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Amprius Applied sciences, Inc. (NYSE:AMPX) This autumn 2022 Earnings Convention Name March 23, 2023 5:00 PM ET
Firm Contributors
Greg Bradbury – Investor Relations
Kang Solar – Chief Govt Officer
Sandra Wallach – Chief Monetary Officer
Convention Name Contributors
Colin Rusch – Oppenheimer
Operator
Good afternoon and welcome to the Amprius Applied sciences Convention Name and Webcast. It’s now my pleasure to show the decision over to Greg Bradbury.
Greg Bradbury
Good afternoon. Welcome to Amprius Applied sciences’ fourth quarter and full 12 months 2022 convention name. Becoming a member of us for at this time’s presentation are the corporate’s CEO, Dr. Kang Solar and CFO, Sandra Wallach. Right now, all members are in listen-only mode. Following administration’s remarks, we are going to open the decision for questions.
Please word that this presentation incorporates forward-looking statements, together with however not restricted to statements relating to future product commercialization, new buyer adoption and timing and talent of Amprius to construct its massive scale manufacturing facility, develop its manufacturing capability and scale its enterprise. These statements contain identified and unknown dangers, uncertainties and different necessary components which will trigger Amprius’ outcomes, efficiency or achievements to be materially totally different from any future outcomes, efficiency or achievements expressed or implied in such forward-looking statements. For a extra full dialogue of those dangers and uncertainties, please discuss with Amprius’ filings with the Securities and Change Fee, together with however not restricted to a dialogue of Amprius’ threat components in its quarterly report on Type 10-Q filed on November 14, 2022.
Lastly, I want to remind everybody that this convention name is being webcast and a recording will probably be made out there for replay on the corporate’s Investor Relations web site at ir.amprius.com. Along with the webcast, the corporate has posted a shareholder letter that accompanies these outcomes, which can be discovered on the Investor Relations web site.
I’ll now flip the decision over to Amprius Applied sciences’ CEO, Dr. Kang Solar, for his feedback. Sir, please proceed.
Kang Solar
Welcome, everybody and thanks for becoming a member of us this afternoon. To start at this time’s dialogue I’ll give some full background adopted by a evaluate of our current accomplishments earlier than turning the decision over to our CFO, Sandra Wallach to debate our monetary outcomes for the 12 months in additional depth. After that, I’ll share some closing remarks earlier than opening the decision for questions.
Amprius develops and manufactures extremely high-energy density lithium-ion battery based mostly on our proprietary silicon anode know-how. Our enterprise has 4 distinct benefits: unmatched technical and product efficiency, confirmed manufacturability, years of product commercialization with industrial leaders, and a workforce of seasoned enterprise operators with a strong monitor report. Our near-term objective is to scale our manufacturing with the long-term objective of changing into a mainstream battery answer. With functions throughout all segments of {the electrical} mobility, together with the aviation and EV industries, over the previous few years, Amprius has delivered business batteries with the best identified vitality density and the facility density. Our present out there batteries have as a lot as 450 watt-hour per kilo in particular vitality density and 1,150 watt-hour per liter in volumetric vitality density with as much as 10C high-power functionality.
Our batteries are additionally constructed for the fee working environments together with your capability to cross america navy benchmark nail penetration check in addition to the flexibility to function in an especially broad temperature vary of effort as little as minus 30-degree Celsius and as much as 55 levels Celsius. These options together with excessive quick cost charges of 0% to 80% state of charging in roughly 6 minutes set Amprius aside. It’s our perception that there is no such thing as a one else within the business market that may carry out at this degree. As well as, we have now amassed over 80 patents and over a decade of the know-how in silicon anode know-how and manufacturing.
Shifting to our evaluate, 2022 was arguably probably the most transformational 12 months for Amprius since our founding in 2008. It was additionally the 12 months of many firsts for our enterprise as we execute on our technique to remodel electrical mobility with the deal with aviation functions. I’ll now make a minute to spotlight a few of our key milestones from the previous 12 months. As I discussed a couple of minutes in the past, Amprius has a number one place within the rising vitality transmission sector with disruptive know-how. We entered 2022 with our first business phase on 450 watt-hour per kilo and the 1150 watt-hour per liter product for top efficiency aviation. We manufacture the one batteries on market that may produce these specs and we’re continually working to enhance the efficiency and capabilities of our know-how.
