MP Materials Reports Second Quarter 2024 Results
NdPr production more than doubled quarter-over-quarter to 272 metric tons; expect 50% sequential growth in Q3
Signed NdPr supply agreement with a global automaker for a significant volume commitment
Awarded Department of Defense NdPr supply contract
Received initial $50 million magnetics customer prepayment
Expecting approximately $190 million in additional customer prepayments and tax credits by the end of 2025
Commissioned prototype magnet production line in Fort Worth; start of commercial metal production on track for 2024
LAS VEGAS–(BUSINESS WIRE)–$MP #rareearth–MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”), today announced financial and operational results for the three months ended June 30, 2024.
“We had a very challenging quarter, operationally and financially, with higher-than-expected upstream downtime and a continued weak pricing environment. Despite this, we more than doubled NdPr production sequentially. We also signed a substantial new NdPr supply agreement with a global automaker,” said James Litinsky, Founder, Chairman and CEO of MP Materials. “Going forward, we expect to ramp NdPr output by 50% in the third quarter, positioning us for continued reductions in our refined products cost structure through year-end.”
Litinsky continued, “While it is early, we are cautiously optimistic that the third quarter will be one of our best REO production quarters ever. Moreover, our growth projects are progressing well with Upstream 60K advancing and NdPr metal production in Fort Worth on track to begin later this year.”
Second Quarter 2024 Financial and Operational Highlights
|
|
For the three months ended |
|
2024 vs. 2023 |
||||||||||
|
(unaudited) |
|
2024 |
|
|
|
2023 |
|
Amount |
|
% Change |
|||
|
Financial Measures: |
(in thousands, except per share data) |
|
|
||||||||||
|
Revenue |
$ |
31,258 |
|
|
$ |
64,024 |
|
$ |
(32,766 |
) |
|
(51 |
)% |
|
Net income (loss) |
$ |
(34,055 |
) |
|
$ |
7,395 |
|
$ |
(41,450 |
) |
|
N/M |
|
|
Adjusted EBITDA(1) |
$ |
(27,060 |
) |
|
$ |
26,951 |
|
$ |
(54,011 |
) |
|
N/M |
|
|
Adjusted Net Income (Loss)(1) |
$ |
(28,036 |
) |
|
$ |
17,023 |
|
$ |
(45,059 |
) |
|
N/M |
|
|
Diluted EPS |
$ |
(0.21 |
) |
|
$ |
0.04 |
|
$ |
(0.25 |
) |
|
N/M |
|
|
Adjusted Diluted EPS(1) |
$ |
(0.17 |
) |
|
$ |
0.09 |
|
$ |
(0.26 |
) |
|
N/M |
|
|
|
|
|
|
|
|
|
|
||||||
|
Key Performance Indicators: |
|
|
|
|
|
|
|
||||||
|
Rare earth concentrate |
(in whole units or dollars) |
|
|
||||||||||
|
REO Production Volume (MTs) |
|
9,084 |
|
|
|
10,863 |
|
|
(1,779 |
) |
|
(16 |
)% |
|
REO Sales Volume (MTs) |
|
5,839 |
|
|
|
10,271 |
|
|
(4,432 |
) |
|
(43 |
)% |
|
Realized Price per REO MT |
$ |
4,183 |
|
|
$ |
6,231 |
|
$ |
(2,048 |
) |
|
(33 |
)% |
|
Separated NdPr products |
|
|
|
|
|
|
|
||||||
|
NdPr Production Volume (MTs) |
|
272 |
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
NdPr Sales Volume (MTs) |
|
136 |
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
NdPr Realized Price per KG |
$ |
48 |
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
N/M = Not meaningful. |
|
|
N/A = Not applicable as there was neither NdPr production nor sales volume in the three months ended June 30, 2023. |
|
(1) |
See “Use of Non-GAAP Financial Measures” below for the definitions of Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Diluted EPS. See tables below for reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. |
Revenue decreased 51% year-over-year to $31.3 million, driven by a 43% decrease in rare earth oxide (“REO”) in concentrate sales volumes and a 33% decrease in the realized price of REO, partially offset by sales of separated NdPr, which began in the fourth quarter of 2023. The decrease in REO sales volume was mainly due to lower REO production volumes and the start-up of separated rare earth (“Stage II”) production, as a significant portion of the REO produced, which could otherwise have been sold as rare earth concentrate, was used for work-in-process or to produce packaged and finished separated rare earth products. The change in realized price reflects a continued softer pricing environment for rare earth products as compared to the prior year period. REO production volumes decreased 16% year-over-year primarily due to higher unplanned downtime due to equipment damage to one of our thickeners which impacted production for approximately three weeks.
