CRKN - Earnings call transcript Q2 2022 | Crown ElectroKinetics Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to Crown ElectroKinetics Fiscal 2022 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow management’s remarks. This conference call is being recorded. A replay of today’s call will be available on the Investor Relations section of Crown’s website and will remain posted there for the next 30 days. call the Allison Harbor reading the for Investor statements. hand and introductions of now over Soss, to Relations I’ll the Safe Please go ahead.

Allison Soss

XXXX Krutz, Doug Croxall, morning, to Chief Executive With Good and Chairman; Crown’s Officer. on second and and fiscal Joel us are you. call. Financial quarter call Thank today’s Officer conference Chief everyone, Crown’s welcome

of from www.sec.gov. this call, including forth obligation March these XX, on available The with except company, as the those website differ SEC’s after by the identify are forward-looking ending Form of our year believe, statements. subject remind of are contains the certain call as date Report the numerous of anticipates, Act we Before SEC. management statements XXXX within as Section changes may, the update that made These you such amended or Copies may begin, fiscal Actual beyond for such conditions, of such and Act to at I the those these Securities company implied by plans, XX-K results many Annual estimates, to XXE would intense, today’s of to expressed variations expects, expressions Section no forward-looking materially on Risk control in Factor statements. the XXXX with as of meaning hope, similar statements XXXX of Words words statements company’s Securities set undertakes revisions documents and like from the XXA for to the should, and forward-looking Exchange which section amended. are of the law. filed of and projects, or intended required are the

Croxall, my pleasure time, this CEO. it Doug at Now, go please ahead. Doug, introduce to is

Doug Croxall

to to the because go morning. of going going over this we start have hand to Thanks, shareholders. on report our lot operational of it get through But performance on going financial I us to Allison. a everybody for start Joel and in to quarter, then my results. joining report I’m who’s the Thanks, his new I’m like

those for I to So with like you of are Crown our the story, mission. to new start who

Our mission an estate customers solution turn expenses will lower and real enable market to that the glass to to commercial provide reduce its smart carbon affordable energy is in emissions.

film the affordable, insert the in Our existing which the hardwired to installed carbon solar an by energy, is does building’s intact. frame, first initially window commercial existing existing increased amounts window into leading insulators and and by require inefficient wiring office. kinetic Crown’s product in It’s called was DynamicTint, recognize of that HP proprietary patent side developed causing hard and Insert is Window interior powered the Crown, Smart insert, in DynamicTint. based based by on technology. be which are not pigment can our to windows powered window electro easily system is is Crown transforms the our At installs we strip, Window a HVAC eliminating easily Insert of each need to emissions. window a Once spend This pane pane the leaving building solar existing double into insert unnecessary installed, of excessive window. an single and systems efficient Smart use powered building. have smart energy the energy electrical into a the protected

costs, reduce consumption from carbon footprint. their amount pressure increased sunlight, and sector is The smaller and HVAC HVAC to insert building more of usage tenants Our regulators, commercial reducing leading carbon importantly, their the energy emissions. thereby electricity to absorbed a shareholders, lower reduce under

blinds, payback We very leads which only competitive are the priced in is comparatively and a retrofit ROI Insert marketplace. the products Window Smart period. window to Crown

time, or real Crown’s target in engaged United customers At this the buildings the States. discovery through customer two are investment initial Crown’s process. So target over market an million commercial with dozen REITs REITs our trusts. are iterative X.X estate

market technologies market building previous technologies can have legislative decades, over support and afford for owners social and what with today around frankly more these the in environmentally focused fallen growing demands two glass have conscious the and their been their on awareness, are what surroundings aware market smart becoming tenants more and While of short of decisions.

