Progressed Construction of Rochester Hub;
On-Track to Commence Commissioning in Late 2023
Announced New Spoke in France; Further
Expanding Global Spoke Network
Achieved Significant Milestone With $375
Million Loan Commitment From the U.S. Department of
Energy
Highlights
- Advanced Spoke & Hub network growth strategy; Maintained
the Rochester Hub schedule and budget range and announced a new
Spoke in France, underpinned by customer demand;
- Entered into multi-year preferred recycling contract with the
KION Group, a leading global provider of forklift and warehouse
trucks;
- Received $375 million loan commitment from U.S. Department of
Energy (DOE); and
- Ended calendar 2022 with cash on hand of $517.9 million,
excluding the DOE loan commitment.
Li-Cycle Holdings Corp. (NYSE:
LICY) ("Li-Cycle" or the “Company"), an industry leader in
lithium-ion battery (LIB) resource recovery and the leading LIB
recycler in North America, today announced financial and operating
results for its two-month transition period ended December 31,
2022. Total revenues in the period increased to $5.9 million
compared to $2.8 million in the corresponding period of 2021.
“We are proud of our team’s significant achievements as we
continue to solidify the critical role that Li-Cycle will play in
the development of a sustainable global EV battery supply chain. At
our Rochester Hub, we remain on schedule and were thrilled to
receive a low-cost, long-term loan commitment for $375 million from
the DOE, providing us with greater financial flexibility for
additional network growth plans,” said Ajay Kochhar, Li-Cycle’s
President and Chief Executive Officer. “Further, Li-Cycle continues
to grow its position as a preferred recycling partner through the
expansion of its Spoke footprint. We are poised to open our first
European Spoke in Germany this year and launch a new Spoke in
France, underpinned by commercial demand, including our recently
announced long-term arrangement with the KION Group.”
Spoke & Hub Network Expansion
Rochester Hub
The Rochester Hub has received significant federal and local
government support and is expected to be the first source of
recycled battery-grade lithium in North America. The Company has
continued to make significant strides on key engineering,
procurement, and construction milestones, maintaining the project
schedule to initiate commissioning in late 2023. The Rochester
Hub’s construction costs are currently on track, trending towards
the higher end of the previously disclosed budget range of $486
million to $560 million, with an expected investment of $250
million to $300 million in 2023.
Spoke Network
Li-Cycle is strategically scaling its Spoke network based on
accelerating market and customer demand. The Company expects to
invest $35 million to $45 million towards its expansion plans in
2023.
In North America, the Company’s total operating capacity of
51,000 tonnes of LIB material input/year includes first-of-a-kind
full battery pack processing capabilities at the Arizona and
Alabama Spokes and the recent upgrade and expansion at the New York
Spoke. Additionally, the Company has announced the development of a
third generation Spoke and warehouse facility that will replace the
existing first generation Ontario Spoke. This new Spoke would have
a main line recycling capacity of 10,000 tonnes of LIB material
input/year as well as research and training facilities.
In Europe, the Germany Spoke is expected to commence operations
in mid-2023, with a total capacity of 30,000 tonnes of LIB material
input/year (including two main lines and ancillary processing). A
new Spoke facility has been announced in France, which is projected
to be Europe's third-largest battery cell manufacturing and
end-of-life market. This Spoke will have an initial main line
processing capacity of up to 10,000 tonnes of LIB material
input/year, with operations expected to commence in 2024. In
Norway, construction is progressing with the building expected to
be finished in late 2023.
DOE Financing and Balance Sheet Position
Li-Cycle maintains a strong balance sheet position with cash on
hand and access to low-cost long-term debt funding in support of
the continued global expansion plans of its Spoke & Hub
network.
At December 31, 2022, Li-Cycle had cash on hand of $517.9
million. During the transition period ended December 31, 2022, the
Company's capital spend was $21.5 million, with the majority
allocated to the purchases of equipment and construction materials
for the Rochester Hub coupled with upgrades and development of the
Spoke network.
On February 27, 2023, the Company entered into a conditional
commitment with the DOE for a loan of up to $375 million through
its Advanced Technology Vehicles Manufacturing Program, in support
of the Rochester Hub development. This strategic financing achieves
the Company's goal of executing on debt financing that optimizes
its capital structure, providing increased financial flexibility to
fund future network growth plans.
