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spk02: Greetings and welcome to the Laser Photonics third quarter financial results and webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Siegel, Senior Manager, Director of Hayden Investor Relations. Thank you, sir. You may begin.
spk03: Thank you. With me today are Wayne Tupola, Laser Photonics CEO, and Jade Barnwell, the company's CFO. Any forward-looking statements made during this conference call and webcast, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, the specific risks and uncertainties discussed in the reports that we file periodically with the SEC. Laser photonics assumes no obligation to either update any forward-looking statements that we have made or may make, or to update the factors that may cause actual results to differ materially from those that are forecast. I will now turn the call over to Wayne. Take it away, Wayne.
spk00: Good morning, ladies and gentlemen. Thank you for joining us today for laser photonics course Q3 2023. Earnings Vault. I'm Wayne Tupuola, CEO of Latonix Corp, here to provide an overview of our financial performance and discuss our future outlook. Let's start by addressing our operating loss for the quarter, which was under $1 million. While we encountered this loss, it's essential to provide context and note our Q3 year-over-year increase of 1.4%. This increase reflects our efforts to improve our financial standing fight challenges faced throughout the year. Looking at the year-to-date figures for Q3, we experienced a decrease of 9.1%. As we stated on the past few calls, the old economic environment, including the substantial increase in interest rates, has taken some time for our potential customers to get used to. I want to assure you that our company has a robust pipeline of opportunities that we expect to positively impact our fourth quarter and allow us to finish the year on a positive note. One of our strengths lies in our high-power laser products, which have consistently led the pack in revenue generation. This success played a significant role in the increase from Q2 to Q3, and we expect this trend to continue in the coming months and years. The marked outlook remains positive for Lace Photonics Corp. despite geopolitical and economic disruptions. We remain dedicated to serving the global community. Our company's diligence has allowed us to navigate these challenges and sustain our growth plans, which we anticipate will yield promising results in 2024, as we are seeing an uptick in interest from major distributors who possess substantial sales forces. We are optimistic that these new distributions can leverage their unique market exposure to enable us to sell more laser blaster units. This development positions us well for the future success, and we expect these relationships to ramp in 2024. We also have some exciting news of our Marlin line of laser cleaning products for the maritime industry. as we are putting together a commercial to target potential buyers of this product. To the best of our knowledge, this will be the first laser cleaning commercial of its kind to be aired to the public, and we can't wait to see the results. Additionally, we have experienced growing interest from international markets. As a part of our expansion strategy, we have increased our internal sales force to take advantage of these opportunities. We already experiencing orders from the Department of Defense, which represents over 35% of this quarter's revenue, with our Service Partner Network program also receiving orders from Hawaii and abroad. In spite of a strike-driven downtick in the automotive industry, Lays Botanics Corp. is still receiving orders from Tier 2 customers, while the oil and gas industry should start to see sales in 2024. As I had mentioned in our last earnings call, the company has announced plans to expand its product offerings by enhancing the Cleantech laser cleaning product line with what we believe to be a revolutionary change by using a larger format class one product enclosure that enables end users laser safety product protocols for most industrial manufacturing environments. To that effect, in October we acquired a new license for ICT investments that will allow the company to pursue opportunities with major aerospace companies which are struggling to apply fiber laser cutting material process prone to heat affected zones that are critical to stress cracks. We plan to introduce a line of products called Sabertech cold cutting and turbo piercing technology to address this problem. Marketing efforts have begun and we are excited about this new addition to the laser photonics product lineup. In conclusion, we remain focused in our growth plan and future opportunities. With a healthy pipeline, leading high-power laser products, and increasing interest from major distributors and international markets, we are well positioned to achieve positive outcomes in 2024. Thank you for all your continued trust and support, Now I will turn this call over to Jade to explain the financials.
spk01: Thank you, Wayne. Good morning, and thank you, everyone, for joining us on the call. Our third quarter revenue increased from the same period last year by 1.2% to $1.2 million. Our gross margin on those Q3 revenue increased by nearly 2,800 basis points year over year to approximately 73%. as our mix was more heavily weighted toward our higher margin clean tech systems. Operating loss was $1.1 million, down from operating income of $0.2 million last year. The most significant change in our operating cost structure was the increase in sales and marketing resources, NASDAQ and SEC compliance costs, and rent for our new facility. This increase in our SG&A is mainly due to our strategic plan to increase market reach and sales force as noted previously. GAAP net loss and loss per share were $1.1 million and 13 cents respectively, down from last year's net income and EPS of $0.2 million and 4 cents respectively. From balance sheets, and cash flow perspectives, we finished the quarter with $8.3 million in cash and no debt. This balance represents a $1.6 million cash outflow during the third quarter, mainly resulting from $1.4 million cash used for our operating activities during the period. Turning to our outlook for the fourth quarter of 23, We expect to see double-digit growth in our revenue sequentially and also year-over-year, based on the current orders and pipeline. Looking at our operating expenses, given our continued growth investments in R&D, sales and marketing, and expanding our distribution channel, we expect these costs will also rise further in the fourth quarter. That concludes my prepared remarks for today. We can now move to questions.
spk02: Thank you. We will now be connecting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that you limit yourself to one question and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.
spk03: All right, operator, there's no webcast questions either, so we can just close out the call.
spk02: We have reached the end of our question and answer session, which concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.
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