LIQT - Earnings call transcript Q4 2017 | LiqTech International, Inc.

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Operator

Greetings, and welcome to LiqTech International Year-End and Fourth Quarter Ended December 31, 2017 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Donald Weinberger, Managing Partner at Wolfe Axelrod & Weinberger Associates. Mr. you, Thank begin. may Weinberger you

Donald Weinberger

as Thank you, today's the of to remarks as to quarter will Aldo begin the and call to welcome formal well XXXX conference XX, for year-ended all business discuss developments. and Petersen, you shortly. December Doug recent financial fourth results

open to Before following there call, the over Sune Q&A let him an session. turn I call me Mathiesen, conference will and the remind that be listeners

ID available of should XXXX. at for ask the starting opportunity XXXXXXXX. also question your question. for please one replay number be ask the note additional enter call You In number, an After XXXXXXXX. questions. ending have have To to XX, all enter conference access and all the and you're the listeners dial replay, to to and ask today to please replay order opportunity individuals P.M. April this for follow-up and a the their today to dial international one questions, X:XX XXX-XXX-XXXX question the XXX-XXX-XXXX please same To welcome ID will questions, that on the initially access limit number callers, had

for statements. as conference a with read the I forward-looking bear please contains forward-looking Now The me and release press minute call statements.

reflect to from to interested that Securities and risks release one or in the forward-looking the Factors urge parties all materially different conference uncertainties all made underlying forward-looking materially if of conference If therefore or that, these and to that Although the obligation and this in judgment and actual to carefully my may our or filed of it operations of flows. circumstances please proceed. actual order Exchange now faith that the financial We and may may unknown cash to the conference our undue any after and have update vary of business, therefore affect release the subject call. review risks Risk risks or various condition sales urge call. discussed events and statements with call consider only statements good which be and the disclosures more reflect not statements, and the remarks Commission, assumptions his of reliance the management, these listeners as is results uncertainties in place Having no expected release including advice of attempt reports Aldo that forward-looking We of inherently the and those may We Aldo, with date the known materialize, date and from listeners forward-looking assume statements call. any to to are those date with results press incorrect, dispensed speak conference pleasure begin prove arise this the Petersen to or projected. on cause

Aldo Petersen

and Thank a ladies for call this gentlemen that to been agreement conference long you, LiqTech call big of morning announcement very has conference good Don and very today’s with and the and collides LiqTech’s for, good time. working and team afternoon,

CEO, I ado like the on further our Sune, who to any event. Mathiesen So would collaborate turn over today’s without please. to Sune conference will

Sune Mathiesen

Aldo. Thank very you much,

to fiscal in the quarter to the discuss year very participants and participants the all, and and morning results all warm afternoon to good Europe. our XXXX for today First our dialing for from a the much fourth outlook U.S., of good the you to business. Thank from call

ramp pioneers continue have One scrubber an market has quarters. the in continuous the and ship and for expect was we into could for even that we line with fourth we working LiqTech one lot We’ve scrubber in coming there though our up say Today happy industry. in quarter the scrubber note largely almost we that almost ramp expectations business. Our even solution results competitive were marine for up to to offer a were four marine years numbers and this been low owners. especially in anticipated The the made manufacturers were it the learned now to industry. improvements of were very before we technology. we our our

implement Our lower systems the from short international and footprint, cap modular are of shipping. significant on November global XXXX savings. voted CapEx cap sulfur XXXX. design X, new of come by January and terms International savings into also force Organization, we in IMO quality will OpEx discharge, times, In a of a to new advantages The lower emissions Maritime delivery

says That the this $X IMO and we billion in from X,XXX of after says Amongst in few in X.X% a million from the our article scrubber by regulation used scrubbers. corresponds to and XXXX about Korea that other expect most decided vessels the ramp China this great up commissioned billion Street things, manufacturers up Wall global is were are with manufacturers also That the million position scrubber to XXXX. fleet ships. that to industry. will than significant And with shipyards about in very of Journal commercial that retrofitted dedicate executives be that The a it of or booked said about $XXX comply talks built said $XX will about between to scrubbers it be study marine scrubber. the a into XXXX. roughly be to just X,XXX inquiries. XX% and Following Yesterday, an XXXX that resources by fitted these orders article less also from in said expectations new It XXXX. published of

