BALLERUP, Denmark, Nov. 9, 2023
/PRNewswire/ -- LiqTech International,
Inc. (NASDAQ: LIQT) ("LiqTech"), a clean
technology company that manufactures and markets highly specialized
filtration technologies, today announced its financial results for
the third quarter of 2023 for the period ended September 30, 2023.
Q3 2023 Financial Highlights
- Revenue of $5.1 million, a 53%
increase from Q3 2022.
- Gross profit margin of 19% compared to 3% in Q3 2022.
- Operating expenses of $2.6
million, compared to $2.4
million in Q3 2022.
- Net loss of $(1.4) million, an
improvement from $(1.8) million in Q3
2022.
- Strong ending cash balance of $11.8
million.
Recent Operational Highlights
- Received orders for two marine scrubber water treatment systems
through recently enhanced distribution relationship with Joyo in
China.
- Entered into an agreement for the distribution of LiqTech's
Aqua Solution® swimming pool water filtration systems covering the
Middle East.
- Entered into an agreement for the distribution of LiqTech's
Aqua Solution® swimming pool water filtration systems covering
Australia and Pacific
Islands.
- Entered into an amendment to extend the maturity of our
$6.0 million Senior Promissory note
from June 2024 to January 2026.
Management Commentary
"Our enhanced commercial strategy continues to deliver positive
results, driven primarily by our established businesses--including
the provision of commercial pool systems, general aftermarket
sales, and the sale of ceramic membranes and diesel particulate
filters--resulting in a year-over-year revenue growth of 53%,"
commented Fei Chen, CEO of LiqTech.
"We also continued to execute against our goals to improve our
manufacturing and operational efficiencies, demonstrating an
increase in gross profit margin from 3% in the prior-year period to
19% in the current period, coupled with a 4% sequential decline in
our operating expenses. As revenue growth continues and we better
absorb our fixed manufacturing overhead through increased
throughput, we should see continued improvement in gross profit
margins as evidenced during the third quarter. This strong trend
provides us with a clear pathway to quarterly breakeven in line
with previous guidance."
"Within the established segment of our business, we also saw the
return of our first new marine scrubber system orders in more than
18 months as we deployed an upgraded, modular-designed system
through our recently enhanced distribution relationship with Joyo
in China. LiqTech has more than
160 installations in the marine scrubber market, which occurred
primarily between 2018 and 2020. With a renewed focus on this
market, coupled with capable distribution partners, I believe there
is an opportunity to regain our position in this market in the
future."
"As we look to the rest of the year and into 2024, we see a
number of opportunities in our targeted business segment
particularly within phosphoric acid, mono ethylene glycol (MEG),
and produced water as a component of the oil and gas market, all of
which we believe will be key contributors to future growth
alongside our established business. Further, our new partnerships
within the commercial swimming pool market are expected to
accelerate our growth in this key market segment for us starting
next year."
"I am pleased with the progress our new leadership team has made
to transform LiqTech operationally and commercially to become a
leading provider of advanced and sustainable filtration solutions,
servicing our clients globally. Looking into the last quarter of
2023, we will carefully monitor the escalating conflict in the
Middle East, more specifically
Israel and Gaza, as we continue to have important O&G
projects ongoing in the region that may be negatively impacted by
the situation. Across the rest of our business, we will work
diligently to close out 2023 on a strong note while positioning for
growth and margin accretion in 2024," Chen concluded.
Q3 2023 Financial Results
Revenue for the quarter ended September
30, 2023, was $5.1 million,
compared to the $3.3 million reported
in the third quarter of 2022. The positive development in revenue
reflects a continued strengthening of our established business
lines with a significant increase in aftermarket sales, more
specifically membrane housings and general spare part sales, but
also increased deliveries for pool systems in Europe and Asia
Pacific. Furthermore, the quarter benefitted from stable DPF
activity, continued remediation work for marine systems, and
progress on external R&D projects to further strengthen our
technology base.
