Q1 2021 Advent Technologies Holdings Inc Earnings Call
And excuse me, ladies and gentlemen. This is the operator today's conference is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.
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Good morning, everyone I will be your conference operator today at this time I would like to welcome everyone to the advent technologies first quarter earnings Conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session on the call. Today, we are joined by Dr. The silly, Yes, Google, where you and Vince Chairman and CEO, and Bill Hunter and Vince President and CFO before we begin the prepared remarks, we would like to remind you that had been issued a press release announcing its first quarter.
'twenty 'twenty 1 financial results shortly before market close today, you may access immaterial on Investor Relations section.
I R dot advent that energy.
And also like to remind everyone that during the course of this conference call and this management will discuss forecast targets and other forward looking statements regarding the company's future.
Customer orders and the company's business outlook that are intended to be covered by D.
Yeah.
The safe Harbor provisions other private securities will get it.
Litigations Reform Act of 1995 for forward looking statements.
While these statements represent management's current expectations and the predictions about future results and performance is as of today Atkins and actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expected in addition to anyways.
During these this call and important factors that may affect and against future results are discussed and his most recent S. E. C report filed with the Securities and Exchange Commission, including todays earnings press release.
Except as required by applicable law. The company undertakes no obligation to update any of these forward looking statements for any reason after the date of this call and lastly information discussed on this call concerning the company's industry competitive position and the market and which it operates.
Is based on information from independent industries and research organizations other third party resources and management estimates.
Management estimates are derived from publicly available information released by independent industry analysis, and other third quarter third party resources as well as data for them companies internal research and are based on assumptions made upon review and such data and this experience and.
And knowledge of such industry and markets, which believes to be reasonable.
These assumptions are subject to uncertainties and risks, which could cause results to differ materially from those expressed and the estimates.
Please note that this call is being recorded kicking off the call will be doctor for seal Heraeus book.
Gary Your Doctor for Gary You I will now turn the call over to you.
Thank you.
Good morning, everyone and thank you for joining us and our first question here.
And it's called.
And I'm excited and tell you about the storm quarter, followed by an update and that business and execution to date.
And without tearing things overdrive, and I see a probe and Honda drop day, you are in good financial performance and business outlook.
Public company, we're moving forward and there have been paid for.
Are you getting out and tied them to Japan for all banks to new and existing markets.
And from the mandates from our business remains strong and the broker and felt that pink has made over the last 3 months is truly remarkable.
And the first quarter would deliver 1 point for $9 million and ready to go.
Well actually I Dubai revenue per for months weighted founding 82006, and 52 U S dollars for all of fiscal year, 'twenty, and 'twenty and driven by a strong pipeline of new business and increased demand our growth sectors.
Continuous accounts don't guarantee reserves totaling 124 for $97 million or corridor and for.
For those perhaps new to the business, let me provide you with a bit more background on who Adler and news and why this business is so compelling.
Today, I think technologies, using our advanced materials and technology development and operating the fuel cell and hydrogen technology space advent develops manufactures and assemblies and agreed about components that would determine the third for months for cod dates.
And fueling sales and other energy systems advent score product called for it is a member and electronic assembly and be a at the center for the future and the other 98, which derives its keep benefits from the Barclays of advent into native membrane technology and.
And <unk> and moral bonds and longer lasting and ultimately lower cost for you and cell product and be able credit enbridge adventure and sells it to fulfill the promise of any fuel anywhere.
And they allow for <unk> and renewable methanol ammonia airplanes do around and that Nathan Nathan and hydrogen and known for great power generators to work with any green shoots that is easily transportable toured and Margaret actions.
And to use any hydrogen and fuel and addition to for hydrogen is a major breakthrough and reducing the required infrastructure investments.
Our performance and the first quarter continues to demonstrate that we are witnessing growing interest our growth investors, who had numbers and penfield and some technology, we have seen tremendous growth and growing public catch Fedex pent up our growth vindicated non abroad and shows that we have the right technology to win and this industry.
Last February we closed the business combination with NCI acquisition Corporation and became public listing on NASDAQ under the ticker symbol a D and since our public and listen we kept successfully continued our efforts to grow I'd men's business and expand our revenue streams.