proves inquiries scrubbers. by that retrofitted XX% been There in scrubbers taken a likely there ship in are the already Based we more reason more worldwide affected are legislation. strong for than or resources predict will XX XXXX that pick comes higher. agreement of framework considering that decision even experts scrubbers morning one optimism. of approximately was is vessels delivered right install significant very following for world's that be of be the our these expected around our manufacturers the to by be dedicating scrubber that most the XX,XXX will agreement We we system and that announced the on that be feedback share have it believe of important our believe in provides that industry the and where from up newbuild systems owners XXXX. one. scrubber we agreement are us XXXX have uptake new And and to it the customers This and marine XXXX. optimism with fleet to will decision and of largest the analysts This step that scrubbers. all more industry, seems framework it's the the market the to of we also experiencing uptake all The marine like With with of

positioned manufacturers more into Our in marine difference. from references with since where scrubber market readdressed And has ship long-term we supplier industries four almost started to water other being our transformation have we mentioned Besides a agreement of has identifying makes scrubber and of us earlier scrubber well been systems. the come. significant also treatment strategy business, a this a our in resources supplier our technology of invested number the marine the a we company owners. first of and that the It of years believe and investments is business components

have of various references large a to of The an pipeline and drinking in these healthy applications the industry. heavy our successful have power all gas be business We scale further now plant have as part building and oil and metal term. to of with done receive industries water, I scale in industries. systems large be will those into a we in lot are within been believe that longer pilots agriculture, the removal, delivering within projects specified for now, we these and that industries, important we'll projects Right qualified

long-term the And We are scrubber primary be marine results investments industry. our seeing now in the focus also scrubber industry XXXX. marine our into from course will of the

into also power however plant resources will dedicate We the industry. more

to Denmark, other this are successful ourselves this geographical broaden been have to in out areas. establishing We industry we now in and planning into

systems Our to success power plant us. a significant be prove similar believe for and that We also systems are for advantages. marine to have scrubbers golden very for industry could the the delivered plants future power we we have

almost As where where we it years a been supplier component solution. treatment a able of took from has are makes a we competitive business time difference our earlier applications systems. and some now a since into certainly water four to identify transforming taken the mentioned, our technology the has decision supplier offer of It to

has for getting a before. We references scale future have us mentioned that been large industries allowed number I of in This be specified to successful projects. in

you we standardized and XXXX especially today. development be said believe taken Q&A come anticipated the year conference longer company our that process. to I narrowed been water the a for choices. complete and has transformation by of experiencing encouraged Thank the this, finally now over systems than very greatly change believe treatment that turning end of like of in us marine but agreement and the profitable. the scrubber now right We also marks are the business, will have announced from to we success We has We we to we are business company industry would where that Having the focus turn our turn framework the to our the believe we much. It session. and our that it the point the earlier by

Operator

you. Thank

Craig-Hallum. session. begin the to Stine with line [Operator your Instructions] comes Please of will question first question-and-answer proceed with Eric now from question. our We Our

Eric Stine

Sune. Hi,

Sune Mathiesen

Eric. Hi,

Eric Stine

start your it I whether any the could as talk want structured are but also to and to that. not and how you any then guarantees And do Hello. minimum with agreement This or part the framework agreement from contract sounds there exclusive, I are is of there Wanted -- confirm say? should about the is like this commentary.

Sune Mathiesen

guarantees Yes, the was is its over agreement framework a the that of next percentage certain it years. us orders two customers' what

orders these So, receive two years. guaranteed in of they are orders in that percentage whatever certain would whatever or we way

we we framework could number, customer. years. it world's again of all seen have us to one the no is they percentage receive two it guarantees the the in the manufacturers pipelines It largest but of realistic regards the in agreement the minimum of budget just from believe there guarantees, a scrubbers, would As be figure, XX that this is the and orders are

Eric Stine

they’re And process soon? orders in Okay. will now, getting of or the those

Sune Mathiesen

they in the they orders the hand in some all securing. of Yes, are have and process orders

Eric Stine

half guess it. of this event got as is XXXX? I second should and split it’s much there sounds it this, that it's but anticipate know we is view in mean, like would between something this you I Is -- hard I XXXX early volumes any Okay, are XXXX, of and XXXX, it's -- maybe project more this to there the

