Danimer Scientific Inc. Q1 2023 Earnings Call
Speaker 1: The.
Speaker 2: Greetings. Welcome to the Danimer Scientific 2023 first quarter earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance,
Speaker 2: This press has star zero for the operator. This call is being recorded on Wednesday, May 10, 2023. I would now like to turn the presentation over to Mr. James Polzinski, the company's Investor Relations Representative.
Speaker 3: Thank you, operator, and good afternoon to everyone, and thank you for joining us today for Danimer Scientific's 2023 first quarter earnings call.
Speaker 3: Leading the call today is Steve Crossgreet, Chairman and Chief Executive Officer and Mike Hayjoast, Chief Financial Officer. I'd like to note that there is a slide deck that accompanies today's discussion which is available on the Investor Relations section of our website at danimerscientific.com.
Speaker 3: I'll call your attention to the company's Safe Harbor language, which is published in our SEC filings and on slide two of the presentation I just referenced.
Speaker 3: On today's call we may discuss forward-looking statements within the meaning of the Safe Harbor provisions of the private securities litigation Reform Act of 1995 as amended.
Speaker 3: Forward-looking statements include, among other things, statements regarding future results of operations, including margins, profitability, capacity, production, customer programs, and market demand levels.
Speaker 3: Actual results could differ materially from what is expressed or implied in our forward-looking statements. The company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date year of, except as required by law. Today's presentation also includes references to non-GAAP financial measures.
Speaker 3: within the meaning of SEC Regulation G. We believe these non-GAAP measures have analytical value, but note that they should be taken as an additional measure of performance to GAAP results. We have provided reconciliations for non-GAAP financial measures to the most comparable GAAP financial measures in our earnings release and our presentation.
Speaker 3: Thank you and it's now my pleasure to turn the call over to Steve Crossgree, Chairman, and Chief Executive Officer of DynamoScientific.
Speaker 4: Thank you, James. Good afternoon and thank you for joining us to talk about our progress thus far in 2023.
Speaker 4: that temporary situation is now behind us.
Speaker 4: What's also clear in the first quarter numbers and is expected to remain clear in future quarters is the progress we've made in controlling our operating costs.
Speaker 4: We continue to expect, with the impact of new commercial opportunities, to accelerate our growth through the remainder of the year. We are gathering momentum in the business, harnessing our research and development to drive new solutions into the market, and growing in confidence about the path in front of us.
Speaker 4: We have gained additional and specific visibility into the levels of demand associated with a discrete set of near-term commercial opportunities. If captured in full, this business would require the lion's share of our remaining production capacity.
Speaker 4: and ready capacity. We are increasingly confident that we will finish 2023 on a strong pace.
Speaker 4: I'll start by reviewing some important advances in our customer and product portfolio.
Speaker 4: While it is premature to make any customer or program announcements, we are energized about the near-term opportunities that are materializing in the quick service restaurant channel for straws and for cutlery especially, but also in the cup category with our coating materials.
Speaker 4: As we speak, our product is in a multi-store test for straws with a new major QSR chain with thousands of locations in the United States. We anticipate a successful test will lead to a wider rollout in the third quarter.
Speaker 4: Additionally, we are in the late stages of an opportunity with another major QSR chain for straws, also numbering in the thousands of locations in the United States alone.
Speaker 4: Further, we are excited to be moving quickly forward with our biodegradable cutlery resin.
Speaker 4: As we announced last quarter, we were pleased to capture in coordination with Hobby, Cutlery for an important snack line with Zespri.
Speaker 4: We made the first shipments to execute that program at the end of the first quarter and believe that a fully biodegradable solution for this high-visibility application will prove to be brand-enhancing.
Speaker 4: We are also pursuing a large and high priority opportunity in the cutlery market with a major QSR that we expect to begin shipping to in early 2024.