Financial Results for the Two-Month Period Ended December 31,
2022
Revenues from product sales and recycling services of $3.6
million increased from $1.6 million in the same period of 2021. The
increase in product revenue was primarily attributable to increased
black mass production and sales related to the ramp-up of
operations at the Spokes. Total revenues were $5.9 million, as
compared with $2.8 million last year, and included a non-cash fair
market value metal pricing benefit of $2.3 million versus $1.2
million, respectively.
Operating expenses increased to $25.3 million versus $12.5
million in the same period of 2021, driven primarily by higher
expenses related to the expansion of the Company's global Spoke
operations and the build out of the Rochester Hub. In addition, raw
material and supply costs were up due to higher production volume
and average material costs.
Net income was $1.7 million, compared to $3.9 million in the
same period of 2021, and included fair value gains on financial
instruments of $21.4 million and $16.0 million, respectively.
Adjusted EBITDA1 loss was $17.8 million, compared to a loss of
$8.5 million in the same period of 2021, primarily related to the
higher expenses in support of the Company’s expansion of the global
Spoke operations and the build out of the Rochester Hub.
Additionally, non-cash stock-based compensation increased to $2.1
million from $1.1 million in the same period of 2021.
2023 Annual General Meeting (AGM)
The Company will hold its 2023 AGM of shareholders (the
“Meeting”) on Thursday, April 27, 2023 at 8:30 a.m. (Eastern Time)
in a virtual format, via live audio webcast. All interested parties
are invited to attend the Meeting by using the live webcast link
here: www.virtualshareholdermeeting.com/LICY2023. Only registered
shareholders and duly appointed proxyholders as of the record date
on March 6, 2023 will be entitled to vote and ask questions at the
Meeting. The Company’s Management Information Circular and Annual
Report on Form 20-F are available at
https://materials.proxyvote.com/50202P, and on Li-Cycle’s website
at https://investors.li-cycle.com, as well as on SEDAR at
www.sedar.com, and on EDGAR at www.sec.gov.
1 Adjusted EBITDA is not a recognized measure under IFRS. See
Non-IFRS Financial Measures section of this press release,
including for a reconciliation of adjusted EBITDA to net profit
(loss).
Interim ESG Report
The Company recently issued a 2022 Interim Environmental,
Social, Governance (ESG) Report, providing insight into the
integration of ESG across its business and how it shapes
relationships with key stakeholders. The Company is on track to
publish its first full ESG Report in 2024 and to achieve alignment
in 2025 with the Financial Stability Board’s Task Force on
Climate-Related Financial Disclosures. For a copy of the 2022
Interim ESG report, refer to link here:
https://li-cycle.com/sustainability/.
Webcast and Conference Call Information
Company management will host a webcast and conference call on
Thursday, March 30, 2023, at 8:30 a.m. Eastern Time. The related
presentation materials for the webcast and conference call will be
made available on the investor section of the Li-Cycle website:
https://investors.li-cycle.com/overview/default.aspx. Investors may
listen to the conference call live via audio-only webcast or
through the following dial-in numbers:
Domestic: (800) 579-2543 International: (203)
518-9783 Participant Code: LICY0330 Webcast:
https://investors.li-cycle.com
A replay of the conference call/webcast will also be made
available on the Investor Relations section of the Company’s
website at https://investors.li-cycle.com.
About Li-Cycle Holdings Corp.
Li-Cycle (NYSE: LICY) is on a mission to leverage its innovative
Spoke & Hub Technologies™ to provide a customer-centric,
end-of-life solution for lithium-ion batteries, while creating a
secondary supply of critical battery-grade materials. Lithium-ion
rechargeable batteries are increasingly powering our world in
automotive, energy storage, consumer electronics, and other
industrial and household applications. The world needs improved
technology and supply chain innovations to better manage battery
manufacturing waste and end-of-life batteries, and to meet the
rapidly growing demand for critical and scarce battery-grade raw
materials through a closed-loop solution. For more information,
visit https://li-cycle.com/.