Sune Mathiesen

be It is will XXXX. clear XXXX that number higher than

the market other current we up be hand, see the ramp a continuous in ramp do On scrubber will it and up.

up going like XXXX, explode January So be it's ramp not will it a then. it's to of -- Xst

So, some lot business business a come already -- of out in it XXXX. will of

Eric Stine

of Got that us the then have think part it, and I can you agreement? the helpful. volume that supplying as just are that's And that entire remind already, one ASP, what just in you there past, I this -- any or and of discounts ASP? I'm wondering then mean And for mean whether an quoted system you

Sune Mathiesen

for constantly installed that they we have now can average be scrubber selling different larger prices is episodes systems $XXX,XXX, that they XXXX In six see seen increasing. an in and the our renegotiated now and that average are is Yes, regards so the the scrubbers price we larger we selling offer the to fixed beginning size What ships. was smaller average fixed, price the on in of Right had in we selling are $XXX,XXX. being XXXX. we it price are saw sizes,

for large was of the in In announced the fact, be would we the orders the one the largest announced world. when largest what containership we scrubber orders

is So up of hence, systems is so going size price. and our the also selling average

$XXX,XXX price a good average number selling $XXX,XXX. is to So for

Eric Stine

to the could past And remind last then you’ve you looking for would kind these handle me, are know you’ve And of just that’s that what CapEx about and you was at? there just the Got need of think if got? you number the numbers talked it, helpful. big I us one capacity a expand be in that okay,

Sune Mathiesen

handle that would be analyzing We came that we that Yes, of last a to significant this longer was in-house. we realize no ramp spend very the would lot manufacturer decision up be to a time facing. to and how year

quite So over rapidly. to would up six the capacity we sub-suppliers set past of a months and have enable our network increase us that

as in-house our testing allows of we do It inside R&D, will will can what this capacity course system up with We allows but I outside. is more to we to and sub-suppliers. standardized ramp much will up up us use really ramp capacity would very in-house, everything manufactured And us come sampling we be quickly. want do because more otherwise as always say have And system. this this modular we that enables

So It’s regardless of the the that ship system same system always each kits what involved installed. of varies. is number the only its in

we your sub-suppliers. we question some an be able these answer have course there any short, think lot would done ramp already to time in entered to I have work a up be we would with needed, of to we sub-suppliers, So but handle is the of agreement facing identify into

be the would could increase to So it quite demand whatever increase rapidly and volume market. we could from meet

Eric Stine

Okay, thanks lot. a

Sune Mathiesen

Thanks, Eric.

Operator

line your Private of Martiza, from Our Anthony proceed next the question. Please comes with Investor. question

Unidentified Analyst

morning. will you in XXXX balance or you to capital market? the on fulfill hi scrubber order good Question win. sheet, raise to Yes, is XXXX your need in Congratulations for your goals

Sune Mathiesen

We need sub-suppliers I capital cash handling up the not current have quite raise We and have to set have time now. some of quite means answer how difficult ramp of and in management raise Again raise capitalization alone company. We order, right would the raised would that we have been some network again it back year. to massive now; now question need wait any capital say good in last we do position November we that this for not plans we see would But it’s have actually much capital. we say should develops. market see low more agreement and right cash agreements, the this for to but could up, each a does I to the

Unidentified Analyst

question do quarter? XXXX saying that Okay, are or a you you for thank mentioned anticipate the next profitability you year to just you’ll profitability example you. be profitable And follow-up in full that for during the

Sune Mathiesen

is shows we we the us turn our did have year is the a believe company to it scrubber that this business need but coming orders XX budgets, is When are other get likely where And Bob. to be Thanks, to that profitable year. besides this we going significant we it's up believe we from one. from, that that that we not we ramp what that easy could

Unidentified Analyst

Okay, thank you.

Sune Mathiesen

Thanks.

