Q1 2021 BioHiTech Global Inc Earnings Call

[music].

Ladies and gentlemen, thank you for standing by.

Good afternoon, and welcome to the bio high Tech Global first quarter, 'twenty, 'twenty, one and financial results and corporate update conference call.

At this time, all participants are on listen only mode.

And so this call advised that the audio of this conference is being broadcast live over the Internet is also being recorded for playback purposes and what.

A replay of this call will be available approximately one hour. After the end of the call today through August 17th 2020 I want.

I would now turn the conference over to Scott Gordon, President and acquire or buy a hijacked Global's Investor Relations firm. Please go ahead Sir.

Right.

Yeah.

Thank you Keith good afternoon, everyone and thank you for participating in today's conference call joining.

Joining me from bio High Tech Global leadership team are Tony Fuller, Chief Executive Officer and <unk>.

Brian Essman, Chief Financial Officer.

During this call management will be making forward looking statements, including statements that address bio high tech global expectations for future performance or operational results forward.

Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements for more information about these risks. Please refer to the risk factors described and <unk>. Most recently filed periodic reports on form 10-K, its 10-Q filed with the SEC today May 17.

2021, and <unk> press release that accompanies this call, particularly the cautionary statements in it for <unk>.

On this call contains time sensitive information that is accurate only as of today may 17, 2020 weren't except as required by law by a high tech disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call. It is now my pleasure to turn the call.

All over to CEO, Tony for Tony. Please go ahead.

Thanks, Scott and good afternoon to everyone on the call I welcome you to bio hijacked global first quarter 2021 financial results and corporate update call.

We have maintained the momentum from 2020 and continue to drive our efforts to grow revenue and reduce expenses across both of our complementary waste solutions.

Our first quarter revenue of over $3 million surpassed our fourth quarter by 21%.

Marking a new quarterly record high since bio Hacek became public in 2015.

This was largely driven by continued growth and digest your revenues as a result of the equipment purchases by Carnival Corporation.

Revenues from equipment sales were $2.3 million and increase of 602% over the first quarter of 'twenty, and 'twenty and 37% over the fourth quarter of 2020.

We also lowered our SG&A expenses and loss from operations as a percentage of revenue in the quarter by a significant margin.

During the first quarter, the operating loss was $1.3 million, which represents a one point so a reduction of one $7 million as compared to the fourth quarter in 2020.

We are encouraged by these results and remain confident and our approach to executing on our operating and growth plans.

We continue to be encouraged with the expansion of our contract with Carnival Corporation, the world's largest cruise company.

And are pleased to report that since we last updated we've received additional orders totaling approximately $2 $3 million.

We're actively pursuing others and the maritime industry and beyond.

Companies, whom we believe share our goals of reducing food waste and responsibly disposing of the food that ends up and waste streams.

The value proposition of our Revolution series Digesters to the diverse array of industries. We are targeting can result in a substantial reduction in cost by eliminating the transportation and logistics expense associated with food waste disposal.

And the greenhouse gas is associated with food waste transportation and decomposition and landfills.

That had been late to climate change are reduced.

Our digester data analytics platform provides real time waste transparency, which attach the problem with food waste and at inception.

Our clients continue to realize the strong value that our products and services offer we.

We are confident that our efforts to expand into additional industries are on track to yield results in the coming quarters.

Our business development and sales efforts continue and health care grocery stores government and universities, where our products gain traction in 2020.

Yes.

Turning now to our <unk> facility revenues during the first quarter of 2021 for $353000.

A decrease of 138000 versus the comparable period in 2020. This was offset by a decrease in expenses of 135000 as compared to the comparable period in 2020.

Our capabilities to process, both municipal waste and plastic that are no longer able to be recycled serve a crucial function for communities.

Taking that which was destined for landfill and converting it into and EPA recognized renewable fuel.

We are currently exploring additional uses for our fuel.

Such as fuel for gasification and as the feedstock for Bioplastics what.

What we have learned is that we make a very good fuel.

With a consistent btu value, which opens many opportunities for additional uses and future growth.

