LIQT - Earnings call transcript Q1 2019 | LiqTech International, Inc.

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Operator

Good morning, and welcome to LiqTech Reports First Quarter Fiscal Year 2019 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Robert Blum with Lytham Partners. Please go ahead sir.

Robert Blum

Nancy. much, very you Thank Good morning, as results. joining today you and discusses its thank LiqTech financial for first us everyone, quarter XXXX I call. Lytham your am of I Robert be will Partners moderator and today's for Blum

Mathiesen, Joining us from Officer. call on Chief is the Executive company today's Sune

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

call will and note Relations that website. a on of a be call available also this conclusion available shortly should the You the section of of live that transcript be company's call the following replay of will the Investor the

we Before call prepared conference may for submit contain forward-looking the we record begin statements. following This with the statements. remarks,

this to no in of unknown to call. and statements date known the that company to discussed Although, which materially results all subject therefore conference to reflect vary conference and inherently materialize these not risks of uncertainties events be company order statements, update management, cash to speaks those The underlying carefully forward-looking cause arise one or listeners place may the attempt filed date our incorrect, conditions those Commission, projected. The of that and call. various any date factors may in review company or reflect risks release company’s materially and of forward-looking including statements actual of and the or risk this of that statements reliance the if to the or are and during actual and the and risks and only call. made on all these the that a after more the of listeners may uncertainties assumptions may the prove financial expected Securities with any operations affect release circumstances forward-looking urge to and the forward-looking good from undue interested Exchange results urges different flows. parties consider advise conference obligation If judgment business, therefore faith The from assumes the reports as sales or disclosures

to proceed. International. Now, the to of pleased Sune, like turn Sune call LiqTech CEO Mathiesen, I’d over

Sune Mathiesen

Thank you of all with speaking today joining you. morning discuss Robert, you be today. quarter I and to good our much, very to am us Thank first XXXX results. to excited you for

to from million of the of quality did the significant same net period million point only it the in compared record increase quarter. quarter first to in Adjusted in history was for report but the costs, XXXX The the approximately $X.X for was was revenues a of a revenue $X.X LiqTech. was XXXX. profitability. company period in The the same also up of returned XXX% in fourth million recent quarter turning in we $XXX,XXX non-recurring XXXX, a loss and XXX% $X.X most income Not

a couple like have to exactly We quarter of I since happy has Even there's been just being that spoke, a of you. the I'm first a last us weeks now. case. though that for of been report LiqTech to And point exciting about XXXX for the tipping developments alluded share was year it would at to couple with we the

XXX announced was filtration water more commitments that It continued approximately in compelling than first it from our doubled for now for The where XXXX, order orders standardized January our is customer to grow. we has when systems.

extremely moving assured specific from are backlog rest the we strong. that providing away While numbers, is

of from successfully the completed we the to on NYSE uplisting April XX our NASDAQ. American the Second, shares

NYSE and announced wastewater greater restrictions October or agreement the treatment American marine jointly framework owning marine believe of transition in system who develop on north we especially this global We will scrubber to stocks plan with for have our from showcase of are continuing world's at against XXXX Oslo, of one level for this to manufacturers. advancing the allow shipping We largest are now in funds June. from greater interest Norway a participation the investors investor see conference larger Third, that we institutional

excited very throughout And XX% increase last of are increased our than to $X.X as treatment are year water least that second revenue million due we scrubber in to sequentially momentum the mainly first continued moving this seeing happy We interest I'm commercialization. but plants. and for be quarter expect revenue to from the we full not we sequential systems expect power into quarter discussed more earlier report growth Fourth, the to to sales.

