Crown Electrokinetics Corp. (CRKN) 2024 Q1 法說會逐字稿

Good afternoon, everyone, and welcome to the Crown Electrokinetics first quarter 2024 conference call. (Operator Instructions) This conference call is being recorded. A replay of today's call will be available on the Investor Relations section of the Crown website.

大家下午好，歡迎參加 Crown Electrokinetics 2024 年第一季電話會議。（操作員說明）本次電話會議正在錄音。今天電話會議的重播將在皇冠網站的投資者關係部分提供。

I will now hand the call over to Jason Assad, Director of Corporate Communications for introductions and the reading of the Safe Harbor statement. Please go ahead.

我現在將把電話轉交給企業傳播總監賈森·阿薩德 (Jason Assad)，以進行介紹並宣讀安全港聲明。請繼續。

Thank you, operator. Good afternoon and welcome to Crown's first quarter 2024 call. With us today on the call are Doug Croxall, Crown's Chief Executive Officer and Chairman; and Joel Krutz, Chief Financial Officer.

謝謝你，接線生。下午好，歡迎參加 Crown 2024 年第一季的電話會議。今天與我們一起參加電話會議的有皇冠執行長兼董事長 Doug Croxall；財務長喬爾‧克魯茨 (Joel Krutz)。

Before we begin, I'd like to remind you that today's call contains certain forward-looking statements from management made within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended. Words such as should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements.

在我們開始之前，我想提醒您，今天的電話會議包含管理層根據 1933 年證券法及其修訂案第 27A 條和 1934 年證券交易法第 21E 條的含義做出的某些前瞻性聲明，經修正。諸如“應該”、“項目”、“期望”、“打算”、“計劃”、“相信”、“預期”、“希望”、“估計”等詞語以及這些詞語的變體和類似表達旨在識別前瞻性陳述。

These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's quarterly report on Form 10-Q for the first quarter ended 2024. Copies of these documents are available on the SEC's website at sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law.

這些聲明受到許多條件的約束，其中許多條件超出了公司的控制範圍，包括公司截至 2024 年第一季的 10-Q 表格季度報告的風險因素部分中列出的條件。這些文件的副本可在 SEC 網站 sec.gov 上取得。實際結果可能與此類前瞻性陳述明示或暗示的結果有重大差異。除非法律要求，否則本公司沒有義務在本次電話會議之後更新這些聲明的修訂或更改。

Now at this time, it's my pleasure to introduce Doug Croxall, CEO and Chairman of Crown. Doug?

現在，我很高興向您介紹 Crown 執行長兼董事長 Doug Croxall。道格？

Thanks, Jason, and welcome, everybody, to our first quarter 2024 earnings call. As most of you know, Crown is comprised of two divisions: a film division and a fiber division. We're going to start with our discussion of the film division today.

謝謝 Jason，歡迎大家參加我們的 2024 年第一季財報電話會議。正如大多數人所知，Crown 由兩個部門組成：薄膜部門和纖維部門。我們今天將從電影部門的討論開始。

In late February of this year, we announced that Crown's Electrokinetics Film team had solved the 12-inch mastering challenge for its Gen 1 alpha smart window insert. We remain in a great position to start shipping first product in small quantities later this summer.

今年 2 月底，我們宣布 Crown 的 Electrokinetics Film 團隊已經解決了其第一代 alpha 智慧窗嵌件的 12 吋母帶製作挑戰。我們仍然處於有利地位，可以在今年夏天晚些時候開始小批量發貨第一批產品。

With this technical milestone behind us, Crown recently announced that Sheldon Davis, who was previously a consultant to the company, was named President of our Electrokinetics Film division. Sheldon's work history makes him the ideal person for Crown's exact stage of growth. Sheldon and I have known each other since 2016 while he was working at Guardian Industries, a Coke Industries company.

隨著這項技術里程碑的到來，Crown 最近宣布，公司前顧問謝爾登戴維斯 (Sheldon Davis) 被任命為電動薄膜部門總裁。謝爾頓的工作經歷使他成為皇冠發展階段的理想人選。謝爾頓和我自 2016 年相識，當時他在可口可樂工業公司旗下的 Guardian Industries 工作。

His knowledge of our information and window glass manufacturing and different glazing technologies like electrochromic, SPD, and liquid crystal make him the perfect person for the job. We're excited to have him take a leadership role at this important time. Crown feels very fortunate -- going forward, Crown expects to provide more details on product capabilities, timing, customer wins, as well as pricing and expected revenue and margins.

