via NewMediaWire – Tecogen, Inc. (OTCQX:TGEN), a leading
manufacturer of clean energy products, reported revenues of $7.4
million and net income of $89 thousand for the quarter ended March
31, 2022 compared to revenues of $6.1 million, an improvement of
$1.4 million, and a net profit of $1.8 million in 2021, a decrease
of $1.7 million. The positive net income in Q1 2021 was primarily
due to the benefit from the CARES Act payroll support programs. The
company generated $1.9 million in cash from operations during the
quarter and ended the quarter with a cash balance of $5.5 million.
Key Takeaways
Net Income and Earnings Per Share
- Net income in Q1 2022 was $89
thousand compared to $1.8 million in Q1 2021, a decrease of $1.7
million, primarily due to the forgiveness of the PPP loan in
Q1 2021. EPS was $0.00/share and $0.07/share in Q1 2022 and Q1
2021, respectively.
Income from Operations
- Income from operations for the
three months ended March 31, 2022 was $81 thousand compared to a
loss of $139 thousand for the same period in 2021, an increase of
$220 thousand. Our increased revenues combined with reduced
operating costs resulted in positive income from operations.
Revenues
Revenues for the quarter ended March 31, 2022 were $7.4 million
compared to $6.1 million for the same period in 2021, a 22.8%
increase.
- Product revenue was $3.9 million
in Q1 2022 compared to $2.1 million in the same period in 2021, an
increase of 85.6%, primarily due to increased cogeneration and
chiller unit volume. We continue to see sales into our key market
segments including controlled environment agriculture.
- Services revenue was $2.9 million
in Q1 2022 compared to $3.3 million in the same period in 2021, a
decline of 11.1%, primarily due to reduced lower margin
installation activity. Services contract revenue increased 4.8% to
$2.9 million compared to $2.8 million in the first quarter of
2021.
- Energy Production revenue
decreased 11.0%, to $582 thousand in Q1 2022 compared to $653
thousand in the same period in 2021 due to site closures as a
result of COVID.
Gross Profit
- Gross profit for the first
quarter of 2022 was $3.1 million compared to $3.0 million in the
first quarter of 2021. Gross margin reduced to 41.6% in the first
quarter compared to 48.7% for the same period in 2021 due to higher
material costs reducing product margin from 44.7% to 32.9%.
Services margin remained comparable quarter to quarter.
Operating Expenses
- Operating expenses decreased by
2.6% to $3.01 million for the first quarter of 2022 compared to
$3.09 million in the same period in 2021 due to reduced external
commissions and gains on the disposal of assets and corresponding
reversal of the unfavorable contract liability associated with the
asset.
Adjusted EBITDA(1) was a positive $154 thousand for the first
quarter of 2022 compared to $20 thousand for the first quarter of
2021. (Adjusted EBITDA is defined as net income or loss
attributable to Tecogen, adjusted for interest, income taxes,
depreciation and amortization, stock-based compensation expense,
unrealized gain or loss on equity securities, goodwill impairment
charges and other non-cash non-recurring charges or gains including
abandonment of intangible assets and the extinguishment of debt.
See the table following the Condensed Consolidated Statements of
Operations for a reconciliation from net income (loss) to Adjusted
EBITDA, as well as important disclosures about the company's use of
Adjusted EBITDA).
“We saw a substantial increase in revenues this quarter and were
able to produce positive operating income and net income. However
we saw a significant increase in cost of goods due to the
inflationary environment we presently find ourselves in. We have
instituted price increases and continue to execute on our strategy
of focusing on clean cooling in our key market segments including
controlled environment agriculture. Our Board has formed a special
committee headed by our Board member Prof. Ahmed Ghoniem to
determine how Tecogen can help reduce the environmental impact of
agricultural food products by expanding the use of our systems in
the controlled-environment growing segment” commented Benjamin
Locke, Tecogen's Chief Executive Officer.
Conference Call Scheduled for May 12, 2022, at 11:00 am
ET
Tecogen will host a conference call on May 12, 2022 to discuss
the first quarter results beginning at 11:00 am eastern time.
To listen to the call please dial (877) 407-7186 within the U.S.
and Canada, or (201) 689-8052 from other international
locations. Participants should ask to be joined to the
Tecogen First Quarter 2022 earnings call. Please begin
dialing 10 minutes before the scheduled starting time. The
earnings press release will be available on the Company website at
www.Tecogen.com in the "News and Events" section under "About Us."
