Danimer Scientific, Inc. (NYSE:DNMR) This fall 2023 Earnings Convention Name March 28, 2024 4:30 PM ET
Firm Contributors
Blake Chamblee – Investor Relations
Steve Croskrey – Chairman and Chief Government Officer
Mike Hajost – Chief Monetary Officer
Convention Name Contributors
Jon Tanwanteng – CJS Securities
Thomas Boyes – TD Cowen
Laurence Alexander – Jefferies
Operator
Welcome to the Danimer Scientific 2023 Fourth Quarter Earnings Name. Presently all strains are in listen-only mode. Following the presentation, we’ll conduct a question-and-answer session. Directions will probably be supplied at the moment so that you can queue up for a query. [Operator Instructions]
I might now like to show the presentation over to Mr. Blake Chamblee, the Firm’s consultant. Please go forward.
Blake Chamblee
Thanks, operator. Good afternoon, everybody, and thanks for becoming a member of us immediately for Danimer Scientific’s 2023 fourth quarter earnings name.
Main the decision immediately are: Steve Croskrey, Chairman and Chief Government Officer, and Mike Hajost, Chief Monetary Officer. I might like to notice that there’s a slide deck that accompanies immediately’s dialogue, which is on the market on the investor relations part of our web site at danimerscientific.com.
As we start, I will name your consideration to the corporate’s Secure Harbor language, which is revealed in our SEC filings, and on slide two of the presentation I simply referenced. On immediately’s name, we could focus on forward-looking statements inside the that means of the Secure Harbor Provisions of the Personal Securities Litigation Reform Act of 1995 as amended. Ahead-looking statements embody, amongst different issues, statements relating to future outcomes of operations together with margins, profitability, capability, manufacturing, buyer packages, and market demand ranges. Precise outcomes may differ materially from what’s expressed or implied in our forward-looking statements. The corporate assumes no obligation to replace any forward-looking statements to replicate occasions or circumstances after the date hereof, besides as required by regulation.
As we speak’s presentation additionally contains references to non-GAAP monetary measures inside the that means of SEC Regulation G. We consider these non-GAAP measures have analytical worth, however notice that they need to be taken as supplementary measures of efficiency and never as alternate options to GAAP outcomes. We now have supplied reconciliations for non-GAAP monetary measures to essentially the most comparable GAAP monetary measures in our earnings launch and our presentation.
Thanks, and it is now my pleasure to show the decision over to Steve Croskrey, Chairman and Chief Government Officer, Danimer Scientific.
Steve Croskrey
Good afternoon, and thanks for becoming a member of us. The conclusion of the fourth quarter of 2023 marks the tip of a difficult 12 months as Danimer skilled delays in anticipated business launches. Regardless of these delays, we’re drastically inspired by our successes in the course of the 12 months and we consider we stay nicely forward of the competitors in each deep understanding of the bio-dividable plastics trade and the accessible manufacturing capability to satisfy our present and future prospects’ wants.
Some examples of our latest successes embody the beforehand introduced 20 million pound PHA resin cutlery award for a big fast service restaurant chain or QSR, the beginning of a Nodax primarily based draw scale up with one other massive QSR, in addition to the business launch of house compostable licensed mini carrot luggage beneath the Boathouse Farms model accomplished along side our converter accomplice, Columbia Packaging Group.
We’re enthusiastic about our partnership with Delta Espresso’s within the improvement of single use espresso pods that can meet stringent EU environmental requirements. Moreover, we’ve made nice strides in analysis and improvement efforts with a number of of our prospects, together with Mars Wrigley, Kemira, Eagle Fishing, and Pepsi. We now have additionally introduced the completion of our Rinnovo pilot plant in Rochester, New York. This enables us to reveal the capabilities of this distinctive PHA materials in assembly our finish prospects’ wants and supplies an vital proof-of-concept supporting our designs for business scale manufacturing.
We stay engaged with a significant oil and gasoline firm as a co-location accomplice for a business facility and are additionally in negotiations with one other accomplice to have interaction in analysis purposes utilizing our Rinnovo PHA. Our work with Chevron Phillips Chemical to develop and commercialize cast-exclusion movies, blown-exclusion movies, injection molded elements, and rotational molded elements utilizing Rinnovo polymers continues to progress in a really optimistic method.
