Financial Data and Key Metrics Changes - For the full year 2022, revenue was $16 million, a decrease of 13% compared to $18.3 million in 2021 [56] - The net loss for the year was $14.2 million, compared to a loss of $11.1 million in 2021, attributed to non-recurring restructuring costs and other factors [38] - Operating expenses for the year were $13.1 million, an increase from $12.3 million in 2021, but adjusted operating expenses were down 16% year-on-year [36][60] Business Line Data and Key Metrics Changes - System sales and related services revenue was $5.3 million, down 26% from $7.2 million the previous year [33] - EPS and ceramic membrane sales were $6.8 million, a decline of 5% from $7.2 million in 2021 [33] - Plastic revenues were $3.5 million, a slight decrease of 2% from $3.6 million [33] Market Data and Key Metrics Changes - The DPF business saw a 9.8% decrease last year, but a 3.8% increase is expected in Q4 2022 due to re-engagement with existing accounts [9] - The company anticipates a 70% increase in plastic sales in Q1 2023, driven by a large order in biological-based material development [14] Company Strategy and Development Direction - The company is focusing on recurring revenues and large system opportunities, with a clear corporate vision and commercial strategy [6] - Recent agreements with partners in the Middle East and North Africa aim to leverage capabilities in produced water treatment [19][20] - The company is also pursuing distribution partnerships to expand geographic reach and access key market verticals [25] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges from energy-related concerns, higher interest rates, and inflation but remains optimistic about progress [31] - The company expects Q1 2023 revenue of approximately $4 million, representing an 11% increase from the previous year [58] - Management is committed to achieving a quarterly breakeven at around $7 million in revenue [43] Other Important Information - The company has reduced operating expenses by 37% year-on-year, evidencing cost reduction efforts [60] - Cash balance at the end of the year was $16.6 million, down $1 million from the previous quarter, indicating lower cash burn [62] Q&A Session Summary Question: Update on distribution agreements and their maturity - Management indicated that distribution agreements are progressing well, with expectations for results in the near term, particularly with Liquinex and NESR [67] Question: Pipeline development in major markets - Management confirmed a strong pipeline for larger systems, although these projects have longer cycles compared to recurring business [47] Question: Timing of revenue following orders - Management noted that revenue from recurring business is expected to ramp up in Q3 and Q4, while larger projects have more uncertainty regarding timing [49] Question: Pricing actions and their impact - Management confirmed that pricing improvements and cost reductions are expected to positively impact profitability in 2023 [51]
LiqTech(LIQT) - 2022 Q4 - Earnings Call Transcript