LiqTech International (LIQT) 14 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the LiqTech International Reports Third Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

All right. Thank you very much, Debbie. and thank the joining LiqTech XXXX. operator Quarter Financial and conference on International's everyone, the XXXX as for call, mentioned, Results, morning, you September us for the Third period Good ending is XX, this to discuss

us Officer. the is Chief call Fei the company's from Phillip Officer; and Price, today's Interim on Chen, Joining company Executive Chief Financial

the will at to record turn let conference me submit of there it the that forward-looking. session Q&A over we management, may [Operator call begin be I the we open Before listeners an remarks, This Instructions] Before with call. end remind contain following prepared statement. the for

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

International. like proceed. turn to over LiqTech Fei, please the CEO of I'd Now, to call Fei Chen,

Thank you, to good on everyone call. and day Robert, the

decision to America, quarter delay Let's delivered physical the the expected delayed now to North commercial following of customer set installation. This impacts of contribute project the was in clearly which right the significantly has jump and third change topic results. about revenue is million was $X.X quarter, the third during be by produced our was which to the our water a unit in to in been to but results. quarterly location This disappointing the key treatment large quarter the the

Fortunately, our with customer driver XXXX and has the Canada growth. in touch future to location South of this States will United be just a has the finalized from the a to be which delivered set to will more our to I their units on key in help installation, moved moment.

negative quarter. the the of that's side So,

to Let's turn positives. a few now of the

at today We more have various than our systems in of history. testing time, piloting any any and phases point at

shipped moment, past X completed the the industry East the will pilot units customer UF have more We X months. One our in the chemicals energy unique of at in in leading The satisfactorily order quarter with the treatment Middle for unit commissioning. U.S., unit for three the NESR, one water in in oil solutions. The XXXX in energy field recognized as the in system. which will the provide bluestem producers which with and in world's site and integrated with which Middle Direct at a this one produced produced the us in and containerized gas four installed presently pilot filtration companies the the in in is the Razorback what X shipped water ship legacy now has the customer of to we for opportunity clearly pilot technology and the treatment was integrated quarter for be operation in our led operated would Razorback Middle was East This region. The proposition pilot the were in in to of of U.S. quarter U.S., with world's operated for region. One success companies quarter operational than Middle leading of was value to energy commercial is superior showcase originally the East, in the the been value of pilot and one which January one the set years. The East. leading system one the water treatment our under unit produced

with We lead project this will partner to expect testing that in XXXX. the commercial a pilot

gas, oil U.S. and have quarter placed a we removal, shipped pilot a unit recently, for company microplastics which Beyond three. petrochemical with in was

order, led unit mini to a We deliver lithium step, successful the set focused next U.S., a pretreatment is also completed pilot the unit on with a was which test which to this brand month. in has and production

in satisfactory engine, We of water engines. We DG completed us units dual-fuel this lead could of think test factory ships recently commercial dual-fuel WIN also WIN permitting treatment to treatment sales highlighting DG to result for EGR unit address XXXX. our a for water based systems on

unit XX New silicon and the Denmark, offshore year treatment key unit a a metal China units marine industry the project more also in for through an markets, system Within processing units through China in system than phosphoric filter, in the XX Mediterranean, wastewater purification pool MEG have for shipped shut we multiple last York, a scrubber past recovery for months. over end units have pilot in for in acid we including or so,

JiTRI, wide and a support. cost slower including further provide our To funding. JiTRI make spare back possible quarters industries, areas, put assembly segment. Coming parts JV extensive the term, will marine of end timing China. our partnership a the research local contributing in one technology province adoption minority out adoption, for ourselves in variety be JiTRI Australia, good assist established deal the drive said to markets, initial of have of water it will multitude feel clean through aim access was us systems the and to Technology a along to innovation hire support, joint Jiangsu China, to JiTRI and and and located venture share. The and XX% reduction. years the JV Limited announced it price to owner position linear, of and local will has long collaborations key has to in will market will to ago be expand were in the treatment. they service commercial be a Technology Institute institute Research approximate impugning a be last in China on we institutes presence technology. This While a always in not and LiqTech majority has localize would Company which the we made network market, operational in with and Energy to Jiangsu Europe, sales customers universities with this province. the the and key be promoting our is Nantong research of shipbuilding focused investment. JITRI to owner the JiTRI large with technology establishment XX progress us named Industrial and provide be Jiangsu Green of where Canada U.S., a have market about commercialization built joint system will much Haimen, few LiqTech JV, In with of will Nantong an and medium, reach facilities for up to force possibility