And you can see our commitment to innovation and the development of alternative uses for our renewable fuel continues to grow and.

And as a key component of our growth strategy in 2020 one.

We are pleased with our continued efforts along these lines as we broaden the uses for our renewable fuel.

Yeah.

We're seeing an uptick and interest and the plant. We are regularly approached the stakeholders to understand how our technology could serve their community needs.

We believe our prospects for growth remains strong and we're excited as we look to the future and to the construction and operation of additional <unk> facilities.

And with that I'll now turn the call over to Brian Our CFO, who will review our financial results for the first quarter, Bryan Thanks, Tony and Hello, everyone and.

The financial results for the first quarter ended March 31, 2020 one and.

The company continued to grow and the quarter ended March 31, and 2021 with total revenues of 3 million, increasing 21% over the fourth quarter of 'twenty, and 'twenty and 124% over the comparative first quarter of 2020.

Total revenues of 3 million Mark as Tony had mentioned a new high quarterly highs since the company went public in 2015.

The overall contribution rate revenues less direct costs increased to 29% and the first quarter of 2021 as compared to 20% and the fourth quarter of 'twenty, and 'twenty and 10% and the comparative first quarter of 2020.

Selling general and administrative expenses as a percentage of revenue decreased to 54% and the first quarter of 2021 as compared to 115% and the fourth quarter of 2020 and 141 for sensors and the comparative first quarter of 2020.

The loss from operations as a percentage of revenue decreased to 42% and the first quarter of 2021.

As compared to 120% and the fourth quarter of 2020, and 176% and the comparative first quarter of 2020.

The company continues to achieve gross and digester and corporate line of business that has most recently been driven by sales for Carnival cruise lines, such that the first quarter operating loss was driven down to $184000 from $1 million during the fourth quarter of 2020.

And $1 3 million during the comparative first quarter for 2020.

During the first quarter of 2021, the Hebei facility.

Revenue was 353000, a decrease of 138000, which was offset by 135000 and.

And direct costs as compared to the fourth quarter and 2020.

The decrease in revenues of $1 42 was partially offset by a decrease of 116000 and direct cost the.

The company has been hindered and growth at the Hebei on plant in Martinsburg, West, Virginia, resulting from mechanical challenges during 2020 and constraints on our primary solid fuel.

Customers' ability to accept fuel due to its closure, resulting from COVID-19, and subsequent re firing difficulties update kiln that have only recently been partially resolved.

And each of the current sequential and comparative quarters. There has been a negative contribution which when combined with other operating expenses resulted in a loss operating loss of $1 1 million too.

$2 million and $1 1 million during the first quarter of 2021.

Fourth quarter of 2020, and the first quarter of 2020, respectively.

For the three months ended March 31, 2021, the company had a consolidated net loss of $2 3 million incurred a consolidated loss from operations of $1 3 million and used net cash and consolidated operating activities of 1.9.

At March 31, 2021, unrestricted cash was $7 3 million.

I will now turn the call back over to Tony before we turn the call back over to the operator.

Thank you Brian.

Before I turn the call over to questions.

I would like to thank our entire dedicated team.

We drive our accomplishments with the deep sense of pride and determination.

We would also like to thank our investors for entrusting a portion of their investment dollars and our company and the causes we pursue.

And closing.

I reflect upon the 510 and twist valves and our year end review and our progress on each and the first quarter.

We achieved record revenue, while reducing expenses.

We have progressed and improving operations at the plant.

We are communicating with intention and.

And we have grown our team through a singular vision to achieve our mission and our capabilities.

Operator, please open the call to questions.

Yes. Thank you for Q1 and I'll begin the question and answer session.

And I ask a question you May Press Star then one on your Touchtone phone.

We are using a speakerphone please pick up your handset before pressing on the keys to try your question. Please press Star then two.

At this time and we'll pause momentarily just have other roster.

Oh.

Yes.

And the first question comes from Joel Marcus with network one financial.

Okay Yeah.

Hi, guys congratulations on a really.

And as seen quarter.

Please.

I really don't have so much of a question as I just like to add a comment.

