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Financing in Connection with Aspen's PyroThin® Thermal Barrier Capacity Expansion
NORTHBOROUGH, Mass., Nov. 29, 2022 /PRNewswire/ -- Aspen Aerogels, Inc. (NYSE: ASPN) ("Aspen" or the "Company"), a technology leader in sustainability and electrification solutions, today announced that its wholly-owned subsidiary, Aspen Aerogels Georgia LLC, together with the Company and Aspen Aerogels Rhode Island, LLC have entered into a definitive loan agreement with General Motors Holdings LLC ("GM"), an affiliate of General Motors (NYSE: GM), for a secured lending commitment of $100 million in connection with Aspen's construction and equipping of its second aerogel manufacturing facility in Statesboro, Georgia. The $100 million of loan proceeds (the "Loan") will be available to Aspen to draw on a periodic basis from January 2023 through September 2023, subject to certain conditions precedent to funding and other financing requirements. The Loan has a maturity date of March 31, 2025 and carries no prepayment penalty.
"Aspen is pleased to add this additional financial dimension to our strong technical and commercial relationship with GM, a relationship we deeply value," noted Donald R. Young, Aspen's President and CEO. "GM's investment will be dedicated to support the construction of our new, state-of-the-art aerogel manufacturing facility in Georgia, which is designed to triple Aspen's nameplate aerogel capacity in support of our significant growth plans. For over two decades, we have leveraged our Aerogel Technology Platform™ to bring sustainability solutions into large, important markets and, we believe that Aspen's focus on enhancing electric vehicle battery performance and safety is well aligned with that strategy."
Mr. Young continued, "We are proud to be a key supplier to GM. Earlier this year, GM named Aspen an Overdrive Award winner as part of GM's 30th Annual Supplier of the Year awards. In addition, Aspen has signed GM's ESG Supplier Pledge, with a shared vision for a collaborative supply chain that endeavors to minimize environmental impact and enhance long-term sustainable electrification." Since signing GM's ESG Supplier Pledge, Aspen's sustainability performance was assessed by GM's independent third-party supplier verification platform, EcoVadis, and in November 2022, Aspen was awarded a Silver EcoVadis Medal for its overall sustainability scorecard, placing Aspen in the 87th percentile of companies assessed by EcoVadis.
About Aspen Aerogels, Inc.Aspen is a technology leader in sustainability and electrification solutions. The Company's aerogel technology enables its customers and partners to achieve their own objectives around the global megatrends of resource efficiency, e-mobility and clean energy. Aspen's PyroThin® products enable solutions to thermal runaway challenges within the electric vehicle ("EV") market. Aspen Battery Materials, the Company's carbon aerogel initiative, seeks to increase the performance of lithium-ion battery cells to enable EV manufacturers to extend the driving range and reduce the cost of EVs. Aspen's Spaceloft® products provide building owners with industry-leading energy efficiency and fire safety. The Company's Cryogel® and Pyrogel® products are valued by the world's largest energy infrastructure companies. Aspen's strategy is to partner with world-class industry leaders to leverage its Aerogel Technology Platform™ into additional high-value markets. Headquartered in Northborough, Mass., Aspen manufactures its products at its East Providence, R.I. facilities. For more information, please visit www.aerogel.com.
Special Note Regarding Forward-Looking and Cautionary StatementsThis press release and any related discussion contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements, including statements relating to Aspen's 2022 financial outlook. These statements are not historical facts but rather are based on Aspen's current expectations, estimates and projections regarding Aspen's business, operations and other factors relating thereto, including with respect to Aspen's 2022 financial outlook. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook," "assumes," "targets," "opportunity," and similar expressions are used to identify these forward-looking statements. Such forward-looking statements include statements regarding, among other things, Aspen's ability to meet the conditions precedent to funding and other financing requirements needed to draw on the $100 million loan from GM; Aspen's expectations about capacity, revenue, backlog, costs, expenses, profitability, cash flow, gross profit, gross margin, operating margin, net loss, Adjusted EBITDA, Adjusted EBITDA margin and related decreases, improvements, timing, variability or trends; beliefs about higher than expected demand from automotive original equipment manufacturer ("OEM") customers and how they may enable path to profitability, expectations about improvement in ability to absorb fixed costs and reduction of conversion costs as a percentage of sales and the same leading to target gross margins; beliefs about the general strength, weakness or health of Aspen's business; acceleration in demand; demand increase from OEM customers for the remainder of 2022, energy industrial demand book acceleration for the remainder of 2022, level of penetration in the EV market, growth in energy industrial markets; beliefs about current or future trends in the energy, energy infrastructure, chemical and refinery, liquefied natural gas ("LNG"), sustainable building materials, EV thermal barrier, EV battery materials or other markets and the impact of these trends on Aspen's business; beliefs about the strength, effectiveness, productivity, costs, profitability or other fundamentals of Aspen's business; beliefs about