OTTAWA,
April 30, 2012 /CNW/ - Thermal Energy
International Inc. (TSXV: TMG), a leading provider of custom energy
and emission reduction technologies for energy intensive industries
worldwide, today announced its Third quarter (Q3) financial results
for the three-month and nine-month periods ended February 29, 2012.
Highlights
- Q3 2012 revenue of $3.6 million,
compared to $1.9 million in Q3 2011
(up 92%)
- Nine-month revenue of $9.7
million compared to $7.8
million last year (up 24%)
- Q3 2012 net loss of $31,854 for
2012, compared to $53,611 for Q3
2011
- Nine-month income of $111,072
this year compared to a net loss of $86,254 last year (up $197,326)
- Nine-month operating cash flow of $686,962 compared to $500,740 last year (up 37%)
- Working capital of $2.4 million
(up $522,143 or 28% since the
beginning of the year).
- Order backlog of $2.9 million
compared to $1.6 million at the same
time last year.
- During the quarter, the Company received purchase orders
totalling approximately $832,000 from
a major UK food manufacturer for heat recovery systems at two
different locations.
- Subsequent to quarter end, Thermal Energy received purchase
orders totalling approximately $726,000 for heat recovery systems at two
different NHS hospitals in the UK.
"The growth in our revenue and our strong
backlog of orders clearly demonstrate that our sales and marketing
efforts across North America and
Europe are paying off," said
William Crossland, the President and
CEO of Thermal Energy. "Our current focus is to drive sales from
existing product lines, and we have recruited additional sales and
marketing resources to facilitate this growth. The market place and
our clients are recognizing the energy saving and emission reducing
benefit our products offer and this is resonating into increased
sales to new and existing customers."
Financial Highlights
Revenue
Revenue was $3.6 million for the
three-month period ended February 29,
2012, compared to $1.9 million
for the corresponding period in 2011. During the quarter revenue
generated from heat recovery systems increased by $2.1 million (352.8%), while sales of GEM®
condensate return systems decreased by $421,725 (33.6%). The increase in revenue from
waste energy recovery systems was as a result of revenues generated
from the Fibrek and St. Georges
projects which were previously announced. The decrease in GEM®
condensate return systems was largely due to the timing of some
large orders from two of the Company's UK based key corporate
accounts. Last year the quarter included $317,925 in sales related to $1.3 million in orders from a major UK based food
manufacturer announced in December
2010 and February 2011,
compared to nil this year. The balance of the decrease was due to
the timing of orders from the NHS in the UK. In North America GEM®
Condensate return systems sales for the quarter, excluding sales to
a major pharmaceutical company, were up 99% over last year.
Revenue was $9.7
million for the nine-month period ended February 29, 2012, compared to $7.8 million for the corresponding period in
2011. Heat recovery sales increased $2.4
million primarily due to the Fibrek and St. Georges projects. GEM® Condensate return
systems sales decreased $0.5 million
primarily due to reduced sales to a major pharmaceutical company in
both Europe and North America and a continued difficult
economic environment in Europe.
Excluding sales to this major pharmaceutical company North American
GEM® Condensate return systems sales for the nine-month period
ended February 29, 2012 are up 64%
over last year.
The strong Q3 and year-to-date sales of the GEM®
Condensate return systems in the North American market indicates
the roll out of this product is proceeding as expected. Similarly
the strong increase in HR sales and orders in both North America and the UK indicates the
Company's targeted cross selling to existing customers, and focused
sector specific sales and marketing strategies, implemented over
the last two years is starting to pay off.
Gross Profit
Gross profit was $1.4 million for the
three-month period ended February 29,
2012, compared to $1.1 million
for the corresponding period in 2011. Gross profit expressed as a
percentage of revenue was 39.4% during the quarter compared to
61.1% for the corresponding quarter in 2011. The decrease in gross
profit is due to product mix with a lower proportion of revenue
generated from the GEM® product during the quarter.
Gross profit was $4.3
million for the nine-month period ended February 29, 2012, compared to $3.6 million for the corresponding period in
2011. Gross profit expressed as a percentage of revenue was 44.8%
for the nine-month period compared to 46.5% for the corresponding
quarter in 2011.
Operating Expenses
Operating expenses were $1.5 million
for the three-month period ended February
29, 2012, compared to $1.1
million for the corresponding period in 2011. The increase
in operating expenses is primarily the result of additional
commission payable on the increased revenues, increased staff costs
including salaries for additional sales, marketing and finance
staff, and increased training costs relating to development of our
distributor network in North
America. In addition audit and legal fees increased in the
quarter due primarily to the timing of receipt of audit fee
invoices, the transition to IFRS reporting, and activities related
to the statement of claim filed against the Company by a past
president. Despite the increase in operating expenses in the
quarter, as a percent of sales, operating expenses continued to
decrease and were 41% of sales for the three-month period ended
February 29, 2012 vs. 61% for the
same period last year.
