PyroGenesis Canada Inc (CVE:PYR) (OTCQB:PYRNF) CEO Photis Peter Pascali offered a bright outlook for the year based on a backlog of nearly $30.27 million in signed contracts as the group posted first-quarter business and financial results.
For the period ended March 31, 2020, the company which designs, manufactures and commercializes advanced plasma processes, posted revenue of $718,908, a decrease from $736,443 recorded in the first quarter in 2019. The company said cash on hand as at March 31 was $1,139,416.
“Percent complete revenue recognition in our major projects, which is the revenue recognition method we are mandated to follow by GAAP, is such that it is not linear, but exponential, and as such Q1 2020 may not have reflected the results one might have expected given recent announcements.
"However, using this same revenue recognition method we expect Q2 2020 and the six months ending June 30, 2020, will be profitable as will year-end results. Management has modified several notes in the financials, for the first time, to reflect this outlook,” Pascali said in the statement accompanying the numbers.
“The company also has over $50 million in tax loss carryforwards which is not reflected as an asset on the balance sheet. Given recent events and the structuring in 2019, the company is undeniably well positioned to execute on, and build upon the backlog of signed contracts which currently stands in excess of $30 million. With the eagerly anticipated US Navy contract in hand backlog of signed contracts will be in excess of $40 million,” he added.
The company expects to clock up revenue of between $2.00 million to 2.25 million in the second quarter as it turns profitable. “Overall, management expects significant revenue growth in 2020,” the company said.
During 2020, PyroGenesis noted that it has received “significant payments” under its $22 million contract with DROSRITE International, validating contract win announcements made in 2019.
The Canadian company has also established a relationship with a US-based tunneling company with “contracts and payments ongoing.”
Significantly, the company has established itself in the iron ore pelletization industry as a potential supplier of torches geared to replacing existing burners.
PyroGenesis harnesses the unique properties of thermal plasma to melt and transform metal, carry out high-temperature chemical reactions and convert waste into energy. Its team is comprised of experienced engineers, scientists and technicians working out of its Montreal office and a 3,800-square-metre manufacturing facility.
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