new for majority cleaner water As of gas applications moving treatment most recirculation is vessels being engine, of fuel exhaust reliable dual the towards you know, with systems fuel which the EGR. marine the shipping or equipped with industry requires

perspective, on to through have for and I order in in XXX another this expand ship it do company's vessels. published addition finalized with help presence swimming to according vessels forward to our retrofit us, which am are increasing shipping market and to what can intelligence For engine EGR key LNG-powered pools. market Clarkson solutions to in China. Transitioning JV new to for applications, pleased data, XXXX are XXXX, the planted look

building one area the Poolcourt we Spain. Oxidine below expected increased in we we believe During touched Ireland certification help into and receipt that last is of in the the for delivered partnerships more and of intensively certainly quarter distribution the will NSP One systems, U.S. pool on team. We work in area territories. is new one our geographic for X system cadence quarterly in up swimming an by focus our by quarter, This

through pool not this are the aware, we that approval are those work we in For as to process. commercial our U.S. sell unable solutions swimming

established markets, million is to below of membrane that compared customers This membranes. to were expectations, ceramic during now in quarter in hand, market adoption ceramic be potential quarter. end awaiting with numerous the been the conditions in X DPFs $X.X to year. Transitioning with U.S. in partners and million cuts. $X.X year place will temporary the interest have sales we help DPF potential of certification by we with other and what with parts ago about new our reflecting rate believe third collaborations the in end to conversations the With drive goal the starting largely have our

continued at this sales up other which the market are last gas to ramping impacted delays, commercial demand. to level, we of year-to-date, large be us showing we the order the Clearly, quicker. point oil to continue behind year's strong remain and where Fortunately, above sales want delay due and has

XXXX, be again, of expect revenue levels fourth compared the $X.X quarter. But As be third be we most was million, and first above year exceeding quarter to these $X.X quarter XXXX. $X.X recent to and we to would million the above million look in the expectation between ago our which to

target an basis cost-saving includes $X.X million. for balance board a reduction $X.X the to a as reduction cuts compensation cost reduction of revenue cash more quarter As million. our than target with was in XX% well on in our rate adjusted breakeven cost previous cash will lowering XX% a holding the approximately be XXXX run aimed and management headcount, across quarterly million $X base a pro breakeven $XX for a forma result, to a EBITDA XXXX, in salaries Board initiatives. Positively, These as implemented senior XX% a ended million. Remember, of solid a at plan we in Directors we of other sheet, the reduction balance in measured

goal. With thank possible. them delayed and orders continue I that have mentioned, in management our this said, million a on delivered to in more team, reminder, place large November, institutional stated coupled we strong commitment our call our a as Despite Phillip for private conviction large in in over with to their to to to orders investors. with additional turn existing opportunities. It a September year, that not We a set bring of soon company, initiatives in me of profitability future review our placement believe to strong raise the to to next to are $XX I and As and as results is respect capital the with closed subsequently the let reduction be achieve detail. with and number agreements position cost this we Phillip? financial business

Fei, and you, good Thank morning, everyone.

quarter. year. comment the last sales of were the DKK last million of in decrease ceramic at XX% Broken of quarter to briefly down finally, year. And for million, the million on follows: in the as period DKK representing same million year, Revenue in X.X highlights $X.X equivalent $X.X me system services last related membrane came compared compared year. the let revenues $X.X to period sales sales verticals, million a of million DPF in million Now, financial $X.X $X.X X.X last and plastics and compared with to by QX same same

mentioned, in X.X has been which system this million Fei QX of next set delayed delivered be a to year. year, large we As had to

of pool this short of fell delivered systems Additionally, number our quarter the expectations.

