IPWR - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Ideal Power First Quarter 2019 Business Update and Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Chris Tyson, Managing Director of MZ North America. Please go ahead.

Chris Tyson

Thank you and good morning. you Power's taking update first conference thank us to and to call. Ideal for quarter like all time for join results I'd XXXX business

idealpower.com. Brdar, Bell, today at Tim as X:XX this and these Company's A today Executive Dr. results hosts Officer. the Commercial is Lon P.M. Financial the release Your Officer; as Eastern are Burns, Company's Dan available afternoon press BTRAN Chief well crossed Chief Officer; wires website Chief on detailing the

prepared will who questions dialing we Management's for those in call. to Following the floor comments, open today's of are you for

begin may presentation, call differ everyone and the we in subject Bell. would Please you of Company's number be prospects financial uncertainties like we Executive like the time, Dr. that those described the including to industry to and regarding SEC to a future to I'd could to Company's a turn Before remind floor associated information. results risks, the for yours. and filings cause formal actual webcast results materially risks on and statements that those forward-looking, made website is from At supporting and I'd for also call Lon Power's to this call. Chief the Ideal industry refer Officer, more over list Lon, refer the the to of are

Dr. Lon Bell

power XXXX, slightly division. importantly, call with deviate first announced our disposition our start January and update Thank on strategic will conference our I to systems Today's our and the quarter that XXXX new business you, conference everyone more we update of welcome Chris, and results traditional in conversion an call. focus will from call.

an proposals standalone That recent we in the closing are substantial, opportunity the agreement was our of has energy our storage conditions mature. evaluation not believe Holdings several has PCS sufficient to industrial been systems level being the and for for power segment PATHION we to from division of we time, flow After substantiate announced sale and conversion commercial business this segment market division. focus our shortly. that produced to expect suitors, order is close completed of slow the long-term proprietary the While investment At to sale Incorporated.

Let's [ph] of division to our PATHION assets this to PATHION receive forward. completion shares our maintenance our associative we terms pent production become quickly and to fees. expected will review planned PATHION and In and deliver IPO. At including the liabilities liquid what PCS structure we stock XXX,XXX sale is asset equipment, pending a involving tooling, cash. operating in will does $XXX,XXX the warranty laboratory exchange, closing, their upon obligation, prosecution going PPSA and of

the to reduced January in power $X.X million. division system $X and strategic by systems, As expenditures reduce sales. development At we facilitate capital and PCS, workforce burn reduce conversion company's XXXX shift the time, million cash early these rate, approximately actions and annualized further we previously estimated to announced would to suspended our conversion that power

of charge workforce with result Power and benefits. in $XX,XXX incurred employee termination cash a a of the costs Ideal onetime severance As reduction, connection

we're In of resources near B-TRAN concentrate main of commercialization that our the areas proprietary will let near-term broadly circuit. Now company shift strategic our five that PCS and to sale patented me discuss announced the the it's technology. division, January, our closure on and on we of early activities

foundry. finally, relationship strategic samples, to a our commercial and of what development, second-generation Bipolar and a domestic And die's segment projects. And partner B-TRAN demonstration First, based customer pursuit accelerate pursue Junction Three, B-TRAN Two, customer market specific at advanced creating commercialization. entering the access. and we development state device Bidirectional technology partners. of samples for support for funding five, call fabrication Four, packaged customers provide technology. switch potential development solid and fabricate Transistor government to

efficiently us of B-TRAN. become allow you As why capital company, are transition we have excited use asked the B-TRAN $XX Many asset-wide an so believe will we operating we to our about power market. the commercialize billion to switch for

First, three, bidirectional, let's transistors the devices one. of extend has B-TRAN patented the review phase an markets fast industrial as our vehicle in silicon transmission renewable to hybrid is several growing unique performance energy to distribution what control silicon-based drive, reduction same new is. faster potentially enabling such and semiconductor the offering widely of performance than are silicon conduction B-TRAN Two, within current such and XX% highly applicability it potential wide is as electronic IGBTs potentially electric switches. power fixed plus storage with [ph] direct comparable compared The insulated-gate controls, a switches the speed is comparable conventional motor B-TRAN power B-TRAN's which switching directions are technology efficient improvements or the and and both switch. that is It controls, is and And powered and losses. system bipolar converters. solid to based architecture of and in switches. energy characteristics powered enables performance

already enable packs. cost of efficiency and vehicles, smaller electrical which hybrid even XX% drive technical fuel the is growing for the greater high office segment semiconductors in for speed power a turn could to of flowing account B-TRAN largest improvement signs hottest no that in EV markets market. publication, semiconductors. and of approximately and in early entry, or the Even Motor longer fastest would electric Toyota vehicles hybrid their power battery is electric early alternately According One showing market efficiency the stage market for X.X% recent are low at of The of or enable the range vehicle.

