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Date
Thursday, August 14, 2025 at 5 p.m. ET
Call participants
Chief Executive Officer and Co-Founder — John Bissell
Chief Financial Officer and Chief Operating Officer — Matt Plavan
Co-Founder and Chief Product Officer — Ryan Smith
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Risks
Revenue guidance reduction-- Chief Financial Officer Plavan stated, "We estimate an aggregate reduction in manufacturing output of approximately 50%-15% for 2026 and 2027, respectively, compared to our prior estimates" due to CapFormer build-out delays.
Adjusted EBITDA run rate delay-- Plavan said adjusted EBITDA run rate breakeven has been delayed from 2026 to 2027.
Tariff impact on equipment capital costs-- Plavan emphasized, "The 15% tariff on EU imports, up from 10% as of late July 2025, and the 39% tariff on Switzerland imports, which went into effect on August 7, 2025, affect Origin because we source CapFormer systems from Switzerland and Germany for deployment in the United States." He further stated, "Such tariff costs can significantly raise the cash outlay required for financing equipment, as we do not expect the tariff cost to be financeable."
Nasdaq minimum price compliance-- Plavan explainedOrigin Materials(ORGN -8.54%) is in its "first 180-day grace period" after being priced below $1, with "51 days" left to regain compliance before requiring further remedial action.
Takeaways
PET cap launch-- The first Origin PET bottle caps are now on store shelves with an 1881 cap for noncarbonated water, entering the $7 billion noncarbonated water cap market.
Manufacturing capacity progress-- The first CapFormer system is producing PET caps in Reed City, Michigan, while two more CapFormers arrived in the U.S. in July; CapFormers three through six are expected to complete factory acceptance testing on a rolling basis through 2025.
Build-out delays-- Factory acceptance testing for CapFormers seven and eight is now planned for 2026, updated from the prior first quarter 2026 target because of capital constraints and tariff exposure.
Strategic customer agreement-- Berlin Packaging has become the first publicly named customer and will distribute Origin's PET 1881 caps, immediately extending market reach.
European manufacturing expansion-- A partnership with Royal Hoerdijk enables PET cap production in Europe, bypassing U.S. import tariffs and broadening manufacturing capabilities.
Revenue guidance-- Updated revenue for 2026 is projected at $20 million-$30 million, and for 2027 at $100 million-$200 million (non-GAAP), down from the prior guidance ranges of $50 million-$70 million for 2026 and $150 million-$210 million for 2027.
Financial position-- Origin reported $69 million in cash, cash equivalents, and marketable securities as of June 30, 2025, $17.9 million in net accounts receivable, related to a supply chain program winding down, and $9 million in land held for sale as of June 30, 2025.
Go-to-market strategy shift-- Origin is refocusing on immediate sales for the qualified 1881 flat water market, instead of waiting for broader cap format designs.
Strategic review initiated-- Origin has launched a review with RBC Capital Markets to identify ways to expand manufacturing, marketing, and capital solutions.
Product differentiation-- CEO Bissell said, "Our technology platform produces what we believe to be the world's first and only commercially viable PET caps," emphasizing performance and recyclability advantages over incumbent and historical PET cap attempts.
Summary
Origin Materials has put its first commercial PET bottle cap on store shelves, marking entry into the multi-billion-dollar water closure segment. The company is adjusting its manufacturing rollout due to supply chain disruptions and tariff escalations, delaying revenue expectations and shifting breakeven targets into 2027. Strategic partnerships with Berlin Packaging and Royal Hoerdijk are expanding both distribution reach and European manufacturing capacity. A strategic review is underway to assess ways to accelerate capital availability, capacity expansion, and market penetration. Management acknowledged explicit risks from tariffs, production timing, and ongoing Nasdaq compliance issues, highlighting the urgency around operational and financial flexibility.
Management indicated that expanded interest from established packaging and cap companies may drive further partnership announcements as Origin seeks to address demand beyond current capacity.
CEO Bissell highlighted, "We think that our cap performs better than other attempts at making PET caps out there," positioning Origin's thermoforming-based technology as differentiated on both economics and performance.
Receivables from the winding-down supply chain activation program and planned land sales represent potential incremental cash sources in upcoming quarters.
Origin is prioritizing quick scaling in the high-value water closure segment while progressing toward product qualification for the larger CSD market projected for 2026.
