PyroGenesis Canada (TSX: PYR) this morning reported its third quarter financial results, toplined by flat revenues of $5.7 million on a quarter over quarter basis, while revenues declined on a year over year basis.
“We remain confident in our positioning and long term plans given (i) our above-industry average margins, (ii) continuing introduction of torch niche solutions, and (iii) a focus on large companies seeking technology solutions for GHG reduction and production output optimization. Combined with the upcoming commencement of major trials of our key plasma products, and near completion of various testing and certification processes by other clients, we continue to see a positive future,” commented CEO Peter Pascali on the results.
Revenues were relatively flat compared to the second quarter, falling to $5.7 million from that of $5.8 million in Q2, while on a year over year basis revenues declined 39% from $9.3 million in Q3 2021. Notably, the company attempted to make the results a story of improving margins, with margins increasing to $4.1 million, or 73%, on a gross basis, compared to $2.5 million, or 43% in the second quarter.
Despite this, SG&A for the quarter still came in higher than gross margins at $5.9 million, with R&D adding a further $0.3 million to expenses. Overall, it resulted in a net loss from operations of $2.1 million.
After financing costs and changes in fair value of strategic investments, the company posted a net loss of $4.1 million for the quarter, while adjusted EBITDA came in at negative $2.4 million.
In terms of the balance sheet, the company saw its cash position improve from $1.3 million to $2.4 million during the quarter, while accounts receivable jumped from $19.2 million to $23.8 million, representing over four quarters worth of revenue at the current run rate. Total current assets improved from $30.2 million to $34.3 million.
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In terms of liabilities, bank indebtedness declined slightly from $0.9 million to $0.7 million, while accounts payable jumped to $12.7 million from $9.4 million. Total current liabilities overall grew from $22.4 million to $26.6 million.
The real story for the quarter here appears to be the declining backlog faced by the company. As of the end of the second quarter, backlog was said to sit at $35.3 million, however this figure declined by $9.3 million by the end of the third quarter to $26.0 million – despite the company realizing only $5.7 million in revenue, suggesting clients are growing tired of waiting for product deliveries.
In terms of outlook, the company said it “remains firm in the belief that it is well positioned and remains confident in the potential sales increases cited in the previous Q2 outlook, through 2023 and beyond,” however it declined to provide forward-looking guidance.
PyroGenesis last traded at $1.28 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.
