NextTrip (NTRP) 21 Oct 212021 Q3 Earnings call transcript

Good day, and welcome to the Sigma Labs Third Quarter 2021 Financial Results Conference Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Chris Tyson, Executive Vice President of MZ North America. Please go ahead, sir.

You may begin.

afternoon. good and you, Thank I'd like join business taking to all and thank for Sigma you us XXXX conference for Labs results time call. to third update quarter

are company's Chief Financial is Eastern A Executive today Your the and results detailing today website, available Officer. Ruport, at wires Orzechowski, company's Frank and this press Chief afternoon host sigmalabsinc.com. the Officer; Mark these and the crossed release on President p.m. X:XX

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

than financial Thank our differently context results. additional into quarter we good for to insight have conference give our you, you calls some structure afternoon, and third more call Chris, past and joining put call. to around our everybody. thank And this We're you plans going some to

quarter's clear indication of own transitioning industry, is out what The mentioned in in to manufacturing believe calls Sigma a I beginning metal a of First, to increased very printing the ways. call say last Gartner result of I'm that good disillusionment. Labs was entire I additive QX that on its activity for pleased is and growth. into the coming number revenue that quarter trough it's specifically XD in a

importantly, results financial lagging are focused quarterly indicators I'm July, more leading in said and I on indicator. more a somewhat as However, XXXX and XXXX. of QX for

just quarter. a record as objective a company isn't Our to have

go of strong progress business through talented After the them Our objective metrics a is the a the what attracts on seeing At with I'd so that numbers, XD to adoption culture into and quarter the provide with and financial of to bit accelerates. market put and doing, our advantage printing, develops return some in a a that shareholders. some we build achieve technology company plan point, are made our and and dive and retains and we've metal in a and to competitive the our as Frank color like people, of context we're accelerating of then I'll XXXX. sustaining going deeper provides Frank? this in to products significant the that, mission

you, Mark. Thank

Our our detailed we SEC with the today XX-Q and results. of financial highlights financial release results are contained press contains filed key in issued our the Form

$XXX,XXX Gross months or XXXX compared as Laboratory. compared single of well of a XXXX XXXX increase XX, a unit million trade is totaled compensation were Department ended benefits, gross quarter same million $X.X of for in of expenses $XXX,XXX as totaled XXXX, of Expenses of $XXX,XXX that period unit in $X.X XXXX, PrintRiteXD COVID-related due by versus third for addition quarter by to quarter $X.X for nine sale, third the additional the XXX,XXX. period XXXX to due compared third compared travel sale sales, revenues in same expenses was including in for $X a first the revenue XX employees stock-based in XX% third in increased as I of total for as first increase $XXX,XXX the National contractor and XXX%. due today, as related the for September Of Year-to-date provide to revenue was million. third results, an same $X.X expenses increase, Total the restrictions, overview nine resulting of XXXX, period first September as the an XXXX. for of the almost to XX, easing So some quarter operating XXXX. an $XXX,XXX remarks. for $XXX,XXX salary million the full-time of to the of at The to million XXXX during the quarter multi-unit related those recruiting increased profit margin to to U.S. company's increased XXXX. of of Revenue and the of the operating followed to months a XX% shows increase to Energy to was of total will which U.S.

ongoing contribute stock-based consultants The due costs to premiums and non-cash While to directors compensation insurance hardware to higher and development software is in development and $XXX,XXX. non-employee work related remaining research and XXXX. increase primarily

shareholders $X per XXXX in $X.X same used a months The a to $X.XX loss result net for XX, XXXX in in net operating compared our a of third to quarter or $X.X used in of $X.X activities which the loss in September for third $X.X the operating net or XXXX, per the $X.XX million share an was loss. compared as as XX% months the XXXX quarter to in ended million increase $XXX,XXX. represents cash for Our million of the common applicable totaled share primarily increase XXXX. of of September million quarter ended Cash the nine $X.X third compared million, for activities XXXX, XX, million, three period the totaled to increase of

year balance XX, as million the during in to to $X.X XX, million private related is compared and our year at turning to from December million increase balance the warrant of totaled of million our Now $X.X in during net at and cash cash September a The XXXX a $XX.X result $XX.X cash sheet, public offerings proceeds XXXX. exercises.