Industry glossary
CapFormer: Origin Materials’ proprietary manufacturing line used to produce PET bottle caps through thermoforming.
FAT (Factory Acceptance Testing): Final on-site testing ensuring equipment meets operational and quality specifications before deployment.
CSD: Carbonated soft drinks, a major beverage segment requiring distinctive closure specifications.
HDPE: High-density polyethylene, a common resin used for traditional bottle caps.
Thermoforming: A manufacturing process where PET sheet is heated and formed into cap shapes, as opposed to injection or compression molding.
Full Conference Call Transcript
John Bissell, followed by CFO and COO Matt Plavan. Then we will open the call to questions from analysts and discuss questions submitted as part of this quarter's Ask Origin campaign. Ahead of this call, Origin has issued its 2025 second quarter press release and presentation. These can be found on the Investor Relations section of our website at originmaterials.com. Please note that during our discussion today, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.
These statements reflect our views as of today, should not be relied upon as representative of our views of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion on the material risk and other important factors that could affect our financial results, please refer to our filings with the SEC, including our quarterly report on Form 10-Q filed today.
During today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Origin Materials performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, which will be posted to our website. The webcast of this call will also be available on the Investor Relations section of our company website. With that, I will turn the call over to John.
John Bissell: Thank you, Ryan. Good afternoon. In a separate press release issued today, we announced the first Origin PET bottle caps are now on store shelves. A world's first and a significant inflection point for the company and the packaging industry. We are now officially in the market with our 1881 cap for noncarbonated water, a $7 billion segment of the cap's market. Coupled with our recent customer announcements, including our first publicly named customer, Berlin Packaging, and recent progress reports on our manufacturing capacity build-out, we are closer than ever to bringing our transformative PET bottle cap technology to the entire $65 billion closures packaging market.
Our technology platform produces what we believe to be the world's first and only commercially viable PET caps. The platform excels in seven areas: recyclability, oxygen barrier, which enables longer shelf life, closure diameter, enabling more economic large formats, thickness, which enables lighter weight, rigidity, gives a premium feel, use of recycled content, and optical clarity. Successful commercialization will be a step change for recycling and improved packaging performance while creating significant value for our shareholders in the process. During the quarter, we maintained laser focus on the priority build-out of our first eight CapFormer lines, making solid progress advancing through the various stages of order placement, manufacture, testing, and shipping of lines two through eight.
Despite our progress, we experienced a number of OEM manufacturers' delays, including slower subcomponent deliveries and procurement delays, often due to tariff considerations. As a result, we expect FAT completion for each of our lines to be 30 to 90 days beyond our prior expectations. These delays accentuate the gap between the indicated demand for Origin's PET caps and our production capacity, leaving money on the table. Separately, we have fielded a number of strategic collaboration inquiries reflecting the natural synergy between the robust manufacturing and distribution capabilities of legacy packaging companies and the high-value products and innovative technology development capabilities at Origin. The packaging industry is well-defined, highly commoditized, and very competitive.
Its core competencies are operational efficiency, consistently high productivity, and reliable delivery. What we hear regularly from customers, however, is that innovation in the packaging industry is lacking. To pursue these emerging opportunities and help address the gap between the indicated demand and production capacity for Origin's PET caps, we have launched a strategic review with our financial adviser, RBC Capital Markets, to identify accretive strategies that can enhance the company's manufacturing capacity, marketing and distribution capabilities, and strategic capital. We believe this will enable value capture beyond what we can achieve organically, potentially enabling Origin to more effectively fulfill pent-up demand and accelerate our efforts to unlock shareholder value in the near term.
One early result of our strategic review is an important refinement of our go-to-market strategy to more effectively prioritize and capture high-value opportunities within the over $65 billion caps enclosures market. It is comprised of a number of different differentiated segments. Our current strategic prioritization targets five large functional segments, including water at $7 billion, carbonated soft drinks or CSD at $6 billion, other beverage applications such as hot fill, ready-to-drink, beer, wine, milk, and sports drinks at $18 billion, food and pharmaceutical at $20 billion, and other nonbeverage at $17 billion. Each segment utilizes different cap formats to achieve unique performance characteristics required by the product.
