Li-Cycle Reports Second Quarter 2024 Operational and Financial Results, Including Record Quarterly Revenue
Highlights
-
Continued to work closely with
U.S. Department of Energy (“DOE”) on key technical, financial and legal workstreams to advance towards definitive financing documentation for a loan for gross proceeds of up to$375 million ; -
Largest customer source of revenue in 1H 2024 was a leading
U.S. -headquartered vertically integrated EV and battery manufacturer with a substantial global EV market share; -
Record quarterly revenue of
$8.4 million , representing a 133% year-over-year increase; -
Selling, general & administrative ("SGA") expenses decreased 39% year-over-year to
$15.3 million , mainly due to the Company's cost reduction initiatives; - Exploring financing and strategic options to increase near-term liquidity;
- Advanced go-forward strategy for Rochester Hub project execution plan for proposed mixed hydroxide precipitate (“MHP”) scope, and refined cost estimates with the local market; and
- Continuing to review and optimize Spoke network, including transitioning the Ontario Spoke from operational pause to closure.
“During the second quarter of 2024, we continued to work closely with the
Financing and DOE Loan Update
In addition, the Company is also exploring financing and strategic alternatives to increase near-term liquidity.
Commercial Highlights
During the first half of 2024,
Review of Q2 2024 Financial Results
The Company achieved record total revenue of
Total cost of sales decreased 4% to
SG&A expenses decreased 39% to
Other income increased to
Net loss improved to
Adjusted EBITDA1 loss improved to
The Company incurred capital expenditures of
1 |
|
Adjusted EBITDA is not a recognized measure under |
Balance Sheet Position
As of
Webcast and Conference Call Information
On
Investors may listen to the conference call live via audio-only webcast or through the following dial-in numbers:
Domestic: (800) 579-2543
International: (203) 518-9814
Participant Code: LICYQ224
Webcast: https://investors.li-cycle.com
A replay of the conference call/webcast will also be made available on the Investor Relations section of the Company’s website at https://investors.li-cycle.com.
About
Results of Operations Summary1 |
|||||||||||||||||
|
Three months ended |
Six months ended |
|||||||||||||||
$ millions, except per share data |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||||||
Financial highlights |
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
8.4 |
|
$ |
3.6 |
|
$ |
4.8 |
$ |
12.6 |
|
$ |
7.2 |
|
$ |
5.4 |
|
Cost of sales |
|
(19.4 |
) |
|
(20.2 |
) |
|
0.8 |
|
(37.3 |
) |
|
(39.3 |
) |
|
2.0 |
|
Selling, general and administrative expense |
|
(15.3 |
) |
|
(24.9 |
) |
|
9.6 |
|
(45.9 |
) |
|
(47.6 |
) |
|
1.7 |
|
Research and development |
|
(0.6 |
) |
|
(1.3 |
) |
|
0.7 |
|
(0.5 |
) |
|
(2.2 |
) |
|
1.7 |
|
Other income (expense) |
|
18.7 |
|
|
10.9 |
|
|
7.8 |
|
(73.8 |
) |
|
13.6 |
|
|
(87.4 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
(0.1 |
) |
|
0.1 |
|
Net loss |
|
(8.2 |
) |
|
(31.9 |
) |
|
23.7 |
|
(144.9 |
) |
|
(68.4 |
) |
|
(76.5 |
) |
Adjusted EBITDA1 loss |
|
(23.4 |
) |