$X.X December XX, XX, to XX, XXXX. Stockholders' September compared to $XX September totaled December XXXX. at Our million XX, compared million million million as capital working equity XXXX $X.X $XX.X at at was XXXX as at

put Frank. some anticipated? now to those you our to numbers. might seem give growing some expenses have insight can us What shareholders Thanks additional much as of let's around be faster why And our context than

Well, most importantly, investment people made a significant this we in infrastructure our year. our and

we a As it. of the to in of the us, to size of resources advantage opportunity we saw market ahead to be we take add needed position realized

required going So achieve a in If are outlined remarks. mission we you it to was opening the in your investment. fact,

total XX% most single our about speak Like compensation biggest of is expenses. employees. our companies, First, I'll our comprising expense about

the added since year. full-time XX beginning of employees the have We

increased to two our increase have team opportunities, our in We presence seven sales to from an pipeline. our effort in

in engineers. Sales we've Western the manager area technical a European, the Specifically, U.S. Senior three for added Middle East and sales and Director sales region, an Africa of region

rate and to customer aligning VP would we've we culture. whom capacity sales furthering management our many to consultants. conserve salaries the in employees recently, Relationships. support who others. we To benefits, as a ensure expense Strategic we recruited this to Sigma from management, to competitive manufacturing as of by us keep our increasing restrictions and and equity-related to development applications an skilled effects and most in not success team believe attract mind for talented non-cash and well. and employees to of Brunsberg We of and this increase resources is enough just already also to valuable and two, true important company invest to lower business perform points as important of comparing and joined our respect to often our overused One that due have hire as with machine Jake the reinforces majority employee slow including we AI on you and and year, been most been The helping engineers them ability well than We've therefore, than in our non-employee as highly it from must last not engineers, of growth trained, continue and seven And of in Europe initiatives, they I compensation, phrase, employees, has it's perhaps have the believe a will otherwise final add four the might heavily we our in employees and directors asset also expenses will expenses in needed, significantly labor everyone to expenses. And field our added support. company COVID be are is One competitive the component to increased our investment invests Senior extremely executive retain of that new GE installations that employee-first at Management is Sigma. employees of of and XXXX business. has efforts. in know, future. investments although, our when to to This But could were Product made shareholder, aligns the two and as everyone designed and The marketplace. operating additional total our end, expect to is more we be learning the to with And in make are engineers, is And our foreseeable market the year. cash. three software company well interests, made addition remain that while that

that. appreciate I Frank, Okay,

increase to where talk Why make margin. be profit? and let's Now gross have does it have a we be been us to able for about able to to it

a of several factors. It’s combination

lower has components certain us as sourcing enabled as costs. well material First, alternative from multiple find to supply vendors sources our

and while unit redesigns and Second, optics computing performance. storage engineering power costs, around enhancements, have particularly lowered improving

research fact, is spent to you category these In related of in enhancements. the the development see directly some and

started objectives our a program improved us do production which we rapid improve largely in do controls, are lowered and and past. lean in the we also test our manufacturing Fourth, and ultimately shorter has installations The RTEs defined forced when is leading with and a how we terms improved have customers. fifth, and thing with installations, have expert evaluation more And engaged costs sales. today much Third, of customer more unit of our labor to become support clearly certain outcomes we to duration which in our process, COVID efficiency. assess to our rethink efficient legacy

relates to you profitable. Now, going asked forward our and to that our ability become about specifically also margin how gross

above at to XX margin gross our September year. XX% range earlier, mentioned XX% is for was which this targeted XX%, our I As of

was all XXXX June was points margin it reference, XX, XXXX, at XX% of gross and As of our XX%. for

in So nine this range first margin we’ve We’ve year. seen as through a gross XX% the our significant goal. improvement targeted the months of

of software-only embedded product the an moving We within first OEM our to to OEMs PrintRiteXD by units themselves. hardware components provision our having the get expect partners and ultimately printers there

of provisioning where step a our Ultimately, In first us model increase of will leverage we our the to OEM this increase believe fact, taking two get overhead. is volume hardware. in allow already committed have to in without will partners the business commensurate that we

do However, of that will of with time to take will retrofit the that hardware be the we take product future hardware all and our OEMs a expect over foreseeable continue for market existence the said, to provisioning. to component due there that the to the

tell somewhere. so right. that? getting about burn? you about the shareholders we’re All cash How Frank, What can

a Well, is cash factor of several things. burn

course, Of when well also and operating we’ve as of investments booked experienced, revenues the expenses, which in increase made. but as cashes an other timing collected we’ve get

discussed. of seeing Also due of before revenues lagging mentioned have that trend To to we’ve but payment As And is customer we date, collected in behind is soon. just it positive we outstanding the receivable October. increased are end September, be a received revenue. in towards investments the another we $XXX,XXX booked a I’ve from that

laser usage nine our the these year. this this printer metal our year. also of We by have replace about in in to months the together items cash And $XXX,XXX in-house impacted taking had negatively first

flatten our revenues will that as outpace out increased expect we to expenses. begin forward, increases Going cash in burn

you, Frank. Thank

plan, as So you requirements. path well on can we we our but profitability are see only clearly not to executing as that capital our our understand

to efficiency. infrastructure to support build overall beginning growth are increase we Additionally, our an and

