Li-Cycle Reports Third Quarter 2024 Operational and Financial Results, Including Strong Revenue Growth and Lower Costs
Highlights
-
Closed an upsized
$475-million loan facility with theU.S. Department of Energy (“DOE”) to support development of the Company's Rochester Hub project; - Completed Rochester Hub internal technical review under the proposed mixed hydroxide precipitate (“MHP”) scope and expects annual production of up to approximately 8,250 tonnes of lithium carbonate and up to approximately 72,000 tonnes of MHP;
-
Secured 100% off-take agreement with
Glencore Ltd. for the MHP production from the Rochester Hub on market terms; -
Achieved strong year-over-year revenue growth of 79% to
$8.4 million , which is equal to the previous quarter’s record revenue; -
Lowered selling, general & administrative ("SG&A") expenses by 50% year-over-year to
$12.9 million , mainly due to the Company's cash preservation initiatives; -
Prioritizing full financing package to support construction restart at the Rochester Hub and to satisfy requirements for first advance of the
DOE loan facility; and - Working to establish a self-sufficient and financially accretive Spoke business through optimization initiatives and focus on Generation 3 Spokes.
“We are pleased to report that
“We believe the completion of the
DOE ATVM Loan Facility Finalized
The Loan Facility has a final maturity of
The BEC includes a requirement for the Company to settle commitments related to the Rochester Hub project for costs incurred but not yet paid (approximately
The Company is actively exploring additional financing and strategic alternatives for a complete funding package needed to restart the construction at the Rochester Hub (of which the Loan Facility is a key component) and for general corporate purposes. The funding package would assist in satisfying the conditions for First Advance under the Loan Facility, including funding the remaining BEC (which includes the reserve account requirements) and a minimum cash balance.
The Company has completed its internal technical review of the MHP scope for the Rochester Hub.
The Company estimates the total capital cost of the Rochester Hub project through to mechanical completion to be approximately
___________________________ | ||
1 The Loan Facility reserve accounts required for First Advance includes reserves for project construction, project ramp-up, and Spoke capital expenditures. Funding of these reserve accounts does not constitute capital expenditure on the Rochester Hub project and the requirement to fund these reserve accounts is in addition to the total capital cost of the Rochester Hub project through to mechanical completion. The majority of these reserve account funds are expected to be released to the Company on or before the completion of the Rochester Hub project. |
Spoke Optimization
Commercial Highlights
During the first nine months of 2024,
Review of Q3 2024 Financial Results
The Company achieved strong year-over-year revenue growth of 79% for total revenue of
Total cost of sales was slightly lower at
SG&A expenses decreased 50% to
Other income increased to
Net profit was
Adjusted EBITDA2 loss improved to
The Company incurred capital expenditures of
Balance Sheet Position
