CLIR - Earnings call transcript Q1 2018 | ClearSign Technologies Corporation

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Operator

Good afternoon, and welcome to the ClearSign Combustion First Quarter 2018 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lou Basenese, Vice President of Corporate Communications. ahead. go Please

Louis Basenese

and first Austin, to ClearSign the Thank XXXX welcome results Corporation's quarter conference Combustion you, everyone call.

include, sales not in public risks to whether Investors potential update actual a and statement expanding During should the based this subject We the is Annual these the is of not any with so. those of statements. projections, statement. the responsibility are read and no This ClearSign outcomes SEC, plans, reflect statements make and conference will of historical includes that to intend or results numerous actual date it's call future the whether of successfully including periodic not risks forward-looking a that described statements. from remarks risks. the forward-looking are conference does as assumes field will products, analysis The call, ClearSign's statements events uncertainties the call caution to important statements these beliefs and be but investors and forward-looking risks this testing the Form you this and on on the forward-looking made uncertainties the Company materially Risk These to conference section statement do completed, limited cause Report Factor judgments XX-K. could and fact XXXX of in Company's and about forward-looking or to ClearSign's be in expectations, are differ described successful for ClearSign with in will are filings to that market associated that discussion products other in prospects.

to and Chief Steve with Executive turn me go the Chairman to Fike, Fike. over like that, Please today ahead, Financial ClearSign's the Brian ClearSign's Brian now Chief Pirnat, I'd Brian. With call call On are and Officer. Officer;

Brian Fike

you, to today. Lou, us everyone thanks joining Thank and for

quarter first for they reported I'll to XX-Q. of on review were our Form turn our the I Steve, the call over recent XXXX Before results as

to For the of of quarter, we $X.X million incurred a XXXX. compared the quarter loss for $X.X a loss million, of first

compared Our most we sales Through we end the first of project in that in to and the to project was related an in increased of completed. the XXXX. at the ground XX% enclosed sales year quarter with Steam backlog compared during the of Gross had just the of Once of $XXX,XXX the $XXX,XXX, flare quarter reported revenue Generator first XX% XX% to XXXX, quarter fiscal margin

normalize installations. increased approximately Our consistency the expectation of we and will for is XX% margins as that number gross duplex our

As share, we most cash ended the of net you and debt-free. know, February at wherein on quarter we $XX.X offering raising $X.XX shares X,XXX,XXX million per $XX.X approximately million. completed of remained a approximately proceeds stock in We with sold XX

to cash on remainder the warrant continue We that Steve. Steve. Please that, funding methods ahead, the partnerships the to monitor turn structure. could alternative working outflows include modifications go strategic I to existing and like our over to would call of With and/or

Stephen Pirnat

welcome and beyond. financial into insight call. share Brian, progress I future to our on as participants would Today, for the as quarter XXXX, review XXXX activities first thank you, our the like for that intend And to we of Thank and well update. today's during

Accordingly, costly three solutions, initiatives payback for expanding As low but reducing a focused potential opportunity with to population capitalize to and you requirements key on uniquely shareholders. dollar is know, fines. remain attractive we market on our air massive, thanks provide believe emissions and positioned, also products maintenance improving efficiencies, by multi-billion eliminating for controls not ClearSign portfolio global we at of is only urgent our and a need; to cost

proven The best-in-class already emissions our and performance controls demonstrated Duplex patented we've markets where with first penetration accelerating is technology. into existing

most including to notably Company's The the second markets and investing advantage, protect is technology East. well competitive faithfully the enhance China, new as new well is in Europe Middle as development third and as enable into expanding expansion markets. the And into international as

to Duplex enclosed have believe vertical our versus acquired a continue an for Near-term, anticipate needs which Because at dominate make basis, reduced which customer entire retrofitted newbuild this first recent recovery the I recently new successfully increases of a time, this technology the major improvements, we also progress in oil most this controlled industry all we the the positioned ground to regulated to in on by quarter flares recently producer and final three this review thanks $X.X technology. flare will the is a like fronts additional projects. initial on project significant would During overtime. for ideally ClearSign oil created emissions believe of time. XX% existing the completed we This areas million customer same project we enhanced in the phase retrofit significant into in country. and to production. space California stringently one assets multi-unit We the of At the

