LIQT - Earnings call 3 2023 | LiqTech International, Inc.

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Operator

Good morning, and welcome to the LiqTech Third Quarter Fiscal Year 2023 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

Robert Blum

All right. Thank you very much, Andrea, and good morning, everyone. us quarter conference the XXXX September XXXX. joining LiqTech to period for XX, third International's financial you on call today's discuss ending Thank results for

Chen, call company's Stadil, Financial Officer. company Joining and Chief from on Executive Officer; today's are us Fei company's Chief Simon the

Before the end the of to call today. call management, listeners me remind at I there Q&A will session turn that be over let an open the

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

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

Fei Chen

to I the to speak call. you, and you excited progress. good with day get good Thank opportunity Robert, to everyone to our you and share the on with am

progress plan the by quarter, And profitability. increase our year third of improved we to saw against $X.X compared quarter Gross net executing in drive a third strategic We from million. quarter. business last last made margins the continued year's this loss XX% X% towards to third improved to XX% year. During our revenue

such protect focus to acids, commercial Enhance develop million ceramic business. look we we businesses, towards to words, pool put we're established revenue Importantly, phosphoric our and other as our delivering in our driving new established business service to and our businesses adjusted $X.X as with components. year diesel results and negative membranes, systems, business growth our it which as and markets. To areas into expand areas gas and such includes business our particulate overall profitability. on move This enacted the are EBITDA due targeted strategy on improved was focus expansion a just enhanced we increase last through and oil strategic target filters the

As word my key focus. mentioned the recent is presentations, I here in corporate

approach and and back, This protecting success. a scary This reuse, megatrends we where LiqTech, listed as on our filtration can world's water at We're are reduction demonstrated a we that of any in design dual in markets focused exciting have can sustainable resource vision our of economy core our carbon that and of leverage technology protecting solutions. successful. Taking growth by sure the are and upside overall on are customer capabilities. We key save to us the enabling become is one not environment. making all reliant to emission position key markets sustainable high we advanced circular business ensures to for are be project provider defending cleaning we step leading system key or and a greenhouse it silicon gas and a history

due our commercial economic all preserving Beyond went ideas we is and produced of through have protecting gas providing in energy Whether that The ability chlorine we swimming solutions, key resources, needs products. years system, our the product of the solutions environment of reuse provide lower our distribution to are the our value cost the benefit through consumption phosphoric or for acid and -- pools in recent agreements signed oil and the dosing have water, purification after to customers. real sales our to increased case the solution the and achieved water customers. it to decrease

Let over a about past me minute some take key developments took the that to talk months. few place

X a our pool Zealand. pool received Let's and the more delivering during we Spain, swimming which XX the delivered and Year-to-date, with have systems, X geographic systems quarter start we We Australia successfully in fourth with focus compared in for U.K., systems shipped have recently commercial swimming systems, quarter. products. third XXXX, XX New anticipate orders during to Portugal,

footprint progress looking in agreements with With by partners. have entering the have we we these made new been at ways great broaden our key into to areas, geographic sales distribution

and agreements. a of UAE. the areas Oman, the Kuwait, thorough U.K. key with a Dubai-based Arabia entered to including into Barr we cover key and X East, One + group, Qatar, Middle process, Bahrain, Saudi Wray, Following

state-of-the-art and + system CEO work Barr the leisure of edge a is build strategically their with pool mentioned, LiqTech's match design centers most and spas. the As perfect in Wray's cutting filtration the prestigious

key to Zealand, years into is New and these working LiqTech swimming territories. has with substantial in Waterco player to to with companies customers. well-established entered pool market and New bring reach the Islands. over joint in to aquatic X with worked X a We broaden global water our a Pacific cover and past solutions treatment forward the industry the look in these make well-respected impact Australia, their Guinea to and the We successfully Papua also agreement Waterco