While delivering a strong quarter, we did see a decline in
incoming orders for general component sales due to macro-economic
uncertainty and the impact from the European holiday early in the
summer.
Gross profit for the quarter ended September 30, 2023, was $0.9 million, reflecting a gross profit margin of
19%, compared to $0.1 million, or a
gross profit margin of 3%, in the third quarter of 2022. The
positive variance in gross profit is a result of increased volume,
an improved revenue mix with elevated contribution of high-margin
aftermarket activities, enhanced pricing discipline, and targeted
cost reductions. During the quarter, we have onboarded new hires to
ramp up our ceramics manufacturing throughput, improve kiln
utilization, and compress delivery lead times. Profitability was
also underpinned by new quality and production optimization
efforts, seeking to standardize our system and service delivery
platforms.
Total operating expenses for the quarter ended September 30, 2023 were $2.6 million, compared to $2.4 million in the third quarter of 2022, with
the increase attributable to the onboarding of additional sales
representatives, increased IT costs, and intensified marketing
efforts partly offset by reduced general and administrative
expenses following the CEO transition and key management changes
recorded in the third quarter of 2022.
Other Income (Expense) for the quarter ended September 30, 2023 was $0.3 million compared to $0.5 million in the third quarter of 2022, with
the change reflecting a reduced gain on currency transactions,
partially offset by increased interest income due to a more
favorable deposit interest rate
Net Loss for the quarter ended September
30, 2023 was $(1.4) million
compared to $(1.8) million in the
third quarter of 2022. The change was attributable to the increase
in revenue and gross profit margin, partially offset by an increase
in operating expenses and reduction of other income.
Cash on hand (including restricted cash) on September 30, 2023 was $11.8 million compared to $12.6 million on June 30,
2023.
2023 Full-Year Outlook
The Company expects 2023 full year revenue between $19 million and $21
million with a reported full year gross margin range of
15-20%.
Conference Call Details
Date and Time: Thursday, November
9, 2023, at 10:00 a.m. ET
Call-in Information: Interested parties can access the
conference call by dialing (833) 535-2206 or (412) 902-6741.
Webcast: Interested parties can access the
conference call via a live webcast, which is available in the
Investor Relations section of the Company's website
at https://www.liqtech.com/investor-relations/ or at
https://app.webinar.net/zAd4Xa5XeNn.
Replay: A teleconference replay of the call will be
available until November 16, 2023, at
(877) 344-7529 or (412) 317-0088, confirmation # 8554685.
About LiqTech International Inc.
LiqTech International, Inc., a Nevada corporation, is a clean
technology company that provides state-of-the-art ceramic
silicon carbide filtration technologies for gas and liquid
purification. LiqTech's silicon carbide membranes are designed
to be used in the most challenging water purification applications,
and its silicon carbide filters are used to control diesel exhaust
soot emissions. Applying nanotechnology, LiqTech develops
products using its proprietary silicon carbide technology,
resulting in a wide range of component membranes, membrane systems,
and filters for both microfiltration and ultrafiltration
applications. By incorporating LiqTech's SiC liquid membrane
technology with the Company´s extensive systems design
experience and capabilities, LiqTech offers unique, turnkey
solutions for the most difficult water purification
applications.
For more information, please
visit www.liqtech.com
Follow LiqTech on
Linkedln: http://www.linkedin.com/company/liqtech-international
Follow LiqTech on Twitter: https://twitter.com/LiqTech
Forward–Looking Statement
This press release contains "forward-looking statements."
Although the forward-looking statements in this release
reflect the good faith judgment of management, forward-looking
statements are inherently subject to known and unknown risks and
uncertainties that may cause actual results to be materially
different from those discussed in these forward-looking
statements. Readers are urged to carefully review and
consider the various disclosures made by us in the reports filed
with the Securities and Exchange Commission, including
the risk factors that attempt to advise
interested parties of the risks that may affect
our business, financial condition, results of
operation, and cash flows. If one or more of these risks
or uncertainties materialize, or if the underlying assumptions
prove incorrect, our actual results may vary materially from those
expected or projected. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only
as of the date of this release.
