• Revenue: $2.5 million, a decrease of 51% from $5.1 million in the same quarter last year.
• System Sales and Related Services: $0.7 million, down from $2.6 million in the same period last year.
• DPF and Ceramic Membrane Sales: $1.1 million, compared to $1.6 million in the same period last year.
• Plastics Revenues: $0.7 million, equivalent to Q3 last year.
• Gross Margin: Negative gross loss of $0.2 million, compared to a positive gross margin of $0.9 million last year.
• Operating Expenses: $2.4 million, down from $2.6 million in Q3 of last year.
• Net Loss: $2.8 million, compared to $1.4 million for the comparable period of 2023.
• Cash Balance: Ended the quarter with $4.5 million in cash, with a pro forma cash balance of $13.3 million after a private placement.
• Cost Reduction Plan: Aimed at lowering break-even target to a quarterly revenue run rate of approximately $5.5 million.

• Warning! GuruFocus has detected 5 Warning Signs with LIQT.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LiqTech International Inc (NASDAQ:LIQT) has more systems in various phases of testing and piloting than at any point in its history, indicating strong potential for future growth.
• The company has successfully placed pilot units in key markets, including oil and gas, petrochemicals, and lithium brine production, showcasing the versatility and demand for its technology.
• LiqTech International Inc (NASDAQ:LIQT) has established a joint venture in China to expand its presence in the marine water treatment market, which is a significant growth opportunity.
• The company has implemented a cost reduction plan, lowering its break-even target and demonstrating a commitment to financial discipline.
• LiqTech International Inc (NASDAQ:LIQT) ended the quarter with a solid balance sheet, holding a pro forma cash balance of more than $13 million, providing financial stability and flexibility.

Negative Points

• A large commercial produced water treatment project in North America was delayed, significantly impacting third-quarter results and causing a 51% revenue decrease compared to the same quarter last year.
• The company experienced a slowdown in its DPF and ceramic membrane business, attributed to temporary market conditions and customer hesitancy due to potential interest rate cuts.
• Revenue from system sales and related services decreased significantly, from $2.6 million in the same period last year to $0.7 million this quarter.
• The delivery of swimming pool systems fell short of expectations, highlighting challenges in this segment.
• Net loss for the quarter increased to $2.8 million compared to $1.4 million for the same period in 2023, indicating ongoing profitability challenges.

Q & A Highlights

Q: Can you provide more details on the delay in shipping to the oil and gas market and its impact on future orders? A: The delay was due to the customer's decision to change the installation location, which requires additional testing. The shipment is now expected in the first half of 2025. This delay does not affect the pilot's ability to secure follow-on orders as the system's robustness has been demonstrated. - Fei Chen, CEO

Q: How significant is the lithium brine market, and what is the typical system size? A: The lithium brine market is substantial, with potential system sizes being significantly larger than usual, possibly double or five times the size of typical systems. The market is very promising, and our technology has shown unique performance. - Fei Chen, CEO

Q: How do you track your order pipeline, and do you have a backlog figure? A: We track our recurring business with dollar-marked pipelines for potential orders. For longer sales cycles, we follow each step from testing to pilot orders, which should lead to commercial-sized orders. - Robert Blum, Managing Partner

Q: What are the challenges faced in the pool system market this year? A: The challenges were internal, related to underperformance by sales management. We have since made changes, hiring new sales personnel and building distribution partnerships. We expect improvements in 2025. - Fei Chen, CEO

Q: Can you elaborate on the joint venture in China for marine scrubbers? A: The joint venture with a state-owned technology research institute in Jiangsu aims to strengthen our presence in China. It involves hiring local staff, establishing service and spare parts support, and potentially localizing system assembly. This will enhance our market position in China's marine industry. - Fei Chen, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.