TMG:CC - Thermal Energy International Announces First Quarter Financial Results
(TheNewswire)
Thermal Energy International AnnouncesFirst Quarter Financial Results
Strongorder intake, record Custom Equipment iii revenue, and record Turn-key Projectdevelopment indicate strong, growing demand from customers. Quarterlyresults reflect residual pandemic impact on the longer sales cycleTurn-key Project orders.
OTTAWA, ONTARIO – TheNewswire - October 25,2022 – Thermal Energy InternationalInc. (“ Thermal Energy ” or the “Company”) (TSX - V: TMG ) , ( OTC QB : TMGEF ) , an innovativecleantech company and global provider of proprietary energy and carbonemissions reduction solutions to some of the world’s largestcorporations, has announced its financial results for the quarterended August 31, 2022. All figures are in Canadian dollars.
Highlights:
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Revenue: $3.1million for the quarter
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EBITDA i : $(230) thousand for the quarte
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Net loss of$(509) thousand for the quarter
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Cash and working capitalbalances is at $2.3 million and $2.1 millionrespectively
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Order backlog ii $6.0 million as atAugust 31, 2022
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Order intake: Year-to-date order intake to September 30 of $9.8 million,151% ahead of the same period last year.
“The results for this first quarter are largely as expected andreflect the Company’s ongoing strategy to emerge from the pandemicstronger than ever by continuing to invest in the business despite thepandemic related slowdown”, said William Crossland, CEO of ThermalEnergy.
“Much like our financial results for theyear ending May 31, 2022, the first quarter has seen continued strongCustom Equipment iii revenue and order intake growth as well as record levelsof Turn-key Project development. More recently we have also seenstrong Turn-key Project order intake. In summary, our CustomEquipment business is thriving, and our Turn-key Project success isclosely following with record Project Development Agreements (PDA),and strong recent order intake. The final element to exceedpre-pandemic records will be recognising revenue from the recentgrowing demand for Turn-key Projects.”
“We are seeing unprecedented customer engagement and demand, withyear-to-date order intake (as of 30 th September) of $9.8 million, 133% higher than thepre-pandemic level of $4.2 million in Fiscal 2019. With an orderbacklog of $12.3 million as of October 20, 2022 and record levels ofPDAs reaching 300% growth since pre-pandemic F2019 we’re not onlymarking the end of the pandemic impact, but returning to levels muchhigher than even pre-pandemic. This is testament to our perseverancein maintaining key customer relationships and retaining staff tocapitalize on the significant recent market improvements.”
“Thermal Energy has truly entered an exciting time as globalorganisations and governments advocate for energy efficiency as thequickest and most cost-effective way to lower carbon emissions andreduce energy bills. The continued push for more ambitious energyefficiency targets is having an influence on our global customers,particularly those with operations in Europe and as a result we areworking with our customers to develop and implement Thermal Energy’sproven technology and projects at record pace.”
“Globally our teams are determined to bring Thermal Energy’ssolutions to the forefront of our customer’s sustainability plans,and I’m excited for the and future growth of the Company.”
| In thousand except % data |
| Three months ended August 31, 2022 |
| Three months ended August 31, 2021 |
| $3,122 |
| $3,879 |
| Gross profit |
| $1,349 |
| $1,644 |
| Gross margin |
| 43% |
| 42% |
| Operating expenses |
| $ 1,729 |
| $1,722 |
| Net (loss) income |
| $(509) |
| $(154) |
| EBITDA i |
| $(230) |
| $81 |
| Cash position |
| $2,321 |
| $4,233 |
| Working capital |
| $2,073 |
| $3,255 |
| Orders received |
| $3,660 |
| $2,154 |
| Order backlog ii as ofAugust 31 |
| $6,000 |
| $6,300 |
First Quarter 2023 Financial Review
Quarterly revenue was $3.1 million, down 19.5% fromlast year. The decrease of revenue was due to the decreased revenuesfrom Turn-key heat recovery projects as a result of the pandemicrelated slowdown on Turn-key Project orders. Alternatively, CustomEquipment orders and revenue continue to show steady growth with firstquarter revenue up 21% compared to the same period last year and morethan double the pre-pandemic levels in fiscal 2019. Gross profit forthe quarter was $1.3 million as compared to $1.6 million from theprior year. The decrease in gross profit was mainly due to thedecreased revenues from Turn-key heat recovery projects. Operatingexpenses incurred for the quarter amounted to $1.7 millionwhich was comparable to the same period of the previous year. A netloss of $509 thousand was incurred for the quarter and EBITDA i was negative $230 thousand.
