Pyrogenesis Canada Inc (PYR) 2023 Q2 法說會逐字稿

Good morning, everyone, and thank you for joining PyroGenesis 2023 second quarter financial results and business update conference. On the call with us today are Steve McCormick, Vice President of Corporate Affairs; Andre Mainella, Chief Financial Officer. Peter Pascali, Chief Executive Officer, will not be joining us today as he is currently on a business trip. The company issued a press release on Thursday, August 10, 2023, containing a business update and financial results for the second quarter, which ended June 30, 2023, and which can be viewed on the company's website. (Operator Instructions) The company's management will now provide prepared remarks reviewing the operational and financial results for the second quarter ended June 30, 2023.

大家早上好，感謝您參加 PyroGenesis 2023 年第二季度財務業績和業務更新會議。今天與我們通話的是公司事務副總裁 Steve McCormick；安德烈·梅內拉，首席財務官。首席執行官彼得·帕斯卡利 (Peter Pascali) 今天不會參加我們的活動，因為他目前正在出差。該公司於 2023 年 8 月 10 日星期四發布了一份新聞稿，其中包含截至 2023 年 6 月 30 日的第二季度的業務更新和財務業績，可在公司網站上查看。 （操作員指示）公司管理層現在將提供準備好的評論，審查截至 2023 年 6 月 30 日的第二季度的運營和財務業績。

I would like to remind everyone that this discussion will include forward looking information that is based on certain assumptions, is subject to risks and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Forward-looking information provided in this call speaks only as of the date of this call, and it's based on the plans, belief, estimates, projection, expectations, opinions, and assumptions of management as of today's date. There can be no assurance that forward-looking information will prove to be accurate, and you should not place undue reliance on forward-looking information. PyroGenesis disclaims any obligation to update any forward-looking information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

我想提醒大家，本次討論將包括基於某些假設的前瞻性信息，這些信息存在風險和不確定性，可能導致實際結果與歷史結果或前瞻性信息預期的結果存在重大差異。本次電話會議中提供的前瞻性信息僅代表截至本次電話會議之日的情況，並且基於截至今天為止管理層的計劃、信念、估計、預測、期望、意見和假設。無法保證前瞻性信息將被證明是準確的，您不應過度依賴前瞻性信息。 PyroGenesis 不承擔更新任何前瞻性信息或解釋後續實際事件與此類前瞻性信息之間任何重大差異的義務，除非適用法律要求。

In addition, during the course of this call, there may also be references to certain non-IFRS financial measures, including references to adjusted net loss and adjusted EBITDA, which do not have any standardized, meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For more information about both forward-looking information and non-IFRS financial measures, including a reconciliation of each of adjusted net loss and adjusted EBITDA to net loss, please refer to the company's management discussion and analysis, which along with the financial statements, are available on the company's website at www.pyrogenesis.com and the company's corporate filings on SEDAR at www.sedar.com.

此外，在本次電話會議期間，還可能會提及某些非 IFRS 財務指標，包括調整後淨虧損和調整後 EBITDA，這些指標在 IFRS 下沒有任何標準化含義，因此可能無法與其他公司也提出了類似措施。有關前瞻性信息和非國際財務報告準則財務指標的更多信息，包括調整後淨虧損和調整後EBITDA 與淨虧損的調節表，請參閱公司管理層討論和分析，該討論和分析與財務報表一起，可在公司網站 www.pyrogenesis.com 以及 SEDAR 網站 www.sedar.com 上查閱該公司的公司文件。

With that, I will now turn the call over to Steve McCormick, Vice President of Corporate Affairs. Please go ahead, Steve.

現在，我將把電話轉給公司事務副總裁史蒂夫·麥考密克 (Steve McCormick)。請繼續，史蒂夫。

Thanks, Rodayna, and thanks, everyone, for joining us today on our call. I'm going to start off with a quick review of some of the company's top-line financials, followed by a summary of key business activities that occurred during the quarter. I'll then turn the call over to the company's Chief Financial Officer, Andre Mainella.

謝謝羅達娜，也謝謝大家今天加入我們的電話會議。我將首先快速回顧一下公司的一些主要財務數據，然後總結本季度發生的關鍵業務活動。然後我會將電話轉給公司首席財務官安德烈·梅內拉 (Andre Mainella)。

So we exited the quarter with revenues of just over $3 million, which was lower than desired, especially after the expectations set by the company's highest-ever second quarter results from 2021 and 2022. While lower, this quarter's results are not out of range when compared to the rest of the company's second quarter financial history, but certainly leaves room for improvement as the company works to regain the momentum of the last two years.

因此，我們以略高於300 萬美元的收入結束本季度，這低於預期，特別是在公司2021 年和2022 年第二季度最高業績設定的預期之後。雖然較低，但本季度的業績並未超出預期範圍。與該公司第二季度財務歷史的其他部分相比，但隨著該公司努力恢復過去兩年的勢頭，肯定還有改進的空間。

Gross margin was up considerably to 37%, rising back to a level more consistent with the company's past second quarter results. Given that several of the company's technology solutions are either only recently commercialized or can have long time spans between orders of a similar system type, we regard any high or even medium-sized margins at such an early stage as very positive and a strong sign for the future. As the company continues to focus on improving efficiency for its technologies while growing its customer base, future sales should improve margin even further.