Speaker 4: We believe that the unique environmental benefits of our PHA-based residence are becoming increasingly visible, and we were honored to be invited to ring the closing bell of the New York Stock Exchange on April 17 to help recognize the importance of Earth Day.
Speaker 4: In conjunction with that event, we announced that we have successfully developed a partnership with Total Energy Corporation, a new engineering resident for the manufacturer of single-use coffee pods.
Speaker 4: That material, which is used in an injection molding process, has been in development for a little over two years. While any new resin we develop benefits from decades of research into various blends, this is a challenging material to formulate given the combination of requirements for heat tolerance anduppressure.
Speaker 4: barrier properties, and stringent biodegradability standards required within the EU market for this product.
Speaker 4: Importantly, we have experience in this category and currently have a PLA-based material used for the manufacture of coffee pods for a U.S. brand. We are pleased to have received certification for this new material from TUV Austria for Home Compost and are currently in testing with multiple potential customers. While somewhat obvious, this means that our material biodegrades safely and quickly, and
Speaker 4: in home as well as industrial composting and can eliminate a tremendous amount of waste from the environment. Well, the EU legislation is still a bit into the future. We expect that demand for our material may be strong, even in the even in advance of the legislation's inaction, as major suppliers seek to preposition themselves.
Speaker 4: to avoid potential disruption to their business. I'd like to turn to cup coating materials which provide a barrier to contain liquids. In the aggregate, this is a significant application for single-use plastics.
Speaker 4: Currently paper cups achieve functionality with a petroleum plastic liner making them essentially non-recyclable.
Speaker 4: Our PHA-based biodegradable coating materials can change that as an important customers of ours is demonstrating.
Speaker 4: We were very excited to see Windcup launch a new paper cup product with a Nodex-based coating under its distinctive Fade brand. Fade is an increasingly meaningful and visible brand in an otherwise commodity-oriented set of categories.
Speaker 4: We think that is a powerful state into the market where Pratt to provide the unique PHA-based resins that enable their products. While we share a vision for the future with many customers, we think what WingCup is doing in the market speaks exceptionally well to that mission. As we look toward the second half of the year, we're confident that our Kentucky manufacturing plant is capable of operating at a high level.
Speaker 4: It has consistently performed at or above all requested through put targets. Further, we are working toward improve product quality and process efficiency, all which should benefit our margins. In closing, I'll just note that we have no new information to provide regarding the Department of Energy's process. We will communicate any developments as soon as the DOE informs us of our status.
Speaker 4: $11.9 million as compared to $14.7 million in the same quarter of 2022. We experienced a modest decline in both product and service revenue. First quarter product revenue was $2.1 million lower versus prior year, driven largely by an unfavorable shift in the timing of PHA-based shipments.
Speaker 4: Ukraine impacted both this year's and last year's quarter.
Speaker 4: that certain customers that have completed funded R&D projects are now moving to commercialization. We reported a first quarter 2023 gross loss of $6.3 million compared to a gross loss of $1.3 million in the first quarter of 2022.
Speaker 4: mass depreciation and amortization expenses was by far the largest driver. After adjusting for depreciation, stock-based compensation, and certain non-recurring items, we reported an adjusted gross loss of $1 million as compared to adjusted gross profit.
Speaker 4: of 2 million in the first quarter of 2022. On top of an increase in fixed production costs associated with greater capacity in Kentucky, we also had unfavorable leverage of those fixed costs due to decreased production volume. We expect gross margin to recover nicely with growing volume.
Speaker 4: R&D and SG&A expenses, excluding depreciation and amortization, stock-based compensation, and one-time items totaled $7.6 million in the first quarter compared to $12.3 million in the prior year quarter.
Speaker 4: This improvement was a result of a broad cost control program that yields savings in many areas of the business. Adjusted EBITDA loss for the first quarter improved to $8.9 million, compared to an adjusted EBITDA loss of $10.6 million in the first quarter of 2022.
