OTTAWA, ONTARIO – January 29, 2018 – Thermal Energy International Inc. (“Thermal Energy” or the “Company”) (TSXV: TMG), a global provider of industrial and institutional energy efficiency solutions, today announced its financial results for the three-month (the “quarter”) and six-month (the “first half” or “year-to-date”) periods ended November 30, 2017. All figures are in Canadian dollars.
HIGHLIGHTS:
“Fiscal 2018 is shaping up to be a banner year for Thermal Energy International,” said William Crossland, CEO of Thermal Energy. “We are experiencing strong demand for our proprietary energy efficiency solutions and our reported order backlog is at an all-time high. Heat recovery revenue in particular was up 132.4% in the first half of the year and we received our largest order on record – an $11 million energy efficiency project with Resolute FP Canada – subsequent to the end of the second quarter. We’ve also had several recent GEM™ orders, including four from two multinational consumer products companies, both of whom are part of our corporate account development strategy.”
Second Quarter Financial Review:
Driven by stronger heat recovery sales, Thermal Energy’s revenue increased 21.1% to $3.7 million for the quarter compared to $3.1 million for the second quarter of last year. Heat recovery revenue was up 108.0% and included the substantial completion of an installation at a major hospital, progress of a project at a sixth site of a leading Fortune 500 food and beverage customer (as announced July 6, 2017), and the partial installation of a system at a leading producer of industrial and fuel alcohols (as announced September 28, 2016).
Revenue from GEM condensate return systems was down 26.0%, despite further orders from a leading performance materials company. The decrease was mainly the result of lower public sector sales.
Gross profit for the quarter was just under $1.9 million, or 49.7% of revenue, compared to slightly more than $1.9 million, or 62.7% of revenue, in the second quarter of last year. Gross margin was affected by the product split, with the second quarter of this year having a much higher proportion of revenues deriving from the sale of heat recovery systems.
Operating expenses for the quarter were $1,777 thousand compared with $1,687 thousand for the same quarter last year. Operating expenses as a percentage of revenue decreased to 47.7% from 54.8% a year ago, despite additional costs associated with new technical and sales staff needed to grow the business.
The Company had EBITDAS and net income of $109 thousand and $71 thousand respectively for the quarter. This compares to EBITDAS and net income of $285 thousand and $175 thousand respectively in the second quarter of last year.
Business Update and Order Backlog Summary:
Subsequent to quarter end, on December 5, 2017 the Company announced an $11 million energy efficiency project with Resolute FP Canada Inc. The project, which included the installation of two FLU-ACE® Heat Recovery Systems and the conversion of the mill’s steam traps to Thermal Energy’s proprietary GEM Steam Trap system, represents the Company’s largest heat recovery and largest GEM orders to date. The project is expected to be substantially completed and revenue earned over the next 17 months.
As part of the Company’s evolving corporate account development strategy the Company recently received four GEM orders totaling $601 thousand from two multinational consumer products companies. More specifically:
Also subsequent to year end, the Company received a $120 thousand heat recovery equipment order from a producer and supplier of fresh and value-added food products.
Including the above mentioned recent orders, the Company had an order backlog of approximately $1 million as at January 2018, compared to $7.1 million when it reported second quarter results a year earlier. The Company includes in “order backlog” the value of projects in respect of which purchase orders have been received but have not yet been reflected as revenue in the Company’s published quarterly financial statements.
About Thermal Energy International Inc.
Thermal Energy International Inc. is an established global supplier of proprietary, proven energy efficiency and emissions reduction solutions to the industrial and institutional sectors. We save our customers money and improve their bottom line by reducing their fuel use and cutting their carbon emissions. Our customers include a large number of Fortune 500 and other leading multinational companies across a wide range of industry sectors.
Thermal Energy is also a fully accredited professional engineering firm and by providing a unique mix of proprietary products together with process, energy and, environmentalengineering expertise, Thermal Energy is able to deliver unique turnkey projects withsignificant financial and environmental benefits for our customers.
Thermal Energy's proprietary products include; GEMTM - Steam traps, FLU-ACE® - Direct contact condensing heat recovery, and Dry-Rex® - Low temperature biomass drying systems.
Thermal Energy International Inc. has offices in Ottawa, Canada as well as Bristol, U.K., United States, Germany, Italy and China. The Company’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG.
For more information, visit the Company's website at www.thermalenergy.com and follow @GoThermalEnergy on Twitter at http://twitter.com/GoThermalEnergy.