Adjusted EBITDA declined $54.0 million to $(27.1) million, driven mainly by the lower revenue as discussed above, as well as higher cost of sales and general and administrative expense. The increase in cost of sales was mostly driven by production costs related to the start of Stage II production, including an inventory reserve of $11.8 million recorded in the quarter. The reserve was largely attributable to elevated carrying costs of the initial production of separated products given the early stage of ramping the Stage II facilities to normalized production levels. In addition, cost of sales was impacted by repair and maintenance costs associated with the thickener equipment damage. Selling, general, and administrative expenses were also impacted by higher legal costs as well as the initial costs related to the implementation of a new ERP system in the quarter, some of which were non-cash.
Adjusted Net Income (Loss) decreased $45.1 million to $(28.0) 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. Also impacting the comparison was higher interest expense, mainly due to the newly issued 2030 convertible notes, as well as slightly lower interest income. These changes were partially offset by an income tax benefit due to a pre-tax loss in the current quarter compared to income tax expense due to the company generating pre-tax income in the prior-year quarter.
Net income (loss) decreased $41.5 million year-over-year to $(34.1) million, primarily due to the factors driving the lower Adjusted Net Income (Loss) discussed above, partially offset by lower demolition, start-up and transaction costs in the current quarter.
Diluted earnings per share (“EPS”) decreased $0.25 year-over-year to a diluted loss per share of $(0.21), in line with the change in net income (loss) discussed above. Adjusted Diluted EPS decreased $0.26 to $(0.17) in line with the decrease in Adjusted Net Income (Loss) discussed above. Diluted EPS and Adjusted Diluted EPS were also impacted by a lower average share count in the current quarter. Diluted share count was primarily lower due to the repurchase of 13.0 million shares in March of 2024. Adjusted Diluted share count was impacted by both the share repurchase as well as approximately 15.6 million shares associated with 2026 convertible notes included in the 2023 average share count due to their dilutive effect in that period.
|
|
|||||||
|
MP MATERIALS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
|
June 30, 2024 |
|
December 31, 2023 |
||||
|
(in thousands, except share and per share data, unaudited) |
|
||||||
|
Assets |
|
|
|
||||
|
Current assets |
|
|
|
||||
|
Cash and cash equivalents |
$ |
295,604 |
|
|
$ |
263,351 |
|
|
Short-term investments |
|
641,398 |
|
|
|
734,493 |
|
|
Total cash, cash equivalents and short-term investments |
|
937,002 |
|
|
|
997,844 |
|
|
Accounts receivable |
|
8,459 |
|
|
|
10,029 |
|
|
Inventories |
|
115,384 |
|
|
|
95,182 |
|
|
Government grant receivable |
|
19,371 |
|
|
|
19,302 |
|
|
Prepaid expenses and other current assets |
|
10,419 |
|
|
|
8,820 |
|
|
Total current assets |
|
1,090,635 |
|
|
|
1,131,177 |
|
|
Non-current assets |
|
|
|
||||
|
Property, plant and equipment, net |
|
1,217,073 |
|
|
|
1,158,054 |
|
|
Operating lease right-of-use assets |
|
9,357 |
|
|
|
10,065 |
|
|
Inventories |
|
17,102 |
|
|
|
13,350 |
|
|
Equity method investment |
|
9,339 |
|
|
|
9,673 |
|
|
