MP Materials Reports Third Quarter 2023 Results
Commenced shipments and ramping production of NdPr oxide
Announces “Upstream 60K” strategy targeting ~50% expansion of REO output at Mountain Pass
Stage I REO sales and production volumes of 9,177 and 10,766 metric tons, respectively
Revenue of $52.5M and net loss of $4.3M
Adjusted EBITDA of $15.6M
Diluted loss per share of $0.02 and Adjusted Diluted EPS of $0.04
LAS VEGAS–(BUSINESS WIRE)–$MP #rareearth–MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”), today announced financial results for the three months ended September 30, 2023.
“In the third quarter, we produced separated NdPr on U.S. soil, repatriating a critical national security capability. This is a tremendous milestone for the company and American supply chain independence writ large,” said James Litinsky, Founder, Chairman and CEO of MP Materials. “Our financial results reflect solid operational performance against a weak pricing backdrop. In addition, we are excited to announce “Upstream 60K” where we will target a 50% increase in REO production within four years with modest incremental investment. In addition, we have begun trial production of NdPr metal and continue to make steady progress in our magnetics business, both technically and commercially.”
|
Third Quarter 2023 Financial and Operational Highlights |
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|
|
For the three months |
|
2023 vs. 2022 |
|||||||||||
|
(unaudited) |
2023 |
|
2022 |
|
Amount Change |
|
% Change |
|||||||
|
Financial Measures: |
(in thousands, except per share data) |
|
|
|||||||||||
|
Revenue(1) |
$ |
52,516 |
|
|
$ |
124,445 |
|
$ |
(71,929 |
) |
|
(58 |
)% |
|
|
Net income (loss) |
$ |
(4,276 |
) |
|
$ |
63,177 |
|
|
$ |
(67,453 |
) |
|
N/M |
|
|
Adjusted EBITDA(2) |
$ |
15,551 |
|
|
$ |
91,372 |
|
|
$ |
(75,821 |
) |
|
(83 |
)% |
|
Adjusted Net Income(2) |
$ |
7,026 |
|
|
$ |
68,119 |
|
|
$ |
(61,093 |
) |
|
(90 |
)% |
|
Diluted earnings (loss) per share |
$ |
(0.02 |
) |
|
$ |
0.33 |
|
|
$ |
(0.35 |
) |
|
N/M |
|
|
Adjusted Diluted EPS(2) |
$ |
0.04 |
|
|
$ |
0.36 |
|
|
$ |
(0.32 |
) |
|
(89 |
)% |
|
|
|
|
|
|
|
|
|
|||||||
|
Key Performance Indicators (“KPIs”)(3): |
|
|
|
|
|
|
|
|||||||
|
Rare earth concentrate |
(in whole units or dollars) |
|
|
|||||||||||
|
REO Production Volume (MTs) |
|
10,766 |
|
|
|
10,886 |
|
|
|
(120 |
) |
|
(1 |
)% |
|
REO Sales Volume (MTs) |
|
9,177 |
|
|
|
10,676 |
|
|
|
(1,499 |
) |
|
(14 |
)% |
|
Realized Price per REO MT |
$ |
5,718 |
|
|
$ |
11,636 |
|
|
$ |
(5,918 |
) |
|
(51 |
)% |
|
Production Cost per REO MT(2) |
$ |
2,020 |
|
|
$ |
1,653 |
|
|
$ |
367 |
|
|
22 |
% |
|
Separated NdPr products |
|
|
|
|
|
|
|
|||||||
|
NdPr Production Volume (MTs) |
|
50 |
|
|
|
N/A |
|
|
|
N/A |
|
|
N/A |
|
|
NdPr Sales Volume (MTs) |
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
|
N/A |
|
|
|
N/M = Not meaningful. |
|
|
|
N/A = Not applicable as there was neither NdPr production nor sales volume in these periods. |
|
|
(1) |
The vast majority of the Company’s revenue pertains to sales of its rare earth concentrate product. |
|
|
(2) |
See “Use of Non-GAAP Financial Measures” below for the definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Production Costs, which is used in the calculation of Production Cost per REO MT. See tables below for reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. |
|
|
(3) |
During the third quarter of 2023, upon production of separated products, management identified two new metrics as KPIs of the Company’s business. See “Key Performance Indicators” below for definitions and further information. |
Revenue decreased 58% year-over-year, driven by a 51% decrease in the realized price of rare earth oxide (“REO”) in concentrate as well as a 14% decrease in sales volumes. The change in realized price reflects a significantly softer pricing environment for rare earth products as compared to the prior year period. The decrease in REO sales volume was due to the start-up of separated rare earth (Stage II) production, as a sizeable portion of the REO produced, which could otherwise have been sold as rare earth concentrate, was used to charge the Stage II circuits, establish separations work-in-process inventory, or produce packaged and finished separated rare earth products. REO production volumes were relatively unchanged year-over-year.
