REO Sales and Production Volumes of 10,215 and 10,671 Metric Tons, Respectively
Revenue of $95.7M and Net Income of $37.4M
Adjusted EBITDA of $58.7M
Diluted EPS of $0.20 and Adjusted Diluted EPS of $0.27
LAS VEGAS--(BUSINESS WIRE)-- MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”), today announced financial results for the three months ended March 31, 2023.
“MP continued to advance the multiple streams of our business during the quarter despite weaker recent commodity pricing,” said Chairman and CEO James H. Litinsky. “At Mountain Pass, we sustained strong production and sales volumes while simultaneously commissioning additional Stage II circuits and moving closer to producing separated rare earth materials. In addition, construction and engineering of our Stage III magnet facility continues at a rapid pace, bringing the restoration of the full magnetics supply chain closer to fruition.”
First Quarter 2023 Financial and Operational Highlights
For the three months ended March 31, 2023 vs. 2022
(unaudited) 2023. 2022 Amount Change % Change
Financial Measures: (in thousands, except per share data)
Revenue(1) $ 95,700 $ 166,258 $ (70,558) (42) %
Net income $ 37,44 $ 85,551 $(48,104) (56)%
Adjusted EBITDA(2) $ 58,700 $ 132,257 $(73,557) (56) %
Adjusted Net Income(2)(3) $ 51,327 $ 94,043 $ (42,716) (45)%
Diluted EPS $ 0.20 $ 0.45 $(0.25) (56)%
Adjusted Diluted EPS(2) $0.27 $0.49 $(0.2%) (45)%
Key Performance Indicators: (in whole units or dollars)
REO production volume (MTs). 10,671 10,828 (157) (1)%
REO sales volume (MTs) 10,215 11,706 (1,491) (13)%
Realized price per REO MT(2) $ 9,365 $13,818 $(4,453) (32)%
Production cost per REO MT(2) $1,978 $1,594 $384 24 %
(1)
The vast majority of our revenue pertains to product sales of our rare earth concentrate.
(2)
See “Use of Non-GAAP Financial Measures” below for the definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Production Costs, which is used in the calculation of production cost per REO MT. See tables below for reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. The definition of realized price per REO MT is also included in “Use of Non-GAAP Financial Measures” below.
(3)
Effective September 30, 2022, the Company no longer excludes depletion expense for purposes of calculating and presenting Adjusted Net Income, and has retroactively revised the prior year period for comparability purposes.
Revenue decreased 42% year-over-year, driven by a 32% decrease in the realized price of rare earth oxide (“REO”) in concentrate as well as a 13% decline in sales volumes. The change in realized price reflects a softer pricing environment for rare earth products as compared to the prior year period when recent pricing peaked. Metric tons (“MT”) of REO sold in the quarter declined year-over-year mainly due to the timing of shipments, which fluctuate quarter-to-quarter but have approximated production volumes over time.
Adjusted EBITDA decreased 56% year-over-year, driven by lower per-unit profitability, a decrease in sales volumes, and higher personnel and other general and administrative costs, as well as advanced projects and development costs. The per-unit profitability decrease was driven primarily by the decline in realized prices discussed above, as well as higher production costs as we expand our workforce and ready our facilities to support separated rare earth (Stage II) production. Production cost of $1,978 per MT of REO increased 24% year-over-year, mainly due to the scale benefits of higher sales volumes in the prior year period, as well as higher payroll costs, primarily as a result of increased headcount discussed above and higher costs of materials and supplies.
Adjusted Net Income decreased by 45% year-over-year to $51.3 million, mainly due to the lower Adjusted EBITDA, partially offset by increased interest and investment income earned on an increase in short-term investments as well as lower income tax expense primarily associated with the lower pre-tax income.
Net income decreased 56% year-over-year, primarily due to the factors driving the lower Adjusted Net Income discussed above, as well as costs incurred to support growth initiatives, start-up costs, and costs associated with the removal of legacy facilities at Mountain Pass. These impacts were partially offset by lower stock-based compensation expense compared to the prior year period, mainly due to the accounting impact of accelerated amortization of certain equity grants.
Diluted earnings per share (“EPS”) decreased 56% year-over-year to $0.20, in line with the lower net income discussed above. Adjusted Diluted EPS decreased 45% to $0.27 in line with the decrease in Adjusted Net Income discussed above.
MP MATERIALS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