business last question, done over have appreciate the many to you Now what profitable But we it I structure to in I would said company past existing explain would quarters manner. support a I the Frank. know the was the that multiples if of

business initiatives Well, in we will undertaken we our we’ve forward. ensure Sure. going several need to leverage the embed model designed

processes. an adopting ensuring are as in is discussed we as lean important as principles possible component First, production I’ve efficient of our manufacturing

project customer investment by and tracking an our is and which software inventory system, relationship right made company and we’ve reducing efficiency can new Even applications, more our Second, which size, lifecycle program a and doesn’t off management if communication management number our ledger input, of in increased the helped keep manual everyone a rails including general doing. goals program, of a a product through management modules have system, advanced is a quickly focused hand hand go the communication. things enhanced know the on in left efficient what of poor

Thank have a our we’ve you, company way market is assess I there CFO caliber. year, When over of how fortunate were size past the Frank’s far the a And by Frank. takeaways. to and extremely four opportunity our main come

at manufacturing end widespread Total rely have there’s quality part. you can’t said, that CT father with for caused First, in-process traditional That’s time, to the machine the issue time, of system. material the place. Management wasted revolution in analysis the do who or mid-XXth regarding quality century. you It’s additive inspect scans have a and lost TQM, of monitoring we of destructive first agreement we to note the address when as a the manufacturing post-processing a the you part production quality whatever time exactly into precious product for in process. is need the on famously interesting what need Deming, time third-party or seen went that Quality a through By

the continues our metal Secondly, most and technology validated of to printing. users by end advanced be sophisticated XD

set printer monitor across a then is source a end-users, compelling by that printers. OEMs and heterogeneous the process and organizations a a XD address quality need has by to most by seeking of by manufacturing recently First and federal to research trusted the universities and agency

in mentioned the an I PrintRiteXD Additive had One Energy. through we laser by Department was contract was had comes MetalFABX we in QX, our printer, – first way, QX, our Industries a the first mentioned as multi-system support in As which sale earlier quad ready. of PrintRiteXD of of system

print monitor the an is of The printer. other printed to laser parts SLM on system quality dual

national a to sold system an university. international PrintRiteXD also We and a laboratory

Additionally, proof-of-concepts. several we recognize revenue for from engineering services

engineers the Beckett continues and from see team share knowledge University Drexel printing. twins. engineering laser our flaws our XD process our on career ago, now detecting Darren they the joining with group of to a collaborated Technical be digital that printed University led future metal advancing the a powder we have industry researchers Nebraska, to plan and will a PrintRiteXD. a to and that addition XD of bed leading located company experience a and is Third, employee them executives They University help A finally, Navajo sales year Additive capable for new like dedicated edge accelerate by to And of technology, in with recently, fusion that personnel a for Europe part one of innovate adoption developed parts Most we and today. want of in is in opportunity. use because executing had experienced solution offer Sigma to the need is who

such XD in Systems, and this Industries as Formnext Materialise, diverse end Additive Germany users not but JB collectively team staffing Additive At field X.X. booth, be years Our this only SLM, our OEMs EOS, Stratasys, organization of DMG Materialise’s PrintRiteXD over and from others. also MORI’s, experience to and has November, highlight XX will additive GE,

So as I change record disappointing one earlier, a setting our quarter mentioned strategy. doesn’t

of outside a towards as a three-year have addressable several our as fold conference, large. I for materials, the becomes we look very market opportunity. market other increases investors metal expanding to our at addressable We recent and total maximize discussed very, And technology plan to

overall our including to to all subscribers added and XX content, Looking our our CRM leading our online track, that indicators suspects ahead, of rate. company the of the we visitors grow to and activity the multi-site website, sales almost measure month opportunities overall prospective deals, to accelerated pipeline, ability size an system, of the towards the basic at point number number and and

similar partners, In OEM are in excellent Our COVID summary, have of experiencing by the made we activity. levels way, progress XXXX. increased despite

will glad managing sales even that We their enter staffed questions ability team to field during has challenging capable multi-site to an have. of fully any and and expect Operator? to that With experienced proven you deals I management most the be with a might Frank momentum, answer times. team execute XXXX

comes [Operator of Buck first with Our the question from line Scott Instructions] Wainwright. H.C.

