In This Article:
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Net Sales: $3.2 million in Q2 2024, up 8% compared to Q2 2023.
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Volume Increase: 21% increase in volumes, contributing $600,000 to sales.
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Gross Profit: $860,000 in Q2 2024, an increase of 56% from the prior year.
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Gross Margin: 31% in Q2 2024, up from 25% in Q2 2023.
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SG&A Expenses: $1.4 million, an increase of $280,000 from the prior year.
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R&D Expenses: $640,000, unchanged from Q2 2023.
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Adjusted EBITDA Loss: $790,000, unchanged from Q2 2023.
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Cash and Term Deposits: $33.2 million as of June 30, 2024.
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Share Buyback: $550,000 invested to retire 160,000 shares in Q2 2024.
Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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EcoSynthetix Inc (ECSNF) reported an 8% increase in sales for Q2 2024 compared to the same period last year, indicating positive growth.
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Volumes have increased by 21% this quarter and 43% year-to-date, showcasing strong demand across end markets.
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The company secured two new wins on new lines at existing accounts, validating the performance and value of their product offerings.
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Positive trial results in pulp, packaging, tissue, and wood composites markets demonstrate the effectiveness of EcoSynthetix's technology.
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The company has a strong cash position with $33.2 million in cash and term deposits, allowing for continued investment in growth strategies.
Negative Points
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Lower average selling prices impacted sales by $400,000 or 13% due to lower manufacturing costs being passed on to customers.
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SG&A expenses increased by $280,000 due to asset relocation costs, impacting overall profitability.
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The conversion of positive trial results into sales is slow, as industrial changes are challenging and take time.
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The graphic paper end market is not seen as a significant opportunity due to macro headwinds and diminished demand.
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The company reported an adjusted EBITDA loss of $790,000 in the quarter, unchanged from the same period in 2023, indicating ongoing financial challenges.
Q & A Highlights
Q: Are the service providers progressing as planned, and what's your confidence level in driving further penetration of the Surf Block product? A: Jeff MacDonald, CEO: One of the wins was through service providers, demonstrating their ability to deliver. We couldn't do this alone, and their relationships and technical depth are invaluable. They've advanced tremendously in the last year, learning how to apply our product and achieving better results. Their conviction in our technology as a growth enabler is high, and they've made significant investments to support our efforts.