Our main focus stays our improvement and commercialization efforts within the fast service restaurant channel. We work carefully with the highest three QSRs as measured by U.S. system-wide gross sales for quite a lot of end-use merchandise together with straws, cutlery, movie wrappers, bowls, and container lids. Our beforehand introduced 20 million pound annual awards present cutlery resin to a big international QSR chain continues to progress as we anticipated. We now have entered the primary levels of scale up and count on the primary business shipments within the second quarter of 2024, with Cutlery being delivered to no less than one buyer distribution middle in the course of the third quarter of 2024. We count on this award to succeed in full run charge within the second quarter of 2025.
We now have additionally lately discovered of a chance to increase each in geography, particularly into Asian markets together with Japan, and into extra finish product classes together with straws and movie wrappers for cutlery with this identical buyer. Scale up of our Nodax primarily based straw resin with one other massive QSR has progressed and is anticipated to enter business launch throughout 2024. The success of those trials has additionally led to a joint improvement settlement with the identical QSR for lids and coated paper containers.
We additionally proceed to advance within the commercialization strategy of compostable cups utilizing our PHA resins for each aqueous and excruciating coatings. This has been a technically difficult space, however we’re very near a profitable final result. Our accomplice Kemira has lately exercised an possibility to increase their license and exclusivity with us to commercialize biodegradable aqueous barrier coatings for use on paper-based meals and beverage purposes. This extension builds on our longstanding profitable improvement partnership which started in 2020 and bodes nicely for the long run. The QSR trade continues to quickly transfer in direction of extra sustainable options and we’re thrilled to be part of this transformation.
We partnered with Delta Coffees, a espresso roaster and occasional packaging firm in Portugal to develop a compostable single-use capsule for his or her Delta Q line of floor espresso. We now have begun business shipments of this resin within the first quarter of 2024. These pods are in full compliance with proposed new EU laws requiring any espresso pod offered to satisfy new compost requirements. These capsules degrade inside industrial composting environments leaving no microplastics or different residues that might hurt pure ecosystems. As a reminder espresso pods and tea luggage signify a possible 500 million pound alternative within the European market.
We have additionally expanded our analysis and improvement contract with Mars Wrigley to additional our relationship with their snacking division, together with the completion of testing and validation of a singular product packaging utilizing totally biodegradable PHA supplies this 12 months. Our partnership has additionally made important progress in direction of the event of compostable PHA packaging that showcases the specified efficiency for merchandise in Mars pet care and meals and diet companies.
One other promising R&D challenge is concentrated on the sports activities fishing trade. Eagle Fishing, an innovation chief within the trade, has partnered with us to develop a brand new PHA know-how for comfortable fish baits. Growth of this new PHA comfortable plastic know-how is nearing completion, and full-scale testing ought to be underway by mid-year, which can assist to interchange the plasticized PVC lures that hurt our aquatic ecosystems. That is an thrilling marketplace for us as we proceed to develop in new instructions and end-use purposes with our Nodax PHA-based resins.
We now have efficiently accomplished a joint improvement settlement with PepsiCo to create house compostable multilayer movies to be used in snack meals packaging. Our mixed R&D efforts have led to the event of a multilayer packaging construction that meets the sensible necessities for shielding the product whereas providing a sustainable, disposable different. The anticipated demand development for our PHA-based merchandise permits us to reaffirm our projected profitability timeline for our Kentucky operation and the corporate in complete.
We count on our Kentucky facility on a standalone foundation to change into EBITDA optimistic in the course of the second-half of 2024 at plant capability utilization of simply over 30%. We count on the entire firm will change into EBITDA optimistic when our Kentucky facility reaches 70% to 80% capability utilization close to the beginning of 2025. To assist the shopper income development outlined above, we determined to additional increase our liquidity place to assist guarantee an sufficient money runway.
As we beforehand introduced, we lately accomplished an fairness providing, producing $13.5 million of extra money after buyer closing charges. This extra liquidity, together with our projections for a reducing money burn charge as volumes improve in our Kentucky facility will help us in assembly our ahead money wants.
