(TheNewswire)
OTTAWA, ONTARIO - TheNewswire - April 19, 2021– Thermal Energy International Inc. (“ ThermalEnergy or the “Company”) (TSXV: TMG ) (OTC:TMGEF) , an innovative cleantech company andglobal provider of energy efficiency and emissions reductionsolutions, has announced its financial results for the third quarterended February 28, 2021. All figures are in Canadian dollars.
Third-quarter financialhighlights:
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- Revenue: $11.6 million year-to-date, $3.7 million for thequarter
- EBITDA: $975thousand year-to-date, $172 thousand for the quarter
- Net income: $329 thousand year-to-date, net loss of $34 thousand for thequarter
- Cash and working capitalbalance s remain strong at $4.4 million and $4.2 million respectively
- Order intake continues to track well ahead of last year up 87% year-to-date and171% for the quarter
- Order backlog: $6.1 million up 79% from the previous year
“I am very proud of these latest financial resultsgiven the ongoing challenges we, like many global businesses, continueto cope with as a result of COVID-19, ” said William Crossland , CEO of Thermal Energy.
“Year-to-date revenue from our BEI and GEM product categoriescontinues to track well ahead of last year, but revenue from turnkeyHeat Recovery projects was once again temporarily impacted in thethird quarter when some key markets reintroduced stricter COVID-19mitigation measures.
“Such measures impact our high revenue turnkey Heat Recoveryprojects, because of the customers’ preference for onsiteengineering, design, and installation. However, the growing globaldemand to reduce carbon emissions and build-back-better, together withour diverse range of proprietary energy efficiency solutions andgeographically varied global presence, has enabled us to consistentlysecure a growing level of orders despite the temporary and variedCOVID-19 restrictions in some of our key markets.
“Despite COVID-19 we have still generated positive year-to-dateEBITDA and net income of $975 thousand and $329 thousand respectively.
“Orders received during the quarter have also more than doubledcompared to the same period last year. Overall, our order intakecontinues to track significantly ahead of 2020 levels with quarterlyand year to date order intake are up 171% and 87% respectively. Thishas resulted in an order backlog at quarter end that is 79% more thanthis time last year.
“We also continue to have a very strong financial position with cashand working capital balances of $4.4 million and $4.2 millionrespectively, indicating we are in a strong position to continuegrowing the business.
“A large amount of our growth is the result of harnessing ourestablished network of large multinational customers and applying ourclient-specific expertise across multiple global sites. By way ofexample, GEM orders totalled $386,000 received recently around quarterend from a leading multinational cereal company marks $1 million inorders received to date from this customer. Thermal Energy hasdeveloped six projects with the manufacturer over the last 12 monthsalone, which highlights the importance and success of this key growthstrategy.
“As noted, with a worldwide Build-Back-Betterapproach driving unprecedented demand for carbon emission reductionand fuelling the growth in our order intake, the Company iswell-positioned to continue to provide our customers with thesolutions and support they need.”
In thousand except % data | Three months ended Feb 28, 2021 | Three months ended Feb 29, 2020 | Nine months ended Feb 28, 2021 | Nine months ended Feb 29, 2020 |
Revenue | $3,736 | $5,812 | $11,584 | |
Gross profit | $1,644 | $2,417 | $5,399 | $7,526 |
Gross margin | 44% | 42% | 47% | 40% |
Operating expenses | $1,621 | $1,942 | $4,849 | $6,217 |
Net income (loss) | ($34) | $430 | $329 | $1,056 |
EBITDAS | $172 | $709 | $975 | $1,890 |
Cash position | $4,455 | $3,837 | $4,455 | $3,837 |
Working Capital | $4,203 | $2,787 | $4,203 | |
Orders received | $3,993 | $1,474 | $13,389 | $7,142 |
Order backlog as at February 28/29 | $6,100 | $3,400 | $6,100 | $3,400 |
For further details, visit Thermal Energy’s Third Quarter Fiscal2021 Financial Overview and Commentary here: www.thermalenergy.com/financial-reports.html
Third Quarter and Year to Date Fiscal2021 Financial Review
Quarterly revenue of $3.7 million delivered a grossprofit of $1.6 million. This resulted in a gross margin of 44%,compared to 42% for the same quarter prior year. Operatingexpenses incurred for the quarter-end amounted to $1.6 million. Thisdecrease was mainly due to the cost savings achieved through costcontrol measures and the government wage subsidies of $247 thousandrecognized as a reduction to operating expenses in Q3 2021. A net lossof $34 thousand was incurred for the quarter ended February 28, 2021and EBITDA was $172 thousand.