For example, earlier at this time, we realized that our improve 500 watt-hour per kilo succesful batteries are these not but out there to the market had their capabilities verified by unbiased third-party, which is an important step within the product improvement timeline. Demand for this next-generation of the battery diploma and we’re making nice progress. Based mostly on development estimates, we count on to have the ability to save prototypes to chose clients earlier than finish of the 2023. We additionally full a number of necessary demonstrations of our applied sciences functionality in 2022. In October, we efficiently exhibit our battery’s excessive quick charging capability by means of a video demonstration the place we have been capable of obtain a return of 0% to 80% state of cost in roughly 6 minutes.
Our efficiency is forward of america superior battery consortium 2025 objective of 0% to 80% cost in quarter-hour. In apply, this can permit the autos and different functions to function far more effectively with much less downtime. Moreover, in November, we permit that unbiased third-party testing lab validate our 390 watt-hour per kilo polymer electrolyte cells profitable passing of america navy efficiency specification to nail penetration check. This check is used to find out the feasibility of a particular product in fight situations and is necessary benchmark to be thought-about for navy functions. We now have a novel alternative to offer a big vitality density efficiency enhance of practically 100% doubling the runtime for mobile-powered gadgets with out the rise within the general weight of the wearable batteries for our troopers.
Shifting to our enterprise improvement efforts, 2022 was a profitable gross sales 12 months for our aviation and protection segments. Amprius has deep inroads with the aviation and the eVTOL market, as a result of we produce high-energy density, light-weight battery. Single most necessary difficulty in eVTOL efficiency is battery weight, which is why our batteries are in such high-demand. Lighter and denser batteries, means better and normal vary, whereas sooner cost turnaround time means elevated flight time. To that finish, we signed new multiyear agreements with the Federal Aviation business leaders like AeroVironment, Teledyne, FLIR and the BAE Techniques and develop our current commitments with Airbus, the united statesArmy and the USABC amongst others.
I’ll spotlight a few of these agreements now. In July, we launched a 3-year take care of Teledyne FLIR to provide our batteries as they develop their unmanned plane system merchandise. Additionally in October, we entered right into a 3-year cooperation settlement with BAE Techniques to develop light-weight high-energy batteries particularly for electrically powered flight functions. In Might, we are going to award funding for the second multiyear improvement program in america superior battery consortium for the event of a low value EV battery. This consortium is between Ford, GM and Stellantis and is enabled a cooperative settlement with america Division of Power. Their mission is to develop electrochemical vitality storage applied sciences that advance the commercialization of next-generation electrified automobile functions.
I’m happy to announce that we formally delivered the primary set of the reference cells within the fourth quarter of 2022. Altogether, these new wins and expansions quantity to a 65% year-over-year enhance in shipments. We consider our profitable early efforts are actually driving a constructive flywheel impact, resulting in orders from the brand new clients and growth orders from current clients. As we take into consideration our objectives for the following a number of years, our main focus is on increasing capability to satisfy demand and finally obtain sustainable value construction at scale. We made a number of strategic strikes in 2022 that put us our profession paths to attain these objectives.
In September, we closed our enterprise mixture with the Kensington Capital Acquisition Corp. IV to offer us with better entry to capital through the general public markets. By that course of, we additionally raised roughly $70 million in money web of bills and added a strategic buyer to our investor base in AeroVironment. We couldn’t have requested for higher companions than the Kensington workforce and have continued to work intently alongside them as we execute on our technique. Extra lately, we put in place a dedicated fairness facility, which permits us to evaluate as much as $200 million of extra funding.
After a aggressive course of, we have been chosen to obtain two cost-sharing grants from the U.S. Division of Power in October of 2022. The primary is a $1 million cost-sharing grant from the DOE’s Superior Manufacturing Workplace particularly for the analysis of improvement of mass manufacturing course of we use for our silicon anodes. This course of basing our Fremont facility features a deposition shifting, presently utilized in photo voltaic cell manufacturing. The second is a $50 million value sharing demonstration grant chosen for negotiation of the award from the DOE’s Workplace of Manufacturing and Power Provide Chain. We’re among the many first set of the businesses to be chosen for negotiation of the awards to obtain funding from the President Biden’s Bipartisan Infrastructure Legislation to develop the home manufacturing of batteries.
