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): November 5, 2015
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) |
(I.R.S. Employer Identification No.) |
30 Forbes Road, Building B, Northborough, Massachusetts |
01532 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (508) 691-1111
Not Applicable
(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)) |
Item 2.02 | Results of Operations and Financial Condition. |
On November 5, 2015, Aspen Aerogels, Inc. (the Company) announced its financial results for the third quarter of 2015 ended September 30, 2015 and also discussed business highlights from the quarter. 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 2015 and 2016 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 2015 and 2016 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 |
Description | |
99.1 | Press Release issued by Aspen Aerogels, Inc. on November 5, 2015. |
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: November 5, 2015 | By: | /s/ John F. Fairbanks | ||||
Name: | John F. Fairbanks | |||||
Title: | Vice President, Chief Financial Officer and Treasurer |
Exhibit 99.1
Aspen Aerogels, Inc. Reports Third Quarter 2015 Financial Results
NORTHBOROUGH, Mass., November 5, 2015 Aspen Aerogels, Inc. (NYSE: ASPN) (Aspen Aerogels) today announced financial results for its third quarter of 2015, which ended September 30, 2015, and discussed business highlights from the quarter.
Total revenue for the quarter of $31.5 million reflected growth of 24% compared to the third quarter last year. On a GAAP basis, third quarter net loss was $2.5 million compared to a net loss of $2.4 million in the third quarter of 2014. GAAP net loss attributable to common stockholders per share (GAAP EPS) for the quarter was $0.11 compared to $0.10 in the third quarter of 2014.
Adjusted EBITDA for the third quarter of 2015 was $1.7 million, compared to $1.2 million in the third quarter of 2014. A reconciliation of GAAP to non-GAAP results is provided in the financial schedules that are part of this press release. An explanation of these measures is also included below under the heading Non-GAAP Financial Measures.
Third Quarter 2015 Highlights
| Record total revenue of $31.5 million |
| Product revenue increased 26% year-over-year to $30.9 million |
| Adjusted EBITDA increased 38% year-over-year to a record $1.7 million |
| Selected Statesboro, Georgia, as site for our second plant |
We achieved solid revenue and Adjusted EBITDA growth supported by output from our third production line, despite lower than planned manufacturing yields and unplanned manufacturing downtime due to a CO2 supply disruption. Strong demand in the subsea, North American and European markets offset particular weakness in the Latin American market, said Don Young, President and CEO of Aspen Aerogels.
We are pleased to announce the selection of Statesboro, Georgia, as the site for our second manufacturing facility. The forty three acre site is served by rail and provides access to the Savannah, Charleston and Jacksonville ports. The City of Statesboro and the surrounding region is served by a well-developed technical education system featuring Georgia Southern University, Ogeechee Technical College, and East Georgia State College. In addition, the region is home to a strong, available workforce and will provide Aspen with secure and low-cost utilities and good access to critical raw materials, continued Mr. Young.
2015 and 2016 Financial Outlook
Aspen Aerogels updates its 2015 full year outlook as follows:
| Total revenue is expected to range between $120 million and $122 million, up from the prior guidance range of $118 million to $120 million |
| Adjusted EBITDA is expected to range between $8.3 million and $9.0 million, a refinement of the prior guidance range of $8.2 million to $9.5 million |
| GAAP EPS is expected to range between $(0.28) and $(0.31) per share, down from the prior guidance range of $(0.26) to $(0.30) per share |
Our 2015 outlook assumes depreciation and amortization expense of $9.9 million, stock based compensation expense of $5.4 million, interest expense of $0.2 million, and weighted-average shares of common stock outstanding of approximately 23 million for the full year.
Aspen Aerogels issues the following initial 2016 full year outlook:
| Total revenue is expected to range between $117 million and $122 million |
| Adjusted EBITDA is expected to range between $11.5 million and $13.0 million |
| GAAP EPS is expected to range between $(0.06) and $(0.15) per share |
Our 2016 outlook assumes depreciation and amortization of between $9.5 million and $9.8 million, stock based compensation of between $4.7 million and $4.9 million, interest expense of $0.2 million, and weighted average shares of common stock outstanding of 23.2 million for the full year.