毛利率大幅上升至 37%，回升至與公司過去第二季度業績更為一致的水平。鑑於該公司的一些技術解決方案要么最近才商業化，要么類似系統類型的訂單之間可能有很長的時間跨度，我們認為在如此早期階段的任何高甚至中等規模的利潤都是非常積極的，並且是一個強烈的跡象。未來。隨著該公司繼續專注於提高技術效率，同時擴大客戶群，未來的銷售應該會進一步提高利潤率。

But 37% gross margin is also notable when compared to the industries, the company primarily serves who continue to have difficulty maintaining 2022 level margins due to persistent logistical difficulties and an inflationary environment for heavy industry and the customers. For example, overall, aluminum industry margins continued to fall to 6.3% in the second quarter, down from approximately 19.8% in 2022. Iron and steel industry margins are down to 26.9% from 30.7%, metal and mining fell to 28% from 31.5%, and aerospace and defense is at 20.7%, down from 25.6%, all Q2 versus previous year's Q2.

但與行業相比，37% 的毛利率也很引人注目，該公司主要服務於由於持續的物流困難以及重工業和客戶的通脹環境而繼續難以維持 2022 年水平利潤率的行業。例如，總體而言，第二季度鋁行業利潤率繼續下降至6.3%，低於2022年的約19.8%。鋼鐵行業利潤率從30.7%下降至26.9%，金屬和採礦行業利潤率從31.5%下降至28%。 %，航空航天和國防為 20.7%，低於去年第二季度的 25.6%。

And when compared to other industrial machine and component manufacturers, PyroGenesis' 37% is slightly ahead of the sector with the broader industry registering 36.3% second quarter margin. And finally, backlog, which for the quarter was a bright spot, growing to $33.9 million. This represents the 12th quarter out of the last 15 above $30 million in backlog since the company first reached that mark in 2019. In general, and as stated in previous reports, the company's revenues are likely to be irregular and unpredictable quarter to quarter as contract related revenue fluctuates for a variety of reasons.

與其他工業機器和零部件製造商相比，PyroGenesis 的 37% 略領先於該行業，整個行業第二季度的利潤率為 36.3%。最後，積壓訂單增長至 3,390 萬美元，是本季度的一個亮點。自該公司2019 年首次達到這一水平以來，這是過去15 個季度中積壓超過3000 萬美元的季度中的第12 個季度。總體而言，正如之前的報告所述，該公司的收入可能會按照合同規定按季不規律且不可預測。相關收入因多種原因而波動。

Revenue is accrued on a percentage of work completed model that varies based on both the nature of the project and the client's own scheduling and logistical decisions, both of which can impact the company's production milestones and resulting ability to book revenue.

收入是根據已完成工作的百分比計算的，該模型根據項目的性質以及客戶自己的調度和物流決策而變化，這兩者都會影響公司的生產里程碑以及由此產生的預訂收入的能力。

During this period of continued supply chain, logistical and inflationary challenges, those issues have been more frequent and exacerbating. As noted in the 2022 year-end report, some client projects were indeed experiencing longer than expected client logistical or project management delays impacting the company's ability to conclude key aspects of projects such as commissioning that would advance revenue progression. And this continued into 2023, contributing to the lower quarterly revenue for the first half of the year.

在供應鏈、物流和通貨膨脹持續面臨挑戰的時期，這些問題更加頻繁且加劇。正如 2022 年年終報告中指出的那樣，一些客戶項目確實經歷了比預期更長的客戶物流或項目管理延遲，影響了公司完成項目關鍵方面的能力，例如可以促進收入增長的調試。這種情況一直持續到 2023 年，導致上半年季度收入下降。

Also noted in the 2022 full year report was the additional caution and highly methodical approaches occurring within industries undergoing decarbonization efforts especially in regards to fuel switching to electricity. These changes are often preceded by first time and lengthy pilot and testing phases where unanticipated issues can often lead to delay. An example of this of just such an occurrence was reported by the company in this quarter's outlook, whereby the company's iron ore palletization towards clients suffered damages after torrential rainstorms that affected the Montreal area. The furnace containing the company's torches was impacted causing several week delay to the current site acceptance testing leading up to the trials.

2022 年全年報告還指出，正在進行脫碳工作的行業內採取了額外的謹慎態度和高度有條理的方法，特別是在燃料轉向電力方面。這些變化之前通常是首次和漫長的試點和測試階段，其中意外問題通常會導致延遲。該公司在本季度的展望中報告了此類事件的一個例子，該公司向客戶提供的鐵礦石托盤在影響蒙特利爾地區的暴雨後遭受了損失。裝有該公司火炬的熔爐受到影響，導致目前試驗前的現場驗收測試延遲了幾週。

Overall, while the financials for the second quarter were an improvement on Q1 by 17%, we still have work to do. As existing customers continue to press forward on slower moving projects while resolving their own logistical issues, our aim is to add more concurrent, overlapping, and higher profit projects to help offset slowdowns that may occur in other areas. We continue to increase sales and marketing efforts to this end to significant improvement in margins, the ongoing focus on efficiency, and the recent signing of contracts in new markets bodes well for this objective.

總體而言，雖然第二季度的財務狀況比第一季度提高了 17%，但我們仍有工作要做。隨著現有客戶繼續推進進展緩慢的項目，同時解決他們自己的物流問題，我們的目標是增加更多並發、重疊和利潤更高的項目，以幫助抵消其他領域可能出現的放緩。為此，我們繼續加大銷售和營銷力度，以顯著提高利潤，持續關注效率，最近在新市場簽署的合同預示著這一目標的良好實現。

And now on to company business. First, a reminder of the company's business strategy that the company outlined starting in 2022-year end results. The company is a provider of a growing technology ecosystem for heavy industry with a number of solutions in different stages from early pilot to full commercialization. That ecosystem is a concentration of offerings under three verticals that align with the economic drivers key to heavy industry.

現在談談公司業務。首先，提醒大家注意公司從 2022 年最終業績開始概述的業務戰略。該公司是不斷發展的重工業技術生態系統的提供商，擁有許多處於從早期試點到全面商業化不同階段的解決方案。該生態系統集中了三個垂直領域的產品，與重工業的關鍵經濟驅動因素相一致。

These three verticals are energy transition and emission reduction, which focuses on fuel switching, helping heavy industry reduce their fossil fuel use and lower their greenhouse gas emissions by utilizing the company's electric-powered plasma torches and it's biogas upgrading technology across various process steps.

