-PureCycle's flagship purification facility in Ironton, Ohio, ("Ironton") is nearly mechanically complete with
the final systems expected to be complete in April.
-PureCycle executed a mutually agreeable limited waiver with
the Ironton Bondholders to extend completion milestones with
transfer of funds to specific accounts for project closure and
operations.
-Secured a line of credit representing $150 million of borrowing capacity to be
available for general working capital purposes.
-Selected its first European polypropylene ("PP") recycling
facility location at the Port of Antwerp-Bruges in Belgium.
ORLANDO,
Fla., March 15, 2023 /PRNewswire/
-- PureCycle Technologies, Inc. ("PureCycle" or "the Company")
(NASDAQ: PCT), a U.S.-based company revolutionizing plastic
recycling, today announced a corporate update and financial results
for the fourth quarter ending December 31,
2022.
Management Commentary
Dustin Olson, PureCycle's Chief Executive
Officer, said, "I could not be more proud of our PureCycle team
as the Company's flagship purification facility in Ironton is weeks away from the final
installation of remaining processes and we expect to reach
mechanical completion by early April. Despite experiencing delays
outside of our direct control, we expect to be on track for
commercial production of pellets and be in a position to ramp-up
production by the end of April. The whole Company has worked
hard to overcome various challenges during the last four months,
and like many of you who have followed our progress, we cannot wait
to start-up operations at Ironton."
While our focus was primarily on Ironton during the fourth quarter and
year-to-date, PureCycle continued its momentum on pursuing its
growth strategy. Since our last corporate update, we announced our
first PP recycling facility in Europe at the Port of Antwerp-Bruges in
Belgium and continued to make
progress on our joint venture agreement with Mitsui in Japan and development plans with SK geo
centric in South Korea.
Larry Somma, PureCycle's Chief
Financial Officer, added, "We are pleased to have reached a
mutually agreeable resolution with our Bondholders on a limited
waiver. Equally important, we secured a $150
million revolving line of credit to be available for general
working capital purposes. We are also in various stages
related to additional capital raises in order to further strengthen
our balance sheet. As we have noted previously, our goal is
to maintain financial flexibility and optionality with the capital
we raise prior to Ironton being
fully operational. The interest in our mission is very strong
and once Ironton is operational,
we will endeavor to raise the capital necessary to fund Phase 1 of
our Augusta project at an
attractive cost of capital for the benefit of all
stakeholders."
Ironton Update
Construction of the Company's flagship
purification facility in Ironton
is in its final stages of construction and nearly mechanically
complete, with the remaining systems expected to be mechanically
complete in April. PureCycle expects to be in a position for
commercial production of Ultra-Pure Recycled ("UPR") resin and
begin ramping up production at the Ironton facility by the end of April.
The delay in our start-up commissioning timeline was primarily due
to engineering rework, extruder component deliveries, and extruder
electric equipment damaged during commissioning.
Subsequent to year-end and following the Company's
inability to complete all construction activities by December 1, 2022, the Company and Ironton
Bondholders agreed to a limited waiver to the original Indenture
Agreement that principally adjusts certain operational milestones
and transfer of funds for specified purposes.
Expansion Update
The Company continues to move forward
on engineering and pre-construction activities at its planned
multi-line purification facility in Augusta, Georgia. As of year-end, the Company
has committed or spent $185.7 million
on long-lead equipment for Phase 1 of the Augusta project.
On January 17, 2023, PureCycle and
the Port of Antwerp-Burges announced the Company's first European
PP recycling facility in the port's NextGen District located in
Belgium. Initially the site will
have one purification line with an annual nameplate capacity of 130
million pounds, with the potential to expand up to four
purification lines with a nameplate capacity of 520 million pounds.
We anticipate construction activities to commence in the first half
of 2024, with production ramp-up currently anticipated in the first
half of 2026.
Additionally, PureCycle signed a Heads of Agreement ("HOA") with
Mitsui, which outlines the general terms of the expected joint
venture agreement, and together have identified two potential sites
to develop a multi-line purification facility. Our joint venture
team with SK geo centric in Ulsan South Korea continue to make
progress in finalizing the feedstock engineering, project budget,
and financing strategy.
Liquidity and Capital Resources
As of December 31, 2022, PureCycle had total liquidity
of $326.1 million including
$162.5 million of cash, cash
equivalents and debt securities available for sale and $163.6 million in restricted cash. PureCycle had
$249.6 million in debt and accrued
interest, less $16.1 million of
discount and issuance costs as of December
31, 2022. Total cash invested in the Ironton Facility
through December 31, 2022, was
$280.9 million. We are currently
forecasting another $39-45 million
spend in 1Q23.
As previously referenced, on December 8,
2022, the Company entered into an amendment with the Augusta
Economic Development Authority to extend the initial financing
deadline for the Augusta Project from December 31, 2022 to June
30, 2023. Subsequent to year-end, the Company negotiated a
limited waiver with Bondholders and secured a line of credit
representing borrowing capacity of $150
million. The line of credit enables the Company to continue
to fund operations while providing additional time to complete
financing at a more attractive cost of capital for the Augusta project once Ironton is operational.
Conference Call
The Company will hold a conference
call Thursday, March 16th
at 10:00 a.m. ET to provide an update
on recent corporate developments, including activity from the
fourth quarter and updated future strategic plans.
Fourth Quarter 2022 Conference Call Details
Date:
|
Thursday, March 16,
2023
|
Time:
|
10:00 a.m.