Non-IFRS Financial Measures
Adjusted EBITDA (loss)
The table below reconciles adjusted EBITDA (loss) to net profit
(loss):
Two months ended
December 31,
Unaudited - $ millions
2022
2021
Net income before taxes
$
1.7
$
3.9
Income Tax
—
—
Depreciation
2.4
1.2
Interest expense
3.0
2.5
Interest income
(3.5
)
(0.1
)
EBITDA
3.6
7.5
Fair value gain on financial
instruments¹
(21.4
)
(16.0
)
Adjusted EBITDA (loss)
$
(17.8
)
$
(8.5
)
¹ Fair value gain on financial instruments
relates to convertible debt, and to warrants, which were redeemed
and no longer outstanding as of January 31, 2022.
Li-Cycle reports its financial results in accordance with the
International Financial Reporting Standards (“IFRS”). The Company
makes references to certain non-IFRS measures, including adjusted
EBITDA. These measures are not recognized measures under IFRS, do
not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented
by other companies. Rather, these measures are provided as
additional information to complement those IFRS measures by
providing a further understanding of the Company’s results of
operations from management’s perspective. Accordingly, it should
not be considered in isolation nor as a substitute for the analysis
of the Company’s financial information reported under IFRS.
Adjusted EBITDA is defined as earnings before depreciation and
amortization, interest expense (income) and income tax expense
(recovery), adjusted for items that are not considered
representative of ongoing operational activities of the business
and items where the economic impact of the transactions will be
reflected in earnings in future periods. Adjustments relate to fair
value (gains) losses on financial instruments. Foreign exchange
(gain) loss is excluded from the calculation of adjusted
EBITDA.
Cautionary Notes - Forward-Looking Statements and Unaudited
Results
Certain statements contained in this press release may be
considered “forward-looking statements” within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995, Section 27A
of the U.S. Securities Act of 1933, as amended, Section 21 of the
U.S. Securities Exchange Act of 1934, as amended, and applicable
Canadian securities laws. Forward-looking statements may generally
be identified by the use of words such as “believe”, “may”, “will”,
“continue”, “anticipate”, “intend”, “expect”, “should”, “would”,
“could”, “plan”, “potential”, “future”, “target” or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters, although not all
forward-looking statements contain such identifying words.
Forward-looking statements in this press release include but are
not limited to statements about: the expectation that Li-Cycle will
continue to solidify its crucial role in the development of a
sustainable global EV battery supply chain; Li-Cycle’s expectation
that it will receive a low-cost, long-term loan of up to $375
million from the DOE; the expectation that the Rochester Hub will
be the first source of recycled battery-grade lithium in North
America; the timing of expected commencement of commissioning of
the Rochester Hub and its construction costs, with an expected
investment of $250 million to $300 million in 2023; Li-Cycle’s
expectation that it will invest $35 million to $45 million towards
its Spoke expansion plans in 2023; and the expected timing and
capital investment requirements for the Company’s Spokes in
development and the expected main line processing capacity and
ancillary processing capacity of Li-Cycle’s Germany Spoke, Norway
Spoke, France Spoke and New Ontario Spoke. These statements are
based on various assumptions, whether or not identified in this
communication, including but not limited to assumptions regarding
the timing, scope and cost of Li-Cycle’s projects; the processing
capacity and production of Li-Cycle’s facilities; Li-Cycle’s
ability to source feedstock and manage supply chain risk;
Li-Cycle’s ability to increase recycling capacity and efficiency;
Li-Cycle’s ability to obtain financing on acceptable terms;
Li-Cycle’s ability to retain and hire key personnel and maintain
relationships with customers, suppliers and other business
partners; general economic conditions; currency exchange and
interest rates; compensation costs; and inflation. There can be no
assurance that such estimates or assumptions will prove to be
correct and, as a result, actual results or events may differ
materially from expectations expressed in or implied by the
forward-looking statements.
These forward-looking statements are provided for the purpose of
assisting readers in understanding certain key elements of
Li-Cycle’s current objectives, goals, targets, strategic
priorities, expectations and plans, and in obtaining a better
understanding of Li-Cycle’s business and anticipated operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes and is not intended to serve as, and
must not be relied on, by any investor as a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability.
