Q1 2024 Earnings Summary
Reported on Feb 4, 2025 (After Market Close)
Pre-Earnings Price$1.16Last close (Apr 24, 2024)
Post-Earnings Price$1.16Open (Apr 25, 2024)
Price Change
$0.00(0.00%)
- Strong backlog and future orders: As of the end of Q1 2024, the company has over $30 million in open orders, with significant orders already on hand for Q3 and Q4. Solésence is expected to represent 80-90% of the company's revenues for the year , indicating sustained demand and growth potential.
- Operational improvements leading to increased throughput: Inventory availability improved to over 95%, effectively addressing materials availability issues that were a primary drag on performance in H2 2023. Throughput increased from 50% of target in January to over 90% in March, yielding a Q1 average of around 76%. The company aims to improve on-time in full (OTIF) delivery performance to greater than 90% by the end of Q2 , positioning it to better meet customer demand and drive sales growth.
- Reduction in legal expenses and focus on core business: Settlement of litigation with BASF eliminates significant legal expenses, which totaled $1.3 million in 2023 and $0.4 million in 2022, totaling $1.7 million. This frees up management bandwidth to focus on growing the Solésence business , potentially improving profitability and operational efficiency going forward.
- Revenue visibility is uncertain due to "lumpy" demand and reliance on customer-supplied components, leading to unpredictability in revenue streams. The company acknowledges that revenue cannot be guaranteed to grow steadily every week, impacting their ability to achieve consistent quarterly revenues.
- Margins are subject to significant fluctuations, with the company noting that they are "still a really small company with big things that can impact the margins in a huge way." The company admits that margins might be "fluid," and achieving the targeted 35%-40% gross margin range is uncertain.
- High dependence on Solésence business, which represents 80%-90% of revenues, indicates a concentration risk. Any issues in this segment could materially impact overall performance.