have framework all brand orders plant of industry have interest we pleased of part power strong and for several number we agreement is the future We XXXX The visibility the good our note marine a for Between good the now. in projects applications our put been new about this backlog this the feel in important first and business commercial we are launch strategy scrubber development. XXXX. marine and growth year of an to specified positive in and very of based right into our non

options the they a is to vessels are you based One of surrounding reduction bunker at fuel sulphur with regulations. are various least IMO IMO and today. familiar the is and XXXX it, to the than let emissions the attributes XXXX the switch those me that main comply are expensive ship newly bridge regulations that from of many fuel for more with company. key the joining to significantly new loss with green two just using the owners the of As

in the the the install diesel water solution engine a capturing spray is The over containing scrubber second scrubbers, option loop substances thereby and this harmful loop open without including cleaned water the process the It contain emissions system will that which system. scrubber such the the discharged would water. harmful and separate aforementioned treatment reagents took to types the sea be there after harmful closed water and as scrubber be so the clean a course, them the are allowed in of the system return to one will into two it emissions take from a being sea the the process. that scrubber of water system and device is An from open or seawater in loop There of and will particles and a to reused basic another those lives. substances an and

are Some half scrubbers. means operating These closed scrubber are hybrid treatment of which called system. of and capable open loop systems both that scrubbers loop water

the of of to open Over continue in throughout mainly scrubbers open largest this some ports the Singapore discharge loops water industry expect world. China loops the banning of scrubbers and of from number including the have ban months, last the

As loop such we and increasing of of Singapore, There's as over they quarters, loop from open the talked towards couple movement about scrubbers. discharge an been water scrubbers. last there's ended countries China

Our and ability has regulation to the by key growth. regulations to shipowners and a uniquely IMO believe are help industry within been the that demand, world our XXXX and of most accelerating benefit this positioned sequence. we software We address moments countries of in key environments the concerns at implementation pressing the regulatory around driver from

design ships scrubber into new conversion loop them new the retrofitting existing deployment from orders existing systems. We are of builds range from of seeing of and to coastal fleet, already scrubbers the from of of on systems the we installed covers from where a expect open

impacts we Since environmental these sorts an the made For originally retrofitted with our part name industry. of have of of with these founding we million in important history LiqTech, within particular reducing nearly we those large of particular been services our X and vehicles unfamiliar XXXX, have transportation.

reduction product of We position are We been in filters of the long-term developing current That our in the in products continuing experience is is the for our a a for carbide marine nearly industry. solutions us based the believe take that silicon manufacturing on diesel marine EPS improve particulate manufacturing to and the environments. same we this have NOx new unique products, XX that and opportunity. industry puts success advantage years. One

the to expect June. this of new ready beginning in We the for market have product

on just job gives ahead in capacity we also the an the an of ensure looking a company provide to done excellent to me manufacturing which demand demand, strong Let bit has where very update you. meet our have

and demand manufacturing ago for anticipate silicon membrane process. we up our As orders carbide discussed furnaces quarters ramp for in recently, this we placed we several

in space is is for year and office the began our where Denmark current existing are of improving The we double we to and meet come and later progressing also XXXX. We and deliveries this manufacturing we online expansion and systems both will our on to facilities. will expansion plan to expected manufacturing planned be more our track than laboratory according

expansion made and $X of already for have million [indiscernible]. of down mobile the furnaces is We the the systems manufacturing in payments without

me to leader. any we and concept into never positioned please. strong our how have. just confidence relations in the quarter to scrubber over as orders in me questions backlog commercialization call installations the that shipments day establish visibility behind the that an our business turn applications full With questions, might I now on This with of now first development transitioning are of shipments the increased say occur how and confidently Every increase easy. to and marine said, you that the with me provides grow, our proceed. manufacturing from gaining extremely market forward how we a to call say ability I ourselves over let turn intricacies plan. order go covered let will well to experience is will to the will With Operator are us, fourth execute can Before product

Operator

with comes Eric Instructions] [Operator question Stine The Please ahead. first from go Craig-Hallum.

