Aspen Aerogels, Inc.

Good morning. Thank you for attending the Aspen Aerogels Incorporated Q1 2022 earnings call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Laura Gerrant, Aspen's Vice President, Investor Relations and Corporate Communications. Thank you. You may proceed, Ms. Gerrant.

Thank you, Emily. Good morning, and thank you for joining us for the Aspen Aerogels Fiscal Year 2022 First Quarter Financial Results Conference Call. With us today are Don Young, President and CEO, Ricardo Rodriguez, Chief Financial Officer, and Keith Schilling, Senior Vice President, Technology. There are a few housekeeping items that I'd like to address before turning the call over to Don. The press release announcing Aspen's financial results and business developments. as well as a reconciliation of management's use of non-GAAP financial measures compared to the most applicable U.S. generally accepted accounting principles, or GAAP measures, is available on the Investors section of Aspen's website, www.arogel.com. Included in the press release is a summary statement of operations, a summary balance sheet, and a summary of key financial and operating statistics for the 2022 first quarter ended March 31, 2022. In addition, I'd like to highlight that we have uploaded to our website a slide deck that will accompany our conversation today. You can find the deck at the investor section of our website. An archive of today's webcast will be on our site for approximately one year. Please note that our discussion today will include forward-looking statements, including any statement regarding outlook, expectations, beliefs, projections, estimates, targets, prospects, business plans, and any other statement that is not a historical fact. These forward-looking statements are subject to risks and uncertainties. Aspen Aerogel's actual results may differ materially from those expressed in these forward-looking statements. A list of factors that could affect the company's actual results can be found in Aspen's press release issued yesterday, page one of the presentation, and are discussed in more detail on the reports Aspen files with the SEC, particularly in the company's most recent annual report on Form 10-K. The company's press release issued yesterday and filings with the SEC can also be found in the investor section of Aspen's website. Forward-looking statements made today represent the company's views as of today, April 28, 2022. Aspen Aerogels disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. During this call, we will refer to non-GAAP financial measures, including adjusted EBITDA, These financial measures are not prepared in accordance with GAAP. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a discussion of why we present these non-GAAP financial measures are included in yesterday's press release. And one final note, during the Q&A session, in the interest of time, We ask that you limit your questions to two questions at a time. If you have additional questions beyond the initial two, please get back into the queue and we will get to all questions. I'll now turn the call over to Don. Don?

Thank you, Laura. Good morning, everyone. Thank you for joining us for our Q1 2022 earnings call. I will kick things off with a progress report on recent business developments. Ricardo will discuss business results and outlook, and Keith will cover our work at Aspen Battery Materials. We will conclude with a Q&A session. Starting on slide three, I'm highly encouraged by the progress we are making towards achieving our goals. Our teams throughout the company are operating at a high level of performance. These outstanding teams are being strengthened as we continue to recruit talented people with deep experience. On the heels of a solid 2021, Aspen is off to a strong start in 2022. Total first quarter revenue was up 37% year over year and 22% sequentially, reflecting continued penetration in the EV market and an advancing recovery in the energy industrial market. With this commercial momentum, and, of course, our existing awarded programs with GM and Toyota, we are confident that we will meet or exceed our 2022 revenue guidance of $145 million to $155 million, and we believe that we are in a strong position to meet our $240 million revenue target in 2023. I'll talk more about that shortly. During the quarter, we were honored to receive the Overdrive Award as part of GM's 30th Annual Supplier of the Year ceremony. We won the award for launch excellence, which recognized our role in GM's thermal propagation strategy for its Ultium battery platform. The recognition is indicative of the depth of the technical and commercial collaboration between Aspen and GM. We are excited to see GM's unwavering commitment to battery performance and safety in its Ultium battery platform and are equally excited to be part of GM's fast-paced transition to electrification. Turning to slide four, let's talk further about our growth targets and what is driving our momentum and conviction. our growth targets to double annual revenue from 2021 to 2023 and to triple annual revenue from 2023 to 2025 to approximately $720 million to be stage one of our long-range plan. The strong outlook for the energy industrial business is fueled by pent-up maintenance demand following the pandemic, high energy prices, and strong activity levels in LNG projects. The thermal barrier business is coming at us faster than we had initially anticipated. Pirated and thermal barrier revenue of $7.6 million in Q1 alone exceeded our revenue level for full year 2021. This strong outlook for power-thin thermal barriers is supported by awarded programs that we currently assess at approximately $1 billion to be fulfilled in Stage 1 of our long-range plan through 2025, and an additional approximately $2 billion to be fulfilled in Stage 2 beginning in 2026. We estimate that the awarded programs from GM and Toyota, to whom we have been delivering production parts for two quarters, represents 100% of the 2023 Pyro Thin Thermal Barrier revenue target and 60% of the 2025 target. Like other Tier 1 suppliers, we define the term awarded programs as estimated gross revenues from the volume forecast of customers taking into account our negotiated program pricing. In addition to our work with GM and Toyota, we are working closely with other automotive OEMs and are striving to convert additional quotes into awarded programs with our unique thermal barrier products. During Stage 1, we are making upfront investments in people, optimized processes, automation, and capacity that not only enable the doubling and then tripling of revenue, but also the transition to positive cash flow and to the monetization of the investments throughout Stage 2. These investments burden margins in the short term, but we believe they set us up structurally so that in 2025, at the targeted revenue level of $720 million, we are positioned to deliver gross margins approaching 35% and EBITDA margins approaching 25%. These margin levels are similar to those of other advanced engineering components delivered to the automotive industry for critical functions that enable electrification, such as high voltage connectors, advanced power electronics, and silicon carbide components. With our proprietary technology and scale, we are positioning ourselves to be a valued supplier to a growing list of EV producers. I'd also like to provide a brief update on Plant 2. On March 31st, we celebrated the groundbreaking ceremony for our second aerogel manufacturing facility in Statesboro, Bullitt County, Georgia. With long lead time items purchased starting in Q4 2021, the first phase of Plant 2 is on a projected timeline for completion in late 2023. The first phase of Plant 2 targets $650 million of annual revenue capacity and will bring our total annual revenue capacity to approximately $900 million. As we approach full capacity utilization at this level, we project our EBITDA will be approximately $225 million per year. Upon the completion of the second phase of Plant 2, we expect to have overall targeted annual revenue capacity of $1.6 billion across both plants and the capability to generate approximately $550 million of gross profit and approximately $400 million of EBITDA. With the auto industry on track to invest a half a trillion dollars in the next five years to make the transition to electric vehicles, the speed and size of our potential ramp is increasing rapidly. In addition to our EV and energy industrial businesses, We continue to invest in the strategy to leverage our aerogel technology platform into other high-value markets with sustainability themes. We have an extremely talented group of people laser-focused on this part of our business, and we expect these investments will continue to validate the richness of our aerogel technology platform and create significant value. We believe our carbon aerogel initiative within Acid Battery Materials is next in line to commercialized products. I would like to turn the call over to Keith Shelley to comment more fully on ABMs. Keith?