HIGHLIGHTS:
- Revenue up 21% to $3.7 million for the quarter and 31% to $6.8 million for the first half of the year;
- Gross profit comparable to the same periods a year ago as a higher proportion of heat recovery sales resulted in lower gross margins of 49.7% for the quarter and 49.4% year-to-date;
- Higher operating expenses as a result of continued investment in growing the Company;
- The Company had net income of $70.5 thousand for the quarter and a net loss of $110.3 thousand for the year-to-date;
- Order backlog currently at $17.5 million.
“Fiscal 2018 is shaping up to be a banner year for Thermal Energy International,” said William Crossland, CEO of Thermal Energy. “We are experiencing strong demand for our proprietary energy efficiency solutions and our reported order backlog is at an all-time high. Heat recovery revenue in particular was up 132.4% in the first half of the year and we received our largest order on record – an $11 million energy efficiency project with Resolute FP Canada – subsequent to the end of the second quarter. We’ve also had several recent GEM™ orders, including four from two multinational consumer products companies, both of whom are part of our corporate account development strategy.”
Second Quarter Financial Review:
Driven by stronger heat recovery sales, Thermal Energy’s revenue increased 21.1% to $3.7 million for the quarter compared to $3.1 million for the second quarter of last year. Heat recovery revenue was up 108.0% and included the substantial completion of an installation at a major hospital, progress of a project at a sixth site of a leading Fortune 500 food and beverage customer (as announced July 6, 2017), and the partial installation of a system at a leading producer of industrial and fuel alcohols (as announced September 28, 2016).
Revenue from GEM condensate return systems was down 26.0%, despite further orders from a leading performance materials company. The decrease was mainly the result of lower public sector sales.
Gross profit for the quarter was just under $1.9 million, or 49.7% of revenue, compared to slightly more than $1.9 million, or 62.7% of revenue, in the second quarter of last year. Gross margin was affected by the product split, with the second quarter of this year having a much higher proportion of revenues deriving from the sale of heat recovery systems.
Operating expenses for the quarter were $1,777 thousand compared with $1,687 thousand for the same quarter last year. Operating expenses as a percentage of revenue decreased to 47.7% from 54.8% a year ago, despite additional costs associated with new technical and sales staff needed to grow the business.
The Company had EBITDAS and net income of $109 thousand and $71 thousand respectively for the quarter. This compares to EBITDAS and net income of $285 thousand and $175 thousand respectively in the second quarter of last year.
Business Update and Order Backlog Summary:
Subsequent to quarter end, on December 5, 2017 the Company announced an $11 million energy efficiency project with Resolute FP Canada Inc. The project, which included the installation of two FLU-ACE® Heat Recovery Systems and the conversion of the mill’s steam traps to Thermal Energy’s proprietary GEM Steam Trap system, represents the Company’s largest heat recovery and largest GEM orders to date. The project is expected to be substantially completed and revenue earned over the next 17 months.
As part of the Company’s evolving corporate account development strategy the Company recently received four GEM orders totaling $601 thousand from two multinational consumer products companies. More specifically:
- Subsequent to quarter end, the Company received two GEM orders totaling $386 thousand from one of the world’s leading consumer products conglomerates.
- During the months of November and December, the Company received $215 thousand in orders from a multinational personal care consumer products company. These orders did not contribute any revenue during the second quarter.
Also subsequent to year end, the Company received a $120 thousand heat recovery equipment order from a producer and supplier of fresh and value-added food products.
Including the above mentioned recent orders, the Company had an order backlog of approximately $1 million as at January 2018, compared to $7.1 million when it reported second quarter results a year earlier. The Company includes in “order backlog” the value of projects in respect of which purchase orders have been received but have not yet been reflected as revenue in the Company’s published quarterly financial statements.
About Thermal Energy International Inc.
Thermal Energy International Inc. is an established global supplier of proprietary, proven energy efficiency and emissions reduction solutions to the industrial and institutional sectors. We save our customers money and improve their bottom line by reducing their fuel use and cutting their carbon emissions. Our customers include a large number of Fortune 500 and other leading multinational companies across a wide range of industry sectors.
Thermal Energy is also a fully accredited professional engineering firm and by providing a unique mix of proprietary products together with process, energy and, environmentalengineering expertise, Thermal Energy is able to deliver unique turnkey projects withsignificant financial and environmental benefits for our customers.
Thermal Energy's proprietary products include; GEMTM - Steam traps, FLU-ACE® - Direct contact condensing heat recovery, and Dry-Rex® - Low temperature biomass drying systems.
Thermal Energy International Inc. has offices in Ottawa, Canada as well as Bristol, U.K., United States, Germany, Italy and China. The Company’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG.
For more information, visit the Company's website at www.thermalenergy.com and follow @GoThermalEnergy on Twitter at http://twitter.com/GoThermalEnergy.
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