marine we an deployed the saw enhanced scrubber Joyo of the upgraded in system relationship XX marine modular new China. return design scrubber -- recently market, orders first system developed distribution our we through months in with our more than Within as

future. Finishing we this business X. where received will to continue we mentioned the the ago, orders strategy, distribution deliver market and in contributors demonstrates partners, Our scrubber our I validates returns confidence dialogue solutions, has XXX to LiqTech delivers established in This opportunity marine day-to-day from third customers XXXX believe few be which in confirmed a more occurred but an and as between the partners installations. only than with their also is in primarily focus quarter orders owners in the has position quarter moments off, on ceramic costs. LiqTech membrane during proven design our and marine and and a established reducing capabilities technical element investments. Furthermore, OpEx order delivery is XXXX. the system for on new on our not significantly strong that the standpoint, the LiqTech's market installations highly with renewed market, business new modular maintenance design reliable water there scrubber has membrane I from enhanced commercial for driving verticals in a continuous new by regain With revenue customers market capable set focus and which coupled largely our reduces treatment operational and our generation

We business revenue we growth into tremendous experienced areas persistently this to DPF the but stable new On expect looking side, contribution. don't application here, hold steady.

a area On quarter, up in pullback of material order large the development. side, we bit at as sequential received biological-based we of of wrapped the in a the end year the plastics third a did experience we last

We continue the opportunities this look future. grow to area for to into

quarter have across in operation. our nice we more increases progress made recurring This Finally, of did the us. Overall, opportunity the are sales X areas we as will pleased in become systems significant established business areas I the we spare on business key parts all for mentioned. see with we of in a

improved have LiqTech intelligence, visibility cost to is discipline enhanced gross pricing profit delivering which increased We ultimately our and elevated and profitability. bring closer through market

solutions recognize markets there the our This industrial LiqTech gas a While solutions applications in can filtration, our system in pleased other purification growth large for variety suited generated in long the treatment, business, ideally for that for and market industry from is very are addressable we solutions a oil wide that we with of of acid opportunity areas potentially are and LiqTech. established water the traction drive large run.

As progress has we I have area much made. that stated, this longer the but is downside is being cycles, sales believe

with is and NESR our ahead. moving Within the collaboration gas oil market,

to building what I demonstrations. for specifically as are NESR utilize in currently would system, a pilot We various define

Filter share to we solutions build in and technology I third Silicon sales in our this could are this recognized target process to in the phosphoric and their X quarters. Within hope revenue and phosphoric product dialogue efficiency acid with China. in We close with our pilot acid, effectively where our believe unit will We coming water unit Middle enhance you X out solutions ultrafiltration drive quality. the into to applied. to be We our the the have customers can pilot to in during customers the partners our East further their more for future. system that demonstrate region produced to on help delivered look enable further U.S.-based quarter pilot to installations similarly

market system the here and delivered highlights it and where yet in quarter, wide the opportunity, of solutions metal large international During a recognized the by company. Denmark, our our we across validation not opportunities also of large range third a another on cooling capabilities revenue

offshore oil continue client front, gas installation large the glycol, with Finally, and the well. fourth monoethylene MEG to Mediterranean our the perform or in

be project for orders the As of of this location more due coming I the the And timing coast in XXXX expectation some which the follow off first XXXX. or is current to due for of to X-part said, the uncertainty Israel, offshore this the That slipped is the mentioned on shown. there should and last or platform, order not know conflict a fiscal in whether the quarter, with region. to shipped will We in weeks.