Our has dominant solution. be to Insert glass Smart Window the potential smart

retrofit world We’re kinetic the only electro are a targeted only company that at manufacturers that Window company offers the and the in film market. Insert Smart the

utilization June rendered Window from Los We’re May, insert Insert emissions. ink technology customers solution. to window a a the continuously floor partially field lower announced can where we windows. building, become Smart single the approximately was of in test In the Angeles Glass the that we reduce our with this reduction initial HVAC guidance over buildings and Smart results and XXnd carbon preliminary August, better help scale, summer such the pane can then prospective HVAC launched from refining a Earlier At costs by the our also of into suggest Crown placed our in energy customers XX%. Insert year, of patented

to glare, needs Recently, a second of started blinds. comfort, test Additionally, we our new field design a test are tenant intended window the improve for framing system. reduce inserts to the and eliminate

our product We’ve executive, teams into to engineering closely of their XXXX, four technology strategic most Immediately, buildings. and ESG continued analyzed Pacific a a of years our with DynamicTint value migrate recognize results meeting first invest Properties. about We two in efficient we their June and expect they in work in to way, In offering. our About potential meaningful the published identify ago, round. to the have weeks. and had to technology Hudson with their to those three their Hudson became which

been customers, with in the Northwest. we and third our has but Smart with from California Window none Hudson. active buildings developed rollout With Insert potential prospective Inserts Window more than Smart to are designed feedback building Our two the lead, identifying Hudson’s in

their and Hudson other to our follow We with are next have this start expect relationship REITs very excited soon. to of chapter REITs

efficiency a Houston first MetroSpaces, holding as – our will windows their MetroSpaces estate help into of existing easily enhance need window our the first eliminating the company rollout aware, This foot replace the windows, square Insert Smart As in proptech-focused by Window building. agreement existing Inserts We’ll commercial office our Smart customer. Window XX,XXX installing we frames. their install real you’re our to also their announced

Our inserts are not electrical energy, their we means which do have powered by hardwire solar into anything building. to

and the we’ll to deployment Insert. look keeping the next we We’re preparation our target customers of progress With we as in also Smart pleased with you update perspective wins of base, our development our apprised quarter of with customer other additional strong growing forward manufacturing. pipeline our customer future. We for continue and in-house first for market manufacturing our Window

and throughout talented experience last the from production joining Prior Window talented me to Engineering. about Vice from backgrounds in in are for help Smart President Tesla, and leading of building call, Saint And for as operations welcomed teams thin-film with let at Now this extensive Infrastructure Hamlin Mindy cycle. as and Operations at the unique Crown, rapidly a our is we’ve manufacturing, ramp we’ve talk up Insert. of Intel, perfect that made Crown a Director hires our Crown. new key growing HP. Technology, manufacturing, and marketing tremendous individual new Mindy served most we Mindy to engineering, team, Since a development, and we our companies expanding Gobain backgrounds built as life teams. Development, ITs team product’s Their These like notably, Kodak.

we’ll continue our Looking rollout part as ahead, strategy. commercialization to talent add of for our

results. our to call Now, who I’ll the financial review Joel, on Joel? will pass

Joel Krutz

Total million compensation. expenses a loss Thank same for you, net million of Doug, was by increase million review XX, stock-based decrease compensation $X.X and fiscal non-cash quarter lower increase in quarter and expense. good the XXXX quarter operating being morning, million, Crown’s million non-cash the September with for $X.X quarter expense. ended loss million stock-based which in in second XXXX non-cash included than other $X.X offset compensation expenses million, last was included $X.X $X.X the results. everyone. I’ll net $X.X stock-based of year which million our financial was This $X.X operating $X.X

expenses of stock-based increase R&D the SG&A and fees, operating increase quarter a $X.X professional payrolls, million million compensation, consulting $X.X a in impact million higher $X.X $X.X a Excluding the year. last were in the driven of by and and million both operating in This was overhead. same than increase

$X.X was patents of we year. this the Our for Net last for million $X.X other primarily due $X.X million activities interest expenses and were first in expense This of nominal the cash was against operating is had decrease invested last second while $X.X same for was quarter million quarter financing fiscal. the incurred quarter quarter the million following flows of with million. was consistent conversion this compared deployed in used all $X.X as and the in reductions equipment, and to and our debt notes the year. to

As XXXX, the $X.X up financing two our operations, with production a for to January our standing And Crown and the access required facility new fiscal the yet, we’ve operational additional letter This months XX of will $XX we’ll our stub prepared financial potentially to of X, with September this That current changing company’s our from million for XX, recently million. our effective we for begin next were close and we’ll This equivalents to phase credit. financial December cash year And fiscal also would XX agreed cash provide if XXXX. institution align out from years. during remarks. reporting terms for be year better finally, mean, end ramp calendars, Crown’s fiscal year. nine March concludes the and

you Now, we’d Operator, ahead. can like for go to the questions. please call open