To that finish, in October, we acquired the primary large-scale anode manufacturing machine from Centrotherm, which is now put in in our Fremont facility and is anticipated to extend our capability for silicon anode manufacturing to roughly 2 megawatts exiting 2023. To satisfy this better manufacturing output, we lately expanded our lease facility in Fremont, California successfully doubling our footprint in that location. Our growth in Fremont is deliberate to enhance our high-volume manufacturing processes and enhance our capability by 10x, which is able to serve strategic aviation clients’ growing wants and the assist sampling and qualification initiatives with new clients who’re at the moment in backlog.
This takes me to our extra thrilling information. Earlier this month, we introduced the choice of a website in Brighton, Colorado as the placement for our 775,000 sq. foot web manufacturing facility. The choice of the Colorado for our gigawatt scale manufacturing facility marks an necessary milestone for Amprius. We now have labored intently with the state of Colorado, the Colorado Financial Growth Fee, Adams County and the Metropolis of Brighton to align on phrases which might be mutually helpful, which embody a complete incentive proposal. The preliminary section of our build-out of the present facility will present a possible of as much as 5 gigawatt-hour, and can also be expanded to create over 330 new jobs. For the next phases, the location has growth capabilities for as much as a complete potential manufacturing capability of 10 gigawatt-hour.
This website additionally hosts a number of benefits over our different potential areas. The physique is already outfitted with {the electrical} energy and the present structural format wanted for gigawatt scale lithium-ion battery manufacturing facility, which is able to scale back build-out value and time-to-market with a objective of being operational in 2025. Additionally, our Brighton is nearer to a few of our materials distributors within the Northwestern U.S., which we count on will decrease operational value over the long-term.
Lastly, our dedication to Colorado permits us to determine our largest scale operations right here in america. Amprius batteries will probably be designed and made within the U.S. This new facility will remodel our long-term manufacturing capabilities. Within the near-term, we are going to proceed to develop and form cutting-edge merchandise from our Fremont facility, whereas we refine our manufacturing processes to additional de-risk the deal with of our mass manufacturing merchandise to Brighton within the coming years. To assist with the transition, we made a strategic choice to kind two new enterprise items: Amprius Lab and Amprius Fab.
Amprius Lab, positioned in Fremont, will deal with superior the battery know-how product and the manufacturing course of improvement. Whereas Amprius Fab positioned in Brighton will deal with massive scale fabrication of silicon anode batteries. To assist this transition, Jon Bornstein at the moment the corporate’s COO, will take a brand new position to steer Amprius Lab because the Division Enterprise Unit President. Within the interim, I’ll function the Appearing President of Amprius Fab.
I’ve one closing replace earlier than I flip the decision over to Sandra. One of many areas which I’m most proud is the workforce we have now constructed. During the last a number of months, we have now added important roles to steer up our efforts nonetheless. In my Appearing President position for Amprius Fab, I’m working with our new Vice President of Infrastructure, Andrew Huie, who joined us final September. Andrew brings over 30 years of facility improvement and administration expertise and most lately served because the Director of Services on the Panasonic Power of North America. Huie will probably be spearheading our efforts to scale manufacturing capability, specializing in manufacturing facility planning, facility improvement and regulatory compliance. With our management workforce in place, we consider that we’re effectively positioned to execute on our progress technique.
With that overview full, I’ll now flip the decision over to our CFO, Sandra Wallach, to evaluate our monetary outcomes for the complete 12 months. Sandra?
Sandra Wallach
Thanks, Kang. I’d now prefer to spend a couple of minutes protecting some key updates. As a reminder, our detailed financials may be present in our shareholder letter. As Kang talked about, we consider that we have now the proprietary know-how in place and we have now proven constant manufacturability and business success. We now have been delivery business merchandise since 2018. So, our focus at this time will not be on commercializing, however is as an alternative on scaling our manufacturing capability to satisfy the rising demand in these fast-paced markets.
