LIQT - Earnings call transcript Q3 2020 | LiqTech International, Inc.

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Operator

Good day and welcome to the LiqTech International Third Quarter Fiscal Year 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note Today's event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. sir. ahead, go Please

Robert Blum

Partners. and us everyone. International's today results. of XXXX Rocco for your all call. today's third thank for financial Lytham Blum Robert joining to I'm will good you, be And moderator morning, you quarter I Thank discuss LiqTech

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

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

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

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

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

to turn LiqTech Officer Executive to International. the Sune, proceed. like Chief call over I'd Sune please Mathiesen, Now of

Sune Mathiesen

Robert morning you, you, you good and forward to you looking quorum, of much today. Thank joining thank I've and us today. all to software been Despite very with I've speaking a for been the announcements opportunity to of transformative business for made looking rather a expand ability to exciting very forward. this the the forward all the going which to we number be has on morning

our ever came we've opportunity is to this very marine than exciting much So we seeing from given Carbon about with with explain market quarter, scrubber release market. wanted global first This be, a let's internal understand the you expectations. over step standpoint, financial much, a March expectations line ahead opportunity, last how significantly in. we The and started are back morning. results more market press reduction in is the and the market and bigger discuss talked third financial in I'll this in the on COVID-XX worked NOx improving the activity. the our help is from And Black and for a that marine on impacts moment, being marine of quarter scrubber which to the but potential training in market take slowdown internal the and product increased a any came

exhaust diesel a LiqTech has years, in DPF, engine. gas a matter leader are or diesel many particular diesel which been particulate filters for the defined remove First, to from of

of of the And into applied first in in market few and vehicles, Europe been from particles and business. cities market, engine jurisdictions South and begin and many have these in clear, has as have $X.X been been the has DPF For pollution our vehicles. America. more XXXX, we been to regulate to more drive in well countries, to regulation years, to reached DPF are had mainly years, particular services. a in implementing major million levels. to response to humans of Asia. economic from is in have In DPF North have emissions In linked And has buses, DPF diesel in will expected diesel diesel in legislation approximately diesel reducing retrofits health to as Due benefits. therefore The social as our exhaust governments expected later Emissions existing be requiring engines engines. the increase off-road problems we Asian trucks, growth emissions products from XX high metal and shown impacts, the our health always variety health savings market in growth in past for global

potential and essence, DPF with new history leverage in our in develop implement an industry. standards. emission to our I'm such the and for intent path reduction for but pleased have down now that with As tightening have by of Marine with introduced by so IMO than and us much Chinese other XXXX services, the came mandate governments This see announce that and we to the governments legislation particularly regulations anticipated. faster reduction expertise now mandates a as known product. time NOx opportunity We've vehicles, Black reduction negotiations We our we to the some extremely marine completed others scrubber to move the work in Investor operating many we the for After IMO, their result, in NOx engineering have numerous entered happen, our and Day commercial lead organizations in along vehicles government in for coupled it market China previously Carbon Black And XXXX. would Carbon new with a Carbon on-road Black and turned our have during that you NOx customers. to this meet focus communicated additional

together our in we entities is our China their in to to opportunity leverage the region with the leading largest with this the scrubber based of marine customer for in negotiations capabilities. relationships work entered And DPF an market. company us saw One

emerging will past market where we something supply success steam, supply the I a Over markets than multiple market. silicon to in deliver have of much front announced the these are systems. treatment beginning, in become having let negotiations come the to and are we of much and years we we one reduction months, with about customers our in in the of opportunity number gas share the extremely be ticked the ideal significantly continued gas local originally marine much, now excited oil joint venture in. on to And and is proprietary off water to with the the has oil at in on quarter leaders operated New that from in clear carbide joint experience the leveraging producers. on years' with and the on Again, worked this solutions Middle are long-term last industry, in advanced oil more just built and our and we an worked systems potential projects. LiqTech confident for by be Further said the East. the is position Black market venture conversations being about about we couple Carbon news marine than and any in Year. likewise is expected the are I negotiations quicker market in More, progress we market China we partners now, making water in water there this The industry, opportunity in recent on we look scrubber this based The XX exciting the are for industry, and technology, to currently forward bigger DPF NOx China, me able are agreements scarcity new gas excited have

last the treat than some quality both and ventures world, mentioned our successful our of industry, more months, execution Solution have oil the and and makes to alternatives quarter, technology joint What following completion In the ability we I this within offers difficult unique gas negotiating and to pilot of currently water in over supply process. it with the in technology juicers the our XX in a the costs companies our gas that oil water in existing terms venture is, several joint proven of largest filtration tests which of occurred in market market. much LiqTech compared the long-term reuse projects of utilizing agreements. the solution better in As

