Laser Photonics Corporation Q2 FY2023 earnings call

• Wayne introduced Jade Barnwell as the new CFO, highlighting her experience in managing financial growth at larger companies.
• Q2 revenue was impacted by delayed CapEx spending by customers, but sales and marketing efforts are expanding the pipeline.
• In Q1, R&D investments were increased, including equipping the application center with robotic laser blasters and developing new technologies.
• Introduced the Titan FX platform for the aerospace industry, designed for laser cutting with laser cold-cutting feature and TurboPiercing technology, enhancing safety and production efficiency, and integrated into CleanTech product line.

In Q2, Laser Photonics reported revenue of $1 million, a decrease from $1.35 million in Q2 2022. The decrease was due to delayed CapEx spending by customers. Gross margin increased to approximately 71% year-over-year due to higher-margin CleanTech systems. Operating income was breakeven, benefiting from a $700,000 mark-to-market from noncash stock issuance costs. GAAP net income and earnings per share were breakeven. Cash on hand at the end of the quarter was $9.9 million, a $0.9 million decline from operating activities.

• Expect operating expenses to rise further in 2023 due to growth investments in R&D, sales/marketing, and distribution.
• Third quarter pipeline is $4.7 million, but dependent on customer purchase order releases influenced by global trends and economic conditions.

• Economic conditions, including interest rate increases, causing customers to delay capital equipment spending.
• Sales cycles for laser cleaning products can be 6-12 months, fluctuating quarter-to-quarter.
• Need for customers to develop new protocols and procedures for laser technologies, which takes time.
• Supply chain challenges affecting component availability.

Q: Why have sales declined and when will we see sales turn around?

A: Sales declined due to delayed CapEx spending by customers. It takes about 6 months to get the message out and then 6 months for the sales cycle, so it's an investment year with expected good results in the near future.

Q: Are products truly 100% American made?

A: America can't produce 100% of all components. We manufacture major components in US, assemble here, but some components come from global sources.

Q: What's the annual cost of press release program and its effectiveness?

A: Press releases are cost-effective, with good open rates and feedback, though some may view them as mundane. It's part of the marketing strategy and working.

Q: What are sales looking like for third quarter?

A: There's a $4.7 million pipeline, but dependent on customer purchase order releases influenced by economic conditions.