Speaker 4: Despite the revenue timing impact and fall off an adjusted gross margin, the positive operating cost factors permitted adjusted EBITDA to improve by $1.7 million year-over-year.
Speaker 4: other income, and other ad backs as reconciled in the appendix. Including 12 million of restricted cash that has since become unrestricted, effective liquidity at the end of the first quarter was 114 million as compared to 62.8 million at the end of 2022. Capital expenditures in the first quarter were 16.4 million.
Speaker 4: This now reflects the term loan we closed on during the first quarter. I remind you that this includes about $46 million of new market tax credit loans, which we expect will be forgiven starting in 2026. As we noted on our year-end call, the key to our performance in 2023 will be the magnitude and timing of the customer demand ramp up.
Speaker 4: for PHA-based resins and our increased utilization to serve that demand from our Kentucky operations.
Speaker 4: Our first quarter was fully consistent with our expectations, and therefore has had no impact on our four-year guidance. We are maintaining our expectation for adjusted EBITDA in the range of negative 31 million to negative 23 million in 2023, and improvement and profitability of between 14 million to 20.
Speaker 4: about a few recent developments in particular. The identification of some specific high-volume sales opportunities, which we expect to be decided very soon, ongoing process engineering work in Kentucky, increasing discipline on our expense line, and progress on research and development is specific to a number of significant market opportunities.
Speaker 4: The momentum in our business is tangible. Major customer opportunities are now very close at hand and we are very excited about the future we are creating.
Speaker 2: Thank you to everyone listening to today's call for your attention and your support. And operator, we're now ready to take questions. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the number 1 on your touchstone phone.
Speaker 2: You will hear a 3-tone prompt acknowledging your quest. If you would like to withdraw your quest, please press the star followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys.
Speaker 2: One moment please for your first question. Also as a reminder you are only allowed to ask two questions.
Speaker 2: And first question comes from Lawrence Alexander with Jeffries.
Speaker 2: And first question comes from Lauren's Alexander Vigiafries. Please go ahead.
Speaker 4: This is Kevin F. Stockton for Lawrence Alexander. Thank you for taking my questions.
Speaker 4: I guess my first question, oh hey, yeah so I actually have more than two so I'll maybe hop back on the line after but I guess if you were to roll together all the brand launches that you hear customers intend for this year, you talked a bit about this in the call already but I guess what is the implied run rate of demand if those allleticking out sales?
Speaker 4: scale as expected. And I guess what is the potential demand just from those customers if those launches go well and then they flip the switch and then embrace PHA in a more aggressive fashion. I guess like serving up side scenario. Just curiously your thoughts there.
Speaker 4: Yeah, thanks, Kevin. This is Steve. If if every 1 of the.
Speaker 4: that. Forecasted launches hits and hits at the scale that's forecasted. I guess the
Speaker 4: If those customers then get even more aggressive and move forward with follow-on applications, we could fill up the green field as well. Okay, thank you. That's really helpful.
Speaker 4: And then I was just wondering if you could provide an update on the ACES of partnership, I guess any progress there, and I guess what would be a reasonable timeframe for seeing a revenue stream and maybe another monetization event? I'm sorry, Kevin, which partnership?
Speaker 4: provide an update on the adhesive partnership, I guess any progress there and I guess what would be a reasonable timeframe for seeing a revenue stream and maybe another or another monetization event? I'm sorry, Kevin, which partnership? I'm a ???? Shift...I'm a Nicious!
Speaker 4: Yes, any, if your team's partnerships or even maybe an update on the NoviMar applications and acrylic acid, I guess any progress there. Just curious to get some updates on partnerships you have.
Speaker 5: Sure, so on the Danimer Catalytic Technology side, which was the November acquisition, we are building out the pilot plant. All the modules have been delivered and hooked up and we're well along the way in that facility.