Operator

will comes Sweeney you. Instructions] our session. first we ROTH Please at Capital. with question-and-answer question. Thank And your question [Operator Gerry Our state this time, conducting from be

Gerry Sweeney

this for obviously if buildings buildings, two have on Thanks do they be It we agreement relationship Hudson curious could a trial but a to is good doesn’t morning, and other on three longer sound Hudson for taking of and the established what maybe more How from little the I Doug front, exactly call. may you bit buildings. give formalized, details entirely contract, XXX that go but Hey, wondering my Pacific Joel. to cetera? sort et was looking rollout.

Doug Croxall

Yes.

So that question. take I’ll

forward buildings know lot for we’re make So that partners. we’re the their sense with couple are us the of rollout to moving is buildings would other with first we of and identify And what to a Hudson, owned trying Hudson. for most do

And or either so not we Vancouver. it’ll we LA building a those Area, their of just but targeting, building in exposure much one It’s back. Hudson, area, financial want a some buildings the building in other in the a we’re Seattle as to like, Bay of get looking the in as can, that be

real mean, building a it’s it buying contract, and where and installing product this So, they’re we’re customer not trial, actually is it. and a I the

– certainly there’s the a which a throughout goes than buildings rollout the So start into, is expectation and it’s phase than trial. across rest you to more decision-making then that our couple of have a when that lot XXXX. portfolio with rollout we’ll of start And But XXX. of first the we’ll

Gerry Sweeney

you potentially third, then Got also the for it. in two but there’s though well. discussion sounds I I press behind as a and as highlight there’s suspect, me mean, additional it buildings buildings release, –

Doug Croxall

Yes, of course.

Gerry Sweeney

down meeting Got and a to, what narrow it qualitative doesn’t then to customer speaking customer discovery that what for you’re and it. sort additional could obviously feedback And you everybody’s too mentioned and you or How entail? the of does looking And obviously, it What REIT been process. does discussing, this as bunch opportunities. REITs process a is, you’ve background what in I some know, maybe with funnel. is of this provide contracts you’re

Doug Croxall

Yes.

the is So of straddles product making operations, quite meetings first the relations, are our you right leasing, to get few a parties are frankly, And typically decision-maker. interested doing lot what within we’re engineering, different of kind tenant that ESG, this in because sure the there’s REIT.

buildings, meetings first than facilities. they medical to And REITs Insert have a of they because a literally doesn’t And – then that have Window get right warehouse, they these exist Smart are what the we’ve one they So what have other it’s anywhere explaining few sure have hospitality, office lot have party. made. we the is, making

trying on focused to we’re So be U.S. office very buildings.

with. it’s problem, that first are inefficient, the are So what understanding solution set is. speak what and the really their then are problems identifying are making And to really with they really of have meetings our of that are which windows alignment the part sure that in person right

want prototype get we to that’s we sent get in don’t we’ve demo, is, what and can Most And film, so in a getting far, a any bad to not quickly we’ve I the of – market. the had been REIT when out what to when we moving the It’s we’re can we’re our hear say, actually not say forward. quite facility and but opposite. interested building

So process a that bit but process, it’s been of has a ongoing.

of the to you coming say. a four more so kind have next two of end announcements And towards lot the we And at we’re coming months, the if the should would I funnel, market will. over

Gerry Sweeney

Got front you. buildup like, along step question of, conference in And that issues that lot manufacturing with if a and obvious, calls, to maybe of and positioning the has well. having sort on address How’s that’s next you’re you’re having chain supply obviously coming final as that across any deal the if the process. you’re hearing, issues acknowledge as them capacity

Doug Croxall

Yes.

but doesn’t future, mean I we that it. yet. we a We companies chain we in – have are, have won’t of lot are having the not that not know supply issues

risk if the does But obviously market would haven’t do, So a K’s where we our we won’t. and that’s so let we know. that seen publish that not that and mean in we anything, far, Q’s

matter a Bay, fact, the As and horizon. cargo ships up Monica there’s overlooks of and every lining my more are on office that more day, Santa

it’s a problem, reached hasn’t us yet. So I it know but

to far our capabilities, film own now. right make we’re as As able manufacturing

as gearing when how expand, and at that we’re is we And to expand from are our demand looking to customers. to up can and a think assemble We be current able prospective to inserts meet many as also we what growing we can. so

Gerry Sweeney

Got it. Thanks, Doug.

