call.

Following the live event, an archived version of the webcast will be available on the Aspen Aerogels website for convenient on-demand replay for at least a year.

A copy of this press release is posted in the Investors section on the Aspen Aerogels 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 Aerogels 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 Aerogels' core operating performance. In addition, management uses Adjusted EBITDA (i) for planning purposes, including the preparation of Aspen Aerogels' 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 Aerogels' 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 Aerogels' 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 Aerogels' 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 Aerogels' GAAP financial results and should only be used as a supplement to, not as a substitute for, Aspen Aerogels' financial results presented in accordance with GAAP. In this press release, Aspen Aerogels has provided a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. Management strongly encourages investors to review Aspen Aerogels' financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.

About Aspen Aerogels, Inc.

Aspen Aerogels is an aerogel technology company that designs, develops and manufactures innovative, high-performance aerogel insulation used primarily in the energy infrastructure and building materials markets where thermal energy efficiency is at a premium and Aspen's products offer unique value. Headquartered in Northborough, Mass., Aspen Aerogels manufactures its Cryogel®, Pyrogel® and Spaceloft® products at its East Providence, R.I. facility.

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 Aerogels' 2018 Financial Outlook. These statements are not historical facts but rather are based on Aspen Aerogels' current expectations, estimates and projections regarding Aspen Aerogels' business, operations and other factors relating thereto, including with respect to the 2018 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 Aerogels' expectations about revenue, expenses, Adjusted EBITDA, GAAP EPS, cash balances and related variations or trends; beliefs about the general strength or health of Aspen Aerogels' business; beliefs about current or future trends in the energy, energy infrastructure, core, adjacent, North American,  subsea, South Asian or other markets and the impact of these trends on Aspen Aerogels' business; beliefs about the conclusion of the South Asian petrochemical project and its impact on Aspen Aerogels' business; beliefs about volume, timing or trends of subsea projects and their impact on Aspen Aerogels' business; beliefs about Aspen Aerogels' strategic initiatives and implementation; beliefs about Aspen Aerogels' strategic partnership with BASF, including the potential for the joint development agreement to create new product and market opportunities; beliefs about the receipt of advance payments from BASF; beliefs about the potential to develop new market opportunities from Aspen Aerogel's technology platform; beliefs about Aspen Aerogels' investment in new initiatives and personnel; beliefs about the potential of new aerogel products, technologies and businesses; beliefs about Aspen Aerogels' intellectual property strategy and its implementation; expectations about the cost, timing or likelihood of success of Aspen Aerogels' patent enforcement actions and defense of challenges to the validity of its patents; beliefs about Aspen Aerogels' ability to continue to fund patent enforcement or defense actions; beliefs about the productivity or efficiency of Aspen Aerogels' manufacturing operations; beliefs about the cost, likelihood of success and benefits of Aspen Aerogels' project to expand the capacity and profit potential of the East Providence manufacturing facility; beliefs about the Aspen Aerogel's ability to fund its capacity expansion plans including in the East Providence manufacturing facility; 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 and market opportunities; any sustained downturn in the energy industry or energy prices; any sustained downturn in the core, adjacent, North American, subsea, South Asian 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 maintain or expand our operations; any failure of demand for Aspen Aerogels' products; any failure to achieve expected average selling prices for Aspen Aerogels' products; the failure to generate sufficient operating cash flow or to obtain significant additional capital to pursue Aspen Aerogels' strategy; the failure of our products to become widely adopted; the competition Aspen Aerogels faces in its business; any failure to enforce any of Aspen Aerogels' patents; any failure to protect or expand Aspen Aerogels' 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 Aerogels' new business, capacity expansion, technology, patent enforcement, or patent defense strategy; any failure of Aspen Aerogels' 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 Aerogels 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; shortages of raw materials, utilities or any other manufacturing consumable; 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, 2017 and filed with the Securities and Exchange Commission ("SEC") on March 1, 2018, 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 Aerogels does not intend to update this information unless required by law.

 


ASPEN AEROGELS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)













March 31,



December 31,




2018



2017


Assets









Current assets:









Cash and cash equivalents


$

9,615



$

10,694


Accounts receivable, net



20,134




26,764


Inventories



9,974




8,915


Prepaid expenses and other current assets



1,088




1,289


Total current assets



40,811




47,662


Property, plant and equipment, net



73,292




76,067


Other assets



83




86


Total assets


$

114,186



$

123,815


Liabilities and Stockholders' Equity









Current liabilities:









Accounts payable


$

7,032



$

10,653


Accrued expenses



3,939




5,862


Deferred revenue



1,019




1,304


Revolving line of credit



3,750




3,750


Total current liabilities



15,740




21,569


Other long-term liabilities



1,263




1,303


Prepayment liability



1,962





Deferred revenue long-term



488






Total liabilities



19,453




22,872


Stockholders' equity:









Total stockholders' equity



94,733




100,943


Total liabilities and stockholders' equity


$

114,186



$

123,815


 

 


ASPEN AEROGELS, INC.

Consolidated Statements of Operations

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





Three Months Ended




March 31,




2018



2017


Revenue:









Product


$

22,521



$

22,326


Research services



553




676


Total revenue



23,074




23,002


Cost of revenue:









Product



20,023




20,470


Research services



241




311


Gross profit



2,810




2,221


Operating expenses:









Research and development



1,605




1,576


Sales and marketing



3,499




3,110


General and administrative



4,456




6,587


Total operating expenses



9,560




11,273


Loss from operations



(6,750)




(9,052)


Other expense, net:









Interest expense, net



(92)




(26)


Total other expense, net



(92)




(26)


Net loss


$

(6,842)



$

(9,078)


Net loss per share:









Basic and diluted


$

(0.29)



$

(0.39)


Weighted-average common shares outstanding:









Basic and diluted



23,567,019




23,257,541


 

 

Square Foot Operating Metric

We price our product and measure our product shipments in square feet.




Three Months Ended




March 31,




2018



2017



(amounts in thousands)










Product shipments in square feet



7,742




8,273


 

Reconciliation of Non-GAAP Financial Measures

The following tables presents a reconciliation of the non-GAAP financial measure included in the Aspen Aerogels, Inc. press release dated May 3, 2018 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 months ended March 31, 2018 and 2017: 



Three Months Ended




March 31,




2018



2017




(In thousands)


Net loss


$

(6,842)



$

(9,078)


Depreciation and amortization



3,171




2,676


Stock-based compensation



1,136




1,244


Interest expense, net



92




26


Adjusted EBITDA


$

(2,443)



$

(5,132)


 

For the 2018 full year financial outlook:



Year ending




December 31, 2018




Low



High




(amounts in thousands)


Net loss


$

(20,600)



$

(17,600)


Depreciation and amortization



10,800




10,800


Stock-based compensation



4,300




4,300


Interest expense, net



500




500


Adjusted EBITDA


$

(5,000)



$

(2,000)


 

 

Cision View original content:http://www.prnewswire.com/news-releases/aspen-aerogels-inc-reports-first-quarter-2018-financial-results-and-recent-business-developments-300642374.html

SOURCE Aspen Aerogels, Inc.

John F. Fairbanks, Chief Financial Officer, Phone: (508) 691-1150, jfairbanks@aerogel.com

Stock Quote

NYSE ASPN Price: $ 3.17 Change: -0.28 (-8.12%) Volume: 5,938 November 20, 2018 20 minutes delay

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508.691.1111
ir@aerogel.com

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ASPEN AEROGELS, INC.
30 Forbes Road, Building B
Northborough, MA 01532 USA
Tel: 1.508.691.1111 | Fax: 1.508.691.1200