Applied UV, Inc. (NASDAQ:AUVI) Q1 2023 Earnings Conference Call May 23, 2023 9:00 AM ET

Company Participants

Brett Maas - Hayden IR

Max Munn - Founder, Chief Executive Officer, President & Director

Mike Riccio - Chief Financial Officer

Conference Call Participants

Chip Moore - EF Hutton

Operator

Good day. I would like to welcome everyone to the Q1 2023 Applied UV Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Brett Maas, Investor Relations from Hayden IR. Thank you. You may begin.

Brett Maas

Thank you. Once again, welcome to Applied UV's Q1 2023 earnings call. With me on the call today are Max Munn, Founder, CEO, President and Director; and Mike Riccio, Chief Financial Officer. As a reminder, all materials for today's live presentation are available on the company's Investor Relations website at applieduvinc.com.

Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we'll make certain predictive statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recent Form 10-K lists some of the most important risk factors that could cause actual results to differ from our predictions.

With that, I'll turn the call over to Max Munn. Max, the floor is yours.

Max Munn

Thanks, Brett. Good morning, everyone. Our Q1 2023 financial results included revenues of $10.7 million, up 217% over the prior year quarter, with our Hospitality segment growing 332% and our Disinfection and Healthy Buildings Technologies segment growing 135%. As a reminder, Applied UV has 3 portable operating segments -- reportable operating segments: the design, manufacture and distribution of disinfecting pathogen elimination systems for use in food preservation, health care, hospitality, education and public spaces as well as cannabis, correctional facilities, commercial, municipal and residential markets; the Disinfection Healthy Buildings Technologies segment; and the manufacturer of funders and custom furniture specifically for the hospitality industry, our Hospitality segment; and lastly, the Corporate segment which includes expenses related primarily to corporate governance, such as Board fees, legal expenses, audit fees, executive management and listing costs.

Now, I'd like to take a deeper dive and review our Hospitality segment. In Hospitality, MunnWorks continues its pre-pandemic growth and the industry continues to show strong growth fueled by the post-pandemic travel surge. This market growth continues to heighten the need for hotels to make capital improvements to facilities to maintain their franchise flag. We've had several high-profile hotel operators placing orders with us in the million -- multimillion-dollar area. The rising demand for U.S.-based manufacturing which eliminates the 25% tariff on China manufactured goods as well as 6.5% duties, as well as mitigating supply chain disruption, shortening times to delivery of goods, is both driving sales and what we anticipate to be margin expansion, much of which we spoke about in our Q4 call. We expect this margin expansion and sales growth into Q2 and to continue to improve the remainder of the year. Our sales backlog for Hospitality segment is approximately $10 million at this point.