could electric the losses bi-directionality automotive growth become broader reduce B-TRAN's power by lower market simplified to lower efficiency, one DC energy. is and XX%. wind energy grow plus and commercial efficiency generation world's loss estimated distribution to costs. current of and eventually of current system could takes count It's of of and distribution the and it drives, systems, tolerance motor converter renewable such develop, could time the $X solar using cost, transmission full XXXX. and B-TRAN's technology for loss, largest systems. sector integration to This these as need efficiency and steady energy. systems direct in transmission billion by matrix The higher Interestingly, higher the the electric AC reduction and design direct distribution based motors driving traditional is markets. our adoption XX% to offer metrics operating DC Compared lower converters enable of While transmission lower and consume with for to variable enables simplification, improvement size B-TRAN leads associated frequency cost. By applications part industrial drives

review However, DC mechanical and could fast-acting power broad high finally, of system over systems. be renewable of Officer XXXX adoption early such in now to on Chief reducing for ideally distribution The storage technology. and switching losses losses can by has and conduction reduce efficiency energy technology creation the high for B-TRAN produced commercialization. switches. the and is energy high conversion the XX% speed limited because turn plus breaker. semiconductor the circuit conventional progress our call electricity by the suited applications. to switching is of these of B-TRAN's XXXX cost Dan medium not transmission efficiency of the thereby low-loss and fast B-TRAN's enabling our power voltage based DC breaker a of by and And energy occurred efficiency conventional renewable made I Dan? limitations will Commercial circuit Brdar,

Dan Brdar

Thank Lon. you,

to has processes engage evaluate boards new checkout The their end-users our device these is to driver waiting preparation a features, initial universities flexibility prototype also B-TRAN expect and as our division modular testing device second-generation versus has The and die and a as the will [ph] wide highly we variety prototyping part-to-part the the we role as initial engineering this we the expect driver. early enable specific we and would mature accommodate capability manufacturing to prioritize stage to device customer as device. customer have Our will for for The performance. daughter made B-TRAN B-TRAN's compared significant input at conduct of plans. technical the Also, refined. in of several testing. and In interface early by design design. driver make requirements, those flexibility a We've This teams be our identify new sampling, it functionality in on to user accommodate them characteristics progress also of to early a efforts. are adopters to useful more partners operate highlighted play a development been major supporting fixed gather our working changes commercialization to potential our driver for easier variability to that with driver sampling operating and characteristics

Santa and rooms designs and fabrication semiconductor University at partners. the the early to Barbara the of device by fabricate to prototype California changes use of used the we example; develop to Texas fabrication For our processes commercial at fabrication at Austin, University and

forward interested efforts universities in development organizations the will our the of teaming in now as and testing third-party expertise important small to driver. driver bring conduct on progress to We independent our with of second-generation secure the also prototype characterization to major intend With Their with such and with efforts on specific government-funded business National from is in collaborating to sampling die, Foundation R&D generation Energy. enable of prototype power on universities devices. opportunities implemented semiconductors our Also, Science Department testing our with us hardware, in packaging our partner to our results results move or other successfully those based second will applications.

notable is achievements, one the that losses. at switching than more reduction bi-directional a XX% in Before unique disruptive let's for conduction offers semiconductor switching switch earlier and solid-state technology, I our Lon's B-TRAN review comments. other the and detail device highlight potential little in than greater a a B-TRAN,

full-featured semiconductor Our as been the which produce versions standard B-TRAN the our to fabrication we to fabrication refer of working with device device partners focused B-TRAN. have the and efforts two on

die Our it current simpler to features fabricate. efforts thicker the B-TRAN standard pure manufacturing a development is double-sided with focused on which making are

most As XX% allows in recent a manufacturing it compared lower more risk for power fewer the in our in fabrication manufacturing reduction a offering This validated wafer. than the to more performance testing. to switches. losses thicker inherent producing and double-sided of avoid device, a This thin process complex allows conventional level us potential steps was process for but

second designs level. and it's of demonstrations performance their B-TRAN pursue Using data partnering markets the standard government showcase to entities on with further developed critical commercial B-TRAN, and and universities performance Both and the The which development losses. manufacturing are full and the being features versions B-TRAN reduce both further featured has is with equipment more that of to and thinner conventional the B-TRAN is potential using we're version conduction to have and based for switching complex addressable from fabrication funding performance. applications

we're pursuing addition, term manufacturing for In longer the wide-band associated to potential versions of explore and B-TRAN. gap performance challenges development funding opportunities with

and silicon Our near-term manufacturing B-TRAN level are power silicon development on with versions efforts performance possible extending their switches. focused of