As of
Between
___________________________ | ||
2 Adjusted EBITDA is not a recognized measure under |
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:
International: Link to international dial-in numbers
Participant Code: 546174
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 |
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Three months ended |
Nine months ended |
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$ millions, except per share data |
|
2024 |
|
|
2023 |
|
Change |
|
2024 |
|
|
2023 |
|
Change |
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Financial highlights |
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
8.4 |
|
$ |
4.7 |
|
$ |
3.7 |
$ |
21.0 |
|
$ |
11.9 |
|
$ |
9.1 |
|
Cost of sales |
|
(20.0 |
) |
|
(20.1 |
) |
|
0.1 |
|
(57.3 |
) |
|
(59.4 |
) |
|
2.1 |
|
Selling, general and administrative expense |
|
(12.9 |
) |
|
(25.9 |
) |
|
13.0 |
|
(58.8 |
) |
|
(73.5 |
) |
|
14.7 |
|
Research and development |
|
(0.7 |
) |
|
(2.7 |
) |
|
2.0 |
|
(1.2 |
) |
|
(4.9 |
) |
|
3.7 |
|
Other income (expense) |
|
81.7 |
|
|
13.3 |
|
|
68.4 |
|
7.9 |
|
|
26.9 |
|
|
(19.0 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
(0.1 |
) |
|
0.1 |
|
Net profit (loss) |
|
56.5 |
|
|
(30.7 |
) |
|
87.2 |
|
(88.4 |
) |
|
(99.1 |
) |
|
10.7 |
|
Adjusted EBITDA1 loss |
|
(21.7 |
) |
|
(41.4 |
) |
|
19.7 |
|
(72.5 |
) |
|
(120.4 |
) |
|
47.9 |
|
Profit (loss) per common share - basic and diluted |
|
2.43 |
|
|
(1.38 |
) |
|
3.82 |
|
(3.81 |
) |
|
(4.47 |
) |
|
0.65 |
|
Net cash used in operating activities |
$ |
(20.6 |
) |
$ |
(38.7 |
) |
$ |
18.1 |
$ |
(92.5 |
) |
$ |
(89.3 |
) |
$ |
(3.2 |
) |
|
|
|
|
|
|
|
|||||||||||
As at |
|
|
Change |
||||||||||||||
Cash and cash equivalents |
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents balance2 |
$ |
32.2 |
$ |
70.6 |
$ |
(38.4) |
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 |
Nine months ended |
||||||||||
Unaudited - $ millions |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net profit (loss) |
$ |
56.5 |
|
$ |
(30.7 |
) |
$ |
(88.4 |
) |
$ |
(99.1 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
Depreciation and amortization |
|
4.4 |
|
|
2.5 |
|
|
11.2 |
|
|
6.4 |
|
Interest expense |
|
17.3 |
|
|
0.2 |
|
|
44.4 |
|
|
1.4 |
|
Interest income |
|
(0.5 |
) |
|
(2.5 |
) |
|
(2.0 |
) |
|
(11.7 |
) |
EBITDA profit (loss) |
$ |
77.7 |
|
$ |
(30.5 |
) |
$ |
(34.8 |
) |
$ |
(102.9 |
) |
Debt extinguishment loss |
|
— |
|
|
— |
|
|
58.9 |
|
|
— |
|
Restructuring fees adjustment1 |
|
(0.2 |
) |
|
— |
|
|
13.5 |
|
|
— |
|
Fair value gain on financial instruments2 |
|
(99.2 |
) |
|
(10.9 |
) |
|
(110.1 |
) |
|
(17.5 |
) |
Adjusted EBITDA (loss) |
$ |
(21.7 |
) |
$ |
(41.4 |
) |
$ |
(72.5 |
) |
$ |
(120.4 |
) |
1 |
|
Restructuring fees adjustment 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 balance sheets |
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All dollar amounts presented are expressed in millions of US dollars except share and per share amounts |
||||||
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|
|
||||
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|
2024 |
|
2023 |
||
|
|
|
||||
Assets |
|
|
||||
Current assets |
|
|
||||
Cash and cash equivalents |