Nine-month year-to-date revenue was $11.6 million, representing a 38%decrease compared to last year. While GEM and BEI revenue was ahead oflast year, revenue from turnkey heat recovery systems has beennegatively impacted by temporary COVID-19 restrictions and mitigationmeasures and the resulting inability to visit customer sites. Theincreased gross margin of 47% this year, compared to 40% last year, isdue to the change in product mix. Operating expenses decreased $1.4million, mainly due to $868 thousand in government wage subsidies andsupport programs as well as other temporary cost saving measures.Despite the COVID-19 related reduction in revenue, the Company stillgenerated positive EBITDA and net income of $975 thousand and $329thousand respectively.
Working capital increased by $1.3 million to $4.2 million at February28, 2021, compared to $2.9 million at May 31, 2020. The increase inworking capital is partially attributed to the receipt of a $1 millionCOVID-19 related working capital loan during the first quarter, with acurrent interest rate of 3.45%, as well as the Company’s positiveoperating cash flow before working capital changes. The Company’scash position remains strong at $4.4 million as of February 28, 2021,compared to $4.8 million at May 31, 2020.
business Outlook and Order Summary
The Company ended the quarter with an order backlog of $6.1 million,compared to $3.4 million for the same quarter in previous year, orderintake continues to be strong. Orders received during the thirdquarter this year are more than double the orders received during thesame time last year, and during the nine months of this fiscal year wereceived 87% more orders than the same period lastyear .
The Company defines its order backlog as the value of projects forwhich purchase orders have been received, but that have not yet beenfully reflected as revenue in the Company’s published quarterlyfinancial statements.
A selection of recent orders includes:
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1. $500,000 equipment order for a Heat Recoverybiogas application from a leading global brewer in Russia, announcedApril 15, 2021
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2. $1,180,000 heat recovery project with amajor US dairy group to reduce site’s natural gas usage by 13% aswell cut its annual CO 2 emissions by over 730 tonnes, announced March 17, 2021
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3. $1,000,000 heat recovery system for amultinational brewery, announced February 24, 2021.
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4. $770,000 heat recovery equipment order for aNorth American Hospital, announced January 19, 2021
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5. $1,530,000 heat recovery equipment andextension order for a large publicly funded European healthcareprovider as announced October 27, 2020
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6. $115,689 GEM™ steam traps order for a gasprocessing plant in United Arab Emirates to help the site continue toreduce its maintenance requirement
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7. $129,531 site survey and failed steam trapGEM™ replacement? project for a? multinational pharmaceuticaland biopharmaceutical company
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8. $236,000 GEM™ steam trap order from amajor fruit products processor
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9. $386,000 order for low maintenance GEM™steam traps from a major grain and cereal processor
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10. $262,000 GEM™ steam trap order from amulti-national pharmaceutical company
Full financial results including Management’s Discussion andAnalysis and accompanying notes to the financial results are availableon www.SEDAR.com and www.thermalenergy.com/financial-reports.html .
ENDS
For media enquiries contact:
Devin Crockett or Liz Fisher
Marketing Manager
Thermal Energy International Inc.
Canada: 613-723-6776
UK: +44 (0)117 917 2179
For investor enquiries:
William Crossland
President and CEO
Thermal Energy International Inc.
613-723-6776
About Thermal Energy InternationalInc.
Thermal Energy International Inc., ranked as one of Canada’s Top Growing Companies in 2020 and 2019,is an 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 industry sectors.
Thermal Energy is a fully accredited professional engineering firm andby providing a unique mix of proprietary products together withprocess, energy, and environmental engineering expertise, ThermalEnergy can deliver unique turnkey projects with significant financialand environmental benefits for our customers.
Thermal Energy's proprietary products include: GEM ™ - Steam traps, FLU-ACE ® - Direct contactcondensing heat recovery, HEATSPONGE – Indirectcontact condensing heat recovery systems, and DRY-REX ™ - Low temperaturebiomass drying systems.
Thermal Energy has engineering offices in Ottawa, Canada, Pittsburgh,USA, as well as Bristol, UK, with sales offices in Canada, UK, USA,Germany, Poland, Italy, and China. TEI’s common shares are traded onthe 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 twitter.com/GoThermalEnergy .
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 theCompany’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 and the anticipated benefits of the Company’scurrent efforts at training and business improvement efforts.Information as to the amount of heat recovered, energy savings andpayback 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 delayedor in the most serious cases eliminated. Actions taken by theCompany’s customers and factors inherent in the customer’sfacilities but not anticipated by the Company can have a negativeimpact on the expected effectiveness and lifespan of the Company’sproducts and on the expected environmental effects and cost savingsexpected from the Company’s products. Any customer’s willingnessto purchase additional products from the Company and whether orders inthe Company’s backlog as described above will turn into revenue isdependent on many factors, some of which are outside of theCompany’s control, including but not limited to the customer’sperceived needs and the continuing financial viability of thecustomer. The Company disclaims any obligation to publicly update orrevise 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 .
EBITDAS 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 theCompany’s most recent Management’sDiscussion and Analysis available at www.SEDAR .com for more detailsabout these non-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.
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