Quarterly production and sales volumes climbed
2% and 12% year-over-year, respectively
2022 production of 42,499 metric tons
represents highest annual primary rare earth production in U.S.
history
Generated $527.5 million of revenue in 2022, an
increase of 59%
Increased annual net income 114% to $289.0
million and Adjusted EBITDA 77% to $388.6 million
Commissioning of Stage II assets underway
Signed distribution agreement with Sumitomo
Corporation providing access to Japanese customers
MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”)
today announced its financial results for the fourth quarter and
full year ended December 31, 2022.
Full Year 2022
Highlights
- Produced 42,499 metric tons of rare earth oxides (“REO”) in
concentrate, the highest annual rare earth production in U.S. and
Mountain Pass history
- Sold a record 43,198 metric tons of REO, generating record
revenue of $527.5 million, up 59% year-over-year
- Produced net income of $289.0 million; Adjusted EBITDA of
$388.6 million, a 77% increase year-over-year
- Maintained fortress balance sheet with $1.2 billion of cash,
cash equivalents and short-term investments and $492 million of net
cash as of year-end 2022
- Accelerated our Stage III strategy to deliver rare earth metal,
alloy, and magnetics from our manufacturing facility in Fort Worth,
Texas
- Signed definitive long-term agreement with General Motors to
supply alloy and magnets powering 12 Ultium Platform electric
vehicles
Fourth Quarter 2022
Highlights
- Increased production 2% year-over-year to 10,485 metric tons of
REO
- Improved sales volumes 12% year-over-year to 10,816 metric tons
of REO
- Began commissioning Stage II assets and producing roasted
concentrate
- Advanced heavy rare earth front-end engineering design and
long-lead procurement
“The MP team executed really well in 2022. Stage I operations
again set records for production and sales volumes, we began
commissioning Stage II assets, and we made substantial progress in
our Stage III magnetics business. In addition, we achieved record
financial results and positive free cash flow, even as we made
significant growth investments throughout the year,” said James H.
Litinsky, Founder, Chairman and CEO.
“For 2023, the MP team is driving towards run rate production of
separated rare earths at Mountain Pass and the first production of
magnetic alloy in Fort Worth. As we transform our business, MP is
uniquely positioned to capitalize across some of the most critical
and exciting verticals of today’s global economic landscape.”
Fourth Quarter 2022 Financial and Operating
Highlights
For the three months
ended
December 31,
2022 vs. 2021
(unaudited)
2022
2021
Amount
Change
% Change
Financial Measures:
(in thousands)
Revenue(1)
$
93,245
$
99,109
$
(5,864
)
(6
)%
Net income
$
67,007
$
48,989
$
18,018
37
%
Adjusted EBITDA(2)
$
55,050
$
71,343
$
(16,293
)
(23
)%
Adjusted Net Income(2)
$
78,786
$
56,602
$
22,184
39
%
Diluted EPS
$
0.36
$
0.26
$
0.10
38
%
Adjusted Diluted EPS(2)
$
0.42
$
0.30
$
0.12
40
%
Key Performance Indicators:
(in whole units or dollars)
REO production volume (MTs)
10,485
10,261
224
2
%
REO sales volume (MTs)
10,816
9,674
1,142
12
%
Realized price per REO MT(2)
$
8,515
$
10,101
$
(1,586
)
(16
)%
Production cost per REO MT(2)
$
1,928
$
1,525
$
403
26
%
(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 Total Value Realized and Production Costs,
which are used in the calculations of realized price per REO MT and
production cost per REO MT. In addition, see tables below for
reconciliations of non-GAAP financial measures to their most
directly comparable GAAP financial measures. 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 6% year-over-year, as a 12% increase in sales
volumes was more than offset by a 16% decline in realized sales
prices of REO in concentrate. The 12% increase in metric tons
(“MTs”) sold was mainly due to the timing of shipments, which
fluctuate quarter-to-quarter but approximate production volumes
over time. The 16% decline in realized prices was in part due to
the impact of foreign exchange rates. The 2% increase in production
volumes compared to the fourth quarter of 2021 was due to a modest
improvement in the efficiency of our processing operations,
including higher ore feed rates, partially offset by lower feed
grade and mineral recoveries.