I wish to now draw your consideration to slides 5 and 6 in our investor presentation, which supplies a visible reminder of our gross sales cycle course of. From the preliminary result in commercialization, this is usually a prolonged, iterative course of moderately than a linear one, however we’ve been at this a very long time. We at the moment have 85 prospects within the materials choice cycle starting from preliminary pattern manufacturing to bigger scale trials to market testing to regulatory and certification work. This cycle establishes the long-term gross sales pipeline for our enterprise.
We lately introduced two new board members. We’re honored to welcome Dr. David J. Moody and Mr. Richard Altice to the Danimer Scientific Board of Administrators. Dr. Moody, who was appointed to the board on January the 17 of this 12 months, is the previous Chief Government Officer of Jadex, Included, a U.S.-based manufacturing and materials science firm. He has over 30-years of expertise managing chemical and polymer associated companies.
Mr. Richard Altice, whose appointment will probably be efficient April 15 2024, is the Former President and CEO of Nature Works, a developer and producer of biopolymers. He has over 30-years of gross sales, advertising and marketing, operational, and administration expertise in particularly chemical substances and biopolymer industries. These new board members deliver invaluable trade perspective and expertise as we search to quickly develop our enterprise and we have been very enthusiastic about including these seasoned executives to our workforce.
Lastly, we’re coming into the ultimate levels of our due diligence work with the DOE Loans Program Workplace, and we look ahead to negotiations on a projected time period sheet.
I’ll now flip the decision over to Mike Hajost, our Chief Monetary Officer, to replace you on the monetary outcomes for the fourth quarter and on our outlook for 2024.
Mike Hajost
Thanks, Steve, and good afternoon, everybody. I will begin with our monetary outcomes on slide seven of our presentation for these of you following alongside.
Fourth quarter complete income was $10.9 million in comparison with $15.3 million led by a product income decline of $4 million or 28%, in comparison with the prior 12 months stage. PHA-based resin gross sales grew by 11% within the quarter in comparison with final 12 months. And we proceed to expertise regular development, however PLA-based resin gross sales fell 74% in comparison with final 12 months, primarily because of the ongoing points related to the Ukraine battle.
We reported a fourth quarter 2023 gross lack of $6.4 million as in comparison with the prior 12 months quarter’s gross lack of $2.7 million. The year-over-year improve is primarily attributable to general decrease PLA gross sales in addition to increased depreciation bills. After adjusting for depreciation and stock-based compensation, we reported an adjusted gross lack of $1.2 million as in comparison with an adjusted gross revenue of $2.0 million within the fourth quarter of 2022, primarily because of the decrease PLA gross sales.
R&D and SG&A bills, excluding depreciation, amortization, inventory bid compensation and sure nonrecurring objects, totaled $9.4 million within the fourth quarter of 2023 in comparison with $10.5 million within the fourth quarter of final 12 months. Our continued price management initiatives throughout many areas of the enterprise created this $1.1 million year-over-year enchancment. Adjusted EBITDA loss was $10.7 million within the fourth quarter of 2023 and was at lack of $8.6 million within the fourth quarter of 2022.
For the complete 12 months, we had an adjusted EBITDA lack of $39 million, which was in keeping with our newest steering vary of minus $37 million to minus $40 million. On a year-over-year foundation, this represents a $6 million enchancment over prior 12 months’s adjusted EBITDA lack of $45 million. Adjusted EBITDA excludes stock-based compensation, depreciation, amortization, curiosity and different nonrecurring objects as reconciled within the appendix.
Money and equivalents on the finish of the fourth quarter was $59.2 million as in comparison with $62.8 million on the finish of 2022. Restricted money was $14.3 million which is especially held for future curiosity funds beneath our senior secured time period mortgage. Capital expenditures have been $2 million within the fourth quarter and $27.7 million for the complete 12 months which was in keeping with our newest steering vary of $27 million to $29 million.
We ended the fourth quarter with a complete debt stability of $382.8 million comprised primarily of our convertible senior notes, the senior secured time period mortgage and our new market tax credit score loans, which we count on will probably be forgiven beginning in 2026.