The earnings conference call will be webcast live. To view the
associated slides, register for and listen to the webcast, go to
https://ir.tecogen.com/ir-calendar. Following the call, the
recording will be archived for 14 days.
The earnings conference call will be recorded and available for
playback one hour after the end of the call. To listen to the
playback, dial (877) 660-6853 within the U.S. and Canada, or
(201) 612-7415 from other international locations and use
Conference Call ID#: 13672659.
About Tecogen
Tecogen Inc. designs, manufactures, sells, installs, and
maintains high efficiency, ultra-clean, cogeneration products
including engine-driven combined heat and power, air conditioning
systems, and high-efficiency water heaters for residential,
commercial, recreational and industrial use. The company provides
cost effective, environmentally friendly and reliable products for
energy production that nearly eliminate criteria pollutants and
significantly reduce a customer’s carbon footprint.
In business for over 35 years, Tecogen has shipped more than
3,000 units, supported by an established network of engineering,
sales, and service personnel across the United States. For more
information, please visit www.tecogen.com or contact us for a free
Site Assessment.
Tecogen, InVerde e+, Ilios, Tecochill, Tecopower, Tecofrost,
Tecopack and Ultera are registered trademarks of Tecogen Inc.
Forward Looking Statements
This press release and any accompanying documents, contain
“forward-looking statements” which may describe strategies, goals,
outlooks or other non-historical matters, or projected revenues,
income, returns or other financial measures, that may include words
such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," "project," "target," "potential," "will," "should,"
"could," "likely," or "may" and similar expressions intended to
identify forward-looking statements. These statements are only
predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results to differ
materially from those expressed or implied by such forward-looking
statements. Given these uncertainties, you should not place undue
reliance on these forward-looking statements.
Forward-looking statements speak only as of the date on which
they are made, and we undertake no obligation to update or revise
any forward-looking statements.
In addition to those factors described in our Annual Report on
Form 10-K, our Quarterly Reports on Form 10-Q and on our Form 8-K,
under “Risk Factors”, among the factors that could cause actual
results to differ materially from past and projected future results
are the following: fluctuations in demand for our products and
services, competing technological developments, issues relating to
research and development, the availability of incentives, rebates,
and tax benefits relating to our products and services, changes in
the regulatory environment relating to our products and services,
integration of acquired business operations, and the ability to
obtain financing on favorable terms to fund existing operations and
anticipated growth.
In addition to GAAP financial measures, this press release
includes certain non-GAAP financial measures, including adjusted
EBITDA which excludes certain expenses as described in the
presentation. We use Adjusted EBITDA as an internal measure
of business operating performance and believe that the presentation
of non-GAAP financial measures provides a meaningful perspective of
the underlying operating performance of our current business and
enables investors to better understand and evaluate our historical
and prospective operating performance by eliminating items that
vary from period to period without correlation to our core
operating performance and highlights trends in our business that
may not otherwise be apparent when relying solely on GAAP financial
measures.
Tecogen Media & Investor Relations Contact
Information: Benjamin LockeP: 781-466-6402E:
Benjamin.Locke@tecogen.com
TECOGEN INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(unaudited)
|
|
March 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ |
5,460,870 |
$ |
3,614,463 |
Accounts receivable, net |
|
7,631,611 |
|
8,482,286 |
Employee retention credit |
|
1,276,021 |
|
1,276,021 |
Inventories, net |
|
7,756,737 |
|
7,764,989 |
Unbilled revenue |
|
2,906,931 |
|
3,258,189 |
Prepaid and other current assets |
|
576,787 |
|
578,801 |
Total current
assets |
|
25,608,957 |
|
24,974,749 |
Long-term
assets: |
|
|
|
|
Property, plant and equipment, net |
|
1,705,974 |
|
1,782,944 |
Right of use assets |
|
1,716,737 |
|
1,869,210 |
Intangible assets, net |
|
1,140,925 |
|
1,181,023 |
Goodwill |
|
2,406,156 |
|
2,406,156 |
Other assets |
|
185,222 |
|
148,140 |
TOTAL
ASSETS |
$ |
32,763,971 |
$ |
32,362,222 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
4,402,772 |
|
3,508,354 |
Accrued expenses |
|
2,478,523 |
|
2,343,728 |
Deferred revenue |
|
1,446,048 |
|
1,957,752 |
Lease obligations, current |
|
653,176 |
|
641,002 |
Unfavorable contract liability, current |
|
295,065 |
|
330,032 |
Total current
liabilities |
|
9,275,584 |
|
8,780,868 |
Long-term
liabilities: |
|
|
|
|
Deferred revenue, net of current portion |
|
215,931 |
|
208,456 |
Lease obligations, net of current portion |
|
1,147,982 |
|
1,315,275 |
Unfavorable contract liability, net of current portion |
|
816,690 |
|
929,474 |
Total
liabilities |
|
11,456,187 |
|
11,234,073 |
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Tecogen Inc.