relies this technology Steam time long-standing track reductions a emissions a the delivering market you has in As shareholder, Generator on production. or best-in-class Duplex Through long NOx And OTSGs Once OTSGs. segment know, to record facilitate of

emissions both opportunities updates for the look coming forward months. this on the As in both help and fronts are to customer We needs, flares their such, control we excited OTSGs. providing to about with

reduction. by that a customers catalytic selective industry our a not vertical, this such significantly believe would achieve per quarter of We related achieved retrofit potential of X.X emissions waste should initial and levels current technology This project per is regulatory average Speaking complex remind OTSG I'm in is application. system testing the breakthrough the therefore that OTSG report an we field that for cost fraction million. emission parts to results unnoticed go Duplex X an I alternatives first, the is deploying standard completed successfully million, below shareholders of unit of and alike. gas another cost a parts follow-on these of to happy as the with a to NOx during everyone

As previously with ClearSign a this multi-unit disclosed, Duplex OTSGs. contract negotiated for technology customer multi-year in

We have remain in this been agreement can with a made customer we public. commercial terms this to not requirements. that of While future active discussions share their support specific

Moving installation Tyler, their to to vertical; refinery actively the heater. with remaining Duplex in FCC of into the we schedule are and Texas burners Refinery working our Delek on plug play

ultra-low determine our performance, finalized on last was same each the market. modifications During investors not NOx we provided is it burners requested to and rate burners the for footprint firing and understand increase maintaining installation if possible several NOx that on call, the emissions to update that this existing It's low initial based we and an the to important the while possible profile. NOx burner customer with

we team technical the made possible necessary are our with now awaiting technology. the the Duplex is it go However, Accordingly, adjustments customers ahead to and has determined installation. finalize

our unrelated our timing our variability impact of As is all can customary technology to in the installations. verticals,

development refinery Also Duplex We and become in assets work significant with updates as improvements. to help cost reduce Duplex coker safety emissions various and continue debottleneck advantages units our impingement in resulting to where opportunities technology. we provide we technology closely delayed and segment, inherent available. relevant continue install the working our believe also We're the our ExxonMobil technology they flame on in in of deployment these with their to Delek will of

scheduled, to regular headquarter installation been of location Seattle, in success to location technical the previously discuss selected we the and announced petrochemical has and to meetings be will ClearSign's testing further U.S. our technology operations. at an within joint as at for ongoing Once moved one determined, shareholders of ExxonMobil's our have able As to deployment refinery this progress. notify we

In to with has from heater the treaters. our separate ExxonMobil, addition, the us announced technology previously evaluate and project to also Duplex applying for potential ExxonMobil asked

look often to unaware, maintenance flame are summary, follow-on due high by gas of the providing flame impingement. are our end and potential required as in separate clarity for with they well ExxonMobil, future opportunity and as on we forward every oil Thanks a we Duplex's established water verticals. found our gas more it to the new piece use we those to technology, inherently design although impingement, significant we a and heater as time, could same to market which also expecting report eliminates our this opportunities equipment repair can cooperation continued believe tubes business in encouraged represent preliminarily costly and In orders pursue are ongoing that treaters we refiners. At fire in of For to new this existing the markets. almost meaningful probability uptick oil, other pad site, further on in and they

stages in with various commercial new majors. of potential including super We dozen customers over a discussions multiple are

Duplex to to of in productize the forward our by ability quarter, clean for to obviously related continue turn, in months. look is the control increase activity our believe to more within expand factor, in recent offered in commitment our our and to emissions prices coming orders base we first announcing ever field in need While is affordable the a markets. technology the rise Including core air and we installations new our presence. Accordingly, NOx oil the directly pipeline is

