Origin Materials, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Origin Materials second quarter 2024 earnings call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. At this time, for opening remarks and introductions, I would like to turn the call over to Ryan Smith, co-founder and chief product officer. Please go ahead.

Thank you. Good afternoon, and thank you for joining us, everyone. Speaking first today is Origin's co-CEO, Rich Riley. Co-CEO and co-founder John Bissell and CFO Matt Flavin will speak next. Then we'll open the call to questions from analysts and discuss questions submitted as part of our Ask Origin campaign. Ahead of this call, Origin has issued its 2024 second quarter press release and presentation. These can be found on the investor relations section of our website at originmaterials.com. Please note that during our discussion today, we will be making forward-looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent date, And we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion on the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our quarterly report on Form 10Q filed today. During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of origins materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, which will be posted to our website. The webcast of this call will also be available on the investor relations section of our company website. With that, I will turn the call over to Rich.

Thank you, Ryan, and thank you, everyone, for joining us. I will begin with a commercialization update as our caps and closures business is making significant strides, and we are closer than ever to producing and selling products in significant volumes. Today, we are announcing our first signed customer for our PET caps and closures. We anticipate delivering multiple billions of caps to this customer, which we expect will generate over $100 million in revenue in the initial two-year term. with revenue ramping from 2025 to 2026. Therefore, to fulfill demand for this MOU as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchases, which we previously announced as having expected capacity to generate between $45 million and $65 million in annual revenue. We plan to announce future customers as appropriate, taking into consideration context such as the timing of our prospective customers' product launches involving our caps and our customers' related marketing activities. Concurrently, we are negotiating potential licensing agreements with key players. We anticipate that licensing our technology, in addition to selling the caps we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps business. This will further catalyze the revolution in recycling, circularity, and product performance that we are bringing to beverage packaging, food packaging, and home goods. We expect to be first to market with PET caps. We expect to produce them cost-competitively. We can make them with any type of PET, making the use of 100% recycled PET possible from cap to container for the first time ever. Our caps perform better than today's HDPE and polypropylene caps in ways that can improve product shelf life, and our caps are designed for circularity, with no additives used to modify the polymer. For a wide variety of containers, our technology enables the lightest cap, reducing plastic waste and improving sustainability. Demand for these products has been incredibly strong, and some have called PET-CAPS the holy grail for packaging circularity. Today, we are reaffirming that CAPS commercial production is on track to begin during the fourth quarter of this year, with revenue generation expected to start ramp up during the first quarter of 2025. This past quarter, in Switzerland and Germany, we've tested all manufacturing line subsystems at full speed, and we are pleased with the system's performance. We also passed the milestone of over 1 million caps produced to date, which puts us well on our way to launching the strategically important business. We are also reaffirming our path to profitability, requiring no additional equity capital. Our path to profitability is entirely independent of the scale-up of our biomass conversion technology and related manufacturing plant construction. We believe our cash runway, with over $130 million on hand, is sufficient to eliminate the need for an equity capital raise. given the revenues we expect to generate in the quarters and years ahead, led by our caps and closures business. Today, we are maintaining our expected 2024 net cash burn of between $55 and $65 million. We anticipate our caps and closures business will begin to generate revenue during the first quarter of next year, with significant gross profit generation beginning in 2025 and a healthy growth trajectory thereafter. As such, we continue to forecast a solid minimum cash flow on our way to sustained profitability. Apart from our caps and closures business, we continue to grow the long-term value of the Origin platform. We anticipate caps and closures will enable us to reach profitability and will be a strong business on its own terms. But the Origin technology platform is more than caps and closures, with significant upside due to the extreme flexibility and low cost of the sustainable molecules produced by our technology for converting biomass to sustainable intermediates. Growing the long-term value of the Origin platform means continuing to engage potential strategic partners around the scale-up of our biomass conversion technology, including exploring high-value application development initiatives that could generate near-term revenue. Some of these applications are capable of using materials that Origin 1 and Origin 2 are designed to produce but are not dependent on those plants for production and sale. We're managing these initiatives thoughtfully, and we'll announce them as appropriate. Looking ahead, we are positioned to vigorously grow our business, led by caps and closures, and to continue to cultivate our broader technology platform in the quarters and years ahead with a strong financial position, strong IP moat, and a highly innovative and creative team. With that, I'll turn it over to John. Thank you, Rich, and good afternoon, everyone.