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• Q4 Revenue: $5.4 million, up 91% from the same period last year.

• Annual Revenue: $18.5 million, up 46% from 2023.

• Q4 Volume Demand Increase: 82%.

• Annual Volume Demand Increase: 56%.

• Q4 Gross Profit: $1.6 million, an increase of $1.1 million from the same period in 2023.

• Annual Gross Profit: $5.3 million, up 91% or $2.5 million compared to 2023.

• Q4 Gross Margin: 34.4%, compared to 21.9% in the same period in 2023.

• Annual Gross Margin: 33.2%, compared to 28.9% in 2023.

• Q4 SG&A Expenses: $1.8 million, compared to $1.3 million in the same period in 2023.

• Annual SG&A Expenses: $6.5 million, compared to $5.0 million in 2023.

• Q4 R&D Expenses: $360,000.

• Annual R&D Expenses: $2 million.

• Q4 Adjusted EBITDA: $90,000, an improvement of $1.1 million from the same period in 2023.

• Annual Adjusted Loss: $860,000, an improvement of $1.7 million compared to 2023.

• Cash and Term Deposits: $32.2 million as of December 31, 2024.

• Share Buyback: $2.2 million invested to purchase and retire 679,000 shares in 2024.

• Warning! GuruFocus has detected 3 Warning Signs with ECSNF.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EcoSynthetix Inc (ECSNF) reported a 91% increase in Q4 sales to $5.4 million compared to the same period last year.

• The company achieved a significant milestone with a $1.1 million order from an international pulp manufacturer, validating their fiber strength offering.

• EcoSynthetix Inc (ECSNF) demonstrated strong volume growth across its end markets, with an 82% increase in Q4 and 56% for the full year.

• The company reported positive adjusted EBITDA and cash flow improvements, indicating strong financial health.

• EcoSynthetix Inc (ECSNF) is making progress in strategic markets such as pulp, wood composites, and personal care, with new wins and ongoing trials.

Negative Points

• The company is experiencing some softness in volume demand across its base business in early 2025.

• There is potential exposure to US and Canadian tariffs, which could impact revenue and customer demand.

• The average selling price was a slight drag on annual sales due to lower manufacturing costs passed on to customers.

• EcoSynthetix Inc (ECSNF) faces challenges in displacing long-established chemistries in industrial markets.

• The timeline for commercial adoption by external producers in the wood composites sector is uncertain and dependent on customer decisions.

Q & A Highlights

Q: Can you explain the significance of the $1.1 million contract and its potential for growth? A: Jeffrey MacDonald, CEO: The $1.1 million order is a base load for our customer's current clients, representing growth potential as they build more customers. The customer is trialing at additional mills, which could lead to further growth opportunities. The $50 million to $60 million potential is based on supporting an entire mill's conversion to enhanced pulp, addressing a $2 million-ton structural gap.