Speaker 5: In terms of the partnerships, as we've talked about in the past, we're negotiating a co-location agreement in the Gold Coast, and we're also negotiating an off-cake agreement with a major chemical company. Those conversations are going well, and they're actively...
Speaker 2: Thank you and next question we have Thomas Boyce with TD Cowie
Speaker 2: next question we have Thomas boys with CDCowing. Please go ahead.
Speaker 3: Thank you for taking my questions. Maybe the first one just...
Speaker 4: Looking at the kind of the coffee pod opportunity more broadly, I mean, I kind of articulated what it looked like in Europe . But since you already have a PLA version here in the US, just wondering if you could kind of give me a sense of maybe potential demand or size of opportunity that you could see here. I know that overall.
Speaker 4: policy landscape is a little bit more fragmented in the US than in Europe , but I was just trying to get a better sense there what's going on or what could go on.
Speaker 5: Yeah, thanks, Thomas. Good question. Off the top of my head, I do not know the market share for that particular application in the US, so I can't answer that, but we can find that out and get back to you.
Speaker 5: We do have a PLA version of the pod, which we've been selling in the US for quite some time. I don't see that growing. It's part of our PLA business.
Speaker 5: Which we don't really see as a strategic, but we couldn't see those sales flipping over to PHA and then potentially becoming a growth driver. But it's not a current part of our forecast.
Speaker 6: Got it. I appreciate the insight there.
Speaker 6: Maybe another question would just be on the work that you're doing with Corvon. Since you're both kind of committing resins there, is it the same kind of split? Are you 50-50 as far as what that final product looks like? Is there still more work to be done?
Speaker 5: scale up. But right now we think that's in final form and it's in the very final stages of testing to be able to go live with a specific customer, a specific customer testing.
Speaker 5: To be able to go live this year with that as far as kind of how that arrangement works. It's really similar to how we have always. I've done business in terms of formulating with, it's a buy sell. So we buy the from.
Speaker 5: Total Energies Corbeon and then we formulate it and sell into the market. All right. Thank you very much.
Speaker 4: on and then we formulate it and sell it to the market.
Speaker 2: Thank you. Next question, we have John with CJF Security. Please go ahead. Hey, guys, thanks for taking my questions. It's nice to see that you're getting better visibility here. I was wondering if you'd give us a little bit more sense of.
Speaker 2: how you expect utilization in Kentucky to still is a trend with all these, you know, new and large, I guess, projects that are in the pipeline. Any hope of getting it towards full utilization by the end of next year? Is there any milestones you want to reach?
Speaker 5: Before that, just help us get a sense of how quickly these things are actually going on from a bottom perspective. Yeah, thanks, John . Yes, I think it's a reasonable expectation to think that by the end of 24, we would be at full utilization there.
Speaker 2: Okay, and your sense of fluidization is like 80%, 90% or thereabouts?
Speaker 2: Okay, and your sense of fluidization is like what 80%, 90% or thereabouts? In that rain.
Speaker 2: Sure, yep. Okay, got it. The Cutlery announcement is interesting because my understanding is that that probably uses a lot more PHA per unit than a straw would. Could you help us understand the economics of something like that and how it's being distributed and kind of the use cases? Sure, so as far as the.
Speaker 5: in terms of the amount of PHA that we need to put in it. So, to achieve industrial compostable, we don't need much at all to achieve home compostable. We need more and then to achieve marine degradable, we would need even more. So, right now we have...
Speaker 5: more than one formulation out on market trials. There's a range, but it's in the mid, it's still in that mid 50-60 percent area as far as the amount of PHA that's in the formulation. After maybe 40 days, we still have about 600,000 discount rates that somebody cannotising as far as what gets pulled $100,000 more. It's a a requirement from a doctor to chest care, wellness, Sexy heart attack do follow
Speaker 5: From what I've seen from individual customers, I would say that the size of those two markets, at least when you look at any one QSR, the size of those markets are similar.