In our financials, significantly in our income outcomes, you will notice knowledge factors that strengthened the energy of our buyer improvement efforts as we scale. We consider that these outcomes, particularly when paired with our investments in each our Fremont capability and gigawatt-hour scale capabilities place the corporate effectively to attain its progress and profitability potential.
We closed out 2022 with $4.4 million in income. Product income was $2.4 million together with over 25 new clients, to which we shipped batteries inside calendar 2022. Inside that set of latest clients, 4 are main eVTOL producers and a pair of are world battery pack suppliers for the aviation sector. Additionally, we delivered business amount shipments to AeroVironment and Teledyne FLIR and accomplished two flight checks for Airbus’ HAPS program with a backlog of 6 extra units for future deliveries nonetheless pending.
Growth companies income totaled $1.8 million pushed by each the supply of cells and the timing of different deliverables beneath a number of contracts. We additionally acknowledged the primary portion of the $1 million DOE value sharing grant income, which was $0.2 million. For 2022, our GAAP gross revenue margin was detrimental 123%. Our gross margin shows variations interval over interval based mostly on the combination of services.
Now shifting to our working expense administration, our GAAP working bills for 2022 have been $12.6 million with increased G&A bills in Q3 and This autumn as a consequence of elevated public firm value. Our 2022 GAAP web loss was $17.3 million or a lack of $0.24 per share. Our shares excellent at December 31, 2022 have been $84.6 million with $71.3 million weighted common shares of frequent inventory excellent for the 12 months. As of December 31, 2022, there have been 59 full time staff based totally in our Fremont, California location. Share-based compensation for 2022 was $2.7 million.
Turning to the stability sheet, we exited 2022 with $69.7 million in money and no debt, a web enhance of $58.2 million from December 31, 2021. The important thing drivers of our money exercise for the 12 months have been $13.9 million utilized in working actions, $1.5 million in capital expenditures, which represents our funding in our present manufacturing facility in addition to in alternatives to develop our footprint and speed up our capability to assist buyer {qualifications} and scale up, $73.6 million web money supplied by financing actions pushed by proceeds acquired in reference to the enterprise mixture and pipe funding, web of issuance prices plus proceeds from the train of inventory warrants and choices.
Shifting to our outlook, we count on to proceed to be restricted by manufacturing capability till we exit 2023 with the brand new 2-megawatt capability coming on-line. Relating to income, we have now a number of ongoing improvement companies packages with efficiency obligations that we count on to finish inside 2023, which signifies that we count on elevated income recognition weighed extra closely in direction of the latter a part of the 12 months. We count on that our G&A prices will proceed on the increased fee exiting 2022 noting extra public firm bills. We are going to proceed to be lean on different working bills strategically including important mass to the brand new enterprise items that we introduced and allocating nearly all of our capital to scaling up our manufacturing. And we count on increased capital expenditures going ahead as we proceed to construct out the 2-megawatt capability in Fremont, California, whereas we, in parallel design and assemble our newly introduced Brighton, Colorado, gigawatt-hour scale facility. Our spending sample relies on a number of components exterior of our management, together with the timing of approval for rezoning for the Colorado website. So we are going to present extra particular projections as we have now extra data to share.
Additionally, we count on that we are going to proceed to have robust assist from the U.S. Inflation Discount Act as we entry manufacturing tax credit on the anode and cell ranges. As well as, we have now acquired over $10 million in state and native incentive packages regarding our gigawatt scale facility, which is the results of important partnerships in-built Colorado by means of our choice course of. We consider that these tailwinds will additional improve our economics as we speed up our scale to satisfy our large market. With the energy of our stability sheet and a number of autos to generate extra funding by means of each fairness resembling warrants in our dedicated fairness facility and non-dilutive sources resembling grants, loans and incentives, we consider we may have sufficient money to execute on our strategic plan.
With that, I’ll conclude the monetary dialogue and cross the decision again to Kang.
Kang Solar
Thanks, Sandra. I want to re-emphasize a number of key factors earlier than closing. First, at this time, we have now market main know-how and the place in aviation which might be reflective of our unmatched efficiency in actual world functions. Over the previous 12 months, we have now demonstrated excessive quick charging functionality, enhanced our battery particular vitality density from 450 to 500 watt-hour per kilo and we efficiently handed the important thing efficiency check necessary to future work with the U.S. authorities.
