Aqua Metals(US:AQMS)2019-11-13 18:28Financial Data and Key Metrics Changes - For Q3 2019, the company recognized revenue of approximately $2.4 million, a 102% increase compared to $1.2 million in Q3 2018, and a 59% increase from Q2 2019 [10] - Cost of products sold was $8.2 million, up 28% from $6.5 million in the previous year, but cost as a percentage of revenue decreased by 37%, indicating improved efficiency [10] - General and administrative expenses (G&A) for Q3 2019 were $5.1 million, compared to $2.2 million in Q3 2018, with approximately two-thirds of G&A being non-cash expenses [11] - The company reported an operating loss of $11.3 million for Q3 2019, compared to a loss of $8.4 million in Q3 2018, and a net loss of $11.3 million or negative $0.20 per diluted share [12] Business Line Data and Key Metrics Changes - The company is on track to operate all 16 modules simultaneously by the end of 2019, which is expected to significantly increase production capacity [6] - The AquaRefinery is projected to reach a production rate of 40 tonnes of AquaRefined lead per day, plus an additional 40 tonnes of other lead products by mid-2020 [6] Market Data and Key Metrics Changes - The company has received commercial volume shipments orders from its battery manufacturing partner, Clarios, indicating strong market interest in AquaRefined lead [9] - There is ongoing interest from large operators globally in the AquaRefining technology, suggesting a positive market outlook for licensing opportunities [9] Company Strategy and Development Direction - The company aims to maximize shareholder value through various financing options, including debt, equipment leasing, and preselling AquaRefined lead [15] - The strategy includes scaling the plant to full capacity and expanding beyond the current 16 modules, with a focus on operational efficiency and cost management [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to transform lead recycling through innovative technology, positioning Aqua Metals as a leader in the industry [8] - The company is focused on completing capital projects and scaling operations, with expectations of achieving full utilization of the plant by mid-2020 [19] Other Important Information - The company used $6.8 million in cash for operations and $5 million for capital expenditures in Q3 2019, indicating a need for additional capital to support growth [14] - Management confirmed that the drying system will not be completed by year-end but will not affect the operation of the 16 modules [51] Q&A Session Summary Question: Can you discuss the ramp-up cadence after all equipment is installed? - Management indicated that all 16 modules will be running simultaneously by year-end, with scaling expected to begin in early 2020 and reach full utilization by mid-year [19] Question: What are the revenue expectations for Q4? - Management stated that Q4 revenues will focus on completing capital projects, with expectations that revenues will resemble Q1 or better, but not a primary focus [22] Question: How many customers are currently testing lead products? - Currently, Clarios is the primary customer taking lead shipments, with ongoing discussions with other potential partners [24] Question: Is there a buyout clause with Clarios? - Management confirmed there is no buyout option in the agreement with Clarios [33] Question: What is the status of the power supply and its impact on operations? - Management assured that power outages would not significantly impact operations, as the facility can restart quickly after outages [56]