Adjusted EBITDA declined 23% year-over-year, driven by lower
per-unit profitability, higher personnel and other general and
administrative costs, as well as advanced projects and development
costs. The per-unit profitability decline was driven primarily by
the lower realized prices discussed above, as well as higher
production costs. Production cost of $1,928 per MT of REO increased
26% year-over-year mainly due to the timing of maintenance, higher
payroll costs, including an increase in employee headcount to
support the expansion of Stage II operations and higher fuel costs.
Also impacting the comparison was higher energy costs incurred
following the restart of our combined heat and power (“CHP”) plant
in January 2022. Excluding Stage II related costs, the increase in
production cost per metric ton would have been slightly lower than
the reported year-over-year growth rate, with the timing of
maintenance spend and fuel costs as the primary contributors.
Adjusted Net Income increased 39% to $78.8 million, primarily
due to a tax benefit derived from the timing of capital assets in
service and the related impact on certain other deductions, as well
as increased interest and investment income earned on an increase
in short-term investments, partially offset by the lower Adjusted
EBITDA.
Net income was $67.0 million compared to $49.0 million in the
prior year period. The improvement was mainly due to the increase
in Adjusted Net Income partially offset by higher start-up
costs.
Diluted earnings per share (“EPS”) increased 38% year-over-year
to $0.36 and Adjusted Diluted EPS increased 40% to $0.42 due to the
increase in Adjusted Net Income and net income discussed above,
respectively.
Full Year 2022 Financial and Operating Highlights
For the year ended
December 31,
2022 vs. 2021
(unaudited)
2022
2021
Amount
Change
% Change
Financial Measures:
(in thousands)
Revenue(1)
$
527,510
$
331,952
$
195,558
59
%
Net income
$
289,004
$
135,037
$
153,967
114
%
Adjusted EBITDA(2)
$
388,631
$
219,077
$
169,554
77
%
Adjusted Net Income(2)
$
320,557
$
154,187
$
166,370
108
%
Diluted EPS
$
1.52
$
0.73
$
0.79
108
%
Adjusted Diluted EPS(2)
$
1.68
$
0.83
$
0.85
102
%
Key Performance Indicators:
(in whole units or dollars)
REO production volume (MTs)
42,499
42,413
86
—
%
REO sales volume (MTs)
43,198
42,158
1,040
2
%
Realized price per REO MT(2)
$
11,974
$
7,745
$
4,229
55
%
Production cost per REO MT(2)
$
1,728
$
1,493
$
235
16
%
(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 Total Value Realized and Production Costs,
which are used in the calculations of realized price per REO MT and
production cost per REO MT. In addition, see tables below for
reconciliations of non-GAAP financial measures to their most
directly comparable GAAP financial measures. 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 increased 59% year-over-year, driven by increases in the
realized sales prices of REO in concentrate as well as greater
volumes sold. The 55% increase in realized sales price was
primarily due to higher demand for rare earth products driving
increased market prices. The 2% increase in MTs sold was mainly
driven by the timing of shipments, which vary period to period, but
generally track our REO production volumes over time. Production
volumes were relatively unchanged in 2022 compared to 2021 as
improvements in the efficiency of our processing operations,
including higher ore feed rates, were offset by lower average feed
grade and mineral recoveries.
