Q4 2022 Advent Technologies Holdings Inc Earnings Call
Good morning, everyone I will be your conference operator today at this time.
Fine I would like to welcome everyone to advent technologies fourth 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. If he would like to ask a question at that time simply press star followed by the number one on your telephone keypad. If he would like to withdraw your question again press Star one.
On the call today, we are joined by a Doctor Vasili Gregorio advanced Chairman and CEO and Kevin Brackman advent CFO before.
Before we begin our prepared remarks, we would like to remind you that had been issued a press release announcing its fourth quarter 2022 financial results shortly before market open today you.
You may access the materials on the Investor Relations section of the company's website Www Dot advent dot energy.
I would also like to remind everyone that during the course of this conference call and bench management will discuss forecasts targets and other forward looking statements regarding the company's future customer orders and the Companys business outlook that are intended to be covered by the safe Harbor provisions of the private.
Securities Litigation Reform Act of 1995 or forward looking statements.
While these statements represent management's current expectations and projections about future results and performance as of today advanced actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations.
In addition, 20 risks highlighted during this call important factors that may affect advanced future results are described in its reports filed with the United States 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.
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 are there third party sources and management estimates.
Management estimates are just right from publicly available information released by independent industry analysis, and other third party resources as well as data from the Companys internal research and are based on assumptions made upon reviewing such data and with knowledge of such industry end markets, which it bill.
Pleased 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 that this call is being recorded.
Kicking off the call will be Dr. Vasili Gregorio Dr. Gregorio I'll now turn it over to you.
Thank you operator, and good morning to everyone listening in and thank you for joining us on Adventist fourth quarter 2022 earnings call.
On today's call I will provide an update on the business.
Then turn it over to Kevin who will give a review of our financial performance.
It is clear that the energy transition is underway and while the sustainability has always been for most of the eastern branded security is also now from the <unk>.
Nation of sustainability and then its secured they just provided.
<unk> been point for the clean Energy fund.
In particular, the increasing support from governments and most notably the U S and EU given the reduced incentives such as the inflation reduction back to slide 22, I think Barbara you and that you would be on hydrogen ipi projects.
<unk> is one of the participants.
I've been here the productive fourth quarter after Formula if you get from being you will find in the $782 1 million.
What I've been saying keep a project we have been working with the Greek state on the mechanism and diamond scheduled for the final placebo.
These included visits by Greek state officials to the components of a certain production facilities and pipelines at Grace is out.
Goal to finalize these discussions as soon as possible and policy with a rollout of the program.
The scope of great people over the initial payments.
He is doing now, but if I look at Pfizer appeal incentive systems and like the laser systems for the production of power and hydrogen respect.
So you wanted to have capacity of 118.
Megawatts of fuel cells, and one five gigawatts over like realizes over this time.
Some of the systems will take place in Greece.
And the Western Macedonia, which will become our focal point for technology development and hospital Walton.
The company will create approximately 600 direct jobs for qualified scientific and technical personnel and up to four to 600 indirect jobs over the six year period.
Thank you Paul we'll provide that went with a momentum to enter into an accelerated four square myself, Jason let their license systems. As a result, we wouldn't be established a global green hydrogen value chain from hydrogen production.
There's two clean energy production with fuel cells. In addition to the Greenfield project I will now give an overview of key recent developments.
The U S auto and recently announced that it opened its new items inbound Hudson facility at Hoot part it sounds on Massachusetts.
State of the article Park facility will enable them to scale up and deliver on the increasing global demand for electric chemical components in the clean energy sector.
This includes state of the art Gordon seeds to support the seamless transition from Brooklyn types production runs.
Memphis and electrodes.
The fully analytical facility dedicated to quality control performance analysis.
Fluids product lifetime shields.
Fuel cell destinations or statistical process control and development of next generation that videos.
And and mechanical engineers, a lot for a development automated process for MBS.
One of the products have been developed.
I'm sorry, the wood facility will be the iron <unk> NDA, which is currently being developed within the framework of the elevator the Companys joint development program with the U S departmental budgets.
I've been intense but leesville bright there.
Sell products, such as Syrian and hunting about 50 will incorporate the iron, but I've been MBA beginning of 'twenty 'twenty four.