Operator

Please line of question Penmartin Peter from proceed questions. with comes next your the [ph] [indiscernible]. Our from

Unidentified Analyst

Sune. Hi,

Sune Mathiesen

Peter. Hey,

Unidentified Analyst

is we what of this kind this order it just So some framework, out versus Because guess of I help going it's in flush sounds actually find framework us means? an this sounds agreement of to like work to like capacity. like are together -- it sort sort more mechanism

us like of be So together just whether guys to comments business. earlier working guaranteed working Because what be are really scrubber going this understand can of your sounds like towards sounds from means? we're a their help percentage framework you it’s

am So I not? it thinking or about right,

Sune Mathiesen

are we years. the percentage over two guaranteed customer's agreement What minimum means that this business absolutely of next this a

more this lot number the expectation low XX agreement. from under is the us. this a And worth actually it's company for course So of

could us risk could But there important business next of years. be be of number over the a a thing that this us the doing would two it the low. that is is higher. whatever customer percentage secures And minimum it also for So this course be

Unidentified Analyst

scrubber look Okay, book that's your current like. what very then And / helpful. backlog order is

in first have months of help this understand six year? of kind you hand what Just us for the

Sune Mathiesen

of right see second that we XXXX. the six up the this have of do backlog compared means a to months Yes, first year we ramp now in a will that half

be was in So ramp will already further XXXX. ramp a up, XXXX up second a half of there

the actually could are out orders still there that XXXX. numbers seeing delivery still half of in change, for of terms first we In

from increase that still could that So level. further

Unidentified Analyst

first remind scrubber the shipped And how you XXXX? many Okay. in of half systems us the -- or second

Sune Mathiesen

a We in minimum year that seven half the XXXX. we we last announced were expectations. met And of ship to planning systems of second those

Unidentified Analyst

the XXXX? in better And of going think will Okay. half you than do you and -- so that first

Sune Mathiesen

Correct.

Unidentified Analyst

got Okay, it.

I Okay, you. that's all Thank have.

Sune Mathiesen

Peter. lot, a Thanks

Operator

with from Matt line next comes question Capital. with Laridae of Our your Please Campbell the questions. proceed

Matt Campbell

or good Sune Hey, good afternoon. morning

wondering… Just

Sune Mathiesen

Matt. Good morning,

Matt Campbell

does preclude from any you that Good have this scrubbers? you morning. any manufactures signing the partnerships with This of other of agreement

Sune Mathiesen

I mentioned a and in my is very happy we does with customer. as been have this to remarks, very into enter orders and But are anticipating the we're very, working preclude It in it more near-term. valued we LiqTech and customer not No, with this of more long-term to us working from agreement. others agreements sign

Matt Campbell

late, detail. little up things could other going helpful. the of I got your more up businesses you bit Yes, just that's are businesses? little other at speak a How a but some to

Sune Mathiesen

know about of ago. the we decision you membranes company being company this years water systems. a to made from as treatment of to started Yes, into supplier a We transform complete transform the four supplier

water, active drinking Where agriculture, We in the we and gas, in heavy all pool success the oil the in swimming have power industries far power industry. metal been removal, most industry. and is industry these so plant have seen plant

actually ourselves Denmark power been of application we very we systems are what The is Denmark able a to selling well. very we are have in very systems have similar. also scrubbers to The that plants well very, and ships. see similar that number to position it’s and We do in we in quite for good very, delivered working

that of other and point and view XXXX And that so in we try take resources have broaden We Denmark to already into the very from industry in XXXX. plant that success more to on a geographic areas plan is helpful. in to production power investing the out

Matt Campbell

forward the Look much. very thanks progress. Great, to

Sune Mathiesen

Matt. Thanks,

Operator

comments. There to questions to for the like hand queue. in no I’d further closing management are back call

Sune Mathiesen

identify near-term everybody framework some discuss hard to right to technology. now the the taken had that we markets end and shareholders much our in for technology you We do appreciate the our and announced that like believe we support. transformation time realize of come in back just chance today conference shareholders. into the dialing the for thank call opportunities take support company. finally the we have marine both we the continue for you But from and bring would the we with I the to us much. to development of we industry We’ve in establish the dialing it continued your to very thank value this do Bye-bye. you today. long-term scrubber will and that Thank work you for the market agreement see continued very and Thank has opportunity to our do our all to

Operator

this conclude today’s you Ladies your and gentlemen Thank for does teleconference. participation.

You may disconnect lines a your day. And have wonderful this at time.

LiqTech International (LIQT) 21 Mar 182017 Q4 Earnings call transcript