We expect continued solid growth in the refinery, petrochemical and LNG segments of the energy market in 2016. However, we will be challenged to offset the expected decrease in revenue due to the completion of the multi-year Asian petrochemical project, and a reduction in the number and volume of subsea projects from this years record levels. Accordingly, we are projecting revenue for 2016 at approximately the same level projected for 2015, said Don Young, President and CEO of Aspen Aerogels. We are also committed to improving manufacturing performance in 2016 to improve our profit margins, continued Mr. Young.
Aspen Aerogels may incur charges, realize gains or losses, incur financing costs or experience other events in 2015 and 2016 that could cause actual results to vary 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 the third quarter results and business highlights will be webcast at 5:00 pm ET on November 5, 2015. During the call, management will respond to questions concerning, but not limited to, Aspen Aerogels financial performance, business conditions and industry outlook. Managements 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, you may call 877-201-0168 (toll free, U.S. & Canada only) passcode 58726687, or +1 647-788-4901 (international) passcode 58726687, to listen to the live webcast.
Following the live event, an archived version of the webcast will be available on the Aspen Aerogels website for convenient on-demand replay.
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). These non-GAAP financial measures include Adjusted EBITDA. Management uses these 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 each non-GAAP financial measure used in its financial reporting to 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 measure.
About Aspen Aerogels, Inc.
Aspen Aerogels is an energy technology company that designs, develops and manufactures innovative, high-performance aerogel insulation used primarily in large-scale energy infrastructure facilities. Headquartered in Northborough, Mass., Aspen Aerogels manufactures its Cryogel®, Pyrogel® and Spaceloft® products at its East Providence, R.I. facility.
Investor Relations Contact:
Shawn Severson
Phone: (415) 489-2198
Fax: (415) 217-7721
shawn@blueshirtgroup.com
Special Note Regarding Forward-Looking and Cautionary Statements
This press release 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 2015 and 2016 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 2015 and 2016 Financial Outlook. Words such as may, will, could, would, should, anticipate, predict, potential, continue, expects, intends, plans, projects, believes, estimates, outlook, 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, margins, Adjusted EBITDA and GAAP EPS; beliefs about future projects, manufacturing performance and the general health of Aspen Aerogels business; expectations about the benefits of the proposed location for Aspen Aerogels second manufacturing plant; and accounting assumptions involved in arriving at the expectations. All such forward-looking statements are based on managements 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: any disruption in either of our three production lines or the manufacturing facility in which they are located; any failure to achieve an increase in production capacity that Aspen Aerogels growth plan requires in a timely manner; any failure of demand for Aspen Aerogels products; any failure to achieve expected average selling prices for Aspen Aerogels products; the failure to obtain significant additional capital to pursue Aspen Aerogels growth strategy; the failure of our products to become widely adopted; the competition Aspen Aerogels faces in its business; the failure to manage Aspen Aerogels growth, and the demands that growth places on Aspen Aerogels management systems and infrastructure; any failure of Aspen Aerogels products to meet applicable specifications and other technical and delivery requirements; the failure of Aspen Aerogels to achieve anticipated improvement in profit margins; the general economic conditions and cyclical demands in the markets that Aspen Aerogels serves; any sustained downturn in the energy industry and/or energy prices; 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; the maintenance and development of distribution channels; and the other risk factors discussed under the heading Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2014 and filed with the Securities and Exchange Commission (SEC) on March 13, 2015, 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)
September 30, | December 31, | |||||||
2015 | 2014 | |||||||
Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 29,964 | $ | 49,719 | ||||
Accounts receivable, net |
24,491 | 17,924 | ||||||
Inventories |
6,629 | 4,897 | ||||||
Prepaids and other current assets |
1,837 | 836 | ||||||
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Total current assets |
62,921 | 73,376 | ||||||
Property, plant, and equipment, net |
77,424 | 71,492 | ||||||
Other assets |
100 | 175 | ||||||
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Total assets |
$ | 140,445 | $ | 145,043 | ||||
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
$ | 9,594 | $ | 14,202 | ||||
Accrued expenses |
4,465 | 5,588 | ||||||
Deferred revenue |
5,601 | 292 | ||||||
Other current liabilities |
894 | 126 | ||||||
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Total current liabilities |
20,554 | 20,208 | ||||||
Other long-term liabilities |
293 | 1,119 | ||||||
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Total liabilities |
20,847 | 21,327 | ||||||
Total stockholders equity |
119,598 | 123,716 | ||||||
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Total liabilities and stockholders equity |
$ | 140,445 | $ | 145,043 | ||||
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ASPEN AEROGELS, INC.