$ |
32.2 |
|
$ |
70.6 |
|
Restricted cash |
|
9.9 |
|
|
9.7 |
|
Accounts receivable, net |
|
8.2 |
|
|
1.0 |
|
Other receivables |
|
1.2 |
|
|
1.9 |
|
Prepayments, deposits and other current assets |
|
21.4 |
|
|
56.2 |
|
Inventories, net |
|
9.2 |
|
|
9.6 |
|
Total current assets |
|
82.1 |
|
|
149.0 |
|
|
|
|
||||
Non-current assets |
|
|
||||
Property, plant and equipment, net |
|
693.2 |
|
|
668.8 |
|
Operating lease right-of-use assets |
|
88.5 |
|
|
56.4 |
|
Finance lease right-of-use assets |
|
— |
|
|
2.2 |
|
Other assets |
|
6.8 |
|
|
9.6 |
|
|
|
788.5 |
|
|
737.0 |
|
Total assets |
$ |
870.6 |
|
$ |
886.0 |
|
|
|
|
||||
Liabilities |
|
|
||||
Current liabilities |
|
|
||||
Accounts payable |
$ |
105.1 |
|
$ |
134.5 |
|
Accrued liabilities |
|
24.2 |
|
|
17.6 |
|
Deferred revenue |
|
— |
|
|
0.2 |
|
Operating lease liabilities |
|
6.5 |
|
|
4.4 |
|
Total current liabilities |
|
135.8 |
|
|
156.7 |
|
|
|
|
||||
Non-current liabilities |
|
|
||||
Accounts payable |
|
3.3 |
|
|
— |
|
Deferred revenue |
|
5.8 |
|
|
5.3 |
|
Operating lease liabilities |
|
86.7 |
|
|
56.2 |
|
Finance lease liabilities |
|
— |
|
|
2.3 |
|
Convertible debt |
|
342.6 |
|
|
288.1 |
|
Asset retirement obligations |
|
1.1 |
|
|
1.0 |
|
|
|
439.5 |
|
|
352.9 |
|
Total liabilities |
$ |
575.3 |
|
$ |
509.6 |
|
Commitments and contingencies (Note 14) |
|
|
||||
Going concern (Note 1) |
|
|
||||
|
|
|
||||
Equity |
|
|
||||
Common stock and additional paid-in capital
Authorized unlimited shares, Issued and outstanding - 23.2 million shares at |
|
655.6 |
|
|
648.3 |
|
Accumulated deficit |
|
(360.0 |
) |
|
(271.6 |
) |
Accumulated other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) |
Total equity |
|
295.3 |
|
|
376.4 |
|
Total liabilities and equity |
$ |
870.6 |
|
$ |
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 months ended |
For the three months ended |
For the nine months ended |
For the nine months ended |
||||||||
|
|
|
|
|
||||||||
Revenue |
|
|
|
|
||||||||
Product revenue |
$ |
4.4 |
|
$ |
3.5 |
|
$ |
11.5 |
|
$ |
9.7 |
|
Recycling service revenue |
|
4.0 |
|
|
1.2 |
|
|
9.5 |
|
|
2.2 |
|
Total revenue |
|
8.4 |
|
|
4.7 |
|
|
21.0 |
|
|
11.9 |
|
|
|
|
|
|
||||||||
Cost of sales |
|
|
|
|
||||||||
Cost of sales - Product revenue |
|
(19.4 |
) |
|
(20.1 |
) |
|
(54.3 |
) |
|
(59.4 |
) |
Cost of sales - Recycling service revenue |
|
(0.6 |
) |
|
— |
|
|
(3.0 |
) |
|
— |
|
Total cost of sales |
|
(20.0 |
) |
|
(20.1 |
) |
|
(57.3 |
) |
|
(59.4 |
) |
Selling, general and administrative expense |
|
(12.9 |
) |
|
(25.9 |
) |
|
(58.8 |
) |
|
(73.5 |
) |
Research and development |
|
(0.7 |
) |
|
(2.7 |
) |
|
(1.2 |
) |
|
(4.9 |
) |
Loss from operations |
$ |
(25.2 |
) |
$ |
(44.0 |
) |
$ |
(96.3 |
) |
$ |
(125.9 |
) |
|
|
|
|
|
||||||||
Other income (expense) |
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Interest income |
|
0.5 |
|
|
2.5 |
|
|
2.0 |
|
|
11.7 |
|
Interest expense |
|
(17.3 |
) |
|
(0.2 |
) |
|
(44.4 |
) |
|
(1.4 |
) |
Foreign exchange gain (loss) |
|
(0.7 |
) |
|
0.1 |
|
|
(0.9 |
) |
|
(0.9 |
) |
Fair value gain on financial instruments |
|
99.2 |
|
|
10.9 |
|
|
110.1 |
|
|
17.5 |
|
Debt extinguishment loss (Note 11) |
|
— |
|
|
— |
|
|
(58.9 |
) |
|
— |
|
|
$ |
81.7 |
|