the role of Aspen's technology and opportunities in the EV market; beliefs about Aspen's ability to provide and deliver products and services to EV customers; beliefs about content per vehicle, revenue, costs, expenses, profitability, investments or cash flow associated with Aspen's EV opportunities, including the EV thermal barrier business; beliefs about revenue growth and profitability; beliefs about the performance of PyroThin® including its ability to mitigate the propagation of thermal runaway in EVs; beliefs about Aspen's ability to expand the market for PyroThin, to achieve design wins, to commence shipments of production parts, and to become an industry standard solution for thermal runaway management; beliefs about Aspen's thermal barrier design, prototype, quoting and assembly activities; expectations about the cost of the capital projects, including Plant II, expectations about the timing of commissioning of Phase I of Plant II in the first half of 2024; beliefs about our Mexico parts fabrication facility and its operations, ability to timely meet demand, the growth in thermal barrier demand to match the parts fabrication operation and vice versa; ability to shift operations from East Providence, RI to Mexico in a timely manner. All such forward-looking statements are based on management's present expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, the following: inability to execute the growth plan through 2025, inability to complete construction and commissioning of Phase I of Plant II and reasonably within budget in a timely manner, or at all, inability to manage supply chain disruptions to avoid undue delay or impact on operations or construction of Plant II and Mexico fabrication facility, inability to create new product, partnership and market opportunities; any sustained downturn in the energy industrial prices; any sustained downturn in the energy, energy infrastructure, chemical and refinery, LNG, sustainable building materials, EV thermal barrier, EV battery materials or other markets due to the coronavirus pandemic, COVID-19 or any other factor; any failure to sustain project-based demand in the subsea, LNG, on-shore or other markets; lower demand than expected from OEM customers, in particular during the remainder of 2022; the contractual the right of automotive OEM customers to cancel contracts with Aspen at any time and without penalty; any costs, expenses, or investments incurred by Aspen in excess of projections used to develop pricing under the contracts with automotive OEM customers; any failure of Aspen or PyroThin to meet contractual specifications and requirements under contracts with automotive OEM customers; Aspen's inability to create customer or market opportunities for any of its products, including PyroThin; any other battery performance and safety products, battery materials or other new products developed from Aspen's aerogel technology; any disruption or inability to achieve expected capacity levels in any of our three existing production lines in East Providence, RI or the Mexico fabrication facility, including due to the coronavirus pandemic, COVID-19 or any other factor; any inability to expand manufacturing capacity in a second manufacturing facility in Bulloch County, Georgia or at any other location; any inability to establish or timely establish thermal barrier assembly operations in Mexico or any other location; the failure to receive all applicable regulatory or other approvals required to operate, maintain or expand any of Aspen's facilities; any failure to achieve demand for Aspen's products; any failure to achieve expected price increases or average selling prices for Aspen's products; any significant increase in the cost of raw materials, utilities or any other manufacturing consumable; shortages of raw materials, utilities or any other manufacturing consumable due to the coronavirus pandemic, COVID-19 or any other factor; the failure to generate sufficient operating cash flow or to obtain significant additional capital to pursue Aspen's strategy; any failure to timely raise sufficient capital to fund various capital projects; the failure of Aspen's products to become widely adopted; the competition Aspen faces in its business; any failure to enforce any of Aspen's patents or other intellectual property rights on a global basis; any failure to protect or expand Aspen's Aerogel Technology Platform™; any future finding of invalidity of any of Aspen's patents in any jurisdiction; any failure to generate sufficient operating cash flow or to obtain sufficient additional capital to continue to pursue Aspen's new business, technology, patent enforcement, or patent defense strategy; any failure of Aspen's products to meet applicable specifications and other performance, safety, technical and delivery requirements; the general economic conditions and cyclical demands in the markets that Aspen serves; the economic, operational and geopolitical risks associated with sales and expansion of operations in foreign countries, including Mexico; the loss of any direct customer, including distributors, contractors and automotive OEMs; compliance with applicable health and safety laws and regulations; the maintenance and development of distribution channels; and the other risk factors discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021 and filed with the Securities and Exchange Commission ("SEC") on March 1, 2022, as well as any updates to those risk factors filed from time to time in our subsequent periodic and current reports filed with the SEC. All statements contained in this press release are made only as of the date of this press release. Aspen does not intend to update this information unless required by law.
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SOURCE Aspen Aerogels, Inc.