Q2 2022 Advent Technologies Holdings Inc Earnings Call
Good morning, everyone I will be your conference operator today at this time I would like to welcome everyone to advent technologies second 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 doctors to Sylvie Gregoire, you advance chairman and CEO and Kevin Brackman advent CFO before.
Before we begin our prepared remarks, we would like to remind you that advent issued a press release announcing its second quarter 2022 financial results shortly before market open today.
You may access the materials on the Investor Relations section of the company's website Www Dot advent <unk> energy.
I'd also like to remind everyone that during the course of this conference call Advanced management will discuss forecast targets and other forward looking statements regarding the company's future customer orders in the company's business outlook that are intended to be covered by the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 for forward looking statements.
While these statements represent management's current expectations and projections about future results and performance as of today advent actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations. In addition to any risks highlighted during this call important factors that may affect advanced future results are described.
This most recent S. T. SEC reports filed with the Securities and Exchange Commission, including todays earnings press release Excel.
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 last.
Lastly, information discussed on this call concerning the company's industry competitive position in the market in which it operates is based on information from independent industry and research organizations. Other third party sources and management estimates management estimates are derived from publicly available information released by independent industry analysis.
Other third party resources as well as data from our company's internal research and are based on assumptions made upon reviewing such data and with knowledge of such industry in markets, which it believes to be reasonable.
These assumptions are subject to uncertainties and risks, which could cause results to differ materially from those expressed in the estimates.
Please note this call is being recorded.
Kicking off the call will be Doctor facility Gregorio Dr. Regard. Please go ahead.
Thank you Brad good morning to everyone listening in and thank you for joining us for <unk> second quarter.
Two earnings call.
Jonathan.
And CFO Kevin Bradley.
On today's call I will provide comments regarding our second quarter results.
Based on the business I will then hand over to Kevin.
You bet.
The financial performance and outlook in more detail.
Subsequent to my lock date on May 12.
Presented its inaugural Investor day.
Seven which provided a comprehensive review of our technology and commercial brokers. This event was very well attended and for those of you who can join me.
Our full recording is available towards through our website.
I've been here, the very exciting second quarter cash flow from the Greek state core funding of 782 boardwalk.
On the <unk> hydrogen technology for Oddbins approaches.
Notification from the Greek state incentives.
IPC I framework.
Subsequently ratified by the EU.
Jason.
Moved up to $5 4 billion Euro support by 15 member states into hydrogen technology.
He is also expected that this funding will unlock additional eight 8 billion euros and private.
These valued saying she has four key areas consistent with credits and generation fuel cell technology.
Transportation of distribution and end user technology.
Are those green keyboard encapsulates Diego proprietors.
<unk> fuel cell technology and examples of other companies in these areas include <unk> the joint venture between Blackbird underwritten all comics Macphee ahlstrom.
Oh boy.
Ross and Daimler trucks.
Ovens Green Cubo project was originally among five products out of the candidates from Greece for IPC I funded.
These five projects what are then subject to due diligence.
Vintages by Bu resolved and into projects been notified by the Greek state.
If it gets on the first wave of <unk>.
IPC Hudson Technology projects is a testament to the world class innovation that <unk> possesses and the commitment that recently, you ship and not been stability.
To deliver such an important project.
This cohort green shoot pool over the initial period of six years is to develop and manufacture fuel cell systems and electrolyze it system.
For cumulative capacity of one competent AC.
Mega Watts, or so and 1.5 gigawatts of Electrolyzed, there's over that time.
Production of these systems will take place in Greece in the region of Western Macedonia, which will become our focal point for technology development and mass production.
And my last update I mentioned that during this year, we will continue to consolidate our business to make operations.
It's more efficient and effective and to concentrate our global activities on our key sectors.
We have therefore bond that expertise and stationary power portable.
This has resulted in not been development specific because taking on the commercial expertise within these key sectors.
Clear vision has given rise to serious traction from global Oems, Therefore, augmenting our pipeline.
System sales will provide near term revenue.
Stationary power sector has therefore been targeting telecommunications and our portable sector has been targeted in the defense sector.
Product development in the defense sector is geared toward product groups such as reliability.
Partners were soft due to fuel source and power.
As a result these same factors have also made our portable product attractive to a multitude of non defense applications.
Our mobility airports are geared towards heavy duty vehicles marine and aviation.
While opportunities from the mobile sector are significant and they will likely emanate from longer term license agreements.
What is a parent is that are overlapping mixture of revenue streams would eventually in the wine and will contribute to both the Mike Booth and the strength of Badlands commercial truck.
We continue to have strong cash reserves totaling $46 $5 million at June 30.
Overall, our performance this quarter leaves us confident about the long term growth and earnings potential of the company.
In addition to the many people projects I mentioned earlier I will now give an overview of our kit shipments due to the court.
In April <unk>.
The signing of a technology assessment sales and development agreement.
Hi, <unk>.
Multinational automotive manufacturing offering a range of her work class vehicles, and mobility services and number 200 content.
Other issue diagram to deliver clean energy solutions to current high carbon applications using fuel cell technology.
