Eguana Tech Posts Q1 2021 Revenues Of $1.3 Million

Eguana Tech (TSXV: EGT) last night announced its first quarter financial results. Revenues for the quarter came in at $1.3 million, while recording an operating loss of $2.42 million for the period.

Revenues were down on a year over year basis from $2.3 million to $1.3 million. The decline in sales for the quarter was said to be the result of a global resin shortage, which limited the firms ability to complete product. Gross margin suppression also occurred during the quarter, with margins coming in at $10.4 thousand. Margin suppression was said to be the result of freight costs of raw materials.

Expenses for the quarter amounted to $2.2 million, lead by G&A expenses of $0.7 million, and selling and marketing expenses of $0.6 million. Overall, the company posted a net loss of $2.4 million.

The company noted that during the quarter they completed all certification modifications required for its 10kW Max full home system, with final certification now expected to be 4 to 6 weeks away.

The firm during the quarter also notably entered into a white label partnership arrangement with PowerCenter+, which will see the firms product white labelled under the Duracell brand. That transaction has seen two significant purchase orders already, the first for $6.0 million which was received on December 20, and the second for over $11.0 million in early February, which has lead to the company having an order book of over $17.0 million in the first eight weeks since the launch of the partnership.

That being said, revenue for the quarter, arguably, was below expectations. Stifel had estimated revenues of $2.6 million for the quarter, as well as an EBITDA loss of $1.6 million, instead of a loss of $1.9 million. The analyst firm this morning reduced the firms price target to $0.70 per share, while stating that further clarity on Calendar Q2 (Eguana’s fiscal Q3) product deliveries is “the catalyst to re-rate the stock.” The firm currently anticipates 2022 revenues of $40.0 million.

Stifel also expects the recent news of entering the microinverter market as being a positive, given that the product only has 50 components and 1 circuit board, compared to the energy storage units which have 900 components and 9 circuit boards. The company is expecting higher gross margins from this product line, and the ability to sell 300,000 units by the second half of the year.

Eguana Technologies last traded at $0.40 on the TSX Venture.

FULL DISCLOSURE: Eguana Technologies is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Eguana Technologies on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.