KULR Technology (KULR) 15 May 232023 Q1 Earnings call transcript

Welcome, everybody, to KULR Technology Group First Quarter 2023 Earnings Call set for today, Monday, May 15, 2023. With me on the call today is Michael Mo. He is the CEO of KULR Technology Group; as well as Keith Cochran, President and COO; and Shawn Canter, Chief Financial Officer of KULR Technology Group.

Now as we have done on prior calls, we will have opening statements from management followed by a Q&A section with some analysts that will be joining us later on the call.

But before we begin this call, please allow me to read the following safe harbor statement regarding statements that are made on this call. constitute to to any buy not solicitation or entity. does offers of any call an sell offer a This securities of company's This based assumptions certain contain involve current the that uncertainties. call and expectations, and forward-looking risks forecasts may on statements

call this date to the based on on the made information as company statements are Forward-looking of hereof. available

factors uncertainties on implied disclosed and include statements due forward-looking actual may materially differ such XX-K which Form results their Exchange XXXX. business, from risks in in associated and filed KULR's the Securities their risk those March stated or the with to with XX, Commission

intend, Forward-looking future should similar or expectations, and statements beliefs, and words their identified words. the be expect, regarding forward-looking by strategies believe, may, include can anticipate, regarding such would intentions statements as or estimate, could,

this are are on provided available may change management on over information projections expectations time, by management forecasts and this and time. based All call expects internal that at

future estimate new in forecasts the future and are addition, KULR their included events customers of new backlog contracts, conversations whether to In given about a management's with opportunities as and obligation otherwise. the and update entirely best their assumes products call, of services. current existing information current of financial this their result on no or performance, information,

Mo. that, would the is Michael, Michael of call turn like Technology the to KULR call With Group, I CEO over to the yours.

Thank joining to Good you, transition to Thank today. for electrification the platforms is leading mission Mo. sustainable economy. everyone, build accelerate you, Stuart. a industry is management energy afternoon. Michael This KULR's us to global

and of with component transform years, hard Defense supplier to X powering very company. solidly to electrification multiple growth-stage past KULR the platforms to the company economy. KULR is a from Over worked a a niche Department now NASA we've

In over revenue XXX% on we're approximately to XXXX reach same XXXX $X.X quarter growth. first Our in XXXX, quarter million. focusing the grew revenue

well marquee military fast-growing and beyond We include broaden vertical and initial customer we demand across increasing positioned increasing service customer multiple and our base customer these space clients. the to our we We're large markets. to to continue markets. are names in experiencing We have believe demand

like recycling XXXX, reach market in battery to to $XX billion battery XXXX. ion and areas is be over is by billion $XXX Specifically, lithium estimated

our product and platforms the solutions. mission-critical drive requirements along given with mobility. regulatory areas, consumer, We view our proven clean as in at for these electrification, multiple government and that energy commercial, demand and sectors, increasing service of growing and across The tested sit sustainability, intersection industrial we from demand the further markets,

approximately market Lithium-ion battery the this this estimates of global include KULR $XXX lithium leading believe McKinsey challenge. packs battery a battery a approximately growth to bottleneck platform is solution market safety and for XXXX. recycling. operates cells, the critical that of We billion KULR $XXX portion the ion be provides the battery industry. billion in by for

KULR The Design technology, SafeCase electric safety Runaway to the internal storage energy opportunity our can platform storage. like mobility in market modular, and a with NASA. circuit energy issues an for methodology is short technologies Thermal Shield, as KULR licensing Solutions device, holistic ONE our the such solve patented which exclusive partner battery and is CES Energy this at January. launched intelligent storage safe, It's largest the XXXX. multiple serve KULR is platform We sustainable that ONE unit past commercial for applications KULR

electric the battery We're infrastructure aviation to our storage ONE pack from received we announced platform. contract energy We seeing electric KULR million KULR utilizing Solutions engagement platform. to a and develop their that platform. ONE next-generation recently customer Design We're high-energy KULR demand for fast-charging U.S. $X.XX Army our in Design significant seeing the for ONE customer vehicles,

