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Danimer Scientific Inc. (DNMR) stock declines in pre-market trading. Why is it happening?

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Danimer Scientific Inc. (DNMR) stock declined by 4.73% in the last trading close while the DNMR stock continued to decline by 11.56% in pre-market trading as well. The decline in DNMR stock price has been observed after Danimer Scientific announced its full-year 2020 financial results on March 29, 2021, in addition to few other developments in Danimer Scientific which we will discuss below. Danimer is a well-known company for its more eco-friendly and sustainable ways for making plastic products. Its renewable and safe biopolymers have been used to help produce biodegradable and compostable plastic goods that contribute to nature rather than polluting our lands and waters for more than a decade.

Financial Results

  • The revenue generated by DNMR for the full year 2020 was $47.3 million which shows an increase of 46% compared to the revenue reported in the last year. The increase in revenue is due to the high demand increased PHA production capacity at the Company’s Winchester, Kentucky plant, which was brought online in 2020.
  • Net loss reported for the full year 2020 was $12.6 million including $4.3 million of transaction costs as well as professional fees which is linked with DNMR to become the private company.
  • DNMR has calculated its adjusted EBTIDA1 as $3.2 million which was $1.6 million in the prior year.
  • Adjusted EBITDAR1, which removes rent cost mainly related to DNMR’s Kentucky Facility and Georgia production activities, was $0.4 million, down from $1.5 million the year before.
  • Total debt outstanding of $56.6 million and cash of $377.6 million as of December 31, 2020, representing transaction gross proceeds from the Danimer-Live Oak merger completed in December 2020.
  • Lastly the Gross profit has also increased from $11.1 generated in the previous year to $11.5 million this time.

Recent Development

On March 29, 2021, DNMR announced that they are thinking of investing $700 million in extending their Bainbridge manufacturing activities, bringing their workforce in Decatur County to nearly quadruple. Danimer and Mars-Wrigley revealed a collaboration on March 16 to create revolutionary home compostable packaging which means SKITTLES will be the first brand to use the new packaging.

Another recent news is that The Schall Law Firm which is a national shareholder rights litigation firm has announced that they are going to investigate the claims which are being made by the investors of Danimer Scientific. DNMR is being accused by its investors for violating the securities law. Quite possibly this recent news might have caused the DNMR stock price to decline since the investors are unhappy with them.

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