Speaker 5: If one color might be a little larger than straws, but not a whole lot larger.
Speaker 2: Okay, understood. Got one from Mike. Your OPEX was just a little bit under $8 million on an adjusted basis. Is that a good run rate to be using going forward or what are the puts and takes that you put the rest of the year?
Speaker 4: I think overall, we're continuing to control costs very carefully. We were pleased with what we did achieve in the first quarter, especially on a year over year basis, which I think was substantial. Some of those were related to reversals of bad debt reserve and things like that.
Speaker 4: to be able to manage those. And we've been able to reduce a lot of those costs by bringing those in-house, just by having more internal experience now and skills. So we're really pleased with how we've been able to get rid of outside services. We brought in our own internal general counsel, and we believe that savings a lot of money and legal expenses there.
Speaker 4: So I'll say a lot of things between outside services, consulting and all of that. We would expect to maintain those levels going forward and we'll continue then to look at the next tranche of cost that we can kind of manage. So we're hopeful it can go down further. Certainly, we don't expect it to go up.
Speaker 4: a lot of things between outside services, consulting and all of that. We would expect to maintain those levels going forward and we'll continue then to look at the next tranche of cost that we can kind of manage. So we're hopeful it can go down further. Certainly, we don't expect it to go up. Okay, great. Thank you. Thank you.
Speaker 3: Thank you. Next question, we have Charles Leibert with Piper Sandler. Please go ahead.
Speaker 7: You know, guys, just a couple of things. One, when you looked at the build out of the things that you mentioned, you know, the cutlery, the straws, some of the other in markets. And I know you talked already about, you know, the size of those markets that they are, I guess, today. When we get to, you know, the...
Speaker 7: more full use, not the reset, but the period of introduction in there. Which products are the biggest and in terms of split of where the PHA is going?
Speaker 7: and where you estimate them looking out longer term.
Speaker 5: which one has the strongest, the best possibility for volume? So, Charlie, let me take a stab at that. I'm not 100% sure I got the question, but I'll give you an answer. And if it's not the right question, you can repeat.
Speaker 5: So, you know, straws and cutlery are sizable opportunities for us, you know, given the amount of capacity that we have available. But cups is kind of the next domino to fall. And that is a much bigger opportunity. Coatings for cups. Those coatings can be extrusion, which are PHA.
Speaker 5: than straws or coloring.
Speaker 7: And that's perfect. And also though, so if I look going forward, you know, your opportunities, you've got some opportunities in the squad, they're growing, got some opportunities in the youth and so they're growing. But is there any reason that over the course of the next year and a half?
Speaker 7: you're gonna, for lack of a better term, reserve some capacity for the cup coatings if they start to move? Is that something you're gonna have to do? I mean, obviously, you just said this potentially is the biggest thing we got, and you might be getting some traction on it in the, you know, over the course of the next, let's say 12 months. Is it, given the fact that you won't have the new plant up for a while.
Speaker 7: term reserve some capacity for the cup coatings if they start to move? Is that something you're going to have to do? I mean, obviously, we just said this potentially is the biggest thing we got and you might be getting some traction on it in the, you know, over the course of the next, let's say, 12 months. Given the fact that you won't have the new plant up for a while,
Speaker 7: How do you strategize going forward in terms of gaining volume? Is that something you're going to have to, it's a nice problem to deal with, but how do you deal with that considering the size? Yeah, good question. When I answered that,
Speaker 5: match the timing of the greenfield coming online with the timing of customers ramp-ups. And that doesn't mean that there's, you're not going to hit some point where that means you're flat on the top line for some period of time, but obviously we want to compress that as much as possible. medalist column approximately there.
Speaker 7: One last question, this one's a little off-beat. Is the cutlery that you guys put out with the resin, and we'll call it on the commercial side, not residential, not marine side.