We proceed to view the magnitude and timing of the shopper ramp for PHA-based resins and our elevated utilization to serve that demand from our Kentucky operations as the biggest components for variability in our short-term monetary outcomes. With the shopper expectations described earlier, that can enhance money stream from our Kentucky operations, we’re set to launch our full 12 months 2024 steering.
We consider our adjusted EBITDA will probably be within the vary of minus $22 million to minus $32 million. With little or no required spend on the greenfield challenge in 2024, we’re anticipating our complete capital expenditures for the corporate to be within the vary of $8 million to $10 million. We additionally count on to finish 2024 with an unrestricted money stability within the vary of $20 million to $25 million. The ending money stability vary is pushed by the adjusted EBITDA vary as a proxy for money stream, the 2024 CapEx vary, recognized money curiosity for the 12 months primarily based on our present debt construction, the web money acquired from our latest fairness issuance and important enhancements in working capital.
The working capital enhancements will probably be led by our alternatives to cut back stock from artificially excessive present ranges and our capacity to enhance our general receivables collections to incorporate collections from accomplished R&D contracts. This ending money stability vary doesn’t embody potential money or liquidity from different financing transactions which might be accessible to us.
I will now hand the decision again to Steve for his closing remarks.
Steve Croskrey
Thanks, Mike. In conclusion, and as we glance in direction of 2024, we’re targeted on the immense long-term alternative to remodel the plastics market. With our developmental experience, capability footprint and a rising blue-chip buyer base, we consider we stay nicely forward of any competitors and have a transparent path to ship on our targets for 2024 and past.
Thanks to your time immediately, and we look ahead to updating you on our progress. We’ll now open the road for questions.
Query-and-Reply Session
Operator
Thanks. Women and gents, we’ll now start the question-and-answer session. [Operator Instructions] Your first query is from Jon Tanwanteng from CJS Securities. Please ask your query.
Jon Tanwanteng
Hey guys, thanks for taking my questions. My first one is, may you speak a little bit bit extra about your expectations for timing and ramp up by the 12 months? It sounds such as you’re getting a little bit bit higher visibility simply as associated to the cutlery and a few of the different contracts that you might have seen, however I am questioning if in case you have any extra — a extra detailed breakdowns as to ramp by quarter?
Steve Croskrey
Sure, Jon, I do not know that we can provide you an in depth ramp by quarter, however I can attempt to coloration it in right here. Most of that is going to be pushed by the cutlery award, which is considerably bigger than a few of the different alternatives. As we talked about already, we count on to be in distribution facilities by Q3 and to be at full run charge with that by Q2 of subsequent 12 months. The place the challenge is true now, the converters which were conscious of the enterprise are within the strategy of getting instruments constructed particularly for this program. One converter has ordered about $9 million price of recent gear that will probably be delivered in April. So it is nicely underway. We do not have particular manufacturing necessities but.
However we all know what the targets of the shopper are that assist our level that this will probably be at full run charge by Q2 of subsequent 12 months. And I will simply level out, that is a 20 million kilos, and that can greater than double our PHA gross sales. And one of many thrilling issues now could be that we’re additionally going to be doing the plastic wrap for the cutlery and that is going to additionally add considerably to the award. Thanks for the query.
Jon Tanwanteng
Bought it. That is useful. Second, I used to be questioning when you may give us an replace on the DOE mortgage program. And if there’s any motion there, or any adjustments to expectations?
Steve Croskrey
Okay. We’re on the level now the place the DOE is nearing completion of its due diligence, and we count on to be negotiating the phrases and are searching for a conditional supply conditional dedication by someday in Q3.
Jon Tanwanteng
Bought it. And the funds can be accessible round This fall in that point line. Is that truthful to consider it?
Steve Croskrey
Properly, that is doable, Jon. Sure, that is doable, Jon, however it would additionally rely on what the precise conditional dedication is. So relying on what necessities there could be. We all know what we have requested for, however we do not actually know precisely what we’re getting. So there may nonetheless probably be monies that should be raised and so it simply sort of is determined by how a lot when it comes to how lengthy that might take. However we’re hopeful that we will get it executed by This fall. However till we truly see the time period sheet it is actually onerous to foretell precisely.
