Interview transcript
I transcribed the interview for anyone to review. It's about a 97% replicate of the interview. May have some typos and small misinterpretations (I didn't go over it and typed it rather quickly), but pretty much all the info is there. I know it will not settle any disagreement on what the company's future might look like, but you can make up your own mind by reading it.
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Consultcanam:
How are you doing today William?
Crossland:
Good Richard, and thanks for having me.
Consultcanam:
Great. Before we get started in learning a little bit more about your exciting company, why don’t you tell us a little bit about your past success?
Crossland:
Of course. So, I spent about 20 years in corporate investor banking, and during that time, I did an awful lot of renewable energy, alternative energy and clean tech financing and back almost ten years now, in 2007, I realized there was an awful lot of little companies out there in the clean tech sector that needed good strategic advice, MNA advice, financing advice, and Thermal Energy, as it turns out, was the very first company I came across when I started that process… when I decided to launch a new career in the clean tech sector. I found out about the company, I found out about the products, I really like it. I invested money in the company and I joined the board. That was in 2007. And since then, we have just been building the company and putting the infrastructure in place to have a solid international platform to distribute our products.
Consultcanam:
That sounds great. It sounds like you’re definitely on the right track. What’s happening with your company today?
Crossland:
As I said, Richard, I joined the board in 2007 and then we acquired the company in 2009 and as most people probably remember, in 2008, 2009 and 2010, those were very difficult times in the world economy. So really, we spent that time, using our own cash resources, to build our team and grow our distribution capabilities, growing our engineering capabilities, and I think we are at the point now where we’re poised for some very exciting growth. Our year end is May 31
st. So our last year ended on May 31
st, 2016. We had about an 80% increase in revenue, about a 90% increase in gross profit. We were profitable. We generated almost a million dollars in positive cash flow. So that was a real turnaround. It was sort of a watershed moment for us, with growing sales. And so far this year, we just released our Q1 results. Our gross profit is up another 30% compared to the first quarter last year. And… positive cash flow, and our backorder backlog is double what it was this time last year. So we’re looking like this year could be another very good year for us. We’re very excited about the future.
Consultcanam:
Wow, yeah, those are incredible numbers! And this is why we’re doing this interview today… to learn a little bit more and tell the entire world your story. Now, every company that we find that is successful has a unique ability to solve a problem. What is the problem that your company solves?
Crossland:
So we’re a global provider of energy efficiency solutions, proprietary solutions, to the industrial and institutional sector worldwide. And the end of the day we save our customers money and improve their bottom line by reducing their fuel use and lowering their carbon emissions. And everybody wants lower carbon emissions these days, and everybody wants to make themselves more efficient, and that’s what we help them do. And everything we do for our clients is sold on a return basis. So we go to them and we say ‘we think we could save you $500,000 in energy savings and it’s going to cost you a million dollars to do that, so that’s a tow-year payback. Does that meet your return hurdles?’ So like I said, everything we do, we sell on a return of investment for our clients.
Consultcanam:
Very good. Now, the other thing that we like to find are companies with a unique culture. When you cultivate a culture where employees want to be part of the success of the company, we find that incredible things happen. What makes your company’s culture unique?
Crossland:
The company’s culture really comes from the founding of the company. Thermal Energy today is really two companies that came together. Two very unique products. One is the FLU-ACE direct contact condensing heat recovery unit, and the other is our GEM venturi orifice steam trap… big long technical names. But at the end of the day, both products save our customers money, by saving them energy. And both of those companies, we put those two companies together in 2009, because the two products are perfectly complementary. It’s the same type of customer that uses both products. And the history of both of those companies is they were founded by the inventors of the technology. And up to the point of 2009, they hadn’t really done a lot with the technology. They sold in their own sort of backyard. When I came along, I said ‘we have a best-in-class product. Two best-in-class products with worldwide application’. So what we do for our customers, is we take great pride in providing best-in-class products, and more importantly and perhaps more uniquely, best-in-class service. So where we differ a lot from other companies that may be trying to do something out there is, you’ve got consulting engineers out there that are trying to tell companies how they can save money, and you’ve got people out there selling pieces of equipment to them. We do both. We come to the shop, we come to the floor of the customer. We can tell them how they can save, and we provide a custom engineered turnkey solution. We design it, we engineer it, we install it and we get it up and running for them and we don’t go away until it’s running and saving them the energy they wanted. And that part is unique. We don’t want any customer every to be dissatisfied. We take that very seriously, and that permeates through the whole culture of the company.
Consultcanam:
Very good. Now, another thing that we noticed here, is that in order for companies to grow, every company has needs as far as financing, and mergers and acquisitions. What are your company’s needs as far as financing and mergers and acquisitions.
Crossland:
Well, I’ll address it two ways. First, in terms of growing organically, we’ve been very successful at growing the company at about a 20% compounded annually for the last seven or eight years. And that growth is starting to accelerate. And we can continue growing at that rate or higher without any external financing and without raising more capital. And again, when I joined the board and became CEO, the history of the companies is they always got back to market when they needed more money. I said ‘look, there’s no reason for us not to be very profitable and to grow on our own’. We don’t need to raise capital unless, as you pointed out, there’s an accretive merger or acquisition opportunity. So we can grow very successfully on our own, with our own resources, organically. But there’s also a really exciting acquisition story here. We brought two small companies together 5 or 6 years ago in 2009… with a lot of synergies. We see a lot of other similar companies out there that are manufacturing and trying to sell very complementary products that we could then acquire, and distribute that product through our distribution network. We’ve got sales people and distribution capabilities in North America and Europe. And in terms of the small company our size, we are very unique in that regard, so it would be very easy for us to roll in other products that are complementary and that we could sell to our same customers through our existing distribution network and gather the synergies that way.
Consultcanam:
That sounds great…
And for that, we would look to do a financing.
Consultcanam:
Okay. Well I’m sure we could do another interview in that point in time. What are some of your key milestones in the next 12 months?
Crossland:
You know, just continuing to grow the company. I think if you look back at the press releases we have been issuing in the last little while, we’ve had some great orders. Our orders backlog is double what it was last year, with a whole host or orders from a variety of companies. And it’s just to continue along that track, just to continue growing the base of business. We continue to increase our salespeople. So we’ve added a couple more salespeople in North America, we’re adding a couple more salespeople in Europe this year, and we’ll just continue growing at this sort of 20% rate or more that we had in the past. So the key milestones are just more orders from the same sort of customers in a variety of industries.
Consultcanam:
Very good. Now, as an investor, and to all the investors out there, why would someone want to invest in your company?
Crossland:
Well I think, because we spent the last several years, as I said, building the infrastructure, building the team, and the market has never been better than it is right now. You know, it started with the signing of COP21, the climate change agreement back in Paris last year, about a year ago. That was the first time every country in the world signed on to aggressive reductions in carbon emissions, including the world’s two largest economies, China and the US. So now every country around the world, including Canada, including the US and including all the Europeans, are aggressively reducing carbon emissions, and you know, we see that as a great opportunity for us. We think we’re perfectly positioned to capitalize on that opportunity. And as I said, the market place today is better that I’ve ever seen since I’ve got involved in this company.
Consultcanam:
That sounds great. Now, how can somebody get in contact with you. If you are an investor, a funder, a potential partner that wants to contact you today, how can someone contact you?
Just go to our website,
www.thermalenergy.com, and all our contact information is there. My contact information is there and you can contact us through that. Everything you need to know about our company and who to contact will be on our website.
Consultcanam:
Great….