Crown Electrokinetics Corp. (CRKN)·Q4 2021 Earnings Summary

Executive Summary

• Crown Electrokinetics reported a nine‑month stub period ended December 31, 2021 with net loss of $16.5M and cash of $6.1M as the company remains pre‑revenue while vertically integrating manufacturing and preparing for initial product deliveries .
• Management shifted first shipment timing from “Q1 2022” to “this summer,” a de‑facto delay, while highlighting completion of in‑house manufacturing capabilities and Oregon facilities ramp by end of Q2 2022 .
• Commercial traction advanced: a third MSA with a large REIT (largest customer Brandywine) alongside Hudson Pacific and MetroSpaces, positioning for pilot deployments across select buildings in 2022 .
• One new purpose‑built roll‑to‑roll line is expected to support $110–$120M annual revenue and $20M EBITDA at capacity; management is pursuing non‑dilutive equipment financing ($11–$12M cost) as a near‑term catalyst .
• Wall Street consensus (S&P Global) for Q4 2021/FY2021 was unavailable; estimate context will rely on qualitative drivers (manufacturing readiness, customer MSAs, financing progress) rather than numeric beats/misses [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

• Vertical integration achieved; Crown now manufactures its own electrokinetic film (6‑inch width, moving to 12‑inch within ~1–1.5 months), improving IP protection, margins, and time‑to‑market. “We now control our own destiny” .
• Commercial progress: entered a third MSA with a large REIT; identified Brandywine (170+ buildings) and Hudson Pacific rollouts (LA/Bay Area/Northwest) for gen‑1 insert deployments in 2022 .
• Clear financial framework for scale: a single gen‑2 production line targeted to support $110–$120M revenue and ~$20M EBITDA annually, with plans for non‑dilutive equipment financing .

What Went Wrong

• Shipment timing push: prior guidance targeted first shipments in Q1 2022; updated to “this summer,” implying delay amid manufacturing build‑out .
• Elevated OpEx and losses while pre‑revenue: nine‑month operating expenses $16.9M (incl. $8.7M SBC) and net loss $16.5M; Q3 quarterly net loss was $5.7M .
• Cash burn and funding reliance: cash used in operations of $8.5M for the nine months; cash fell to $6.1M as of Dec 31, 2021; management highlighted standby letter of credit and equipment financing plans .

Financial Results

Quarterly and Stub Period Performance

Year‑over‑Year (Stub Period vs Prior Year)

Balance Sheet Snapshots

Estimates vs Actuals

*Consensus values unavailable via S&P Global for CRKN for these periods (request returned error; no coverage).

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategy and mission: Crown targets an affordable, solar‑powered smart glass insert retrofit for commercial buildings to reduce HVAC energy and carbon emissions; “We’re the only Smart Glass retrofit product in the market” .
• Manufacturing achievements: “Crown is able to manufacture our own film… we now control our own destiny” and developed “stitching” to reach up to 72‑inch widths .
• Scale economics: “One line… should be able to produce between $110–$120 million annually and… about $20 million of EBITDA annually” .
• Customer path: “We will be delivering our first generation inserts to all three customers this summer” including Hudson Pacific and Brandywine .
• Tone: CEO acknowledged stock price pressure but emphasized execution: “By controlling the inputs, we will eventually control that output” .

Q&A Highlights

• Production line timing: ~10 months from order to production readiness (design ~1.5 months; build ~5.5; install/commission ~3) contingent on financing .
• Film width flexibility: Line can run any width between 12–72 inches to optimize yield and meet window dimensions (45–60 inches typical) .
• Near‑term capacity: Corvallis proto tool targeted 800–1,000 units initially (up to 2,500–3,000/month potential); gen‑2 line ~13,000 inserts/month at maturity .
• Inflation impact: PET/ITO input costs may see slight increases; not material as of the call .
• OpEx outlook: CFO expects reduced monthly burn in the next quarter as organization optimizes .

Estimates Context

• S&P Global consensus for Q4 2021 and FY2021 was unavailable for CRKN at time of retrieval due to data access error/limited coverage; thus no numeric beat/miss analysis relative to Street is provided [GetEstimates error].
• Given pre‑revenue status and evolving manufacturing ramp, near‑term estimate revisions likely hinge on shipment timing (summer vs Q1), financing execution, and initial customer deployment scale .

Key Takeaways for Investors

• Shipment delay to summer is a short‑term negative, but vertical integration and facility ramp materially de‑risk manufacturing and improve gross margin potential .
• Commercial pipeline is broadening (third REIT MSA; Brandywine/Hudson deployments), increasing probability of early revenue capture once gen‑1 units ship .
• Equipment financing (non‑dilutive) and executed $10M LOC reduce equity raise risk for initial scale; watch for financing closes in the next 30–45 days as a stock catalyst .
• Line‑level economics ($110–$120M revenue; ~$20M EBITDA) set clear scale targets; subsequent lines could benefit from lower capex (60–70% of first line), enabling operating leverage .
• Monitor OpEx burn trajectory and cash runway; CFO expects lower monthly burn next quarter; liquidity remains the key gating factor until revenue inflects .
• Product differentiation (solar‑powered, retrofit, no hardwiring) and ESG ROI (26% HVAC savings field test) support strong customer value proposition—execution on installations is the near‑term proof point .
• Absence of Street estimates limits traditional beat/miss trading setups; stock likely reacts to discrete milestones: financing close, shipment commencement, initial building installs, and customer expansion announcements .

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