I'm quickly, our the opportunity are and very the in reduction XXXX. billion couldn't Carbon a Black things has if be already remains optimistic markets And front. expectation be for it next we'll this later and While on will important revenue than we month And any advanced announce you $X.X oil this metal for NOx that launching to that us able contributor generation of gas rather are, address to they soon very membrane market. something get busier my ceramic also

adoption and about us are including XX beverage OEMs our market, as working quickly nanometers, new pharmaceutical membrane component to of term, technology. LiqTech Longer well very well market. wastewater provider both to nanometers, designed a be market, As pore will drinking industrial a food the as with of water XXX can compared and to this allow a as membranes, system markets, current market, enable size municipal will this which some has large specifically to accelerate the which be enter as supplier that

we be shares. manufacturing competing equipment lower our market recently and silicon us unique in our established advantages and be win against carbide will industry, players believe enable technology well this due the of While to upgraded competitive manufacturing to costs the we'll that

laid team able Our Analyst on to opportunity. this to expecting during in set pleased to ramp couldn't XXXX, at be research the beginning expectation The forth at to orders a the Denmark. out Day, to phenomenal be once this initial beginning this up revenue in the again the is done product our engineering we be really development bring goals our of job with plans year of and XXXX. market. we'll has more in in advancing We I LiqTech that for deliver

the don't the exciting opportunities fields, to take want on all market news with So from I today these scrubber marine market. additional away

decreased fuel for marine mentioned, global of scrubbers affected I market by including as of the to transportation. a COVID-XX the impacts As be in continues global result a decrease spreads near-term

may However, scrubbers to important transition from already has scrubbers, voted further the loop macro that recently a XX% which installed global and committee itself. not being transition open closed open the currently loop environmental filtration picked close This loops systems the are Parliament's have enabled that estimate and the discussed. in believe is loop European ban scrubber $X It's by by We convert from to is market. continue the off have to towards with this accelerate to of that lows QX in potential on open share and technology. the opportunity some transition billion open outfields of those from $X.X drive vessels we of to currently billion systems that loops This XXXX towards filtration understand loop ban away company's will a an market majority and a And that closed we and to ultimately activity a benefit QX. scrubbers. it, provide the we scrubbers seen yet scrubbers. market opportunity coastal But

the the wrap one NOx the the gas again growth, oil and whether membrane, while still would any done it product confident subsides market transformative marine industry, an in billion development the the and we reduction the in the things the the systems. to economic the key the marine areas feel company we launch scrubber business hit into number in our believe and towards initiatives Black them entry of the COVID-XX years beginning consequences continued of in progress market, poised still and by pandemic, main and about market four excited XXXX. to of markets has discussed East, the marine be To for great in a Carbon represents slowdown has of the with drivers up, allowing each us enter potential $X.X loop historical is our scrubber closed of XX-nanometer a of So, next be new potential as become is the to transition hopefully of the it continuous generation that team for come. that which revenue for Middle I job advance incredible Normally, to utilizing industry

the we're excitement them progress I'd As have was different about any all of these, normally, I company completely of one level. saying shape. be the think excited great making in to simultaneously to hitting I a is sort Needless takes to say, on the

And increased to and our enabled products. lower balance. our us better and cash strong new manufacture the new significantly, year has have manufacturing We this and cost installed equipment also we capacity

of products opportunities the world well I and completed the that several take mandates opening around extremely sizeable is service up new are have in and development XXXX. increased We forward new environmental we a positioned us. to new believe for leap

final upcoming of to now note, conference you Hallum November, many I'll one conferences, be forward events. might talking Just in including with Lytham that and have. Stephens call in you Partners I Look please? over any questions of Craig the said, December. and couple the With let all of participating a to join these conferences the me Operator, turn in

Operator

you. Thank

[Operator with go begin instructions] Eric Craig-Hallum. now Please question-and-answer will first Stine the session. ahead. We from Today's comes question

Eric Stine

morning Sune. Good

Sune Mathiesen

morning Good Eric.