這三個垂直領域是能源轉型和減排，其重點是燃料轉換，通過利用該公司的電動等離子炬和跨越各個工藝步驟的沼氣升級技術，幫助重工業減少化石燃料的使用並降低溫室氣體排放。

Second, waste remediation, the safe destruction of hazardous materials and the recovery and valorization of underlying substances such as chemicals and minerals that can be reused or resold. And third, commodity security and optimization, which is using the company's technology to aid in the recovery of viable (technical difficulty) and in the optimization of production output. Both actions meant to improve the availability of critical minerals such as titanium, aluminum, magnesium, and others that are essential for modern manufacturing.

其次，廢物整治、危險材料的安全銷毀以及可重複使用或轉售的化學品和礦物等基礎物質的回收和增值。第三，商品安全和優化，即利用公司的技術來幫助恢復可行的（技術難度）和優化產量。這兩項行動都旨在提高鈦、鋁、鎂等現代製造業所必需的關鍵礦物的可用性。

But first, there was a key development that occurred post quarter end that the company believes will have impact for the years ahead. On August 1, the company was awarded a $4.1 million contract to produce a 4.5-megawatt plasma torch system for US-based aeronautics and defense contractor. Both the client and the technology contracted for are positive developments for the company's future. The nature of the client, a highly regarded, but confidential contractor for the US government as well as for public and private corporations helps to reaffirm PyroGenesis's long term opportunity within both military and aeronautics.

但首先，季度末後發生了一項關鍵進展，該公司認為這將對未來幾年產生影響。 8 月 1 日，該公司獲得了一份價值 410 萬美元的合同，為美國航空和國防承包商生產 4.5 兆瓦等離子炬系統。客戶和合同技術都對公司的未來產生了積極的發展。客戶的性質是美國政府以及公共和私營公司備受推崇但保密的承包商，這有助於重申 PyroGenesis 在軍事和航空領域的長期機會。

The technology of 4.5-megawatt plasma torch system reveals a necessity for appreciably higher power levels solutions made without fossil fuels. The demand for which the company sees accelerating as a result of advancing global energy transition measures. Higher-powered systems such as the 4.5 megawatt and beyond will help the company expand into other heavy industries such as glass, cement, and petrochemical that are also facing tightening greenhouse gas emission regulations, while considering moves toward electricity.

4.5 兆瓦等離子炬系統技術揭示了無需化石燃料而提供明顯更高功率水平的解決方案的必要性。該公司認為，由於全球能源轉型措施的推進，需求不斷增加。 4.5兆瓦及以上等更高功率的系統將幫助該公司擴展到玻璃、水泥和石化等其他重工業，這些工業也面臨著嚴格的溫室氣體排放法規，同時考慮轉向電力。

Moving now to actual in-quarter Q2 production highlights. In the energy transition and emission reduction vertical, in May, the company announced that its subsidiary, Pyro Green-Gas, had successfully completed the integrated cold test step or ICT under a previously announced $9.3 million project with a key client who is one of the world's top diversified steel producers.

現在轉向第二季度實際生產亮點。在能源轉型和減排垂直領域，該公司於5 月宣布，其子公司Pyro Green-Gas 已成功完成了先前宣布的930 萬美元項目的綜合冷測試步驟或ICT，其關鍵客戶是該公司的主要客戶之一。世界頂級的多元化鋼鐵生產商。

The test completion marked a significant milestone towards the completion of the overall project where power green gas has been mandated to supply: first, coke oven gas purification solutions; and second, hydrogen production processes that combined -- have the potential to allow for the extracting of hydrogen with a 99.999% purity level while improving the client's environmental outcome.

此次測試的完成標誌著整個項目完成的一個重要里程碑，電力綠色燃氣的任務是提供：一是焦爐煤氣淨化解決方案；二是焦爐煤氣淨化解決方案。其次，氫氣生產工藝相結合，有可能提取純度為 99.999% 的氫氣，同時改善客戶的環境成果。

With the implementation of Pyro Green-Gas's hydrogen extraction technology, the client would benefit from a cleaner energy source for its annealing, galvanizing, and acid recovery processes helping to reduce its carbon footprint. The ICT step confirms that all systems, equipment, and components meet and exceed the required operation and safety standards.

通過實施 Pyro Green-Gas 的氫氣提取技術，客戶將受益於其退火、鍍鋅和酸回收工藝的更清潔能源，有助於減少其碳足跡。 ICT 步驟確認所有系統、設備和組件均滿足並超過所需的操作和安全標準。

Within commodities, security, and optimization, this quarter saw a major corporate breakthrough. As in May, the company announced the signing of its first commercial by-the-tonne order for titanium metal powder, a key material used in additive manufacturing, the ink, so to speak, that is used by 3D printers to make metal parts and components. The contract for 5 metric tonnes or 5,000 kilograms was a provisional order for an additional 6 tonnes.

在商品、安全和優化方面，本季度企業取得了重大突破。今年 5 月，該公司宣布簽署了首個按噸計算的商業鈦金屬粉末訂單，鈦金屬粉末是增材製造中使用的關鍵材料，可以說是 3D 打印機用來製造金屬零件和墨水的墨水。成分。 5 公噸或 5,000 公斤的合同是額外 6 噸的臨時訂單。

These titanium metal powders are being produced using the company's NexGen plasma atomization system, which the company has spent several years designing, developing, and testing to produce what is planned to be among the highest quality titanium metal powders available. The NexGen system has evolved from producing initial test batches measured in grams to sample batches measured in kilograms and then hundreds of kilograms.