last expected we with opportunities number and in to acid, as to to phosphoric and and component certainly the as the in segments, in pool as to Where see our of guidance moving of such rest of partnerships million market XXXX. Further, segment $XX confident that for year our what the In we in look we the XX%. year be was profit margin will expand always there encountering XX% in gross that year summary, with in XXXX, we our our well swimming water year believe feel also contributors in Please the us XXXX on for this we MEG, hopefully, revenue margin commercial produced the we particularly are the as $XX business Further, oil to XXXX our remain newly are key a targeted into Mediterranean, of remember position uncertainties our key that market installation full is of full within to -- X.X%. achieve growth with ahead. only market gas growth, million. gross believe track established we range the MEG

questions. advantages, me We which I technological and opportunity to your sustainability to performance over good comments business. with up leverage open detail, have this to tremendous and brand come. With let and us the continued XXXX, after ahead a then in that unique succeeded the the competences more and wrap pleased our to progress growing financials turn making profitable proceed. and a few review in in will Simon In quarter we Simon, am continued highly to quarters the extremely of anticipate a call call with in build to progress please I that, have each value

Simon Stadil

Thank you, Fei, everyone. and good morning,

as XX% XX% million quarter. The $X.X down recent to and revenue reported financial most XX. Thrown second third some recent the were add of quarter compared a for Systems $X.X compared more sales in June quarter quarter. related the QX color services compared of $X.X on year reported up and me important sales follows: to and to increased $X.X ended of million by increase most also to million, than reported the in up million marked modest, sequential XXX% third last however, vertical, the the compared Let the highlights XXXX,

dedicated DPF R&D phosphoric key projects. In ceramics shorter our $X.X and reported managing to strategy. To sales a the with of specific, Asia, year stable and focus to on development membrane focus complementary lines. million Europe but be aftermarket sales $X.X in was with continued the correlated in global with clients our the key and plastics core on $X.X aftermarket China, by our quarter and finally, in compared business, first and systems for business to oil profitability XX% increased progress More at QX to at delivery leveraging funded pool with record projects our and in million, base. Zooming marine the pilot external on projects the strategic & to ceramics shipped acid dedicated XX strengthen directly is activity September businesses our orders externally the last down specifically, quarter R&D plastics business. improving key applications, finally, a revenue ended and of drivers installed both metal gas XX delivery on systems the progress mix. And components carefully of during acid XX% established cycles up Looking across summary, and our with revenue revenue million, our reflecting last revenue cooling compared ended sales new also year, uptick

and summer times. decisive incoming throughput on orders cutting Our on focus ceramics lead businesses executed and improving post plastic with

mentioned, In $XX to gross million million, full reported both are year we terms XX%. It's progress and with Fei million the to top of profitability. as to the expect XX% of compared and last a evident on with the revenue margin of in rate $XX we line pleased guidance, that year, $XX range

This, monitoring carefully that and in unrest escalating gas oil make business. turn, directly Gaza, amid Ukraine that such are industries as in and geopolitical directly impact the fuel uncertainty conflict in are which in countries or we particular, exposed. the However, our

and Turning breakeven. margin to insight our our gross journey towards more on

to margin $X.X the an third XX% couple profit compared strong with and over The profit gross reported of reported quarter quarters, just echoes of gross last the progress implied of equally our comparable last the period optimizing of positive year. a levels The focus a on development discipline. pricing and and result increased is activity mix important, in stringent X% revenue million company-wide

and a year, new pleased robust lines operational this our that gas business we From an times profitability to As phosphoric towards on oil end and the execute backlog. Profitability see and within new also target acid. business remains meeting increase breakeven. remain manufacturing underpinned compress will are staff focused both we was KPI financial we established which seeking delivery reduce quality again our sustainable our focus monitoring and objectives closely ensure contribution platforms, throughput order our our yield. Taking of incremental earlier perspective, by quick allow scrap to to this decided We to margin. on to business and the reported a develop across of and system manufacturing important to profitable optimization and look the of to delivery ceramics onboard ramp-up quarter with accelerate accelerated production our efforts, standardize our and help at business on

we and when the contribution the XX% During in reported quarter, the year. quarter was XX%, fixed out cost, last approximately margin above third well our take thus,

directly mix. margin very Our This volatile. with contribution historically been correlates has underlying revenue the