$ |
13.3 |
|
$ |
7.9 |
|
$ |
26.9 |
|
|
|
|
|
|
||||||||
Net profit (loss) before taxes |
$ |
56.5 |
|
$ |
(30.7 |
) |
$ |
(88.4 |
) |
$ |
(99.0 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
Net profit (loss) and comprehensive loss |
$ |
56.5 |
|
$ |
(30.7 |
) |
$ |
(88.4 |
) |
$ |
(99.1 |
) |
|
|
|
|
|
||||||||
Net profit (loss) and comprehensive profit (loss) attributable to |
|
|
|
|
||||||||
Shareholders of |
|
56.5 |
|
|
(30.7 |
) |
|
(88.4 |
) |
|
(99.0 |
) |
Non-controlling interest |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
|
|
|
|
|
||||||||
Profit (loss) per common share - diluted |
2.15 |
(1.38 |
) |
(3.81 |
) |
(4.47 |
) | |||||
Profit (loss) per common share - basic |
2.43 |
(1.38 |
) |
(3.81 |
) |
(4.47 |
) |
|
|
|
||||
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 nine months ended |
|||||
|
|
2024 |
|
2023 |
||
Operating activities |
|
|
||||
Net loss for the period |
$ |
(88.4 |
) |
$ |
(99.1 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
||||
Share-based compensation |
|
6.1 |
|
|
10.7 |
|
Depreciation and amortization |
|
11.2 |
|
|
6.4 |
|
Foreign exchange loss on translation |
|
0.5 |
|
|
(0.3 |
) |
Fair value (gain) on financial instruments |
|
(110.1 |
) |
|
(17.5 |
) |
Bad debt expense |
|
— |
|
|
1.0 |
|
Adjustment to net realizable value |
|
(1.8 |
) |
|
4.4 |
|
Loss on write off of fixed assets |
|
0.1 |
|
|
— |
|
Interest and accretion on convertible debt |
|
44.4 |
|
|
1.4 |
|
Interest paid |
|
(0.8 |
) |
|
— |
|
Debt extinguishment loss |
|
58.9 |
|
|
— |
|
Non-cash lease expense |
|
(1.8 |
) |
|
0.1 |
|
|
|
(81.7 |
) |
|
(92.9 |
) |
Changes in working capital items: |
|
|
||||
Accounts receivable |
|
(7.2 |
) |
|
0.9 |
|
Other receivables |
|
0.7 |
|
|
6.4 |
|
Prepayments and deposits |
|
(1.2 |
) |
|
(15.3 |
) |
Inventories |
|
2.2 |
|
|
(0.8 |
) |
Deferred revenue |
|
0.3 |
|
|
5.3 |
|
Accounts payable and accrued liabilities |
|
(5.6 |
) |
|
7.1 |
|
Net cash used in operating activities |
$ |
(92.5 |
) |
$ |
(89.3 |
) |
|
|
|
||||
Investing activities |
|
|
||||
Purchases of property, plant, equipment, and other assets |
|
(20.6 |
) |
|
(290.8 |
) |
Net cash used in investing activities |
$ |
(20.6 |
) |
$ |
(290.8 |
) |
|
|
|
||||
Financing activities |
|
|
||||
Proceeds from convertible debt |
|
75.0 |
|
|
— |
|
Issuance of common shares |
|
1.2 |
|
|
— |
|
Payments of transaction costs |
|
(1.3 |
) |
|
— |
|
Purchase of non-controlling interest |
|
— |
|
|
(0.4 |
) |
Net cash provided (used in) by financing activities |
$ |
74.9 |
|
$ |
(0.4 |
) |
|
|
|
||||
Net change in cash, cash equivalents and restricted cash |
|
(38.2 |
) |
|
(380.5 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
66.6 |
|
|
517.9 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
42.1 |
|
$ |
137.4 |
|
|
|
|
||||
Supplemental non-cash investing activities: |
|
|
||||
Purchases of property and equipment included in liabilities |
$ |
23.9 |
|
$ |
16.1 |
|
Supplemental information: |
|
|
||||
Bad debt recovery |
$ |
1.0 |
|
$ |
— |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107816898/en/
Investor Relations & Media
Investor Relations: investors@li-cycle.com
Media: media@li-cycle.com
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