historically, X release, energy design modeling, evaluate engineers battery This can we the depending a for with life on and analysis. engagement to year necessary a simulate starts and fancy is through understand anywhere This analysis real process any happens customer a the we prototype analysis help and design, where of the safety customer expert requirements, design. a After its process to in using our requirements. which After take say what a build way within to lot multi-phases and based computers customer provide pack go months do testing the certification applications. testing. battery is and the that Our cells, on

when are described customer's the solutions During product mostly so this generates revenue revenue. service into because product have goes sales customer's product into line. as appear far, KULR as the volume certified product the KULR generates scales up specifically are process products as When our up revenue built volume, our into in our I production, designed. customer's it scales solutions that our -- When our production customer's with

Solutions customer anticipate with able We manufacture. KULR be that will platform increasing our ONE to the wins, cycle time Design from design shorten to

X at readiness April Army what our like we're on return investment we U.S. manufacturing both of or product doing pack by where year the with Our in design, the start map. We customer's can think design we and accelerating battery goal there, to to get less, and be XXXX. April our sales is XXXX get

operational updates. Next, Operating Cochran, President will our and Keith? Keith Officer, Chief provide

Leon, operations highlights I QX and our expanded pleased In QX, call. and our Webster from everyone, am you our thank Hello, to report 'XX Texas. San to for earnings attending operations.

the Webster will our casing which through is material. calorimetry, runaway measures through versus design, runaway Our a of center released external cell's heat is facility pack a its thermal total the design and KULR of the that battery ONE and support services. of heat internal FTRC, thermal fractional location the and This total objective fraction for output battery cell excellence

U.S.-based crucial properties a This so and runaway. battery also gas measures testing a characteristics in to which understanding proper the visit the airport middle facility cell's event customers being customers And calorimetry, our thermal to Houston, of near in and a is short thermal for are into conveniently bomb want do a facility. located allows designed protections to to major The the who is close cell country, our we our trips from pack. thermal is international

and established execute testing destructive battery external is internal for designs. San Leon pack to facility Our lithium-ion

facilities are if testing modular Our portable needed. and

continue capacity we At We of capacity expand will QX present, our expansion to continues significant increase. in further have and 'XX. as to expect backlog demand

for am fully Instruction also live has required The all share KULR Department which our flight the acting Space first eVTOL, and testing We to taxis customers. also system I system excited cell this NASA, believe battery only for manned for Center now this have This highest executed the to battery is NASA received test to and for Work eVTOLs missions. advanced in deliver to standard we deployed is exacting tested standard, and inspection NASA, QX electrical the order automated in and NASA landing human cells be Johnson and went of Defense traceable may vertical fully future. as Further, performing testing. standard adopted XX. takeoff

increase. we be modular the and and inspection flexible mix. replicated demands standard. that capacity to Again, cells, as the and such system we adjust The KULR of to XXXXX the automated can XXXXX as only stand be mix capable easily test as can fully designed can capacity testing option both meeting with equipment and

as only already America, significant to and constraints providing our done here demand. customer capital to we have in requirements CapEx limiting hit and testing CapEx on of future We have our North with invest the increasing planning We our establishing in equipment screening hard capacity should us manufacturing work flexibility. due

X focused Over getting past recognized. brand capabilities our years, the our KULR on and

we acquisition investment. early targeted We Accordingly, of in customer built just will reduce marketing brand brand of in activities. the significant have monetizing innings in successfully recognition that are our spend and favor

I anticipate As continuing to mentioned, demand. invest behind our we customer

Lastly, continues the focus team operational on to excellence.