interest is We customers conditions experienced in market slowdown are and we membrane ceramic rate temporary our which as on DPF potential waiting driven believe by also a cuts. business, end

the for of year. $X.X to range $X.X quarter revenue million quarter million last fourth and we million compared XXXX, be of expect in in ahead Looking fourth to of the $X.X the

expected full of million. year, revenue $XX.X million to and an this guidance For the translates range $XX.X

a gross of a were quarter margin the pressure impact led to revenue on on quarter positive margins. compared additional loss Turning a margin last over This revenue year. in the million same performance gross negative the fixed $X.X The spread to our base, putting costs production to million reduced for of revenue lower-than-expected gross of as smaller profitability. decline $X.X base underscores

one highlight of still we that being margin. to and metrics have overhead the we look absorbed, not fixed is costs other are made progress key our As being contribution fully at the

year. During in the out approximately quarter, to reported when cost, ended contribution XX.X% compared the you quarter back XX.X% last fixed same at our margin

OpEx. a chain travel year. to and decreased $X.X saw well reduction a but related X.X as Relations particular, million expenses increased and sales services. G&A selling costs, attributable $X.X million, from the million DKK million, reduced executive expenses $X.X new of from to in lower addition Investor operating in officers, Total expenses, supply the QX decrease insurance In Turning to expenses project last down for mainly external legal expenses from in also and quarter of in increased management savings as positions we costs. consultancy were

X.X As we quarters, focused the quarter was objectives. Concluding protect X.X DKK costs evaluating monitoring for million have lean financial the emphasized we period in carefully loss running on a net of DKK our comparable P&L, by recent the million on for to remain XXXX. to our and spend compared business

cash target on reduction to implemented revenue million million. cost rate run This for adjusted a will XX% have be improvement along reduction in of a an lower from senior approximately quarterly breakeven other measured to is significant Directors cost-saving initiatives. of a previous DKK comprehensive, management to our including DKK in we Board our target XX% the compensation XXXX, Fei costs with a reduction for DKK X.X of As cost a headcount, XXXX, X.X mentioned, in base XX% in X.X. These basis EBITDA reduction salaries plan a in

due issuing briefly Fei. used second $X sheet me $X.X to quarter ended decrease balance on offset over the operating Finally, quarter, in cash comment million stock. let cash back and flow partly of handing the from common proceeds primarily activities, by before from our in a and with cash, million summarizing We to

ensuring proceeds, quarter's flow critical adding as tranche us safeguard balance to and for forma private million. To cash our the second completed a in bringing cash earlier summarize, financial cash the is an Following placement pro we strategic work to end, both of reserves, balancing the we $X.X $XX.X announced, flexibility. incremental KPI million

lean cost central to to you you, over operation Thank with efforts, are building long-term Our including salary cuts And aligns support. reduction a back continued goals. your targeted headcount our and Fei. that for now

any you, Philip. phases than quarter to delivery, Thank disappointing today testing more In piloting we was at where point and of at the due have in systems history. closing, the various delayed our

partnerships a on dependent can X that be and of put to us technology the quarter. to across ourselves applied not applications, incredible a have each We be to on is it in number imperative different orders position further or develop so various X

position sheet, but I Fortunately, to that want granted. we not balance it taking have clear a are make strong we for our elevated cash

expenses; growth. have to would We our are operator, to driving that, initiatives put happy in any questions. revenue With reduce take place we we be

first Street comes [Operator Markets. from with Lake The Brown Instructions] Rob Capital question

Any get and taking I that that change ability of maybe in orders? shipped? effort you to little when the shipping Just kind to timing 'XX. on pilot color market. of wanted more follow-on will on get in said the color a unit and oil delay to ultimate orders in I know the the follow-on sense delay gas does guess, be on some and that And or

Thank you, Rob.