ET
|
Participant
Registration:
|
[click here]
|
Please register for the conference call using the above link in
advance of the call start time. The webcast platform will register
your name and organization as well as provide dial-ins numbers and
a unique access pin. If you have any difficulty connecting with the
conference call, please contact PureCycle Investor Relations at
(689) 233-3595.
The conference call will have a live Q&A session and be
available for replay here and on the Company's website at
www.purecycle.com. Please note there will no longer be a telephonic
replay.
A replay of the conference call will be available after
2:00 p.m. Eastern time on the same
day through March 15, 2024.
Forward-Looking Statements
This press release contains
forward-looking statements, including statements about the
financial condition, results of operations, earnings outlook and
prospects of PCT. In addition, any statements that refer to
projections, forecasts or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking statements.
Forward-looking statements are typically identified by words
such as "plan," "believe," "expect," "anticipate," "intend,"
"outlook," "estimate," "forecast," "project," "continue," "could,"
"may," "might," "possible," "potential," "predict," "should,"
"would" and other similar words and expressions, but the absence of
these words does not mean that a statement is not
forward-looking.
The forward-looking statements are based on the current
expectations of the management of PCT and are inherently subject to
uncertainties and changes in circumstances and their potential
effects and speak only as of the date of this press release. There
can be no assurance that future developments will be those that
have been anticipated. These forward-looking statements involve a
number of risks, uncertainties or other assumptions that may cause
actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, those
factors described in the section of PCT's Annual Report on Form
10-K for the fiscal year ended December 31,
2022, entitled "Risk Factors," those discussed and
identified in public filings made with the U.S. Securities and
Exchange Commission (the "SEC") by PCT and the following:
- PCT's ability to obtain funding for its operations and future
growth and to continue as a going concern;
- PCT's ability to meet, and to continue to meet, applicable
regulatory requirements for the use of PCT's UPR resin (as defined
below) in food grade applications (both in the United States, Europe and internationally);
- PCT's ability to comply on an ongoing basis with the numerous
regulatory requirements applicable to the UPR resin and PCT's
facilities (both in the United
States, Europe and
internationally);
- Expectations and changes regarding PCT's strategies and future
financial performance, including its future business plans,
expansion plans or objectives, prospective performance and
opportunities and competitors, revenues, products and services,
pricing, operating expenses, market trends, liquidity, cash flows
and uses of cash, capital expenditures, and PCT's ability to invest
in growth initiatives;
- PCT's ability to scale and build its first commercial-scale
recycling facility in Lawrence County,
Ohio (the "Ironton Facility") in a timely and cost-effective
manner;
- PCT's ability to complete the necessary funding with respect
to, and complete the construction of, its first U.S. multi-line
facility, located in Augusta,
Georgia (the "Augusta Facility"), in a timely and
cost-effective manner;
- PCT's ability to sort and process polypropylene plastic waste
at its plastic waste prep ("Feed PreP") facilities;
- PCT's ability to maintain exclusivity under the Procter &
Gamble Company ("P&G") license (as described below);
- the implementation, market acceptance and success of PCT's
business model and growth strategy;
- the success or profitability of PCT's offtake
arrangements;
- the ability to source feedstock with a high polypropylene
content at a reasonable cost;
- PCT's future capital requirements and sources and uses of
cash;
- developments and projections relating to PCT's competitors and
industry;
- the outcome of any legal or regulatory proceedings to which PCT
is, or may become, a party including the securities class action
case;
- geopolitical risk and changes in applicable laws or
regulations;
- the possibility that PCT may be adversely affected by other
economic, business, and/or competitive factors, including rising
interest rates, availability of capital, economic cycles, and other
macro-economic impacts;
- turnover or increases in employees and employee-related
costs;
- changes in the prices and availability of labor (including
labor shortages), transportation and materials, including
significant inflation, supply chain conditions and its related
impact on energy and raw materials, and PureCycle's ability to
obtain them in a timely and cost-effective manner;
- any business disruptions due to political or economic
instability, pandemics, armed hostilities (including the ongoing
conflict between Russia and
Ukraine);
- the potential impact of climate change on the company,
including physical and transition risks, higher regulatory and
compliance costs, reputational risks, and availability of capital
on attractive terms;
- operational risk; and
- the risk that the COVID-19 pandemic ("COVID-19"), including any
new and emerging variants and the efficacy and distribution of
vaccines may have an adverse effect on PCT's business operations,
as well as PCT's financial condition and results of
operations.
Should one or more of these risks or uncertainties materialize
or should any of the assumptions made by the management of PCT
prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements.
All subsequent written and oral forward-looking statements or
other matters attributable to PCT or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this press release. Except
to the extent required by applicable law or regulation, PCT
undertakes no obligation to update these forward-looking statements
to reflect events or circumstances after the date of this press
release or to reflect the occurrence of unanticipated events.
About PureCycle Technologies
PureCycle Technologies
LLC., a subsidiary of PureCycle Technologies, Inc., holds a global
license for the only patented solvent-driven purification recycling
technology, developed by The Procter & Gamble Company
(P&G), that is designed to transform polypropylene plastic
waste (designated as No. 5 plastic) into a continuously renewable
resource. The unique purification process is designed to remove
color, odor, and other impurities from No. 5 plastic waste
resulting in an ultra-pure recycled (UPR) plastic that can be
recycled and reused multiple times, changing our relationship with
plastic. www.purecycle.com
Investor Relations Contact:
Charles Place
cplace@purecycle.com
689.233.3595
Media Contact:
Christian
Bruey
cbruey@purecycle.com
352.745.6120
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SOURCE PureCycle Technologies