Adjusted EBITDA decreased 83% year-over-year, driven by lower per-unit profitability, and higher personnel and other general and administrative costs, as well as advanced projects and development costs. The per-unit profitability decrease was driven primarily by the decline in realized prices discussed above, as well as higher production costs, partially offset by lower shipping costs. Production cost of $2,020 per MT of REO increased 22% year-over-year, mainly due to higher payroll costs, primarily as a result of increased headcount as we expand our workforce and ready our facilities to support Stage II production, and to a lesser extent, higher material and supply costs.
Adjusted Net Income decreased by 90% year-over-year to $7.0 million, mainly due to the lower Adjusted EBITDA as well as higher depreciation expense resulting from an increase in capital assets placed into service over the last year. These declines were partially offset by increased interest and investment income earned on an increase in short-term investments as well as lower income tax expense primarily associated with the lower pre-tax income.
Net income decreased $67.5 million year-over-year to a net loss of $4.3 million, primarily due to the factors driving the lower Adjusted Net Income discussed above, as well as costs incurred to support growth initiatives, start-up costs, and costs associated with the removal of legacy facilities at Mountain Pass. These impacts were partially offset by lower stock-based compensation expense compared to the prior year period, mainly due to the timing of grants and the accelerated method of recognizing expense for virtually all of our stock awards.
Diluted earnings per share (“EPS”) decreased $0.35 year-over-year to a diluted loss per share of $0.02, in line with the change in net income discussed above. Adjusted Diluted EPS decreased $0.32 to $0.04 in line with the decrease in Adjusted Net Income discussed above.
|
MP MATERIALS CORP. AND SUBSIDIARIES |
|||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
|
|
|
|
||||
|
(in thousands, except share and per share data, unaudited) |
September 30, |
|
December 31, |
||||
|
Assets |
|
|
|
||||
|
Current assets |
|
|
|
||||
|
Cash and cash equivalents |
$ |
547,668 |
|
|
$ |
136,627 |
|
|
Short-term investments |
|
536,994 |
|
|
|
1,045,718 |
|
|
Total cash, cash equivalents and short-term investments |
|
1,084,662 |
|
|
|
1,182,345 |
|
|
Accounts receivable |
|
13,180 |
|
|
|
32,856 |
|
|
Inventories |
|
77,179 |
|
|
|
57,554 |
|
|
Income taxes receivable |
|
4,128 |
|
|
|
2,201 |
|
|
Prepaid expenses and other current assets |
|
9,162 |
|
|
|
18,872 |
|
|
Total current assets |
|
1,188,311 |
|
|
|
1,293,828 |
|
|
Non-current assets |
|
|
|
||||
|
Property, plant and equipment, net |
|
1,097,727 |
|
|
|
935,743 |
|
|
Operating lease right-of-use assets |
|
10,346 |
|
|
|
99 |
|
|
Inventories |
|
12,589 |
|
|
|
5,744 |
|
|
Intangible assets, net |
|
9,179 |
|
|
|
89 |
|
|
Other non-current assets |
|
4,070 |
|
|
|
2,284 |
|
|
Total non-current assets |
|
1,133,911 |
|
|
|
943,959 |
|
|
Total assets |
$ |
2,322,222 |
|
|
$ |
2,237,787 |
|
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Current liabilities |
|
|
|
||||
|
Accounts payable, construction payables and accrued liabilities |
$ |
92,096 |
|
|
$ |
72,265 |
|
|
Income taxes payable |
|
— |
|
|
|
21,163 |
|
|
Operating lease liabilities |
|
728 |
|
|
|
84 |
|
|
Other current liabilities |
|
4,188 |
|
|
|
3,969 |
|
|
Total current liabilities |
|
97,012 |
|
|
|
97,481 |
|
|
Non-current liabilities |