in think we the actually release, have expect press it XXXX. first in I half coming we our of written

And sort what then reasoning the shifted location, was of guess, that think the -- for the delay? I it I but to was

testing testing of can different some they put Yes. all us need X but before have because a our really water handle in do they in treatment. sites, been X steps place. it like before Because and to not they or robust to and some would they there, the very do it And new the streams but to our water running when they different, has they location are run the different system demonstrated shift

process. So, one was reason the that delayed

brine that project sense the how lithium us can a on you a you is that and give big that or what then market in market is had, typical of size there? And system

are very, results. the we convincing. to mean, I It's see happy very so

are order So, pilot to unit. fast the customer very the

So, huge. the is market size

it than or what we double we will normally Xx for what size Just it's more site, alone the this in normally like a be one even customer expect. size

once, steps. will will they big, in but together they it come but stepwise. at very come come it's So, all think I will in don't

So, excited it's has and about very, huge a turned they And very, performance, our market. that. out it a very very unique potential very technology are

have exchange also patent is they a So, unique. technology very ion

like are be share all bigger. So, the to would pilots what excite information bigger when expected. finished of because to able to it's with much I the clearer, normally but more is you It's much then we market than

Ward from Lucas The next Capital Markets. is question Ascendiant with

little Do bit the your lead or like are tracking Or backlog drill a wanted or your ultimately pilot what you X-month down X-month backlog? a simply I'm it. which hopefully individual your dollar in track on order to have orders? is interested you figure pipeline. how more you I to backlog commercial for Like projects,

depends So, business on that areas. the

sites, where recurring business Fei we dollar longer have also have where markets our cycles pilots, business each all testing potential with sized the at for have with beginning order commercial with turn into the orders. We and and turn customer should pipelines as orders for should orders other follow pilot pilot the orders. of sales into the areas that mentioned, step we we But

business differs, the So, it depends on areas.

of if at you let's pilot an lumpier one give seems the them idea million, it size book you're phase thought. the of revenues say, like or at not? like can it sounds us test it's order is all, I So, than the let's do say, Like X.X well, Because you phase. first of, booking

Yes.

the as as it's a the to or the rental. sale been arrangement But announced, with customers. depends the direct that a customer recent on with either So, pilots we've

the we and customer us do engineering And provide and rents pilots testing our them, the the we gives with together that So, service customer. for revenue. then

be? the What's part, you system a from if buy they that like the million, rent $XXX,XXX? obviously, commercial pilot it's difference if in different to the it. $X mean So, buy how much is pilot commercial? I let's scale Is you it, say would if it,

Yes.

buy to on if end, not obviously. able to it depends long say. if wants But depends market. customer time on how it, it, you We're it we So, win the end the

it record of So, track the end really market. a have and depends end market within that on what we

price to capacity plan, price the on the cost it capacity. a the question, and sales the because pilot to depends on with the treatment back depends the Coming compared your commercial

the It's So, exact it's on not a depends of really project. number. one kind

be it varied. So, can

of some gas, at be. look to up we swimming lot it that lithium is oil or If say, newer potentially pools, would going extraction, system obviously, a is fair brine say water marine and or your like produced these let's markets relative the and scrubbers previous butter, bread to, value

They very yes. Yes. going so, are Definitely. much up

cleaning to respect sure release sounds says With that production exchange, filtration produced as maybe the in Is downstream water like project, it that the membrane the what a UF becoming I'm LiqTech? lithium you're which enhance a press new it that ion actually your not just means. opposed that the of the result. part of for But kind can to is process as position

correct. Yes, you're totally

We production their of process production. brine in part lithium the are be going a to

do ion to they pretreated. water That to So, they really ion lithium exchange have to have a very reaction the are to need efficiently, of using the with the they special the need ion metals to order material, to use. a convert exchange. chemical And this they in that as the have being do means kind material,

will Otherwise, this the efficiency will the reduced. react in the be lithium media. way, So, on only ion

So, ready their ion. increase lithium here capture efficiency to are them of of we to