Previously, our approach had been to design a single 1881 cap to serve all of these markets. However, following the recent successful qualification of our 1881 cap for flat water, we can now begin immediately selling into the 1881 flat water market rather than waiting until completion of the final designs for the 1881 cap that will serve the broader CSD market later in 2026. Our PET cap works, passed qualification for a customer's water requirements, succeeded on a commercial bottling system, and went on store shelves. We continue to work side by side with CSD customers and anticipate success with CSD qualification, with a focus on impact resistance and multiday heated horizontal stress testing.
Given the design freedom and material properties afforded by our proprietary method for producing PET caps, we believe CSD qualification is a matter of when, not if. Next, I will highlight a few of our recently announced strategic partnerships and customer relationships and then share the status of our manufacturing capacity build-out. Earlier this month, we announced a new customer, Berlin Packaging. Berlin Packaging is a respected market leader and has agreed to purchase PET 1881 caps from Origin Materials for sale and distribution. Berlin's broad and deep distribution footprint not only immediately extends our market reach for 1881 but also opens the door for all our forthcoming formats across all closure applications globally.
As a strategic customer, Berlin was exceptionally attractive because of their expertise in connecting closure products with brands to unlock the highest value opportunities. We look forward to working with Berlin and to revealing more about our other customers as well. On the supply side, we continue to grow our manufacturing capacity and execute our adaptive supply chain strategy, actively responding to macroeconomic uncertainty and changing conditions. The status of our CapFormer build-out is as follows: Our first CapFormer system is producing PET caps in Reed City, Michigan. Two additional CapFormers, including thermoformers and for one of the CapFormers all of its subsystems, arrived in the United States from Europe in July 2025.
The equipment arrived at Reed City prior to or received an exemption from the EU and Switzerland tariff increases to 15% and 39%, respectively, saving over a million dollars. We continue to expect CapFormers three through six to complete factory acceptance testing on a rolling basis through 2025. Primarily due to capital constraints accentuated by tariff exposure, we now plan to complete factory acceptance testing for CapFormers seven and eight in 2026, updated from Q1 2026. In July, we announced a new European mass production partner, Royal Hoerdijk, further diversifying Origin's manufacturing footprint in response to continued pressure from US tariffs on European imports.
European manufacturing capacity expands Origin's global footprint, enabling the production and sale of PET caps without equipment or caps crossing US borders. Hoerdijk is a leading Dutch producer of sustainable plastic packaging solutions in operation for over one hundred years. Hoerdijk will use its PET extruders to produce extruded sheet for use in CapFormer production lines owned by Origin and operated by Hoerdijk in Hoerdijk facilities in the EU. We expect Hoerdijk PET extruders and extrusion expertise can drive capital cost efficiency for CapFormer lines. We anticipate installing the first CapFormer in a Hoerdijk facility before 2026. Finally, our sales pipeline remains strong, and interest remains high for larger cap formats with attractive unit economics.
We believe our thermoforming PET technology advantages us disproportionately as format size increases, which we believe will translate to higher margins than HDPE caps the larger the format. A key objective of our strategic review process is to identify ways to accelerate our development and deployment of these new formats. And now I will hand it over to Matt for a review of our expected near-term financial performance.
Matt Plavan: Thanks, John, and good afternoon, everyone. I would like to begin with an update on our financing strategy. As we previously indicated, we endeavor to source the majority of funds for our capital equipment build-out on our way to sustained profitability from nondilutive capital such as equipment and corporate debt. However, depending upon equipment operation target locations, tariffs may require us to deploy meaningfully more capital for our equipment going forward. The 15% tariff on EU imports, up from 10% as of late July 2025, and the 39% tariff on Switzerland imports, which went into effect on August 7, 2025, affect Origin because we source CapFormer systems from Switzerland and Germany for deployment in the United States.
Such tariff costs can significantly raise the cash outlay required for financing equipment, as we do not expect the tariff cost to be financeable, thereby making debt financing in those instances more expensive and potentially suboptimal. As John mentioned, we believe our strategic review process will help us optimize the cost of capital under these circumstances and to maintain timely capacity build for demand capture, and to preserve the path to our stated goal of nondilutive financing for the majority of our forthcoming capital expenses. Next, we are revising our revenue and run rate EBITDA guidance. We estimate an aggregate reduction in manufacturing output of approximately 50-15% for 2026 and 2027, respectively, compared to our prior estimates.
This is due to the impact of the aforementioned delay in CapFormer FAT timing for lines two through eight on our backloaded 2026 production schedule as we described in May 2025.