shareholders’ equity: |
|
|
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized;
24,850,261 issued and outstanding at March 31, 2022 and December
31, 2021 |
|
24,850 |
|
24,850 |
Additional paid-in capital |
|
57,112,566 |
|
57,016,859 |
Accumulated deficit |
|
(35,744,212) |
|
(35,833,621) |
Total Tecogen Inc. stockholders’ equity |
|
21,393,204 |
|
21,208,088 |
Non-controlling interest |
|
(85,420) |
|
(79,939) |
Total
stockholders’ equity |
|
21,307,784 |
|
21,128,149 |
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
32,763,971 |
$ |
32,362,222 |
TECOGEN INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)
|
Three Months Ended |
|
|
March 31, 2022 |
|
March 31, 2021 |
Revenues |
|
|
|
|
Products |
$ |
3,939,481 |
$ |
2,122,722 |
Services |
|
2,917,280 |
|
3,281,144 |
Energy production |
|
581,562 |
|
653,295 |
Total
revenues |
|
7,438,323 |
|
6,057,161 |
Cost of
sales |
|
|
|
|
Products |
|
2,644,756 |
|
1,174,287 |
Services |
|
1,366,752 |
|
1,537,603 |
Energy production |
|
336,027 |
|
394,063 |
Total cost of
sales |
|
4,347,535 |
|
3,105,953 |
Gross profit |
|
3,090,788 |
|
2,951,208 |
Operating
expenses |
|
|
|
|
General and administrative |
|
2,473,903 |
|
2,453,853 |
Selling |
|
501,091 |
|
510,203 |
Research and Development |
|
140,135 |
|
126,150 |
Gain on disposition of assets |
|
(33,945) |
|
— |
Gain on termination of unfavorable contract liability |
|
(71,375) |
|
— |
Total operating
expenses |
|
3,009,809 |
|
3,090,206 |
Income (loss)
from operations |
|
80,979 |
|
(138,998) |
Other income
(expense) |
|
|
|
|
Other income (expense), net |
|
(14,150) |
|
(1,203) |
Interest expense |
|
(828) |
|
(4,640) |
Gain on extinguishment of debt |
|
— |
|
1,887,859 |
Gain on sale of investment securities |
|
— |
|
6,046 |
Unrealized gain on investment securities |
|
37,497 |
|
37,497 |
Total other
income (expense), net |
|
22,519 |
|
1,925,559 |
Income before
income taxes |
|
103,498 |
|
1,786,561 |
Provision for
state income taxes |
|
3,930 |
|
8,058 |
Consolidated net
income |
|
99,568 |
|
1,778,503 |
Income
attributable to the non-controlling interest |
|
(10,159) |
|
(11,796) |
Net income
attributable to Tecogen Inc. |
$ |
89,409 |
$ |
1,766,707 |
|
|
|
|
|
Net income per
share - basic |
$ |
0.00 |
$ |
0.07 |
Net income per
share - diluted |
$ |
0.00 |
$ |
0.07 |
Weighted average
shares outstanding - basic |
|
24,850,261 |
|
24,850,261 |
Weighted average
shares outstanding - diluted |
|
25,028,616 |
|
25,122,271 |
|
Three Months Ended |
|
|
March 31, 2022 |
|
March 31, 2021 |
Non-GAAP
financial disclosure (1) |
|
|
|
|
Net income
attributable to Tecogen Inc. |
$ |
89,409 |
$ |
1,766,707 |
Interest expense,
net |
|
828 |
|
5,843 |
Income taxes |
|
3,930 |
|
8,058 |
Depreciation
& amortization, net |
|
107,061 |
|
124,066 |
EBITDA |
|
201,228 |
|
1,904,674 |
Gain on
extinguishment of debt |
|
— |
|
(1,887,859) |
Gain on
disposition of assets |
|
(33,945) |
|
— |
Gain on
termination of unfavorable contract liability |
|
(71,375) |
|
— |
Impairment of
intangible asset |
|
— |
|
7,400 |
Stock based
compensation |
|
95,707 |
|
39,085 |
Unrealized gain
on investment securities |
|
(37,497) |
|
(37,497) |
Gain on sale of
investment securities |
|
— |
|
(6,046) |
Adjusted
EBITDA |
$ |
154,118 |
$ |
19,757 |
(1) Non-GAAP Financial
MeasuresIn addition to reporting net income, a U.S.