So, it right, totally Lucas. is

production are the process. in We

for a to LiqTech? is microplastic And with this respect new market removal,

doing the removal wastewater. actually very new. is this a in and And mean, It got testing results of a in microplastic by found development development surprised XXXX, industry very see government Danish from were to we question. good good is that we project project. I really very, We had

And microplastic petrochemical that very our challenge they their data we and in company in wastewater. U.S. realized So, technology. a have got to results we they start with about hand, our excited have with with communication this a the because

at So, the we're we order. And U.S. the right pilot conducting customer very the site to in pilot get actually fast now,

this question, scrubber new a to Last standard I what's mean your significance the that of fuel WinDG is market? dual engines, relative opportunity? marine

This application. is new a

discharge really would scrubber control. I the because new this efficiency traditional So, traded they into engine They order water from is And the this engine marine cleaned say, regulatory market yes, standard market can has of before to the the the and to gas one trade combustion need to the is to traded, really be have is be in ocean. their engine. a exhausted

So, control. a this for regulatory is the It's the really requirement engine. not

interesting technology, not cheapest, So, not way, efficient in choose have they the that's this because only why choosing much it's more cheapest. by to the

in only that demand here. competitive So, and many we engine technology we position be the that's run And makes think time solution. why short we unique And is also, operating this solution continuously treatment perform of has able this solution really application. And when very water to need is and of our our to a running. unique the have continued other also the the cheap XX cleaning. know cannot is hours the for And

very new area it's So, us, for a application interesting definitely.

Instructions] [Operator

here. you the This customer? and was of are have if you I questions. Fei time it and the few we while live wait there questions get there do see is I brine lithium asked, for estimates not I've got on any submitted expect the the additional component, brine Philip, submitted question pilot? is pilot for the how long did Do to already line think, that you be webcasts to one here, Robert a guess

they there expect couple of there. will the next I They be will be until months.

it months, few Next will take.

Okay.

is, the about can for some reason system pool of year? within this the you talk reasons any Is there there? challenges one Next the particular here question

partners are very in the technology. the all customers from very, perspective, mean, our the I market interested and

technology pool the a sales sales perform for management, So, caused a sales not did for strong really we salesperson in a value good our very down very very, system a unfortunately, also the system and actually side. and we VP proposition. And well, with pool have that going had

actions. correct have we made So,

a We also, VP salesperson. and sales hired we the changed have have new for

have I now partnerships left in what catch closely new speed, also, and up are been up we are to really up the they intensive distribution And whole out. building work follow So, we XXXX, with more professional it really to efficient a sales new be you're old ones. the with believe, effect will the our distributors. And going and see of really existing team, much compared

internal market about nothing customer. the So, and reason, the our it's purely

Instructions] looks It on the China and one main have further? might JV I you expand to the in various like some bit Can the are it's here, processes [Operator question additional of will relating a of and the be yourself scrubber. little partners that What marine for the just goals and undertaking? some that

joint Yes. Institute, venture state-owned And It's Shanghai. next Jiangsu just JITRI, a province Research a Technology with in Jiangsu. to is

region. Actually, keeping of sector, very that crucial. majority they strong work we And for water So, will invest this harbor. locally in relationship Nantong parts and And lot long And marine really, actually good service stakeholder also network because China look has place. a in of start in actually industry there's the at through going there build really why system And we in a looking and that China term, build in that very people will of the also short term. also and exactly be localization are it's partners, at we venture. hiring us. And is a actually assembly. a the already industry joint up deep-sea these build and have they that's location there's And the is to our spare this

China institute in very the those following really solution for to have our that help ground scrubber strong to really and get China C will people us all order to really presence on up make to the think building it in will in to This, EGR the And and I in sold marine be close us the them. We design have make China. industries happen.

I additional the Great. the there not hope I line. am from those here any questions webcast. showing live answered through Okay. questions the

back turn to you So, Philip, Fei remarks. and I over it for closing any will

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

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

disconnect. now may You