Second, we’re constructing out the size to serve super demand within the U.S. and to assist U.S. based mostly provide chain resiliency. Exiting 2023 we are going to additional all through our large-scale manufacturing course of and the parameters with 2-megawatt pilot line arising in our Fremont, California facility. We’re additionally now shifting swiftly to organize and construct out our gigawatt scale facility in Brighton, Colorado for the primary 500-megawatt demonstration program with america Division of Power. Third, we’re persevering with to construct a pipeline of blue chip clients to satisfy our deliberate growth efforts, which has working at a scale of a whole bunch of megawatts exiting 2024.
As we glance to the remainder of 2023, our technique and focus at Amprius stays unchanged. We now have super alternative forward with the product portfolio that positions us to put up progress in aviation market and develop it to different industries, taking batteries with stronger efficiency and the sooner cost time. We’re persevering with to construct on our early lead by means of technological development and strategic partnerships. By the non-public and public sector, we now have the capital and are constructing the capability to turn into a number one business supplier within the sustainable mobility sector.
Lastly, we have now the workforce in place to execute our mission. Thanks on your continued assist of Amprius Applied sciences. With that, I’ll flip it again to the operator for Q&A.
Query-and-Reply Session
Operator
Thanks. [Operator Instructions] Our first query at this time is coming from Colin Rusch from Oppenheimer. Your line is now dwell.
Colin Rusch
Thanks a lot guys and congratulations on all of the progress. Actually glad to see you guys get that award this week with the Battery Present. Kang, as you began putting in the megawatt instruments and evaluating them, are you able to speak about any surprises both constructive or detrimental that you’re seeing from the instruments which might be in set up at this level?
Kang Solar
At this level, we already powered the 2 in Fremont, this Centrotherm software. We don’t – we additionally attempt to tune the supply, as a result of this factor we have to work with the provider to get the deposition supply adjusted. We count on someday in summer season – later summer season early fall, this software will probably be totally – this explicit software will [indiscernible] progress will probably be totally in operation.
Colin Rusch
Okay, that’s super. After which when it comes to the choice of Colorado clearly, the constructing website has some benefits. However are you able to speak slightly bit extra about provide chain benefits when it comes to location in addition to hiring alternatives, as a result of there appears to be doubtlessly some efficiencies that you simply guys are gaining by selecting this location?
Kang Solar
Sure, the obvious one in every of course is near our promoting supply. Promoting at this time is manufactured within the state of Montana, Colorado in comparison with the opposite state, the place we appeared Georgia, Texas, now we see that in Colorado. Now, that is in all probability probably the most seen provide chain benefit. Along with that Colorado’s climate, it’s largely drier, that is essential for us, I feel crucial factor is the Colorado, they’ve the adequate the facility for us, as a battery producer, we can not afford to have energy disruptions. In order that they virtually assure that the facility provide, the present of energy provide already sufficient for our Section 1.
Colin Rusch
Okay, that’s tremendous useful. After which only a closing one with the introduction on the brand new product. And the validation with a 3rd celebration, I assume, are you able to speak about what your clients are in search of? And when it comes to incremental validation on that earlier than you begin to see some orders or is it actually only a capability difficulty for you guys proper now on that product, given the efficiency, so that you’ve been capable of reveal?
Kang Solar
We now have capability difficulty with quite a lot of clients quite a lot of inquiries. We now have inquiries from industrial gamers, even from the federal government, however we don’t have sufficient capability to fulfill their demand. That’s a one problem for us. That’s why the capability extension is our precedence. The second demand from the shopper, after all, we’re at the moment specializing in aviation phase. So aviation phase, thus far we’re the one one can present excessive vitality, excessive energy batteries. And already at this time, we introduced the five hundred watt-hour per kilo. That’s the battery the Airbus has for when actually wanted to make a 2nd era product [indiscernible]. So we have now capability problem. On the similar time, we have now buyer demand, some vitality and the facility, okay. [indiscernible] vitality and the facility Amprius at this time, in all probability the one firm we are able to get – okay, excessive vitality excessive energy. I’ve not seen different battery can ship.