generally accepted accounting principle (“GAAP”) measure, this news
release contains information about Adjusted EBITDA (net income
(loss) attributable to Tecogen Inc adjusted for interest, income
taxes, depreciation and amortization, stock-based compensation
expense, unrealized gain or loss on investment securities, goodwill
impairment charges and other non-cash non-recurring charges
including abandonment of certain intangible assets and
extinguishment of debt), which is a non-GAAP
measure. The Company believes Adjusted EBITDA allows
investors to view its performance in a manner similar to the
methods used by management and provides additional insight into its
operating results. Adjusted EBITDA is not calculated
through the application of GAAP. Accordingly, it should
not be considered as a substitute for the GAAP measure of net
income and, therefore, should not be used in isolation of, but in
conjunction with, the GAAP measure. The use of any
non-GAAP measure may produce results that vary from the GAAP
measure and may not be comparable to a similarly defined non-GAAP
measure used by other companies.
TECOGEN INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)
|
|
Three Months Ended |
|
|
March 31, 2022 |
|
March 31, 2021 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Consolidated net
income |
$ |
99,568 |
$ |
1,778,503 |
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
107,061 |
|
124,066 |
Gain on extinguishment of debt |
|
— |
|
(1,887,859) |
Stock-based compensation |
|
95,707 |
|
39,085 |
Gain on sale of investment securities |
|
— |
|
(6,046) |
Unrealized gain on investment securities |
|
(37,497) |
|
(37,497) |
Gain on disposition of assets |
|
(33,945) |
|
— |
Gain on termination of unfavorable contract liability |
|
(71,375) |
|
— |
Impairment of intangible asset |
|
— |
|
7,400 |
Changes in
operating assets and liabilities |
|
|
|
|
(Increase) decrease in: |
|
|
|
|
Accounts receivable |
|
850,674 |
|
638,643 |
Inventory |
|
8,252 |
|
326,655 |
Prepaid assets and other current assets |
|
2,014 |
|
17,307 |
Other assets |
|
152,888 |
|
(583,419) |
Increase (decrease) in: |
|
|
|
|
Accounts payable |
|
894,418 |
|
(799,615) |
Accrued expenses and other current liabilities |
|
134,795 |
|
153,225 |
Deferred revenue |
|
(504,229) |
|
(97,937) |
Other liabilities |
|
(155,119) |
|
574,447 |
Net cash provided
by operating activities |
|
1,894,471 |
|
369,772 |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
|
(80,873) |
|
(16,098) |
Proceeds from disposition of assets |
|
64,669 |
|
— |
Proceeds from the sale of investment securities |
|
— |
|
11,637 |
Purchases of intangible assets |
|
(16,220) |
|
(5,682) |
Distributions to non-controlling interest |
|
(15,640) |
|
(18,176) |
Net cash used in
investing activities |
|
(48,064) |
|
(28,319) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from note payable |
|
— |
|
1,874,269 |
Net cash provided
by financing activities |
|
— |
|
1,874,269 |
Net increase in
cash and cash equivalents |
|
1,846,407 |
|
2,215,722 |
Cash and cash
equivalents, beginning of the period |
|
3,614,463 |
|
1,490,219 |
Cash and cash
equivalents, end of the period |
$ |
5,460,870 |
$ |
3,705,941 |
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