Eric Stine

the trended early given the So year. thank commentary in the orders you on it's you. appreciate and Do how since

or backlog also Just now. thoughts have me you it's been order a number. it months been the your I but makeup that of XX wondering And six that framework talk underway. seems what the kind it handful then have is representative about where the its between I'd agreements to can two you're significant on if a progressing that seeing might love it's plus ago know that of

would be So helpful. very any color there

Sune Mathiesen

Yes.

framework well. all, agreements are of the performing first very So two

ordered was to and systems exceed that XXXX on if One of well track they to them exceeded. and for expected XX be not XXXX an are already in

So very well. they performing are

you expectations, was and And the be of right track to is are are other meet one XXXX progressing if expectations months XX plan. of one on maybe those to all XXXX they system also exceed even in system expected on according back to is orders like one The well XX and older and size the systems we from it so absolutely those go there. that here than

and it’s for vessels an and Now vessels vessels there. XX here more XX here order XX

ago. So today was size greater year it than is our a significantly

Eric Stine

versus trending agreement June, at that there third some how be or commercial framework your terms the you’re of in on And expectations. thoughts commentary tradeshow to just launch that's that have the going maybe in

that this think thought system systems calendar I and might to was be some then year that customer away system wondering changes curious, in in XXX using be previously that there you the XX it from you? moving a that for the that centrifuge talk or ASP know could size and if I

Sune Mathiesen

little of few all for system. see shy a marketing out revenue this are and what of expect our $XXX,XXX a our we amount is see expect lot big ASP XXXX while we very of believe only. bit year know to see we largest for that still they all said and to this A decision. a customer meaningful come the per be for and significant to in be this that. manufacture. those We we coming and solutions could is agreement of scrubber We that expect potential those they still customer systems will Potentially,

Eric Stine

to industry the bans think the that so the for you is systems? banning IMO does that last ports loop the just key that open closed some me your more wants people I of like thoughts industry wait or love with in shift take you're whether side. seeing do it industry the it And kind which what's the on forces on shift worldwide of the just it viewpoints, on port hybrid whether in sounds there to are talking loop like scrubbers diversion banning really going ports to and until the but adoption time, regulatory one the that already ban, curious, may a sounds it

Sune Mathiesen

have And saw last ports. scrubbers we generally we Singapore the year and out discharge November this ports. at loop part open from course, towards worldwide, worldwide. and eventually end loop closed place We loop have in systems. we countries of and the out ports of What think this scrubbers seen about it movement in loop a scrubbers come discharge with banning see open open from followed. more we the versus come we speculation. of saw and And discussion though, So significantly open systems there is will a that and year greater today this a scrubbers be closed loop right from now scrubbers China There that loop bring know in point banned is

our ship open the new We focusing is favor. has are new owners on manufacturers given loop market scrubber also loop movement new that sold see are that now progressing also in that So focusing upon been scrubbers. scrubbers customers in closed previously who

Operator

Our ahead comes please. Street next Brown Lake from Capital Rob Go question with Markets.

Rob Brown

us On much how the the are other is you order much how a sense framework customers? order give agreements of book, could book and

Sune Mathiesen

than more book comes little now XX-XX, about a it’s Well, in so other comes order a from right framework agreements and customers. bit shy of from little XX% XX% bit

Rob Brown

ramp you give the the of the know can hit cadence. up step nice do year view a for rest that are? or order levels throughout of should continue to point through thinking how then where sort the the you you QX, in that do increase year, I And a

Sune Mathiesen

We seen we announced had the healthy revenues than $X of more quarter Well, growth million so same includes. growth… order the expect and from expect the of pipeline $X.X increase bit current book there that in do our and this year as great second is very we we and process where loss in year last XX% that a still first sequential earlier the revenues throughout when fourth and quarter million. move year had quarter so And a little we've

Rob Brown

financial where the mentioned expansion there, online what And you then capacity and you - capacity be comes remind there? CapEx is at you’ll in on I when whole on furnaces expansion, capacity could the where you're terms of us the your think units the what's there on power and commitment annual

Sune Mathiesen

now made accounts included commitment reference is core. which put million, I payments the in have as $X.X of in $X we is for right as approximately So order of mentioned We all million. which

losing of terms are manufacturing is In we the the no of expansion permits. there systems capital spending,

Operator

next [Operator Please Instructions] with question FBR. Our B. comes ahead. Liam from Burke Riley go

Liam Burke

gross given growth up we margin us Can gross on sequential revenue higher sequentially based you’ve margins but was the sequential of step expected significant. your side, as Sune, just volume? expect improvement a

Sune Mathiesen

and in more you elimination to we volume better think get journey well. We are also of you still quarters third the we expecting guess, And but a the fourth or growth our in with as the do better sequential the It’s in and with second improve improve will I a costs it’s see are likely and the and to non-recurring increased quarter gross that margins. same the in for the had we and us so first quarter.

we yes, throughout see expecting So are improvement to the that year.