Current assets decreased by $729,288 to $6,284,671 atAugust 31, 2022, compared to $7,013,959 at May 31, 2022. This decreasewas mainly due to the decrease in cash and cash equivalents of$310,785, and trade and other receivables of $367,936. Currentliabilities slightly decreased by $25,233 to $4,211,907.
Working capital decreased by $704,055 to $2,072,764 atAugust 31, 2022, compared to $2,776,819 at May 31, 2022. The decreasewas mainly due to the decrease in cash and cash equivalents of$310,785, and trade and other receivables of $367,936.
Business Outlook and Order Summary
Orders received during the first quarter are 70% higher than ordersreceived during the same quarter of last year. The Company ended thequarter with a total order backlog of $6.0 million, down 5% from the$6.3 million in same quarter of last year, and with the CustomEquipment order backlog 0.8% higher than last year.
The Company defines its order backlog as the value ofprojects for which purchase orders have been received, but that havenot yet been fully reflected as revenue in the Company’s publishedfinancial statements.
The Company has received $6.3 million in new orders subsequent to theAugust 31, 2022 quarter-end bringing the current order backlog to$12.3 million as of October 20, 2022. A selection of recent orderhighlights includes:
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$2,800,000 order for a Turn-key heat recovery and GEM TM project from a Premium BeerProducer, announced September 30, 2022. The project is to recoverwaste energy from the boiler exhausts and use the captured energy toreduce overall steam and fuel consumption on site, and the GEM TM trap, a premium venturiorifice steam trap designed to minimize ongoing steam trap maintenanceand maximise energy savings in the steam system.
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$1,400,000 order for a Turn-key heat recovery project from a GlobalNutrition Company, announced September 29, 2022. This is the fourthconsecutive project from the Company to recover waste energy from thedryer burner exhaust.
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$800,000 order for a Turn-key heat recovery project from a leadingEuropean meat producer, announced September 7, 2022. This is thesecond project for this specific application where the technology hasbeen applied to a new innovative heat source.
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$350,000 order from a leading textile manufacturer for a waste water heat recovery system, and GEM TM steam traps taking the totalfor this customer to $900,000. Announced September 13, 2022 this isthe first RBT system outside North America and illustrates a milestonein our Sofame acquisition strategy.
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During the first three and half months of the current fiscal year(FY23), GEM TM orders aremore than double the amount received during the same period lastyear with more than $1.5 million GEM steam trap orders received inonly a few weeks.
Full financial results including Management’sDiscussion and Analysis and accompanying notes to the financialresults are available on www.SEDAR.com and www.thermalenergy.com/financial-reports.html .
Readers areencouraged to subscribe to TEI News to receive strategic news and updatesdirectly to their inbox.
ENDS
For media enquiries contact:
Thermal Energy International Inc.
Canada: 613-723-6776
UK: +44 (0)117 917 2179
For investor enquiries:
Thermal Energy International Inc.
613-723-6776
About Thermal Energy InternationalInc.
Thermal Energy International Inc., ranked as one of Canada’s Top GrowingCompanies in 2021, 2020 and 2019, isan established global supplier of proprietary, proven energyefficiency and emissions reduction solutions to the industrial andinstitutional sectors. We save our customers money and improve theirbottom line by reducing their fuel use and cutting their carbonemissions. Our customers include many Fortune 500 and other leadingmultinational companies across a wide range of industrysectors.
