Q3 2024 Crown Electrokinetics Corp Earnings Call
Good day, everyone and welcome to Crown third quarter 2020 for a conference call. At this time participants are in a listen only mode. A question and answer session will follow management's remarks. This conference call is being recorded.
A replay of today's call will be available on interest on the Investor Relations section of Crown's website and will remain posted there for the next 30 days.
Speaker Change: I'll now turn the conference Walker and hand, the call over to Jason Assad director of corporate communications for introductions and the reading of the Safe Harbor statement. Mr. Assad. Please go ahead.
Jason Assad: Thank you operator, good morning, everyone and welcome to <unk> third quarter 2024 results conference call with US on today's call are Doug Cross sell Chief Executive Officer, and Chairman and Joe <unk>, Chief Financial Officer before we begin I'd like to remind you that today's call contains forward contains certain forward looking statements for management made within the <unk>.
Jason Assad: Turning of the section 27, a of the Securities Act of 1033 as amended and section 20 <unk> of the Securities and Exchange Act of 934 as amended words, such as should projects expects intends plans beliefs anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.
Jason Assad: These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factors section of the company's most recent 2024 quarterly 10-Q filings copies of these documents are available on the SEC website at SEC Gov. Actual results may differ materially from those expressed or implied by such forward looking statements.
Jason Assad: <unk>.
Speaker Change: The company undertakes no obligation to update these statements for revisions or changes after the date of this call except as required by law now it's my pleasure to introduce Dr. <unk> CEO and chairman of ground. Doug. Please go ahead.
Alright, Thank you, Jason and thanks, everyone for joining today for our third quarter 2024 earnings call.
Speaker Change: We had our best quarter to date, achieving record revenue of $8 million delivering on our top line forecast.
Speaker Change: As we scale, we expect this momentum of meeting and exceeding guidance to continue.
Speaker Change: This quarter's growth was primarily driven by contracts from our newer businesses before we dive into the updates on the three business divisions I want to take a moment to discuss our vision for Crown and the foundation guiding everything that we do.
Speaker Change: Crown, we're committed to delivering innovative technology solutions that address critical challenges across multiple industries from advancing sustainable infrastructure to promoting environmental responsibility. Our mission is to drive positive societal change that benefits both our communities.
Speaker Change: And the environment, we're working towards a future where our solutions meet industry demands and shape a better tomorrow.
Speaker Change: We are actively making this vision a reality through our three business divisions.
Speaker Change: <unk> windows fiber optics, and water solutions each business spearheaded by extremely talented industry experts is focused on delivering cutting edge solutions that are disrupting the status quo, while redefining and modernizing industry standards.
Speaker Change: While we are enthusiastic about the impact of our current offerings. We also have ambitious plans to continue crown's growth.
Speaker Change: Believing the best is yet to come we anticipate driving future growth, both organically and through select strategic accretive acquisitions now, let's discuss our operational updates starting with the smart Windows Division, which is focused on developing technology for buildings that improves energy efficiency.
Speaker Change: <unk> lowers carbon footprint and increases comfort.
Speaker Change: Recently, we unveiled our three phase rollout strategy for the smart window inserts expected to commence in Q1 of 'twenty five while the development of our smart window Windsor has admittedly been a costly time consuming LNG laden process, we're rapidly approaching commercialization, where we anticipate.
Starting to generate return on investment importantly, while our launch has taken longer than anticipated. The overall market opportunity in total addressable market has grown in tandem.
Speaker Change: In the first phase or the Alpha phase, we plan to deliver prototypes smart window inserts to a select group of customers a major U S cities.
Speaker Change: These targeted installations will support an eventual expansion across entire buildings for our customers. This phase is designed to provide us with valuable feedback on both products performance and the overall customer experience, enabling us to refine and enhance our solution as we progress toward full market launch.
Following April eight following alpha or beta phase, we will replace the prototypes with more advanced inserts introducing updated features and a fully integrated control system, while expanding the number of installations.
Speaker Change: The insights gathered in beta will be crucial to shape. The final first generation product.
Finally in the Charlie bass will prepare for market launch by establishing scalable manufacturing customer management installation and sales teams and start pre sales with delivery anticipated in early 2026.
Speaker Change: After years of dedicated development, we're getting very excited to near Alpha launch alright.
Speaker Change: Alright next fiber optic division.
Speaker Change: The fiber optics division specializes in the design and construction of fiber optic networks connecting rural and urban communities, we deliver state of the art fiber optic solutions by deploying high tech equipment at subcontractor expertise in the third quarter, we secured three major customer agreements.
Speaker Change: Handing our footprint in Oregon, and Nevada Cry.
Speaker Change: Crown as the trusted partner to a range of clients from Fortune 500 tier one telecoms to local municipalities. We see a strong demand for our services. We believe are on contracted pipeline revenue is estimated at over $50 million.
Lastly, let's review our water solutions Division, which provides multiple solutions that improve water quality for communities. The division includes our Slant wells business line and our lead or lead pipe services business line with element 82, and <unk> pipeline I'll begin with Slant wells are first of a kind.
Speaker Change: Propriety proprietary design as previously announced we have commissioned been commissioned by twin Dolphin and Cabo San Lucas to install two slant wells in an area challenged with clean water access I am pleased to report that in the third quarter, we broke ground on the installation and are on track to conclude.
Speaker Change: Before the end of the year.
Speaker Change: Our project has driven a lot of interest in the Los Cabos area for additional slant well installations, we have now engaged with new customers for survey work to determine if their subsurface conditions will work for our Slant wells. The strong demand we are seeing underscores the significant opportunity to expand our slant well installation.
<unk> not only throughout Mexico, but also in other regions of the world that face similar challenges with clean water access we are solving a very prevalent problem and confident that our slant wells represent a scalable revenue stream as we position ourselves as a trusted solution provider for water scarce regions.
Speaker Change: Now, let's cover our work with lead pipes through element 82, and <unk> pipelines are efforts to support the U S. Environmental environmental protection agencies recently passed lead and copper rule improvements legislation also known as LCR I have gained significant momentum this quarter with an estimated now.
Speaker Change: $9 million to $12 million lead pipes in the U S. There is a highly unmet need and opportunity for led type identification and lead pipe remediation to help the millions of American households at risk of blood exposure.
Element 82 secured initial lead type protection projects in Florida, and New York, representing an important first step in identifying and mitigating led risks in these communities. We also signed over $15 million.
Speaker Change: And revenue in element 82 lead pipe inspection projects across Washington, DC, and Maryland, making our expansion into these regions.
Speaker Change: Recently, we were awarded two initial lead pipe remediation contracts for <unk> pipelines totaling $33 million, while pleased with these recent wins. We believe we've just scratched the surface. We now have over 48 million in anticipated secured projects and currently estimate over 70 million.
Speaker Change: And expected projects now I'm going to pass the call over to Joel who will review our financial results in greater detail Joel.
Joel: Thank you, Doug and good day everybody.
Joel: Today I'll review, our financial results for the three and nine months ended September 32024, comparing them to the period same period in 2023.
We reported record revenues of $8 million for the quarter, which was an increase from zero in the same period of 2023. The growth in revenue is primarily attributable to new contracts from crown fiber optics and water solutions divisions, which include the new slot wells and element 82 lead detection business.
Joel: Gross profit was $1 4 million for the quarter compared to zero in the same period of 2023.
Joel: R&D expenses were <unk> 7 million for the quarter increased from <unk> 5 million for the same period of 2023, the increase being primarily driven by accelerated preparations for our upcoming alpha launch plus salaries and benefits.
Joel: G&A G&A expenses of $6 5 million for the quarter up from $2 9 million for the same period of 2023.
Joel: The increase in G&A expenses, primarily due to increases in comp benefits with the new business leadership.
Joel: <unk> new divisions.
Joel: Stock compensation expense professional fees and other expenses made up that one.
Joel: Operating expenses were approximately $7 2 million for the quarter up from $3 4 million in the same period of 2023.
Joel: Net loss was $5 9 million for the quarter compared with a net loss of $2 9 million in the same period of 2023.
Joel: Moving on to the financial results for the nine months ended 32024.
Joel: We have achieved record revenues of $13 4 million increase.
Joel: Increased from a one.
Joel: $1 million in the same period of 2023.
Joel: Gross profit was <unk> 9 million compared to a gross profit point of zero in the same period of 2023.
<unk> expenses were $2 6 million compared to $1 5 million for the same period of 2023.
Joel: And G&A expenses were $12 8 million up from $10 5 million for the same period of 2023.
Joel: Operating expenses overall were approximately $15 4 million compared to $12 4 million in 2023 and <unk>.
Joel: Net loss was $15 5 million compared to $19 7 million in the same period of 2023 nine months year to date.
Joel: Well cash flow remains challenging to predict due to the level of new businesses crowns is capturing and executing as well as the working capital investment required upfront, we're closely managing expenses to align with our growth plans and anticipate reaching profitability in 2025, a testament to our strategic pro.
Joel: Assess.
Moving to the balance sheet and stockholders equity was $9 9 million as of September 32024, and cash was approximately three 1 million now I'll turn the call back to Doug <unk> strategic growth plans.
Speaker Change: Alright, Thanks Joel.
Speaker Change: As we look forward to the end of 'twenty four 'twenty five we continued to build momentum across our diverse yet complementary businesses each with very strong pipeline of projects in place.
Speaker Change: We've made significant headway in our fiber optics and water solution divisions, which are driving new interest in substantial growth opportunities.
Speaker Change: Our customer engagements have broadened reaffirming our position as a trusted partner and fiber optics construction and a trusted leader in addressing critical water infrastructure needs.
Speaker Change: With our expanded capabilities and expert leadership crown is well positioned to achieve our growth objectives for the remainder of 'twenty four and beyond we reiterate our revenue guidance of $9 million in Q4 and $22 million for the end of the year 'twenty four.
Speaker Change: We're pleased to introduce our full year of 2025 outlook, we are expecting revenue between 30 million and $35 million in fiscal calendar 2025 importantly, we remain on track to achieve profitability in 2025.
Speaker Change: Last night I got a note from one of our strategic partners, Chuck Hansen and electro scan.
Speaker Change: He provides us with the equipment that does the lead pipe inspection work.
Speaker Change: Chuck wanted me to know that.
Speaker Change: There's a lot of questions about the incoming administration and the new.
Speaker Change: Proposed chief of the EPA.
And Chuck reminded me that it was Trump's first administration that actually took a 1991.
Proposal that became lead and copper rule improvement that's the legislation that we're working under today. It was it was dusted off in 2017. It was finalized under Bidens regime in 2021, and we expect it to continue and to grow under Trumps administration.
Speaker Change: With that I'd like to thank everyone for the call today, Thank our investors for being supportive. We're very excited about the future that we have ahead of us and the foundations that we've put in place already and we look forward to talking to you again in the new year. Thank you.
Speaker Change: Thank you and this concludes today's conference you may disconnect your lines at this time.
You for your participation thanks, Jim Molloy.
Speaker Change: Thanks, Tim good job I'm going to jump back into the fire.
Speaker Change: Goodbye.
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