Adjusted EBITDA increased 77% year-over-year, driven by higher
per-unit profitability and higher sales volumes, partially offset
by increased costs required to further build out our corporate
infrastructure and support our separations business and magnetics
initiatives. Per-unit profitability improvements were driven
primarily by higher realized prices partially offset by higher
production costs per MT of REO. Production cost of $1,728 per MT of
REO increased 16% year-over-year, mainly driven by higher
materials, supplies and payroll costs, including an increase in
employee headcount to support the expansion of operations, as well
as higher energy costs incurred following the restart of our CHP
plant in January 2022. Excluding Stage II related costs, production
costs per MT would have increased less than the rate of inflation,
due to efficiencies in production somewhat offsetting higher
expenses.
Adjusted Net Income was $320.6 million compared to $154.2
million in the prior year. The improvement was mainly due to the
significantly higher Adjusted EBITDA discussed above, higher
increased interest and investment income earned on an increase in
short-term investments, and a decrease in depletion expense as a
result of a revision to extend our estimate of the remaining useful
life of the mineral rights at the beginning of the fourth quarter
of 2021. These improvements were partially offset by higher income
tax expense mainly due to higher pre-tax income.
Net income was $289.0 million compared to $135.0 million in the
prior year, driven primarily by the change in Adjusted Net Income
discussed above. Net income in 2022 was also impacted by higher
stock-based compensation expense and higher start-up costs
associated with the restart of our CHP plant, our Stage II
optimization project and our Stage III initiatives, as well as
continued investment in research and development activities,
particularly with regards to magnetics.
Diluted EPS increased 108% year-over-year to $1.52 and Adjusted
Diluted EPS increased 102% to $1.68, both mainly due to the
increase in net income and Adjusted Net Income discussed above.
MP MATERIALS CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the three months
ended December 31,
For the year ended
December 31,
(in thousands, except share and per
share data, unaudited)
2022
2021
2022
2021
Revenue:
Product sales
$
92,098
$
97,721
$
517,267
$
328,563
Other sales
1,147
1,388
10,243
3,389
Total revenue
93,245
99,109
527,510
331,952
Operating costs and expenses:
Cost of sales (excluding depreciation,
depletion and amortization)
24,536
18,455
92,218
76,253
Selling, general and administrative
19,707
15,879
75,840
56,646
Advanced projects, start-up, development
and other
5,588
2,137
11,817
4,573
Depreciation, depletion and
amortization
5,593
4,615
18,356
24,382
Accretion of asset retirement and
environmental obligations
222
595
1,477
2,375
Loss on sale or disposal of long-lived
assets, net
133
350
391
569
Write-down of inventories
—
—
—
1,809
Total operating costs and expenses
55,779
42,031
200,099
166,607
Operating income
37,466
57,078
327,411
165,345
Interest expense, net
(1,331
)
(2,487
)
(5,786
)
(8,904
)
Other income, net
10,953
98
19,527
3,754
Income before income taxes
47,088
54,689
341,152
160,195
Income tax benefit (expense)
19,919
(5,700
)
(52,148
)
(25,158
)
Net income
$
67,007
$
48,989
$
289,004
$
135,037
Earnings per share:
Basic
$
0.38
$
0.28
$
1.64
$
0.78
Diluted
$
0.36
$
0.26
$
1.52
$
0.73
Weighted-average shares
outstanding:
Basic
176,646,587
176,117,180
176,519,203
173,469,546
Diluted
193,494,131
193,389,482
193,453,087
189,844,028
Reconciliation of GAAP Net
Income to Non-GAAP Adjusted EBITDA
For the three months
ended December 31,
For the year ended
December 31,
(in thousands, unaudited)
2022
2021
2022
2021
Net income
$
67,007
$
48,989
$
289,004
$
135,037
Adjusted for:
Depreciation, depletion and
amortization
5,593
4,615
18,356
24,382
Interest expense, net
1,331
2,487
5,786
8,904
Income tax expense (benefit)
(19,919
)
5,700
52,148
25,158
Stock-based compensation expense(1)
6,761
8,208
31,780
22,931
Transaction-related, start-up and other
non-recurring costs(2)
4,875
497
9,216
3,716
Accretion of asset retirement and
environmental obligations
222
595
1,477
2,375
Loss on sale or disposal of long-lived
assets, net
133
350
391
569
Write-down of inventories
—
—
—
1,809
Tariff rebate(3)
—
—
—
(2,050
)
Other income, net(4)
(10,953
)
(98
)
(19,527
)
(3,754
)
Adjusted EBITDA
$
55,050
$
71,343
$
388,631
$
219,077
(1)
Principally included in “Selling, general
and administrative” within our unaudited Condensed Consolidated
Statements of Operations.