Intangible assets, net |
|
8,283 |
|
|
|
8,881 |
|
|
Other non-current assets |
|
12,537 |
|
|
|
5,252 |
|
|
Total non-current assets |
|
1,273,691 |
|
|
|
1,205,275 |
|
|
Total assets |
$ |
2,364,326 |
|
|
$ |
2,336,452 |
|
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Current liabilities |
|
|
|
||||
|
Accounts and construction payable |
$ |
19,755 |
|
|
$ |
27,995 |
|
|
Accrued liabilities |
|
74,943 |
|
|
|
73,939 |
|
|
Deferred revenue |
|
50,000 |
|
|
|
— |
|
|
Other current liabilities |
|
13,380 |
|
|
|
6,616 |
|
|
Total current liabilities |
|
158,078 |
|
|
|
108,550 |
|
|
Non-current liabilities |
|
|
|
||||
|
Asset retirement obligations |
|
5,795 |
|
|
|
5,518 |
|
|
Environmental obligations |
|
16,523 |
|
|
|
16,545 |
|
|
Long-term debt, net |
|
936,610 |
|
|
|
681,980 |
|
|
Operating lease liabilities |
|
6,314 |
|
|
|
6,829 |
|
|
Deferred government grant |
|
18,762 |
|
|
|
17,433 |
|
|
Deferred income taxes |
|
107,702 |
|
|
|
130,793 |
|
|
Other non-current liabilities |
|
5,504 |
|
|
|
3,025 |
|
|
Total non-current liabilities |
|
1,097,210 |
|
|
|
862,123 |
|
|
Total liabilities |
|
1,255,288 |
|
|
|
970,673 |
|
|
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, 178,343,770 and 178,082,383 shares issued, and 165,331,382 and 178,082,383 shares outstanding, as of June 30, 2024, and December 31, 2023, respectively) |
|
18 |
|
|
|
17 |
|
|
Additional paid-in capital |
|
943,508 |
|
|
|
979,891 |
|
|
Retained earnings |
|
368,160 |
|
|
|
385,726 |
|
|
Accumulated other comprehensive income (loss) |
|
(90 |
) |
|
|
145 |
|
|
Treasury stock, at cost, 13,012,388 and 0 shares, respectively |
|
(202,558 |
) |
|
|
— |
|
|
Total stockholders’ equity |
|
1,109,038 |
|
|
|
1,365,779 |
|
|
Total liabilities and stockholders’ equity |
$ |
2,364,326 |
|
|
$ |
2,336,452 |
|
|
|
|||||||||||||||
|
MP MATERIALS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the six months |
||||||||||||
|
(in thousands, except share and per share data, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenue: |
|
|
|
|
|
|
|
||||||||
|
Rare earth concentrate |
$ |
24,426 |
|
|
$ |
64,001 |
|
|
$ |
64,502 |
|
|
$ |
159,667 |
|
|
NdPr oxide and metal |
|
6,531 |
|
|
|
— |
|
|
|
14,858 |
|
|
|
— |
|
|
Other rare earth products |
|
301 |
|
|
|
23 |
|
|
|
582 |
|
|
|
57 |
|
|
Total revenue |
|
31,258 |
|
|
|
64,024 |
|
|
|
79,942 |
|
|
|
159,724 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating costs and expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of sales (excluding depreciation, depletion and amortization) |
|
41,463 |
|
|
|
22,704 |
|
|
|
77,057 |
|
|
|
46,920 |
|
|
Selling, general and administrative |
|
21,434 |
|
|
|
18,865 |
|
|
|
42,701 |
|
|
|
38,268 |
|
|
Depreciation, depletion and amortization |
|
18,210 |
|
|
|
12,203 |
|
|
|
36,595 |
|
|
|
20,325 |
|
|
Start-up costs |
|
1,373 |
|
|
|
4,121 |
|
|
|
2,660 |
|
|
|
8,789 |
|
|
Advanced projects and development |
|
1,886 |
|
|
|
3,101 |
|
|
|
6,092 |
|
|
|
6,713 |
|
|
Other operating costs and expenses |
|
384 |
|
|
|
2,547 |
|
|
|
761 |
|
|
|
5,264 |
|
|
Total operating costs and expenses |
|
84,750 |
|
|
|
63,541 |
|
|
|
165,866 |
|
|
|
126,279 |
|
|
Operating income (loss) |
|
(53,492 |
) |
|
|
483 |
|
|
|
(85,924 |
) |
|
|
33,445 |
|
|
Interest expense, net |
|
(6,745 |
) |
|
|
(1,392 |
) |
|
|
(9,602 |
) |
|
|
(2,751 |
) |
|
Gain on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