|
(41.3 |
) |
|
17.9 |
|
(50.8 |
) |
|
(79.2 |
) |
|
28.4 |
|
Loss per common share - basic and diluted |
|
(0.36 |
) |
|
(1.45 |
) |
|
1.09 |
|
(6.44 |
) |
|
(3.08 |
) |
|
(3.37 |
) |
Net cash used in operating activities |
$ |
(37.3 |
) |
$ |
(38.7 |
) |
$ |
1.4 |
$ |
(72.0 |
) |
$ |
(63.8 |
) |
$ |
(8.2 |
) |
|
|
|
|
|
|
|
|||||||||||
As at |
|
|
Change |
||||||||||||||
Cash and cash equivalents |
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents balance2 |
$ |
57.0 |
|
$ |
70.6 |
|
$ |
(13.6 |
) |
1 |
|
Adjusted EBITDA is a non-GAAP financial measure and does not have a standardized meaning under |
2 |
|
Excludes restricted cash of |
Non-GAAP Financial Measures
Adjusted EBITDA (loss)
|
Three months ended |
Six months ended |
||||||||||
Unaudited - $ millions |
2024 |
2023 |
2024 |
2023 |
||||||||
Net loss |
$ |
(8.2 |
) |
$ |
(31.9 |
) |
$ |
(144.9 |
) |
$ |
(68.4 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
Depreciation and amortization |
|
2.6 |
|
|
2.0 |
|
|
6.8 |
|
|
3.9 |
|
Interest expense |
|
15.6 |
|
|
0.1 |
|
|
27.1 |
|
|
1.2 |
|
Interest income |
|
(0.9 |
) |
|
(4.2 |
) |
|
(1.5 |
) |
|
(9.2 |
) |
EBITDA (loss) |
$ |
9.1 |
|
$ |
(34.0 |
) |
$ |
(112.5 |
) |
$ |
(72.6 |
) |
Debt extinguishment loss |
|
— |
|
|
— |
|
|
58.9 |
|
|
— |
|
Restructuring fees1 |
|
2.2 |
|
|
— |
|
|
13.7 |
|
|
— |
|
Fair value gain on financial instruments2 |
|
(34.7 |
) |
|
(7.3 |
) |
|
(10.9 |
) |
|
(6.6 |
) |
Adjusted EBITDA (loss) |
$ |
(23.4 |
) |
$ |
(41.3 |
) |
$ |
(50.8 |
) |
$ |
(79.2 |
) |
1 |
|
Restructuring charges include: expense related to the workforce reduction approved by the Board on |
2 |
|
Fair value gain on financial instruments relates to convertible debt. |
Cautionary Notes - Forward-Looking Statements and Unaudited Results
Certain statements contained in this press release may be considered “forward-looking statements” within the meaning of the
These statements are based on various assumptions, whether or not identified in this communication, including but not limited to assumptions regarding the timing, scope and cost of Li-Cycle’s projects, including paused projects; the processing capacity and production of Li-Cycle’s facilities; Li-Cycle’s ability to source feedstock and manage supply chain risk; Li-Cycle’s ability to increase recycling capacity and efficiency; Li-Cycle’s ability to obtain financing on acceptable terms; the success of
These forward-looking statements are provided for the purpose of assisting readers in understanding certain key elements of Li-Cycle’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of Li-Cycle’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and is not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability.
Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of
Unaudited condensed consolidated interim b alance sheets |
||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||
|
|
|
||||
|
2024 |
2023 |
||||
|
|
|
||||
Assets |
|
|
||||
Current assets |
|
|
||||
Cash and cash equivalents |
$ |
57.0 |
|
$ |
70.6 |
|
Restricted cash |
|
9.6 |
|
|
9.7 |
|
Accounts receivable, net |
|
5.7 |
|
|
1.0 |
|
Other receivables |
|
1.5 |
|
|
1.9 |
|
