Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ClearSign Technologies Corp (CLIR, Financial) reported a revenue increase to approximately $1.1 million for Q1 2024, up from $900,000 in Q1 2023.
- Gross margin significantly improved to 39.7% in Q1 2024 from 11.9% in Q1 2023, driven by higher-margin product sales.
- Net loss decreased by approximately $300,000 compared to the prior year, attributed to increased sales volume and gross profit.
- The company received repeat orders from Kern Energy, indicating customer satisfaction and trust in ClearSign's technology.
- ClearSign's hydrogen burner project, funded by a $2 million Department of Energy grant, showed promising initial results, potentially accelerating commercial availability.
Negative Points
- Net cash used in operations increased to approximately $1 billion in Q1 2024 from $500,000 in Q1 2023, due to customer collections.
- Despite revenue growth, ClearSign Technologies Corp (CLIR) still reported a net loss of approximately $1.1 million for Q1 2024.
- Operations in China faced delays, impacting the burner certification process and overall project timelines.
- The company acknowledged that a portion of the industry remains unfamiliar with ClearSign's progress and technology, posing a challenge for market penetration.
- The commercialization of sensor technology with Narion Corporation is a long-term prospect, with no expected revenue in the next 24 months.
Q & A Highlights
Q: Jim, you mentioned in your comments the sensor technology in there in particular. Could you kind of give us an overview of where that project is at and what it might look like for a commercial product for the company?
A: Yes, certainly. At ClearSign, we have a unique sensing technology that we have promoted and developed as a flame sensor for use in burners and especially burner pilots. We are working with Narion Corporation to develop this technology for applications outside our core strengths. Narion is developing technologies using ClearSign's sensor for the aviation industry and other fields. While this is a long-term project, the potential market is vast, including commercial and military aircraft. The development is self-funded or funded through grants, not by ClearSign, and could lead to a licensing arrangement in the future.
Q: In terms of projects in queue, there's been a bunch of projects announced. Could you walk us through what is left in queue? And then secondly, beyond that, what it looks like potentially going forward?
A: Certainly. Recently, we announced an engineering order for burners for two additional heaters at Kern Energy. We also have a large 2.5 ppm NOx boiler burner starting up in California soon and the first of four boiler burners for a juice processing company. We have significant interest in our new horizontally-fired process heater technology and ongoing engagements domestically and in Europe. While future orders are not guaranteed, the interest is significant.
Q: Could you give an overview of the commercialization of the hydrogen project/burner? And what is SoCalGas's involvement in that?
A: We have a $2 million Department of Energy SBIR grant for developing a hydrogen burner. The first version of our commercial burner has shown promising results. This burner can run on current fuels and is ready for hydrogen when introduced, bridging the gap for clients. SoCalGas is committed to sponsoring the deployment of this technology into their client base in Southern California, which is part of the Los Angeles Link Hydrogen Hub. Their support is crucial for accelerating the adoption of this new technology.
Q: Can you provide more details on the recent equity offerings and their impact on the company's financials?
A: The recent equity offerings raised approximately $8.7 million, including the over-allotment option exercised in full on May 10. These funds are not included in our March 31, 2024 cash balance of $4.6 million. The additional capital will support our ongoing operations and strategic initiatives.
Q: What is the current status of ClearSign's operations in China?
A: Our project in China has faced some delays, particularly due to an urgent need by Shuang Liang to provide a boiler to one of their customers, which resulted in our test boiler being shipped to that customer. A new boiler for our burner certification process is in production, and we look forward to resuming our certification preparations. Sales and promotion activities will continue in parallel with the certification process.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
