LiqTech International Announces 2020 Financial Results
LiqTech International reported a 2020 revenue of $22.5 million, down 31% from $32.6 million in 2019, with a significant net loss of $9.8 million. Despite the challenges posed by COVID-19, the company maintains a strong cash balance of $13.3 million and has increased R&D investment by 70%. A $15 million convertible note was secured to fund future investments. Management anticipates improvement in the marine scrubber market and plans to build a facility in China targeting black carbon emissions reduction.
- Strong cash balance of $13.3 million.
- R&D investment increased by 70%.
- Plans to build a manufacturing facility in China targeting black carbon emissions.
- 2020 revenue decreased by 31% due to COVID-19 impact.
- Net loss increased to $9.8 million from a profit of $0.04 million in 2019.
- Fourth quarter net loss worsened to $3.7 million from $0.8 million in Q4 2019.
BALLERUP, Denmark, March 25, 2021 /PRNewswire/ -- LiqTech International, Inc. (NASDAQ: LIQT) ("LiqTech"), a clean technology company that manufactures and markets highly specialized filtration technologies, today reported fiscal year 2020 financial results for the period ended December 31, 2020.
2020 Highlights
- 2020 revenue of
$22.5 million . - Net loss of
$9.8 million . - Strong ending cash balance of
$13.3 million . - Increased R&D investment
70% above 2019. - Developed significant market opportunities beyond marine scrubbers.
- Secured
$15.0 million Senior Unsecured Convertible Note subsequent to year-end 2020.
Management Commentary
2020 was a very challenging year and our financial performance deteriorated significantly compared to 2019. We had a modest sequential improvement in fourth quarter revenues but do not anticipate meaningful improvement in our core business until later in 2021. Although steps were taken after the first quarter of 2020 to reduce and control costs wherever possible, we subsequently made an important decision to continue key investments in research & development and manufacturing for the future.
Our core marine scrubber market was hit particularly hard in 2020 by the COVID-19 pandemic. While underlying marine scrubber economic fundamentals have improved in early 2021, alongside increased customer interest and inquiry levels, incoming orders remain at a lower level than pre-pandemic levels. However, the price spread between high and low sulfur fuels (HSFO and LSFO), the key economic driver supporting investments in marine scrubbers to meet the IMO 2020 low sulfur emissions mandate, has steadily increased and remains above
Sune Mathiesen, CEO, commented, "We continue to look to the future in expanding LiqTech beyond its historic reliance on the marine scrubber market to becoming a more diversified clean technology filtration company by leveraging our core membrane and filtration technologies into other attractive end markets. To generate near-term revenue growth, we are seeking to capitalize on the recovery and anticipated growth in the marine scrubber market. But perhaps more importantly longer term, we are looking to generate revenue growth through the launching of our water treatment solutions into the oil and gas market and by addressing the black carbon emissions reduction market, particularly for the Chinese marine industry. These clean technology opportunities are rapidly developing and provide increasing optimism for later in fiscal 2021 and beyond."
"In this regard, today we are announcing plans to build a manufacturing facility in China to serve the black carbon emissions reduction market for ocean-going and inland vessels. To help fund these important investments, we are also pleased to announce a
"Our progress in the oil and gas and black carbon emissions reduction markets and the improving business case for marine scrubbers provide us with confidence in returning the Company to growth and profitability. We believe that our investments in R&D and manufacturing, coupled with a strong balance sheet, position us well to execute on our strategies."
2020 Financial Results
Net sales in 2020 were
Net sales for the fourth quarter of 2020 were
Gross profit in 2020 was
Total operating expense in 2020 was
Other income/(expense) in 2020 was
Income taxes in 2020 were a benefit of
Net income in 2020 was negative
Cash on hand and restricted cash at December 31, 2020 was
Marine Scrubber Market
The marine scrubber market continues to show signs of improvement following the global economic effects of the COVID-19 pandemic. The price spread between HSFO and LSFO has widened and appears now to have stabilized above
Research analysts estimate that an additional 4,000 to 6,000 ships will yet be retrofitted with exhaust gas scrubber systems. We continue to believe that trends in the marine scrubber market favor increased adoption of closed loop scrubbers that employ the Company's filtration technology. This transition to closed loop systems could accelerate with a potential global port ban of open loop systems, providing LiqTech the additional opportunity to supply conversion filtration systems for some 4,000 vessels that have already installed open loop or hybrid scrubber systems.