(2)
Amounts for the three months and year
ended December 31, 2022, are principally comprised of start-up
costs, which relate to the restart of our CHP plant as well as
certain costs associated with our Stage II optimization project and
Stage III initiatives. Amount for the three months ended December
31, 2021, includes start-up costs primarily associated with Stage
III initiatives. Amount for the year ended December 31, 2021,
relates to advisory, consulting, accounting, and legal expenses and
settlements incurred in connection with non-recurring transactions,
including secondary equity offerings, the redemption of the
Company’s public warrants, and other matters.
(3)
Represents non-cash revenue recognized in
connection with a tariff rebate received relating to product sales
from prior periods.
(4)
Amounts for the three months and year
ended December 31, 2022, are principally comprised of interest and
investment income. Amount for the year ended December 31, 2021,
principally represents a non-cash gain recognized as a result of
the Small Business Administration’s approval to forgive the
Paycheck Protection Loan.
Reconciliation of GAAP Net
Income to Non-GAAP Adjusted Net Income
For the three months
ended December 31,
For the year ended
December 31,
(in thousands, unaudited)
2022
2021
2022
2021
Net income
$
67,007
$
48,989
$
289,004
$
135,037
Adjusted for:
Stock-based compensation expense(1)
6,761
8,208
31,780
22,931
Transaction-related, start-up and other
non-recurring costs(2)
4,875
497
9,216
3,716
Loss on sale or disposal of long-lived
assets, net
133
350
391
569
Write-down of inventories
—
—
—
1,809
Tariff rebate(3)
—
—
—
(2,050
)
Other(4)
(26
)
(98
)
(273
)
(3,754
)
Tax impact of adjustments above(5)
454
(1,344
)
(6,716
)
(4,071
)
Release of valuation allowance
(418
)
—
(2,845
)
—
Adjusted Net Income(6)
$
78,786
$
56,602
$
320,557
$
154,187
(1)
Principally included in “Selling, general
and administrative” within our unaudited Condensed Consolidated
Statements of Operations.
(2)
Amounts for the three months and year
ended December 31, 2022, are principally comprised of start-up
costs, which relate to the restart of our CHP plant as well as
certain costs associated with our Stage II optimization project and
Stage III initiatives. Amount for the three months ended December
31, 2021, includes start-up costs primarily associated with Stage
III initiatives. Amount for the year ended December 31, 2021,
relates to advisory, consulting, accounting, and legal expenses and
settlements incurred in connection with non-recurring transactions,
including secondary equity offerings, the redemption of the
Company’s public warrants, and other matters.
(3)
Represents non-cash revenue recognized in
connection with a tariff rebate received relating to product sales
from prior periods.
(4)
Amount for the year ended December 31,
2021, principally represents a non-cash gain recognized as a result
of the Small Business Administration’s approval to forgive the
Paycheck Protection Loan, which is included in “Other income, net”
within our unaudited Condensed Consolidated Statements of
Operations.
(5)
Tax impact of adjustments is calculated
using an adjusted effective tax rate, which excludes the impact of
discrete tax costs and benefits, to each adjustment. The adjusted
effective tax rates were (3.9)%, 16.3%, 15.0% and 17.5%, for the
three months and year ended December 31, 2022 and 2021,
respectively.
(6)
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 periods for comparability purposes.