Notably on February 10th 1991, like wired into Us and L. L. C. The fuel cell business will bring therapeutics, Inc, or non disclose and mom. This transaction remains critical and bringing attune foods stack and system business broaden its product portfolio.
This is 1 of the best examples of how we're executing on our goal for high temperature fuel cell market.
And as the leader and producing lightweight cutting edge fuel cell stacks and systems for the portable market and their current technology and validates advent key and retool anywhere strategy.
We look for some technology and use pure hydrogen or other hydrogen and bearing liquid fuels ready for.
For Maxim process to deliver reliable power at a fraction of the weight of either lithium iron ore lead acid batteries. In addition, the system had been deploying and stringent and challenging condition and climate from the planet with excellent performance.
And arc of neutrophil acquisition I've been build upon its leadership and small portable stacks and leverages the technology.
And the additional interest is by building lightweight fuel cells with high performance and resilience. This continues to position mastered a true leader and the lightweight starts and fuel and subject to business as well as Ed and considerable technical and engineering talent to our growing fee.
The combination of wideband Blessed with Russell allows us to consolidate our position as the lead there and the high temperature fuel cells.
For years and he's also build up a strong relationship with collaborations with government and public organizations and our first quarter and the public company is only container and explain to them would be strength and.
For the past month, we're now and so the U S Department of energy selected Admins wearable fuel cell for the deal. These 2021 validation program. These announcements stated that ultra since 51 reported met him and wearable.
And power system also known as Connie Badger has been selected by the U S Department of Defense's National Defense Center for energy and environment and D. C to take part and its demonstration and while investment program for 2020.1.
N D C. If a deal would be program that addresses high priority and environmental share.
Basically when conventional shelf and netted the technological challenges that they have demonstrated and validated attractive installations for military application with real time and bonds or 52, and Charlie the only for human cells and this.
Is this part of this program, which supports the U S Army swollen and cabin and technology enabled force by 2028.
The portable honey Badger is breaking new ground in several areas boost for.
For the renewable energy transition and <unk>.
And moving them away from pollute and generators and disposable primary batteries and most.
Most importantly, I liked generators with Nox is exhaust the handbag the system can be used indoors or operating a painful and soldier weiland and more.
We all sat there and doing a joint development agreement with the United States Department of energy.
Los Alamos National Laboratory, Brocade, and National Laboratory, and Max other renewable lenders elaborate on it.
And their lease agreement and with the support of the deal needs and hydrogen and fuel cell technologies office. Other people have signed this will work closely with EPS land B and men and NRL counterparts over the coming years to develop breakthrough my theory outside and we kept strengthen U S manufacturing and the Pulitzer and sector and bring.
High temperature probe and exchange membrane high temperature fuel cells for the market to.
And the advantage war, we recently secured new sites for both our headquarters in downtown Boston, and non R&D and manufacturing facility at Hoot, Parker, and Charlestown and mass with a lot there, allowing us to accelerate product development and research make the interaction and their initiatives, including high temperature and pure in cell technology for their commodity.
And this facility is being cash flow build as a product development and manufacturing center.
We're also thrilled that advent is now a member of the fuel cell and hydrogen Energy Association and.
F C. A T E is a national trade Association and the U S, representing leading combination of Grand possession of their advanced and innovative clean safe and reliable energy technologies and solutions. The emission of F. C. H E used to advance the commercialization of it for.
Oh and promote the markets for fuel cells and hydrogen economy.
And we look forward for and accelerate the energy transition to the U S and we remain committed to likely be playing a role and the compromise and the warm last month, we welcomed president and Joe Biden, and American jobs plan, including its articulation of deep and support for clean energy and stated goal and 100 per sampling power by 2035.
Our technologies will be essential for realizing this goal and we look forward for the future and continual private and public sector to join Netflix and <unk>.
Interest in fuel cell technology.
The transformation of energy products from 1 based on existing book.
And feel that ignores the day cleaner and Youll book is critical to not go into the future of rods and I'll do it.