Moving outside of the internationally. area factor existing markets, focus our is expanding second key

such based focusing emissions company. a path that importantly, improvements. the opportunities In the revenue fastest for opportunities needs China. on We clear budget words, opportunities for we reductions, have regulatory regions most international for remains with clear of notable are most prioritized mandate, other on and our The making represent a to

You opportunities and successful which District burner a hundreds will opportunities retrofit the alone recall, District ClearSign of for working throughout of Heating with balance large project Chinese large state-owned retrofit could represent market. of group a China's on currently is thousands Heating enterprise virtually retrofit if

experts of customers It this believes important sales try the provide allow literally trains, we in of existing During a Duplex important burners we well this modifications here. for to retrofit verticals. do. this would customer to ideal operating savings, management burner, the it potential what with of because of with burner a systems, asked achieve is hard Duplex this project, them a that installations burner China, the and is significant cost and existing as simplify client to choose that ultralow is marketing components use etcetera. to customer's ability did emissions. in the to modifications previous the necessary NOx The burner initial is gas to as type upgrade Company them air ClearSign's from wishes customer result note a client to like other to retrofit exactly their Since and very hundreds delivery customer's European the huge fuel our expects of accommodate technology new new to to to and consistent environment what level to When in substantial the us has initiatives is where phase an determine

details. result give would the the not this the complete burner While encouraged we heating to of by are reluctance since characterize accelerated because the in it result rather having the the an single heating If they the existing technology, simplified this project when season, is are any was Nevertheless, manufacturer and would significantly it unable making did, us burner it's failure of would details is during a not is installed retrofit of understandable of we were the Duplex design we in season. operating process. market during the work Their competitive the this customer to have field multiple manufacturer lose largest Duplex successfully. progress

technology requirement been District continue efforts commercial refinery It customers Duplex Company just one testing we investment beginning and of including heating season discussions the partners important note like work petrochemical towards opportunities potential currently others represents has very customer China. in success in The Our before BASF. the advanced demonstrate the evolves the as we satisfy practical. is to the are the in as Heating is that like soon to industry solution as with project next our CITIC and accelerate What's to previously, and will our strategic additional the more, of in and China. Sinopec pursuing announced and supportive from customers as

key East. Europe long-term throughout and parts other and the South Japan, this market including Beyond Korea the expect regard we in Middle in remain shortly. of be able interest opportunity and for provide optimistic about to we We continued our in our have and and interests demand technology to technology updates China, globally, Asia

quarter during on pre-engineered final developing encouraging Moving made focus to development. technical a We burner. boiler tube the our progress fire area,

analysis at we more reported the expensive oxygen promising Recirculation. X% to the is XX previously use represents reminder, product performance opportunity currently for & based market of Flue products a to-date, are billion NOx As specifically, of currently compared available laboratory done an and this additional Gas ppm Company Sullivan. third-party best a emissions in the market shows concentration the on Frost that in $X development by independent market stage This without

enhance we the the and X ppm X% results and more to a goal operating including our scale business able also week commercial multiple to Department major I'm that emissions would vertical receive Phase to global avenues NOx as million the believe scale be to X is in achieve confidence the funds were grant manufacturers. If sites initial vertical and represents the achievement To first achieve confident increased performance existing our exploring license two oxygen at potentially NOx enabler X report of first, to than other customers, markets technology that state-of-the-art which act we our that down. controls successful, significant this small happy plan original awarded of boiler offered of that bring concurrently actively and characteristics reasons; product progress concentration including were this this $X.X markets. as a delivers earlier less Energy grant. In the that these next $XXX,XXX for truly month the of NOx innovative levels starting derivative of for demonstrate quarter technology at us into we During performance to next extend X potential period a upto progress, and us funds emissions This recent roughly to offices. and requirement to could China. would end the able of required expansion turn envelope That we're successful could and the we stretch the including for a we sell-through X% evaluating oxygen than up the on after to funds into will technical research X successful, if industry installation Based will July. depending industry. below a emissions a in business Phase will for on give offering potential be provides small that the our said, implementation a key latest The could X Duplex's product market to represent with we is program ECC is grant work of the it the over words, and technology ppm be step compelling emissions of We at field. testing Company used in XX% other region. and ever execution already transfer part Phase original in Duplex. our eligible breakthrough the by impressive for are be this product already

