PyroGenesis sees 1Q revenue rocket to $6.3M, as its current backlog expands to $26M signed contracts

PyroGenesis Canada Inc (TSE:PYR) (NASDAQ:PYR) (FRA:8PY) posted first-quarter results that saw its revenue rocket 771% year-over-year driven by strong demand, which also expanded the firm’s current backlog of signed contracts to $26 million. For the period ended March 31, 2021, the Montreal, Canada-based high-tech company reported revenue of $6,264,503, up 771%, compared to $718,908 in revenue in the first quarter of 2020. PyroGenesis posted net earnings and comprehensive income of $3,712,903, compared $5,469,931 in the same quarter a year earlier. The firm said it had a gross margin profit of $2,143,010, up 701%, compared to $267,414 in the same quarter in 2020. This translated to basic earnings per share of $0.02 for the quarter, compared to a loss of $0.01 in the 1Q of 2020. READ: PyroGenesis providing high-tech plasma products for a growing number of major industries Significantly, the Canadian company which harnesses the unique properties of thermal plasma to melt and transform metal, carry out high temperature chemical reactions and convert waste into energy, had a backlog of signed contracts of $26 million. It also had cash and equivalents of $26,274,344 as of March 31, 2021. “Our Q1 2021 financial results continue to reflect the historical trend set early last year. The last several quarters saw PyroGenesis more than triple its backlog of signed contracts, reduce debt to basically zero, and record over $25 million of cash on the balance sheet. All this, while graduating to the TSX, co-listing on the NASDAQ, and closing an oversubscribed bought deal of over $10 million,” said PyroGenesis CEO P Peter Pascali in a statement. “Q1 2021 saw PyroGenesis post $6.3 million in revenues; over 7x that posted in same period 2020. Operations broke even after share-based compensation, costs associated with up-listings, as well as R&D expenses (Q1 2021: $286K vs $23K in same period last year) which were associated with developments in our additive manufacturing offering.” Pascali said the statistic he found “most revealing” in terms of where the company may be going, is the fact that “we posted 40% more revenues in this quarter alone than we did for the entire year in 2019, a year that saw us post a net loss of over $9 million.” “We believe that the company has never been better positioned and is well placed to build upon this trend for the future,” added Pascali. In terms of outlook, PyroGenesis said it is “well-positioned, with a clean balance sheet, to execute on all its organic growth strategies,” as well as actively pursue acquisitions. The company has recently focused its offerings to highlight their GHG emissions reduction benefits. “We consider this strategy to be timely as many governments are considering stimulating their respective economies by promoting and funding both environmental technologies and infrastructure projects,” said the company. “Management expects that this will be a tailwind into an already strong pipeline which will further increase revenues.” The firm spelt out its organic growth strategy of identifying new areas as its "Coffee and Donuts" strategy. “If you are selling coffee you could generate additional revenues, with little additional effort, by adding on donuts,” said the firm. PyroGenesis said it is bidding on a request for quotation valued at $40 million, with the award date within four months. Similarly, with additive manufacturing, it expects to see a boost in its 3D metal powders as its NexGen facility is now online. “There are major top tier aerospace companies and OEMs, in Europe and North America, eagerly awaiting powders from this new state-of-the-art production line,” said the company. The firm said it “intends to pursue” plasma based tunneling opportunities. As sales of plasma torches increase, the company will benefit from providing spare parts from which it expects “significant recurring revenue.”  Separately, the firm’s goal is to expand its role as HPQ’s technology provider for the PUREVAP family of silicon processes which it is developing for HPQ and its subsidiary HPQ Nano Silicon Powders. PyroGenesis broke down 1Q revenues from its main businesses: DROSRITE related sales of $2,740,725 (1Q 2020 - $474,432); PUREVAP related sales of $625,086 (1Q 2020 - $17,965); Torch related sales of $195,221 (1Q 2020 - $87,944); Support services related to PAWDS-Marine systems supplied to the US Navy $2,586,021 (1Q 2020 - $23,896); Other sales and services of $117,450.   Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive