Q4 2023 Laser Photonics Corp Earnings Call

While the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce Brian Segal from Hayden IR. Thank you you may begin.

Thank you Doug.

With me today are waiting to polo lasers, photonics, CEO and Carlos readiness, the company's VP of finance any forward looking statements made during this conference call, whether general or specific in nature are subject to risks and uncertainties that may cause actual results to differ materially from those that the company anticipates these risks and uncertainties <unk>.

<unk>, but are not limited to specific risks and uncertainties discussed in the reports the company periodically files with the SEC.

Photonics assumes no obligation to either update any forward looking statements that are made or may make or update the factors that may cause actual results to differ materially from those that they forecast I will now turn the conference over to Wayne Wayne taken away.

Good morning, ladies and gentlemen, thank you for joining us.

This morning, we reported fourth quarter and full year 2023 results.

As part of our press release I wrote a letter to investors reviewing our 2023 highlights.

I will provide a detailed commentary on what to expect for 2024.

On today's call I will review the quarter, our highlights from 2023, and then outline some of the exciting plans we have for 2024.

<unk> do this however, I wanted to introduce Carlos <unk>, who joins us as VP finance at the beginning of April.

Carlos brings a wealth of relevant finance and accounting experience.

Having served in these rules at L. Three Harris technologies and his predecessors.

Welcome Carlos we're excited to have you join us.

Before reviewing our quarter I wanted to address our league filings and pending restatement for 2022.

As you know we are a young public company and since coming public we had some turnover in our finance leadership and made an auditor change.

These moves came from the lessons we gained throughout the key year.

Turning to the auditor change as part of.

Saving.

Starting of engagement.

Our new Auditor did a thorough two year review of our financial reporting and asked us to make some changes.

<unk> reviewing and auditing, our 2022 financial statements, our new auditors determined certain previously reported items required statement.

Specifically revenue and <unk> were not recognized in accordance with ASC 606.

And there was a liability related to stock that we issued post IPO, which was incorrectly recorded under cost of goods sold that needed to be reclassified.

These reclassifications drove the restatement of our 2022 results and the delay in filing our 2023 10-K as we corrected these items as well as early quarters, we're working to hopefully a file our 10-K today.

Now that we're addressing these audit concerns and have brought on Carlos tours here, our finance and accounting, we hope to improve our transparency and financial reporting.

We had a strong fourth quarter and revenue growing 673% to $8 million versus the restated <unk> $1 million last year, we saw strength in our clean tech product lines, which made up 80% of work with a unit sales during the quarter. We also made significant.

Progress on the customer front by adding 10 customers. These customers came from industrial aviation.

Energy Maritime and educational industries.

Next I'd like to remind you about the season.

Seasoning behind the reasoning behind the noticeable shift in our operating expenses compared to last year.

As we set at our IPO and repeated throughout the year, we expect it to make significant strategic investments in sales and marketing activities to penetrate existing customers further.

Other identified new potential customers and educate the market about the benefits of our Cleantech product line one.

One of these investments was participating in a major trade show that attracted more attention than we initially anticipated the.

The fact that.

The show helped us win several new orders, while building a $70 million plus pipeline of opportunities for us to pursue over the next 12 months based on these early returns we are confident that the positive impact of these.

It's a good investment.

Sure.

The remainder of 2024, setting a strong foundation for sustainable growth and profitability in the near future.

On the cost side, the higher revenue and improved gross margin help reduce operating losses from $3 million last year to $1 $9 million. This year, while net losses decreased from 3 million to $4 million.

Our loss per share improved from <unk> three eight cents to.

To 0.053.

During 2023, we had numerous milestones I believe will set us up for future success with respect to our clean Tech products. We introduced a 3000 water system, which will help further differentiate LPC from expanding our cleaning capabilities at the high end of the market.

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We also developed a clean tech robotics solid closures to reduce safety risk significantly.

Programmable and closure will have the ability to leverage AI to handle several important tasks simultaneously, providing significant efficiencies and reducing tumor risks.

We also launched two industry specific product lines defense Tech at Marlin.

Defense Tech addresses laser cleaning and engraving applications for the military and department of defense.

Leverage is both pretax Mark star products that has seen early success in the Army Navy and Air Force and we'll talk more in a little bit about our sales and marketing efforts for this market and.

In conjunction with four months of technologies.

Marlin is targeted at the maritime industry.

Okay.

Vessels.

We see this opportunity as having a half.

A million dollar total addressable market.

And our portable handheld system is ideal for the smaller convenient surface treatment areas.

Next I'm going to discuss our relationship with Ford on Corporation.

In 2023, ICT transferred the bulk of its L. P. C stocked full not making the company our largest shareholder forum has a portfolio of exciting IP for laser semiconductor and additive manufacturing technologies, including clean tech that it plans to monetize it.

At least with Tommy's Corp, and its other subsidiaries in the coming months, we expect to restructure both organizations with LPC, becoming a publicly traded majority on subsidiary of four nine Corporation.

Once the reorganization occurs LP.

<unk> will focus on sales marketing and product development for industrial marketplace, while also serving as four months manufacturing arm.

At the same time, our sister subsidiary for non technologies, which is set up as the government military contractor will continue to focus on sales and marketing of our defense Tech blind and those customers.

An example of why we are doing this happened last October when we expanded our market opportunity into laser cutting width.

Boy licensing phonons high powered turbo piercing technology, which enables cold cutting of materials that were otherwise warp under the heat of the laser.

This technology will serve as the basis for our <unk> product line and as other another way for us to expand our total addressable market.

In summary, we see our relationship with a phone on a very synergistic relationship for the Companys and shareholders.

And we plan to keep you apprised of any developments as things move forward.

As we look to 2024 I foresee an exciting year ahead, so far we announced a significant expansion in our distribution and technology partnerships. During the first quarter, we linked the distribution agreement with personal.

A large industrial distributor for our laser cleaning and protective personal protective equipment products.

For the industrial market more recently, we announced a technology partnership with Brock the leading manufacturer of advanced remote controlled demolition machines.

Where we will integrate our technology into the robots. This is a great deal for us as Brock is one of two companies that provided provides these machines for our nuclear decommissioning, which brings a large pipeline for repeat itself as these robust become contaminated it needs to be replaced frequently.

On the government and military side for <unk> and L. P. C signed a sales and distribution agreement with incredible supply and logistics or ISO lithium marketer and distributor to these bodies.

We believe this will help expand and accelerate our sales of the defense Tech product lines going forward.

Moving to our product road map, we expect to release several exciting new products and next generation upgrades this year.

Starting with the ladder, we plan to introduce the next generation clean Tech systems. Some of the key new features include the ability to customize the power and frequency setting of the system enable a wider range of materials that can be clean certain models will be also a reduction in form factor lower power requirements.

And other upgrades higher power systems will be Iot ready and come with Ethernet and Wi Fi support.

We believe this next generation system will enhance the user experience, while expanding our sales funnel.

Returning to <unk>.

We will revamped the tightened FX or large format cutting system.

The new system will come with automatic sheet metal loading and unloading systems that were lowered metal sheets into Titan Titan.

Got them and unload the pieces Oh to Iraq system.

This automation customers can run the tightened 24, seven to have plenty of material ready for them.

Protection production shifts.

Finally, we will reinvigorate sales of our legacy laser engraving systems by introducing the March startup Vin.

This initiated initiative directly response to the recently passed California Senate, Bill 55, which requires all more vehicle catalytic converters to remark.

With a in.

This system will have specific capabilities and features targeted at complying with this new legislation, ensuring that automotive manufacturers and repair shops can easily adhere to the law.

Incorporating this legal requirement into our products capability, we aim to explore and capitalize on tap potential within the automotive market.

In summary.

With our new products distribution and technology partnerships and increased sales and marketing efforts.

We have built an estimate a pipeline of over $70 million.

While this won't all closed this year, we believe it sets us up for improved results in 2024, and beyond and bodes well for our medium to long term growth prospects.

That concludes my prepared remarks for today.

Now move to questions.

Okay.

Thank you ladies and gentlemen at this time, we will be conducting a question and answer session.

If you'd like to ask a question you May press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue.

You May press star two if he would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key one moment, while we poll for questions.

Yeah.

[laughter].

Yes.

Yeah.

Okay.

There are no questions in the queue at this time.

Okay I've got.

Online question.

<unk> with sales because that's key customers as GE Emerson.

Military when might we begin to see some repeat orders.

It appears many of these sales are one and done.

Test orders and they Havent led to anything more substantial.

Yes.

Yeah. Thanks for the question of Ryan So these opportunities.

These opportunities are developed.

In our pipeline as we Oh acquire.

Acquire.

These interest levels from high profile customers.

These customers are inquisitive of the technology and.

And how to incorporate it into their environment and these are sometimes a long drawn out processes because.

Well as you know our laser cleaning is a new.

Technology.

To disrupt sandblasting.

Embraces sandblasting and therefore.

Therefore, there is a monumental task.

Developing our standard operating procedures to replace field.

<unk> introduced a new so with that being said we won.

Once we we inquire interest from these high profile customers, such as GE or Emerson.

They basically decide at the high level to make these changes within their companies because it's just the.

A monumental change throughout the entire organization.

Proceed just needs to be developed and are therefore.

It takes time for the change that happened, but nonetheless these changes happen rapidly once of your systems are in place for Cds are drawn and Oh. They can proceed with the purchase.

Okay great.

Got one.

Other question. This one is about phone on <unk>.

<unk> has existed for more than a decade under the control of ICT and it's it's controlling shareholder.

It's an enhanced strategic advantages that laser photonics does not have.

Why was not so wireless phone on that taken public in the first place rather than laser.

What we've seen was a development of.

Behind the scenes work that format has done with laser photonics.

And obviously it was a success story with laser photonics going to market, which is the ultimate goal.

When youre developing technology and you're commercializing it.

You know it took it took a while for a phone on to position itself for Penn.

It's into the public market. So at the time it wasn't ready so now we are ready.

Okay.

Appears to be all the questions. We have today operator, you can close the call.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.