Jon Tanwanteng
Understood. After which lastly, as you consider the greenfield and the time line it would go up and relying on what you get financing for, are you seeing any motion in prospects who’re prepared to take — may decide to both an anchor buyer or quantity indications, which can point out they could want the greenfield?
Steve Croskrey
Sure. I might inform you that a few of our prospects which might be included on this present ramp are shifting ahead with the expectation that we’ll get the greenfield deal executed as a result of they know that we cannot be capable of deal with their total necessities simply out of Kentucky. So we predict that is a good factor, clearly. And we count on, as we proceed to get a few of these different improvement initiatives throughout the end line that, as we have mentioned, many occasions, there’s multiples extra demand in our pipeline than what we will deal with even with the greenfield.
So — and I might level to 1 particular want, that are compostable cups, ingesting cups, as we get that over the end line, that is going to create an incredible quantity of demand and we’ll require the greenfield to assist that.
Jon Tanwanteng
Okay, nice. I will soar again in queue. Thanks.
Steve Croskrey
Thanks, Jon.
Operator
Thanks. Your subsequent query is from Thomas Boyes from TD Cowen. Please ask your query.
Thomas Boyes
Thanks for taking the questions. Perhaps only a follow-on, only a bit on the DOE mortgage. Extra on the method — sort of a excessive stage, assuming that the mortgage conditional enchancment is available in 3Q ’24, for the $180 million that you’ve got already spent on Bainbridge. Would you get 80% of that every one at one time? Is that sort of how that works? After which possibly wouldn’t it be truthful to imagine that there is a one quarter lag on CapEx that you just spent in 1Q of ’25 displaying up in 2Q after which the three and 4 and so forth and so forth. Is that sort of how the timing you assume works?
Steve Croskrey
Thanks for the query, Thomas. Let me ensure I — I will attempt to reply it and ensure I am answering the best query. So we’ll get as a part of the time period sheet, an LTV mortgage to worth. So we’ll get credit score for the roughly $190 million-ish that we have already bought into the challenge will depend in direction of our fairness. And each time — if there is a hole, we’ll have to lift extra fairness. If there’s not a niche, we’ll simply get began immediately, and it is going to be once more quick draw in opposition to the mortgage proceeds. So there will not be like a step factor every month or something like that. It is going to be — when the mortgage closes, it would all be accessible.
Thomas Boyes
Okay. That is useful. After which only for my second one, may you speak a little bit bit extra in regards to the joint improvement settlement for the lids and coated paper containers. I do know you have already got made important progress internally on lids. And in concept, may that velocity up the gross sales course of that you’ve got outlined within the deck?
Steve Croskrey
Sure. I am unable to actually supply an excessive amount of extra, Thomas, to that aside from it is for main QSR however these are lids. It is similar to lids for cups however these are lids particularly for meals containers. So it is a little bit totally different. However each time we do one in all these initiatives, we be taught issues, and we be taught issues that we will translate into different areas. So it is all good.
Thomas Boyes
Bought it. And if I may sneak yet one more in. Simply any replace on feedstock pricing? What you are seeing out there? What you have locked in, can be useful?
Steve Croskrey
Sure. Mike, do you wish to take that one?
Mike Hajost
Sure, certain, Thomas. Sure, I believe general, in This fall, our canola costs averaged proper round $0.86 a pound and we’re seeing actually about the identical kind of worth right here in Q1. It is — as we glance ahead right here by the remainder of the 12 months, the place we will — projecting these costs to maneuver all the way down to about $0.70 by mid-year. And we’re additionally anticipating to sort of finish the 12 months someplace within the mid-$0.60 vary. So we’re seeing a pleasant lower within the costs and we’re beginning to lock a few of these in.
Thomas Boyes
Admire it. I will hop again in queue. Thanks.
Operator
Thanks. Your subsequent query is from Laurence Alexander from Jefferies. Please ask your query.
Laurence Alexander
Good afternoon. Simply wish to begin with the filtration course of for the shoppers, the 85 that you just talked about, does that materially change the mixture potential demand pool that you’ve got in comparison with what you have talked about beforehand? Or are you able to give some sense of sort of if all of these prospects did ramp up, what number of vegetation of potential demand that might signify?