However, a carbide B-TRAN development as to switching well; architecture, can a objectives improved of hence R&D switch funded the capability exploring silicon well effort, bring performance carbide programs. the suited as federally devices and to B-TRAN bidirectional silicon is it's at long-term

B-TRANs. for of second-generation at the our Five, and our we Now second-generation to to the and and internal our troubleshoot device present we'll progress. semiconductor fabrication manufacturing finally, and government for configurations Since packaging. and to engineering will proceeding the by completed build following customer our part fabricators, expanded new design have in to capabilities the test pro-tester our of testing device various sampling. using manufacturing B-TRAN the pursue be in installing device Three, prototype we've our for progress preparation simulation customer initial We program currently driver adding develop fabrication challenges die second-generation prototype package capability away evaluation die we've units increased a our Two, die for capability and internal And first prototype packaging selection, standpoint. call, as capability accomplished of packaged several for B-TRAN design, and partners. our driver division process characterization and the initiatives. in-house, of test with vendor agencies in let's for steps review the with as continue for bringing and engineering device Four, completed recent and the fabricated our in grants is driver resolve prototype design our supply are from result and to and for R&D we've delays funding. to design validation for lab builds of last

B-TRAN development at are market the state, collaboration if achievable for of respect with efforts Europe issued XX will B-TRAN applications power R&D research level likely Our is United practical and projects, or those the China, our efforts with entry now future companies partnering form where These patents and collaborations and for projects issued government patent basis switches. With outside close enabling conventional to an have universities States and of not with include demonstration other and in patents B-TRAN and we the our successful. Australia. X technology,

patent portfolio see potentially and provide Japan, In and will more in significant continue XX summary, pending Korea filings to commercialization in Our India. technology. potential our B-TRAN proprietary includes than we coverage

We laboratory and Burns, will strategic information, we Tim the results. will turn this expect which partners. we'll to sharing more I'll CFO, to engineering customers now our characterization target the discuss Tim? to and floor have samples with financial begin comprehensive perform potential over

Tim Burns

run first XXXX will I financial results. through the Thank you, quarter Dan.

January the facilitate early we sales. strategic proprietary B-TRAN broadly technology. in reduction our and shift our a PCS strategic division also that power we a of suspended announced burn and PCS time mentioned, development rate, cash at in and focus Lon As further workforce, conversion or commercialization to announced significant reduce our systems To on that shift patented previously in

in have year-end the As our this Research asset and such, beginning drive to basis. our provides results, on in my shareholder reporting operations historical We of of as our into changes a as believe discontinued presented presentation balance and focus in the from I'll our XXX% our potential PCS an XXXX operations our transparency division sheet. operations value. of investors we as operation new cost XXXX, company internal held-for-sale development greater utilized from the with financial shareholders from and of P&L development and leverage with development research two the continuing to working will here results results, supplement will go-forward increase small the personnel primarily future and of was quarter these expenses now financial have on abroad. expertise increased our future first continuing review our first we've resources resources, benefit employees allow as to third-party to with [indiscernible] cost-effectively and in continue higher to past These due expenses we semiconductor the to and B-TRAN the technology. in our quarter in specific and $XXX,XXX managing The dedicated in of $XX,XXX the third-party XXXX. our

of costs of general as costs, personnel the compared administrative costs be from continuing $XXX,XXX General We first modestly operations were $XXX,XXX in higher the expect including first stock professional was quarter insurance, the cost and for and expenses in expenses development and of General to quarter lower other XXXX compensation and headcount to over such business lower infrastructure based year. fees research administrative to and activities year. lower G&A include expense. balance and as costs last public due the reduction company costs.

the to be G&A to balance lower expect year. of over We flat the

on of of a watch XXXX. $XXX,XXX Our the of operations the first quarter quarter loss continuing compared to first $XXX,XXX for XXXX totaled in

was our from Overall, $X.XX a share per quarter quarter continuing to $X.XX discontinued operations the was year. net in the the share, in Our million of of $X the including first per quarter first in loss of XXXX quarter million XXXX XXXX. net last of compared of first operations, first from $X.X loss loss in down