Future of our planet without I'd like to turn it over to our CFO and <unk> hundred.
Thank you for Sally and welcome everyone to our first quarter call.
First I'd like to make a couple of comments about.
The restatement, you might've seen yesterday and our delay our announcement that we employ our filings.
The SEC staff statement that was issued by the SEC on April 12, 2021, and foreign market participants that warrants issued by Spacs and farmers facts may need to be very classified as liabilities with noncash fair value adjustments recorded in the earnings at each reporting period.
The FCC focused on a couple of particular provisions and the war and agreements and guided that such provisions would preclude the warrants from being classified as equity and that's some warrants should be reclassified should be classified as a liability.
As a result, and this FCC staff statement the company revalued, its accounting treatment and the company's public warrants and the private placement warrants both on day to the business combination as well as the prior periods and 12.31, 'twenty and 12.31 19. Accordingly, you can see with all the restatement and classified both Republican private placement warrants its liabilities for the prior peer.
However, and our analysis of the warrants post closing of the business combination and on a go forward basis, we have determined that due to now having a single class of common stock the public warm it warrants will be classified as equity for future reporting periods and the private placement warrants together with the working capital warrants issued at the consummation of the business combination will continue and.
Classified as liability and market their fair value.
More details can be it can be found and our amended 10-K that we filed earlier.
Now on to the more fun stuff and so.
And so I noted earlier, we delivered revenues of 1 point for 9 million and the first quarter 2020, 1 which is a 13 fold increase to our revenues for the first quarter of 2020, and addition, I would point out that adds and its first quarter, which is historically its slowest.
We exceeded our revenues for all of fiscal year 2020, and was primarily the result of increased demand for our products, which includes we saw increased demand for our high temperature and proton exchange membrane based fuel cell materials we.
And we saw increased demand for our redux flow battery components, we saw increased shipments of our internet of things sensors business.
And in addition.
Our ultrasound business was a solid contributor and the first quarter.
We reported gross profit of 1.14 million and the quarter.
Which is also a significant increase compared to the gross profits of <unk>.
Oh 3 million and the first quarter of 2020, driven primarily by higher revenues and a favorable business mix favorable sales and business mix in the quarter.
As it remains very well capitalized with $124.97 million cash from the balance sheet, which will allow us the flexibility to continue to execute on the strategic and operational priorities that we've set for it.
The company expects the balance of the year to remain strong and it continues to receive interest and demand for its existing edits developing technology.
Finally, we reported net income of $2.91 million and the quarter and and adjusted net loss of right and $1 million point and $99 million and the court. Our net income for <unk> per share was 8 cents a quarter, which also reflects the change.
Change and warrant liability.
Turning to our outlook, we're affirming our previously issued full year 'twenty 'twenty, 1 guidance of investing between $25 million and $40 million and combined capex and operating expenses.
To develop our next generation fuel cell products and expand our business.
We continue to plan, we continue to plan on utilizing between 15% and $30 million on a net cash basis, which includes our own current revenue projections for existing products.
We continue to anticipate entering 2022, and a very strong position with a significant portion of our current cash proceeds and a liquidity position that will allow us to fund ourselves for this foreseeable future.
While we do not provide quarterly guidance I'd like to note again that the second half of the year is historically stronger for our business and the first half and we see that our strong trend continuing through 2020.1.
Just to close my part.
We would have and are well positioned for the future and we're looking forward to a strong 2020 wanted to be honest, so I'll turn it back over to Mr. <unk> for some closing remarks.
And thank you Ben and summary, we believe that our high temperature of fuel cell technology will really become a part of the amazing hydrogen and calling them and meet the government decarbonization goals.
A proven business model and and technology that we believe represent the missing piece and pinching fuel sales and a bunch of materials and this will benefit all government stakeholders. This remains the critical missions and multi based the entire advent team can not only advance our critical technology for to execute our vision and responsibly and efficiently and everything we do.
We believe that our success today and that's the beginning and we continue our mission to become a leading provider for fuel cell technology and helping to enable the hydrogen mcallen and I want to thank you all for joining extra day and now we're ready to answer your questions. Thank you very much.