Eric Stine

big, the that I least you've in now. it's would that XXXX. than also, NOx love and it's referenced Hey, the developments hear what I we of next your, and to I so cadence end starting mean, I markets advance participating you of months? the how may this, just obviously, mean, have think of over at maybe should Carbon missed couple much estimate but larger larger expect your of for Black you know other substantially that contributor a I been or to to then be the on look in reduction. this you

Sune Mathiesen

time referenced important us we Carbon have now. Day in Investor in So, reduction been for expecting for it industry be at to in and reduction an marine some our market January. NOx back we the end And to Black

when What year what we that vessels us we that operating surprised and see I going and next a has moving we we general, vessels now a think bit we'll think but also see mandates global in also a talked longer the fruition. in little it can China quickly big see vessels, right China nearly countries coastal areas. And for mandates, seeing for is civil term, mandates, will in for What now. worldwide. of anticipation was think transportation And mandates is especially is this we in And many both China that be in specifically local ocean also say inland shipping that mandate. come mandate. in mandate. ASP these now emissions by hit how China, industry to it In well, we all and there's that industry. approximately inland has ocean-going would systems we're about think inland ago, around I vessels. We in would is the the And seize of $XXX,XXX. think XXX,XXX towards is of European for $XXX,XXX be this global new And them opportunity, to and be vessels one this new to for

opportunities. So it's sizable a really really, really,

Eric Stine

mean, what they up are mean, sounds Got what expect when are the at clearly to you saw And whether or on confidence maybe I the gives faster scrubber things to mean, guess, than side relative it. the available regulations, it's to side? it of it move XXXX. with second faster I I think I scrubber standards, the you some follow that. you a on makes you just, wanted and look you this IMO than meet move that how that. now these what will marine developing to are these options the what - on - like

Sune Mathiesen

the is us global gives focus. that what the confidence think environmental I increased

emission really focusing unique the And inland mandates. years. big transportation is now taking China of a not there is last And is on-road standards. are three So, transportation is incredible see sustainability They of the disintermediation first And China amount push there's expected. have now an them. that vehicles have to which one membranes. is They step and operator's this in What for on the country's commercial meet next we big the What they vessels. the or new something for on of is we new an been shipping. four is is the of about

they the is as have as which it an why vessels, of opportunity is big And amount inland so is. enormous

great we four last collections. for with years which three come was well another that for operated now with thing confidence business. with that trustworthy. where marine all that known And record the what now are needles, our us customer So provides scrubber in four us is a on done road very also China they really new teaming in customer proven will with largest scrubber or actually it inland and marine vessels or confidence for track with us confidence up with the three we've fruition. And we have have a provides whom as mandate the years that that provides to and And is here they have

with So, provides real confidence all something us of happened. that opportunity is a great that has and really that that this

Eric Stine

Got it.

know, and just that has last know in Okay, But view you know moving there, you're still and scrubber a waiting be in XXXX me things. been. you've one you negotiation got oil it? to fair is and statement? business. you given got COVID parts impact what mean, that turning bigger is mean, in gas. you've that some that things that the past a on of said maybe And to still I your for than the are the I way I that I I some had still lot that might thought

Sune Mathiesen

than Absolutely. We XXXX. opportunity revenue a in marine will gas that scrubbers. still it us think that think bigger and will for oil We significant be very be

with like in oil from doesn't that Carbon gas kind happening so, Black of NOx and developments reduction the and is simultaneously. And in away developments the new China anything take

Eric Stine

you Thank it. very much. Got

Operator

Markets. Capital go Street Brown from Please next your And Lake question comes today Rob at ahead.

Rob Brown

Morning Sune.

Sune Mathiesen

Rob. Morning

Rob Brown

a Carbon a bigger system? you follow-up for system into a supply will that thing market? goes providing this - in you with Are market particular. Or is that be component a Black Just

Sune Mathiesen

looking are for a supply coating We and ocean vessels. going including vessels for system and inland to DPFs complete canning

Rob Brown

oil Okay were of at you sort market, are that of you've those you're got? it range size systems said of coating then of a there there the great. the and think the and number through JV outside the I to or on. And - point maybe gas projects Could you here this kind characterize switching other is all of the JV

Sune Mathiesen

for of And now is projects process Yeah. well. We're Middle right that East. large quoting in going extremely number the

own, actually projects mentions the rolling But right I with now, of of We on projects are specifically projects, joint the of plan. for first all And to progressing from according orders proprietary we'll in terms in progressing venture some projects of Partners. for different together together they doing competition well. dare transformative it's technology. all now, Venture We not that size potential orders we company. the the with our the all We're partner. all Joint near think say, specifications the them are all future. It's because the our we're see quite regions. And Right own out our doing in are

Rob Brown

kind is are kind when picking that starting seeing and that and point? up recover or loop to how And you. driving what's just market, back. the you you closed on more recently, think Is or, talked coming is I scrubber dependent Is order just, then signs Thank the of about COVID that? how on that you this at that that's toward maybe of of greater sort some last recovery really trend scrubbers, activity question that sense of

