Proven plasma torch processes for US military, 3D powders for aircraft engines and solar grade silicon metal for solar industry

Q3 2020 Results: Revenues $8.1MM; Net Income $15.3MM; Gross Margin 67.9%, Current Backlog $36.4MM; Basic EPS $0.10

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PyroGenesis Canada Inc Profile

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PYR: TSX

Up 833% YTD (as of Nov 25, 2020)

PyroGenesis $PYR.ca Announces Q3 2020 Results: Revenues $8.1MM; Net Income $15.3MM; Gross Margin 67.9%, Current Backlog $36.4MM; Basic EPS $0.10

  • Revenues of $8,149,427, an increase of 289% from $2,097,437 over the same period in Q3 2020;
  • Comprehensive income of $15,325,996 an increase of 16 times that posted in Q3 2019 – ($965,032);
  • Net income from operations before share-based expenses of $3.1MM vs ($1MM) posted over the same period in 2019;
  • Positive cash flow from operations for three and nine months 2020 of $2.4MM and $1.6MM respectively versus ($0.85MM) and ($2.8MM) over the same periods in 2019;

PyroGenesis Signs Initial Plasma Torch Contract with Major Iron Ore Producer

  • Signed an initial plasma torch contract to provide one high powered (approx. 1MW) plasma torch with ancillary equipment, with Client A, a major iron ore producer, for approx. $1.8MM.
  • This does not include continued after-sale services, which was not the subject of these initial negotiations.
  • It is expected that future sales with this Client will include a separate continued after-sale services agreement.
  • The Client is a multi-billion-dollar international producer of iron ore pellets, one of the largest in the industry, whose name will remain confidential for competitive reasons.
  • The Client, which has committed to reduce its greenhouse gas (“GHG”) emissions, has over ten (10) plants, each possibly requiring up to 50 plasma torches.

PyroGenesis Signs $11.5MM Contract for US Navy’s Two Ship Build

  • Signed $11.5MM contract to provide PyroGenesis’ waste destruction systems
  • Contract is for two Systems, one for each ship in the US Navy’s two-ship build
  • Systems are expected to be built within the next 18 months, and are to be installed on the next Gerald R. Ford-class US aircraft carriers; the USS Enterprise (CVN-80) and the USS Doris Miller (CVN-81)
  • Includes a first payment of approx. $4.8MM (received)
  • With this additional Contract in hand, the resulting backlog is expected to be approx. $40MM.

Company Highlights:

  • Completed Contract for Specialty 3D Metal Powder; Full Payment Received
  • Received an additional US$325K (approx. CA $457K) under the exclusive agreement with a US based tunneling company
  • Payments totalling 7.5MM have already been received under the exclusive contract with Drosrite International LLC
  • Nominated “Materials Company of the Year” at the 3D Printing Industry Awards 2019 (2nd year in a row)
  • Quality management system for the production of metal powders for the Additive Manufacturing (3D Printing) industry, has been approved by one of the premier non-European aerospace companies
  • Clients include: U.S Air Force, U.S NAVY, Canada Natural Resources
  • Received Conditional Approval to Graduate to the Toronto Stock Exchange

Q3 2020 Highlights:

  • Revenues of $8,149,427, an increase of 289% from $2,097,437 over the same period in Q3 2020;
  • Comprehensive income of $15,325,996 an increase of 16 times that posted in Q3 2019 – ($965,032);
  • Net income from operations before share-based expenses of $3.1MM vs ($1MM) posted over the same period in 2019;
  • Positive cash flow from operations for three and nine months 2020 of $2.4MM and $1.6MM respectively versus ($0.85MM) and ($2.8MM) over the same periods in 2019;
  • Gross margin of 67.9% an increase of 22.7% over the same period in Q3 2019;
  • Cash on hand at September 30, 2020 of $2,095,519 (December 31, 2019 – $34,431);
  • Backlog of signed contracts of $36.4MM.
  • Basic Earnings per Share (EPS) of $0.10 for Q3 2020 and $0.13 for 9 months ending 2020.

LINES OF BUSINESS

Powder Production:

  • Completed Contract for Specialty 3D Metal Powder; Full Payment Received
  • PyroGenesis has now produced titanium powder on its NexGen™ Plasma Atomization System with production rates in excess of 25 kg/h.
  • Of note, these increased production rates are achieved with lower operating and capital costs.
  • Announced that the Board of Directors is moving forward with the previously announced spin-off of PyroGenesis Additive. See Release.
  • Signed a mutually exclusive Partnership Agreement with Aubert & Duval a subsidiary of the ERAMET Group (2017: Sales: > Can$5.4 Billion; Assets: > Can$4.9 billion; Paris Stock Exchange: ERA.PA).
    • Agreement outlines a multi-step strategy between the Parties to supply plasma atomized titanium powder, on a mutually exclusive basis, to the Additive Manufacturing Market in Europe
  • Nominated “Materials Company of the Year” at the 3D Printing Industry Awards 2018,
  • Contracted for an order of 10 tons (minimum) of titanium powders,
  • Recommended by leading 3D Printer OEM to their customers as titanium powder supplier;
  • Strategic commercial discussions with 3D printer manufacturers, distributors, and end-users continue.
  • New Additive Manufacturing metal powder production facility
  • AS9100D Certified
  • Discussions with significant players to accelerate market penetration