represents avenue an it efforts Company. the pursued supplement our which R&D to means a ongoing by non-dilutive being is Second,

submitting of committed both grants the on made we research we be in grants remain through and expect the to advancing development two the to were to third fact, to and if decision total awarded, final Regardless are consideration by process In technology quarter. next stage advance regular government spending. additional of recently end of a the our for worth a $XXX,XXX. selected We're final of proposal the a

we As to advancements the into technical potential clarity discussed on as significant recently last the made and us gas development expand which markets marine. We forward end turbines new call, in these opportunities warrants. should look aerospace, future to including providing on more several enable

additional three the to patents as portfolio quarter applications research and XXXX. commitment led our grants XX, first total bringing patent of ongoing granted to development also March to and XX has Our in XX

combined a solutions. disruptive more industry's continues relationship More lie costs. can having quality California. and the want interest [ph] front. for with down from Before in recognizing emissions creates cost patented data air interest paradigm regulators clean the and award regulators shift already an the technology be with driving achieved that in at Southern site ClearSign's demonstration ClearSign in on the update symbiotic closing, to effective the to enjoy provide very I in lower management regulatory are This Coast district resulted South whose

our in a cases, available hand-in-hand work and markets, rules core existing our with have emissions partner with to control in problem do jurisdictions refinery superior will NOx believe not deliver lead BACT for multiple and we're designation best there. to to being a emission expect we -- many defined Moreover, to revisited technology. continue our suitable in to consistent technologies We are ability going as regulators a

is demonstrated payback. this Duplex for the like designation can a solutions an cost not ClearSign that with that such While attractive commercialization, In has of at deliver requirement regulatory to low adoption market for our accelerate any reiterate Duplex. promises I'd clean air to provide ability to closing,

demonstrate determine, of existing timing broad-based making base to the are we commercialization. difficult and significant and with grant revenue we deployments to continue towards follow-on is efficacy our of progress While orders

In to new I our turn call new the as like our At for and to expand converting continues addition, the the potential, in meaningful this and our Company's remain pipeline existing of to of over markets. pipeline as with time, operator the current I'd revenues. questions. well end excited very about into opportunities customers, technology prospects

Operator

And question [Operator go Bersek Securities. our first Instructions] [ph] Please come with from will National ahead. Michael

Unidentified Analyst

new I don't forward I getting little I'm stuff -- perhaps to whole know, Am getting may of it a like and let's the since of that thin, stretching say. -- the -- maybe a got it moving sort a you're it seems wider it's too little story yourself instead it wrong? like bunch something I faster, secondary relatively offering; you've concerned happening I'm seems of

Stephen Pirnat

our it's getting by the assets really it control. budget The their things the to I wider. availability at pace determined which of are think customer, cycles, and access your correct somewhat is is more observation and forward outside that moves

happy like they take and as question you very going the equipment. to the get things example, And said, period it's okay, I we to we they with perfect crew. a these example said, in it's think to while them. take is and it's adoption, you how can we Delek it we us of that a going a on get know we'd us budget it's to then, as they to don't the that install it a I can customers and well, necessarily -- to accelerating should certain back work. it So in, operate gestation is buy put said, refocus lot more; the us much of and ship install terms like not came when product to And a the were would schedule make worked, When get us and a

So those answered so kinds for not calories but any the there of all of little it know if a things I our than we we're that resources, us don't takes more time consume prefer. don't frustrating would question? but burning it's

Unidentified Analyst

guess then of was coming increases starting it sense without does going the that I to little a and this we concern through you're I obviously burn flow that. that market, sort cash What rate for the big seeing pretty stocks you're quickly, like -- money lot is a to is a fine. a the not burn lot of then in up your punishes your burning sort of of that's But that money saying if in quarter?

Stephen Pirnat

million million It's $X a roughly to $X.X quarter.