Carbon expected the reduction to the island.
<unk> was up significantly and it was the cost of our sort of influx of products suite.
Thus expand.
Immediately addressable market.
Furthermore, the expected system increase in power density lifestyle will highly differentiate the occupant sensing the heavy duty mobility.
In Madison Square augmented shoe die analysis successful technology assessment.
Assessment evaluated our advanced proprietary technology.
<unk> needs.
And following its success the two carbon escape out there into a joint development agreement.
The agreement solidifies the interest of one of the world's leader in fuel cell technology.
The way I look at the high dentistry pump technology in collaboration with Us.
The first type of the J P E focuses on the MBA.
<unk> goal is to provide its MBIA and its high <unk> fuel cell development expertise to co develop it with automotive manufacturers the next generation of immune cells or <unk>.
High temperature fuel cell technology is highly differentiated compared to the parent Delphi technology, because it allows the vehicle to operate with a fuel such as email.
Biofuels and low period as it has.
It allows higher periods into hydrogen.
In fact the.
The case, which is very common practice and kits.
Basically Hamburg low temperature deployments and rehab work condition.
He has built in resilience as the high temperature back soon sell does not rely on water conductivity. Therefore, eliminating the problems are operated and extreme cold conditions.
Conditions.
Any kids at Heidrick <unk> <unk> resulted from the high temperature Foundation, which allows for optimized coolant excuse me got it for.
Foremost barometer for heavy duty trucks are naphtha.
Based on this outlook.
Continuing to Brazil.
Joint development agreements to achieve its goal of supplying <unk> components and technology for the mobility market.
In December I've been launched a proof of concept project with $1000 to replace diesel generators with fuel cells.
But those towers, Greece is the largest and non independent tower and the prospects of the company in Greece operate in more than $5250 for further from Greece and when the loss.
Replacement visit generators with pure says at knockdown among the sites, but they're not connected to the power grid that can be supplied with brilinta.
Under the project.
Denise a subsidiary of <unk> group, one of Europe's leading power companies will explore the applicability or broadband civic Biomethane powered fuel cell systems is backed up and primary power sources, whether it's telecom towers. Following the successful completion of the project degrees oven in the stars group considered wider deployment.
I think that's already installed approximately 1000 methanol policy in June seven systems worldwide, primarily used as backup power source for the telecommunication sector.
In January of this year are going to announce a collaboration with Alfa Laval, a global provider of heat transfer separation tenda products on a project to explore application of Oddbins memo about high temperature fuel.
Fuel cells in the marine industry.
Finally by the data centers the guards of development and demonstration program. The project is a joint effort between oven Alfa Laval and our global industry partners.
The project will focus on destiny methanol powered high numbers eventually sell it as a source of marine auxiliary power during the course of the project.
Our system will undergoing risk assessment by the national police of injection site.
At the same time the project aims to integrate the next generation of other infusion sets is June sales would be based on Atlas next generation EMEA.
Aimed to meet the even growing power requirements of the mining industry advanced next generation fuel sales are expected to demonstrate a significant increase in lifetime efficiency and electrical out.
In February .
<unk> announced a new modern collaboration with a global leader in non energy technology company, often and sustainable solution that grocery and dining LNG budgeting.
And its partners work together to develop a 50 kilowatt to 500 kilowatt marine fuel cell solution for a range of Super yards, we will provide a sustainable and reliable source of auxiliary power and offer improved power density.
<unk> fuel cell solution is initially expected to be used as a hybrid power source, enabling clean electricity generation instead of using conventional diesel engines and generators for procedures, such as anchored and maneuver.
As part of the agreement had been Spartech has placed an initial order for 'twenty abutments methanol.
<unk> fuel cell systems. Following the completion of this project. The two parties will explore the potential of development similar solutions for the wider range of business applications beyond Murray such as industrial power solutions.
I'd been continually develop and therefore behind it but the 50 the portable power generation for the defense market funded by the U S Department of defense.
So the company expect the production measured to be finalized in 2023, and our goal is to see production orders in 2024, increasing to hand volumes in 2025.
We consider that the bottom of the defense programs and very important product, providing the restaurant portfolio is a demand for four months under extreme conditions improve.
