Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: You mentioned a case study on how the PX reduced costs at a nanofiltration-based lithium extraction facility in China. What other commercial applications might this result validate? A: David Moon, President and CEO, explained that the PX technology could potentially be applied to four other verticals: mining applications, heavy manufacturing, chemical manufacturing, and textile manufacturing. These sectors involve large solids streaming through the system, making the product applicable.
Q: Can you elaborate on the specific drivers of growth margin improvement you expect in 2025? A: Michael Mancini, CFO, highlighted that the key drivers are efficiency improvements in the manufacturing process. The company is optimizing every step, from stacking kilns to cycle times and pressing bullets with iso presses. This manufacturing transformation plan is expected to continuously improve costs throughout the year.
Q: You mentioned increased activity from customers outside of core focus areas. Can you elaborate on these areas and how they learned about the PXG? A: David Moon noted interest from Japan and South Africa. In Japan, an OEM learned about the company through trade shows, leading to test sites and a first official order. In South Africa, a large supermarket chain called Macro learned about the technology through a consultant, and they are working on setting up a test site.
Q: Regarding the additional $30 million buyback, was it due to early progress on costs and desal visibility for 2025? A: Michael Mancini confirmed that visibility on cash flow and the quick completion of the initial $50 million buyback gave them confidence to increase it. The company is committed to returning excess cash and aligning with their capital allocation strategy.
Q: What are your expectations for the geographic breakdown of desal revenue in 2025? A: Michael Mancini expects the geographic breakdown to be similar to 2024, with over 60% of business coming from the Middle East and North Africa. The mix is project-driven, and they anticipate a generally similar distribution.
Q: How might tariffs impact the wastewater business, and is there upside without trade issues? A: Michael Mancini explained that the guidance was given without known tariffs. If tariffs affect the effective price of PX products in China, it could impact sales. Currently, about 5% of the wastewater business comes from China, and any trade war impact could affect ROI for customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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