Under this agreement <unk> will provide catalyst Watson for evaluation with adverse proprietary MBA.
<unk> intends to support him die in fulfilling its fuel cell project needs through development, Inc, and structure using that catalyst.
All of them, which they will determine whether one catalyst alternative standup cost on this will be used for the project.
In addition, Adam will support him die by supply not been EMEA throughout the development and commercialization cycle for testing and evaluation and optimization under conditions set by Hyundai and by assisting chugai, where they use and specifications of MBA AIDS as well as the implementation and the <unk> design.
Following the completion of the first thing.
First phase of the project.
<unk> will collaborate closely linked to set out specific requirements collaborative product goals and milestones for <unk> defined targets and plans for the second phase, which are low to include outbound starts cooling technology.
The I've been NBA to be tested by Hyundai are currently being developed within the framework of Liberum.
Later, Oddbins joint development program with a U S departmental vendors this Los Alamos National Laboratory.
National Laboratory and national renewable energy level.
The new App in EMEA is expected to redefine the EMEA market globally, and further validates <unk>, leading position in the electrochemical component business.
These are the most important components of a human cell has been greatly refined over four months lifetime weight and cost of the system.
Adam NBA operate at the temperature between 80 degrees Celsius to 240 degrees Celsius compared to the incumbent low temperature <unk>.
Technology, which is an aesthetic return operating temperature of below a 100 degrees.
The ability to operate the borgwarner degrees Celsius compared significantly.
Efficient kidney removal in heavy duty mobility applications.
<unk> been an idea at the closing track <unk>.
<unk> and marine applications.
Other than NBA can operate effectively with fuel cells as low fuels, such as low grade hydrogen, which can be reform onboard for methanol natural gas another renewable fuels.
EMEA also resilient to extreme temperature variations to immediately and air quality conditions.
As a further milestone broad mobility focus in May I've been announced the signing of the growth assessment agreement with another large global automotive manufacturer.
With a common goal of sustainability and the fastest began implementation of the U S automotive industry I've been supporting their efforts to advance innovative fuel cell technology is a sustainable and efficient option for achieving carbon trials.
More specifically under will provide assistance to supply an MBA for testing.
<unk> optimization.
<unk> support in EMEA operational parameter and sat and technical Knowhow for fuel cell stack for <unk>.
<unk> high temperature technology, and leveraging <unk> for advanced cooling systems.
One of the primary objective will be to conduct a detailed assessment of our bandwidth proprietary high temperature pump technology and EMEA for consideration for future opportunities.
Upon the successful execution of the first phase of the project.
<unk> will work with tablet a joint development agreement government specific product requirements goals milestones and plants that you have.
EMEA to be tested as part of this process are currently being developed again within the framework of the Illinois Basin.
In April <unk> announced that it received new orders for its proprietary NDA and sovereign power units a leader in auxiliary power systems and turbo jet engines.
Emea's are based on Nasdaq's proprietary high temperature Panther growth.
<unk> started in the first quarter of <unk>.
Bill and deliveries continue through the second quarter.
The Mbas will support soft ramp our system units RSV F <unk>.
<unk> technology has application across multiple industries, such as heavy duty automotive and aviation because again operated with almost any low carbon zero carbon fuels.
So from power units constantly innovate and develop new pilot human solutions.
Featuring high performance it with lower environmental footprint.
Footprint and operating costs are in line or niche expertise and hybridization and fuel cells.
I'm proud of units is a long term customer of <unk> have been tested and deployed augment state of the art the MBA and the variety of applications in the past.
And the export in the heart of the fuel cell and therefore, a month's determined the lifetime efficiency.
And to a large extent the final cost of the complete power delivery system.
In May <unk> participated in the European <unk> summit in Brussels.
This event was organized by the European Commission in cooperation with cadence in Europe and took place under the auspices of the European clean hydrogen alive.
<unk> for the entire market 30, <unk> CEO of <unk>, Europe , Europe into <unk> and 'twenty other Ceos and executives from the European Elektra Liza community method Sciences joined the collaboration establishing a clear goal of paving the way towards achieving the objectives of the Repowering Youll proposal.
Hydrogen accelerated this sets out the strategy to double the previous EU renewable hydrogen power to get to 10 million tons of vinyl domestic production and an additional 10 million pounds of annual hydrogen imports.
The joint Declaration Europe , leading manufacturer agreed to increase our manufacturing capacity in an effort to share by 2025.
Bind download Electra laser manufacturing capacity of $17 five gigawatts as well as to further increase the capacity by 2030 in line with projected demand for renewable and low carbohydrate.
The joint Declaration features the objective or regulatory framework access to financing and to supply chain integration.
In June <unk> announced the signing of an Mou with naphtha alliance and leading vehicles logistics provider.
Marine vessel.
All lines have not been have agreed to jointly conduct a pilot program to explore the application of a fuel cell based auxiliary power system.
This application.
By Neptune lines high experienced team, who will evaluate its performance as a sustainable source of power generation.
After devaluation states the parties will consider a broader collaboration.
Fuel cells are a reliable source of on demand parts interaction across various applications and industries, including symptom power generation and heavy duty mobility.
