Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Crown ElectroKinetics Corp (CRKN, Financial) has successfully solved the 12-inch mastering challenge for its Gen one AlphaSmart window inserts, setting the stage for initial product shipments.
- The appointment of Sheldon Davis as President of the Electric Film Division is expected to drive significant growth due to his extensive industry experience and knowledge.
- Crown ElectroKinetics Corp (CRKN) has secured a large backbone project in Nevada, which is anticipated to generate approximately $5.7 million in gross revenues.
- The company's fiber division has shown robust performance with multiple ongoing projects across different states and a new project in Mexico, expected to generate about $3.5 million of revenue.
- Crown ElectroKinetics Corp (CRKN) recorded $7 million of revenue in its fiber division for the quarter, showing a strong financial performance compared to previous periods.
Negative Points
- Crown ElectroKinetics Corp (CRKN) reported a net loss of $4.6 million for the quarter, indicating ongoing financial challenges.
- The company is currently non-compliant with NASDAQ's minimum bid price requirement, risking its listing status.
- Net cash decreased by $0.8 million as the company deployed $2.7 million in operations, reflecting significant cash burn.
- Crown ElectroKinetics Corp (CRKN) faces a backlog with its auditors, potentially leading to a non-timely filing of its 10-Q report.
- Despite some revenue from operations, total operating expenses were high at $4.7 million, with significant costs attributed to scaled-back operations in Arizona.
Q & A Highlights
Q: Can you provide an update on the progress of Crown's film division, particularly regarding the Gen one AlphaSmart window inserts?
A: Douglas Croxall, CEO and Chairman, highlighted that the film division has overcome the 12-inch mastering challenge for Gen one AlphaSmart window inserts and plans to start shipping in small quantities by late summer. Sheldon Davis has been appointed as President of the division, bringing extensive industry experience to spearhead this growth phase.
Q: What are the strategic plans for the rollout of the Gen one AlphaSmart window inserts?
A: CEO Douglas Croxall explained that the initial rollout, termed Gen one alpha, involves deploying 4 to 10 inserts across 10 to 20 buildings in major U.S. cities to gather customer feedback. This will be followed by Gen one beta and Gen one Charlie, aiming for mass production by next spring or summer.
Q: Could you discuss the developments in Crown's fiber division and its impact on the company's revenue?
A: Douglas Croxall noted significant progress in the fiber division under Corey Boaz’s leadership, with projects across multiple states and in Mexico expected to generate substantial revenue. The division has shifted to a more cost-effective operational model, partnering with subcontractors to enhance profitability.
Q: What were the financial results for Crown in the first quarter of 2024?
A: CFO Joel Krutz reported a net loss of $4.6 million for the quarter, with net losses from operations at $3.7 million. However, the fiber division recorded $7 million in revenue, with additional deferred revenue expected to materialize in the following quarters.
Q: How is Crown addressing its NASDAQ non-compliance issue?
A: Joel Krutz mentioned that Crown is in discussions with NASDAQ for an extension to regain compliance and is exploring other options to maintain its listing. The company's improving production levels and financials are expected to enhance its market value.
Q: What are the future projections for Crown's revenue and operations?
A: Looking ahead, CFO Joel Krutz anticipates revenues to align with previous guidance and plans to update on Q3 projections soon. The company is optimistic about its growth trajectory and achieving net income positivity by the end of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