team preparation upcoming of management XXXX audit giving audit. ISO led recent growth we external an as conducted There our recognized multiple The the of significant As in QMS, KULR. system outstanding the for were our delivery during were been such, have companies this to on high for the praise for ramp quality a elevating recently results QMS our quality highlight to I to customers our with found and the X annual auditors our has audit during by other nonconformances KULR wins for recommendations our Their focus industry-leading. system, audit. as company.

are best of singing And praises proud peers. that to our their marketing is and that quite are customers all. our I team The the

have all areas operations of the such, to to operations As of deliver now 'XX. pleased am expanded accommodate QX feel performance we with that we of the and growth. well in I prepared rest very are

Shawn? Canter. now turn our Shawn Thank call I CFO, you, and over the to will

Keith. Thank you,

from You some can results I'll highlights. the on touch detailed our first financial see quarter.

million of year. approximately for XXXX. million same last was of the equipment first XX% investments deposits business quarter million trend $X.X Equipment same in was quarter at deposits the increasing was inventory ended revenue our approximately Mike versus $X.X XXXX the products first and million quarter versus our approximately for customer reflect $X.X the for XXXX quarter Gross the increase cash. Inventory approximately continuing initially, $X.X As plus XXXX XXX% $X.X same last same year. of million, over the for year. $XXX,XXX These approximately in ended quarter last the services. quarter plus a versus demand mentioned with XX% quarter for the margin first of quarter We approximately

Our product significant and engineering logged both services revenue increases.

an sales approximately XXXX XXX% $X.X quarter $XXX,XXX for generated to product approximately the same compared in million Our in increase.

XXX% $XX,XXX approximately We a the in $XX,XXX quarter were the over increase. revenue year XXX% revenue-generating increase. $XXX,XXX approximately Our a generated in per quarter last services customer revenues same $XXX,XXX quarter in for same versus only versus this year, last

topic customers remind almost full had the full year paying to wanted number doubled year on we that of and highlight XXXX. While versus the XXXX customers, of I everyone from

international XXXX, our due growth KULR and revenue our the to including first sales remind You and growth of everyone has XX% in I Board XX-month issues can to own trailing highlight to returned that part line KULR its insiders, supply wanted chain prior COVID the management trajectory. approximately of shares. lockdowns After trend trend. our team, see

"In is long-term market says: a the and fit, the ultimately, share Warren machine, addressing stock voting stock. a it the run, meaningful The in marketplace, long weight the short of driving the Buffett of machine." value the per growth earnings As weighing market in need a run, is product

on focused cooking. the stakes, are eat power We meaningful earnings we equity and own have of we our KULR. long-term growth Since

as a are proud KULR, we humbled you and of you to If partner. are have our shareholder

more at opening our about to we invite from us aren't, learn kulrtechnology.com. you statements concludes That management. you If

Back to you, Stuart.

you, you, well opening for well, right. as Shawn, you thank your and Keith, as Michael as Thank statements. All

Sekelsky. We're Let's Global are Q&A the call. Jacob call this to open portion Alliance with up Director Analyst, and start yours. you Jake, is now Managing of Research Senior going The there? Partners

with prototyping across for more is curious, portfolio Texas. customers? geared center starting new is specific just in be this location the the I'm a it to just products So product R&D for going and or

Jake. one, that take and ahead go I'll Yes.

will so volume that the into prototype, primarily testing a KULR and we'll facility. development location third-party move it for Once ONE So will be manufacturing, designed initial do facility volume there, that for do our gets our expense limiting capital there. pack we'll production, at into

That's Okay. helpful.

for So prototyping commercialization? earlier-stage more transitioning it's more before towards

correct. is probably happen early sometime onshore doing competitive. facility, that makes our And manufacturing in back pull we it cost so from That's be China. late very Thermal And QX, automated, QX. that it Eventually, Runaway Shield will will which completely we'll that

it. Got

follow-on Okay. over Army trying see time announced you get to development when testing from Do to to of I'm It or there? commercialization. development sense a just few And ago. could a then switching to product sense weeks we the transition a you either have of just is a seems a commercialization line contract order underway. like the

