Aspen Aerogels(US:ASPN)2019-08-04 17:24Financial Data and Key Metrics Changes - Total revenue for Q2 2019 grew by 36% to $29.5 million from $21.7 million in Q2 2018 [19] - Net loss improved to $5.3 million or $0.22 per share from $7 million or $0.29 per share year-over-year [19] - Adjusted EBITDA was negative $1.7 million compared to negative $3.2 million a year ago [19] Business Line Data and Key Metrics Changes - Product revenue was $28.9 million and research services contributed $0.6 million, marking a 36% increase from last year [20] - Project revenue accounted for 38% of total revenue in the first half of 2019, exceeding the target of 33% [9] Market Data and Key Metrics Changes - Total shipments increased by 18% to 8.4 million square feet of aerogel blankets, with an average selling price rising by 16% to $3.43 per square foot [21] - The subsea market showed strong growth, contributing significantly to revenue during the quarter [20] Company Strategy and Development Direction - The company aims for over 20% revenue growth in 2019 and a growing percentage of revenue from project work [8] - Focus on profitability through gross margin improvement initiatives, with expectations for gross margins to reach the low to mid-20% range in the second half of 2019 [12] - New business creation initiative targeting the battery materials market, leveraging aerogel technology [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting 2019 performance indicators, including revenue growth and adjusted EBITDA targets [17] - Anticipated revenue wins from the Middle East, particularly from Saudi Aramco, are expected to impact business positively [36] Other Important Information - The company revised its full-year revenue guidance to between $126 million and $134 million, with adjusted EBITDA expected to range between breakeven and positive $1.6 million [27] - Capital expenditures for the year are projected at approximately $2.5 million [29] Q&A Session Summary Question: Potential partnership in the battery material space - Management reiterated the goal of establishing a partnership in 2019 and noted progress in discussions with major battery players [30] Question: Crossover opportunities with Technip and LNG projects - Management confirmed strong relationships with Technip and ongoing efforts to participate in LNG projects, including the Arctic LNG project [33][34] Question: Impact of qualification with Saudi Aramco - Management expects to see increased revenue from the Middle East, including contributions from Saudi Aramco, later in the year [36] Question: Raw material cost reduction efforts - Initiatives to lower costs are being implemented across all product lines, with a focus on optimizing formulations and negotiating lower prices [39] Question: Average selling price trends - The company anticipates selective price increases in the future, following a significant increase in 2019 to match raw material cost increases [42] Question: Project pipeline in the LNG space - Management highlighted a strong project pipeline, including both large and small-scale projects, with significant opportunities in the LNG sector [45]