Thermal Energy is a fully accredited professionalengineering firm and by providing a unique mix of proprietary productstogether with process, energy, and environmental engineeringexpertise, Thermal Energy can deliver unique turnkey projects withsignificant financial and environmental benefits for ourcustomers.
Thermal Energy's proprietary products include: GEM ™- Steam traps, FLU-ACE ® - Direct contact condensing heatrecovery, HEATSPONGE – Indirect contact condensingheat recovery systems, and DRY-REX ™ - Low temperature biomass dryingsystems.
Thermal Energy has engineering offices in Ottawa,Canada, Pittsburgh, USA, as well as Bristol, UK, with sales offices inCanada, UK, USA, Germany, Poland, and Italy. TEI’s common shares aretraded 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
This press release contains forward-looking statementsrelating to, and amongst other things, based on management’sexpectations, estimates and projections, the anticipated effectivenessof the Company’s products and services, the timing of revenues to bereceived by the Company, the anticipated effects of COVID-19 on thebusiness, backlog and revenue, the expectation that orders in backlogwill become revenue, the anticipated benefits of the Company’scurrent efforts at training and business improvement efforts,opportunities for growth, the Company’s belief that it cancapitalize on opportunities, the size of markets and opportunitiesopen to the Company and expectations that order intake will bounceback.. Information as to the amount of heat recovered, energy savingsand payback period associated with Thermal Energy International’sproducts are based on the Company’s own testing and average customerresults to date. Statements relating to the expected installation andrevenue recognition for projects, statements about the anticipatedeffectiveness and lifespan of the Company’s products, statementsabout the expected environmental effects and cost savings associatedwith the Company’s products and statements about the Company’sability to cross-sell its products and sell to more sites are forwardlooking statements. These statements are not guarantees of futureperformance and involve a number of risks, uncertainties andassumptions. Many factors, some of which are outside of theCompany’s control, could cause events and results to differmaterially from those stated. Fulfilment of orders, installation ofproduct and activation of product could all be delayed for a number ofreasons, some of which are outside of the Company’s control, whichwould 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 thecustomer’s facilities but not anticipated by the Company can have anegative impact on the expected effectiveness and lifespan of theCompany’s products and on the expected environmental effects andcost savings expected from the Company’s products. Any customer’swillingness to purchase additional products from the Company andwhether orders in the Company’s backlog as described above will turninto revenue is dependent on many factors, some of which are outsideof the Company’s control, including but not limited to thecustomer’s perceived needs and the continuing financial viability ofthe customer. The Company disclaims any obligation to publicly updateor revise any such statements except as required by law. Readers are referred to the riskfactors associated with the Company’s business as described in theCompany’s most recent Management’s Discussion and Analysisavailable at www.SEDAR.com .
EBITDA and backlog are non-IFRS financial measures, donot have a standardized meaning prescribed by International FinancialReporting Standards and therefore may not be comparable to similarmeasures presented by other companies. Please refer to the Company’smost recent Management’s Discussion andAnalysis available at www.SEDAR .com for more details about thesenon-IFRS financial measures.
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the TSX Venture Exchange) accepts responsibility for the adequacyor accuracy of this release.
i EBITDA representsearnings before interest, taxation, depreciation, amortization,impairment of intangible assets, and share-based compensation expense.See note below about non-IFRS measures.
ii Order backlog representsany purchase orders that have been received by the Company but havenot yet been reflected as revenue in the Company’s publishedfinancial statements. See note below about non-IFRS measures.
iii Custom equipment refers to indirectcontact heat recovery solutions (HEATSPONGE and SIDEKICK), andcondensate return system solutions (GEM TM steam traps).Turn-key solution refers to direct contact heat recovery solutions(e.g., FLU-ACE®).
i EBITDA representsearnings before interest, taxation, depreciation, amortization,impairment of intangible assets, and share-based compensationexpense.
ii Order backlog representsany purchase orders that have been received by the Company but havenot yet been reflected as revenue in the Company’s publishedfinancial statements.
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