Reconciliation of GAAP Diluted
EPS to Non-GAAP Adjusted Diluted EPS
For the three months
ended December 31,
For the year ended
December 31,
(unaudited)
2022
2021
2022
2021
Diluted EPS
$
0.36
$
0.26
$
1.52
$
0.73
Adjusted for:
Stock-based compensation expense
0.03
0.04
0.16
0.12
Transaction-related, start-up and other
non-recurring costs(1)
0.03
0.00
0.05
0.02
Loss on sale or disposal of long-lived
assets, net
0.00
0.00
0.00
0.00
Write-down of inventories
0.00
0.00
0.00
0.01
Tariff rebate(2)
0.00
0.00
0.00
(0.01
)
Other(3)
0.00
0.00
0.00
(0.02
)
Tax impact of adjustments above(4)
0.00
0.00
(0.04
)
(0.02
)
Release of valuation allowance
0.00
0.00
(0.01
)
0.00
Adjusted Diluted EPS
$
0.42
$
0.30
$
1.68
$
0.83
Diluted weighted-average shares
outstanding
193,494,131
193,389,482
193,453,087
189,844,028
(1)
Amounts for the three months and year
ended December 31, 2022, are principally comprised of start-up
costs, which relate to the restart of our CHP plant as well as
certain costs associated with our Stage II optimization project and
Stage III initiatives. Amount for the three months ended December
31, 2021, includes start-up costs primarily associated with Stage
III initiatives. Amount for the year ended December 31, 2021,
relates to advisory, consulting, accounting, and legal expenses and
settlements incurred in connection with non-recurring transactions,
including secondary equity offerings, the redemption of the
Company’s public warrants, and other matters.
(2)
Represents non-cash revenue recognized in
connection with a tariff rebate received relating to product sales
from prior periods.
(3)
Amount for the year ended December 31,
2021, principally represents a non-cash gain recognized as a result
of the Small Business Administration’s approval to forgive the
Paycheck Protection Loan.
(4)
Tax impact of adjustments is calculated
using an adjusted effective tax rate, which excludes the impact of
discrete tax costs and benefits, to each adjustment. The adjusted
effective tax rates were (3.9)%, 16.3%, 15.0% and 17.5%, for the
three months and year ended December 31, 2022 and 2021,
respectively.
Reconciliation of GAAP Product
Sales to Non-GAAP Total Value Realized
For the three months
ended December 31,
For the year ended
December 31,
(in thousands, unless otherwise stated,
unaudited)
2022
2021
2022
2021
Product sales
$
92,098
$
97,721
$
517,267
$
328,563
Adjusted for:
Tariff rebate(1)
—
—
—
(2,050
)
Total Value Realized(2)
92,098
97,721
517,267
326,513
Divided by:
REO sales volume (in MTs)
10,816
9,674
43,198
42,158
Realized price per REO MT (in
dollars)
$
8,515
$
10,101
$
11,974
$
7,745
(1)
Represents non-cash revenue recognized in
connection with a tariff rebate received relating to product sales
from prior periods.
(2)
See “Use of Non-GAAP Financial Measures”
below for definition and further information.
Reconciliation of GAAP Cost of
Sales to Non-GAAP Production Costs
For the three months
ended December 31,
For the year ended
December 31,
(in thousands, unless otherwise stated,
unaudited)
2022
2021
2022
2021
Cost of sales(1)
$
24,536
$
18,455
$
92,218
$
76,253
Adjusted for:
Stock-based compensation expense(2)
(743
)
(1,856
)
(2,853
)
(4,294
)
Shipping and freight(3)
(2,454
)
(1,847
)
(13,002
)
(8,923
)
Other(4)
(490
)
—
(1,715
)
(79
)
Production Costs(5)
20,849
14,752
74,648
62,957
Divided by:
REO sales volume (in MTs)
10,816
9,674
43,198
42,158
Production cost per REO MT (in
dollars)(5)
$
1,928
$
1,525
$
1,728
$
1,493
(1)
Excluding depreciation, depletion and
amortization.