Unidentified Analyst

sense You the of revenue any even? next quarter don't guidance sort at all, for have any

Stephen Pirnat

we don't guidance. Do yes, we have a but provide sense, any

Unidentified Analyst

thing; you appreciate little very I Thank surprised Finally, answers. question. was withdraw now I that the a much. not. went I that they really well, the actually I'm China

Operator

question from [Operator Instructions] comes go Please [ph] Jim Inc. with next ahead. Your CEA

Unidentified Analyst

could by that cost the was down? showing superior that existing existing your the for outside without study yours results to consultant is shutting you what comment using capital easy the significantly operating installations? performed the and flares how that are and you installation technology online them technology less comparing overall of on with whereas the operate And that for installation, automated curious been to would [ph] install cost have the the pursuing -- operations I'm

Stephen Pirnat

hired says dramatic in takes the similar I relate The by by costs opposed actually so that [ph] of by burner you're technology Nordan is study to. them; referring is [ph] SCRs anybody. intuitive to to the the the regulators Duplex. also study dramatic was underline the catalytic done the to Whitepaper Engineering of ClearSign relative our of on think understanding selective replacing And -- you're call, Nordan rest the to on Engineering there was just what is really is what to not -- it referring for people a as study a versus savings for disputed a do reduction install in pretty which versus a to system simple word just SCRs the

question of choice don't know, the the technology XX% So time we you our and SCRs is picks feel when that customer our the between customer a a that faced with becomes, technology.

Unidentified Analyst

technology for these are about someplace allow I often that always why poor because would What else replacing those actually doing so and been against violations. them they Furthermore, their aren't operation and are -- will some installing operations fined things know they up to limits increase your it?

Stephen Pirnat

permitted relatively slipped emissions what the do anhydrous to a called point; which while an hit SCRs, we've and that X SCRs we interesting to into and has at an there of some point are level, SCR have You replacing the of ppm reagent low to clarity, can ammonia the the regulators is the made kind about but ammonia anhydrous for just the similar important provides economic air. argument -- also very a

that SCRs a less just better terms that is extra an it a we're the know were survey the be make even in catalyst technology the independent putting they X be also consumption by it reducing in advantage. anywhere has emissions, creating a an natural could we're come out, cost argument costs putting a the of required originally them NOx, in I there though an SCR to because in NOx that is The less -- because made the So because fact good taking removing technology and operations they that there argument technology, our of think -- of point lot first air of there solution, an of of general, our for that to why shown ppm not and removing place. made for SCRs, from the the our that I the produce is showing pure close also don't cost. reduce then of you're overtime don't that recent is you to you they in

where I perfect it we've people regulators at and fund try so here of why a a with me technology us, see much seen different up because know, you that the look will -- save. it's act meaning aren't In our savings is you they the think our economics or will to So difficult with understand the greater huge and bunch California theories; doing they what places advantageous eventually say catch said project what that befuddling so to to Southern people is themselves, we have they money I a can fall progress for to advantage. can are as ice-breaker is an short-term, the determined will exactly that willing how refinery example, our to to is obviously it's independently so obvious, technology

Unidentified Analyst

it, right for or something. was in Lamps need and China it you aren't you use could why cited to of of if got it? a be would put be to in have but here movie, to sell Just information; that you've that Do [indiscernible] that are who this good nuclear XXXX you already sales you like appears of organization, -- on reps. it. for Can reminds why the you to me have replace something here you for we target in that and -- your about China Oil -- And I I'd efforts It any can't way sell you've has that through you they you're mean together rep the it? Brian the been in area? another could Oil in other that China. you read China stuff, contacting that know Lamps do that to them or China to a have doing it [Indiscernible]. and go all what report I have they. just a to client to sell reasons used and don't to story, systems, great business you reps used not should read control combustion

Stephen Pirnat

have California. in We reps

Unidentified Analyst

them it to isn't getting Well, solve? why

Stephen Pirnat

is on it or Well, for there you clients. a there as you call are rep investor you is sounds that would interviewing an like good answers many Are a job rep. question are to be because

Unidentified Analyst

I'm we help that I've your how and a discuss can Company, that can of shareholder got you a lot significant doing in I in that experience and -- in offline.