Frank Mitsch: Prior revenue guidance for 2026 and 2027 was a range of $50 million to $70 million and $150 million to $210 million, respectively. We are updating revenue guidance before consideration of potential strategic review outcomes to $20 to $30 million and $100 to $200 million for 2026 and 2027, respectively. In addition, we expect these same factors to push our adjusted EBITDA run rate breakeven from 2026 into 2027. Lastly, we ended the quarter with a strong balance sheet, including $69 million in cash, cash equivalents, and marketable securities.
In addition, the net accounts receivable balance of $17.9 million at June 30, 2025, is comprised of receivables associated with the company's legacy supply chain activation program, which is being wound down in 2025. Concurrent with the wind-down of the supply chain activation program, we expect to collect all related net receivables in due course, resulting in a significant source of cash. Additionally, as of June 30, 2025, the company had $9 million in land held for sale in Geismar, Louisiana. We expect the sale of this land to also result in an additional significant source of cash. With that, I will pass it back to John for concluding remarks.
John Bissell: Thanks, Matt. I will conclude by reiterating what I said at the beginning of this call. Today, Origin is closer than ever to bringing our product to the $65 billion cap enclosures market. The first Origin PET bottle caps are now on store shelves. We are now officially in the market with our 1881 cap for noncarbonated water. This quarter, we announced our first publicly named customer, Berlin Packaging. Despite tariffs as high as 39% directly impacting our business, we remain nimble by expanding the geographies into which we can deploy production.
We are adapting and executing our plan, and we are evaluating promising paths forward for our strategic review with RBC, which we believe can both accelerate and derisk our business plan while simultaneously unlocking significant value for our shareholders. With that, I will open up the call for questions. Operator, may we have the first question, please?
Operator: Showing no questions, I will now turn it over to Ryan Smith, cofounder and chief product officer, for a Q&A section answering Ask Origin questions submitted by investors prior to today's call. Thank you.
Ryan Smith: Thank you, operator. Prior to our earnings call, we invited all investors to submit questions as part of our Ask Origin campaign. Thank you so much to everyone who participated. These questions were, of course, submitted before our call today, and we answered many of them thoroughly with our prepared remarks. We will generally be answering the most relevant questions today during the time that we have. So let's start with the first question for you, John. The investor asks, as soon as the customer becomes public, we would like to know where to buy the product so we can support it and get the cap into our hands to show and tell the tangibility. How do we do that?
John Bissell: Well, as we announced earlier, we now have our product on shelves with a small brand, Power Hydration, located in California. We are excited to get those bottles out, those caps on bottles out there. We are excited to have them in the market. Certainly, if people want to travel to California to go get one of those bottles, they are welcome to do so, but we certainly do not expect that. And we do not expect Power Hydration will be the last brand that we announce with these caps out there in the near term. So we are excited to have our caps qualified for water, and we are excited to have our caps on store shelves already.
Ryan Smith: Great. The next question from the investor asks, have you been monitoring the competition, and could you provide some insight on who your closest competitors are and how much further ahead you think Origin is in mastering this particular type of PET cap production?
John Bissell: Sure. Our technology platform is pretty differentiated from the other attempts at making PET caps, both historically and currently. As a reminder, what we do with our technology is thermoform PET sheet into caps, and then with a little bit of post-processing, can convert those into caps that can be directly put on bottles.
As you compare that to both existing caps technology for HDPE and polypropylene cap production and also the attempts, both historical and current, to make PET caps, those technologies are using either injection molding, which is melting the PET down fully and then extruding it into a fully enclosed mold, or compression molding, which is taking a softened PET and essentially pressing it into a fully enclosed mold to make the shapes. There are some key elements of those technologies which are challenged relative to thermoforming. The first is that making that thin film of a PET cap is quite challenging with both of those technologies due to the material properties of PET.
In fact, when you make that cap, it is not going to have the same kinds of properties that a PET that is formed using thermoforming will due to some of the orientation that occurs within PET when you stretch it and when you mold it over a part with some bra like you do with our technology. We think those are some of the key elements that allow us to both get better unit economics and not just better unit economics for caps the size of 1881, but caps that are even larger than that. We think that is what allows us to get better material properties out of our PET.