Forward-looking statements involve inherent risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the control of Li-Cycle, and are not guarantees of
future performance. Li-Cycle believes that these risks and
uncertainties include, but are not limited to, the following:
Li-Cycle’s inability to economically and efficiently source,
recover and recycle lithium-ion batteries and lithium-ion battery
manufacturing scrap, as well as third party black mass, and to meet
the market demand for an environmentally sound, closed-loop
solution for manufacturing waste and end-of-life lithium-ion
batteries; Li-Cycle’s inability to successfully implement its
global growth strategy, on a timely basis or at all; Li-Cycle’s
inability to manage future global growth effectively; Li-Cycle’s
inability to develop the Rochester Hub, and other future projects
including its Spoke network expansion projects in a timely manner
or on budget or that those projects will not meet expectations with
respect to their productivity or the specifications of their end
products; Li-Cycle’s failure to materially increase recycling
capacity and efficiency; Li-Cycle may engage in strategic
transactions, including acquisitions, that could disrupt its
business, cause dilution to its shareholders, reduce its financial
resources, result in incurrence of debt, or prove not to be
successful; one or more of Li-Cycle’s current or future facilities
becoming inoperative, capacity constrained or if its operations are
disrupted; additional funds required to meet Li-Cycle’s capital
requirements in the future not being available to Li-Cycle on
acceptable terms or at all when it needs them; Li-Cycle expects to
continue to incur significant expenses and may not achieve or
sustain profitability; problems with the handling of lithium-ion
battery cells that result in less usage of lithium-ion batteries or
affect Li-Cycle’s operations; Li-Cycle’s inability to maintain and
increase feedstock supply commitments as well as securing new
customers and off-take agreements; a decline in the adoption rate
of EVs, or a decline in the support by governments for “green”
energy technologies; decreases in benchmark prices for the metals
contained in Li-Cycle’s products; changes in the volume or
composition of feedstock materials processed at Li-Cycle’s
facilities; the development of an alternative chemical make-up of
lithium-ion batteries or battery alternatives; Li-Cycle’s revenues
for the Rochester Hub are derived significantly from a single
customer; Li-Cycle’s insurance may not cover all liabilities and
damages; Li-Cycle’s heavy reliance on the experience and expertise
of its management; Li-Cycle’s reliance on third-party consultants
for its regulatory compliance; Li-Cycle’s inability to complete its
recycling processes as quickly as customers may require; Li-Cycle’s
inability to compete successfully; increases in income tax rates,
changes in income tax laws or disagreements with tax authorities;
significant variance in Li-Cycle’s operating and financial results
from period to period due to fluctuations in its operating costs
and other factors; fluctuations in foreign currency exchange rates
which could result in declines in reported sales and net earnings;
unfavourable economic conditions, such as consequences of the
global COVID-19 pandemic; natural disasters, unusually adverse
weather, epidemic or pandemic outbreaks, cyber incidents, boycotts
and geo-political events; failure to protect or enforce Li-Cycle’s
intellectual property; Li-Cycle may be subject to intellectual
property rights claims by third parties; Li-Cycle’s failure to
effectively remediate the material weaknesses in its internal
control over financial reporting that it has identified or if it
fails to develop and maintain a proper and effective internal
control over financial reporting. These and other risks and
uncertainties related to Li-Cycle’s business are described in
greater detail in the section entitled "Risk Factors" and “Key
Factors Affecting Li-Cycle’s Performance” in its Annual Report on
Form 20-F filed with the U.S. Securities and Exchange Commission
and the Ontario Securities Commission in Canada. Because of these
risks, uncertainties and assumptions, readers should not place
undue reliance on these forward-looking statements. Actual results
could differ materially from those contained in any forward-looking
statement.
Li-Cycle assumes no obligation to update or revise any
forward-looking statements, except as required by applicable laws.
These forward-looking statements should not be relied upon as
representing Li-Cycle’s assessments as of any date subsequent to
the date of this press release.
Li-Cycle Holdings Corp.
