Highcon recently published preliminary financial results for 2023 with $8.4 million in revenues and a loss of $26.9 million, including $5 million related to inventory and fixed assets write offs and impairments.
It completed a series of reorganizational activities that will allow it to save more than $10 million on an annual basis and break even during the second half of 2024. Activities included:
- a funding round from existing and new shareholders;
- debt restructuring; and
- temporary shutdown of major R&D projects and the respective reduction in force.
The company also secured a strategic deal with BHS Corrugated.
According to a media statement, the company’s customer base in its target markets of folding carton and corrugated have demonstrated consistent growth.
Highcon will be participating in Drupa 2024 and sees it as an opportunity to ignite its business.
The company ended 2023 with $7 million in systems backlog to be delivered in 2024, some of which was already delivered to customers and will be recognized as revenue in the first quarter of 2024. It should be noted that the company’s recurring revenues (consumables and services) increased by 20 per cent to $4.2 million in 2023 compared with 2022. The company expects such growth to continue in 2024. As such, the company expects significant growth in overall revenues in 2024 in comparison to 2023.
The company’s cash balance at the end of 2023 was $9.5 million including $0.9 million of restricted cash. Following the company’s actions related to cost reduction as well as its expected growth for 2024, the company expects to reach cash breakeven in the second half of 2024.
“2023 was a challenging year for Highcon as the global economy slow down, negatively impacted new order intake,” commented Shlomo Nimrodi, CEO. “R&D costs increased as the company invested in the development of the new product platform for the corrugated market. While making good progress on this development, which resulted in multiple commitments from new customers to purchase the future product, the impact was that the company faced a cash crunch.”
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