We assume no obligation to update any forward-looking
statements to reflect any event or circumstance that may arise
after the date of this release.
Company Contact: Simon Stadil, Chief Financial
Officer, LiqTech International, Inc., Phone: +45 3140 9128,
www.liqtech.com;
Investor Contact: Robert Blum, Lytham Partners,
LLC, Phone: (602)
889-9700, liqt@lythampartners.com, www.lythampartners.com
LIQTECH
INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
As of
|
|
|
As of
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash and restricted
cash
|
|
$
|
11,832,959
|
|
|
$
|
16,597,371
|
|
Accounts receivable,
net of allowance for doubtful accounts of $48,909 and
$59,559 at September
30, 2023 and December 31, 2022, respectively
|
|
|
3,883,813
|
|
|
|
2,310,344
|
|
Inventories, net of
allowance for excess and obsolete inventory of $898,944
and $663,227 at
September 30, 2023 and December 31, 2022, respectively
|
|
|
4,556,000
|
|
|
|
4,062,001
|
|
Contract
assets
|
|
|
2,587,397
|
|
|
|
2,253,295
|
|
Prepaid expenses and
other current assets
|
|
|
1,311,140
|
|
|
|
1,720,902
|
|
Assets held for
sale
|
|
|
394,623
|
|
|
|
723,872
|
|
|
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
|
24,565,932
|
|
|
|
27,667,785
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Assets:
|
|
|
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of $10,713,077
and
$9,046,499 at
September 30, 2023 and December 31, 2022, respectively
|
|
|
8,640,532
|
|
|
|
8,296,807
|
|
Operating lease
right-of-use assets
|
|
|
2,827,101
|
|
|
|
3,271,997
|
|
Deposits and other
assets
|
|
|
446,149
|
|
|
|
450,038
|
|
Intangible assets, net
of accumulated amortization of $509,641 and $438,250
at September 30, 2023
and December 31, 2022, respectively
|
|
|
135,363
|
|
|
|
212,933
|
|
Goodwill
|
|
|
223,951
|
|
|
|
226,095
|
|
|
|
|
|
|
|
|
|
|
Total Long-Term
Assets
|
|
|
12,273,096
|
|
|
|
12,457,870
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
36,839,028
|
|
|
$
|
40,125,655
|
|
LIQTECH
INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|
|
|
As of
|
|
|
As of
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,233,853
|
|
|
$
|
1,389,355
|
|
Accrued
expenses
|
|
|
3,847,849
|
|
|
|
3,087,206
|
|
Current portion of
finance lease obligations
|
|
|
558,961
|
|
|
|
399,198
|
|
Current portion of
operating lease liabilities
|
|
|
548,417
|
|
|
|
561,182
|
|
Contract
liabilities
|
|
|
540,153
|
|
|
|
649,557
|
|
|
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
|
|
7,729,233
|
|
|
|
6,086,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax
liability
|
|
|
111,077
|
|
|
|
154,645
|
|
Finance lease
obligations, net of current portion
|
|
|
2,899,640
|
|
|
|
2,384,011
|
|
Operating lease
liabilities, net of current portion
|
|
|
2,278,684
|
|
|
|
2,710,815
|
|
Senior promissory
notes payable, net of debt discount of $1,455,127 and
$519,686 at September
30, 2023 and December 31, 2022, respectively
|
|
|
4,544,873
|
|
|
|
5,480,314
|
|
|
|
|
|
|
|
|
|
|
Total Long-term
Liabilities
|
|
|
9,834,274
|
|
|
|
10,729,785
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
17,563,507
|
|
|
|
16,816,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
|
Preferred stock; par
value $0.001, 2,500,000 shares authorized, 0 shares