We reduction previously Our last as our first burn reduce per cash that business $X.XX told the sales loss closing convertor PCS in expect with headcount discontinued quarter in of sales current pending million. our $XXX,XXX XXXX, PATHION. PPSA technology by that cash to and impact at and roughly That expenditures in power power system the down workforce quarter suspension per the in we net levels. to per further division approximately after to $XXX,XXX is includes year. conversion of first PCS of positive systems including quarter of $X.XX likely estimated $X.X currently $X annualized estimate sale This would average share our development we spending the was from conservative million of share to of the estimate investors and division the operations our

PATHOIN of PCS cash our net and of reducing sale our On the reflected facility XX% included is, cash in $X.X sub-win proceeds million June XX thereby to March our will overhead. One be Net in Austin benefits statement. from pending balance PATHION. and there to the [ph] sheet from our from and sheet cash in our the division equivalents flow excludes be sale proceeds sale second will of balance quarter XXst,

since and the We from to have no strategic summary, our debt. our In IPO outstanding cash burn power [ph] rate shift systems conversion quarterly experienced exit the due we well-est business.

quarter from quarter lower quarter call cash the XXXX, cash continuing Lon We net XXXX, sale compares $XXX,XXX XXXX of XX, the the March debt operations million turn weighted the ended I Ideal that XX, operations. was division our operating in March for will for remarks. the with $XXX,XXX were structure, for in to operating $XXX,XXX stable year-over-year. XXXX $X in used was ended believe provide a will no March financial XX% XXXX. was XX, $XXX,XXX into PCS used first operations Cash over activities our Cash runway Our the reduction of of XXXX year-over-year. cost XX, to which compared discontinued continuing XX% to now management, burn Lon? Power strong activities and a to ended ended of decrease quarter for proceeds for closing from March a $XXX,XXX quarter

Dr. Lon Bell

which the funding and develop and R&D towards sampling in division for come device conclude could partnering To future efforts. prototype having progressing commercialization customer for Tim. as months the you, Thank into to B-TRAN available collaboration strategic

will We reduced. devoted With At our time, to the will from structure like Power new value this and to would I cash extended events PCS division, to will of call position Ideal be questions to believe open cost pending listeners. our these the runway in XXXX. vastly the our strategically shareholders deliver closure two be our Operator?

Operator

question Instructions] our Craig from take We'll Partners. Irwin ROTH Capital [Operator first with

Craig Irwin

the around and B-TRAN? can the the lot approximate to B-TRAN opportunities? business, I idea timeline possible us or to B-TRAN XXXX-XXXX a with potential So out an revenue the other it likely thing simplification seeing of give that in be more with to XXXX we bit maybe know given disposal of development a of ask see this little but product out a stage and roughly on streamlining you and the revenue this is licenses is it's is

Dr. Lon Bell

Yes.

I very think that important. last your is comment

the more through -- government contracts the come has at product that joint the to are opposed partnerships, the likely of product is with something proven and device and that and to as through revenue sales adopters, fairly looking ventures us the from think is I and the way is it early consuming for partnering out evolution something that to prove requires we for is early to commercial markets out where be commercial because government government be and to best research. contracts potentially time

Craig Irwin

along So you the timelines so we mainly maybe lines for you for can potential process government can there contracts, what applied of the might [ph] work us And the maybe for? support, scope have government out [Technical Difficulty].

Dan Brdar

in like things start type and are some referred to we of doing for think for some the We're it our important levels, -- do to building, to SBIR like things small that a opportunities variety tend the of B-TRAN at work theoretically, remarks, application with prepared carbide assess demonstrate of analytical and are we of challenges use looking doing of at the it, it's is the look the where with simulations what the do companies those broader be does silicon carbide some what version partnering grant. B-TRAN in significantly actually to the to process. actually tie they something manufacturing characteristics would performance silicon to government value others demonstrate B-TRAN proposals other where And they actually kind are an in the a are can't that terms conventional a of larger technology, you of with things

Dr. Lon Bell

further make one me Let comment.

way architecture, system. sense some the out; B-TRAN material semiconductor is device We to laid have the in is it an the it as agnostic is so

construction technology construction will performance materials differ Dan availability that silicon is depending will as mentioned methodology. in a mature because other quite general, system, on with variety in on potential is characteristics is certain processing device it's Now from which and of materials. the early material B-TRAN the and the And more secondly, conventional The appropriate out silicon, fabrications facilities, uses, the fabrication of most some of a like optionality of silicon for of vary suppliers. have

silicon; as So silicon then we're comparing either we're carbide, other mentioned that out or not with B-TRAN with comparing configurations be comparing with IGBTs. of B-TRAN silicon I would carbide B-TRAN

so but that's date, migrate silicon in So to technology silicon it's will the market. B-TRAN headroom or I of step as that's a in carbide that the easier the evolution show gives however, that in distinction carbide, later us want to make well later a us as and B-TRAN. growth silicon; advantage added for it

Craig Irwin

So streamlining year? is last rest nice burn; Cash for $X under should business. have question asset the I may, what obviously the the a that of of it's this think sort the cash million sale of if well to and was quarter, burn we

Dr. Lon Bell

Yes. current And $XXX,XXX materials, to $XXX,XXX a estimate the prepared is our quarter.