Sune Mathiesen

very not coupled those prices shipyards solvents diesel level industry. hit overcapacity And That COVID-XX been caused There's low has down on being that down caused bunker a transportation working has people caused and to in and refineries global by slowdown diesel. the transportation the to manufacture and significantly a scrubber a an has has low not and probably again, and has with COVID-XX, no in to to justifying doubt means down due that and installation. on come shut the the whole road significant due fuel been that both has a between scrubber marine which as sulfur COVID-XX, phosphate come industry

been we people are that a which see Europe, back. wave are been been back seen in have now. second has We people challenging. has always that But - general, COVID-XX also the in now There of

which as for back that XXXX scrubber once at the COVID-XX. scrubbers, for COVID-XX up exciting open which tunnel, around, forward the market potential We not orders. the end it's on affected really a affected activity seen it's has And loop it in as there'll tunnel news as in also light Pfizer positive again, regarding loop get inquiries, let's We likely. of business should ban scrubber an in that the next opens in in activity But and up. scrubbers We great installation think years. open a as open be though. that hope winning of with of be the eventually opportunity installed to ban off have now. also We already round, and in We owners a case, end there finally, the plans. definitely that long, lot installation terms we vaccine. we the But will attractive they're and picked but the very think is installations announcing market open take the as Parliament, is of be to to European still of of out-phase focused light a of of is conversions, to still And, this right loop the had long see think again, we're scrubbers, loop a vote whole will with things industry terms scrubber But moving it us long a proves marine global convert ban scrubber huge normal. then And by morning, by is ship a COVID-XX. the And lot a scrubbers. be the we're from and had

Rob Brown

I'll it over. thank you. Okay, turn

Operator

from Stephens. Our Instructions] Please go comes Moll [Operator with Tommy today next ahead. question

Tommy Moll

thanks question. and morning, for taking my Good

Sune Mathiesen

Tommy. morning, Good

Tommy Moll

XQ? a us you to significant there Or to black we like light cetera. crystal then some calibrated be the versus impacts COVID, XQ up guess or appropriately? just Do hazard line a revenue hazy as event markets get of start more pathway from flat down the to think be look you up for to margin to Understanding on when you? bit the may some into these that side, get XXXX potentially a have would back yearend does And a top But is for et into able new ball and QX? here

Sune Mathiesen

Yeah, so if third be based already focus the and first, you is sequentially positive. quarter, on QX orders we it that made, like will so which deliveries in up looks QX from current

third was revenue have So and a move marine market into as have have moving, hopefully we the quarter drivers. low have point. we Black we And as more and XXXX, and we NOx lot oil things gas, the we scrubber Carbon a reduction,

set And it looks like well. as XXXX growth we're so, certainly for in

Tommy Moll

to far a the for the then on talked new the on of Good in so to allocation lot you've and both shifting fronts call and capital opportunities about hear release.

or we As about there about should of next should think more you is pretty and CapEx 'XX so to are look feel forward year, some XXXX? set of other in think that as capacity a terms here we consider we to start well you do maintenance dynamics

Sune Mathiesen

are and would opportunities we oil same black expand be our which that build focusing go to further. do from even thing very fill have in the after focus been we obviously And expand have size gas, today. strong into capacity. been million is Yeah, carbon a both doing now focus mean we'll that and have what substantial that And $XXX the to position. to capacity as $XXX that's cash right that. where But a we've have, on in And we to start successful reduction the new what furnaces time, and that would positive our to of XXXX. million first definitely capacity then our grow here we And brand to growth capacity. is businesses our and also think in XXXX we And is able to capacity I the at we we've a

heading shape into growth in we And so, for feel XXXX. great

Tommy Moll

I'll turn Thank hear. and it you Good to back.

Operator

your comes B. with question And go today next Please Burke Riley Liam from FBR. ahead.

Liam Burke

you doing Hi, you. Thank How Sune. are today?

Sune Mathiesen

you, are I'm Liam? good, how

Liam Burke

I'm fine. Thank you.

Just sequentially. investment a down your gross drive What worse was margins quickly gross contribution but manufacturing your in the below plant sequentially of for took would on quarter during the margins? the the efficiencies turn

Sune Mathiesen

margins improvements The affected marine see new the reason in for scrubber see And why the actually we're in quarter the volume, our North America. down to gross manufacturing the in to equipment. we it's volume in some to the DPF to mainly the due the reflected low in that margins margins contribution really is also the due improvements in units. continue due shutting margin. had gross and is also costs We not our also contribution manufacturing our we And

overall growth normal in as of will margin levels and contribution So, reflect are it to business. continuing improvements we return and

