WINDSOR, CT
Thermodynetics' 2008 fiscal year, ended March 31, 2008,
experienced continuing advancement of the Company's results and
prospects. With the capital raised in the May 2006 IPO in London
for our Turbotec Products Plc subsidiary, a much more financially
strong and product positioned company has resulted.
Net revenues increased 19% above fiscal 2007 and, for the last 3
years, net revenues from continuing operations almost doubled from
$15.6 million to $28.0 million. A part of the revenue increase this
year resulted from growth in shipping volume while the remainder is
attributed to new pricing initiatives associated with material
price adjustments. By concentrating attention on lean manufacturing
techniques, this sales growth was accompanied by a return to a
gross profit margin of 26%, which represents a significant
improvement in the latest year.
Contributing to the sales increase was the Company's efficient
water source heat pump coils to the retrofit market as the housing
slump in the US has taken its toll on the customer base for new
construction and units sold to that marketplace. At the same time,
the swimming pool heat pump market which is primarily Florida based
has been affected negatively by these same factors. The exchange
rate pertaining to the US dollar has created added foreign demand
for marine air conditioning units and that has bolstered revenues;
non US shipments approximated 2% of revenues.
At the same time, the need to upgrade facilities and add/train
staff has increased administrative costs. Other contributing
factors in this area were added legal fees, the governance costs
due to the United Kingdom listing of Turbotec on the AIM market,
improved employee benefits to allow the Company to be more
competitive, increased audit fees, the institution of a human
resources department, a new advertising program that enhanced the
web site and printed materials, and the engineering development
programs encompassing potential new products and product designs
and research on new raw material products and sources.
Other income in fiscal 2007 included the proceeds from the
Turbotec IPO that were recorded in last year's figures. As the
closing of Vulcan occurred in fiscal 2007, there was no activity or
expense incurred in the current fiscal year.
As a result of the Relationship Agreement (RA) that was entered
into between Thermodynetics and Turbotec at the time of the IPO,
the Company received monthly Administrative Fees through the end of
the 2008 fiscal year. Turbotec, following advice from its legal
advisers, classified the Administrative Fees as recoverable against
the dividends payable to the Company and has deducted the
Administrative Fee from the dividends payable to the Company
through March 31, 2008. Turbotec declared and paid dividends in
cash to the other shareholders, in the aggregate amount of 12.5
cents per share, but not to Thermodynetics. Thermodynetics owns 7.2
million ordinary shares of the Plc. Thermodynetics has instituted
suit in London to collect the dividends due. Thermodynetics'
solicitors in the United Kingdom share the view as expressed in the
written opinion of the Queen's Counsel representing Thermodynetics
that the interpretation by Thermodynetics of the relevant clauses
in the Relationship Agreement as to their meaning and effect is the
correct one and is likely to prevail at trial, and therefore
Thermodynetics does not view risk of loss to be probable or
material.
Thermodynetics is interested in expanding and continues to
investigate acquisition candidates. Banking and access to capital
for expansion purposes are believed to be adequate.
Figures in $000s, Except for Per Share Data
Year Ended March 31,
2008 2007
---------- ----------
Net Sales $ 28,021 $ 23,530
Operating Income 2,171 831
Income from Continuing
Operations Before Income Taxes 1,311 2,847
Provision for Income Taxes 863 950
Income from Continuing Operations 448 1,897
Income (Loss) from Discontinued
Operations, Net of Tax -- 597
Net Income (Loss) 448 2,494
Weighted Shares Outstanding-
Basic and Diluted 4,060,002 4,025,439
Earnings (Loss) Per Share-
Basic and diluted
From Continuing Operations $ .11 $ .47
From Discontinued Operations -- .15
Total Earnings (Loss) Per Share $ .11 $ .62
ABOUT THERMODYNETICS
Through its Turbotec Products, Plc subsidiary, Thermodynetics
manufactures high performance, high quality heat exchangers,
fabricated metal components and flexible connector products for
heat transfer and transportation applications. The Company serves
customers in the space conditioning, refrigeration, automotive,
biomedical, plumbing, appliance, water heating and aerospace
industries. Turbotec is quoted on the AIM market in London under
the symbol TRBO. Thermodynetics also owns a nominal interest in a
private Belgium company that is engaged in the nutraceutical
industry by providing natural, bioactive chemical compounds that
have health promoting, disease preventing or medicinal properties.
Thermodynetics continues to seek acquisition candidates.
Significant risk factors and economic considerations associated
with heat transfer products include, but are not limited to,
seasonality of purchasing and building cycles, the cost of energy,
the reported housing slowdown, incentives provided by
manufacturers, marketers and municipalities to encourage the use of
more efficient equipment, interest rate changes that may stimulate
or depress demand, the cost and availability of materials used in
manufacturing processes, and regulatory directives relating to
energy consumption, conservation and the environment.
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements
regarding the Company, its business prospects and results of
operations that are subject to certain risks and uncertainties
posed by many factors and events that could cause the Company's
actual business, prospects and results of operations to differ
materially from those that may be anticipated by such
forward-looking statements. Factors that may affect such
forward-looking statements include, without limitation: the
Company's ability to successfully and timely develop and finance
new projects, the impact of competition on the Company's
subsidiary's revenues, changes in unit prices, and supply and
demand for the Company's tubing product lines in the markets
served.
When used, words such as "believes," "anticipates," "expects,"
"continue," "may," "plan," "predict," "should," "will," "intends"
and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this report. The Company undertakes no
obligation to revise any forward-looking statements in order to
reflect events or circumstances that may subsequently arise.
Readers are urged to carefully review and consider the various
disclosures made by the Company in this report, news releases, and
other reports filed with the Securities and Exchange Commission
that attempt to advise interested parties of the risks and factors
that may affect the Company's business.
Contact: Robert A. Lerman 860-683-2005
Thermodynetics (CE) (USOTC:TDYT)
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