Steve Croskrey
Sure. Laurence, in sort of simply huge spherical numbers, I might say that these prospects signify no less than 3 occasions extra capability than is on the market in Kentucky and the greenfield. And clearly, that is a conservative quantity with out throwing like all the pieces added. That is simply the particular initiatives we’re engaged on. And to be clear, that — the 85 does not essentially signify a change. It is simply — we have been searching for a option to attempt to reveal to assist buyers sort of perceive the method higher and to sort of see the place issues are.
And so that is one thing we’ll — we’ll proceed to refine, however we’ll proceed to trace this sooner or later and current that sort of info. So any suggestions we get on how that appears and the way we’d do it higher can be useful.
Laurence Alexander
You may in all probability get too many metrics, all of us need. Talking of which, one that might be useful is when it comes to the shoppers who you received earlier and who you have been ramping up with, may you simply give us a way for the way a lot churn you have had, sort of the shoppers which might be rising the volumes they take versus prospects who’re dropping out as a result of merchandise both did not hit their specs or their wants modified?
Steve Croskrey
Certain, Laurence. Should you look on slide 5 and have a look at the shoppers on the best, these prospects are all rising. And I might say we’ve by no means misplaced a buyer as soon as we had them at sort of full run charge. We’d — we had possibly one buyer up to now and this has been quite a few years in the past, the place they launched — they in all probability did not perceive their very own specs. It was a smaller firm, and we launched, after which they came upon issues after the truth that, that did not work for them. However aside from that, we’ve not misplaced a buyer. All these prospects are joyful and rising with us.
Laurence Alexander
Okay. Nice. After which simply what is the present market expectation or buyer expectation or your messaging to them round once you use a greenfield, do they count on as volumes ramp a major drop in ASPs? Or we be fascinated with sort of flat to modest erosion in combine as you get economies of scale?
Steve Croskrey
Sure, certain. I perceive your query. We now have talked with a few of the bigger prospects, we have sort of proven them some expectations over like a 10-year interval of what that may seem like as we scale and what’s doable. However we’ve by no means particularly supplied anyone decrease pricing as soon as the greenfield comes on-line or had any particular discussions like that.
Laurence Alexander
Nice. After which simply lastly, are you able to replace sort of the market prospects for the Novomer know-how, notably into the aqueous movie purposes?
Steve Croskrey
Certain. So we’re — as you realize, we have simply accomplished the scale-up of the brand new pilot plant, and that can permit us sufficient quantity to have the ability to pattern a few of these prospects that can then be capable of create demand by validating the fabric. We now have — are in the course of negotiations with one other main chemical firm for a improvement settlement to assist that. And as you realize, we’re working with Chevron Phillips on a few these initiatives as nicely. And we’ve a sort of, simply name it, a verbal settlement at this level with — as a result of we’re ready on the shopper traction now, however we’ve an settlement with one other main oil and gasoline firm for colocation enterprise.
We will not — I am unable to speak to something on the aqueous aspect, however on the movie aspect itself, what we’re seeing is, when you keep in mind, Laurence, once we purchased that, that one of many issues we have been including was, that the barrier properties of that materials is a lot better than different business biopolymers, considerably so. And what we’re seeing now could be it is also higher than fossil fuel-based merchandise.
So I maintain telling individuals we’ve a killer app right here. After we can get that commercialized and mix it with Nodax, we’re going to have the ability to create purposes that not one of the different biopolymer opponents which might be out there immediately and even those which might be attempting to get into the market would be capable of compete with on the snack meals aspect due to the barrier properties.
Laurence Alexander
After which simply sorry, one final one, after which I will hop again within the queue. Is there a — would all of these agreements, in the event that they did pan out, do these signify any important capital necessities in your half? Or is the purpose on that aspect of the enterprise to be principally capital-light?
Steve Croskrey
Properly, the purpose is to be capital-light, however worst case, if we do a co-location, which we’ll do it, that is simply how it’ll be executed as a result of these suppliers, they’ve the uncooked supplies that we want, these huge oil and gasoline firms, and in order that’s simply the pure method that it’ll work. If we try this, the — that can scale back the CapEx requirement as a result of we’ll piggyback off of their infrastructure for issues like utilities, chillers and electrical energy and issues like that. So we will scale back our capital requirement that method.
