Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cematrix Corp (CTXXF, Financial) anticipates 2024 to be its second-best year ever, despite project delays.
- The company has a strong backlog and sales pipeline, with $74.7 million in backlog and a pipeline of $400 to $450 million.
- Gross margins have improved significantly, with a 4% increase in Q3 2024 compared to Q3 2023.
- The company successfully completed a TSX uplisting and a $6.6 million life financing, strengthening its financial position.
- Cematrix Corp (CTXXF) is generating positive cash flow and EBITDA, despite revenue declines.
Negative Points
- Revenue for Q3 2024 decreased by 50% compared to Q3 2023, primarily due to project delays.
- Year-to-date sales are down 26% compared to 2023, reflecting the impact of delayed projects.
- The company experienced delays in six major projects, affecting its financial performance in 2024.
- The Canadian market has been slower to adopt cellular concrete compared to the US, impacting growth potential.
- There are no penalties for customers who delay projects, which can lead to unutilized capacity and increased costs for Cematrix Corp (CTXXF).
Q & A Highlights
Q: Russell Stanley asked about the potential impact of tariffs and opportunities with the new administration.
A: Jeff Kendrick, CEO, stated that tariffs would not negatively affect Cematrix as they do not sell materials across the border. He also mentioned that infrastructure spending under the new administration could potentially benefit the company, although this is not factored into current forecasts.
Q: Russell inquired about the strongest demand for project types in 2025.
A: Jeff Kendrick, CEO, highlighted strong demand across various applications, including highway underlays, bridge backfill projects, and tunnel projects. He emphasized the importance of small to medium-sized projects, which can represent a significant portion of their business.
Q: Russell questioned how Cematrix balances targeting larger projects versus smaller ones.
A: Jeff Kendrick, CEO, explained that Cematrix focuses on both large and small to medium-sized projects. Large projects significantly boost the top line, while smaller projects provide a stable base with potentially higher margins and fewer delays.
Q: Russell asked about the sales process and pipeline.
A: Randy Boomhour, COO, described a dual approach: pursuing public procurement projects and building strategic relationships with contractors and designers. The company prioritizes expanding its sales team to grow the top line.
Q: A question was raised about the Canadian market's adoption of cellular concrete compared to the US.
A: Randy Boomhour, COO, noted that the US market is 10-20 years ahead of Canada. Cematrix is focusing on gaining approvals from provincial transportation departments and targeting major population centers to improve product adoption in Canada.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