Speaker 5: Is that Well, let's say for lack of their turn flimsy like polypropylene or stiff and firm like polystyrene would be in in the cutlery business What's the you know, I look what Yeah, good question Charlie I mean we think the quality is fantastic and are you know the the items that our customers have seen
Speaker 5: are getting good reviews. I would say that the answer to me, it depends on the thickness of the color. So different modes are where you're at different thicknesses. Now, honestly, I can't personally tell you that at a 60 mil thickness, is it softer or stiffer.
Speaker 5: you know, then polystyrene or polypropylene. I'm not sure because I know I see the differences at different thicknesses, so I'm not 100% sure. Yeah, I mean, I guess the question because of, you know, who might be the buyer that the better cutlery the stiffer, you know, from our stuff is done by sort of higher and places than places that you use the polypropylene are looking for really cheap.
Speaker 7: And again, you can hardly cut anything or pick anything up with your fork. So it's sort of a.
Speaker 5: No problem, but I'd like to move into a higher end of the market. Yeah, good question. I will tell you that every sample that I've seen is not floppy. They're firm enough to be able to cut food with and things like that. But here's a key point is
Speaker 5: you know, it depends on the customer. What does the customer want? We can formulate to meet either standard, if you will. Ryan, are you there?
Speaker 3: Oh, sorry, I wasn't muted. Next question, we have Lawrence Alexander with CHEFRY. Please go ahead.
Speaker 5: Hi, thanks for taking my questions. This is Kevin again. I guess I was just wondering if you could unpack, I guess, trends you're seeing in ASPs. So, I mean, in different applications and product categories, are they relatively stable or are they sort of moving just as sort of there's kind of rising uncertainty in the US? But I just curious to hear what you're seeing in terms of pricing.
Speaker 2: in your applications. Yeah, Kevin, good question. You know, what we saw through 21 and 22 was some really rapid inflation, and that drove up a lot of our raw material costs.
Speaker 2: And so we were passing on costs that pushed the average selling price up, but that has stabilized. And so we have not seen, as far as trends go, there has not been any trend up or down with respect to current products that are on the market.
Speaker 5: Got it. Okay. Thank you. And I guess my last question, I guess, just curious to hear what you're hearing from your customers and further downstream, I guess.
Speaker 5: I guess, what are you hearing and what do you expect maybe in the cadence of launches? Could they change if there's a recession in the back half of this year and in 2024? I'm just curious to hear what you're hearing from customers.
Speaker 2: Yeah, I wish I was that good at predicting the future, but obviously, anything could happen, especially if there's a dramatic change in the economy. But the things that we're focused on right now are a long way down the road. I would expect that even in the event of some, as long as it wasn't some kind of massive economic upheaval.
Speaker 4: in a mild recession, I wouldn't expect a significant impact on our forecast. Got it. Okay. Thank you very much. Thank you again ladies and gentlemen. As a reminder, if you wish to ask a question, please press star 1.
Speaker 6: Just I didn't see in the deck. Can you let us know what percentage of revenue was readable to the quarter. Yeah, I never calculated that personally. Do you have that Mike? I do. I'm not sure if that's something. Yeah, let me get that for you here. If you have another question, I'll get that information for you. Go ahead Thomas. Sure.
Speaker 6: Yeah, I just wanted to kind of better understand the nature of the restricted cash release. Was that performance related with something that was going on or was there something else there? Yeah, I'll take that there as I go. You know, we had changes in our restricted cash for the most part were kind of related to the IP term loan, and those were short term in nature.
Speaker 4: So the one that you know has really stuck with us is the interest reserve account where we had to put about twelve and Half million dollars into that and roughly maintain that balance so you know over the next couple years They have reserves for the interest payments on the loan There was I would say some short-term I would say cash availability constraints that we had we had to go through and get some consents when
Speaker 4: dollars into a restricted account, a blocked account, just for any kind of subsequent pay out of those loans in the event that we never did get that consent. So there's a lot of noise in the restricted cash line this quarter, a lot to do about nothing.