We’re hopeful that we’ll discover a accomplice by this course of on the business aspect that wish to take part. And we predict if we get that, and we predict the co-location accomplice will even wish to take part and we will scale back our CapEx requirement much more. However the great thing about this product is that the CapEx price on a per pound foundation is one-fifth of the price of a Nodax plant. And so even when we’ve to suit the invoice, we count on to have the ability to do it on a challenge financing foundation.
Laurence Alexander
Okay, nice. Okay, Thanks.
Operator
Thanks. [Operator Instructions] And your subsequent query is from Jon Tanwanteng from CJS Securities. Please ask your query.
Jon Tanwanteng
Hello, sure. I simply needed to follow-up on that final one can be, the catalytic PHA. I used to be questioning when is the earliest you assume you could possibly see business volumes in that product? Simply given the offers that you just’re engaged on now, the companions and the sort of the — with the pilot beginning up?
Steve Croskrey
Sure. Look, I believe you have to sort of assume a few years to construct a plant. I imply, it may be executed extra rapidly. However simply to be protected or truthful within the evaluation right here, I’d simply name it two years to construct a plant. And since we’re — we do not even have that buyer accomplice prepared to barter. We have got the shopper companions that we predict we’ll be negotiating with, however they have to validate the fabric with their prospects first. So I believe you bought so as to add — in all probability add a 12 months to that two years at any given time. So I believe three years out is truthful when it comes to an earliest date.
Jon Tanwanteng
Okay, nice. That is useful. Mike, when you may, simply any ideas on OpEx this 12 months and if that is going to be — stay comparatively steady? Or if there’s any development plan within the price range steering?
Mike Hajost
Sure. I imply I believe we’re actually happy with how we have been driving OpEx price down. Should you have a look at the fourth quarter, we’re down one other $1 million year-over-year for the entire 12 months 2023 versus ’22, I believe we drove down $14.4 million, and we’re anticipating to cut back these working prices once more in 2024 year-over-year versus ’23 within the vary of about $4 million or so. We have gone by rationalizing headcount. We have gotten rid of a whole lot of outdoors providers and consultants. We’re using our personal employees and capabilities to do a whole lot of these issues. We have gotten some higher insurance coverage charges.
So quite a few issues throughout all of the boards. We’re wanting all over the place. That is sort of the place we ended up, to which we’re actually happy as a result of it is simply been a pleasant year-over-year change now for a few years and getting these prices down.
Jon Tanwanteng
Bought it. That is useful and good to listen to. And simply final earlier than I’m going. Simply any ideas on volumes in Q1? Simply we’re fairly shut on the quarter in any case.
Steve Croskrey
Sure. We will — we talked about in our press launch that our year-over-year development with PHA for the quarter will probably be roughly 60%, and I believe it would in all probability exceed 60% at this level.
Mike Hajost
Jon, if I can add additionally on the OpEx?
Steve Croskrey
I am sorry, Jon.
Jon Tanwanteng
I am sorry. Was there NPL in Q1 final 12 months?
Steve Croskrey
Sure. However we’re not — we’ve not supplied any steering on that.
Mike Hajost
And Jon, I wish to simply add one factor. I believe it could be good for everyone to know. When it comes to your fashions, all that stock-based comp it has been working near $56 million a 12 months, I believe, in 2023. And a whole lot of these massive grants are falling off. We’re anticipating one thing that is nearer to about $4 million for full 12 months 2024. So I believe that is only a good factor for everybody to sort of know to not have that enormous piece of noise in your fashions.
Jon Tanwanteng
Bought it. Thanks.
Steve Croskrey
Okay.
Operator
Thanks. There aren’t any additional questions right now. I’ll now hand the decision again to Steve Croskrey for closing remarks.
Steve Croskrey
Thanks to your time, everyone, and your curiosity in Danimer Scientific. We’re happy with our latest progress and the extra buyer alternatives which were offered to us, and we look ahead to speaking to you once more quickly once we current our first quarter earnings, which will probably be arising in simply a number of weeks now. Thanks.
Operator
Thanks. Women and gents, the convention has now ended. Thanks all for becoming a member of. It’s possible you’ll all disconnect.
