In a recent SEC filing, Danimer Scientific, Inc., a company specializing in biodegradable plastics, announced significant changes to its executive leadership team. Effective Monday, Stephen Croskrey has stepped down as Chief Executive Officer. The Board of Directors has appointed Richard Altice as the Interim CEO while a search for a permanent successor is underway.
Croskrey, who led the company for over eight years, had previously indicated his intention to retire by the end of 2024. In line with a Transition and Retirement Agreement, he will continue to provide guidance as a Special Advisor until year-end and remain on the Board.
Altice, who joined the Board in April 2024, brings extensive experience in the biopolymers industry, having served as President and CEO of NatureWorks. His tenure saw significant growth and expansion, including a major facility in Thailand. Altice's previous roles include leadership positions at PolyOne, Hexion, and Solutia, reflecting a strong background in specialty chemicals and materials.
As part of his interim role, Altice has been granted 300,000 Stock Appreciation Rights, which will vest after one year, contingent on his continued service. He will also receive a monthly cash compensation of $25,000 and be eligible for the company's standard benefits, but will not participate in the Non-Employee Director Compensation Program during his tenure as Interim CEO.
Concurrent with these changes, Richard Hendrix will transition from Interim Executive Chairman to continue as the independent Chairman of the Board, effective October 20, 2024.
This executive shuffle comes at a pivotal time for Danimer Scientific, as the company navigates the competitive landscape of sustainable materials.
The information for this article is based on a press release statement.
In other recent news, the company reported preliminary third-quarter 2024 financial results, showing an increase in revenue to $6.7 million, up by $0.8 million from the previous quarter, largely due to a 20-million-pound cutlery contract in the quick service restaurant sector.
Additionally, Danimer Scientific has been awarded a $1.36 million contract by the U.S. Department of Defense to facilitate the development of biobased polyols for high-performance coatings. This could potentially lead to a follow-on award for constructing a U.S. manufacturing facility.
However, TD Cowen and Jefferies, two analyst firms, have downgraded the company's stock from Buy to Hold, with TD Cowen reducing the price target to $1 and Jefferies to $0.80. This follows slower-than-expected growth at the company's Kentucky facility and the announcement of a CEO transition.
Amid these developments, Danimer Scientific's stockholders approved an amendment to increase the authorized shares of Class A common stock from 200 million to 600 million.
InvestingPro Insights
As Danimer Scientific undergoes this significant leadership transition, InvestingPro data provides additional context to the company's current financial situation. The company's market capitalization stands at $45.23 million, reflecting its position as a smaller player in the biodegradable plastics industry.
InvestingPro Tips highlight some challenges facing the new leadership team. The company is "quickly burning through cash" and "operates with a significant debt burden," which may explain the urgency in appointing an experienced interim CEO like Richard Altice. Additionally, Danimer is "not profitable over the last twelve months," with a negative gross profit margin of -61.46% for the last twelve months as of Q2 2024.
The stock price has also taken a significant hit, with a one-year price total return of -77.02% as of the latest data. This decline aligns with the InvestingPro Tip noting that the "stock has taken a big hit over the last six months."
These insights underscore the importance of the leadership change and the challenges facing the incoming management team. Investors and industry watchers will likely be keen to see how the new leadership addresses these financial concerns and steers the company towards profitability in the competitive sustainable materials market.
For those seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Danimer Scientific, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.