PyroGenesis Canada Inc. (PYR.V/ PYRNF) reported its financial and operational results for the third quarter of fiscal year 2016.
Second Quarter Highlights
In Q3 of Fiscal 2016,
- Revenues increased 40%; over the same period in 2015;
- Gross margins before amortization of intangible assets increased to 64.2%; over the same period in 2015;
- Adjusted EBITDA increased 138% to $253,574 over the same period in 2015.
The third quarter has been positively impacted by the increase in business as over $11.5MM in contracts have been signed by the Company since June 30, 2016.
Gross margins before and after amortization of intangible assets, for both the third quarter and nine months have shown significant improvement over comparable periods in 2015. Cash flow, as measured by EBITDA (adjusted), is positive for the quarter ending September 30, 2016.
Operations for the periods under review reflect a significant improvement over the first half of the year which saw the Company transition from selling systems that make powders for Additive Manufacturing to actually making and selling these same powders.
The first six months of 2016, and as such the nine months under review here, were negatively impacted by this decision as work stopped on a previously announced contract to deliver powder producing systems for approximately $10MM, and as such significant pressure was placed on revenues and margins during this period. The strategic decision to produce powders for Additive Manufacturing (3D printing) was made once it was demonstrated to the board that the revenues and profits from selling powders from one system alone, far exceeded, on an annual basis, the onetime profit from selling 10 systems, and as such the Company announced on October 26, 2015, the strategy to move into this potentially lucrative market of producing powders for the Additive Manufacturing industry (3D printing).
PyroGenesis recorded revenue of $1,902,748 in the third quarter of 2016 ("Q3, 2016"), representing an increase of 40% compared with $1,363,077 recorded in the third quarter of 2015 ("Q3, 2015"). Revenues for the nine first months of fiscal 2016 were $3,738,590, a decrease of 7% over revenues of $4,013,221 reported during the same period in 2015.
Revenues recorded in Q3, 2016 and the nine months of fiscal 2016 were generated primarily from (i) the intellectual property and development of a vacuum arc reducing process to convert Silica into high purity Silicon metal; (ii) the manufacture and further field testing of Tactical PACWADS, the first mobile plasma system for destruction of chemical warfare agents under contract with an international military consortium; (iii) the demonstration of the viability of PyroGenesis' existing plasma chemical warfare agent destruction platform with locally available materials, for the complete eradication of chemical warfare agents without creating hazardous by-products; (iv) support services related to PAWDS-Marine systems supplied to the US Navy, and (v) Drosrite™ sales.