Prepayments, deposits and other current assets |
|
21.4 |
|
|
56.2 |
|
Inventories, net |
|
9.1 |
|
|
9.6 |
|
Total current assets |
|
104.3 |
|
|
149.0 |
|
|
|
|
||||
Non-current assets |
|
|
||||
Property, plant and equipment, net |
|
697.8 |
|
|
668.8 |
|
Operating lease right-of-use assets |
|
89.9 |
|
|
56.4 |
|
Finance lease right-of-use assets |
|
— |
|
|
2.2 |
|
Other assets |
|
7.9 |
|
|
9.6 |
|
|
|
795.6 |
|
|
737.0 |
|
Total assets |
$ |
899.9 |
|
$ |
886.0 |
|
|
|
|
||||
Liabilities |
|
|
||||
Current liabilities |
|
|
||||
Accounts payable |
$ |
103.6 |
|
$ |
134.5 |
|
Accrued liabilities |
|
26.1 |
|
|
17.6 |
|
Deferred revenue |
|
0.6 |
|
|
0.2 |
|
Operating lease liabilities |
|
9.3 |
|
|
4.4 |
|
Total current liabilities |
|
139.6 |
|
|
156.7 |
|
|
|
|
||||
Non-current liabilities |
|
|
||||
Accounts payable |
|
6.3 |
|
|
— |
|
Deferred revenue |
|
5.3 |
|
|
5.3 |
|
Operating lease liabilities |
|
85.6 |
|
|
56.2 |
|
Finance lease liabilities |
|
— |
|
|
2.3 |
|
Convertible debt |
|
426.4 |
|
|
288.1 |
|
Asset retirement obligations |
|
1.0 |
|
|
1.0 |
|
|
|
524.6 |
|
|
352.9 |
|
Total liabilities |
$ |
664.2 |
|
$ |
509.6 |
|
|
|
|
||||
Equity |
|
|
||||
Common stock and additional paid-in capital
Authorized unlimited shares, Issued and outstanding - 22.5 million shares at |
|
652.5 |
|
|
648.3 |
|
Additional paid-in capital |
|
|
||||
Accumulated deficit |
|
(416.5 |
) |
|
(271.6 |
) |
Accumulated other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) |
Total equity |
|
235.7 |
|
|
376.4 |
|
Total liabilities and equity |
$ |
899.9 |
|
$ |
886.0 |
|
Unaudited condensed consolidated interim statements of operations and comprehensive loss |
||||||||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||||||||
|
||||||||||||
|
For the three
|
For the three
|
For the six
|
For the six
|
||||||||
|
|
|
|
|
||||||||
Revenue |
|
|
|
|
||||||||
Product revenue |
$ |
5.2 |
|
$ |
3.1 |
|
$ |
7.1 |
|
$ |
6.2 |
|
Recycling service revenue |
|
3.2 |
|
|
0.5 |
|
|
5.5 |
|
|
1.0 |
|
Total revenue |
|
8.4 |
|
|
3.6 |
|
|
12.6 |
|
|
7.2 |
|
|
|
|
|
|
||||||||
Cost of sales |
|
|
|
|
||||||||
Cost of sales - Product revenue |
|
(17.9 |
) |
|
(20.2 |
) |
|
(34.9 |
) |
|
(39.3 |
) |
Cost of sales - Recycling service revenue |
|
(1.5 |
) |
|
— |
|
|
(2.4 |
) |
|
— |
|
Total cost of sales |
|
(19.4 |
) |
|
(20.2 |
) |
|
(37.3 |
) |
|
(39.3 |
) |
Selling, general and administrative expense |
|
(15.3 |
) |
|
(24.9 |
) |
|
(45.9 |
) |
|
(47.6 |
) |
Research and development |
|
(0.6 |
) |
|
(1.3 |
) |
|
(0.5 |
) |
|
(2.2 |
) |
Loss from operations |
$ |
(26.9 |
) |
$ |
(42.8 |
) |
$ |
(71.1 |
) |
$ |
(81.9 |
) |
|
|
|
|
|
||||||||
Other income (expense) |
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Interest income |
|
0.9 |
|
|
4.2 |
|
|
1.5 |
|
|
9.2 |
|
Interest expense |
|
(15.6 |
) |
|
(0.1 |
) |
|
(27.1 |
) |
|
(1.2 |
) |
Foreign exchange gain (loss) |
|
(1.3 |
) |
|
(0.5 |
) |
|
(0.2 |
) |
|
(1.0 |
) |
Fair value gain on financial instruments |
|
34.7 |
|
|
7.3 |
|
|
10.9 |
|
|
6.6 |
|
Debt extinguishment loss |
|
— |
|
|
— |
|
|
(58.9 |
) |
|
— |
|
|
|
|
|
|
||||||||
|
$ |
18.7 |
|
$ |
10.9 |
|
$ |
(73.8 |