Consolidated Statements of Operations
(Unaudited and In thousands, except share and per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: |
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Product |
$ | 30,926 | $ | 24,589 | $ | 83,891 | $ | 71,975 | ||||||||
Research services |
613 | 848 | 1,243 | 2,440 | ||||||||||||
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Total revenue |
31,539 | 25,437 | 85,134 | 74,415 | ||||||||||||
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Cost of revenue: |
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Product |
26,017 | 19,926 | 69,676 | 61,316 | ||||||||||||
Research services |
350 | 439 | 663 | 1,255 | ||||||||||||
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Gross profit |
5,172 | 5,072 | 14,795 | 11,844 | ||||||||||||
Operating expenses: |
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Research and development |
1,146 | 1,258 | 4,001 | 4,461 | ||||||||||||
Sales and marketing |
2,793 | 2,213 | 7,847 | 7,871 | ||||||||||||
General and administrative |
3,709 | 3,966 | 10,866 | 12,894 | ||||||||||||
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Total operating expenses |
7,648 | 7,437 | 22,714 | 25,226 | ||||||||||||
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Loss from operations |
(2,476 | ) | (2,365 | ) | (7,919 | ) | (13,382 | ) | ||||||||
Interest (expense) income |
(46 | ) | (47 | ) | (136 | ) | (50,225 | ) | ||||||||
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Total other (expense) income |
(46 | ) | (47 | ) | (136 | ) | (50,225 | ) | ||||||||
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Net loss |
$ | (2,522 | ) | $ | (2,412 | ) | $ | (8,055 | ) | $ | (63,607 | ) | ||||
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Net loss attributable to common stockholders: |
$ | (2,522 | ) | $ | (2,412 | ) | $ | (8,055 | ) | $ | (63,607 | ) | ||||
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Net loss attributable to common stockholders per share: |
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Basic |
$ | (0.11 | ) | $ | (0.10 | ) | $ | (0.35 | ) | $ | (7.26 | ) | ||||
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Diluted |
$ | (0.11 | ) | $ | (0.10 | ) | $ | (0.35 | ) | $ | (7.26 | ) | ||||
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Weighted-average common shares outstanding: |
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Basic and diluted |
23,060,456 | 22,997,060 | 23,017,822 | 8,762,866 | ||||||||||||
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Square Foot Operating Metric
We price our product and measure our product shipments in square feet.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(amounts in thousands) | ||||||||||||||||
Product shipments in square feet |
10,450 | 9,355 | 30,380 | 28,246 |
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of the non-GAAP financial measure included in the Aspen Aerogels, Inc. press release dated November 5, 2015 to the most directly comparable GAAP measure:
Reconciliation of Net Income (Loss) to Adjusted EBITDA
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, that we do not believe are indicative of our core operating performance. Such other items have recently included loss on disposal of assets.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(amounts in thousands) | ||||||||||||||||
Net loss |
$ | (2,522 | ) | $ | (2,412 | ) | $ | (8,055 | ) | $ | (63,607 | ) | ||||
Interest expense |
46 | 47 | 136 | 50,225 | ||||||||||||
Depreciation and amortization |
2,664 | 2,513 | 7,422 | 7,692 | ||||||||||||
Loss on disposal of assets |
| | | 15 | ||||||||||||
Stock-based compensation |
1,476 | 1,054 | 4,175 | 7,398 | ||||||||||||
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Adjusted EBITDA |
$ | 1,664 | $ | 1,202 | $ | 3,678 | $ | 1,723 | ||||||||
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