It allows us to get lighter weight caps, it allows us to get the optical clarity that our customers have found really quite striking and aesthetically pleasing and differentiating. Actually, it is also what allows us to use recycled content in our caps more easily. Many of the differentiated properties that we think are key, not just to our technology, but to, frankly, PET caps in general and making PET caps successful, depend on the technology that we bring, which is this thermoforming anchored technology. We are really excited about that. We think that is going to be a step change, as we said earlier, in recyclability and really in performance in the product.
The PET caps just perform really well across a whole bunch of different dimensions. I think relative to our competitors, we are excited that we have, we think, the first commercially viable PET cap in the market. We think that our cap performs better than other attempts at making PET caps out there. We think that our cap has the ability to really change the way that the packaging industry innovates, frankly. So, we are excited to be here.
Ryan Smith: Great. The next question asks how should we view the Hoerdijk partnership in the context of prior partnerships and operating partners.
John Bissell: We expect, in general, to have multiple operating and manufacturing partners in all of the major geographies. We see Hoerdijk as an excellent addition to that, in particular with the more protectionist trading environment that all companies are operating in these days. Having another great partner in the EU, in particular, that has a huge capacity for extrusion of PET sheet for thermoforming, PET, and the capabilities and expertise that comes with that kind of large-scale PET sheet extrusion and PET thermoforming operation is something that we think is hugely additive to our overall capability as a company. Of course, particularly our overall capability in Europe.
We are excited to have them, and we do not think they will be the last of the manufacturing partners that we bring on board. In the near future, we think that there are going to be plenty more of those as we look across different geographies and expand into new geographies as well.
Ryan Smith: Great. Next question I want to address to Matt. The question asks, where do we stand with respect to our Nasdaq listing? We have been trading for under a dollar for some time now.
Matt Plavan: Thanks, Ryan. Just as a reminder, there are minimum listing requirements that Nasdaq has for companies on the exchange. One of those is that your stock price stays above a dollar, generally speaking. The way they monitor that is if your stock falls below a dollar for thirty consecutive days, you get a notification that you are not in compliance with that particular minimum listing requirement. They give you initially a hundred and eighty days to remedy that situation, and they measure it as being remedied the moment that your stock crosses over a closing price of a dollar for ten consecutive days. We are a hundred and twenty-nine days into our first hundred and eighty-day grace period.
We continue to see many opportunities for us to perform, execute, and have our stock and the value of our company increase, and in doing so, be over a dollar for ten consecutive days in the near future. At this point, we have another fifty-one days in our first grace period. At that point, you can apply, and we would if we were not over a dollar and had not met that listing requirement.
We would apply for a second grace period of a hundred and eighty days, which the Nasdaq evaluates to make sure that you meet all the other minimum requirements, and if the only requirement remaining is the minimum dollar stock price, and you have a plan that is acceptable to the Nasdaq to earn that second grace period, which is generally what is generally approved. As long as you are willing to perform a reverse stock split during that second period if your attempts through organic measures are not successful in raising the stock price above the dollar. Generally, companies are willing to do that.
We think we, as I said, have many more opportunities during that remaining period of time between what is left of our first period and should we have to request a second grace period, that gives us another seven months to become, to regain compliance. We feel good about our opportunities to do that and keep all folks, investors, posted through our public disclosures on our progress towards meeting those minimum requirements.
Ryan Smith: Great. Thanks for explaining that. John, to close us out, what do we have to get excited about as we look to the future?
John Bissell: I think there are a lot of things to get excited about. The first is that Origin PET bottle caps are now on shelves, and we think this is just the beginning. There is a lot of growth. That watermark is huge, and we are excited to grow sales while we work on our CSD qualifications. We are working on more customer announcements and naming our customers, especially following our Berlin Packaging press release. We have CapFormers three through six, which will be completing their FAT on a rolling basis through the end of the year, so continuing to build capacity there.
We are evaluating promising paths forward for a strategic review with RBC, which we believe can both accelerate and derisk our business plan while simultaneously unlocking value creation for our shareholders. For some time now, we have been receiving inbound interest from well-established cap companies that, frankly, struggle with innovation. It is hard to find innovation in these established industries, and we can provide that. We are excited across all of these areas, from organic to inorganic growth, and we are excited that our high-performance, highly sustainable, and recyclable cap is finally in the market in one of the largest caps enclosure segments. So there is a lot to be excited about.
Ryan Smith: Great. Thank you. I will pass that back to the operator.
Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.