potentially on maintain million the stabilizing mix. lower far this margin measured so that in reported and as target our EBITDA above an XX%. adjusted contribution well revenue revenue improving year, approximately have and we we On note, do However, $X succeeded in of quarterly significantly basis breakeven our right

managing pleased million by do diligent to OpEx lean compared ended and to Total spend. spend $X.X are the OpEx. XX, quarter of and On business. To investments from when and costs I'm comparable down increase was The of that our we to our we in the comes quarter million, combined reiterate, onboarding last OpEx came in note, million reps, sales with our to jeopardize financial evidencing a spend to scale monitoring reflects ensure quarter accelerate marketing $X.X running to and help for objectives. our that not evaluating the on business year. June focused it IT that remain additional our third Turning carefully we $X.X see the

$X.X transactions, and year. compared with reduced the a a period reported down on year, where same explained our to development on a by a cash. Concluding to came building interest increased last net million offset invest deposit million million in from $X.X current more operational in by period of increased Again, stronger in perspective. U.S.-denominated net from P&L, top LiqTech we the $X.X of profitability favorable partially on an from benefit we both loss the million, income excess income gain we rates line Other benefiting growth $X.X organization last loss of and as compared

on XX% adjusted items, year. [ last compared to Considering key at $X.X plus a $X million, EBITDA, breakeven per our when quarter of an comparable it's Thus, of focus. remains achievable revenue million $X.X noncash of we ]. negative approximately adjusted excluding Commenting reported the briefly million revenue, EBITDA contribution incremental the remains reported negative that evident this in quarter adding our

CapEx cash million and to key $X.X a of briefly took medium-term quarter senior 'XX me to the addressed delivered From release, More investment we and pleased our lease delivery Copenhagen. reducing securing quarter. that the this banking cash flow over mirroring as compared was $XX.X will investments. Also, during path quarter you, for improved extended financing Jan cycle initiated to to original towards Fei. our new and quarter will the is structure, the continued let with in and during second ceramics XXXX, support, Fei. cash collateral both the Denmark. summarizing flow on Finally, support ended positive partner, in CapEx That successfully have both cash, quarter, million to the terms handing in the on flow marks near abroad also cash kilns. in and commissioner profile We facility mentioned domestically which, and Hence, generation. Thanks your sheet and capacity over our as related to smaller at our core line on and balance maturity benefits progress down with June further plant improving the 'XX back cash our notes. before cash summary, confined to expansion incremental Furthermore, top as our capital equipment our cash the we our extruders be for terms the of comment shown specifically, manufacturing we, underlying flow less I'm and in proactively with negotiated agreement. In equipment perspective, combined our we the improved with to profitability maintenance end

Fei Chen

leadership progress and made of pleased note LiqTech up take sustainable become to solutions the to high questions. to commercially leading provider a Thank happy team sales new look on and advanced I'm filtration the to Simon. transform our operationally that, continued our saving forward would you, with around any world. operator, XXXX. With success We we be a XXXX finishing and in has for

Operator

[Operator Instructions] from And Brown Street Lake Capital our first Rob come will question Markets. of

Robert Brown

place? You made sense your or nice is there? work you on? do progress to Or are I you've in there geographies wanted more distribution relationships. there on markets just get gotten you now up certain that in how building to go to that of feel kind need much the And like other

Fei Chen

Yes. have areas quite We to areas many still geographic be -- explored.

countries. in example, U.S. have don't distributor any For some also the and we other European

to So we definitely our and our will continue more reach. geographic extend distributors find journey

Robert Brown

then, looking And pipeline How year? quarter. sense had for your market, that? for in on is coming I the of the market scrubber some on that reengaging you the next Great. into guess, orders next the that's feel like you Okay. months? And do sort What's