他對我們的資訊和窗玻璃製造以及電致變色、SPD 和液晶等不同玻璃技術的了解使他成為這項工作的最佳人選。我們很高興讓他在這個重要時刻發揮領導作用。Crown 感到非常幸運——展望未來，Crown 預計將提供有關產品功能、時間表、贏得客戶以及定價和預期收入和利潤的更多詳細資訊。

Now what I want to talk about is how we're going to roll out what we call our Gen 1 alpha, Gen 1 beta, and Gen 1 charlie. Gen1 alpha, as we stated earlier, is smart window insert, which should be hitting the market in the August to September time frame, very small quantities. Our goal is to roll 4 to 10 inserts per building, approximately 10 to 20 buildings, covering large cities within the United States.

現在我想談談我們將如何推出我們所說的 Gen 1 alpha、Gen 1 beta 和 Gen 1 charlie。正如我們之前所說，Gen1 alpha 是智慧窗嵌，應該會在 8 月至 9 月期間上市，數量非常少。我們的目標是在每座建築物上滾動 4 到 10 個插入物，大約 10 到 20 座建築物，覆蓋美國的大城市。

The objective in the Gen 1 alpha is to get customer feedback. As we gather that feedback back, we'll run a parallel path, creating Gen 1 beta, which we expect to roll out sometime towards the end of the calendar year. Doing the same thing, generating customer feedback, customer direction, we'll launch Gen 1 charlie early next year. Gen alpha, Gen1 beta, and Gen1 charlie will help us build what we believe will be the first mass produced smart window insert sometime in the spring to summer of next year.

第一代 alpha 的目標是獲得顧客回饋。當我們收集回饋時，我們將運行並行路徑，創建第一代測試版，我們預計將在今年年底的某個時候推出。做同樣的事情，產生客戶回饋，客戶方向，我們將在明年初推出第一代查理。Gen alpha、Gen1 beta 和 Gen1 charlie 將幫助我們打造出我們相信明年春季到夏季的某個時候大規模生產的第一款智慧窗嵌。

Moving to the Fiber Optics division. As you know, a little over a year ago, Crown made its first investment in fiber optics construction market. The last 19 to 20 months approved some pretty hard lessons taught us a great deal about the market, how to operate and how not to operate within it.

轉移到光纖部門。如您所知，一年多前，Crown 首次投資光纖建設市場。在過去 19 到 20 個月裡，我們經歷了一些相當慘痛的教訓，教會了我們很多關於市場、如何在市場中運作以及如何不在市場中運作的知識。

Crown Fiber is generating revenue in multiple markets under the leadership of Corey Boaz, who we've named President of Construction in early February. We have current projects in Idaho, Nevada, soon to start in California, and Mexico. Corey's not only added revenue and customers to the company but helped us change our operating model that allows Crown to be cash flow positive on a project from day one.

Crown Fiber 在 Corey Boaz 的領導下在多個市場創造收入，我們在 2 月初任命了他為建築總裁。我們目前在愛達荷州、內華達州有項目，很快將在加利福尼亞州和墨西哥啟動。科里不僅為公司增加了收入和客戶，還幫助我們改變了營運模式，使 Crown 從專案的第一天起就實現了正現金流。

As opposed to hiring hundreds of employees, we now partner with other subcontractors. This allows Crown to control cost on a project-by-project basis as well as lock in our margins. Corey has market credibility and connections that has allowed him to build a significant pipeline of revenue-generating projects. The pipeline leverage with this proven business model will allow Crown to generate revenue and soon, net positive income.

我們現在不再僱用數百名員工，而是與其他分包商合作。這使得 Crown 能夠逐個項目地控製成本並鎖定我們的利潤。科里擁有市場信譽和人脈關係，這使他能夠建立大量創收項目。這種經過驗證的商業模式的管道槓桿將使皇冠能夠產生收入，並很快產生淨正收入。

Most recently, Crown announced and it has secured a large backbone project in Nevada that includes horizontal drilling and plowing. The long-haul fiber project recently commenced its completion slated through the company's third quarter. Currently, Crown has received two clusters of the project, which will generate approximately $5.7 million in gross revenues. We anticipate being awarded additional stages of the project as it continues into the State of California.