這些鈦金屬粉末是使用該公司的 NexGen 等離子霧化系統生產的，該公司花了數年時間設計、開發和測試該系統，以生產出計劃成為最高質量鈦金屬粉末的產品。 NexGen 系統已從生產以克為單位的初始測試批次發展到以公斤為單位的樣品批次，然後發展為數百公斤。

The company's stated goal has been to gain orders by-the-ton and with his order from an advanced materials company in the US who has requested an anonymity, that goal has been achieved, signaling full entrance into the titanium metal powders marketplace.

該公司的既定目標是獲得大量訂單，而隨著他從一家要求匿名的美國先進材料公司獲得的訂單，這一目標已經實現，標誌著該公司全面進入鈦金屬粉末市場。

In June, the company announced an achievement regarding its GEN3 PUREVAP Quartz Reduction Reactor pilot plant, or QRR., which received successful laboratory validation. The high purity silicon rated 3N+ was produced in one step from quartz. During test number five of a multi test phase, the pilot plant achieved an average silicon purity percentage of 99.92% across two separate tests. This outcome validates the capability of the QRR process to surpass the minimum purity requirement of 3N or 99.9% that is needed for battery grade silicon, especially silicon used in electric vehicle batteries.

6 月，該公司宣布其 GEN3 PUREVAP 石英還原反應堆試驗裝置 (QRR.) 取得了一項成就，該裝置已成功獲得實驗室驗證。等級為 3N+ 的高純度矽是由石英一步生產出來的。在多重測試階段的第五次測試中，中試工廠在兩次單獨的測試中實現了 99.92% 的平均矽純度百分比。這一結果驗證了 QRR 工藝能夠超越電池級矽（尤其是電動汽車電池中使用的矽）所需的 3N 或 99.9% 的最低純度要求。

As noted at the time in the client news release, silicon also known as silicon metal is a key strategic material needed for the decarbonization of the economy and the renewable energy revolution. However, silicon does not exist in its pure state and must be extracted from quartz. And what is historically been a capital and energy extensive -- intensive process. As invented by PyroGenesis, the PUREVAP is an innovative patented process that will enable the one-step conversion of quartz into high purity silicon, reduced cost, reduced energy input, and carbon footprint.

正如當時在客戶新聞稿中指出的那樣，矽也稱為金屬矽，是經濟脫碳和可再生能源革命所需的關鍵戰略材料。然而，矽並不以其純淨狀態存在，必須從石英中提取。從歷史上看，這是一個資本和能源密集型的過程。 PUREVAP 由 PyroGenesis 發明，是一種創新的專利工藝，可將石英一步轉化為高純度矽，從而降低成本、減少能源輸入和碳足跡。

The client HPQ Silicon Inc. is an advanced materials company that offers a unique portfolio of sustainable silica and silicon solutions sought after by electric vehicle and battery manufacturers among others. PyroGenesis is the engineering and development producer, but also as part of the terms of the contract with HPQ, PyroGenesis benefits from a royalty payment representing 10% of the client sales with set minimums.

客戶 HPQ Silicon Inc. 是一家先進材料公司，提供獨特的可持續二氧化矽和矽解決方案組合，深受電動汽車和電池製造商等的追捧。 PyroGenesis 是工程和開發生產商，但作為與 HPQ 簽訂的合同條款的一部分，PyroGenesis 受益於佔客戶銷售額 10%（最低設定值）的特許權使用費。

And lastly, for the company's waste remediation vertical in June, the company signed two contracts with Aluminerie Alouette for projects to valorize residue waste streams from primary aluminum smelters. Alouette located in Quebec, is home to the largest aluminum smelter in the Americas. The first contract is to further advance the technology to treat spent pot lining or SPL that the company originally announced in March of 2021 upon receipt of a research grant to study the concept.

最後，對於該公司的廢物整治垂直領域，該公司於 6 月份與 Aluminerie Alouette 簽署了兩份合同，涉及對原鋁冶煉廠殘留廢物流進行增值的項目。 Alouette 位于魁北克省，是美洲最大的鋁冶煉廠的所在地。第一份合同是進一步推進處理廢鍋內襯或 SPL 的技術，該技術最初是該公司在 2021 年 3 月收到研究該概念的研究資助後宣布的。

Pot linings are the insulating carbon material that helps enable electrical conductivity inside an aluminum smelter cell called the pot. As part of the process of turning aluminum oxide into aluminum. This lining typically has an average lifespan of about five years, after which it eventually fails from continuous use, causing the pot to be considered spent and put out of service, and the highly contaminated linings to be removed and replaced. An estimated 1.5 million tonnes of spent pot linings are produced annually worldwide.

鍋襯裡是絕緣碳材料，有助於在稱為鍋的鋁冶煉單元內實現導電性。作為將氧化鋁轉化為鋁的過程的一部分。這種襯裡的平均壽命通常約為五年，之後它最終會因連續使用而失效，導致鍋被認為已用完並停止使用，並且高度污染的襯裡需要被拆除和更換。據估計，全球每年生產 150 萬噸廢罐襯裡。

PyroGenesis' SPL remediation technology has now advanced to the point where full participation Alouette in partnership with PyroGenesis has commenced. If PyroGenesis's proposed process proves successful, it could address a major issue concerning the aluminum industry. The second contract is geared to develop a new valorization solution for material known as excess electrolytic bath. In both instances, the dangerous materials, if processed correctly, can be recovered and reused by the primary aluminum producer.

PyroGenesis 的 SPL 修復技術現已發展到 Alouette 與 PyroGenesis 合作的全面參與程度。如果 PyroGenesis 提出的工藝被證明是成功的，它可以解決有關鋁工業的一個重大問題。第二份合同旨在為稱為過量電解槽的材料開發一種新的增值解決方案。在這兩種情況下，如果處理正確，危險材料都可以由原鋁生產商回收和再利用。

Both projects have a commercial angle to market the solutions industry wide in conjunction with the Aluminerie Alouette.

