Thermodynetics, Inc. (PINKSHEETS: TDYT)
Thermodynetics' Turbotec subsidiary sales levels remain at
record levels despite the slow down in the general economy. For the
nine months ended December 31, 2008, revenues were in excess of $22
million as compared with the prior year's almost $21 million. While
the major impetus in maintaining sales levels is the geothermal
heat pump market, the swimming pool heat pump market, largely
Florida oriented, remains weak. Contributing to the steady sales
levels were rebate programs and tax credits in the US and Canada. A
slow down in shipments is anticipated in the January to March
quarter, a typically slow period for the company, as customers are
beginning to extend delivery dates for new orders which also
reflects the current economic conditions in our markets.
Another factor related to revenue levels involves the commodity
prices that have declined significantly over the recent past. The
revenues reported include this factor as price increases are passed
along to customers. The effect of higher commodity prices is a
reduction in gross profit margins as price increases cannot be
fully passed along to customers; as prices of raw materials
decline, the Company can recapture certain costs and thereby
improving manufacturing margins result.
Turbotec has opened a facility in North Carolina and began
limited production in January. Their reason for this new facility
is to allow for greater capacity and to relieve the pressure they
are experiencing at their Connecticut facilities. They expect,
subject to economic conditions, to bring the facility to full
production levels this summer.
The demand for high efficiency heat pumps as part of a "green"
initiative continues to give Turbotec's products broad appeal in
retrofit and high end system applications.
Gross margin percentage was 30% for the first nine months of
fiscal 2009 compared to 26% for the same period last year. In the
latest three month period the margin was 29% vs. 28% in the like
period of 2007. Inventory levels increased from $3.1 million at
March 31, 2008 to $3.9 million at December 31, 2008.
Selling, general and administrative expenses increased in both
the three and nine month periods primarily because of increased
costs incurred for corporate governance, engineering and
administrative expenses and the cost of litigation. Interest
expenses were relatively constant in these periods.
Significant risk factors and economic considerations pertaining
to Turbotec include the cost of energy and incentives provided by
producers, sellers and municipalities to encourage the use of more
efficient equipment; interest rates that can stimulate or depress
purchasing demand; the cost and availability of materials used in
production; and regulatory directives and incentives relating to
energy consumption, conservation and environmental issues. The
Company may be affected by the economic downturn that the world is
currently experiencing as poor business conditions, stock market
volatility and other financial perturbations create disruptions or
opportunities.
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 especially in
applications serving the commercial, industrial and residential
construction industries.
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.
Figures in $000?s,
Except for Per Share Data
Three Months Ended Nine months ended
December 31,
2007 2008 2007 2008
---------- ---------- ---------- ----------
Net Sales $ 6,415 $ 7,322 $ 20,874 $ 22,251
Operating Income 510 295 1,610 1,393
Income Before Income Taxes
And Minority Interest 471 302 1,486 1,307
Provision for Income Taxes 187 255 423 753
Minority Interest in
Subsidiary (171) (150) (504) (456)
Net Income 113 (103) 559 98
Weighted Shares Outstanding-
Basic and Diluted 4,062,297 4,080,306 4,051,906 4,080,306
Earnings Per Share-
Basic and diluted $ .03 $ (.03) $ .14 $ .02
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ABOUT THERMODYNETICS
Through its Turbotec Products, Plc subsidiary, Thermodynetics
manufactures high performance, high quality heat exchangers, heat
transfer tubing and fabricated metal components. The Company serves
customers in the space conditioning, refrigeration, marine,
swimming pool and spa, plumbing, food and beverage, appliance and
water heating. Turbotec is quoted on the AIM market in London under
the symbol TRBO, while Thermodynetics is quoted OTC under the
symbol TDYT. 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.
TDYT invested a nominal amount in a UK based company that acquires
companies it wishes to operate while also assisting other companies
to raise cash through the capital markets in the United States and
the United Kingdom. Thermodynetics continues to seek acquisition
and investment 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.
Contact: Robert A. Lerman 860-683-2005
Thermodynetics (CE) (USOTC:TDYT)
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