I am the IR representative for Puradyn Filter Technologies (PFTI), sharing a note I wrote to some shareholders in the Company I know, as the stock has been sinking the past month or two on a dearth of news. There is nothing going on at the Company to justify this decline - in fact I think the business performance continues to move in the right direction and the pipeline of new business opportunities is progressing well, but slowly, particularly as the oil & gas segment digests the price shocks for oil.
The primary driver for the share weakness seems to be 1) lack of news flow from PFTI as they wait to lock down major orders and than figure out how to disclose them, and 2) the impact of oil services company weakness amidst the oil price decline.
But the thesis remains sound: Puradyn has 5-6 years of experience with these products in use on large industrial engines and the benefits are proven, the savings are substantial. Nabors (NBR) disclosed savings of $5M a year by using Puradyn filtration on 400 engines. Their savings could now approach $20M / year on over 2000 engines which is a significant contribution to their bottom line.
Leveraging our Nabors multi-year proof point / case study and PFTI's CEO’s high level networking contacts, PFTI now has ~15 companies that are in various stages of testing of puradyn filtration equipment. Over 50 filtration systems have been purchased by these companies for test in locations around the world. The CEO is highly confident in these tests translating into orders.
The total pipeline of opportunities totals is at least 10,000 engines, which translates into over $20M in filtration unit sales (the razor) and $6-8M in annual filter element replacement sales (razor blade).
Thus the pipeline of potential opportunities is nearly 10X the Company’s 2014 estimated revenue run rate of ~ $3M and its operating losses have continued to decline over the past few quarters as revenue has risen over 40%.
I'm a shareholder of increasing proportions, and I feel the price weakness could prove to be a great entry point as this is one great speculation on a proven technology with a unique ability to save customers vastly more money than they will spend on PFTI products, with a green benefit as well!
To support this message in getting out, our firm has hired an external oil & gas PR/Marketing consultant based in Houston, and we just launched an email blast to 3,000 highly qualified customer targets via one of the industry’s most prominent trade publication arms. We also hope to secure media coverage for Puradyn solutions within the O&G trade media by working with a proven marketer who's roots are in Houston & energy.
The simple message to prospects is:
“large engine maintenance - get more done for le$$ with Puradyn”
We are also working hard with the Company to find ways to make the progress they are making more transparent for their shareholders. The bad news is that PFTI's team is conservative on disclosure, having had IR efforts deliver no results in the past. The good news is this discipline, honor & credibility gives me great confidence in what they say and their potential - rather than the hype & distrust we generally experience in microcaps.
So far the stock has not worked well, but that seems more a function of news flow than of tangible progress, and my 1/4 century of microcap experience is pretty consistent as far as sales efforts taking longer than expected, particularly in the early stages. So I feel that taking advantage of current market weakness makes a lot of sense given the likelihood of news business news flow in coming quarters, particularly with the CEO as a financial backstop via his personal guarantee of PFTI's low rate debt facility (around 2.77%).
Happy to answer any questions and/or get you on the phone with the CEO if you’d like to learn more.
David Collins
external IR Counsel for Puradyn
212 924 9800
pfti@catalyst-ir.com
The primary driver for the share weakness seems to be 1) lack of news flow from PFTI as they wait to lock down major orders and than figure out how to disclose them, and 2) the impact of oil services company weakness amidst the oil price decline.
But the thesis remains sound: Puradyn has 5-6 years of experience with these products in use on large industrial engines and the benefits are proven, the savings are substantial. Nabors (NBR) disclosed savings of $5M a year by using Puradyn filtration on 400 engines. Their savings could now approach $20M / year on over 2000 engines which is a significant contribution to their bottom line.
Leveraging our Nabors multi-year proof point / case study and PFTI's CEO’s high level networking contacts, PFTI now has ~15 companies that are in various stages of testing of puradyn filtration equipment. Over 50 filtration systems have been purchased by these companies for test in locations around the world. The CEO is highly confident in these tests translating into orders.
The total pipeline of opportunities totals is at least 10,000 engines, which translates into over $20M in filtration unit sales (the razor) and $6-8M in annual filter element replacement sales (razor blade).
Thus the pipeline of potential opportunities is nearly 10X the Company’s 2014 estimated revenue run rate of ~ $3M and its operating losses have continued to decline over the past few quarters as revenue has risen over 40%.
I'm a shareholder of increasing proportions, and I feel the price weakness could prove to be a great entry point as this is one great speculation on a proven technology with a unique ability to save customers vastly more money than they will spend on PFTI products, with a green benefit as well!
To support this message in getting out, our firm has hired an external oil & gas PR/Marketing consultant based in Houston, and we just launched an email blast to 3,000 highly qualified customer targets via one of the industry’s most prominent trade publication arms. We also hope to secure media coverage for Puradyn solutions within the O&G trade media by working with a proven marketer who's roots are in Houston & energy.
The simple message to prospects is:
“large engine maintenance - get more done for le$$ with Puradyn”
We are also working hard with the Company to find ways to make the progress they are making more transparent for their shareholders. The bad news is that PFTI's team is conservative on disclosure, having had IR efforts deliver no results in the past. The good news is this discipline, honor & credibility gives me great confidence in what they say and their potential - rather than the hype & distrust we generally experience in microcaps.
So far the stock has not worked well, but that seems more a function of news flow than of tangible progress, and my 1/4 century of microcap experience is pretty consistent as far as sales efforts taking longer than expected, particularly in the early stages. So I feel that taking advantage of current market weakness makes a lot of sense given the likelihood of news business news flow in coming quarters, particularly with the CEO as a financial backstop via his personal guarantee of PFTI's low rate debt facility (around 2.77%).
Happy to answer any questions and/or get you on the phone with the CEO if you’d like to learn more.
David Collins
external IR Counsel for Puradyn
212 924 9800
pfti@catalyst-ir.com
Puradyn Filter Tech (PFTI) Stock Research Links
Posts that I make on Investors Hangout reflect my own personal thinking and opinion and are neither endorsed nor approved by the subject companies, many of which may be clients or client prospects of our our NY-based investor relations consulting firm.
David Collins, Managing Director
Catalyst Global Investor Relations
www.catalyst-ir.com
dcc@catatalyst-ir.com
212 924 9800
David Collins, Managing Director
Catalyst Global Investor Relations
www.catalyst-ir.com
dcc@catatalyst-ir.com
212 924 9800