這兩個項目都從商業角度與 Aluminerie Alouette 一起在整個行業內推廣解決方案。

To read about additional events and updates to ongoing projects not discussed on this call, please refer to the corresponding section of the news release or the management discussion and analysis, in particular, the outlook sections of those documents. I'll be back at the end for some final thoughts. But at this point, I'd like to turn the call over to the company's Chief Financial Officer, Andre Mainella, to discuss the financials in more detail. Andre?

要了解本次電話會議中未討論的其他事件和正在進行的項目的更新，請參閱新聞稿或管理層討論和分析的相應部分，特別是這些文件的展望部分。我會在最後回來提出一些最後的想法。但此時，我想將電話轉給公司首席財務官安德烈·梅內拉 (Andre Mainella)，以更詳細地討論財務狀況。安德烈？

Thank you, Steve, and good morning, everyone. Let me begin with a review of our financial results. Total revenue for Q2 2023 was $3 million compared to $5.8 million for the same period last year. Revenue for the first six months of 2023 was $5.6 million compared to $10.1 million for the same period of 2022. Although second quarter revenue for 2023 was modest by recent company standards, in previous years only 2021 and 2022 showed second quarter revenue larger than this year's Q2 results. The revenue variation was seen as a general decrease in individual product lines, except for increased sales related to development and support related to the US Navy and increased sales related to SPARC refrigerant destruction, which both increased by $0.2 million each.

謝謝你，史蒂夫，大家早上好。讓我首先回顧一下我們的財務業績。 2023 年第二季度的總收入為 300 萬美元，而去年同期為 580 萬美元。 2023 年前六個月的收入為560 萬美元，而2022 年同期為1,010 萬美元。儘管按照最近的公司標準，2023 年第二季度的收入並不高，但往年只有2021 年和2022 年第二季度的收入高於今年的收入第二季度結果。收入變化被視為個別產品線的普遍下降，但與美國海軍相關的開發和支持相關的銷售額增加以及與 SPARC 製冷劑銷毀相關的銷售額增加（兩者均增加了 20 萬美元）。

As of August 10, 2023, the company had a backlog of signed and/or awarded contracts of $33.9 million. The company's backlog grew again, remaining very comfortably above both the $10 million backlog level that was reached for the first time in Q2 of 2019 and the $25 million backlog threshold first established in Q3 of 2019. This quarter's $33.9 million backlog also represents a rise from Q1 2023 and Q4 2022, which were both at $30.6 million and $32.4 million, respectively. And it is, in fact, the fifth largest quarterly backlog in the company's history.

截至 2023 年 8 月 10 日，該公司已簽署和/或授予的合同積壓金額為 3390 萬美元。該公司的積壓訂單再次增長，仍然輕鬆地高於2019 年第二季度首次達到的1000 萬美元積壓訂單水平和2019 年第三季度首次設定的2500 萬美元積壓訂單閾值。本季度的3390 萬美元積壓訂單也有所增加。 2023 年第一季度和 2022 年第四季度分別為 3060 萬美元和 3240 萬美元。事實上，這是該公司歷史上第五大季度積壓訂單。

Gross profit for Q2 '23 was $1.1 million or 37% of revenues and compared to $2.5 million or 43% for Q2 of 2022. For the six-month period ended June 2023, the gross profit was $1.6 million or 29% compared to a gross profit of $3.5 million or 35% for the six months ended June 2022. The company's healthy gross margin achieved in the current quarter represents a large rebound of more than 1,600 basis points from Q1, which was 20.3% and a 22% basis points over Q4 2022, which was 14.5% margin. This quarter comprise no special or one-time measures contributing to this 37% margin and is based exclusively on production.

2023 年第二季度的毛利潤為110 萬美元，佔收入的37%，而2022 年第二季度的毛利潤為250 萬美元，佔收入的43%。截至2023 年6 月的六個月期間，毛利潤為160 萬美元，佔總收入的29%。截至2022 年6 月的六個月，利潤為350 萬美元，即35%。該公司本季度實現的健康毛利率較第一季度大幅反彈超過1,600 個基點，較第一季度為20.3%，較第四季度提高22% 2022 年，利潤率為 14.5%。本季度沒有採取特殊或一次性措施來實現 37% 的利潤率，並且完全基於產量。

The decrease in the gross profit margin was mainly attributable to the impact of employee compensation, foreign exchange and finally, to the amortization of intangible assets, which does not vary based on revenue.

毛利率下降主要是由於員工薪酬、外匯以及無形資產攤銷的影響，無形資產攤銷不隨收入而變化。

Selling, general and administrative expenses were $6.4 million and $14 million for the three and six months period ended June 30, 2023, respectively, and compared to $7.1 million for Q2 '22 and $12.7 million for the same 2022 six month period. The decrease in Q2 2023 is mainly a result of the share-based compensation expense, which is a noncash item and relates mainly to prior year's grants, not repeated in 2023.

截至2023 年6 月30 日的三個月和六個月期間，銷售、一般和管理費用分別為640 萬美元和1,400 萬美元，而2022 年第二季度的銷售費用為710 萬美元，2022 年同期的六個月期間為1,270 萬美元。 2023 年第二季度的減少主要是由於股權激勵費用，該費用是非現金項目，主要與上一年的補助有關，2023 年不會重複。

The share-based compensation expense for the three-month period ended June 2023 decreased to $0.7 million, down from $1.7 million in Q2 of 2022. Also as part of the SG&A reduction, professional fees for Q2 2023 were $1 million, which decreased by $0.8 million compared to the Q2 of 2022 period. Due to a reduction and tightening in accounting fees, legal, an Investor Relations expense. The offsetting increase to our SG&A expenses, including employee compensation and to the expected credit loss, which increased to $0.7 million in Q2 2023 and is due to the additional quarterly allowance whereby no such expense is reported in the comparable periods.