Fuel cells can deliver direct power without power loss from additional converters offer a substantial and high efficient solution.
Also in June <unk> announced the signing of an Mou with less guarded secret at announced ship management company based in Ireland.
Under the terms of the Mou loss Carryback cheapen another agreed to jointly conduct a pilot program with <unk> with supply less guarded secret with each set any new methanol powered Pulitzer.
Carey reception, we've installed the system some selected dry bulk vessels.
To assess the overall performance as auxiliary backup or magnetic power sources.
Following the successful completion of the pilot program loss carry recipient oven will collaborate on manufacturing best in that next generation of auto insurance.
This collaborative tested fuel cells are expected to be based on <unk> next generation MBA.
<unk> is a vertically integrated manufacturer its portfolio includes advanced high temperature <unk> sub systems covered a range from 25 watts from 90 kilowatts.
<unk> hundred biofuel sell deliver critical and reliable power and environmental friendly way, reducing carbon dioxide emissions and operate inside Lee, while Kevin a low impact on surrounding methanol as a carrier of hydrogen allow simpler storage such as scheduled and logistics compared to pure hydrogen and ahead with safety.
Aten has made very good progress over the last quarter as well as Kevin and a strong pipeline of opportunities or projects are very significant mix of goods alone is potentially transformation, we remain fully focused on commercializing our innovative technology.
With that I would like to turn it over to our CFO , Kevin Brackman Kevin.
Thank you Bill and good morning, everyone turning to our financials, we delivered revenue of $2 2 million in the second quarter compared to $1 million in the prior year quarter.
The increase primarily resulted from the businesses in Denmark, Germany, and the Philippines acquired by AD ban on August 31 2021.
Profit decreased 0.4 million year over year in the second quarter due to the mix of products and customers included in revenue.
Higher fixed cost base, resulting from the acquired businesses and supply chain cost pressure in the second quarter of 2022.
R&D expenses were $2 6 million in the second quarter, primarily related to internal R&D costs incurred in each of our businesses as well as our cooperative research and development agreement with the department of <unk> energy.
Administrative and selling expenses were $8 million in the second quarter, a year over year increase of $1 4 million, primarily due to increased staffing and costs, resulting from the acquisitions and from stock based compensation expenses.
Net loss totaled $11 1 million in the quarter and adjusted net loss was $10 9 million I should note that our adjusted net loss excludes a 0.2 million loss from the change in the fair value of outstanding warrants. Our net loss per share was 22 cents in the second quarter.
Okay.
Advent and remains well capitalized with $46 5 million in cash reserves on the balance sheet as of June .
Provides us with the flexibility to be agile and act.
T J can operational priorities. This is a decrease of $12 8 million from March 31 of 2020.
Driven by the increased level of R&D, and administrative and selling expenses as well as $2 $8 million of spending during the second quarter for the build out of our Hood Park R&D and manufacturing facility.
In the second half of 2022, we expect to receive approximately $5 million in tenant improvement allowances for the HUD Park facility.
Net of additional spending for the Delta.
Our existing cash reserves and projected cash flows are anticipated to be sufficient to support our planned operations for the next 12 months.
I will now turn to our outlook.
Advent develop significantly during 2021, and we entered 2022 with a more advanced product range and a dedicated technical sales team focused on key sectors and geographies. We therefore have a strong pipeline also in mid June the company announced the successful notification.
From the Greek state for funding of $782 1 million Euro for advanced screen Hippo project, which was subsequently ratified by the EU.
As we all know not every opportunity in the pipeline will transpire due to factors that may be beyond advanced control.
And these may not materialize or it could be delayed due to the long term contract nature of our business model and the timing of our revenue can also be difficult to predict.
<unk> global inflationary pressures and economic conditions, we have recently been experiencing some delays from our customers in the Philippines for a fuel cell systems and their installation.
Notwithstanding this our pipeline is robust and together with year one of the Green Hippo funding expected later in 2022, we expect to exceed our previous estimate of $23 million for the year from the total of revenue and grant income.
In closing, we believe that advent is well positioned to be the provider of clean energy solutions across a variety of end markets company.
Company has built a solid foundation for the business and continues to execute on our strategic initiatives.
With that I will hand back to the silly for closing remarks.
Thank you, Kevin <unk> significant portfolio of technology, and commercial strength, allowing us to compete and be successful at the global level.
Many people will be transformational horizon, and green key points for the long term.
During and beyond the initial six year development of production timeframe, we're aiming for significant revenue growth.
Greenkeeper will cement, our food hall, and the global liquor laser market and fuel cell market.
In parallel admin is pursuing a visible and defined path towards key and significant sector.
<unk> is a clean energy technology company by innovative development state of the art technology, we will leverage from this bank to generate commercial products and provide attractive technologies transition through partnerships with Oems.
I would like to thank you all for joining us today, and we're now ready to answer your questions. Thank you very much.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad to remove yourself from the queue Press Star one again, and we will pause just a moment.
Once again as a reminder that is star one.
And at this time, we have no questions that does conclude today's conference call. Thank you for your participation you may now disconnect.
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