PureCycle Technologies (PCT) Q2 2024 earnings summary

Executive summary

• Achieved record production rates at Ironton in June, with feed rates up to 8,000 lbs/hr and pelletization at 11,000 lbs/hr, following significant plant improvements and CP2 system upgrades; July production was lower due to further CP2 modifications.

• Transitioned from startup and commissioning to steadily increasing production and sales, with a focus on reliability and operational consistency; commercial sales of compounded PureFive material began with first customer orders and expanded FDA LNO for food contact applications.

• The Augusta Facility in Georgia is under development, with $91.9 million invested to date; project financing and construction progress are ongoing concerns.

• PureCycle Technologies commercializes patented recycling technology to convert waste polypropylene into ultra-pure recycled resin, holding a global license from Procter & Gamble.

Financial highlights

• Ended June 2024 with $10.9 million in unrestricted cash and $12.6 million in restricted cash; working capital was negative $15.7 million.

• Q2 2024 net loss was $48.2 million, compared to $55.4 million in Q2 2023; net loss for the first half of 2024 was $133.8 million.

• Q2 cash expenses were $34.7 million, about $9 million higher than Q1, mainly due to timing of payments, planned outage, and higher outside services.

• Sold $22.5 million face value of revenue bonds for $18 million in cash proceeds; $117.5 million in bonds remain on balance sheet.

• Gross long-term debt and related party note payable totaled $370.3 million as of June 30, 2024.

Outlook and guidance

• Targeting continuous feed rate of 10,000 lbs/hr, daily production over 200,000 lbs, and 1,000,000 lbs per week in the near term; plans to produce up to 2.8 million lbs/month of compounded material in Q4.

• No further outages anticipated for the remainder of the year; expect production rates to improve after final CP2 handling equipment is installed.

• Management expects additional capital investment of $5–8 million in Ironton and $46.5 million for Augusta and other facilities over the next twelve months.

• Plans to market remaining $117.5 million in revenue bonds in Q4, with ongoing discussions with multiple capital sources.