Morning, everybody,
'I hope everyone is having a great week.
I am just catching up on some of the posts, and I did think it was an interesting one that Delisio posted regarding the old mariner report. I know there was a lot of controversy about that report, but one element of it when I read the link, that resonated was the concept of revenue guidance.
I think that that revenue and contracts are central to one of the major debates that continues to happen on this board. That is, the promoters of the stock continually keep talking about future contracts, about what will come, and about those who will get caught out if a contract drops as the stock could take off.
Still, on the other hand, the realist, looks at the history of those promotions, and that many of those contracts don't come through, or if they do, they don't come through as announced, or the collections don't happen as evidenced on the companies financials, recently reported with accounts receivable in the millions.
Maybe it would be useful, if we looked at where we have come since that report which is quite old.
Just for context here was the report excerpt from the seeking Alpha article that was linked from Delisios post:
"Not quite hundreds of millions in revenue"
'To give our readers an idea of what PYR is about, we highlight a series of claims and show you what actually happened:
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February 2014 – “PyroGenesis is confident that the results from this fourth contract, expected within the next 3 months, will lead to a full scale industrial plasma installation worth in excess of $10 million dollars”
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October 2014 – “Once this process is fully commercialized, potential revenues are in the hundreds of millions of dollars.”
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March 2015 – “PyroGenesis Announces Signing of an Exclusive Marketing License Agreement for $500,000 Plus Commitment for Six (6) 50 TPD Waste Treatment Systems Totaling Over $120 million”
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September 2019 – “We fully expect that this will be the first of many systems ordered by the Client who will benefit, upon reaching a certain milestone, from a limited territorial exclusivity. This contract, together with signed backlog, recently announced contract award, and the imminent US Navy contract for $13.5M, portends to a backlog of over $40M, which must be addressed within the next 18 months, come September. This does not include the $35M of backlog in subsequent years. It is a very exciting time for the Company.”
What we have here are claims that imply tens of millions, if not hundreds of millions, in revenue from 2014 onward, and a 2019 claim that would imply revenue in excess of $40MM through 2020.
Here’s what PYR’s revenues ACTUALLY looked like – not tens of millions, let alone hundreds of millions in revenues post 2014/2015, and less than half of the alleged $40MM backlog is represented in 2020 revenue. Not to mention that a meaningful amount came from DI, a newly-disclosed accounting subsidiary of the company and HPQ, which is approximately 12% owned by PYR. Note here that 80% of 2020’s revenue was, in our view, not arm’s length, as we discuss later."
Source:seeking alpha.com Mariner report