issued
and outstanding at
September 30, 2023 and December 31, 2022
|
|
|
-
|
|
|
|
-
|
|
Common stock; par
value $0.001, 12,500,000 shares authorized, 5,727,310
and
5,498,260 shares
issued and outstanding at September 30, 2023 and
December
31, 2022,
respectively
|
|
|
5,727
|
|
|
|
5,498
|
|
Additional paid-in
capital
|
|
|
98,662,745
|
|
|
|
96,975,476
|
|
Accumulated
deficit
|
|
|
(72,710,060)
|
|
|
|
(67,351,035)
|
|
Accumulated other
comprehensive loss
|
|
|
(6,682,891)
|
|
|
|
(6,320,567)
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders'
Equity
|
|
|
19,275,521
|
|
|
|
23,309,372
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
36,839,028
|
|
|
$
|
40,125,655
|
|
LIQTECH
INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
5,070,446
|
|
|
$
|
3,305,534
|
|
|
$
|
14,071,984
|
|
|
$
|
11,961,062
|
|
Cost of Goods
Sold
|
|
|
4,121,881
|
|
|
|
3,198,255
|
|
|
|
11,569,549
|
|
|
|
11,460,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
948,565
|
|
|
|
107,279
|
|
|
|
2,502,435
|
|
|
|
500,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
965,039
|
|
|
|
676,420
|
|
|
|
3,175,699
|
|
|
|
2,932,881
|
|
General and
administrative expenses
|
|
|
1,253,779
|
|
|
|
1,429,315
|
|
|
|
3,690,211
|
|
|
|
4,611,375
|
|
Research and
development expenses
|
|
|
428,600
|
|
|
|
283,524
|
|
|
|
1,131,003
|
|
|
|
1,377,097
|
|
Restructuring
costs
|
|
|
-
|
|
|
|
(1,964)
|
|
|
|
-
|
|
|
|
1,786,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expense
|
|
|
2,647,418
|
|
|
|
2,387,295
|
|
|
|
7,996,913
|
|
|
|
10,708,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
(1,698,853)
|
|
|
|
(2,280,016)
|
|
|
|
(5,494,478)
|
|
|
|
(10,207,256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
|
103,887
|
|
|
|
1,870
|
|
|
|
272,105
|
|
|
|
344,593
|
|
Interest
expense
|
|
|
(34,734)
|
|
|
|
(28,514)
|
|
|
|
(92,633)
|
|
|
|
(394,532)
|
|
Amortization discount
on Notes
|
|
|
(86,447)
|
|
|
|
(84,098)
|
|
|
|
(257,765)
|
|
|
|
(2,304,054)
|
|
Gain (Loss) on
currency transactions
|
|
|
287,437
|
|
|
|
628,137
|
|
|
|
170,653
|
|
|
|
361,928
|
|
Gain on lease
termination
|
|
|
-
|
|
|
|
(3,317)
|
|
|
|
-
|
|
|
|
150,258
|
|
Gain on sale of fixed
assets
|
|
|
-
|
|
|
|
(19)
|
|
|
|
-
|
|
|
|
642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
|
|
270,143
|
|
|
|
514,059
|
|
|
|
92,360
|
|
|
|
(1,841,165)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes
|
|
|
(1,428,710)
|
|
|
|
(1,765,957)
|
|
|
|
(5,402,118)
|
|
|
|
(12,048,421)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Benefit
|
|
|
14,480
|
|
|
|
13,293
|
|
|
|
43,093
|
|
|
|
42,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(1,414,230)
|
|
|
$
|
(1,752,664)
|
|
|
$
|
(5,359,025)
|
|
|
$
|
(12,006,147)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
Loss Per Share
|
|
$
|
(0.25)
|
|
|
$
|
(0.32)
|
|
|
$
|
(0.94)
|
|
|
$
|
(2.95)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
Weighted Average Common Shares Outstanding
|
|
|
5,705,729
|
|
|
|
5,486,475
|
|
|
|
5,684,430
|
|
|
|
4,066,144
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multimedia:https://www.prnewswire.com/news-releases/liqtech-international-announces-third-quarter-2023-financial-results-301981901.html
SOURCE LiqTech International, Inc.