Yes. I No, that take can Yes. one.

will in So really our silicon cells. These around energy anode ONE new KULR a way, battery the is cells. analyze and the their a designed at of we PR, Design Texas the are, product testing a to by be safety lot about pack platform safety the that build as the testing just talked high that. facility. we utilize And a this pack, contract performed We've performed Solutions we

As note than a much California. you tests easier of that may lot do these Texas disrupted place to a will be

started this time So development of line is April year. we that in

that by readiness time, that revenue during into X-year April to frame for that. expect in design go XXXX, And development so and services, to a to the and do We production we receive of XXXX. manufacturing them expect get time we is that the

EV other As the you vendors of Army consumer is may the of in largest than know, batteries world. one

silicon as the on So configuration not, customers volume pack the to could battery space testing battery contract both large, whether both into similar, development for to configurations anode definitely work level are these production hope we getting be benefit if opportunities. it's these could Army this cells very commercial using think cells, well and benefit high-energy of fairly into doing other we're or into very battery as from metal. that tight higher we opportunity be design commercial that energy that And

quarter. Congrats again strong on a

Jake. you, Thank

All right. very much, Jake. you Thank

Howard we Taglich Halpern. an Now with Brothers. are going to is get He analyst

quarter. good another Congratulations,

phase, In of if are close I will a the are you how prototype? And aggregate because where like terms when more, insight value give guess highlight in basis? or funnel or customers to initial could to many a you of certification maybe the then the the that sequential as how move some many you to are customers will are on revenue when the in us bit jump little the materially that the process of

$XXX,XXX per has that Shawn customer. in Yes, customer can has to increased revenue per QX, that. Yes. significantly paying take shown I Howard,

say, granularity customer we about in think, the phases. QX KULR And Solutions, we But . can was really We we strong customer different customer very demand on the in broken ONE different Q, what platform. paying definitely Design see haven't from I the down our talked

So the service strong battery in test, like customer the safety see they're test very in unique we interest perform, industry. the especially we And that that. FTRC

in of Keith for that. in that investing see the think we the about that's we're expanding And accommodate talked I to what that. Texas some facility backlog and

And coming to quickly them customers different as we're and sales is to design get X cycle about through that stages. ramp year trying cycle are earlier, talked product that as trying less which I and opportunity. different get into to So shorten through than possible, revenue cycle to the that as definitely

over over expected years XX-K probably remind opportunity few the I last generate call, $XX about will where have is in next revenue to the expect I investor I in about, March that KULR ONE, we -- in million. everyone Solutions to a $XXX for strong did million XXXX talked to the be revenue and the platform

contract that to revenue think is ramp. I important milestone an the of Army kind path a on

with through ramp. acceleration more revenue So an we as cycle engage development take quickly, more we the the see them customers would definitely and of

shared with TTM and there. Shawn picking trend you up the the And see momentum can you line and revenue

out our quarter if release just the to have and will press progresses the about progresses, continue stage. take wins through we So design the shareholders customer year phase and

Okay. are you VIBE And to KULR I XX on in been there additional foresee how that customers the jumping that performing? then the And product VIBE, with, has XX along guess, could initial customer going? next months

while still horizontal inches education considered helicopters the per acceptable, technically track provide the for Yes. are question. that. an and helicopters, Thanks, balance KULR appreciate an vibrations of there, bit lateral to vibration as vibration the maintenance the incredible you of in to per And know, in as most Well, level to X.X little square with pilots. has Really second vertical, Howard, up And is operational reductions measured IPS. is VIBE capability and significant a aircraft. to this to planes for execute just damaging