In terms of the <unk> technology.
The portable fuel cell application market is also a potential target for growth, where we intend to 16 of this we've established market leaders that acquired if fuel cell product line.
And finally, let me turn to the station not Greek market.
Vince has made focus there first with visa commercial footprint of the sedan.
<unk> fuel cell system produced in Germany, and in depth, our stationary product product suite has been targeted telecommunication another critical backup power.
Yeah.
We're experiencing and changing landscape in the Philippines was heritage resulted in order delays.
Acquisitions. It ends it was accurate that you sell into both smart and globe Telecom.
The Philippines and try to do this companys proceeded with selling most of their access to powerful. This has resulted in delayed orders and the Monday to reboot. Our efforts in this sector. We are focusing our resources now on major telcos.
<unk> long term large scale deals that can sustain this product and marketing at the darn extensive banks. In addition to lower revenue that we had planned in 2002 and other financial index of the market change and order delays was that a combination of the impairment charge against our Sir investment.
We remain confident though that the answer to that certain products get great promise for both the off grid and marine markets.
With that I would like to hand over to our CFO Kevin Brown.
Thank you <unk> and good morning, everyone.
Turning to our financial results, we delivered revenue of $2 million in the fourth quarter compared to $2 9 million in the prior year quarter. The year over year result is due to a decline in orders for the company stationary fuel cell systems, driven by a change in telecom tower ownership, that's necessarily mentioned.
R&D expenses were $2 5 million in the fourth 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 energy.
Administrative and selling expenses were $9 $3 million in the fourth quarter.
Bind with R&D expenses total operating expenses were $11 7 million a year over year decrease of $4 6 million, primarily due to a reduction in incentive and stock based compensation expenses.
Net loss in Q4 was $47 6 million or <unk> 92 per share.
Adjusted net loss was $13 2 million or <unk> 26 cents per share.
The adjusted net loss excludes a $2 1 million gain from the change in the fair value of outstanding warrants, a $2.4 million gain from an acquisition purchase price adjustments.
And at $38 9 million asset impairment charge, the asset impairment charge, primarily relates to goodwill from the company stationary fuel cell systems business in Denmark, and Germany, and the Philippines, which was acquired in August 2021.
Unrestricted cash reserves were $32 9 million as of December 31, 2022.
Which is a decrease of $9 5 million from September 30.
In the fourth quarter of 2022, we received 0.4 million in tenant improvement allowances for the HUD part R&D and manufacturing facility.
Which is net of additional spending for the build out.
Okay.
Our existing cash balances and projected cash flows are not expected to be sufficient to support planned operations for the next 12 months.
However, as we discussed earlier, we have been working with the Greek state to implement a funding mechanism for the Green head both project as soon as possible.
Additionally, we are exploring opportunities to raise additional capital and expect to provide an update on this very soon.
In the meantime, we will continue to manage our costs closely and capitalize on opportunities to reduce costs where possible.
I will now turn to our outlook.
<unk> entered 2023 with a strong pipeline of opportunities as we all know however, not every opportunity in the pipeline would transpire.
Factors that are beyond advanced control.
Opportunities may not materialize or it could be delayed.
Due to the long term contract nature of our business model the timing of our revenue can also be difficult to predict.
As we mentioned we have experienced delays in the Philippines for stationary fuel cell systems and their installation.
Due to the level of uncertainty caused by these factors we are not providing a revenue outlook for 2023 at this time.
With that I will hand back to bill <unk> for closing remarks.
Thank you Kevin advocate is a significant portfolio of technology and commercial strengths allow me to compete and be successful at the global level.
And then Q4 will be transformational in slide one in Greencastle is for the long run.
We're moving along the process with the Greek state on look state day, and we'll keep you informed on developments.
<unk> is pursuing a feasible defined by towards significant sectors I believe.
A key advantage of technology company, and we will leverage from this strength to generate commercial products. In addition to providing attractive technology solutions through partnerships with Oems in closing, we believe eichmann is well positioned to be the provider.
Managed solutions across a variety of end markets.
I would like to thank you all for joining us today, and we're now ready to answer questions. Thank you very much.
At this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad.
We'll pause for just a moment to compile the Q&A roster.
