OTTAWA, ONTARIO - January 29, 2014
- Thermal Energy International Inc. ("Thermal
Energy" or the "Company") (TSXV: TMG), a global provider of energy
efficiency and emission reduction solutions, today announced its
financial results for the three months ended November 30, 2013. All
figures are in Canadian dollars.
Q2 2014
Highlights:
-Strong heat recovery and
GEM(R) sales resulted in a 219% increase in
revenue compared to the second quarter a year
ago;
-Gross profit increased 134%
compared to the same period last year;
-Net income was $238 thousand
compared to a loss of $787 thousand a year
earlier;
-Operating cash flow was $455 thousand compared to negative $536 thousand for the same period last
year
-Net cash position totalled $2.5
million, compared to $1.3 million as at May
31, 2013
-Strong business development activity
underscored by ~$1.9 million in heat recovery and
GEM(R) orders from a
leading Fortune 500 food and beverage company, and an aggregate of
almost $2.0 million in heat recovery and GEM(R) orders from hospitals.
YTD 2014
Highlights
-Sales up
$3.4 million or 161%
-Gross
profit increased $1.5 million or 115%;
-Net loss
of $121 thousand compared to a loss of $1.6 million last
year.
-Operating cash flow of $279 thousand
compared to negative $1.2 million same period last year.
Highlights
Subsequent to Quarter End:
-Awarded
initial heat recovery order from a global diversified mining and
materials company;
-Received
~$250 thousand GEM (R) order from another major hospital;
-The
Company had an order backlog of approximately $7.1 million as at
January 28, 2014
"Continued growth in both heat recovery and
GEM(R) sales translated
to a return in profitability during the quarter," said William
Crossland, CEO of Thermal Energy. "While our business is
characterized by a long sales cycle, orders received year-to-date
and our strong order backlog are evidence that the investment we
made in sales and distribution in early fiscal 2013 is bearing
fruit. Moreover, our proprietary products continue to receive
validation from a growing number of industries. In addition to
significant orders from a leading Fortune 500 food and beverage
company, and from multiple hospitals during the quarter, subsequent
to quarter end we received our first order from the mining and
resources sector with an initial heat recovery order from a global
diversified mining and materials company."
Summary Financial
Results
----------------------------------------------------------------------
|In thousands|3 months ended |3 months ended |6 months ended |6 |
|except % |Nov. 30, 2013 |Nov. 30, 2012 |Nov. 30, 2013 |months |
|data | | | |ended |
| | | | |Nov. |
| | | | |30, |
| | | | |2012 |
|--------------------------------------------------------------------|
|Revenue |$4,014 |$1,260 |$5,536 |$2,122 |
|--------------------------------------------------------------------|
|Gross profit|$1,875 |$800 |$2,845 |$1,325 |
|--------------------------------------------------------------------|
|Gross margin|46.7% |63.5% |51.4% |62.4% |
|--------------------------------------------------------------------|
|Operating |$1,647 |$1,561 |$3,002 |$3,069 |
|expenses | | | | |
|--------------------------------------------------------------------|
|Net income |238 |(787) |(121) |(1,634)|
|(loss) | | | | |
----------------------------------------------------------------------
Q2 2014 Financial
Review:
Revenue
for the quarter was $4.0 million compared to $1.3 million a year
ago, representing an increase of 218.6%. Sales of heat recovery
systems increased by $2.6 million and sales of
GEM(R) Condensate
return systems increased by almost $0.2 million compared to the
second quarter of last year.
Higher
heat recovery systems revenue during the quarter included
the commencement of projects at two sites of a major
Fortune 500 food and beverage company (order announced September
16, 2013), an ongoing installation at a major pulp and paper
company (order announced June 3, 2013), and the substantial
installation at a major hospital (order announced June 13,
2013).
Higher
GEM(R) sales were driven by strong broad based sales growth in North
America and the partial fulfilment of an order received from a
major food and beverage manufacturer, as announced July 3,
2013.