Condensed consolidated
statements of financial position
December 31,
2022
October 31, 2022
Unaudited $ millions, as at
Assets
Current assets
Cash and cash equivalents
$
517.9
$
578.3
Accounts receivable
4.3
1.5
Other receivables
10.0
7.8
Prepayment and deposits
95.2
85.8
Inventories
8.3
7.5
635.7
680.9
Non-current assets
Plant and equipment
210.4
147.7
Right-of-use assets
50.8
50.1
Other assets
4.2
3.6
265.4
201.4
Total assets
$
901.1
$
882.3
Liabilities
Current liabilities
Accounts payable and accrued
liabilities
$
75.9
$
47.5
Lease liabilities
5.6
5.2
81.5
52.7
Non-current liabilities
Lease liabilities
48.3
46.6
Convertible debt
272.9
288.5
Restoration provisions
0.4
0.4
321.6
335.5
Total liabilities
403.1
388.2
Equity
Share capital
772.4
771.8
Other reserves
18.7
17.1
Accumulated deficit
(293.0
)
(294.7
)
Accumulated other comprehensive loss
(0.3
)
(0.3
)
Equity attributable to the Shareholders of
Li-Cycle Holdings Corp.
493.9
438.7
Non-controlling interest
0.2
0.2
Total equity
498.0
494.1
Total liabilities and equity
$
901.1
$
882.3
The accompanying notes are an integral part of the condensed
consolidated financial statements.
Li-Cycle Holdings Corp.
Condensed consolidated statements of
income and comprehensive income
Unaudited $ millions except for per share
amounts, for the two months ended December 31,
2022
2021
Revenue
Product sales
$
5.8
$
2.7
Recycling services
0.1
0.1
5.9
2.8
Expenses
Employee salaries and benefits
9.0
4.8
Share-based compensation
2.1
1.1
Office, administrative and travel
3.8
1.7
Professional fees
3.3
1.9
Raw materials and supplies
2.5
1.3
Depreciation
2.4
1.2
Plant facilities
1.2
0.3
Marketing
0.3
0.3
Freight and shipping
0.2
0.1
Research and development
0.5
0.3
Change in finished goods inventory
—
(0.5
)
Operating expenses
25.3
12.5
Loss from operations
(19.4
)
(9.7
)
Other income (expense)
Interest income
3.5
0.1
Interest expense and other costs
(3.8
)
(2.5
)
Gains on financial instruments
21.4
16.0
21.1
13.6
Net income before taxes
1.7
3.9
Income tax
—
—
Net income
$
1.7
$
3.9
Net income attributable to
Shareholders of Li-Cycle Holdings
Corp.
$
1.7
$
3.9
Non-controlling interest
—
—
Net income and comprehensive
income
$
1.7
$
3.9
Earnings per common share -
basic
$
0.01
$
0.02
Earnings per common share -
diluted
$
0.01
$
0.02
Li-Cycle Holdings Corp.
Condensed consolidated statements of
cash flows
Unaudited $ millions, for the two months
ended December 31,
2022
2021
Operating activities
Net income for the period
$
1.7
$
3.9
Items not affecting cash
Share-based compensation
2.1
1.1
Depreciation
2.4
1.2
Foreign exchange (gain) loss on
translation
0.8
(0.3
)
Gains on financial instruments
(21.4
)
(16.0
)
Interest expense
3.0
2.5
Interest paid
(0.7
)
(0.3
)
Interest received
2.7
0.1
Interest income
(3.5
)
(0.1
)
(12.9
)
(7.9
)
Changes in non-cash working capital
items
Accounts receivable
(2.8
)
(1.2
)
Other receivables
(1.4
)
0.1
Prepayments and deposits
(0.3
)
3.1
Inventories
(0.8
)
(0.9
)
Accounts payable and accrued
liabilities
(20.2
)
(7.5
)
Cash used by operating
activities
(38.4
)
(14.3
)
Investing activities
Purchases of plant and equipment
(11.8
)
(2.2
)
Prepaid equipment deposits
(9.7
)
(16.0
)
Cash used by investing
activities
(21.5
)
(18.2
)
Financing activities
Repayment of lease principal
(0.5
)
(0.6
)
Cash provided by financing
activities
(0.5
)
(0.6
)
Net change in cash and cash
equivalents
(60.4
)
(33.1
)
Cash and cash equivalents, beginning of
period
578.3
596.9
Cash and cash equivalents, end of
period
$
517.9
$
563.8
Non-cash investing activities
Purchase of plant and equipment in
payables and accruals
$
48.6
$
2.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230330005319/en/
Investor Relations Nahla Azmy Sheldon D'souza Email:
investors@li-cycle.com
Media Louie Diaz Email: media@li-cycle.com
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