PyroGenesis Blames Declining Revenue On Slow “Technology Adoption”

PyroGenesis Canada (TSX: PYR) released on Friday morning its Q4 and full-year 2022 results, toplined by a quarterly revenue of $3.3 million. This is a decline from both $5.7 million in Q3 2022 and $7.2 million in Q4 2021.

The firm also recorded $19.0 million in annual revenue, a huge drop from 2021’s $31.1 million.

“From a revenue perspective, it is disappointing that a slower pace of technology adoption occurred in 2022 than was anticipated – particularly with our aluminum sector prospects, as companies adjusted at various points to shortages of raw materials, soaring energy prices, and ongoing international trade and supply chain volatility – which weighed negatively on our results compared to 2021,” said CEO P. Peter Pascali in a statement.

Pascali added that they acknowledge that the company “is selling into industries contemplating significant technological change” and as such, “revenues are likely to be irregular and unpredictable quarter to quarter.”

READ: Pyrogenesis CEO Peter Pascali Files To Sell 850,000 Shares

A huge chunk of the year-on-year revenue decline is attributed to support services related to systems supplied for the US Navy “due to the project nearing its completion.” DROSRITE™ related sales also contributed to the slump “due to client delays in funding for the construction of the onsite facility.”

Gross margin also declined to 14.5% in the fourth quarter from 18.1% in the comparable period last year. The company attributes this to the negative impact in foreign exchange charge on materials. This improved, however, on an annual basis, ending the year with 42.8% gross margin compared to 2021’s 40%.

Expenses incurred during Q4 jumped to $9.8 million from last year’s $8.2 million. This led to the firm ending at a net loss of $10.7 million compared to a net loss of $22.4 million in Q4 2021. The net loss for the quarter translates to a $0.06 loss per share.

Annually, the net loss came in at $32.2 million compared to 2021’s net loss of $38.4 million.

The firm ended the year with $3.4 million in cash and cash equivalents from a balance of $12.2 million at the beginning of the year. This resulted in the company recording $27.4 million of total current assets while current liabilities ended at $25.8 million.

While the company did not provide guidance for 2023, it said it will continue to “increase sales, marketing, and R&D efforts in-line with–and in some cases ahead of–the growth curve for industrial change related to greenhouse gas reduction efforts.”

Pyrogenesis last traded at $1.13 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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