Research Frontiers(REFR) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2020, total expenses decreased by $225,000 compared to Q1 2019, and the net loss was reduced by $179,303 to $624,594, or $0.02 per share, compared to a net loss of $803,897, or $0.03 per share, in Q1 2019 [9] - Compared to Q4 2019, expenses were lower by about $600,000, and the net loss was almost $664,000 lower [10] Business Line Data and Key Metrics Changes - Royalties from the automotive market increased by over 28% in Q1 2020 compared to the previous quarter [15] - Royalties from aerospace also saw an increase in Q1 2020 compared to Q4 2019 [17] - The architectural market did not show the same strength in Q1 2020 as in Q4 2019, attributed to the timing of key activities and projects [19] Market Data and Key Metrics Changes - The automotive market is expected to rebound as regions begin to reopen, with a noted rush in car dealerships in Wuhan, China [13] - General aviation may benefit from the pandemic, with a reported 27% increase in business for a private jet fleet operator [16] - The architectural market is potentially the largest market for SPD technology, with significant interest in its use in hospitals for infection control [19] Company Strategy and Development Direction - The company aims to diversify its business across various industries and geographies, with a focus on automotive, aerospace, and architectural markets [13][18] - The strategic investment by Hyundai in the SPD-SmartGlass industry is seen as a significant endorsement of the technology and its future potential [28][29] - The company is focused on reducing costs and increasing production capacity to make SPD technology more affordable [84] Management's Comments on Operating Environment and Future Outlook - The management believes the company is well-positioned for future growth despite the challenges posed by COVID-19, with sufficient cash reserves for at least 34 months [7][83] - The company expects to continue reducing expenses and aims to achieve cash flow positivity and profitability [83] - There is optimism regarding the recovery of the automotive market and the potential for increased demand in various sectors post-COVID-19 [15][16] Other Important Information - The company has been debt-free since going public in 1986 and has maintained a conservative fiscal approach [7] - The company has expanded its public relations efforts and participated in various industry conferences to raise awareness of SPD technology [81] Q&A Session Summary Question: What is happening in Brazil? - The company highlighted the aggressive operations of SER in Brazil, focusing on aftermarket upgrades for armored vehicles using SPD technology [36] Question: Can you comment on Isoclima's participation? - Isoclima is active in automotive and aircraft industries, working with major players [38] Question: What is the production capacity of Hitachi and Gauzy? - Hitachi can produce 400,000 square meters per year per shift, while Gauzy's capacity is 1 million square meters per year [42][49] Question: Are there ready customers for the produced film? - The company stated that film is usually produced for customer orders, with minimal inventory [52] Question: Has anyone approached the company for acquisition? - The management confirmed that there have been no inquiries regarding acquisition [78]