|
|
|
||||
|
Asset retirement obligations |
|
5,462 |
|
|
|
5,295 |
|
|
Environmental obligations |
|
16,554 |
|
|
|
16,580 |
|
|
Long-term debt, net |
|
681,094 |
|
|
|
678,444 |
|
|
Operating lease liabilities |
|
7,014 |
|
|
|
15 |
|
|
Deferred income taxes |
|
135,435 |
|
|
|
122,353 |
|
|
Other non-current liabilities |
|
3,578 |
|
|
|
4,985 |
|
|
Total non-current liabilities |
|
849,137 |
|
|
|
827,672 |
|
|
Total liabilities |
|
946,149 |
|
|
|
925,153 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
||||
|
Preferred stock ($0.0001 par value, 50,000,000 shares authorized, none issued and outstanding in either period) |
|
— |
|
|
|
— |
|
|
Common stock ($0.0001 par value, 450,000,000 shares authorized, 177,802,600 and 177,706,608 shares issued and outstanding, as of September 30, 2023, and December 31, 2022, respectively) |
|
17 |
|
|
|
18 |
|
|
Additional paid-in capital |
|
974,103 |
|
|
|
951,008 |
|
|
Retained earnings |
|
401,985 |
|
|
|
361,419 |
|
|
Accumulated other comprehensive income (loss) |
|
(32 |
) |
|
|
189 |
|
|
Total stockholders’ equity |
|
1,376,073 |
|
|
|
1,312,634 |
|
|
Total liabilities and stockholders’ equity |
$ |
2,322,222 |
|
|
$ |
2,237,787 |
|
|
MP MATERIALS CORP. AND SUBSIDIARIES |
|||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the nine months |
||||||||||||
|
(in thousands, except share and per share data, unaudited) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Revenue: |
|
|
|
|
|
|
|
||||||||
|
Rare earth concentrate |
$ |
52,472 |
|
|
$ |
124,231 |
|
|
$ |
212,139 |
|
|
$ |
425,169 |
|
|
Other rare earth products |
|
44 |
|
|
|
214 |
|
|
|
101 |
|
|
|
9,096 |
|
|
Total revenue |
|
52,516 |
|
|
|
124,445 |
|
|
|
212,240 |
|
|
|
434,265 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating costs and expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of sales (excluding depreciation, depletion and amortization) |
|
22,217 |
|
|
|
22,417 |
|
|
|
69,137 |
|
|
|
67,682 |
|
|
Selling, general and administrative |
|
19,561 |
|
|
|
17,722 |
|
|
|
57,829 |
|
|
|
56,150 |
|
|
Advanced projects, start-up, development and other |
|
10,209 |
|
|
|
2,625 |
|
|
|
25,711 |
|
|
|
6,212 |
|
|
Depreciation, depletion and amortization |
|
16,751 |
|
|
|
2,096 |
|
|
|
37,076 |
|
|
|
12,763 |
|
|
Accretion of asset retirement and environmental obligations |
|
227 |
|
|
|
418 |
|
|
|
681 |
|
|
|
1,255 |
|
|
Loss on disposals of long-lived assets, net |
|
1,087 |
|
|
|
— |
|
|
|
5,897 |
|
|
|
258 |
|
|
Total operating costs and expenses |
|
70,052 |
|
|
|
45,278 |
|
|
|
196,331 |
|
|
|
144,320 |
|
|
Operating income (loss) |
|
(17,536 |
) |
|
|
79,167 |
|
|
|
15,909 |
|
|
|
289,945 |
|
|
Interest expense, net |
|
(1,396 |
) |
|
|
(1,224 |
) |
|
|
(4,147 |
) |
|
|
(4,455 |
) |
|
Other income, net |
|
14,456 |
|
|
|
6,168 |
|
|
|
41,970 |
|
|
|
8,574 |
|
|
Income (loss) before income taxes |
|
(4,476 |
) |
|
|
84,111 |
|
|
|
53,732 |
|
|
|
294,064 |
|
|
Income tax benefit (expense) |
|
200 |
|
|
|
(20,934 |
) |
|
|
(13,166 |
) |
|
|
(72,067 |
) |
|
Net income (loss) |
$ |
(4,276 |
) |
|
$ |
63,177 |
|
|
$ |
40,566 |
|
|
$ |
221,997 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
(0.02 |
) |
|
$ |
0.36 |
|
|
$ |
0.23 |
|
|
$ |
1.26 |
|
|
Diluted |
$ |
(0.02 |
) |
|
$ |
0.33 |
|
|
$ |
0.22 |
|
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
177,231,717 |
|
|
|
176,543,624 |
|
|
|
177,034,068 |
|
|
|
176,476,276 |
|
|
Diluted |
|
177,231,717 |
|
|
|
193,409,857 |
|
|
|
193,632,662 |
|
|
|
193,438,939 |
|
|
MP MATERIALS CORP. AND SUBSIDIARIES |