Simon Stadil

we're markets reflecting or a not or commenting into new So if new as the sizable Rob, pipeline. orders were they a are they obviously disclosing are of relevant order. come, tapping we product terms in on they Clearly,

to as through channels. portfolio, Now trying where you to on participation conference multiple address our really in diligently our alluded September, through market also back working that we are we're marine

we that rep have very person, build us more help at As for also point, onboarded channels. alluded to experienced will we sales market, new that a that

really to on we we that in we'll more and So releases time. elaborate on on And that disclose marine pipeline, diligently strengthen will relevant press future our also calls. are due obviously, working

Robert Brown

playing sort some goes you kind And And into to of had of But and what that out? there. business? ramping then maybe nice do on spares improving, services your efforts get see think I how progress that you

Fei Chen

the marine And pool XXX in for more our phosphoric acid, do give even we service and that gas systems selling very business. we're also basis oil have mean also also a market, and the and good us for I for systems swimming the and systems.

we offering, really looking the So up our service proficiency build [ are and actually the ] that. into on process, in

year, we the than before. hope do So significantly next service -- do will very we expect contribute

Operator

Bill [Operator a Chapman, will Our private Instructions] next investor. question come from

Unknown Analyst

are said to acid, are shut to adopt On have you you example, that your the down ROI days, difficult. adopt that that's deal a X to deal well And then X phosphoric plants is the year. the of have still to out? And for issues For and for is so, if presentations, one under obstacles the company this? proving What with they having the with to this? plant what

Fei Chen

our return It's investment less is year of that stands. than nice still very and short, seen you is the have it's presentation. a It true,

cycle we the system -- widen is So really sales actually ultrafiltration are line. going to is longer for the into that production their application put our

always before make a want pilot system. to they testing real their they put So really into

to a they open So the pilots running, sending we have that's more reliable is our when to pipeline. them then sold pilot and really for And also out. more we're up to going will their have [indiscernible], become pilot why

and investment pilot have process. all to a want because return on the want customers So the to with. they troublesome the bit these is take process But are worked impressive see for little they [indiscernible] we very

Simon Stadil

to that, adding is just key performing Bill, that well. mentioned, maybe is as also, I thing here think we And system the the

the to market the a I we view that is when that and we think, But we for mentioned, is time. unfortunately the tapping to the I long-term from system well. quality this, the line, think us right fact focus obviously, of the that performing really the Fei And control the we are us installed process the takes system have decision just client is on. But I can't benefiting co-production side. as have this that that want extremely on it client into correctly reiterate gives

Unknown Analyst

marginal the is it Okay. cost average considered substantial Would cost be manufacturing savings? plant? savings Or to this

Fei Chen

both product for and increase, quality the value a very the much process It's save they is and savings them. that also because cost substantial

Unknown Analyst

Okay. seen One anything that. I big last just it. I question. think on overlooked don't on is the I've did, I How market this? If

So is big market how for this? the

Fei Chen

I for more have potential you one. our X about target the saying something USD presentation, in addressable billion seen, market. exactly max new don't we than for think But business have we're the size we published this think, and area,

So huge it's a market there.

Unknown Analyst

last you? one company, have, have all offerings Of seems which Just question. ones biggest to the product potential way the of the right revenue for now the you it

Fei Chen

exactly we to strategy would That's we and as do one as commercial is have want our why and different defined stand segments we we company. had have We leg. for done to before the not stable same more we today, situation the and have on like take several

So the they and for scrubber, I and are marine on, substantial acid swimming we all be could our revenue would the say, pool very & oil phosphoric and the commercial focused market. solutions, all gas areas the contributor

Operator

management to question-and-answer would I any conference closing to This the remarks. back over turn concludes like for our session.

Fei Chen

for with much today. soon with very Thank us forward attending. you all communicating you again. look Thank you to being We for

Operator

disconnect. now The for now Thank has conference may attending you and you presentation, today's concluded.

LiqTech International (LIQT) 9 Nov 232023 Q3 Earnings call transcript