proceed your question. with You may

guys. Appreciate afternoon. on Hi. call all additional afternoon, this Good the detail the

welcome. quite You’re

more the Mark, provide hoping are So quarter was on most me, could seeing first pipeline. for Where I a maybe we you where color versus there? a little And bit are guys you momentum ago? the

month. to pipeline month The after continues grow

than it’s look but it’s January XX% it’s XXXX. would increased to measure was quarter, say QX, last bigger at going I QX. QX we So over into probably speaking, definitely precisely, compared And to always as generally of over that’s it increased difficult

at very a good So think looking I XXXX. we’re

from, As far we is seeing it as focused industries that it where on. we’re the vertical

saw and this in We had that see related You we activity see government Department more Energy type Department Defense continuing, type sales. we also related of exploration initiatives. of quarter, federal space of

see also especially by OEMs some We’re traction beginning in Europe have that hit with hard to COVID. our been

so helpful Frank, expect hiring like amount a stock OpEx but the kind I’m this quarter. this in little Great. during stock Mark. That’s was mean, not just on comp guidance, the to clear going come of really tied a kind bit sounds the comp And Should to fair of see one-time forward? we it I quarter’s color. of

Yes. was two Well, it’s it things. – is hiring. One the

is, it the year. this we grants to employees of in part second The of made annual August

second way the quarter XX% So the the vest that quarter the third a grant. on the date there’s make of we the and versus grants,

then made. period. level expense remainder vesting you the off have an is extra when of for the So do that it’ll grant And

that’s there. you’re seeing what So

answer down. that yes, your is, question to see So go you’ll

me. for one last Okay, perfect. And then

expect guys of those hires? sales top the the line And the what is recent guys? can on us up those ramp see process some from can for kind hires when quarter, contribution we On to during you remind the

Sure. from we lack the prototyping direct going And consistency hired are. all with they into from the the reason know many know to of points And economics pain relative printing. so experienced earlier, those familiar customer’s production. I the have point we’ve The or primary pain things quality. where the are. running and of quickly. very we’ve can point companies as customers get that a machines And and the to the people primary pain They’re is one where that relationship know up them discussed the two times, They metal mentioned industry. XD of They

these to up very XXXX the running at expect the we and be background experience and people of they So quickly of because beginning have. that

I the time guys. That's perfect, Mark. afternoon, appreciate this

You're Thanks welcome, Scott. for questions. the

[Operator Instructions] Management. Our of line next with comes question Roth Capital Martin the Ferret from

with proceed question. may your You

Hi, get you in in improved go about have blind, companies can't printer. you companies some And even good into don't go door? Apparently, for interest XD into that you the I'm you the wondering that are Do following. afternoon. thank communication. the you there find

have sure. started Companies a initiative that I'm XD not yet have that or not companies initiative? printing quite

Well, On than these them quality? think companies what is are that possibility let's lump a some needs larger of other together. there addressing are they words,

question plant multiple printers encounter software part if and quality really for or up than they're of things printers important about that system our in into they're higher to depends from part, part manufacturers, a means which type multi-printer they have and more location complex our simple one a has volume from using that their where they're the parts given very quality and isn't addresses. multiple them one manufacturer curve, and have to on more will worry producing basically that they're a If they That's And moving volumes, issues because producing. good or curve early very they're in printing. if the they making metal complexity the relative they expertise, relatively printer XD are their two they're

we're the the of our get if on compelling reason not that adoption a there technology the end side right-hand we aware they and, doors probably to utilization So curve adopt metal And any are – in. If on lower yet. have relative not they're they're they're interested printing, curve, problem. the cannot of and to of that their don't they're seldom XD of

Do in quality see printer their of you of part any you. offering manufacturers Thank the control as package?

Yes.

that many the All information the case, of of very separately manufacturers sell equivalent lasers to depending their even has. sell printer. which used And have predict when A to monitoring $XXX,XXX, price actionable machine $XXX,XXX to it's data number data, might because they a and lot type point the the do provide metal They provide not begin end major defect on in where ours, the system that of to of to XD defect. to our is happen. them they a identify but classify to printer the don't a user. analyzed in isn't It's

So system. they all have a monitoring

the and type that However, printer work they analytics they of only on their do seldom we provide provide.

you. Okay. Thank

welcome. You're

end Ladies Ruport and today's like Mark Mr. turn to for the this I would we gentlemen, reached session. back question-and-answer have call of to over closing remarks.

quarter the the shedding month, end the of Well, and I putting the and much. attention. on thank financials end I everybody's each was you know time. and today informative. – are appreciate was light at I those thought the that ask hope questions the appreciate I important context around context time I the some you at very this that we format of and it.

a at using need our looking accelerating and where is an from of that's for across acceptance growing, the metal industry where constituents seen are printing. is XD we're that forward, metal technology all Going the board studying pipeline printing the or XD either

you follow-up again we'll has time. or to hesitate any we'll myself Steven anybody any look be you speaking or forward please if answer MZ questions, for glad of at that, to questions. with or to the contact your And don't the quarter. to And Frank follow-on end So Thank Gersten.

today's concludes conference. This

disconnect Thank enjoy time. and day. your your this at the you may lines participation for of your You rest