Operator

And our ahead. from next [indiscernible]. comes go question Please

Unidentified Analyst

meaningful this I'm understand people be in issues China be equipment and we able and your say, seem why of and going in at installed it or installation is would going heating technical issue investors is some be -- to different the longer should once myself started take to much look in might should place, take were trying it as which and should at modification make modifications. a and needs that resolved to the either announced number to this there this realize other to this unit -- first everybody someone which to you It related would it on not installation thought we start did be the when a ended. place season operating the during to if clear have maybe look

Stephen Pirnat

the any the since just design for I'll that measurements so we internal data able finally we kind -- burner. to was we access burner that it would we didn't have taking we customer it and took measure -- particular and kind of retrofitting didn't a need he simpler particular workings the design, this already these be resolve now. the It and unknowns. and to was simple going vast part interested but report realize answer. inventory of to wasn't to that give what I didn't weren't customer which the At regarding we of hundreds another this started have which of done complicated you the until the allow take we in wasn't to has burner know going of was the us the information fix; that like and time, the the there represent himself that we majority didn't wasn't initially know to this all guess burners, burners -- was get

the a and for to like done information administrative them they have we reasons just of our we and regulatory same we ever former would you. Era try. a have could case customer why apart, it the to modify In willing risk In actually it that several we're with there, to with And opportunity. and we it, case, letting apart, help thing to to it another the the position; run. do wasn't the Now, that didn't the we'd it from take by similar way anything the months thing particular rightfully so process said get who quickly that take us took take were we was We burner bunch for [ph] is, talk in on the us wanted, the something we go forget burner, company competitive that reason get able burner. that and of measure and way in the to burner asked to customer was information my China, were wanted needed the we have

Unidentified Analyst

be you're there place season? to that before off-season, figure heating hopefully, in put needs done issue no now out to what coming timing and is But the it

Stephen Pirnat

That's view, yes. our

Unidentified Analyst

not my installation signed mind. ties first year? And other contracts this my Have question you as just of they in why which about question commercial any into deeper one sort straight are actually

Stephen Pirnat

no. say I'd

Operator

go Myer question comes [ph], And ahead. private from our a next Please investor. Jack

Unidentified Analyst

You of burn about quarter. X.X spoke per X to a rate

do point, runway? amount. down have see a You at that things that bit you burn Based on but some where see come the incredible not this to starting think runway have you rate so with there cash you is how an or more

Stephen Pirnat

I think getting of fundamental preferred there One path. orders is you've revenue, that's the issues. the two because is, got rate course, to burn reduce

Unidentified Analyst

That's the most certainly? critical

Stephen Pirnat

most Yes, the it's course. understandable, of

technology. the want funding little China royalty in have from warrants of upfront in that people said we from investors remarks, perhaps to outstanding go we other As to options fees should we in terms to bit the strategic at a look somebody at looking prepared license the

other from sales. from obvious the have options aside sales and funding is revenue the which get we most So increased

Unidentified Analyst

of the as you if to revenue focus see of level drop revenues based the When of revenue because you how that? on will where burn when land? kick-in lay at the see rate do side, funding, beginning we other So opposed do a to you the see on kinds

Stephen Pirnat

on haven't that. any We representation made the timing of

Operator

conclude remarks. to this Steve back Pirnat will you And your ahead our may with turn conference session. I closing like for Mr. Pirnat, the to remarks. closing any question-and-answer go would

Stephen Pirnat

everyone their continued support. Thank time you. like I'd to thank and for

commercial weeks you, broader revenues. confident in As and earlier, the that multiple path the coming in Thank communicating in I additional to and for our of we said our meaningful pipeline to months. have achieving technology look To prospects successes adoption we're end, forward everybody.

Operator

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

now You may disconnect.

ClearSign Technologies (CLIR) 23 May 182018 Q1 Earnings call transcript