Black Carbon / NOx Reduction Marine Market
Our optimism in the rapidly developing black carbon market for ocean-going and inland marine vessels has led the Company to take a decision to move forward with plans to build a new manufacturing facility in China. The facility will manufacture both black carbon and NOx reduction products and will also function as a service center for our marine scrubber products.
Tightening legislation in the marine industry has created an enormous market opportunity to utilize our extensive experience in diesel particulate filters (DPF) to also reduce black carbon emissions. China is taking the lead in reducing their black carbon emissions but we also see new mandates in several European countries and have expectations that the IMO could likely implement global black carbon emissions reduction regulation. Today's announcement of our plans to build a new manufacturing facility in China is an important and exciting step towards capturing a significant share of this market.
Oil & Gas Market
The Company's Middle East joint venture is focused on the deployment of water filtration systems based on LiqTech's proprietary silicon carbide ceramic filtration technology for long-term water supply agreements with oil and gas producers. We are making progress towards receiving our first contract. The market in the Middle East is also being driven by tightening regulation for environmentally-friendly and sustainable solutions to address local water scarcity and oil production challenges. As discussed at our January 2021 investor day, travel restrictions have made it difficult to conduct necessary site assessments and have thereby caused a delay in the expected receipt of the first contract. However, we remain confident that we will see major orders from these oil and gas market opportunities later in 2021.
Capital Funding
On March 24, 2021, the Company entered into a purchase agreement for a
Sune Mathiesen concluded, "We are putting the building blocks in place now to execute on an aggressive growth strategy centered on our proprietary silicon carbide filtration technology. We expect to play a pivotal role in mitigating environmental threats across a wide variety of industries. We believe 2021 will be the first of many exciting years for LiqTech."
Conference Call Details
Date and Time: Thursday, March 25, 2021 at 9:00 a.m. ET
Call-in Information: Interested parties can access the conference call by dialing (833) 535-2206 or (412) 902-6741.
Replay: A teleconference replay of the call will be available until April 1, 2021 at (877) 344-7529 or (412) 317-0088, confirmation #10153272.
About LiqTech International Inc.
LiqTech International, Inc., a Nevada corporation, is a clean technology company that provides state-of-the-art ceramic silicon carbide filtration technologies for gas and liquid purification. LiqTech's silicon carbide membranes are designed to be used in the most challenging water purification applications and its silicon carbide filters are used to control diesel exhaust soot emissions. Using nanotechnology, LiqTech develops products using its proprietary silicon carbide technology, resulting in a wide range of component membranes, membrane systems and filters for both microfiltration and ultrafiltration applications. By incorporating LiqTech's SiC liquid membrane technology with the Company´s extensive systems design experience and capabilities, LiqTech offers unique, turnkey solutions for the most difficult water purification applications.
For more information, please visit: www.liqtech.com
Follow LiqTech on Linkedln: http://www.linkedin.com/company/liqtech-international
Follow LiqTech on Twitter: https://twitter.com/LiqTech
Forward–Looking Statement
This press release contains "forward-looking statements." Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.
We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.
Company Contact:
Sune Mathiesen, Chief Executive Officer
LiqTech International, Inc.