|||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
|
|
|
|
||||
|
|
For the nine months |
||||||
|
(in thousands, unaudited) |
2023 |
|
2022 |
||||
|
Operating activities: |
|
|
|||||
|
Net income |
$ |
40,566 |
|
|
$ |
221,997 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation, depletion and amortization |
|
37,076 |
|
|
|
12,763 |
|
|
Accretion of asset retirement and environmental obligations |
|
681 |
|
|
|
1,255 |
|
|
Accretion of discount on short-term investments |
|
(17,334 |
) |
|
|
(3,921 |
) |
|
Loss on disposals of long-lived assets, net |
|
410 |
|
|
|
258 |
|
|
Stock-based compensation expense |
|
19,041 |
|
|
|
25,019 |
|
|
Accretion of debt discount and amortization of debt issuance costs |
|
2,650 |
|
|
|
3,153 |
|
|
Revenue recognized in exchange for debt principal reduction |
|
— |
|
|
|
(13,566 |
) |
|
Deferred income taxes |
|
13,156 |
|
|
|
62,561 |
|
|
Decrease (increase) in operating assets: |
|
|
|
||||
|
Accounts receivable |
|
19,676 |
|
|
|
34,991 |
|
|
Inventories |
|
(25,498 |
) |
|
|
(22,386 |
) |
|
Income taxes receivable |
|
(1,927 |
) |
|
|
(3,857 |
) |
|
Prepaid expenses, other current and non-current assets |
|
490 |
|
|
|
1,339 |
|
|
Increase (decrease) in operating liabilities: |
|
|
|
||||
|
Accounts payable and accrued liabilities |
|
8,601 |
|
|
|
(1,271 |
) |
|
Income taxes payable |
|
(21,163 |
) |
|
|
(3,463 |
) |
|
Other current and non-current liabilities |
|
55 |
|
|
|
(453 |
) |
|
Net cash provided by operating activities |
|
76,480 |
|
|
|
314,419 |
|
|
Investing activities: |
|
|
|
||||
|
Additions to property, plant and equipment |
|
(188,927 |
) |
|
|
(214,332 |
) |
|
Purchases of short-term investments |
|
(705,241 |
) |
|
|
(1,358,390 |
) |
|
Proceeds from sales of short-term investments |
|
461,042 |
|
|
|
313,865 |
|
|
Proceeds from maturities of short-term investments |
|
769,907 |
|
|
|
212,000 |
|
|
Proceeds from government awards used for construction |
|
1,050 |
|
|
|
5,130 |
|
|
Net cash provided by (used in) investing activities |
|
337,831 |
|
|
|
(1,041,727 |
) |
|
Financing activities: |
|
|
|
||||
|
Principal payments on debt obligations and finance leases |
|
(2,101 |
) |
|
|
(5,139 |
) |
|
Tax withholding on stock-based awards |
|
(6,476 |
) |
|
|
(14,296 |
) |
|
Net cash used in financing activities |
|
(8,577 |
) |
|
|
(19,435 |
) |
|
Net change in cash, cash equivalents and restricted cash |
|
405,734 |
|
|
|
(746,743 |
) |
|
Cash, cash equivalents and restricted cash beginning balance |
|
143,509 |
|
|
|
1,181,157 |
|
|
Cash, cash equivalents and restricted cash ending balance |
$ |
549,243 |
|
|
$ |
434,414 |
|
|
|
|
|
|
||||
|
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
547,668 |
|
|
$ |
427,969 |
|
|
Restricted cash, current |
|
1,228 |
|
|
|
5,915 |
|
|
Restricted cash, non-current |
|
347 |
|
|
|
530 |
|
|
Total cash, cash equivalents and restricted cash |
$ |
549,243 |
|
|
$ |
434,414 |
|
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the nine months |
||||||||||||
|
(in thousands, unaudited) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Net income (loss) |
$ |
(4,276 |
) |
|
$ |
63,177 |
|
|
$ |
40,566 |
|
|
$ |
221,997 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Depreciation, depletion and amortization |
|
16,751 |
|
|
|
2,096 |
|
|
|
37,076 |
|
|
|
12,763 |
|
|
Interest expense, net |
|
1,396 |
|
|
|
1,224 |
|
|
|
4,147 |
|
|
|
4,455 |
|
|
Income tax expense (benefit) |
|
(200 |
) |
|
|
20,934 |
|
|
|
13,166 |
|
|
|
72,067 |
|
|
Stock-based compensation expense(1) |
|
6,298 |
|
|
|
7,806 |
|
|
|
