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OTTAWA, ONTARIO / TheNewswire / September 25,
2017 – Thermal Energy International Inc.
(“Thermal Energy” or the “Company”) (TSXV: TMG ), a global provider of proprietary
energy efficiency solutions to the industrial, commercial and institutional sectors, today announced its financial results for the
three-month (“Q4” or the “quarter”) and twelve-month (the “year”) periods ended May 31, 2017. All figures are in Canadian
dollars.
Highlights:
-
-Revenue for the year increased 6.4% to $13.2 million;
-Gross profit for the year increased 9.5% to $7.4 million;
-EBITDAS for the year increased 32.9% to $750 thousand;
-Net income for the year increased 51.7% to $393 thousand;
-The Company had an order backlog of $9.0 million as at September 22, 2017 .
“Our record highs in revenue and gross profit in fiscal 2017 are the result of the successful
execution of our strategy on multiple fronts,” said William Crossland, CEO of Thermal Energy. “We gained new customers; sold more to existing customers; and continued to develop our corporate accounts. We also launched
our new ‘Super-Efficient Cogeneration™’ service offering during the year, subsequently announcing our first project under this
offering at the end of August. Importantly, this provides us with another complementary service to sell to both existing and
prospective customers. We look to build on our momentum and capitalize on the very favourable market conditions we have been
witnessing around the world for emission reduction and energy efficiency solutions.”
Summary Financial Results
In thousands except
% data
|
3 months ended
May 31, 2017
|
3 months ended
May 31, 2016
|
12 months ended
May 31, 2017
|
12 months ended
May 31, 2016
|
Revenue
|
$4,754
|
$4,123
|
$13,192
|
$12,402
|
Gross profit
|
$2,379
|
$2,048
|
$7,439
|
$6,794
|
Gross margin
|
50.0%
|
49.7%
|
56.4%
|
54.8%
|
Operating expenses
|
$1,960
|
$1,728
|
$6,858
|
$6,463
|
EBITDAS
|
$463
|
$377
|
$750
|
$564
|
Net income
|
$354
|
$268
|
$393
|
$259
|
Q4 2017 Financial Review:
Revenue for the quarter increased 15.3% to $4.8 million compared with $4.1 million for the fourth quarter of
the year before. Heat recovery revenue was up 1.2% and included the substantial completion of an installation at a major
hospital (announced November 2, 2016), and the partial delivery of a system to a leading producer of industrial and fuel alcohols
(announced September 28, 2016).
Revenue from GEM condensate return systems increased 35.4%, mainly due to sales to a leading chemical producer
as well as the fulfilment of orders from a further three sites of the Fortune 500 food and beverage company, which has already had
a number of site conversions to GEM.
Gross profit increased 16.2% to $2.4 million compared with $2.0 million for the same quarter a year earlier. As
a percentage of revenue, gross profit was 50.0% for the quarter compared with 49.7% for the same period last year. The increases
both in dollar terms and as a percentage of revenue were due primarily to the strong increase in GEM revenues for the
quarter.
Operating expenses were just under $2.0 million compared with $1.7 million for the fourth quarter of the year
before. Despite additional costs associated with new technical and sales staff needed to grow the business, as well as increased
advertising and promotional activities, operating expenses as a percentage of revenue were lower at 41.2% compared with 41.9% for
the same period a year ago.
EBITDAS for the quarter increased 22.8% to $463 thousand compared with $377 thousand for the same period year
earlier. Net income for the quarter increased 32.0% to $354 thousand, up from $268 thousand for the fourth quarter of fiscal
2016.
Fiscal Year 2017 Financial Review:
The Company had record high revenue for the fiscal year 2017. Revenue for the year was $13.2 million,
representing an increase of 6.4% over revenue of $12.4 million for fiscal 2016. While heat recovery revenue was down 9.4%, GEM
revenue increased 28.6% for the year.
Heat recovery revenue for the year included the substantial completion of installations at two major hospitals
as well as the substantial completion of an extension project at another major hospital. Other projects included an installation at
a global brewing company (announced August 8, 2016), an installation at a leading food products business (announced May 3, 2016),
and a second equipment sale to a global mining company. In addition, an equipment sale to a leading producer of industrial and fuel
alcohols (announced September 28, 2016) was partially complete by year end.
Higher GEM revenue for the year included an increase in orders from a leading performance materials company,
orders from an international textiles manufacturer and a multinational biotech company (as reported in the press release dated
September 20, 2016), plus two hospitals.
Gross profit increased 9.5% to a record high $7.4 million compared with $6.8 million the year before. As a
percentage of revenue, gross profit increased to 56.4% from 54.8% in fiscal 2016. The higher gross profit and gross profit
percentage were due primarily to the higher proportion of GEM sales during the period.
Operating expenses were $6.9 million compared to $6.5 million in fiscal 2016. Despite additional costs
associated with new staff and marketing activities mentioned earlier, operating expenses as a percentage of revenue were
essentially unchanged at 52.0% for the year, compared to 52.1% a year earlier.
EBITDAS increased 32.9% to $750 thousand compared with $564 thousand in the prior year. Net income increased
51.7% to $393 thousand compared with $259 thousand in the prior year.
Cash Resources and Working Capital:
As at May 31, 2017, the Company had working capital of $1.4 million compared to just under $1.0 million as at
May 31, 2016. The Company’s net cash position (cash and cash equivalents less bank loans) increased to approximately
$3.0 million from $1.1 million as at May 31, 2016. In addition to its net cash balance, the Company also had an
estimated $435 thousand of unused borrowing capacity under its bank loans at the end of fiscal 2017.
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 .
Recent Order and Backlog Summary:
Subsequent to year end, the Company had received orders totaling $3.28 million from a leading Fortune 500 food
and beverage customer, including a $1.82 million heat recovery order (announced
July 6, 2017 ) and a $1.46 million “Super-Efficient Cogeneration™” project (announced August 31,
2017 ).
Also subsequent to year end, the Company had received $244 thousand in GEM orders representing repeat business
from a leading performance materials company. These orders had not been previously announced.
Including the above mentioned recent orders, the Company had an order backlog of approximately $9.0 million as
at September 22, 2017, compared to $7.3 million when it reported fiscal 2016 results a year earlier. The Company includes in “order
backlog” the value of projects in respect of which purchase orders have been received but have not yet been reflected as revenue in
the Company’s published quarterly financial statements.
About Thermal Energy International Inc.
Thermal Energy International Inc. is an established global supplier of proprietary, proven energy
efficiency and emissions reduction solutions to the industrial and institutional sectors. We save our customers money and improve
their bottom line by reducing their fuel use and cutting their carbon emissions. Our customers include a large number of
Fortune 500 and other leading multinational companies across a wide range of industry sectors.
Thermal Energy is also a fully accredited professional engineering firm and by providing a unique
mix of proprietary products together with process, energy and, environmental engineering expertise, Thermal Energy is able to deliver unique turnkey projects with significant financial and environmental benefits for our
customers.
Thermal Energy's proprietary products include; GEM TM - Steam
traps, FLU-ACE ®
- Direct contact condensing heat recovery, and Dry-Rex ® -
Low temperature biomass drying systems.
Thermal Energy International Inc. has offices in Ottawa, Canada as well as Bristol, U.K., United
States, Germany, Italy and China. The Company’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol
TMG.
For more information, visit our website at www.thermalenergy.com and follow us on Twitter at http://twitter.com/GoThermalEnergy .
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 TM 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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