Liam Burke

air product I applications? some filtration did us the do gave a revenue your future as number, is you looking product traditional your how steppingstone legacy the And in quarter? gross DPF to but of important not mean, an it

Sune Mathiesen

Yes, DPFs. on we actually had a pretty healthy quarter

this see but exactly We right. million are approximately $X DPFs you to revenues for year of expect

ramp We DPFs are products developing product. new

are Marine We the industry. this [NOx] for developing

that We expect sales XXXX from DPFs product year that. are an this $X But expecting increase and million should of from down for to have revenues see DPFs. range we in

Liam Burke

of now newbuild And a you're a but at in if to or orders it? are it how do want look know you waiting looking forward, or past I how I you mix you however looking see look are at is – at at looking at backlog XXXX, retrofits, going the waiting you how

Sune Mathiesen

of orders. are seeing we types So three

We’re for seeing retrofits ASP.

newbuilds it retrofits. XX open and months ago, loop are closed was scrubbers our we all seeing seeing are loop We systems. and upgrades and

that people open and also very more we’re seeing more more are conversion. developing is we seeing And well. more loop Now and

Going of retrofits. forward, expect a new the to we would even lot and loop loops though see of open conversions also hopefully course

Operator

The [indiscernible], from open. Kershner ahead. next Mr. Please question from comes line Trading go Henderson John your Group. is

Unidentified Analyst

issue. unexpected coming out have would think of you say would money. stated be of backlog or previously a rumors charges able be of to there lingering had the that the any sort it clarification of Just forward one-time need to raise be that you to do that was whether be of might and and to the growth a raise hoping you purposes, not in that guiding capital question, might for light to continue an company sort I not analysts or

I think that significantly? is help there if not things that would

Sune Mathiesen

It’s always your the of question business seeing how develops.

We on current in the position helps we the are If of cash. pleased see showing first our $X take and certainly it will profitable the to prepayment had we done quarter. cash million company of furnaces a your

cash cost has our means position since If unchanged which been the flow has cash you year, our that that current last been from company neutral cash neutral cash flow position, is to [indiscernible]. June add actually and

think profitability throughout in we so be good shape. and year the Our improving should we’re

Operator

next with Please comes Group. Henderson go John question The from Kershner Trading ahead.

John Henderson

Quick Hey, again. a extend your guys XXXX. Sune in it of you're you to those with how is shipbuilders conversations those question The XXXX that far that for did terms I I’ll do try of directly, having or mean, visibility. extended conversation kind

trying color on Just get front? that Thanks. some to

Sune Mathiesen

Yes, XXXX. So ahead have a and they it actually major XXXX on XXXX more so XXXX. trend visibility and for extend trend and into having even ship into they of we’re programs investments owners we well and big and more getting discussions lot they are These are

Operator

go Our Harbor from Clear Asset next ahead. question of Management. comes Jeb Please Armstrong

Roger Liddell

you you again be might to the is facilities, lagoons begin and ASP's revenue a Liddell so any scrubber overflows ascending to plants causing this actually again events appears opportunity, just Good lagoons ought the impact precipitation in for rhetoric significant waste lines? industrial an on this other when and can to of the heavy sitting but in and power Roger light Jeb. clarify for ash scrubber problem, Sune. Could Hi, morning, shed it market timeframes, read we be

Sune Mathiesen

Absolutely.

have in So last business getting year we in a readdressed XXXX been our successful since references have or we in we strategy industries. done of number

we done mining are industry embracing just industry, for that, that have across then plants to and and Finland oil is and see them. installations references in really more have in and really happening plant for power things projects. more of marine Germany see What in more name we legislation a more the in orders the world. unique tightened water legislation. and now really we and marking technology the are our industry We in getting successful and driver We've and seeing getting same in drinking We some good in is are first other market power the now see the of and scrubber we importantly tightened and been been countries we more gas, legislation specified some the now some and that reason

we're to So the trying one industry attack this at time.

