Research Frontiers(REFR) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The net loss for the first half of 2020 was less than half of the same period last year, with a net loss per share of $0.03, down from $0.07 per share for the same period last year [16] - The company approached breakeven in the second quarter with a loss of just $0.01 per share, which was down from five times that amount per share in the second quarter of last year [16] - Expenses during the first half of 2020 were down over $450,000 or over 20% from last year [17] Business Line Data and Key Metrics Changes - The company has seen a noticeable increase in activity and projects for SPD technology in Asia and North America, expanding beyond its traditional European market [19] - There is a diversification in automotive, with a migration of interest from the premium segment to less expensive cars [20] Market Data and Key Metrics Changes - The automotive industry experienced significant declines, with premium segment sales down 22% for Mercedes and 39% for BMW in the second quarter [12] - Car sales in Germany were reportedly down 61% in April due to the pandemic [13] - Despite the downturn, there is optimism for a rebound, with light vehicle production expected to decline by about 7% in the second half of the year and a total of 20% for the full 2020 calendar year [14] Company Strategy and Development Direction - The company is focused on expanding its business and diversifying geographically and by industry, with key initiatives in automotive and architectural projects [18] - The architectural market is highlighted as a significant opportunity, particularly in hospitals and homes, with the potential to become the largest market for the company [25] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenges posed by the COVID-19 pandemic but emphasizes the importance of innovation and efficiency in conducting business [9] - The company remains strong fiscally, with over $5.8 million in cash reserves, estimated to last for at least 34 months [17] - The management is optimistic about the automotive market's recovery and the increasing demand for private vehicle ownership [21] Other Important Information - The company was selected for inclusion in the Russell 2000 Index in May, reflecting an increase in market value [7] - The largest sun visor supplier in the automotive industry, Daimay, announced a license with the company, which is expected to enhance market presence [8] Q&A Session All Questions and Answers Question: Concerns about Kevin Douglas's share sale - Management clarified that Kevin Douglas's sale of 20% of his position was for personal reasons and not due to a lack of confidence in the company [31][32] Question: Implementation timeline for Daimay's SPD visor - Management indicated that Daimay's implementation timeline is not publicly disclosed but is being actively developed [90] Question: Cash flow positivity timeline - Management expressed confidence that the company may not need to go to the market for funding for at least the next 34 months, with a focus on reaching breakeven [54][60] Question: Impact of Hitachi Chemical acquisition - Management stated that the acquisition should not affect production, and the new owners can continue to produce SPD film [75] Question: Revenue guidance for the next few years - Management refrained from providing specific revenue guidance due to the uncertainty surrounding the COVID-19 situation [83]