And as a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound or hash key please standby, while we compile the Q&A roster.
And your first question comes from the line of Laurence Alexander with Jefferies.
Good morning.
I guess can we start with could you give a sense for your order pipeline or backlogs for the internet of things sensors business and for your battery materials business.
And what that implies for the seasonal cadence this year.
Yeah, Hey, Laurence it's Bill how are you I think you know for our Internet of things business I mean, I think you are.
We spent a fair bit of time and me at.
And at the end of the year talking about that we.
Got a contract debt.
It goes through the and you know goes for the end of the year and it's pretty pretty stable. So it's a pretty.
Okay.
And straight line straight line shot.
And I can't I don't think we can disclose the full number but.
Suffice to say.
And it's us.
Baked into the projections that we had at year end and that are filed and our and our statements.
With respect to the rest of the backlog.
<unk> continues to build with the existing customers that we talked about.
And our previous and our previous disclosure.
And then related to that how is it how does the landscape look for layering and new customers or.
Larger lumpier contracts that were outside kind of your original plans I mean is it the.
As the contracts right now that you're sort of.
Operating within the boundaries of where the trajectory that you had previously laid out for us the opportunity set expanding.
I'll, let missile and expand upon that but I'd say, it's expanding 1 of the things that I'll touch on that and that's always comments.
After.
After getting the business combination done and we have seen a tremendous amount of interest from.
And you know both large companies and and you know leaders and the AR and the industry to us to work with us. So I would say and added up and again I'll, let him talk about but I'm and I've been pleasantly surprised that the cadence of.
Of conversations.
Yeah, and I cannot do that bill and the eye.
Yeah here is and you just said by being public immediately the index came up and people actually found that there is a technology out there and what's called high temperature from.
But she is existing.
Existing customers and mobile and upgrade application and it's really a very compelling.
For position for the difficult stuff, which is the automotive and.
And so the interest can be tremendous and work and a lot of conversations and I think there's going to be pleasant surprises and all of us lay down in 'twenty 1.
But.
I think that the whole industry. If you will know is dry and it's becoming more mature and also because we have different propositions and I'm, not saying not vendors and all the proposition to the contrary and everybody from outside.
Smaller group, if you will the companies that they do pure sales.
They were looking at the check growth.
And really do a very good day dealing and secure with the brand and generics and I wish him all the difficult questions and batteries.
Tech.
Because I believe.
Talk for the entire IBM team here, we have a very good book position for the longer and we get a lot of vendors.
Okay.
The other thing.
Oh go ahead launched good no go ahead go ahead.
And we're just going to say you know as a demonstration of the you know the cadence that we're seeing we announced yesterday, we've been you know.
We were included and this white Dragon program that the silicon and talk about it a lot more.
If you're interested but I think thats something that well you know it was like was on our radar screen.
You know it was really really helped out by the fact that we've now.
Got both the visibility and the financial wherewithal to be able to compete and a program like that.
And then I guess, just lastly can you give a sense for your appetite for further bolt on acquisitions.
I mean look where are you now or let the Philly China as well, but you know look we're a leader in this space So I.
I would say you know, we're we're gonna be looking at all of our strategic options.
Great. Thanks very much.
Thanks, a lot.
And your next question comes from the line of Adam for site with Longs for research.
And hi, everybody and.
Just 3 questions from me just firstly on costs.
And it looks like and sort of sort of quarterly figure.
And the transaction cost for us at just over about $2 million, which would feel to be below the sort of full year run rate. How do you see that accelerating going forward is it going to be more of a second half story.
Or should we expect to see that sort of if rates ticking up and in the next quarter and.
Related to that how are you seeing hiring are you finding it easy to find the skills you need or is it getting challenging it's a hydrogen economy grows.
And also just wanted to follow up and the last question around Iot and <unk> seen the statement, you're referring to the sales. The revenue there essentially was engineering fees does that explain the flat rate nature Bill that you sort of spoke to there and on the answering that question and when would you if that's right when we would you.
We expect to see and sort of more volume related sales pick up.