19,041 |
|
|
|
25,019 |
|
|
Start-up costs(2) |
|
7,082 |
|
|
|
1,383 |
|
|
|
15,474 |
|
|
|
3,703 |
|
|
Transaction-related and other non-recurring costs(3) |
|
1,642 |
|
|
|
502 |
|
|
|
7,124 |
|
|
|
638 |
|
|
Accretion of asset retirement and environmental obligations |
|
227 |
|
|
|
418 |
|
|
|
681 |
|
|
|
1,255 |
|
|
Loss on disposals of long-lived assets, net(4) |
|
1,087 |
|
|
|
— |
|
|
|
5,897 |
|
|
|
258 |
|
|
Other income, net(5) |
|
(14,456 |
) |
|
|
(6,168 |
) |
|
|
(41,970 |
) |
|
|
(8,574 |
) |
|
Adjusted EBITDA |
$ |
15,551 |
|
|
$ |
91,372 |
|
|
$ |
101,202 |
|
|
$ |
333,581 |
|
|
(1) |
Principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. |
|
|
(2) |
Relates to certain costs included in “Advanced projects, start-up, development and other” within our unaudited Condensed Consolidated Statements of Operations that do not qualify for capitalization incurred in connection with the initial commissioning and starting up of our separations capability at Mountain Pass and our metal alloy and magnet-making capabilities at Fort Worth prior to the achievement of commercial production. These costs include payroll of employees directly involved in such commissioning activities, training costs, costs of testing and commissioning the new circuits and processes, and other related costs. Given the nature and scale of the related costs and activities, management does not view these as normal, recurring operating expenses, but rather as non-recurring investments to develop such capabilities. Therefore, we believe it is useful and necessary for investors to understand our core operating performance in current and future periods by excluding the impact of these start-up costs. |
|
|
(3) |
The majority of the amounts are included in “Advanced projects, start-up, development and other” within our unaudited Condensed Consolidated Statements of Operations, and pertains to legal, professional services, and other costs associated with non-recurring transactions. |
|
|
(4) |
Amounts for the three and nine months ended September 30, 2023, principally relate to demolition costs incurred in connection with demolishing and removing certain out-of-use older facilities and infrastructure from the Mountain Pass site to accommodate future expansion in rare earth processing. |
|
|
(5) |
Principally comprised of interest and investment income. |
|
Reconciliation of GAAP Net Income (Loss) to |
|||||||||||||||
|
Non-GAAP Adjusted Net Income |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the nine months |
||||||||||||
|
(in thousands, unaudited) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Net income (loss) |
$ |
(4,276 |
) |
|
$ |
63,177 |
|
|
$ |
40,566 |
|
|
$ |
221,997 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense(1) |
|
6,298 |
|
|
|
7,806 |
|
|
|
19,041 |
|
|
|
25,019 |
|
|
Start-up costs(2) |
|
7,082 |
|
|
|
1,383 |
|
|
|
15,474 |
|
|
|
3,703 |
|
|
Transaction-related and other non-recurring costs(3) |
|
1,642 |
|
|
|
502 |
|
|
|
7,124 |
|
|
|
638 |
|
|
Loss on disposals of long-lived assets, net(4) |
|
1,087 |
|
|
|
— |
|
|
|
5,897 |
|
|
|
258 |
|
|
Other |
|
(1 |
) |
|
|
(23 |
) |
|
|
(42 |
) |
|
|
(247 |
) |
|
Tax impact of adjustments above(5) |
|
(4,806 |
) |
|
|
(2,299 |
) |
|
|
(12,684 |
) |
|
|
(7,170 |
) |
|
Release of valuation allowance(6) |
|
— |
|
|
|
(2,427 |
) |
|
|
— |
|
|
|
(2,427 |
) |
|
Adjusted Net Income |
$ |
7,026 |
|
|
$ |
68,119 |
|
|
$ |
75,376 |
|
|
$ |
241,771 |
|
|
(1) |
Principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. |
|
|
(2) |