截至2023 年6 月的三個月期間的股權激勵費用從2022 年第二季度的170 萬美元減少至70 萬美元。作為SG&A 削減的一部分，2023 年第二季度的專業費用為100 萬美元，減少了0.8 美元與 2022 年第二季度相比。由於會計費用、法律費用和投資者關係費用的減少和收緊。我們的 SG&A 費用（包括員工薪酬和預期信用損失）的抵消性增長在 2023 年第二季度增加至 70 萬美元，這是由於額外的季度津貼，而在可比期間沒有報告此類費用。

Research and development expense for Q2 '23 was $0.7 million compared to $0.8 million for Q2 of 2022. This slight decrease in R&D expense for Q2 '23 is related to less material and equipment expense, offset by an increase in employee compensation for a net variation of $50,000. Net finance costs amounted to a $0.9 million income in the current quarter versus an expense of $0.2 million in Q2 of 2020.

23 年第2 季度的研發費用為70 萬美元，而2022 年第2 季度的研發費用為80 萬美元。23 年第2 季度研發費用的小幅下降與材料和設備費用的減少有關，但被員工薪酬淨變化的增加所抵消50,000 美元。本季度的淨財務成本收入為 90 萬美元，而 2020 年第二季度的支出為 20 萬美元。

The favorable variation of $1.1 million is due to the reversal of a liability connected to the balance due on business combination. This milestone payment will not be required and therefore, the reversal of the liability favorably impact the income statement. The change in fair value of strategic investment for the current quarter with a loss of $1.2 million versus $7.5 million for the comparable quarter. This was caused by both the disposition and the fair value of the common shares and warrants of HPQ recognized in the period.

110 萬美元的有利變化是由於與企業合併到期餘額相關的負債的沖銷。不需要這一里程碑付款，因此，負債的沖銷會對損益表產生有利影響。本季度戰略投資公允價值變化為虧損 120 萬美元，而去年同期為 750 萬美元。這是由於本期間確認的 HPQ 普通股和認股權證的處置和公允價值造成的。

Comprehensive loss for Q2 2023 was $6.3 million, reflecting a decrease of $6.7 million compared to Q2 of 2022. This decrease is summarized as a decrease in SG&A -- explained earlier -- a decrease in cost of sales and services while achieving a 37% gross margin, a decrease in financial expense, and most significant, the changes in the strategic investment.

2023 年第二季度的綜合虧損為630 萬美元，與2022 年第二季度相比減少了670 萬美元。這一下降概括為SG&A 的下降（如前所述），即銷售和服務成本的下降，同時實現了37% 的毛利率利潤率、財務費用的減少，最重要的是戰略投資的變化。

Lastly, the modified EBITDA, a useful metric in assessing the company's operations as it excludes non-cash and or discretionary items, was a loss of $4.7 million in Q2 2023 compared to a loss of $3.2 million in same period last year. This is an increase of $1.5 million and is explained by the comprehensive loss detailed earlier. And adjusting mainly for depreciation, amortization, net finance costs, share-based expense, and fair value adjust.

最後，修正後的 EBITDA 是評估公司運營的一個有用指標，因為它不包括非現金和/或可自由支配的項目，2023 年第二季度虧損 470 萬美元，而去年同期虧損 320 萬美元。增加了 150 萬美元，原因是前面詳述的綜合損失。主要針對折舊、攤銷、淨財務成本、股份費用和公允價值調整進行調整。

At this point, I'll turn the call back over to Steve.

此時，我會將電話轉回給史蒂夫。

Thanks very much, Andre. In closing, despite a lower quarter year over year, revenues exhibited an upturn over Q1, and management remains confident in its long-term strategy as the opportunities for the company across the large-scale industrial technology and industrial decarbonization landscapes are both significant and emerging. With return growth to the backlog and a varied pipeline, the company has some unique developments on the horizon, stemming from existing customer partnerships as well as from new and even some returning clients.

非常感謝，安德烈。最後，儘管季度同比有所下降，但收入較第一季度有所好轉，管理層對其長期戰略仍然充滿信心，因為公司在大規模工業技術和工業脫碳領域的機遇既重大又新興。隨著積壓訂單的回報增長和多樣化的管道，該公司即將迎來一些獨特的發展，這些發展源於現有的客戶合作夥伴關係以及新客戶甚至一些回頭客。

As the company's CEO, Peter Pascali was quoted in today's news release, while the barriers to entry for gaining a foothold in these markets has always been high from both a technology and resource perspective, particularly in the energy transition segments where fundamental structural change to long-established underlying energy and fuel systems are conducted with measured and exacting processes and where delays are common, we firmly believe that this is where our close to 30 years of R&D and our long-standing industry relationships provide a long-term advantage.

今天的新聞稿中引用了該公司首席執行官彼得·帕斯卡利(Peter Pascali) 的話說，雖然從技術和資源角度來看，在這些市場立足的進入壁壘一直很高，特別是在能源轉型領域，因為根本性的結構性變革需要長期的努力。 -已建立的基礎能源和燃料系統是通過經過衡量和嚴格的流程進行的，並且在延遲很常見的情況下，我們堅信，這就是我們近30 年的研發和長期的行業關係提供長期優勢的地方。

As evidence, against much larger competitors and by using our globally recognized expertise in ultra-high-temperature processes such as plasma, along with robust client relationship building, we continue to experience successes that have enabled us to push past the barriers to entry in several of our strategic business lines.