we now successful have marine So scrubbers. in

plant market as power break work are legislation our other We which products, well. attacking we trying industries some successful. that it we looks driver into will a like where proved And already now when the to as see in we the is of

on first, focused things marines are scrubber first so we the And now. laser market right

We we power look develops focus the into are really industry. industry. starting and more next will unfolds the And to when to plant more and dedicate on that

Operator

Shawn from go Capital. [Operator question ahead. from Instructions] Our Next comes Mark Please next Boyd

Shawn Boyd

Thanks congrats question for on here taking the quarter Sune. the and

expect what but to was in Going million that the heard the second, for I in X one you over exactly back be year to quarter? DPF that

Sune Mathiesen

repeat? you can sorry up broke You

Shawn Boyd

breakdown I still quarter? get it for to terms understand diesel year the trying the million expected for but quarter. of didn't in Just the the over was particulate X filters revenue revenue heard what in

Sune Mathiesen

the $X million quarter. It was roughly for

year. still bit the $X for we're So full higher expecting a calendar little million but usual than

Shawn Boyd

would - quantify and power Is that the business And was I we all it more. a could think see little the going bit plants. of if year earlier to trying to more us kind see XX% color growth? first start is could or when traction that caller get that a to help in bit double, triple two it on the know the to we out of this I just little put we or little XX% there

Sune Mathiesen

still industry. it's plant stages early Yes, the in power very

seeing know and especially will North and come America. in size are now it We Europe in in in legislations we that also Asia

we our get why that, this solution traction. a We several products great for have improving we're now industry with recognized is to now years have which starting in

taking opportunity future. we trying opportunity. develop of are advantage laser and huge while the Potentially, and sized we for at scrubber the opportunity So marine are scrubber the marine this still be could focused market to industry it's on a similar

Shawn Boyd

clear as before XXXX. be business on plants the for to product to be and ramp that potentially actually would starts driver Nox just the And the ships, this power

Sune Mathiesen

for hoping developing product market see We're reduction know which are there March a simultaneously. to why we them the We develop is is it.

starting the We around see business are plant already to from power industry.

developing will two simultaneously. hopefully be So those

Shawn Boyd

Last is going right to and scrubbers. hearts the of terms is the liquid in question back now filters opportunity the in our only it where on

visibility, you a talk think right you going on lead discussions and lead order, If maybe but a far or come of is retrofit et stand mentioned kind new maybe just just talked that the looking of ship, to shipbuilders XXXX, you're framework would someone business I whether to can today how to be and what delivery, You different related with it now to you a versus out be more cetera. where you times newbuild agreements? about visibility that for were outside the out agreements framework also about times

Sune Mathiesen

Yes.

bought actually yesterday August. we order an So for just

We're So to not I that it's guess months. the short three now lead trying right can short. about time do be we

we hopefully time up now. book to let's orders say four allow a business better five months average lead us can to So ramp in way. we have better lead look times right which some to But

very ship We're XXXX owners good in their and right more more we are and visibility in XXXX XXXX, for giving early with having more now. visibility We visibility more are getting and on leads XXXX. discussions

Operator

ahead. [indiscernible] comes The Please Gold Investors. next from go question Black from

Unidentified Analyst

the on quick and a some Just give on small question backlog. percentage your units color units? of large Can us you

Sune Mathiesen

say. would I mix nice a It's

we mix in $XXX,XXX have a lot units, around vessel the some close very ASP We it's of of scrub but it's and costs have and there nice to previously. units a large smaller

Operator

closing This now Mathiesen, I like over conference concludes for CEO our session. question-and-answer back to any remarks. the turn would to Sune

Sune Mathiesen

very much, wish you everybody to Day reach would please and you. out Robert June about to Thank today. to X. call with to to We the of soon. Thank again us on New thanks like York seeing participate, for Blum on of everyone look our joining you Lytham some Investor you there Nancy I remind Should Partners. you forward and speaking in

Operator

concluded. you conference now for This has been Thank attending today's presentation.

You may now day. disconnect great and have a

LiqTech International (LIQT) 14 May 192019 Q1 Earnings call transcript