Speaker 4: But, you know, we've got all of that kind of worked out at this point and the only real change we. The most part have is just a restricted interest payment. So I think going forward is we talk about, we've got to look through all of that. And when we talked about our really our effective liquidity. Being.
Speaker 4: You know, 114M dollars, but you're realizing that 12M of that was actually in a restricted account for a short period of time. Does that help you?
Speaker 6: No, that makes sense. I appreciate the insight. I just kind of want to make sure I'm from the Meccanations that we're growing on. Yeah, so I give you enough time for the PHA for Senators or we can always take off one. It's easier.
Speaker 4: Like, my stellar staff is taking me here on that and. P. H. A. was. About 42% in the current quarter. And.
Speaker 4: Yeah, there's about 52% in the prior quarter. I think this is in the 10Q. Perfect. I appreciate it. Thanks again.
Speaker 4: there's about 52% in the prior quarter. I think this is in the 10Q. Perfect. I appreciate it. Thanks again. Okay. Thank you.
Speaker 8: Thank you. Next question we have, a John Attain One thing with CJF Securities. Please go ahead.
Speaker 9: I was wondering if you could give us a sense of just what's happening in Q2 just directly. I know timing impact to Q1. Those issues been resolved and kind of is regular production resuming number one. And do you have any programs actually ramping in Q2? I know you mentioned Q3, Q4, Q1. Q2.
Speaker 2: I didn't hear any mention of actually this quarter. Yeah, John , the issue that caused the tough comparison the last quarter was really the Eagle Starbucks ramp. And so that's behind us going forward. We expect year-over-year growth.
Speaker 2: But as Mike caveated last quarter, we're still small and these are big customers, so it's still possible that we'll see lumpiness as these things scale up. As far as any Q2 scale up, we do have one large QSR that's starting to Revelation 33 where,
Speaker 2: Store trials this quarter, which is really just the 1st step in the ramp up. So, we have every expectation that will continue that ramp will continue to scale and we'll end up with all of their strong business. Great, thank you. And then, Mike, any update on just input costs and where those costs are going to go?
Speaker 4: commodity prices in general. And we are at our forward outlook, and these are numbers that we're starting to kind of lock in with our contracts. We see prices that were up in the mid 90s sometime near last year, and low 90s is some of the things that we're experiencing, even our first quarter into our second quarter as we kind of work off some of those inventories. But as we look forward here, we're looking at prices now that we can contract in Q1.
Speaker 9: Great. Thank you very much. Last one for you. Just how much interest was actually capitalized in the quarter? Could you give us that number?
Speaker 4: There's very little interest capitalized in the quarter. It's I think. You know, less than a 1Million dollars and probably less than that. I mean, overall is we've kind of paused the Greenfield project and our cap expense has come way down. Our CIP has gone way down as well. So, at this point, you know, majority of our interest is now flowing through the interest expense line.
Speaker 4: As opposed to being capitalized, you know, if we once we get the funding for the greenfield project and that starts up again, we can see a change on that going forward. Right now. The amount of interest that we're seeing capitalized is pretty de minimis.
Speaker 4: You know, once we get the funding for the Greenfield Project and that starts up again, we can see a change on that going forward right now. The amount of interest that we're seeing capitalized is pretty diminuously. Thank you.
Speaker 2: If there are no further questions at this time, Steve, do you have any closing remarks? Yes, thanks, Brian . I'd like to thank everyone on the call with us again for your time and attention today. We're excited about the increased awareness of PHA-based materials among consumers and customers, pleased to have major opportunities for growth right in front of us.
Speaker 2: and grateful for the ongoing support and dedication and shared vision of our investors, employees, partners, teammates, and customers. We'll be looking forward to speaking to you about our continued progress again next quarter.
Speaker 8: This concludes your conference for today. Thank you for participating and ask that you please disconnect your lines.