Colin Rusch
Okay, thanks a lot, guys.
Operator
Thanks. [Operator Instructions] Our subsequent query is coming from Chris [indiscernible] from B. Riley. Your line is now dwell.
Unidentified Analyst
Hey, guys. Thanks for taking my questions right here. Possibly simply contact on the Colorado facility, you referred to as out within the letter rezoning course of that you simply’re going by means of there something you care about that course of? And the way we should always take into consideration the timing, assuming you get readability on that over the following couple of weeks, months each time, after which the general capital wants anticipated by means of the top of subsequent 12 months. Any replace there given the plans seem like fairly solidified in Colorado?
Kang Solar
Sure, okay. And so the timing difficulty, after which timing query, then Sandra are you able to elaborate extra on the financing? So, we’re at the moment working with the regulatory authorities. I feel that is probably the most time-consuming a part of this mission. And at the moment the supply of the manufacturing line and we have now by no means wind up. I consider our manufacturing line may be delivered on time. Building dialogue went effectively. We’re planning to have this development begin late summer season and early fall. It took us about 18 months to get constructing retrofit suite then have our manufacturing line thought.
Unidentified Analyst
Obtained it. After which any replace on the capital expectations by means of the top of subsequent 12 months. Given – I feel we’ve in all probability received a reasonably good concept of your anticipated prices at this level given the location choice and all that?
Sandra Wallach
Sure, in order that’s an amazing query. So our manufacturing and gear capital wants are nonetheless within the $120 million to 150 million per gigawatt. That’s the whole value with out authorities grant offsets. And we’re estimating presumably one other $100 million on development NTIs, so, someplace in complete between $220 million and $250 million.
Unidentified Analyst
Obtained it. Okay, that’s actually useful. After which on the shopper facet, it looks as if you guys are persevering with so as to add new clients testing, possibly you might simply speak slightly bit extra about among the demand and segments other than USABC, are there some other non-aerospace protection kind clients in there, after which possibly inside aerospace, curious in the event you may speak about both dies or use circumstances inside that form of broader sector to offer us some form of breakdown across the forms of demand you’re seeing on the market?
Kang Solar
So we’re working with – after all, most of our buyer aviation battery clients. On the similar time, we have now been previous few years participating with non-aviation battery clients primarily within the electrical automobile battery house, as a result of we don’t have a bigger format, manufacturing line and it’s time. So we solely can see the analysis stage at this section I’d name technical change section. Because the USABC or [indiscernible] the grant, this – twice requested us to proceed the low value excessive vitality density electrical automobile, we additionally interact with different OEM, EV OEMs however presently nonetheless at a technical change stage till we have now a bigger format EV format, I imply, 100 amp-hour, 120 amp-hour cells, we are going to keep at a technically prolonged stage.
Unidentified Analyst
Sure, that is sensible. So possibly simply inside aerospace some other – any methods you’ll be able to form of phase out the forms of clients or the use circumstances can be useful there?
Kang Solar
Proper. For us at this time, you see we have now industrial clients, we have now clients in Protection phase. These batteries are sufficient for different functions. We simply have to have the capability and the lighter format of the battery in a proper dimension of the battery. For these functions, I feel that is our effort [indiscernible] 18 to 24 months, we are going to get there. Our – as we talked about, repeatedly mentioning in our problem is the benefit of capability. As soon as we get capability difficulty resolved, we may have a lot better fluctuation in income era and serve the purchasers.
Unidentified Analyst
Is sensible. I’ll hop into queue. Thanks, guys.
Operator
Thanks. [Operator Instructions] We now have reached the top of the question-and-answer session I’d like to show the ground again over to Dr. Solar for any additional or closing feedback.
Kang Solar
Thanks once more everybody for becoming a member of us at this time. I’d prefer to thank our staff, companions and shareholders for his or her continued assist. As a reminder, you might study extra about our firm updates and the decision we will probably be presenting within the Investor Relations part of our web site. We look ahead to updating you on Amprius progress on our subsequent name. Operator?
Operator
Thanks. That does conclude at this time’s teleconference and webcast. You might disconnect your traces presently and have a beautiful day. We thanks on your participation at this time.
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