Relates to certain costs included in “Advanced projects, start-up, development and other” within our unaudited Condensed Consolidated Statements of Operations that do not qualify for capitalization incurred in connection with the initial commissioning and starting up of our separations capability at Mountain Pass and our metal alloy and magnet-making capabilities at Fort Worth prior to the achievement of commercial production. These costs include payroll of employees directly involved in such commissioning activities, training costs, costs of testing and commissioning the new circuits and processes, and other related costs. Given the nature and scale of the related costs and activities, management does not view these as normal, recurring operating expenses, but rather as non-recurring investments to develop such capabilities. Therefore, we believe it is useful and necessary for investors to understand our core operating performance in current and future periods by excluding the impact of these start-up costs. |
|
|
(3) |
The majority of the amounts are included in “Advanced projects, start-up, development and other” within our unaudited Condensed Consolidated Statements of Operations, and pertain to legal, professional services, and other costs associated with non-recurring transactions. |
|
|
(4) |
Amounts for the three and nine months ended September 30, 2023, principally relate to demolition costs incurred in connection with demolishing and removing certain out-of-use older facilities and infrastructure from the Mountain Pass site to accommodate future expansion in rare earth processing. |
|
|
(5) |
Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, to each adjustment. The adjusted effective tax rates were 29.8%, 26.7%, 23.8% and 24.4% for the three and nine months ended September 30, 2023 and 2022, respectively. |
|
|
(6) |
Reflects the impact of a release of a portion of our valuation allowance. |
|
Reconciliation of GAAP Diluted Earnings (Loss) per Share to |
|||||||||||||||
|
Non-GAAP Adjusted Diluted EPS |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the nine months |
||||||||||||
|
(unaudited) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Diluted earnings (loss) per share |
$ |
(0.02 |
) |
|
$ |
0.33 |
|
|
$ |
0.22 |
|
|
$ |
1.16 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense |
|
0.03 |
|
|
|
0.04 |
|
|
|
0.10 |
|
|
|
0.13 |
|
|
Start-up costs |
|
0.04 |
|
|
|
0.01 |
|
|
|
0.08 |
|
|
|
0.02 |
|
|
Transaction-related and other non-recurring costs |
|
0.01 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
Loss on disposals of long-lived assets, net |
|
0.01 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
|
Tax impact of adjustments above(1) |
|
(0.03 |
) |
|
|
(0.01 |
) |
|
|
(0.07 |
) |
|
|
(0.03 |
) |
|
Release of valuation allowance |
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
Adjusted Diluted EPS |
$ |
0.04 |
|
|
$ |
0.36 |
|
|
$ |
0.40 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted weighted-average shares outstanding(2) |
|
177,231,717 |
|
|
|
193,409,857 |
|
|
|
193,632,662 |
|
|
|
193,438,939 |
|
|
Assumed conversion of restricted stock(3) |
|
582,144 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Assumed conversion of restricted stock units(3) |
|
438,803 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Adjusted diluted weighted-average shares outstanding(2)(3) |
|
178,252,664 |
|
|
|
193,409,857 |
|
|
|
193,632,662 |
|
|
|
193,438,939 |
|
|
(1) |
Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, to each adjustment. The adjusted effective tax rates were 29.8%, 26.7%, 23.8%, and 24.4% for the three and nine months ended September 30, 2023 and 2022, respectively. |
|
|
(2) |
The Convertible Notes were antidilutive for both generally accepted accounting principles in the United States (“GAAP”) purposes and for purposes of calculating Adjusted Diluted EPS for the three months ended September 30, 2023. |
|
|
(3) |
The assumed conversion of restricted stock and restricted stock units was antidilutive for GAAP purposes for the three months ended September 30, 2023. For purposes of calculating Adjusted Diluted EPS, we have added back the assumed conversion of restricted stock and restricted stock units since they would not be antidilutive when using Adjusted Net Income as the numerator in the calculation of Adjusted Diluted EPS. |
|
Reconciliation of GAAP Cost of Sales to |
|||||||||||||||
|
Non-GAAP Production Costs |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the nine months |
||||||||||||
|
(in thousands, unless otherwise stated, unaudited) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Cost of sales (excluding depreciation, depletion and amortization) |
$ |
22,217 |
|
|
$ |
22,417 |
|
|
$ |
69,137 |
|
|
$ |
67,682 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense(1) |
|
(842 |
) |
|
|
(889 |
) |
|
|
(2,759 |
) |
|
|
(2,110 |
) |
|
Shipping and freight |
|
(1,867 |
) |
|
|
(3,796 |
) |
|
|
(6,150 |
) |
|
|
(10,548 |
) |
|
Other |
|
(968 |
) |
|
|
(89 |
) |
|
|
(1,582 |
) |
|
|
(1,225 |
) |
|
Production Costs(2) |
|
18,540 |
|
|
|
17,643 |
|
|
|
58,646 |
|
|
|
53,799 |
|
|
Divided by: |
|
|
|
|
|
|
|
||||||||
|
REO Sales Volume (in MTs) |
|
9,177 |
|
|
|
10,676 |
|
|
|
29,663 |
|
|
|
32,382 |
|
|
Production Cost per REO MT (in dollars)(2) |
$ |
2,020 |
|
|
$ |
1,653 |
|
|
$ |
1,977 |
|
|
$ |
1,661 |
|
|
(1) |
Pertains only to the amount of stock-based compensation expense included in “Cost of sales” within our unaudited Condensed Consolidated Statements of Operations. |
|
|
(2) |
See “Use of Non-GAAP Financial Measures” below for definition and further information. |
Conference Call Details
MP Materials will host a conference call to discuss these results at 2:00 p.m. Pacific Time, Thursday, November 2, 2023. To access the conference call, participants should dial 1-833-470-1428 and international participants should dial 1-404-975-4839 and enter the conference access number 294962. The live audio webcast along with the press release and accompanying slide presentation, will be accessible at investors.mpmaterials.com. A recording of the webcast will also be available following the conference call.
About MP Materials
MP Materials (NYSE: MP) produces specialty materials that are vital inputs for electrification and other advanced technologies. MP’s Mountain Pass facility is America’s only scaled rare earth production source. The Company is currently expanding its manufacturing operations downstream to provide a full supply chain solution from materials to magnetics. More information is available at https://mpmaterials.com/.
Join the MP Materials community on X, YouTube, Instagram and LinkedIn.
We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investors section of our website. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
Forward-Looking Statements
This press release contains certain statements that are not historical facts and are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “will,” “target,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters.
Contacts
Investors:
[email protected]
Media:
Matt Sloustcher
[email protected]