Doug Croxall

Sure.

Operator

Alliance Jeffrey your Please Global from comes ask question. question next with Our Campbell Partners.

Jeffrey Campbell

Doug. morning, Good

pick to The framing first this just today, that new is something referenced? on mentioned you you asked behind up what’s I thing design

Doug Croxall

Yes.

the the framing And was gasket, it. a design of mulling. – So just old more within properties insulative insert real a to no fit our

frame lot mulling, over mulling didn’t radiating that we the frame. a the summer, the still was through test of noticed when that mulling we the heat it sill. the in or the So were is cover And the doing

in gasket And add the like and looked so we redesigned it fit it didn’t It – look was frankly, the like and building. on.

the And that like so framing of our systems exact so we framing more building. system redesigned looked it the

office. go heat more that when And is from therefore and the a the new protecting And second of insulative, it’s so lot the looks it framing for, difference, that building them the with covering customers system, the we’ve design radiating mulling ago. exactly it new of And around was because looks demonstrated system existing framing like fact, the into like the the matter building the couldn’t XX was this built. tell of the the of perspective said, a framing frankly, is years when part many exactly building was built,

of the meant insert. perspective, Window of the So the and things. Insert, performance was aesthetically, an system Smart to ROI look two One, the improve from do

for we a the summer now we’re test. as So relates Jeffrey, I where say, that – and get over the that field how then to that days, is far their weather should pattern test, trying to experience, first the – weather the that number we used as of field – matches

increased X energy So draw an and savings comparison percent. new this has design additional by say, the can that oh, we

our get coincide we now So to with Mother right summer. experienced what now in is Nature to the challenge

We we good have to a because important want pretty data but have an pretty a set, robust number. it’s dataset,

in we’re to three enough going that four comparison. hopefully in data we’re So to to – continuing have set or data draw weeks, test, we our meaningful another

Jeffrey Campbell

data that for recommend certainly capture I Manhattan wouldn’t right now.

you there. you what stick So could thinking color just I provide IBM acquisitions and to the strategy if your the reason I patent the was where some are. economics us underlying was on wondering and

Doug Croxall

Yes.

trading be So the published the to end is our at Q going day. of

will purchase XXX? o’clock price? – Joel, you. beat what the price X the details purchase The So was was And time. your

Joel Krutz

XXX.

Doug Croxall

very $XXX,XXX. and lot. see would defensive? own, we portfolio The are good – question I towards. well to or Are offensive assets this very are the cover move it they’re a And areas the assets in product way the that claims get technology may of some that I because that our assets categorize Crown there technology is for

in there can claims license think frankly, about And make a to somebody worrying that that want need so some infringing, ownership patents. were area other or have without the we will patents competitors that in sell we we else’s a So use product to.

as nice cards hold to those so And well. it’s

Jeffrey Campbell

there installations just we that around before a you XXXX, last Yes, of perspective. I’m is any a And are gating to packaging I’ve been thinking the did just but time? you great. for sounds my really over different when be by should within for accelerate remaining about curious, items sort like role transport the question you such maybe quite impressed visit. Crown preparation start from in that solved to comprehensive maybe really feel product that rollout, Crown’s proper need virtual as,

Doug Croxall

We to down down need we know and the we’re path path. go that that moving

that’s this point. there’s to unknown So at us nothing

a in need know. hours, we oh, we now, that, Corvallis we say, say to to know call know take. and I don’t I’ll Now go direction what from phone two get we But and they’ll we need what steps there’s right something

And really it’s the pretty But that we’re running. we pretty the getting getting the lines a So confident it’s built, – right of lines assembled in think regard. and well-prepared. now, process tools just we’re getting

proven bear away expertise of integrity they’ve set side – to bring comforting they’re with side our a quality and that know experience to and working by and challenging the it’s by of great and blown winners handle. or They’re on all have very prototype now actual Moving a roster But us we you this, for we from And working feel of strong production when that frankly, included. right companies, employees workforce. come look from the they I’m at we R&D got they that is to have us.