最近，Crown 宣布並已獲得內華達州的大型骨幹項目，其中包括水平鑽探和犁耕。長途光纖專案最近開始完成，預計在公司第三季完成。目前，Crown 已收到該項目的兩個集群，將產生約 570 萬美元的總收入。隨著該項目繼續延伸到加利福尼亞州，我們預計將獲得該項目的額外階段。

We also recently announced that we've secured a project in Idaho for horizontal drilling as a prime contractor. The large fiber-to-home project has commenced where it is expected to continue throughout the calendar year, likely resulting in additional work in California, Arizona, and Oregon with the same customer.

我們最近也宣布，我們已作為主承包商獲得了愛達荷州的水平鑽井專案。大型光纖到戶計畫已經啟動，預計將在全年持續進行，可能會導致同一客戶在加州、亞利桑那州和俄勒岡州進行更多工作。

On March 6, Crown announced that we had executed an agreement with Twin Dolphin Club located in Los Cabos, Mexico. The Twin Dolphin Club is a 1,400 resort master plan development. Crown's Fiber Optic division will construct slant wells for the desalinization plant that provides freshwater from ocean water to the hotel and surrounding planned residential development. The project is expected to start later this spring and conclude in the early fall time.

3 月 6 日，皇冠宣布我們已與位於墨西哥洛斯卡沃斯的雙海豚俱樂部簽署了一項協議。雙海豚俱樂部是一個擁有 1,400 人的度假村總體規劃開發案。Crown 的光纖部門將為海水淡化廠建造斜井，為飯店和周邊規劃的住宅開發項目提供海水中的淡水。該項目預計將於今年春季晚些時候啟動，並於秋季初結束。

The project is expected to generate about $3.5 million of revenue. The opportunity was generated and managed by Corey. The new approach to building slant wells should lead to new revenue opportunities in Mexico, Central America, and the Caribbean. Importantly, the agreement generates upfront cash and is anticipated to lead to other opportunities.

該項目預計將產生約 350 萬美元的收入。這個機會是由科里創造和管理的。建造斜井的新方法將為墨西哥、中美洲和加勒比地區帶來新的收入機會。重要的是，該協議會產生預付現金，並預計會帶來其他機會。

Okay. With that, I'm going to turn it over to Joel and I will handle the closing remarks. Joel?

好的。這樣，我將把它交給喬爾，我將處理結束語。喬爾？

Thanks, Doug. Good afternoon, everyone. Today, we'll walk through Crown's 2024 first quarter financial results. Ahead of that though, just a quick update on our current NASDAQ bid price on compliance. As you're aware, we received notification from NASDAQ on October 19 which initially gave Crown 180 days traded by $1 for 10 consecutive days. We recently met with NASDAQ's hearing panel to request an extension for a further 180 days and are waiting the panel's guidance on next steps.

謝謝，道格。大家下午好。今天，我們將回顧 Crown 2024 年第一季的財務表現。不過在此之前，請先快速更新我們目前的納斯達克合規出價。如您所知，我們於 10 月 19 日收到納斯達克的通知，最初給予皇冠 180 天的交易期限，連續 10 天以 1 美元交易。我們最近與納斯達克聽證小組會面，請求再延長 180 天，並正在等待該小組對下一步的指導。

As we discussed with the panel of the company's growing production levels and improving financials and overall fundamentals should contribute to enhancing Crown's market value, but we will also ensure the company has other options necessary to retain our NASDAQ listing.

正如我們與小組討論的那樣，該公司不斷增長的生產水平以及改善的財務狀況和整體基本面應有助於提高皇冠的市場價值，但我們還將確保該公司擁有其他必要的選擇來保留我們在納斯達克的上市地位。

On to the Q1 financials. And for the quarter ended March 31, 2024, Crown's net loss was $4.6 million. This included $0.9 million of noncash other expense primarily related to the final amortization of our line of credit, which expired in Q1. Net losses from operations were $3.7 million compared to Q1 2023's $4.1 million.

關於第一季的財務狀況。截至 2024 年 3 月 31 日的季度，皇冠的淨虧損為 460 萬美元。這包括 90 萬美元的非現金其他費用，主要與我們的信貸額度的最終攤銷有關，該信貸額度於第一季到期。營運淨虧損為 370 萬美元，而 2023 年第一季為 410 萬美元。

Crown recorded $0.7 million of revenue in its fiber division for the quarter, with the majority of those back-ended. The company also booked $1.2 million of deferred revenue for work due to begin in late Q2, primarily Q3. Total operating expenses for the quarter were $4.7 million, with cost of revenue of $1.6 million. This was primarily driven by the operations in Arizona, which the company has now fully scaled back. There was $0.8 million of film R&D and $2 million of depreciation/amortization and SG&A in the quarter.