作為證據，與規模大得多的競爭對手相比，通過利用我們在等離子等超高溫工藝方面全球公認的專業知識以及強大的客戶關係建設，我們不斷取得成功，使我們能夠突破多個領域的進入壁壘。我們的戰略業務線。

The above-mentioned commercialization and the by-the-tonne sales in titanium metal powders and the opening of new markets for higher power plasma torches that August's contract with the Defense and aeronautics contractor for a 4.5 megawatt plasma torch signifies, are just the most recent examples. As Peter was quoted, despite the quarterly ups and downs, our commitment to supporting heavy industry with customer ready, low carbon footprint technology solutions remains steadfast. Beyond all else, the company remains committed to driving shareholder value and looks forward to providing further updates as the developments unfold.

上述鈦金屬粉末的商業化和按噸銷售，以及 8 月份與國防和航空承包商簽訂的 4.5 兆瓦等離子炬合同所代表的更高功率等離子炬新市場的開放，只是最近的一個例子。例子。正如 Peter 所引述的那樣，儘管季度業績有起有落，我們仍然堅定不移地致力於通過客戶就緒的低碳足跡技術解決方案來支持重工業。除此之外，該公司仍然致力於推動股東價值，並期待隨著事態發展提供進一步的更新。

Thank you once again for joining today's call, and I'll now pass it back to Rodayna.

再次感謝您參加今天的電話會議，我現在將其轉達給羅達娜。

At this point, we have a series of prepared questions to which we'd like to respond. Throughout the quarter and during this week prior to the call, we've been collecting various questions posted online or sent into the company via an e-mail. Recent calls where we accepted live industrial questions resulted in a very few quick questions, taking up a large amount of time. So we feel this approach allow us to answer far more questions and, in more details, but in the same amount of time. I'll now pass it back again to Steve.

此時，我們準備了一系列準備好的問題供我們回答。在整個季度以及電話會議之前的這一周，我們一直在收集在線發布或通過電子郵件發送到公司的各種問題。最近我們接受現場工業問題的電話會議導致了很少的快速問題，佔用了大量時間。因此，我們認為這種方法使我們能夠在相同的時間內回答更多的問題，並且回答更多的細節。我現在將其再次傳回給史蒂夫。

Thanks again. One of the challengers we received with this batch of questions is that the vast majority of them are asking for updates to projects. And without having revealed that information publicly, it's almost entirely impossible to answer the majority of these, but we'll see what we can do. There's some other questions that are non-project related and perhaps we'll touch more on those.

再次感謝。我們收到的這批問題的挑戰者之一是，絕大多數都要求項目的更新。如果不公開披露這些信息，幾乎完全不可能回答其中的大多數問題，但我們會看看我們能做什麼。還有一些與項目無關的其他問題，也許我們會更多地討論這些問題。

First question is about the recent raise and asking that and we failed to raise the $5 million deemed necessary for operations in the finished quarter. What are our future plans for the financial situation?

第一個問題是關於最近的融資和要求，但我們未能籌集到最終季度運營所需的 500 萬美元。我們未來的財務狀況有何計劃？

$5 million was a target amount. It was not a necessary or essential amount. Financings are just one tool in a larger toolbox. The company has a strong and growing backlog, some key outstanding receivables, getting close to resolution and a diverse pipeline of opportunities and also a 30-year history. So at this point, we're not too concerned about the long-term financial situation.

500 萬美元是目標金額。這不是必需的或必需的金額。融資只是更大工具箱中的一個工具。該公司擁有大量且不斷增長的積壓訂單、一些關鍵的未清應收賬款、即將解決的問題、多樣化的機會渠道以及 30 年的歷史。因此，目前我們並不太擔心長期財務狀況。

Contract with an advanced materials firm to supply SPARC land-based waste destruction. In the first payment of $2.2 million, are there any other payments coming before the 18 months deadline of the project?

與一家先進材料公司簽訂合同，提供 SPARC 陸基廢物銷毀服務。在 220 萬美元的第一筆付款中，在項目 18 個月的截止日期之前是否還有其他付款？

This was asked and answered in a previous Q&A session. And the answer is, yes, there will be payments coming before the 18 months duration of the project.

這個問題在之前的問答環節中已經被問到並得到了回答。答案是，是的，在項目持續 18 個月之前就會收到付款。

With poor revenue, why are you not laying people off and cutting expenses?

收入不好，為什麼不裁員、削減開支呢？

Well, our margins are solid, which validates the staffing level, but we are continuously seeking efficiencies and we'll continue to do so.

嗯，我們的利潤率很穩定，這驗證了人員配置水平，但我們不斷尋求效率，而且我們將繼續這樣做。

There's a question about the certification process with those -- several questions about the certification process with the major aerospace company that's still not been confirmed or PRed yet. This particular investor would like to know whether or not there's a potential patent of issues causing these delays?

關於這些的認證過程存在一個問題——關於主要航空航天公司的認證過程的幾個問題尚未得到確認或發布。這位投資者想知道是否存在導致這些延誤的潛在專利問題？

Our responses there is definitely no patent issue of any kind whatsoever, and we're not sure where you'd get that idea. The Time-lapse is simply the nature of the process and we remain confident going forward. That's basically the answer to all of the questions regarding the certification process for the global OEM, the process of the process, and it continues and we remain confident.

我們的回答是絕對不存在任何類型的專利問題，我們不確定您從哪裡得到這個想法。延時攝影只是這個過程的本質，我們對前進仍然充滿信心。這基本上是關於全球 OEM 認證流程、流程流程的所有問題的答案，並且它仍在繼續，我們仍然充滿信心。

Regarding the site acceptance testing for client B, the iron ore palletization torch system, which was moving towards trial phase, what's going on? It's been several months. We don't feel we've got an update.