Jeffrey Campbell

for great. today. questions answering Thank you my Okay,

Doug Croxall

Sure.

Operator

Thank you.

Please Shawn comes state your Severson with question. question from Water Tower. next Our

Shawn Severson

the to need bit and process for the they sales through your if through figure evaluating process you them? good you and goes when do solution Hey, you to thanks. what understand it, is out what can talk they’re that a we Doug, in mean? order about does a product little go So say

Doug Croxall

a mean same. is the things. mean – it lot REIT can Now It of I different every not mean

get really oftentimes, stage on of we’re do with so that it’s travel at And really and it’s but at I some now. and for of right same But They’ve So the about in able demonstrating getting done this a That’s can seen back Coast are recently, person. to the little over and see it as us REITs lot product. it. Zoom meetings. them. just buying to out right a see now nice be the thing the product demo it’s it’s we’re the going little mean of to. We’ve to we that easier a to I’ve insert, calls front the been the in were Zoom. window. the West want We I that them and getting not

let’s for owners XXXX, something reduce just do building get late you’re I’ll to it than way. it’s a much impressive their at see it if because that when put a don’t for can footprint. means inserts of If pretty years from can’t turn like always REITs a lot remove this timing buy – everything. and not It’s ago, into the to it, it. inconvenient yes, they them It window we that going you more goes. an that buying sat like building, X,XXX to and we to the in carbon decided, it’s a a mean window. productize a insert you’re a window there’s momentum demand down working, three okay, getting they and we complicated happened insert and I where building right and out technology how But we’re a is removing And process be now

cost that we technology really we is provides frankly so more almost compelling good And to and few really have a the that hundred ROI is a blind. dollars that feel a for equivalent

demand for buildings is need iterative of get, the to inserts process from the where them, the deliver seeing that our what’s some us understanding to easy So REITs. can in which satisfy order we’re really

the a really been core – develop So we’re at for team this engineers right that technology. trying unique we’re now look, of in place five in have years, to

it’s and We’re to awesome now it’s an can that finally satisfying incredibly into see companies years a be. to their building. getting product put want you a efforts an product place turn journey, stage where It’s and buy that and to in really a five of –

now, meeting phase now. talking it’s getting been out that to we’re So about with right right the getting in to them we’ve orders purchase and sign That’s just starting delivered. that

Shawn Severson

I might perspective, how look out. their they they from roll And mean, at this

the someone start and assume that take and And in bites portfolio then portfolio – they the technology, and out they they or they with couple say, of what more properties you at would be their at buildings say, Hudson success roll So and would having if trying look at a to one product the their understand bigger understand this let’s attributes. I people okay, of look do how or Hudson, you think let’s aggressive with apple. the like

for roll outs. say Let’s

Doug Croxall

actually a That’s a great number And question. it’s bit one. of both. little That’s

any Some actually want in to regions want it on I coming see coming the tenants regulatory owners I how the in different are, pressure and way, performs. is my building. to try, from opinion are by tenants that the but building the body, to And want not think. from it biggest what in see see I the

customers for for nice are critical which So everybody, including is us, REITs. because

of we a of and our are see So We out companies bit everything. to little across we properties the the some handful with see of rest it then start like, a want roll hey, portfolio.

like for a we’ll see couple months, six of then goes and buildings try with and expand. maybe we’ll it are how some And

us, for that how of good we gets now. have, So right of then gets quickly in how to moving can this much a deliver. we problem we’re into a and make we bit can get kind Also both. but of And it direction into it little

it’s Shawn, question, your little answer to bit So a of both.

Shawn Severson

get all installation? happens manufacturing good you you’re on if get another but I a what side, the working process problem it be mean work to about if and I question the rollout but of bottlenecks How guess the you and around have, big sudden And the orders? does installation what will times?