And then just finally.
And on Tuesdays IEA roadmap report, which I think is pretty significant for the industry I think it's really interesting to see.
Lot of talk about hydrogen carrier fuels in that report.
Surprised me a little bit how far I actually went in terms of ammonia for shipping and I Wonder if that is particularly an area you've looked at and whether you see that as an opportunity here and beginning to have discussions from that area. I think I think a new and fast shipping and maybe a little bit more cautious around for automotive, particularly in shipping.
So bill you're going to start and I can like the net yeah, Adam Let me, let me try to unpack.
And with respect to the costs.
I think you'll start to see it.
Amp up and the second quarter a bit.
But it certainly is going to be a back half of the year I think our R.
Our cost for low again, primarily due to the business mix and which I'll address your second issue.
And on our Iot business. So those are shipments.
And that's.
That's.
Our Iot and relax flow battery businesses.
Very good business for us so.
But you should see I think you would anticipate that you know from our from our previous forecast the costs will pick up.
Yep Yep.
So I think that's that I'm trying to think of.
And on recruitment around.
The cost actually getting them.
And right people yeah, Yeah, I can take that a bad thing and I've done and Youre right. I think this is 1 of the challenges for us as a management.
And we want to grow and under control and I do their whole idea even.
No.
And to do something just because we have the money and we're trying to do things and and <unk>.
And I'm not kidding.
Because we know this is a long term thing and now we've built the foundation, okay in 2020, 1 and another 2 to become the company that we want and the years to come and the quarters to come. So do we have different jurisdictions, which means differ and Hyatt and profiles, but I think what we've said and the bigger.
And it helps us very well be in the public comment and being a NASA and called by now.
I have a completely different prestige if you will so people and I'm very happy to join.
Looking at the at the lungs from.
Strength of Docomo ne and.
And we try to optimize you know, we recruited and California, we recruited Boston and Weird group in Europe, but and the end of the day, we're 1 call by name.
Going to become a global.
Green energy from our global Channel Telecom Bye Nick is there. So it is I responsibly and if you will of the management to integrate as much as possible as fast as possible. So actually our experience has been good and I would say excellent and are we.
We are and you would have grown a lot and then you'll see the numbers and we will keep on growing but will grow under control and I'm very pleased about that.
Great.
And the ammonia.
Yeah, correct and you hear about for Nellix and <unk>.
And B the big vessels all day.
And it it is the most difficult thing for us because you'll telecom and there I would say because keep in mind. We started from the smaller you know mobile and we bought a grid that would go out to the car ideation and then is this ship.
I think the answer will be what kind of a purely will pretty brain and then we'll see the solution. So will it be on 1 day or will it be Mcdonald.
And I do believe that it will be 1 of the stool are and we will and we will be there as you know with Massimo to word of that.
Right.
And exploring and are more nellix or is it purely it has its pluses and minuses and no. It doesn't go away and cardboard and by kids or their stuff. So it is a global left for the bad as well, Okay, and and we're very closely but I think.
And it's still in its infancy.
And then the use of pure sales, but the the call. If you win sector will grow and our opinion and very fast.
And because of the regulation and because the minute you know the big companies come in and.
And the acceleration will be much much faster than we expect so we're very close to the sector and we're looking very closely.
Great. Thanks.
Thank you.
And as a reminder, if you would like to ask a question simply press Star then the number 1 on your telephone keypad.
And at this time there are no further audio questions I will now turn the conference back over to Dr. <unk>.
And the GOR or you for closing remarks.
Okay.
And again I want to thank you for being here at work.
And we're open to question and it says and as I said and another car load. So we are a tech company. So our strength is our technology and the more the better progress.
We make more people want to use it and and that's what we cared for and we have the I don't know.
And also sites available to draw and several quarters and we're looking forward to.
And to keep this discussion so and thank you very much for being here today and I want to thank God and so the advent and for all the hard work and these past few months have been and.
And incredible experience for all the laughs, but so firewall for me too.
And with the effort and the outcome. Thank you.
And thank you this concludes.
Today's conference call.
And thank you for your participation you may now disconnect.
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