關於B客戶鐵礦石碼垛火炬系統的現場驗收，目前已進入試用階段，進展情況如何？已經好幾個月了。我們感覺沒有更新。

There's a variety of similar questions. So we will just say we have provided several updates when we get them. And most recent as indicated in this quarter's outlook is that the client experienced quite a bit of damage to both the furnaces and the installed torches as a result of the recent torrential rain storms and resulting power failures that impacted the area, to various components have been repaired and the commissioning continues.

類似的問題還有很多。因此，當我們收到更新時，我們只會說我們已經提供了一些更新。本季度展望中的最新情況是，由於最近的暴雨以及影響該地區的停電，客戶的熔爐和安裝的火炬都受到了相當大的損壞，各種部件已被修復。已修復並繼續調試。

Please note that we have no control of the process. It's entirely up to the customer and has been underway for some time as previously reported. What I will say, though, reports about performance of the torches during the time they were operational before the damage were very good.

請注意，我們無法控制該過程。這完全取決於客戶，並且如之前報導的那樣已經進行了一段時間。不過，我要說的是，有關火炬在損壞之前運行期間的性能的報告非常好。

Moving around. What is the situation on Aubert & Duval? Is the partnership still continue?

到處走。奧伯特和杜瓦爾的情況怎麼樣？合作關係還繼續嗎？

Yes, it does. So we have several questions about that. The partnership continues and we will -- we cannot comment on anything beyond that at this time.

是的，它確實。所以我們對此有幾個問題。這種夥伴關係將繼續下去，我們目前無法對除此之外的任何事情發表評論。

From which quarter does the management expect a sustainable positive result?

管理層預計從哪個季度開始取得可持續的積極業績？

Well, the company is -- or profit, obviously, the company is focused on sales growth, bringing to commercialization and closer to commercialization the various commercial ready and in development solutions and continuing to find efficiencies to improve margin. All of those hopefully combined to create a profitable environment, but no predictions are possible. We can't make predictions on quarterly profits nor can we make predictions on potential sales to individual clients.

嗯，公司是——或者說利潤，顯然，公司專注於銷售增長，將各種商業就緒和正在開發的解決方案實現商業化並更接近商業化，並繼續尋找效率來提高利潤。所有這些都有望結合起來創造一個有利可圖的環境，但不可能進行預測。我們無法預測季度利潤，也無法預測對個人客戶的潛在銷售額。

We have a question or a series of questions about how confident are we that a large order will be placed with the iron ore palletization torch clients?

我們有一個或一系列問題，關於我們對向鐵礦石碼垛火炬客戶下大訂單的信心有多大？

We will say we have confidence in our plasma torch system technology overall and in terms of its potential to help in areas like iron ore palletization. And we have confidence in the iron and steel sectors growing interest in electrification. We cannot, though, make predictions on sales to individual clients. We just have to wait until the results of the client trials are complete.

我們可以說，我們對我們的等離子炬系統技術整體充滿信心，對其在鐵礦石碼垛等領域提供幫助的潛力充滿信心。我們對鋼鐵行業對電氣化日益增長的興趣充滿信心。但是，我們無法預測對個人客戶的銷售情況。我們只需要等待客戶試驗結果完成即可。

In regards to revenue. I'm confused as to why there was no revenue showing from 3d powders and no substantial revenue from the SPARC system? The 5-tonne powder order was to be largely complete and the SPARC contract had a large upfront payment. So why is no revenue showing?

就收入而言。我很困惑為什麼 3d 粉末沒有收入，SPARC 系統也沒有大量收入？ 5 噸火藥訂單已基本完成，SPARC 合同已支付大筆預付款。那麼為什麼沒有顯示收入呢？

That's a misunderstanding of revenue versus sales. Payments made by customers do not turn into revenue until we show -- work towards projects against the sales. We are on a GAAP system and for manufacturers, that means revenue is accrued based on a work complete methodology for projects. The fact that we get a payment in, does not indicate that it's revenue. It's just the payment that has to sit there and wait until we actually do work against it. Then we can show a percentage of revenue based on how much of the project we've completed.

這是對收入與銷售額的誤解。客戶支付的款項不會轉化為收入，直到我們展示 - 針對銷售的項目的工作。我們採用 GAAP 系統，對於製造商來說，這意味著收入是根據項目的工作完成方法來累積的。我們收到付款的事實並不表明它是收入。只是付款必須放在那裡，等待我們真正對其進行處理。然後我們可以根據我們已完成的項目數量顯示收入百分比。

And there is a number of questions about a series of different projects, everything from incorporating plasma torches and aluminum scrap, remelting furnaces, cast houses, upstream processes, a bunch of similarly related safety studies, European multinational chemical energy conglomerates.

關於一系列不同的項目存在很多問題，從等離子炬和鋁廢料的結合、重熔爐、鑄造廠、上游工藝、一系列類似的相關安全研究、歐洲跨國化學能源集團。

I will say we have no updates on these beyond what we reported or we have updates forthcoming and saying something today wouldn't be appropriate against the upcoming updates. But I will say everything is positive as leading up to those updates.

我想說的是，除了我們所報告的內容之外，我們沒有任何更新，或者我們即將有更新，並且今天說的話對於即將到來的更新來說是不合適的。但我想說的是，在這些更新之前，一切都是積極的。

And going through the list, sad to say I cannot comment on any of the further questions because they're all asking for updates on things that we just don't have an update for or not ready to release an update yet.

瀏覽列表，遺憾的是我無法對任何進一步的問題發表評論，因為他們都要求我們提供更新，而我們只是沒有更新或尚未準備好發布更新。

And on that, we will conclude the call and we want to thank you again for your time and for tuning in today. Thank you again for your patience as investors, and we look forward to providing updates as developments occur. Have a good day.

至此，我們將結束通話，我們要再次感謝您抽出時間並收聽今天的節目。再次感謝投資者的耐心等待，我們期待隨著事態發展提供最新信息。祝你有美好的一天。