46,265 |
|
|
|
— |
|
|
Other income, net |
|
12,084 |
|
|
|
13,821 |
|
|
|
24,741 |
|
|
|
27,514 |
|
|
Income (loss) before income taxes |
|
(48,153 |
) |
|
|
12,912 |
|
|
|
(24,520 |
) |
|
|
58,208 |
|
|
Income tax benefit (expense) |
|
14,098 |
|
|
|
(5,517 |
) |
|
|
6,954 |
|
|
|
(13,366 |
) |
|
Net income (loss) |
$ |
(34,055 |
) |
|
$ |
7,395 |
|
|
$ |
(17,566 |
) |
|
$ |
44,842 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
(0.21 |
) |
|
$ |
0.04 |
|
|
$ |
(0.10 |
) |
|
$ |
0.25 |
|
|
Diluted |
$ |
(0.21 |
) |
|
$ |
0.04 |
|
|
$ |
(0.28 |
) |
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
165,344,511 |
|
|
|
176,984,917 |
|
|
|
169,950,658 |
|
|
|
176,933,605 |
|
|
Diluted |
|
165,344,511 |
|
|
|
177,859,118 |
|
|
|
176,068,146 |
|
|
|
193,528,819 |
|
|
|
|||||||
|
MP MATERIALS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
|
|
|
|
||||
|
|
For the six months ended |
||||||
|
(in thousands, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
Operating activities: |
|
|
|||||
|
Net income (loss) |
$ |
(17,566 |
) |
|
$ |
44,842 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
||||
|
Depreciation, depletion and amortization |
|
36,595 |
|
|
|
20,325 |
|
|
Accretion of discount on short-term investments |
|
(16,317 |
) |
|
|
(13,933 |
) |
|
Gain on early extinguishment of debt |
|
(46,265 |
) |
|
|
— |
|
|
Stock-based compensation expense |
|
13,170 |
|
|
|
12,743 |
|
|
Amortization of debt issuance costs |
|
1,891 |
|
|
|
1,766 |
|
|
Lower of cost or net realizable value reserve |
|
17,753 |
|
|
|
— |
|
|
Deferred income taxes |
|
(6,954 |
) |
|
|
13,356 |
|
|
Other |
|
928 |
|
|
|
557 |
|
|
Decrease (increase) in operating assets: |
|
|
|
||||
|
Accounts receivable |
|
1,570 |
|
|
|
21,750 |
|
|
Inventories |
|
(41,541 |
) |
|
|
(11,406 |
) |
|
Government grant receivable |
|
(4,837 |
) |
|
|
— |
|
|
Prepaid expenses, other current and non-current assets |
|
(3,815 |
) |
|
|
(3,338 |
) |
|
Increase (decrease) in operating liabilities: |
|
|
|
||||
|
Accounts payable and accrued liabilities |
|
(6,862 |
) |
|
|
252 |
|
|
Income taxes payable |
|
— |
|
|
|
(21,163 |
) |
|
Deferred revenue |
|
50,000 |
|
|
|
— |
|
|
Deferred government grant |
|
2,433 |
|
|
|
— |
|
|
Other current and non-current liabilities |
|
9,533 |
|
|
|
(292 |
) |
|
Net cash provided by (used in) operating activities |
|
(10,284 |
) |
|
|
65,459 |
|
|
Investing activities: |
|
|
|
||||
|
Additions to property, plant and equipment |
|
(98,326 |
) |
|
|
(130,236 |
) |
|
Purchases of short-term investments |
|
(833,705 |
) |
|
|
(320,884 |
) |
|
Proceeds from sales of short-term investments |
|
90,695 |
|
|
|
447,327 |
|
|
Proceeds from maturities of short-term investments |
|
852,210 |
|
|
|
731,907 |
|
|
Proceeds from government awards used for construction |
|
96 |
|
|
|
— |
|
|
Net cash provided by investing activities |
|
10,970 |
|
|
|
728,114 |
|
|
Financing activities: |
|
|
|
||||
|
Proceeds from issuance of long-term debt |
|
747,500 |
|
|
|
— |
|
|
Payment of debt issuance costs |
|
(16,118 |
) |
|
|
— |
|
|
Payments to retire long-term debt |
|
(428,599 |
) |
|
|
— |
|
|
Purchase of capped call options |
|
(65,332 |
) |
|
|
— |
|
|
Repurchases of common stock |
|
(200,764 |
) |
|
|
— |
|
|
Principal payments on debt obligations and finance leases |
|
(1,197 |
) |
|
|
(1,467 |
) |
|
Tax withholding on stock-based awards |
|
(4,124 |
) |