Gross
profit for the quarter was $1.9 million
compared to $0.8 million for the second quarter of last year,
representing an increase of 134%. As a percentage of sales, gross
profit for the quarter was 46.7% compared to 63.5% in the second
quarter of last year. The decline as a percentage of sales was
attributable to differences in the product mix.
Operating
expenses for the quarter increased 5.5% to approximately $1.6
million. An increase of approximately $200 thousand paid in sales
commissions during the quarter was partially offset by reduced
investor relations costs, legal costs, research and development
costs, and amortization of intangible assets, which were fully
amortized in July 2013. In addition, the cost of additional sales
and technical staff was offset by the allocation of staff costs to
cost of sales due to the increased activity in heat recovery
projects
Net
income for the quarter was $238 thousand compared to a net loss of
$787 thousand for the same quarter a year ago.
Operating
cash flow (defined as net loss for the period, plus items not
involving cash, plus lease payments received) for the quarter was
$455 thousand compared to negative $536 thousand for the same
period last year.
As at
November 30, 2013, the Company's net cash position amounted to $2.5
million, compared to $1.3 million as at May 31, 2013.
The Company also had an estimated $0.3 million of
unused borrowing capacity under its bank loans. With cash balances
and unused borrowing capacity of approximately $2.8 million,
management believes that it has sufficient capital resources to
fund existing operations and anticipated capital requirements in
the remainder of fiscal 2014.
Full
financial results including Management's Discussion and Analysis
and accompanying notes to the financial results, are available on
www.SEDAR.com and www.thermalenergy.com.
About
Thermal Energy International Inc.
Thermal Energy International Inc. is an innovative
cleantech company providing a variety of proprietary and proven
energy efficiency, emission reduction, water efficiency, and
bioenergy products and solutions to the industrial, commercial and
institutional markets worldwide. Thermal Energy is also a fully
accredited professional engineering firm, and can offer advanced
process and applications engineering services. By providing a
unique mix of proprietary products together with process, energy,
environmental, and financial expertise Thermal Energy is able to
deliver significant financial and environmental benefits to its
customers.
Thermal Energy's products include;
GEM(R) - Steam traps and condensate return systems,
FLU-ACE(R) - Direct contact condensing heat recovery, and
Dry
RexTM
- Low temperature biomass drying systems.
These award winning products are effective in a wide variety of
industries and application and have an excellent track record of
longevity, proven reliability and performance providing significant
energy savings, reduced GHG
emissions, improved water efficiency, lower maintenance costs,
improved product quality and increased production efficiency.
Thermal Energy International Inc. has offices in Ottawa, Canada as
well as Bristol, UK, United States, Italy and China.
For more information, visit our website at
www.thermalenergy.com and follow @GoThermalEnergy on
Twitter.
William Crossland
President and CEO
Thermal Energy International Inc.
613-723-6776
bill.crossland@thermalenergy.com
Trevor Heisler
Investor Relations
Heisler Communications
416-500-8061
trevor@heislercommunications.com
# # #
This press release contains forward-looking
statements relating to, and amongst other things, based on
management's expectations, estimates and projections, the
anticipated effectiveness of the Company's products and services
and the timing of revenues to be received by the Company.
Statements relating to the expected installation and revenue
recognition for projects, statements about the anticipated
effectiveness and lifespan of the Company's products and statements
about the expected environmental effects and cost savings
associated with the Company's products are forward looking
statements. These statements are not guarantees of future
performance and involve a number of risks, uncertainties and
assumptions. Many factors, some of which are outside of the
Company's control, could cause events and results to differ
materially from those stated. Fulfilment of orders, installation of
product and activation of product could all be delayed for a number
of reasons, some of which are outside of the Company's control,
which would result in anticipated revenues from such projects being
delayed or in the most serious cases eliminated. Actions taken by
the Company's customers and factors inherent in the customer's
facilities but not anticipated by the Company can have a negative
impact on the expected effectiveness and lifespan of the Company's
products and on the expected environmental effects and cost savings
expected from the Company's products. Additional heat recovery and
GEM(R) steam trap projects being developed by the Company may not
result in orders for the Company's products. The Company disclaims
any obligation to publicly update or revise any such statements
except as required by law.
Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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