Operating expenses were $4.1 million for the nine-month period ended
February 29, 2012, compared to
$3.7 million for the corresponding
period in 2011. While operating expenses for the nine-month period
ended February 29, 2012 have
increased compared to the same period last year, as a percent
of sales operating expenses have decreased to 43% of sales compared
to 48% last year.
The Company's staff count in August 2009 was approximately 40 people and
revenue per person was approximately $100,000. After two years of cost containment and
tight cash conservation, during which time operating expenses have
decreased from 140% of sales in fiscal 2009 to 91% in fiscal 2010
to 49% in fiscal 2011, to 43% for this year to date, the Company
believes it is now in a strong position to begin investing for
future growth. As a result since last year at this time the Company
has added 5 new staff including 4 in sales and marketing. With
these staff additions the Company is now back to a staff complement
similar to August 2009. However since
August 2009 annualized sales have
more than tripled indicating the current annual revenue per
employee has increased from approximately $100,000 per person to approximately $300,000 per person. In addition it usually takes
approximately 1 year for an employee to begin contributing
in a meaningful way and since all of these staff additions
occurred less than 12 months ago many of these new employees are
not yet contributing at expected levels of productivity.
Net Income/Loss
Net loss was $31,854 for the
three-month period ended February 29,
2012, compared to $53,611 for
the corresponding period in 2011.
Net income was $111,072 for the nine-month period ended
February 29, 2012, compared to net
loss of $86,254 for the corresponding
period in 2011, an increase of $197,326.
Cash and Working Capital
Cash flow from operations (defined as net income (loss), plus items
not involving cash, plus lease payments received) for the quarter
ended February 29, 2012 was
$236,363, a 54% increase from
$153,435 last year. For the nine
months ended February 29, 2012 cash
flow from operations was $686,962, up
37% from $500,740 last year.
As at February 29,
2012, the Company's net cash position (Cash and cash
equivalents less Bank loans) amounted to $1.9 million, an increase of $911,839 compared to $972,163 at the beginning of the year. In
addition to its net cash balances the Company also had an estimated
$200,000 of unused borrowing capacity
under its bank loans indicating a net cash and unused borrowing
capacity of approximately $2.1
million.
As at February 29,
2012, the Company had net working capital of $2.4 million, an increase of $0.5 million compared to $1.9 million on May 31,
2011.
Business Overview and Update
- On January 4 and January 6, 2012, the Company received orders from
a major food manufacturer in the UK for heat recovery solutions at
two of its sites. The orders total approximately $832,000 and are both expected to be
substantially completed this fiscal year.
- In April 2012, the Company
received purchase orders totalling approximately $726,000 for heat recovery systems at two
different NHS hospitals in the UK.
- The Company's order backlog as at February 29, 2012 was approximately $2.9 million compared to $1.6 million at the same time last year. As at
April 30, 2012 the Company had
approximately $4.4 million in
purchase orders that had not yet been reflected as revenue in the
Company's published quarterly financial statements.
All figures are in Canadian dollars. 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.
About Thermal Energy International
Inc.
Thermal Energy International Inc. is an innovative cleantech
company providing a variety of proprietary and proven energy
efficiency, emission reduction, water efficiency, and bioenergy
products and solutions to the industrial, commercial and
institutional markets worldwide. Thermal Energy is also a fully
accredited professional engineering firm, and can offer advanced
process and applications engineering services. By providing a
unique mix of proprietary products together with process, energy,
environmental, and financial expertise Thermal Energy is able to
deliver significant financial and environmental benefits to its
customers.
Thermal Energy's products include; GEM® -
Steam traps and condensate return systems, FLU-ACE® - Direct
contact condensing heat recovery, and Dry
RexTM - Low temperature biomass drying
systems. These award winning products are effective in a wide
variety of industries and application and have an excellent track
record of longevity, proven reliability and performance providing
significant energy savings, reduced GHG emissions, improved water
efficiency, lower maintenance costs, improved product quality and
increased production efficiency.
Thermal Energy International Inc. has offices in
Ottawa, Canada as well as
Bristol, UK, United States, Italy and China. To find out more about Thermal Energy
International Inc. (TSX-V: TMG), visit our website at
http://www.thermalenergy.com.
# # #
This press release contains forward-looking
statements relating to, and amongst other things, based on
management's expectations, estimates and projections with respect
to the anticipated receipt of funding based on ISTP approval,
results and timing of research, the anticipated effectiveness of
the Company's products and services and the revenues to be received
by the Company from the project described. 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. The Company disclaims any
obligation to publicly update or revise any such statements.
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.
SOURCE Thermal Energy International Inc.