|
|
(6,132 |
) |
|
Net cash provided by (used in) financing activities |
|
31,366 |
|
|
|
(7,599 |
) |
|
Net change in cash, cash equivalents and restricted cash |
|
32,052 |
|
|
|
785,974 |
|
|
Cash, cash equivalents and restricted cash beginning balance |
|
264,988 |
|
|
|
143,509 |
|
|
Cash, cash equivalents and restricted cash ending balance |
$ |
297,040 |
|
|
$ |
929,483 |
|
|
|
|
|
|
||||
|
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
295,604 |
|
|
$ |
927,245 |
|
|
Restricted cash, current |
|
1,087 |
|
|
|
1,888 |
|
|
Restricted cash, non-current |
|
349 |
|
|
|
350 |
|
|
Total cash, cash equivalents and restricted cash |
$ |
297,040 |
|
|
$ |
929,483 |
|
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA |
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|
|
|
|
|
|
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|
For the three months |
|
For the six months |
||||||||||||
|
(in thousands, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income (loss) |
$ |
(34,055 |
) |
|
$ |
7,395 |
|
|
$ |
(17,566 |
) |
|
$ |
44,842 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
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|
Depreciation, depletion and amortization |
|
18,210 |
|
|
|
12,203 |
|
|
|
36,595 |
|
|
|
20,325 |
|
|
Interest expense, net |
|
6,745 |
|
|
|
1,392 |
|
|
|
9,602 |
|
|
|
2,751 |
|
|
Income tax expense (benefit) |
|
(14,098 |
) |
|
|
5,517 |
|
|
|
(6,954 |
) |
|
|
13,366 |
|
|
Stock-based compensation expense(1) |
|
5,703 |
|
|
|
5,730 |
|
|
|
13,170 |
|
|
|
12,743 |
|
|
Initial start-up costs(2) |
|
1,252 |
|
|
|
3,828 |
|
|
|
2,425 |
|
|
|
8,392 |
|
|
Transaction-related and other costs(3) |
|
883 |
|
|
|
2,160 |
|
|
|
4,680 |
|
|
|
5,482 |
|
|
Accretion of asset retirement and environmental obligations(4) |
|
230 |
|
|
|
227 |
|
|
|
461 |
|
|
|
454 |
|
|
Loss on disposals of long-lived assets, net(4)(5) |
|
154 |
|
|
|
2,320 |
|
|
|
300 |
|
|
|
4,810 |
|
|
Gain on early extinguishment of debt(6) |
|
— |
|
|
|
— |
|
|
|
(46,265 |
) |
|
|
— |
|
|
Other income, net(7) |
|
(12,084 |
) |
|
|
(13,821 |
) |
|
|
(24,741 |
) |
|
|
(27,514 |
) |
|
Adjusted EBITDA |
$ |
(27,060 |
) |
|
$ |
26,951 |
|
|
$ |
(28,293 |
) |
|
$ |
85,651 |
|
|
(1) |
Principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. |
|
(2) |
Included in “Start-up costs” within our unaudited Condensed Consolidated Statements of Operations and excludes any applicable stock-based compensation, which is included in the “Stock-based compensation expense” line above. Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at Fort Worth prior to the achievement of commercial production. These costs include labor of incremental employees hired in advance to work directly on 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 initially develop our separations and magnet-making 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. To the extent additional start-up costs are incurred in the future to expand our separations and magnet-making capabilities after initial achievement of commercial production (e.g., significantly expanding production capacity at an existing facility or building a new separations or magnet manufacturing facility), such costs would not be considered an adjustment for this non-GAAP financial measure. |
|
(3) |