Phone: +45 5197 0908
www.liqtech.com
Investor Contact:
Robert Blum
Lytham Partners, LLC
Phone: (602) 889-9700
liqt@lythampartners.com
www.lythampartners.com
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES | ||||
As of | As of | |||
December 31, | December 31, | |||
2020 | 2019 | |||
(Unaudited) | ||||
Current Assets: | ||||
Cash, cash equivalent and Restricted Cash | $ 13,264,449 | $ 9,783,932 | ||
Accounts receivable, net | 3,040,602 | 6,272,760 | ||
Inventories, net | 5,522,038 | 5,199,238 | ||
Contract assets | 2,796,632 | 5,664,929 | ||
Prepaid expenses and other current assets | 919,936 | 566,398 | ||
Total Current Assets | 25,543,657 | 27,487,257 | ||
Other Assets: | ||||
Property and Equipment, net | 6,891,798 | 4,619,825 | ||
Financial leased assets, net | 3,429,713 | 206,127 | ||
Operating lease right-of-use assets | 4,947,734 | 5,053,614 | ||
Deposits and other assets | 545,673 | 498,053 | ||
Intangible assets, net | 565,160 | 488,716 | ||
Goodwill | 260,233 | 236,131 | ||
Total Long-Term Assets | 16,640,311 | 11,102,466 | ||
Total Assets | $ 42,183,968 | $ 38,589,723 | ||
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES | ||||
As of | As of | |||
December 31, | December 31, | |||
2020 | 2019 | |||
(Unaudited) | ||||
Current Liabilities: | ||||
Accounts payable | $ 2,332,151 | $ 4,339,070 | ||
Accrued expenses | 4,552,639 | 3,222,951 | ||
Current portion of finance lease obligation | 394,839 | 34,772 | ||
Current portion of operating lease obligations | 1,026,235 | 999,685 | ||
Current portion of earn-out liability | 330,164 | 299,585 | ||
Contract liabilities | 1,152,167 | 1,421,376 | ||
Accrued income taxes payable | 570 | 14,692 | ||
Total Current Liabilities | 9,788,765 | 10,332,131 | ||
Deferred tax liability | 305,167 | 338,763 | ||
Finance lease obligation, net of current portion | 3,112,496 | 172,273 | ||
Operating lease liability, net of current portion | 4,159,225 | 4,141,855 | ||
Earn-out liability, net of current portion | - | 599,170 | ||
Total Long-Term Liabilities | 7,576,888 | 5,252,061 | ||
Total Liabilities | 17,365,653 | 15,584,192 | ||
Stockholders' Equity: | ||||
Common stock; par value | 21,655 | 20,548 | ||
Additional paid-in capital | 69,897,698 | 61,398,150 | ||
Accumulated deficit | (42,054,967) | (32,246,608) | ||
Other comprehensive loss | (3,046,071) | (6,166,559) | ||
Total Stockholders' Equity | 24,818,315 | 23,005,531 | ||
Total Liabilities and Stockholders' Equity | $ 42,183,968 | $ 38,589,723 |
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES | ||||
For the years ended | ||||
December 31, | ||||
2020 | 2019 | |||
Revenue | $ 22,526,201 | $ 32,637,484 | ||
Cost of Goods Sold | 20,379,519 | 25,475,170 | ||
Gross Profit | 2,146,682 | 7,162,314 | ||
Operating Expenses: | ||||
Selling expenses | 2,918,418 | 2,426,971 | ||
General and administrative expenses | 6,205,040 | 4,563,216 | ||
Research and development expenses | 1,278,331 | 749,249 | ||
Total Operating Expense | 10,401,789 | 7,739,436 | ||
Income (Loss) from Operations | (8,255,107) | (577,122) | ||
Other Income (Expense) | ||||
Gain on modification of earn-out liability | 306,077 | - | ||
Interest and other income | 139,513 | 73,635 | ||
Interest expense | (120,903) | (18,831) | ||
Fair value adjustment of warrants | (901,250) | - | ||
Gain (Loss) on currency transactions | (1,469,607) | 285,742 | ||
Gain (Loss) on sale of fixed assets | 27,772 | (21,060) | ||
Total Other Income (Expense) | (2,018,398) | 319,486 | ||
Income (Loss) Before Income Taxes | (10,273,505) | (257,636) | ||
Income Tax Provisions (Benefit) | (465,145) | (297,252) | ||
Net Income (Loss) | (9,808,360) | 39,616 | ||
Basic Income (Loss) Per Share | $ (0.46) | $ 0.00 | ||
Diluted Income (Loss) Per Share | $ (0.46) | $ 0.00 | ||
Basic Weighted Average Common Shares Outstanding | 21,209,118 | 19,652,277 | ||
Diluted Weighted Average Common Shares Outstanding | 21,209,118 | 19,667,752 |
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SOURCE LiqTech International, Inc.
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