) |
$ |
13.6 |
|
|
|
|
|
|
||||||||
Net loss before taxes |
$ |
(8.2 |
) |
$ |
(31.9 |
) |
$ |
(144.9 |
) |
$ |
(68.3 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
Net loss and comprehensive loss |
$ |
(8.2 |
) |
$ |
(31.9 |
) |
$ |
(144.9 |
) |
$ |
(68.4 |
) |
|
|
|
|
|
||||||||
Net loss and comprehensive loss attributable to |
|
|
|
|
||||||||
Shareholders of |
|
(8.2 |
) |
|
(32.0 |
) |
|
(144.9 |
) |
|
(68.3 |
) |
Non-controlling interest |
|
— |
|
|
(0.1 |
) |
|
— |
|
|
(0.1 |
) |
|
|
|
|
|
||||||||
Loss per common share - basic and diluted |
$ |
(0.36 |
) |
$ |
(1.45 |
) |
$ |
(6.44 |
) |
$ |
(3.08 |
) |
Unaudited condensed consolidated interim statements of cash flows |
||||||
All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||
|
|
|
||||
|
For the six months ended |
|||||
|
2024 |
2023 |
||||
Operating activities |
|
|
||||
Net loss for the period |
$ |
(144.9 |
) |
$ |
(68.4 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
||||
Share-based compensation |
|
4.2 |
|
|
6.9 |
|
Depreciation and amortization |
|
6.8 |
|
|
3.9 |
|
Foreign exchange loss on translation |
|
— |
|
|
0.4 |
|
Fair value (gain) on financial instruments |
|
(10.9 |
) |
|
(6.6 |
) |
Bad debt expense |
|
— |
|
|
1.1 |
|
Inventory write downs to net realizable value |
|
(0.2 |
) |
|
(0.2 |
) |
Loss on write off of fixed assets |
|
0.1 |
|
|
— |
|
Interest and accretion on convertible debt |
|
27.1 |
|
|
1.2 |
|
Interest paid |
|
(0.3 |
) |
|
— |
|
Debt extinguishment loss |
|
58.9 |
|
|
— |
|
Non-cash lease expense |
|
(0.5 |
) |
|
(0.1 |
) |
|
|
(59.7 |
) |
|
(61.8 |
) |
Changes in working capital items: |
|
|
||||
Accounts receivable |
|
(4.7 |
) |
|
2.3 |
|
Other receivables |
|
0.4 |
|
|
5.0 |
|
Prepayments and deposits |
|
(2.3 |
) |
|
(12.1 |
) |
Inventories |
|
0.8 |
|
|
5.3 |
|
Deferred revenue |
|
0.4 |
|
|
5.4 |
|
Accounts payable and accrued liabilities |
|
(6.9 |
) |
|
(7.9 |
) |
Net cash used in operating activities |
$ |
(72.0 |
) |
$ |
(63.8 |
) |
|
|
|
||||
Investing activities |
|
|
||||
Purchases of property, plant, equipment, and other assets |
|
(15.4 |
) |
|
(164.9 |
) |
Net cash used in investing activities |
$ |
(15.4 |
) |
$ |
(164.9 |
) |
|
|
|
||||
Financing activities |
|
|
||||
Proceeds from convertible debt |
|
75.0 |
|
|
— |
|
Payments of transaction costs |
|
(1.3 |
) |
|
— |
|
Purchase of non-controlling interest |
|
— |
|
|
(0.4 |
) |
Net cash provided (used in) by financing activities |
$ |
73.7 |
|
$ |
(0.4 |
) |
|
|
|
||||
Net change in cash, cash equivalents and restricted cash |
|
(13.7 |
) |
|
(229.1 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
80.3 |
|
|
517.9 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
66.6 |
|
$ |
288.8 |
|
|
|
|
||||
Supplemental non-cash investing activities: |
|
|
||||
Purchases of property and equipment included in liabilities |
$ |
12.6 |
|
$ |
9.8 |
|
Supplemental information: |
|
|
||||
Bad debt recovery |
$ |
1.0 |
|
$ |
— |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808793034/en/
Investor Relations & Media
Investor Relations: investors@li-cycle.com
Media: media@li-cycle.com
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