Principally included in “Advanced projects and development” within our unaudited Condensed Consolidated Statements of Operations, and pertains to legal, consulting, and advisory services, and other costs associated with specific transactions, including potential acquisitions, mergers, or other investments. |
|
(4) |
Included in “Other operating costs and expenses” within our unaudited Condensed Consolidated Statements of Operations. |
|
(5) |
Amounts for the three and six months ended June 30, 2023, principally related 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. |
|
(6) |
Pertains to the gain recognized on the repurchase of $480.0 million aggregate principal amount of our 0.25% unsecured senior convertible notes due 2026 (the “2026 Notes”) in March 2024. |
|
(7) |
Principally comprised of interest and investment income. |
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Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss) |
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|
|
|
|
|
|
|
|
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|
For the three months |
|
For the six months |
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|
(in thousands, unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income (loss) |
$ |
(34,055 |
) |
|
$ |
7,395 |
|
|
$ |
(17,566 |
) |
|
$ |
44,842 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense(1) |
|
5,703 |
|
|
|
5,730 |
|
|
|
13,170 |
|
|
|
12,743 |
|
|
Initial start-up costs(2) |
|
1,252 |
|
|
|
3,828 |
|
|
|
2,425 |
|
|
|
8,392 |
|
|
Transaction-related and other costs(3) |
|
883 |
|
|
|
2,160 |
|
|
|
4,680 |
|
|
|
5,482 |
|
|
Loss on disposals of long-lived assets, net(4) |
|
154 |
|
|
|
2,320 |
|
|
|
300 |
|
|
|
4,810 |
|
|
Gain on early extinguishment of debt(5) |
|
— |
|
|
|
— |
|
|
|
(46,265 |
) |
|
|
— |
|
|
Other |
|
— |
|
|
|
(21 |
) |
|
|
— |
|
|
|
(41 |
) |
|
Tax impact of adjustments above(6) |
|
(1,973 |
) |
|
|
(4,389 |
) |
|
|
7,728 |
|
|
|
(7,878 |
) |
|
Adjusted Net Income (Loss) |
$ |
(28,036 |
) |
|
$ |
17,023 |
|
|
$ |
(35,528 |
) |
|
$ |
68,350 |
|
|
(1) |
Principally included in “Selling, general and administrative” within our unaudited Condensed Consolidated Statements of Operations. |
|
(2) |
Included in “Start-up costs” within our unaudited Condensed Consolidated Statements of Operations and excludes any applicable stock-based compensation, which is included in the “Stock-based compensation expense” line above. Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at Fort Worth prior to the achievement of commercial production. These costs include labor of incremental employees hired in advance to work directly on 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 initially develop our separations and magnet-making 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. To the extent additional start-up costs are incurred in the future to expand our separations and magnet-making capabilities after initial achievement of commercial production (e.g., significantly expanding production capacity at an existing facility or building a new separations or magnet manufacturing facility), such costs would not be considered an adjustment for this non-GAAP financial measure. |
|
(3) |
Principally included in “Advanced projects and development” within our unaudited Condensed Consolidated Statements of Operations, and pertains to legal, consulting, and advisory services, and other costs associated with specific transactions, including potential acquisitions, mergers, or other investments. |