Crown 光纖部門本季營收為 70 萬美元，其中大部分為後端收入。該公司還為將於第二季末（主要是第三季）開始的工作預訂了 120 萬美元的遞延收入。該季度的總營運費用為 470 萬美元，收入成本為 160 萬美元。這主要是由亞利桑那州的業務推動的，該公司現已全面縮減業務規模。本季的電影研發費用為 80 萬美元，折舊/攤提和銷售管理費用為 200 萬美元。

For the quarter ended March 31, net cash decreased $0.8 million as the company deployed $2.7 million of cash operations. Crown raised $2 million from its financing activities, primarily its ELOC. And as of March 31, 2024, cash and cash equivalents were $0.3 million.

截至 3 月 31 日的季度，淨現金減少 80 萬美元，因為該公司部署了 270 萬美元的現金業務。Crown 從其融資活動（主要是 ELOC）中籌集了 200 萬美元。截至 2024 年 3 月 31 日，現金及現金等價物為 30 萬美元。

In terms of access to finance, the company still has $42 million available on its ELOC and also has access to a revolving line of credit, which will support working capital needs in the fiber business, which is critical as we are looking to operate and scale our production across multiple markets.

在融資方面，該公司的 ELOC 仍有 4,200 萬美元可用，並且還可以獲得循環信貸額度，這將支持光纖業務的營運資金需求，這對於我們尋求營運和規模擴張至關重要我們的生產遍布多個市場。

In terms of looking forward, we still expect second quarter revenues to be in line with guidance, but we're going to provide an update and first look at Q3 in the near future. Finally, we're all set to file our 10-Q after market today. However, our auditors have advised us with a backlog in their quality control process, which may mean we have to file for a brief nontimely submission today. We're obviously working very closely with our auditors and we'll do all we can to avoid that situation.

就展望而言，我們仍然預計第二季收入將符合指引，但我們將在不久的將來提供最新情況並首先關注第三季。最後，我們今天準備提交 10-Q 售後市場報告。然而，我們的審計員告訴我們，他們的品質控制流程已經積壓了，這可能意味著我們今天必須提交一份簡短的、不合時宜的提交文件。顯然，我們正在與審計師密切合作，我們將盡一切努力避免這種情況。

That concludes the financial update. Doug, back to you.

財務更新到此結束。道格，回到你身邊。

All right. Thanks, Joel. So the great Chicago Bears Coach, Mike Ditka, once said, only losers and cowards live in the past. But I would like -- with all due respect to him, I would like to point out one thing. If you look at where this company was one year ago, compared to where we are today, we've added great leadership in the film division with Sheldon. We've added great leadership in the fiber division with Corey.

好的。謝謝，喬爾。所以偉大的芝加哥熊隊教練麥克迪特卡曾經說過，只有失敗者和懦夫才會活在過去。但我想——帶著對他應有的尊重，我想指出一件事。如果你看看這家公司一年前的情況，與我們今天的情況相比，我們在電影部門增加了謝爾頓的出色領導力。我們在光纖部門增加了 Corey 的優秀領導力。

We've got customer contracts both in the film division and obviously as well in the fiber division. We're generating significant revenue certainly compared in this quarter, certainly compared to the quarter before and to the nonexistent revenue the same quarter last year. We're on track to be net positive -- net income positive before the end of the year.

我們在薄膜部門和光纖部門都有客戶合約。與本季相比、與前一季相比以及去年同季幾乎不存在的收入相比，我們確實產生了可觀的收入。我們預計在年底前實現淨利潤為正值。

So the company is in a great position. We're growing. We've got good capital sources to allow for nondilutive growth in the fiber division, and we're really excited for our Q2 results and look forward to talking to everybody in mid-August. Thank you. I'll turn it back to the operator.

因此，公司處於有利地位。我們正在成長。我們擁有良好的資本來源，可以實現光纖部門的非稀釋性成長，我們對第二季的業績感到非常興奮，並期待在 8 月中旬與大家交談。謝謝。我會將其返還給接線員。

Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

謝謝。本次會議現已結束。感謝您參加今天的演講。現在您可以斷開線路。