(2)
Pertains only to the amount of stock-based
compensation expense included in cost of sales.
(3)
Includes $1.3 million for the year ended
December 31, 2022, of shipping and freight costs associated with
sales of rare earth fluoride (“REF”) stockpiles.
(4)
Amount for the year ended December 31,
2022, pertains primarily to costs (excluding shipping and freight)
attributable to sales of REF stockpiles.
(5)
See “Use of Non-GAAP Financial Measures”
below for definition and further information.
Conference Call Details
MP Materials will host a conference call to discuss these
results at 2:00 p.m. Pacific Time, Thursday, February 23, 2023. To
access the conference call, participants should dial 1 844 200 6205
and international participants should dial 1-929-526-1599 and enter
the conference ID number 154687. The live audio webcast along with
the press release and accompanying slide presentation, will be
accessible at investors.mpmaterials.com. A recording of the webcast
will also be available following the conference call.
About MP Materials
MP Materials (NYSE: MP) produces specialty materials that are
vital inputs for electrification and other advanced technologies.
MP’s Mountain Pass facility is America’s only scaled rare earth
production source. The company is currently expanding its
manufacturing operations downstream to provide a full supply chain
solution from materials to magnetics. More information is available
at https://mpmaterials.com/.
Join the MP Materials community on Twitter, YouTube, Instagram
and LinkedIn.
We routinely post important information on our website,
including corporate and investor presentations and financial
information. We intend to use our website as a means of disclosing
material, non-public information and for complying with our
disclosure obligations under Regulation FD. Such disclosures will
be included in the Investors section of our website. Accordingly,
investors should monitor such portion of our website, in addition
to following our press releases, Securities and Exchange filings
and public conference calls and webcasts.
Forward-Looking Statements
This press release contains certain statements that are not
historical facts and are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“estimate,” “plan,” “project,” “forecast,” “intend,” “expect,”
“anticipate,” “believe,” “seek,” “will,” “target,” or similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. These
forward-looking statements include, but are not limited to,
statements regarding the continued demand for rare earth markets
and the market for rare earth materials generally, future demand
for electric vehicles and magnets, estimates and forecasts of our
results of operations and other financial and performance metrics,
the Company’s ability to control costs, and the Company’s Stage II
and Stage III projects, including the Company’s ability to achieve
run rate production of separated rare earth materials and
production of magnetic alloy. Such statements are all subject to
risks, uncertainties and changes in circumstances that could
significantly affect the Company’s future financial results and
business.
Accordingly, the Company cautions that the forward-looking
statements contained herein are qualified by important factors that
could cause actual results to differ materially from those
reflected by such statements. These forward-looking statements are
subject to a number of risks and uncertainties, including changes
in domestic and foreign business, market, financial, political and
legal conditions; changes in demand for NdFeB magnets; the effects
of competition on the Company’s future business; risks related to
the rollout of the Company’s business strategy, including Stage II
and Stage III, including increased costs and expenses, and the
timing of achieving expected business milestones, including
achieving run rate production of separated rare earth materials and
production of magnetic alloy; risks related to the Company’s
long-term agreement with General Motors, including the Company’s
ability to produce and supply NdFeB magnets; the impact of the
global COVID-19 pandemic, on any of the foregoing risks; and those
risk factors discussed in the Company’s filings with the Securities
and Exchange Commission, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other documents filed by the Company with the Securities and
Exchange Commission.
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. The Company does not
intend to update publicly any forward-looking statements except as
required by law. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this earnings
release may not occur.