Yeah.
Again, if you would like to ask a question press star followed by the number one on your telephone keypad.
Your first question comes from the line of Lacy mentally with Panmure Gordon Your line is open.
Honestly, Kevin can you hear me.
Yes, very well.
Hi, Bob Thank you very much for your presentation, especially so congratulations on the recent appointment.
As to E C.
Uh Huh, she Texas limitation, great and my first question, Matt She's around evergreen.
Type projects and obviously this is a key.
So that's in the neck.
She is suddenly and you mentioned that next steps towards implementation of the project thing.
Can you give us some more color on what the steps are next milestones all and so timing and size. Please.
Yes, absolutely I know this is a.
Very good question and this is Sam.
That's very very important to us.
Paul with everyday here's the situation be the IPC.
It's been ratified at the Frankfurt.
Pipeline 4 billion our gross.
The continent.
Not all.
Countries.
At the same level again.
Has it been a newly elected chairman My first thing is too.
For all of our sort of find out where we are and our goal in the next couple of months, where we ship our first reported to see where everybody is so the idea is that the.
The Greek state has a very positive about it we received a letter in March that first of all and congratulated us on these amazing success. If you will and second is that they go as fast as possible.
Next lever mandated.
Get us a call.
In the call we are going to see the exact dates.
What's going to happen.
In general.
I came back from their first meeting two days ago on Berlin is that.
Hydrogen is here and there's going to be big in Europe .
I think the the collective effort.
Represents.
It through.
Yeah.
World vault opportunity. So I think that's how much I can say I think the next perhaps.
Two months.
Will more things, but right now I don't think we can say something more about it I mean, we are definitely.
There are definitely.
The top end.
We cannot say unfortunately, but we definitely would like to have it by now don't get me wrong, because we gathered at the congestion in the July 22, and we're not going to be some months, but.
Unfortunately, we don't carry today.
Okay, No I understand that thank you that.
That's helpful and then I guess switching.
So talking a little bit on that.
J D I deal, which for me is to.
A significant step forward.
And most recently, but is there any more color you can give us again on sort of expected timing on the development milestones and I know, it's early days of course, but any initial sort of expected timings.
Commercial product.
Being ready with time Doug.
Yes, listen we had a joint press release as you know and I don't think I can say much more for them that I thought it was inclusive.
The long term nature of this because we passed the first step.
The guards assessment in my opinion was the most difficult things there.
We agreed to work together, there's tremendous expertise from shoe die and catalyst that will use it and the final MBA.
We have demonstrated if you die that our hardware capabilities.
<unk>, especially.
In the month of June the capacity that we said before.
Very important to global later like them. So I will say, we will focus on the longer term and it's early.
An important milestone for us.
No no no absolutely I think yeah, I agree and as a follow up just something kind of the answer to this but.
Isn't an exclusive agreement the free to work with other partners.
I was in New York time market.
No no we have with them are particular agreement as I said, we provide.
Expertise that provide their expertise, but because there has been no. These are rather.
<unk> systems right I mean, not everybody knows everything so we got to the different collaborations with different model, but we're very happy so far with.
Jim Congrats.
Congratulate them also to be a net buyer this sector.
Okay and one last one from me just finishing up some.
Mealtime market more generally is the.
This was all interests that you're getting sort of I know you probably don't necessarily too much on this again, but.
From sort of all type players on the human side, given the scale and we did not.
Obviously, you mentioned in the statement with Honda is sensor heavy duty kept patients has been more interest around that given your technology.
So now in the light duty side any color you can give there would be helpful.
Yes.
<unk> said that we are very competitive and we have tremendous eduardo for heavy duty maybe.
Maybe a little bit of light duty and.
We are not.
I know that competitive somewhere else. So we're trying to concentrate where our strength we saw.
I think let's both where we share by stack drive them too.
Tried to engage in ever been done.
At the end of the day. The most technology technology is what makes the thing either work or it doesn't work so heavy duty.
Some light trucks as well I would say.
Good day everyone.
Okay. Thanks, very much that's all from me thanks, guys.
Alright, Thank you very much.
There are no further questions at this time, ladies and gentlemen, thank you for participating. This concludes today's conference call you may now disconnect.
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