Craig Irwin

on great. keep there, swinging Congratulations the [ph]. Perfect, streamlining

Operator

go Craig-Hallum. Eric [ph] Instructions] [Operator next We'll to with

Unidentified Analyst

that you where maybe I my being you as to let's mind question about you? is talk a think I the -- -- electric for top see mean, for the kind -- I of of it is about realistic some So the addressable there view opportunity, -- applications opportunity this other market as $XX what know you then mentioned $XX but I of billion guess overall people. vehicles; a parse And mean, billion just maybe way you do maybe

Dan Brdar

that We see that it looking and the made an of then electric transmission at B-TRAN devices because is but such that's because conventional energy very adapt are a because nearer breaker, technology unfortunately new DC, where generating an constantly example those become is a heat systems, much is, enabling really a lot that good earlier, market solid-state issues there and growing of automobile know, a is things conducting industry are term large longer distribution lost vehicles be because and they we've longer and and term using can You attractive solution with need correct cooled [ph]. need not are comments to to some acting the IGBTs technology. takes fast it's and

-- And you charge bidirectional an see nearer need certainly renewable and and where to frequency energy convertor So discharge power things motor improves energy markets. are market, storage is I control the a term AC about like flow and B-TRAN -- bidirectionality to then think a energy we performance breakers energy to matrix variable things drives near-term AC batteries where like DC switches enables having applications to their substantially or storage you switch which of that called effectively drive. actually make a convertor it of type use

on drives frequency variable home large air conditioning your to appliances from know, systems You buildings. in are used everything

lot because a that performance the in on add substantial right market. that Electric the their that impact of today's upto hybrid losses vehicles. a is vehicle and has are electric all markets $XX such of loss it So of one that substantial up energy big vehicles happens there semiconductor billion to a in part own just make be the

Unidentified Analyst

you've -- some funding whether balance cash or form XXXX. contribution in do mean, does -- lot whatever government you predict I a last will a it's expect fair? doing I question, on progress you're mean, guess in of I it be I mean, to that the mean, your is to but follow-up -- it's And, burn where obviously as the hard made match I that seem

Dan Brdar

as for that the [ph] for think we're good advancement funded development those activities. are power those looking if in that are that fit to a open And co-fund or actually going are now government aggressively strategic also specific with sampling for to the did we're what up we made general. some further that of to doing opportunities program from is applications, will customer that and some organizations of to are to as partnering and to standpoint well. where us There companies things are of we network development we're their this door the collaborate of that industrial for opportunity after opportunities technology Yes, needs there want starting a people with work

Unidentified Analyst

rest it, Got the Thanks. take I'll okay. offline.

Operator

would It to closing further remarks. have I or any appears turn we no back that the to speakers our [Operator like the additional queue. Instructions] for in questions conference

Dr. Lon Bell

for power conversion, that world as could long-term there to power the and atmosphere. COX see growth areas, of to one to a related Yes, are at being a new make and -- all look of electric related Number systems more able energies opportunities as evolving efficient one all -- as to should power more certainly technology, I business, to close we going we accident, in to electric that on overtime, for a them. has growing for to have on is has to we systems, and as quite would but put very closing needs we the needs along the are carbide but in vehicles reduce Dan happens discussed by of applications the by our reiterated adopted on can technology intention, for and It not into very the couple -- energy this opportunity only business, product be couple just by prospects uses for should very verticals, we of distribution contribution applications long-term electric where users, and field The a grateful prospects early we can that remarks. technology into several we've many and not These to discussed energy long-term types, them, focus silicon healthy from migrate from mentioned be attempts for efficient of near-term verticals, because the like some such silicon range mature create are mentioned very our potential our and of unfold, one, as opportunities some rapidly vehicles. that. combination converts -- advancements be

at and So, Thank not very do I contribution Power. Ideal is making but only efficiency think believe development we remarks. for business all. growth energy well we of to to appreciate and in loyalty positioned we you, a our the the significant this that ends shareholders path are robust best And that the

Operator

does and We this presentation. your appreciate conclude participation. Ladies gentlemen, today's

Ideal Power (IPWR) 6 May 192019 Q1 Earnings call transcript