|
(4) |
Included in “Other operating costs and expenses” within our unaudited Condensed Consolidated Statements of Operations. Amounts for the three and six months ended June 30, 2023, principally related 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) |
Pertains to the gain recognized on the repurchase of $480.0 million aggregate principal amount of our 2026 Notes in March 2024. |
|
(6) |
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 24.7%, 30.1%, 31.3% and 25.1% for the three and six months ended June 30, 2024 and 2023, respectively. |
|
Reconciliation of GAAP Diluted Earnings (Loss) per Share to Non-GAAP Adjusted Diluted EPS |
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|
|
|
|
|
|
|
|
||||||||
|
|
For the three months |
|
For the six months |
||||||||||||
|
(unaudited) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Diluted earnings (loss) per share |
$ |
(0.21 |
) |
|
$ |
0.04 |
|
|
$ |
(0.28 |
) |
|
$ |
0.24 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
Initial start-up costs |
|
0.01 |
|
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
Transaction-related and other costs |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
Loss on disposals of long-lived assets, net |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
|
Gain on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
(0.27 |
) |
|
|
— |
|
|
Tax impact of adjustments above(1) |
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
0.05 |
|
|
|
(0.04 |
) |
|
2026 Notes if-converted method(2) |
|
— |
|
|
|
— |
|
|
|
0.18 |
|
|
|
— |
|
|
Adjusted Diluted EPS |
$ |
(0.17 |
) |
|
$ |
0.09 |
|
|
$ |
(0.21 |
) |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted weighted-average shares outstanding(3) |
|
165,344,511 |
|
|
|
177,859,118 |
|
|
|
176,068,146 |
|
|
|
193,528,819 |
|
|
Assumed conversion of 2026 Notes(3) |
|
— |
|
|
|
15,584,409 |
|
|
|
(6,117,488 |
) |
|
|
— |
|
|
Adjusted diluted weighted-average shares outstanding(3) |
|
165,344,511 |
|
|
|
193,443,527 |
|
|
|
169,950,658 |
|
|
|
193,528,819 |
|
| (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 24.7%, 30.1%, 31.3% and 25.1% for the three and six months ended June 30, 2024 and 2023, respectively. |
|
(2) |
For the six months ended June 30, 2024, since the 2026 Notes were dilutive for purposes of computing GAAP diluted earnings (loss) per share but antidilutive for purposes of computing Adjusted Diluted EPS, within this reconciliation, we have included this adjustment to reverse the impact of applying the if-converted method to the 2026 Notes in the computation of GAAP diluted earnings (loss) per share. |
|
(3) |
For the six months ended June 30, 2024, since the 2026 Notes were dilutive for purposes of computing GAAP diluted earnings (loss) per share but antidilutive for purposes of computing Adjusted Diluted EPS, the adjusted diluted weighted-average shares outstanding exclude the potentially dilutive securities associated with the 2026 Notes. For the three months ended June 30, 2023, the 2026 Notes were antidilutive for GAAP purposes. For purposes of calculating Adjusted Diluted EPS, we have added back the assumed conversion of the 2026 Notes since they would not be antidilutive when using Adjusted Net Income (Loss) as the numerator in the calculation of Adjusted Diluted EPS. |
Contacts
Investors:
[email protected]
Media:
Matt Sloustcher
[email protected]