I've been registered for way over 50 years.

And.

During that time.

And involved and many small cap companies are.

Management of this company.

Really.

And is truly truly excellent.

I know, Brian and Tony our.

Fabulous.

I believe in them.

I want to complement them.

And I really really believe.

That they will make this company a huge success and the coming quarters and the coming.

Yes, so for anyone who might be new to this new to the conference up and involved with this for a couple of years through ups and downs and I just want to express that as a quote unquote old timer and this industry I really have rarely if ever.

Management and is capable and is good.

As for the management of this company is blessed with so thank you guys keep up the good work and I really look forward to the future.

Joel.

Thank you for that I will tell you that.

It's probably more than Brian and I deserve, but we're so proud to represent this team here is working on these causes which as I've said in the script or causes that we are pursuing and we commit to all of you.

You know our utmost effort and getting that done it is a joy and a privilege to work with this team and we are truly truly excited about what the future can hold.

Okay. Thank you and once again. Please press Star then one if you'd like to ask a question on my comment.

And the next question comes from Edward Woo with ascend on capital.

Okay.

Please go ahead Mr. Willey Your line is live.

Oh, yes. Thank you for taking my question have you noticed any change and the competitive environment do you feel that that's on.

You cannot be on possibly challenged or is it really more on just taking time to kind of work through this pandemic as companies kind of get back to normal and figure out their ongoing business plan.

Yeah, I can alright, thanks for the question.

I personally would tell you that this has always been a strong competitive environment.

When I look at what we've all been through the past year I think it I think and Thats just takes a little bit I think anybody that's answering that question honestly would say, we are and a time now where and customers who were impacted and getting back and business where.

And at a time now that will represent possibly inflection points as far as opportunities to grow business and expand your business.

But I'd also tell you we welcome that competition.

So from a competitive environment perspective.

We're really excited by the opportunities that we see and we are excited by the opportunity to compete.

And it always makes you better.

And we're committed.

Committed to getting better and to capturing these opportunities it is super encouraging.

Super encouraging to see the way business is coming back and to understand that these sectors and these some of these small businesses have been impacted in the past year are now back and operating again and beginning to operate at higher levels, but you know the thing that they have to.

And figure out and we had to figure out with them is do we compete the same way what is the customer going to demand a view if youre on operator from a cleanliness perspective, how are you going to do with environmental issues.

Clearly I think it's fair to say and fair to believe that the consumer today is more focused on that than they have ever been that the environment and the marketplace is more open today to the top of environmental solutions that we and others have and.

And where we're happy to compete as we saw some of these big problems that face to grow so.

And hopefully that answered your question if not follow up okay.

That does answer my question for Thank you. My last question is more of a.

Has there been any significant issues with your supply chain inflation or shortages on component or just any other potential issues I know you are.

And arent as effective for you.

On your plan, but maybe on your Digesters.

Yeah.

Lots of people, having lots of issues with supply chain today.

I would not tell you that we have experienced significant issues with our supply chain and there are isolated incidents and what we've done.

Good day, Bob George and our team that Manny.

And that part of our business have done a great job getting out in front of that.

We worked hard on the supply chain all of last year.

We're going to have.

We're going to have issues on occasion, where certain.

Certain suppliers every company does from.

From a pricing standpoint.

I think that.

We're seeing some pressure on pricing, but it has not been such that it causes us great concern because simply the volume.

The production that we've been able to enjoy we've been able to ride that out I think that that's going to be a question that we all have to deal within the in the coming years I won't say this this year as Martin because we're pretty well locked in but when you look at the business environment going forward, yeah, who's not talking about inflationary pressure.

<unk>.

Great. Thank you for answering my questions and I wish you guys. Good luck.

Thank you.

Thank you and.

And this concludes our question and answer session I would like to turn the conference back over to Tony a follow on for any closing remarks.

Yes.

Yeah, and I want to I want to thank you all.

For being a part of this today.

I have lost my notes as to exactly how it was going to wrap this up but I do I truly we're grateful for the participation of our shareholders and the opportunity to share our results with each of them and so I have a great day. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.