OTTAWA, ONTARIO / ACCESSWIRE / April 23, 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 February 28, 2014. All figures are in Canadian
dollars.
Highlights:
- For the nine months ending February 28, 2014, revenue of $8.4
million (including $2.9 million for the quarter) surpassed annual
revenue for all of fiscal 2013;
- With net income of $57 thousand for the quarter, year-to-date
net loss narrowed to $63 thousand compared to a net loss of $162
thousand for the same period last year;
- Operating cash flow of $341 thousand for the year-to-date
(including $62 thousand for the quarter) represented an increase of
$1.4 million compared to the first nine months of fiscal 2013;
- Net cash position totalled $2.6 million, compared to $1.3
million as at May 31, 2013 and $701 thousand at the same time last
year;
- The Company had an order backlog of approximately $5.3 million
as at April 23, 2014. The Company includes in order "backlog" any
purchase orders that have been received by the Company but have not
yet been reflected as revenue in the Company's published financial
statements.
"Our strong performance year-to-date is largely attributable to
the investment we made in our sales and distribution capabilities
in early fiscal 2013," said William Crossland, CEO of Thermal
Energy. "Thus far in fiscal 2014, we have been successful at cross
selling and winning other repeat business from a growing list of
multinational customers across a growing number of industries.
During the quarter we received initial GEM(R) orders in the amounts
of $160 thousand from one of the world's largest beer companies and
$161 thousand from a global diversified healthcare company. We also
received an initial $200 thousand heat recovery order from a global
mining and materials company, with mining being a new sector for
our energy efficiency solutions. Each of these orders was from
customers that have a number of additional sites, representing
potential for repeat business."
Summary Financial Results
---------------------------------------------------------------------------------
|In thousands |3 months ended|3 months ended|9 months ended|9 months ended|
|except |Feb. 28, 2014 |Feb. 28, 2013 |Feb. 28, 2014 |Feb. 28, 2013 |
|% data | | | | |
|-------------------------------------------------------------------------------|
|Revenue |$2,898 |$4,209 |$8,434 |$6,331 |
|-------------------------------------------------------------------------------|
|Gross profit |$1,391 |$2,906 |$4,236 |$4,231 |
|-------------------------------------------------------------------------------|
|Gross margin |48.0% |69.1% |50.2% |66.8% |
|-------------------------------------------------------------------------------|
|Operating expenses |$1,325 |$1,450 |$4,328 |$4,519 |
|-------------------------------------------------------------------------------|
|Net income (loss) |$57 |$1,472 |$(63) |$(162) |
|-------------------------------------------------------------------------------|
|Operating cash flow|$62 |$185 |$341 |$(1,020) |
---------------------------------------------------------------------------------
Q3 2014 Financial Review:
Revenue for the third quarter was $2.9 million compared to $4.2
million a year ago. Revenue for the third quarter of last year
included $1.6 million resulting from the extension of the
Greenpower Purchase Agreement with Fortress Specialty Cellulose, as
announced November 29, 2012. Sales of GEM(R) Condensate return
systems increased by $94 thousand, or 9.2%, and included the
partial fulfilment of orders received from a major food and
beverage manufacturer, as announced July 3, 2013 and a global
premium beer company, as announced February 10, 2014. Sales of heat
recovery systems decreased by $1.4 million, or 44%, compared to the
third quarter of last year. Heat recovery sales for the quarter
included revenues from projects at two sites of a major Fortune 500
food and beverage company, as announced September 16, 2013; the
installation at a major pulp and paper company as announced June 3,
2013; and the commencement of projects at two major hospitals, as
announced September 10, 2013 and November 14, 2013 respectively. In
addition to the $1.6 million extension of the Greenpower Purchase
Agreement mentioned above, heat recovery systems sales for the
third quarter of last year also included $1 million from the sale
of a heat recovery system to a publicly owned hospital.
Gross profit for the quarter was $1.4 million compared to $2.9
million for the same quarter last year. The decrease of $1.5
million, or 52%, was almost entirely the result of the Greenpower
Purchase Agreement extension in the previous year, which served to
increase revenues with minimal additional cost. As a percentage of
sales, gross profit for the quarter was 48% compared with 69% in
the third quarter of last year (51% excluding the impact of the
Greenpower Purchase Agreement extension).
Operating expenses for the quarter were $1.3 million, down from
$1.5 million in the prior period. Higher staff costs in the quarter
resulting from two additional sales staff were offset by reductions
in commissions payable and amortization of intangible assets, which
were fully amortized in July 2013, as well as foreign exchange
gains arising from the strengthening of Sterling against the
Canadian Dollar.
Net income for the quarter was $57 thousand compared to $1.5
million 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 $62 thousand compared to $185 thousand for the same
period last year.
YTD 2014 Financial Review:
Revenue for the nine months ended February 28, 2014 increased
33% to $8.4 million compared to $6.3 million a year ago. Gross
profit was largely unchanged at $4.2 million this year and last
year. Net loss for the nine months ended February 28, 2014 was $63
thousand compared to $162 thousand for the same period last year.
However last year's revenue, gross profit and net income were all
positively impacted by the extension of the Greenpower Purchase
Agreement with Fortress Specialty Cellulose. Excluding the impact
of the $1.6 million extension of the Greenpower Purchase Agreement,
revenue increased 77%, gross profit increased $1.6 million, or 58%,
and net income increased $1.7 million.
Operating cash flow improved by $1.4 million with $341 thousand
generated during the nine months ended February 28, 2014, compared
to a negative $1,020 thousand for the same period last year.
Cash Resources and Working Capital
As at February 28, 2014, the Company's net cash position
amounted to $2.6 million, compared to $1.3 million as at May 31,
2013. The Company also had an estimated $248 thousand of unused
borrowing capacity under its bank loans. With cash balances and
unused borrowing capacity of approximately $2.9 million, management
believes that it has sufficient capital resources to fund existing
operations and anticipated capital requirements in the remainder of
fiscal 2014 and into fiscal 2015.
Working capital as at February 28, 2014 was $1.8 million
compared to $1.5 million as at May 31, 2013.
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 potential for
repeat business with existing customers, statements about the
company's backlog, and the ability of existing working capital to
fund operations for a period of time 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. Unexpected issues
could arise that would deplete the Company's working capital faster
than currently anticipated. 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.
SOURCE: Thermal Energy International Inc.
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