Doug Croxall

Yes.

and a way already, building. within crew installation our do we’ve labor work for will installation did an is will But It’s So it intensive. installation that the not a the the our responsible done that process. office Angeles. in be have process. a our I it eventually of it will it’s installation in way will It but we employees. a mean a manual hard, is manual Crown Los It’s

So your installation, that I it’ll employees locally it have buildings. likely and fastest, it, we’ll ship over – time, to a mean the doing want best, of product, to build customers. Crown good customers the with it, a installation to problems likely efficient we’ll that these are to leader probably to team But to to you a start handling least laborers are the that all off look Crown you understand most from like you demand you’re have employees with our got pure it. way of are want But with When we got right. the because all do you you crew inconvenience in sourced got have. have install amount

now, for those so it. we’re plan think we thinking and those problems a pretty have processes we And through good right

Shawn Severson

Great.

offline. much. I rest think of to so take questions Thanks my the

Doug Croxall

Okay.

Operator

question Please next state question. Our Capital from [Operator Thank Management. McMahan your you. Instructions] Tom with McMahon comes

Tom McMahon

most more in the my phrase portfolio, differently, product, in the question the months, conventionally statement, in but recent answered earlier somewhat and manufacturer to they recent Doug? morning, to Good patent your specifically strategy impact additions you you have – were manufacturing intended effect patent your to the or Doug, process an acquisition too. it related your

Doug Croxall

manufacturer much manufacturing so be the the what process as not much as So might product.

Tom McMahon

it. Got

Doug Croxall

look IT, that’s current the potentially have where future product or and what to we invented, for to at plans. the – When at our we see for claims look something IT that need our we look we if

see if out a it’s potentially look marketplace. be patented used could technology a the in claim We competitive also claim, to a that by

competitor. right when a by And manufacturing certainly that be processes for the either come we product look to decision or the those will sold, product bear of manufacturing property, not protected intellectual or product And lot type or a doesn’t of led manufactured a being process purchase we’ll or a by factors actual of it be also So it’s we all used, trade is we by invent might will. mean patented what our process own secrets. so kind the and won’t much that’s make now

Tom McMahon

Got it.

And that can one the all? Okay. become I Doug accumulate does to at fabrication are the question that Is a at don’t unrelated risk time mean I that job what ignorance, installation. show the and a at open none but the or does my – in material between affect there product point unintentionally product’s lapse the warehouse, site? mean elements, efficacy?

Doug Croxall

Oregon No, building happens the the it won’t. to to in Number facility be. one when product our is from wherever shipped

think designed that it’ll go a that that containers, actually immediately. allows truck, that but semi And we’ve way installed containers the be it be long is that of a shipping in we installed not Our time. there’ll store once the us arrived pretty installed, inserts the we inserts periods easily We in that hold of expect don’t to almost on will. We own our containers expectation office. they’re have on building if the inside because a our over

at see installed a think don’t as of there’ll building. inserts immediately. be a an risk. We don’t we they’ll think So accumulation almost We that get

Tom McMahon

you. Thank Good. Yes.

Operator

Croxall, and over you. I’d call Doug for see to the this remarks. the to Thank no Mr. At CEO I time, like Chairman closing turn questions queue. in further

Doug Croxall

reduce dialed one dream. to want I on and engineers remarks, team dream technology. Thank today. our been And out in and earlier a the this get this in only and into technology on We frankly, dream I a do a has marketplace. those mentioned touch of purpose, right. I help the Joel, that that the And help to to participating carbon mandate. purpose into follow left out more HP building both it has turned time. the dream phone and that on bigger There’s that owners importantly put Diego, Not to Allison save money, that in that but build to company this And this. a to in All much who And is was you, our much must thank bigger and for webcast. the more I with of feel environment. want all buildings to a

really a the have climate, play We to have in important we and think regard. role a war role on that we in

customers get And you’re and finally your who And point install it’s to been road. to your you’re a excited buy it’s long product. and delivered. satisfying built so And amazingly the getting getting where product are to

like felt take three the we’re thank getting of fruit. And to steps we’d put into bear shareholders everyone we it I’m about and participated who we see all customers, in not what excited world moving point to but start backward, and only that but for have our we store, steps for forward the that can where really only Sometimes that to efforts this and our finally XX in want I process, ahead. not for

and not our soon. And forward talking you, So before if you listening, next everybody to earnings thank I look certainly for to call.

Operator

This you. today’s Thank call. you. Thank conference concludes Thank participating. you for

day. Have disconnect. good now may You a

Crown ElectroKinetics (CRKN) 12 Nov 212022 Q2 Earnings call transcript