Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Crown ElectroKinetics Corp (CRKN, Financial) has expanded its scope of services to include four complementary markets, enhancing its revenue potential.
- The company achieved a significant technical milestone by solving the 12-inch mastering challenge for its Gen 1 Alpha Smart Window Insert product.
- Crown's Fiber Optics division is generating revenue in multiple markets, with a new operating model that allows for cash flow positivity from day one.
- The company has secured a large backbone project in Nevada, expected to generate approximately $5.7 million in revenues.
- Crown's new divisions, Element 82 and PE Pipelines, focus on lead pipe inspection and remediation, addressing a significant market need in the U.S.
Negative Points
- The development of the Electrokinetic Film has been a long and tedious process, indicating potential delays in product rollout.
- Despite technical progress, the Gen 1 Alpha Smart Window Inserts will only be available in limited quantities by the end of the year.
- The cost of revenues for the Fiber Optics division was high, with $4 million reported for the quarter, impacting overall profitability.
- The company reported a loss from operations of $4.9 million for the second quarter, consistent with the previous year.
- Crown ElectroKinetics Corp (CRKN) is still in the early stages of its new divisions, with much work needed to establish market presence and generate revenue.
Q & A Highlights
Q: Can you provide an update on the progress of the Electrokinetic Film division?
A: Sheldon Davis, President of the Electrokinetic Film division, reported significant progress, including solving the 12-inch mastering challenge for the Gen 1 Alpha Smart Window Insert product. The division is on track to start shipping in small quantities by the end of the year. The team is working on converting technical breakthroughs into manufacturing capabilities.
Q: How is the Fiber Optics division performing, and what changes have been made to its operating model?
A: CEO Doug Croxall highlighted that the Fiber Optics division is generating revenue in multiple markets, including Idaho, Nevada, Oregon, and Mexico. Under the leadership of Corey Boaz, the division has shifted to a model using a limited number of Crown employees and third-party subcontractors, allowing for cost control and margin locking.
Q: What are the new divisions Element 82 and PE Pipelines focused on, and what opportunities do they present?
A: Element 82 focuses on lead pipe inspection, and PE Pipelines on lead pipe remediation. These divisions address the significant issue of lead in drinking water pipes in the U.S. Element 82 has commenced projects in New York, Virginia, and Florida, leveraging the SWORDFISH technology for pipe material detection.
Q: Can you discuss the financial performance for Q2 2024?
A: CFO Joel Krutz reported Q2 revenues of $4.6 million, a nearly sixfold increase from Q1. The cost of revenues was $4 million, with significant contributions from subcontract labor and equipment costs. The company projects Q3 revenues to align with previous guidance of $8 million.
Q: What are the expectations for Crown Electrokinetics in the near future?
A: CEO Doug Croxall expressed optimism about the company's growth trajectory, particularly in utility construction. He anticipates 2025 to be a pivotal year for revenue and EBITDA generation, indicating a strong growth mode for the company.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
