LiqTech International (NASDAQ: LIQT) reported Q1 EPS of ($0.11), $0.03 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $4 million versus the consensus estimate of $4.19 million.

First Quarter 2021 Highlights

• First quarter revenue of $4.0 million.
• Net loss of $2.5 million.
• Strong ending cash balance of $10.7 million.
• Invested in sales and engineering personnel to drive revenue growth.
• Developed significant opportunities in key markets beyond marine scrubbers.

Revenue for the first quarter continued to be negatively affected by the COVID-19 pandemic, although it was in line with our previously announced expectations. While we are seeing an overall improvement in market activity, we are not expecting revenue to materially improve until the second half of 2021.

Our core marine scrubber market continued to be negatively impacted by the COVID-19 pandemic in the first quarter. However, the price spread between high and low sulfur fuels (HSFO and LSFO), the key economic driver supporting investments in marine scrubbers to meet the IMO 2020 low sulfur emissions mandate, has continued to widen and is now above $110 per metric ton. As a result, shipowners are looking again to scrubbers as a cost-effective means to meet the IMO 2020 standard and we are seeing a steady increase in inquiries and improving order intake. Importantly, still more ports are banning the discharge of open-loop scrubber waste water. The IMO is expected to discuss a harmonization of open loop scrubber water discharge regulations in June 2021.

"We are gaining market traction in the three primary areas of revenue growth we have previously noted: 1) a rebound in the marine scrubber market; 2) the launch of our water treatment solutions through our joint venture for the Middle East oil and gas market and; 3) development of the marine black carbon reduction market," commented Sune Mathiesen, CEO of LiqTech.

"We have received our first orders for the black carbon reduction market for marine vessels in China, a market that we believe has significant future potential for LiqTech. We have previously announced our plans to establish a manufacturing facility in China to service this market. We are now working to complete the site selection and are making good progress."

Mr. Mathiesen further commented, "The first orders for the black carbon reduction market and recent orders for new applications highlights the progress we are making in leveraging our proprietary silicon carbide filtration technology to expand beyond our historical reliance on a single market. We are continuing our efforts in diversifying our business and we believe that we will see still more orders from new end markets."

"While the first quarter results continued to reflect the impacts of the COVID-19 pandemic, our first orders for the black carbon reduction market coupled with an improving order intake in the marine scrubber market and a continuously growing pipeline in oil & gas provide us greater confidence in ramping revenues in the second half of 2021. Starting from the third quarter last year, we made significant strategic investments in our sales organization to drive revenue growth. We are pleased to note that our current order intake is at its highest level in more than a year. We expect new orders for the second quarter to exceed $10 million, marking a milestone in the recovery of our business post COVID-19."

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