Ottawa, Ontario--(Newsfile Corp. - October 30, 2024) - Thermal Energy International Inc. (TSXV: TMG) (OTCQB: TMGEF) ("Thermal Energy" or the "Company"), a provider of innovative energy efficiency and carbon emission reduction solutions to major corporations around the world, today reported its financial results for the first quarter ended August 31, 2024. All figures are in Canadian dollars.
Q1 2025 Highlights:
(Compared to Q1 2024)
- Revenue: $8.5 million (up 63%)
- EBITDAi: $0.6 million (up 33%)
- Net income: $0.3 million (up 91%)
- Cash and Working Capital: $5.0 and $3.8 million respectively
- Order intake: $2.8 million (down 15%)
- Order backlogii was $13.5 million as at August 31, 2024 (up 17% year-over-year) and increased to $18.4 million as at October 28, 2024
Overview
"We had an exceptional first quarter with record revenue and the strongest Turn-key Project revenue we've seen since before the pandemic," said William Crossland, Thermal Energy CEO. "The quarter marked the highest gross profit since our record-setting fourth quarter of fiscal 2023, which benefited from a very favourable product mix. Importantly, EBITDA and net income in the first quarter were also both up significantly from the first quarter of last year and when compared to the last two sequential quarters."
"While this is an exciting time for Thermal Energy, our revenues, especially from Turn-key Projects can be quite lumpy depending on the timing of projects. As such, management and the board tend to focus more on the trailing twelve months and longer-term results. In this regard, our record first quarter revenue propelled our trailing twelve months revenue to a new all-time high of $29.2 million, up 26% year-over-year - a clear indication of the continued momentum in the business and the strong demand for our proven energy efficiency and carbon emissions reduction solutions."
Summary Financial Results
| | | | | |
| In thousand except % data | Three months ended
Aug. 31, 2024 | Three months ended
Aug. 31, 2023 | Trailing twelve months ended
Aug. 31, 2024 | Trailing twelve months ended
Aug. 31, 2023 |
| Revenue | $8,469 | $5,183 | $29,166 | $23,152 |
| Gross profit | $3,525 | $2,767 | $13,210 | $10,987 |
| Gross margin | 42% | 53% | 45% | 47% |
| Operating expenses | $3,079 | $2,477 | $11,420 | $9,072 |
| Net income | $309 | $162 | $1,130 | $1,391 |
| EBITDAi | $553 | $414 | $2,127 | $2,372 |
| Cash position | $5,048 | $4,138 | | |
| Working capital | $3,799 | $3,063 | | |
| Orders received | $2,801 | $3,304 | $28,957 | $26,903 |
| Order backlogii as of August 31 | $13,549 | $11,600 | | |
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Financial Review for the First Quarter Ended August 31, 2024
First quarter revenue grew 63% year-over-year to a record $8.5 million mainly due to increased sales from turn-key heat recovery projects. Gross profit for the quarter increased by 27% to $3.5 million, mainly due to the higher revenue earned from heat recovery projects.
Operating expenses for the quarter were $603 thousand higher than the same quarter a year earlier. The increase was mainly due to increase in business development costs and salary expense as a result of growth in the Company's sales and engineering personnel and salary raises.
For the quarter, the Company had EBITDA of $553 thousand and net income of $309 thousand, compared to $414 thousand and $162 thousand respectively in the first quarter a year earlier.
At the end of August, cash and working capital balances were approximately $5.0 million and $3.8 million, respectively.
Financial Review for the Trailing Twelve Months ("TTM") Ended August 31, 2024
TTM revenue increased 26% to a record $29.2 million while gross profit increased 20% to a record $13.2 million.
TTM operating expenses increased by $2.3 million to $11.4 million, but $1.6 million of this increase is related to investments made to drive future growth of the business, including:
- $950 thousand for 9 new staff positions including two in sales and marketing, six in engineering and production and one in accounting and administration;
- $320 thousand as part of our "Architecture for Growth" program including our proprietary mobile ap and new global ERP and financial accounting software; and,
- $330 thousand for a new UK-based office and production facility.
Even with the $1.6 million in increased expenses to drive future growth, TTM EBITDA was $2.1 million and net income was $1.1 million, only $300 thousand less than the prior year's twelve-month period.
Business Outlook and Order Summary
Orders received ("Order Intake") during the first quarter totalled $2.8 million. The Company ended the quarter with an order backlog of $13.5 million, up 17% from the $11.6 million at the end of the same quarter in the prior year.
The Company also received $4.9 million in new orders subsequent to quarter end, bringing the current order backlog to $18.4 million as of October 28, 2024. A list and description of recent order highlights is available on page 13 and 14 of the Management's Discussion and Analysis filed today.
Full financial results including Management's Discussion and Analysis and accompanying notes to the financial results are available on www.sedarplus.ca and investors-thermalenergy.com/en/financial-overview.