Liam Burke

for contribution the you CDP quarter. a and Great the us Can that? give sense of

Sune Mathiesen

I'd Yeah, like that. to get back on you to

some exact you numbers. So we give

Liam Burke

for market with the out what there finally, significant XXXX the this timeframe. looking would tremendous industry? pretty I would done Okay. discussions solution guess NOx IMO about this do Have as to now what filtration you be right be emission marine since can carbon And there's for debate into the then a any

Sune Mathiesen

Yeah.

buses on like, Black And in there's LNG. builds LNG. an big also footprint trucks next know there been overall not this ban LNG, week either. of has It's industry new. can is scrubbers And years. what orders because we've done, the towards Parliament open be many What would not good road the loop said definitely it new and that, open it been that And in debate for for thing. technology based it's scrubbers. many, shipping phase, we loop NOx voted on future many known and There's idea last to push they expressed the in kind done Carbon has basically reduction is a big marine on that how uptick been and of LNG our in the looks that So the passenger European for be skepticism is also footprint, the cars, environmental

carbon that solve shipping solution that large and with best in so, shipping. reduction we think has international probably that a the closed loop and in future quieter scrubbers And still to diesel we represents think reduction, coupled

Liam Burke

Great, thank Sune. you,

Sune Mathiesen

you. Thank

Operator

Roger question And Please from Asset. with today our Clear Liddell next Harbor ahead. comes go

Roger Liddell

Yeah, morning, Sune. good

Sune Mathiesen

morning, Good Roger.

Roger Liddell

treatment. said plant, anything water scrubber coal water treatment, You anything there not Is fired have about power cooking there?

Sune Mathiesen

it and continue lot be to power something we in grow think plants couple recently been will has Yes, investments in A in the focus. that and future. definitely of it's to power they continues would be COVID-XX be. to still - a postponed so, actually won orders due plants We of a

a us. we for is recently said, won couple So as I still focus a orders. of It

of the potential, not and NOx continuing oil systems Black and with market that and definitely for have In it have we we Carbon billion-dollar but to forgotten not developments. talked gas, reduction. are about But it's sell industries efforts our a today terms interesting, about we

Roger Liddell

relief? companies. separately cleanup, Okay. that the you And other foresee hundred related plant sharper But item been ash against multi ramping whether tightening be U.S. dollar that discussing. things part the the deal Eastern, with discharge But particularly premature but becoming standards million ultimately power are had you've issue a coal big lagoons the and up putting Do and Southeastern would in that the is now. it you relevant a of success judgments market in utility into fired with mine environmental of

Sune Mathiesen

to area. as I sustainability. And is focused a be in legislation will. up it open will when think has that of tightening market, world us. recover that, see to lot the I for that, when the this investments experts And I personally listen opportunities we that I the Personally, from on think COVID-XX expectation it do think will we'll and in general

issue this So for the room yes, an would that personal my expectation is future. be

Roger Liddell

is argue for part Reports interesting, contamination of parts that is and is that per I article Consumer trillion. mandate PFAS, only forever of on with And PFOS November they're noted Okay. guidance, guidance on mandates the the with stockholders but quality water to maximum not there's PFAS, provocative groups called. And argument number the discharge a the very they around decided trillion increasing U.S. X a XX EPA in least of an U.S. generally per Magazine, trillion. chemicals water in XX zero Portable at be the in very a water, the state XX parts should or but issue companies there PFOS, on along major as owned a meet environmental the lowest per companies, and have And concern tolerated. lengthy distribution

not So silicon a of in to that a scrub the market water your dramatic area, up apparently to increase per part PFAS to technology? this carbide out opening see and cost delivering is the trillion PFOS, is it compounds you down X

Sune Mathiesen

is more see more a going no local the water around forward. lot that different that think more also that by water market see drinking I and changes of and There and there drinking we'll we water Brooklyn, scarcity substances. is doubt in more polluted

one things time. We for on is which XX-nanometer of other for is some this And the product, membrane new discussed our really have targeted drinking focused others been industry. water we today amongst

the will I players yes, So seeing we're drinking and on our membrane, And developed in think be of think more scarcity. more see one we'll water, we industry. newly this I with tightening legislation

Roger Liddell

you. Thank Okay.

Operator

I'd gentlemen, final to this question-and-answer to and call turn for any remarks. over session. management the ladies back concludes And the the like

Sune Mathiesen

and us we thanks good joining a operator. during presentation all you face much, near day, next virtual the speaking future. forward our Thank you can And everyone on to the Have call. of look and hope ones today that again safe. again, stay and many for face I one to in on very visit with

Operator

presentation. you. concludes you conference thank Thank attending This call. We all today's for today's

have may your lines now wonderful You disconnect a day. and

LiqTech International (LIQT) 9 Nov 202020 Q3 Earnings call transcript