Name: VISION ENERGY Corp Q3 2019 Earnings Call
Start: 2019-11-12T00:00:00.000Z

Executive Summary

Q3 2019 revenue declined sequentially to $1,701,365 and net loss widened to $(189,403), with diluted EPS of $(0.03); gross profit was $459,735 and loss from operations $(117,447) . Versus Q2, revenue fell from $1,927,921 and EPS worsened from $(0.01) . Versus Q3 2018, revenue fell from $1,839,491 and EPS improved from $(0.04) .
Management highlighted “over $3.8 million in new contracts” expected to be primarily completed in Q4 2019 (some in Q1 2020) and a bid list “close to $30 million,” positioning Q4/Q1 as potential catalysts if conversion to revenue occurs .
No formal guidance was provided; commentary focused on minimizing non-cash charges and leveraging growth capital raised earlier in 2019 (equity financing line) to expand in 2020 .
Street consensus (S&P Global) was unavailable for VENG in Q3 2019; estimate comparisons are therefore not provided.

What Went Well and What Went Wrong

What Went Well
- Renewables traction: management cited momentum with $3.8M new contracts and strong bid activity (~$30M), setting up Q4/Q1 execution opportunities .
- Subsidiary operational profitability: “Our two subsidiaries are operationally profitable year to date,” suggesting underlying business viability despite corporate overhead .
- Access to growth capital: company executed a $3M equity financing line in Q2, providing funding to pursue opportunities and expand in 2020 .
What Went Wrong
- Sequential revenue decline and margin compression: revenue fell to $1.70M in Q3 from $1.93M in Q2 and operating loss increased to $(117,447) from $(32,358), reflecting weaker execution/mix and higher costs .
- Higher interest and financing burden: related-party interest expense rose to $64,065 in Q3, with total other expenses $71,956, pressuring net income .
- Working capital and leverage tightness: negative working capital of $(264,588) as of 9/30/19 and increased line of credit utilization to $303,526 underscore liquidity constraints .

Metric	Q3 2018	Q1 2019	Q2 2019	Q3 2019
Revenue ($)	$1,839,491	$1,704,273	$1,927,921	$1,701,365
Gross Profit ($)	$391,803	$507,835	$618,599	$459,735
Loss from Operations ($)	$(234,822)	$(118,717)	$(32,358)	$(117,447)
Net Income (Loss) ($)	$(267,328)	$(143,638)	$(105,223)	$(189,403)
Diluted EPS ($)	$(0.04)	$(0.02)	$(0.01)	$(0.03)
Against Estimates	N/A (unavailable)	N/A (unavailable)	N/A (unavailable)	N/A (unavailable)

Segment Revenue Breakdown (Three Months Ended):

Segment	Q3 2018	Q3 2019
Renewable Systems Integration ($)	$8,499	$45,921
Non-Renewable Systems Integration ($)	$1,830,992	$1,655,444
Total ($)	$1,839,491	$1,701,365

Geographic/Stream Revenue (Three Months Ended):

KPIs and Balance Indicators:

KPI	Q2 2019	Q3 2019
Contract Backlog ($)	$451,022	$312,466
Direct Costs to Complete Backlog ($)	$353,079	$240,403
Line of Credit Outstanding ($)	$230,415	$303,526 (facility raised to $400k)
Working Capital ($)	$(33,913)	$(264,588)

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Revenue/EPS Guidance	FY/Q4 2019	None provided	None provided	Maintained: No formal guidance
Contract Execution Timeline	Q4 2019–Q1 2020	N/A	“Over $3.8M in new contracts… primarily completed in Q4, some pushed to Q1 2020”	New qualitative commentary

No Q3 2019 earnings call transcript was available.

Themes across quarters (from press releases/filings):

Topic	Previous Mentions (Q1 2019 and Q2 2019)	Current Period (Q3 2019)	Trend
Bid Pipeline	Bid list increased from ~$27M to ~$33M in Q1; ~$40M bids with ~$4M renewable in Q2	“Close to $30M of activity”	Mixed to slightly down
Growth Capital	Executed $3M equity financing line in Q2	Commentary: raised growth capital; plan expansion in 2020	Stable access; utilization rising
Non-cash Charges	Q1 non-cash $111,153; Q2 non-cash $75,980	Q3 non-cash $86,217; intent to minimize going forward	Management focus to reduce
Liquidity/Leverage	LOC outstanding $230,415 (Q2)	LOC $303,526; facility increased to $400k; negative working capital $(264,588)	Tightening liquidity
Lease Accounting (ASC 842)	Adoption recognized ROU assets/liabilities beginning 2019	Continued recognition; operating lease liability $226,978	Structural balance sheet impact persists

“Recently… we announced over $3.8 million in new contracts… primarily completed in the fourth quarter, with some… pushed out to the first quarter of 2020… bid list remains strong with close to $30 million of activity.” — Andrew Hidalgo, CEO
“Corporate expenses have been more than originally budgeted this year due primarily to capital raising efforts… We have been successful in raising growth capital which should help us expand in 2020.”
On Q2: “HCCC recently executed a $3 million equity financing line… puts us in the best position yet to take HCCC to the next level… over $40 million in bids… close to $4 million… renewable energy.”
On Q1: “Subsidiaries were profitable and performed well… bid list… increased… to $33 million… We look forward to delivering improved results in the quarters ahead.”

No Q&A transcript available for Q3 2019.

Wall Street consensus estimates via S&P Global were unavailable for VENG in Q3 2019; therefore, revenue and EPS comparisons to consensus cannot be provided.

Sequential slowdown: Revenue fell to $1.70M and operating loss widened, suggesting softer execution/mix; watch Q4 conversion of the $3.8M contracts to see if revenues rebound .
Liquidity tightness: Negative working capital $(264,588) and increased LOC draw ($303,526) point to near-term liquidity constraints; equity financing line provides flexibility but may entail dilution when utilized .
Cost discipline focus: Management aims to reduce non-cash charges; monitoring SG&A trajectory and financing costs (interest expense $75,866 total including debenture amortization in Q3) is critical for margin recovery .
Segment mix: Renewables revenue grew YoY in Q3 ($45,921 vs $8,499) but remains a small share; larger non-renewable segment declined YoY; Q4/Q1 contract execution will be key to mix and margin outcomes .
Backlog and pipeline: Backlog decreased sequentially to $312,466; however, pipeline commentary remains robust—Q4/Q1 delivery is the near-term stock catalyst .
Structural balance sheet changes: ASC 842 lease recognition elevates liabilities and ROU assets; investors should factor lease obligations in leverage assessments .
Risk lens: With no formal guidance and unavailable Street estimates, trading will hinge on contract conversion evidence and liquidity developments; subsequent financing activity (e.g., October 2019 convertible note) adds overhang risk post-quarter .