VIBE this KULR to range fatigue and adjustments wear significantly compared are leads stable to X.Xx And minimal reducing aircraft components with less our our the mechanical while IPS results more the the on that's competition. so And an on causes pilots. typically in

engagements the reduced for had response And the of led there's behind and flight increased and it's so at results us. this. and to readiness numerous support can you tremendous aircraft, We a maintenance on CES, lot for a demand imagine

solution by vibration I the without of eVTOL a address their the that the complete we they designs, little aircraft. struggling were number can think new and when are redesign show, companies a vibrations that coming out in drone surprised of need of with

provide right that we've now as hardware package issues, a we sensor software a have to these such, and customers only for solution want well. As engaged vibration not asked been

to And we've development the to complete VIBE added hardware additional the team resources of solutions.

customer Soon, provide demands. one-stop complete able growing a we'll set solution to be to our

So positioned The the the a originally positive. to National land taken well into months. their I to Department And we as we're of little continue say, we Armed just believe Guard. in few them budgets excited very of to to longer get the branch super with are than would It's lastly, Forces we this. as continues anticipated, well about work from be bit just next customers Defense still a response States United but we the

where excited close few we we're think landing are. more We we're a So to customers.

that addresses So your question. hopefully,

up great and does, it Yes, keep the guys. work,

Thanks a lot, Howard.

Let's Theodore Theo move to for Research. is them. on then O'Neill Litchfield from an Hills analyst

So this And safety so, assuming guys, for type failure? predict a of you contract test. way a cells or I'm recently to NASA. test if there is to failure really catastrophic a XXXXX won is

their the so and XX yes, on screen standard, from Yes. electrical thoroughly NASA their cells really the a Work to contract to is on based based this screen characteristics. NASA Instruction which cells Theo, is mechanical

have were the call, As this line to manually. screening discussed this task perform doing for automated to screening only NASA. is believe we in Prior the we they this, the

you much provides So provides screen it on the as a also, imagine, results much more data can consistent automatically. our more and and importantly, reliable more results, much, process

And about And whole Design this can of ONE another is comprehensive provide really building and for Solutions for this. most health view safety platform provide its amount the to combine with the take our much of lifetime. NASA a the combination important block through to and industry solution huge the in vast intelligence more KULR pretty battery battery in operational benefit state on very our customers data is customers of on this data we this data other battery to

and safety it performance? is safety or just it Is

complex cells. and months out safety. think, internal cells through XX on Yes, over with a built-in very performed Yes, aging these through I very electrical, engaged through performance is process, part of mechanical, latent it, the it's but short bad defects ultimately, it's Screen process.

Okay.

high-energy about battery contract anode? what's a won silicon Army safety Is using you safe a to the cells? develop this of on And the these also here which for selecting recently platform, the talked about testing also call. a and safer with You batteries significance

Yes.

the definitely can the silicon is get energy runaway, the more packs more the lot using anode that challenge cell a KULR more Army a in, violent. applications. they means you energy this thermal So the it's the so behavior per put into battery that pack word, the The to dynamic their in more energy when little battery for the Solutions analyze ONE cells. out is space Silicon platform battery a Design goes more anode it lot pack of limited that

these for is that applications mission-critical critical for safety So of Army, obviously importance.

rely significance -- ONE through through for now they methodology Design So to them. safest That's battery going the on of this. KULR KULR go really this KULR run pack to devise ONE the

In of the the I once batteries. of consumer of this of size for I the a opportunity Army proven mature, platform terms us. largest think business, gets out, huge gets one there's think is And

as here of any All we now I Well, know team the us are operator. no the analysts right. any that from let the want call. well Tom, wrap you us further call now. here there's our are analysts, then questions, as today. up or the joined KULR you management if I Technology the there If guess close questions thank will Group can out of to

further time. [Operator questions Stuart, at are Instructions]. there And no this

call. thank all investors us here Tom. Thank Well, the Thomas. gratitude to once know have team, our I you, today. Excellent. want management Thank they that would shareholders like the and thanks to That phone I and concludes you, joined their extend again, and to

You your wonderful a at lines may this your for again Thank once time, participation. you and phone disconnect have day.