Cross Selling Initiatives
Prove Successful During and Subsequent to Quarter End
OTTAWA, ONTARIO - October 28, 2013
- Thermal Energy International Inc. ("Thermal
Energy" or the "Company") (TSXV: TMG), a global provider of energy
efficiency and emission reduction solutions, today announced its
financial results for the three month period ended August 31, 2013.
All figures are in Canadian dollars.
Q1 2014 Highlights:
-Revenue and gross
profit increased 76.5% and 84.8% respectively, compared to the
first quarter a year ago
-Received $3.7
million in heat recovery and GEM(R)
orders from pulp and paper companies
-Awarded $0.8 million
in heat recovery and GEM(R)
orders from a major hospital
-Received
GEM(R) order totalling
nearly $0.5 million from major multinational food and beverage
company
Highlights Subsequent to Quarter End:
-Awarded
approximately $0.8 million in heat recovery and
GEM(R) orders from
another major hospital
-Received
approximately $1.9 million in heat recovery and
GEM(R) orders from a
leading Fortune 500 food and beverage company
-The Company had an
order backlog of approximately $8.7 million as at October 28, 2013.
$0.5 million of the order backlog is related to long term contracts
that are not expected to be reflected in revenue within the next 12
months. The Company includes in order
"backlog" any purchase orders that have been received by the
Company but have not yet been reflected as revenue in the Company's
published financial statements.
"We had a strong
start to fiscal 2014 underscored by repeat business and growth in
both our heat recovery and GEM(R)
businesses," said William Crossland, CEO of Thermal
Energy. "We have been successful in cross selling
GEM(R) steam trap
systems to existing heat recovery customers. In the pulp and paper
industry in particular, we received one heat recovery and eight
GEM(R) orders from six
customers totalling approximately $3.7 million so far in fiscal
2014, all of which was repeat business. We
have a healthy project pipeline and a record high order
backlog."
Q1 2014 Financial Review:
Revenue for the
quarter was $1.5 million, representing an increase of 76.5%
compared to the first quarter a year earlier. Heat recovery systems
revenue increased by $0.3 million, or 225.1%, and included the
partial fulfillment of the $3.6 million order from a major pulp and
paper company announced June 3, 2013 and the completion of a
project for a major hospital announced in December 2012.
GEM(R) Condensate
return systems revenue increased by more than $0.3 million, or
47.5%, and included the partial fulfillment of an order from a
major food and beverage company announced July 3, 2013 and sales to
a major publicly owned hospital announced June 13, 2013.
Gross profit for the
quarter was approximately $1.0 million, representing an increase of 84.8% compared to the
first quarter a year ago. As a percentage of sales, gross profit
improved to 63.7% compared to 60.9% in the
first quarter of fiscal 2013. The increase as a percentage of sales
was attributable to a higher proportion of revenues coming from
direct sales of GEM(R) Condensate return systems.
Operating expenses
for the quarter were $1.4 million, decreasing
by 10% compared to the same period a year ago. Operating expenses
in the prior period included enhanced staff and distributor
training events, recruitment costs relating to staff additions, and
audit fees relating to the transition to International Financial
Reporting Standards. Within operating expenses research and
development expenses are up due to increased activity on the ISTP
project and the development of ancillary products within the
GEM(R) product line.
Net loss
for the quarter narrowed to less than $0.4 million
compared to a net loss of $0.8 million for the corresponding period
a year ago.
Operating cash flow
(defined as net loss for the period, plus items not involving cash,
plus lease payments received) for the quarter was
negative $0.2 million compared to negative $0.7
million for the first quarter of fiscal 2013.
As at August 31,
2013, the Company's net cash position amounted to $1.1 million,
compared to $1.3 million as at May 31, 2013. The Company also had an estimated $0.3 million of unused
borrowing capacity under its bank loans. With cash balances and
unused borrowing capacity of approximately $1.4 million, management
believes that it has sufficient capital resources to fund existing
operations and anticipated capital requirements in the remainder of
FY 2014.
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(R) - Steam traps and condensate return systems,
FLU-ACE(R) - 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.
For more
information, visit our website at www.thermalenergy.com.
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
Follow Thermal Energy
International on Twitter at http://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 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, statements
about the Company's backlog 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. Orders in the Company's backlog as described above may
not turn into revenue due to many factors, some of which are
outside of the Company's control, including but not limited to the
Company's ability to deliver products on time and in accordance
with specifications and the continuing financial viability of the
customer. Additional heat recovery and GEM(R) 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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