Laser Photonics Corporation Q4 FY2023 earnings call

Key Points

• Fourth quarter revenue growth of 673% to $0.8 million.
• CleanTech product lines accounted for 80% of unit sales in the quarter, and 10 new customers were added across various industries.
• Operating expenses shifted due to strategic investments in sales and marketing, with higher revenue and improved gross margin reducing operating losses from $3 million last year to $1.9 million this year, and net losses from $3 million to $0.4 million, loss per share improving from $0.38 to $0.05.
• 2023 milestones included introducing a 3,000-watt system, CleanTech Robotic Cell Enclosures, launching DefenseTech and MARLIN product lines.
• Relationship with Fonon Corporation: LPC will restructure to be a publicly traded majority-owned subsidiary of Fonon, focusing on sales, marketing, and product development for industrial markets, while Fonon Technologies focuses on DefenseTech sales. Licensed Fonon's high-power turbo piercing technology for SaberTech product line.
• 2024 plans: Distribution and technology partnerships, including agreement with Fastenal for industrial products, partnership with Brokk to integrate technology into robots, sales and distribution agreement with ISL for DefenseTech. Product roadmap includes new CleanTech systems, revamped SaberTech Titan FX, and reinvigoration of legacy laser engraving systems with MarkStar VIN.

In the fourth quarter, revenue grew 673% to $0.8 million versus the restated $0.1 million last year. The CleanTech product lines made up 80% of the unit sales during the quarter.

Forward-Looking

• Estimated pipeline of over $70 million in opportunities for 2024.
• Expect improved results in 2024 and beyond due to new products, partnerships, and sales efforts.

Risks

• Late filings and impending restatement for 2022 due to auditor findings that revenue and AR were not recognized in accordance with ASC 606, and a liability related to post-IPO stock issuance was incorrectly recorded under cost of goods sold, leading to restatement of 2022 results and delay in filing 2023 10-K.

Q: When might we begin to see some repeat orders from key customers like GE, Emerson, the U.S. military?

A: These high-profile customers have a monumental task of developing standard operating procedures to replace old methods with laser cleaning. Once systems are in place and procedures are drawn, they can proceed with purchases, though it takes time for the change to happen.

Q: If Fonon has strategic advantages that Laser Photonics does not have, why was Fonon not taken public in the first place rather than Laser?

A: Fonon was not ready for public market entrance at the time, but behind-the-scenes work with Laser Photonics was successful, and now Fonon is ready to restructure with LPC as a publicly traded majority-owned subsidiary