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DROSRITE™: - System is a salt-free, cost-effective, sustainable process for maximizing metal recovery from dross, a waste generated in the metallurgical industry. The patented process avoids costly loss of metal while reducing a smelter’s carbon footprint and energy consumption, providing an impressive return on investment.

  • DROSRITE™ System has been validated by a world leading primary aluminum smelter as part of the process towards adopting the technology for use
  • Payments totaling over $7.5MM have been received to date under the exclusive contract with Drosrite International LLC
  • Further to its press release dated September 22 nd , 2020, PyroGenesis’ technology successfully passed the Factory Acceptance Test (“FAT”), conducted by Drosrite International LLC (“DI”), on behalf of their client, for the first 5,000 TPY DROSRITE™ System

Market potential for PyroGenesis' DROSRITE™ system, from Aluminium dross alone, exceeds $400MM.

  • Enters the Zinc Market; first DROSRITE™ zinc paid-for-demonstration,
  • Second DROSRITE™ Furnace System Completed,
  • Embraces Tolling Strategy; Signing with multi-billion-dollar Japanese corporation to move forward to jointly toll with DROSRITE™

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HPQ:

  • HPQ NANO on Track to Start of Gen1 Reactor in December Read More
  • HPQ NANO Receives First Order for Spherical Nano Silicon Material from Major Automobile Manufacturer  Read More
  • HPQ Proprietary Nano Silicon Manufacturing Process to Incorporate First Ever One Step Capability of Carbon Coating Nano Silicon Material as it is Produced Read More

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Chemical Warfare Destruction System:

Tests supported the Defense Advanced Research Projects Agency (DARPA) Agnostic Compact Demilitarization of Chemical Agents (ACDC) program

  • Successfully completed long-duration performance tests using the Company's tactical Plasma Arc Chemical Warfare Agents Destruction System ("PACWADS") using surrogate chemical warfare agent material
  • Far exceeded minimum requirements with over 99.9999% destruction efficiency.
  • PACWADS is now scheduled to go through final testing using real chemical warfare agents by the US Military).

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Other Contracts:

US Military

  • Announced that it should be awarded a two-ship build for its PAWDS unit, for approximately $10MM
  • Seeking to establish a presence in the USA to, amongst other things, better serve the US Military’s needs.
  • U.S. Navy has reached an agreement with the shipbuilder, Huntington Ingalls Industries (HII), to move forward with the purchase of two Ford-class aircraft carriers.

Torch/Equipment Sales:

Client A

The company announced the completion and acceptance of its modeling contract with Client A which confirmed, amongst other things, that replacing fossil fuel burners with PyroGenesis’ proprietary plasma torches addresses the Client’s greenhouse gas reduction strategy/policy. PyroGenesis is also pleased to confirm receipt of a draft equipment purchase contract from Client A.

The modeling contract, disclosed in previous press releases, successfully demonstrated the benefits of replacing fossil fuel burners with PyroGenesis’ proprietary plasma torches. More specifically, two of the most important benefits demonstrated were i) that replacing fossil fuel burners with plasma torches was a simple replacement, plug and play process, and ii) that PyroGenesis’ proprietary plasma torches significantly reduce greenhouse gas emissions which, as a result, could play a significant role in Client A’s greenhouse gas reduction strategy/policy.

The Company also confirms having received a Contract which essentially highlights the terms and conditions negotiated to date. Although the major terms and conditions contained therein have been agreed to in principle, there are still several elements that need further review.

Client B
On June 11th, 2020 the Company announced that it had signed a second multi-phase torch modelling contract with Client B, aimed at evaluating the performance of PyroGenesis’ proprietary torches in an existing iron ore industrial furnace with the goal of replacing existing fossil fuel burners with PyroGenesis’ plasma torches.  The first phase, as expected, is to be completed by mid-August.

During the first phase, which is progressing as expected, Client B has already entered into active equipment purchase discussions with PyroGenesis.

New Development – Client C
A new potential client (“Client C”), who is not only a significant player in the iron ore pelletization industry but is also a major player in the steel industry, has entered into active equipment purchase discussions with the Company. There seems to be a high probability that Client C may bypass the modelling phase altogether, however it is PyroGenesis’ preference to incorporate a modeling phase if at all practical.

 

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Last changed at 26-Nov-2020 12:20PM by AGORACOM