Recycler PureCycle Technologies Inc. reported a $30 million loss in its first quarter as a public company, but executives defended their long-term strategy to investors and said plans for their first factory remain on track.
The high-profile startup, which made Time magazine's 2019 list of the 100 best inventions, has seen its stock price drop more than 30 percent since short-selling stock firm Hindenburg Research published a report in early May questioning its technology and business plans.
But in a May 17 call to announce earnings, company executives pushed back and noted they have $570 million in cash reserves.
"Not only are we working on building the first commercial-scale plant in Ironton, Ohio, we've started line engineering on future plants and are working aggressively toward our goal of a billion pounds of installed and commissioned nameplate capacity," said Chairman and CEO Mike Otworth.
The company opened at $15.95 a share May 21, which was down from $24.53 before Hindenburg published its report May 6 and sent shares tumbling to $10.45 by May 13. PureCycle had traded at a high of more than $32 a share when it went public March 18.
Executives disclosed some adjustments in strategy on the call, saying that the company is seeking out a wider range of recycled feedstocks and will focus initially more on the U.S. market than Europe in an effort to reduce risk.
"We want to be de-risking and therefore have decided to be more U.S.-centric early on," said Michael Dee, chief financial officer.
He said the company is also reducing the size of future plants from 165 million pounds a year capacity down to 130 million pounds, a decision he said was "absolutely consistent with our strategy to de-risk."
The company says the Ironton plant, a $250 million investment that will be its first commercial facility with capacity of 107 million pounds a year, will startup in late 2022.
"Ironton remains on track and on budget," Dee said. "This is very important. This is our No. 1 priority."
After the Ironton plant, the company said it plans to bring additional "cluster" manufacturing sites onstream in 2023 and 2024, but it gave no new details on where they would be.
PureCycle uses a solvent-based purification technology to clean recycled PP back to virginlike conditions, using processes originally developed by Procter & Gamble Co. It said its current pilot plant, also in Ironton, has demonstrated the technological viability of its processes.