Use of Non-GAAP Financial Measures
This press release references certain non-GAAP financial
measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted
Diluted EPS, Total Value Realized, and Production Costs. We define
Adjusted EBITDA as our GAAP net income before interest expense,
net; income tax expense or benefit; and depreciation, depletion and
amortization; further adjusted to eliminate the impact of
stock-based compensation expense; transaction-related, start-up and
other non-recurring costs; accretion of asset retirement and
environmental obligations; gain or loss on sale or disposal of
long-lived assets; write-downs of inventories; tariff rebates; and
other income or loss. Adjusted Net Income is defined as our GAAP
net income excluding the impact of stock-based compensation
expense; transaction-related, start-up and other non-recurring
costs; gain or loss on sale or disposal of long-lived assets;
write-downs of inventories; tariff rebates; and other items that we
do not consider representative of our underlying operations;
adjusted to give effect to the income tax impact of such
adjustments; and the release of valuation allowance. Adjusted
Diluted EPS is defined as GAAP diluted earnings per share (“EPS”)
excluding the per share impact, using GAAP diluted weighted-average
shares outstanding as the denominator, of stock-based compensation
expense; transaction-related, start-up and other non-recurring
costs; gain or loss on sale or disposal of long-lived assets;
write-downs of inventories; tariff rebates; and other items that we
do not consider representative of our underlying operations;
adjusted to give effect to the income tax impact of such
adjustments; and the release of valuation allowance. Total Value
Realized, which we use to calculate our key performance indicator,
realized price per REO MT, is defined as our GAAP product sales
adjusted for the revenue impact of tariff rebates related to prior
period sales (if any). Realized price per REO MT is calculated as
the quotient of: (i) our Total Value Realized for a given period
and (ii) our REO sales volume for the same period. Production
Costs, which we use to calculate our key performance indicator,
production cost per REO MT, is defined as our GAAP cost of sales
(excluding depreciation, depletion and amortization), less
stock-based compensation expense included in cost of sales,
shipping and freight costs, and costs attributable to certain other
sales, for a given period. Production cost per REO MT is calculated
as the quotient of: (i) our Production Costs for a given period and
(ii) our REO sales volume for the same period.
MP Materials’ management uses Adjusted EBITDA, Adjusted Net
Income, and Adjusted Diluted EPS to compare MP Materials’
performance to that of prior periods for trend analyses and for
budgeting and planning purposes. MP Materials believes Adjusted
EBITDA, Adjusted Net Income, and Adjusted Diluted EPS provide
useful information to management and investors regarding certain
financial and business trends relating to MP Materials’ financial
condition and results of operations. MP Materials believes that the
use of Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted
EPS provide an additional tool for investors to use in evaluating
projected operating results and trends. MP Materials believes
realized price per REO MT, which utilizes the non-GAAP financial
measure, Total Value Realized, is an important measure of the
market price of the Company’s product. Furthermore, MP Materials
believes production cost per REO MT sold, which utilizes the
non-GAAP financial measure, Production Costs, is a key indicator of
the Company’s concentrate production efficiency. As we evolve as a
business and transition from a producer of rare earth concentrate
to a producer of separated rare earth products upon completing the
commissioning of our Stage II project, the metrics that management
anticipates using to evaluate the business may change or be
revised. For example, in completing the transition to separated
rare earth products, we may determine that production cost per REO
MT, which is a metric focused solely on Stage I concentrate
operations, and consequently, Production Costs, are no longer
meaningful in evaluating and understanding our business or
operating results. MP Materials’ method of determining these
non-GAAP measures may be different from other companies’ methods
and, therefore, may not be comparable to those used by other
companies and MP Materials does not recommend the sole use of these
non-GAAP measures to assess its financial performance. Management
does not consider non-GAAP measures in isolation or as an
alternative or to be superior to financial measures determined in
accordance with GAAP. The principal limitation of non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in MP Materials’
financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgments by management
about which expense and income are excluded or included in
determining these non-GAAP financial measures. In order to
compensate for these limitations, management presents
reconciliations of such non-GAAP financial measures to the most
directly comparable GAAP financial measures.
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version on businesswire.com: https://www.businesswire.com/news/home/20230223005162/en/
Investors: IR@mpmaterials.com
Media: Matt Sloustcher media@mpmaterials.com
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