PyroGenesis Announces 2024 Second Quarter Results

Q2, 2024 revenues increased by $0.9 million, mainly as a result of:

  • PUREVAP™ related sales generated revenue of $0.1 million, a decrease of $0.3 million compared to Q2 2023 due to the completion of the project and with the successful silicon “pour” previously announced by the Company. As a result, minimal revenue was forecasted and realized in the current quarter,
  • DROSRITE™ related sales increased by $0.2 million due to the increase in spare parts orders from existing clients and the increase in storage revenue and other ancillary revenue related to the DROSRITE units, at the request of the client,
  • Development and support related to systems supplied to the U.S generated revenue of $0.2 million, a decrease of $0.6 million compared to Q2 2023 due to the current stage of the project, whereas, in the comparable period, significant advancement was made related to inspection, packaging and shipment of the equipment to our customer in order to move forward with installation and commissioning,
  • Torch-related products and services increased by $2.2 million, due to the continued progress on the significant projects related to our 4.5MW and 1MW torch systems, and additional recurring monthly 24/7 onsite support,
  • Biogas upgrading and pollution controls generated revenue of $0.2 million, a decrease of $0.4 million compared to Q2 2023 due to the decrease in project volume,

During the six-month period ended June 30, 2024, revenues varied by $1.8 million, mainly as a result of:

  • PUREVAP™ related sales decreased to $0.5 million due to the completion of the project and current project phase, whereby lower revenue was expected,
  • DROSRITE™ related sales increased to $0.9 million due to the increase in spare parts orders from existing clients and the increase in storage revenue and other ancillary revenue related to the DROSRITE units,
  • Development and support related to systems supplied to the U.S Navy increased by $0.1 million due to the current stage of the project, whereby, in the comparable period, and beginning of 2024, significant advancement was made related to inspection, packaging and shipment of the equipment to our customer in order to move forward with installation and commissioning, in addition to the increase in awarded contracts for spare parts and engineering services from clients that are third-party suppliers of the US Navy,
  • Torch-related products and services increased by $1.9 million, due to the Company providing continuous 24/7 onsite support and the significant progress related to the current ongoing torch systems projects,
  • Biogas upgrading and pollution controls related sales decreased by $0.4 million due to a decrease in project volume,

As of August 6, 2024, revenue expected to be recognized in the future related to backlog of signed and/or awarded contracts is $29.8 million. Revenue will be recognized as the Company satisfies its performance obligations under long-term contracts, which is expected to occur over a maximum period of approximately 3 years.

2. Cost of Sales and Services and Gross Margins

Cost of sales and services were $2.8 million in Q2 2024, representing an increase of $0.9 million compared to $1.9 million in Q2, 2023, primarily attributable to a $1.4 million increase in direct materials which reached $1.7 million. The increase in direct materials is related to the recognition of costs from the completion of the power supplies required for the Company’s high-powered torch systems. However, the increase was offset by the decrease in employee compensation of $0.1 million reducing it to $0.8 million (three-month period ended June 30, 2023 - $0.9 million), and a decrease of $0.2 million in subcontracting (three-month period ended June 30, 2023 - $0.2 million), attributed to additional work being completed in-house and the product mix related to the cost of sales.

The gross profit for Q2, 2024 was $1.1 million or 29% of revenue compared to a similar gross profit of $1.1 million for Q2 2023, however it represents 37% of revenue. The decrease in gross margin percentage was mainly due to the increase on direct materials costs, and to the 2023 Q2 sales mix which has higher margins.

During the six-month period ended June 30, 2024, cost of sales and services were $5.5 million, an increase from $4.0 million for the same period in the prior year. The $1.6 million increase is primarily driven by a $2.0 million rise in direct materials related to the recognized costs of substantial items, namely power supplies. This increase was partially offset by the decrease in subcontracting expenses of $0.2 million attributed to additional work being completed in-house and the product mix related to the cost of sales.

The amortization of intangible assets for Q2, 2024 was $0.02 million compared to $0.2 million for Q2, 2023, and during the six-month period ended June 30, 2024, was $0.1 million compared to $0.4 million for the same period in the prior year. This expense variation relates mainly to the intangible assets in connection with the Pyro Green-Gas acquisition, which have been fully amortized by January 2024. These expenses were non-cash items, and the remaining intangible assets are composed of patents, and deferred development costs that will be amortized over the expected useful lives.

As a result of the type of contracts being executed, the nature of the project activity, as well as the composition of the cost of sales and services, the mix between labour, materials and subcontracts may be significantly different. In addition, due to the nature of these long-term contracts, the Company has not necessarily passed on to the customer, the increased cost of sales which was attributable to inflation, if any. The costs of sales and services are in line with management’s expectations and with the nature of the revenue.

3. Selling, General and Administrative Expenses

Included within Selling, General and Administrative expenses (“SG&A”) are costs associated with corporate administration, business development, project proposals, operations administration, investor relations and employee training.

SG&A expenses for the second quarter of 2024 amounted to $0.2 million, reflecting a significant decrease of $6.2 million from Q2 2023. This reduction is primarily attributed to several key factors. The expected credit loss and bad debt experienced a substantial decrease of $5.2 million, primarily due to a $4.1 million payment received on a previously provisioned outstanding receivable. This payment led to a reversal of the previously recognized credit loss. Additionally, there was a decrease in the expenses following the settlement of legal proceedings involving Pyro Green-Gas and Gas RNG Systems Inc., which concluded favourably, with a $1.5 million payment. Professional fees were reduced by $0.3 million from the three-month period ended June 30, 2023, due to decreased reliance on external consultants, legal services, and other professional services. Other expenses showed a favorable variance of $0.5 million, driven by reductions in insurance expenses and marketing costs. Additionally, there was a favorable impact of $0.4 million due to changes in the foreign exchange charge on materials due to the variation of the U.S. dollar.

These decreases were partially offset by an increase in employee compensation by $0.1 million. There was also an increase of $0.2 million in office and general expenses. Moreover, there was a positive variance of $0.3 million in government grants due to higher levels of activities supported by such grants.

During the six-month period ended June 30, 2024, SG&A expenses totaled $4.8 million, a notable decrease of $9.2 million from $14.0 million for the same period in the prior year. The key factors contributing to this decrease include the expected credit loss and bad debt provision, which varied favourably by $6.2 million. This was caused mainly by the payment received from a customer whose balance was provisioned, and to higher credit loss expense recognized in Q2 2023. Employee compensation decreased by $0.3 million. Professional fees saw a significant reduction of $1.0 million due to less reliance on external consultants, legal services, and other professional services. Other expenses decreased by $0.7 million, as well, there was a favorable impact of $0.7 million on the foreign exchange charge on materials due mainly to the variation of the U.S. dollar.

Share-based compensation expense for the three and six-month periods ended June 30, 2024, was $0.3 million and $0.8 million, respectively (three and six-month periods ended June 30, 2023 - $0.7 million and $1.7 million, respectively), a decrease of $0.4 million and $1.0 million respectively, which is a non-cash item and relates mainly to 2022, and 2023 grants not repeated in 2024.

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 | 7  Next Page »



© 2024 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us
ShareCG™ is a trademark of Internet Business Systems, Inc.

Report a Bug Report Abuse Make a Suggestion About Privacy Policy Contact Us User Agreement Advertise