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OTTAWA, ONTARIO - September 30, 2019 - Thermal Energy International Inc. ("Thermal Energy or the "Company") (TSXV:TMG) (OTC:TMGEF), an innovative cleantech company and global provider of proprietary, energy efficiency and emissions reduction solutions, has announced its financial results for the fiscal year ended May 31, 2019. All figures are in Canadian dollars. Highlights:
"These figures from our latest quarter and fiscal year are a significant marker of the positive impact our strategic growth plan is having on the business." said William Crossland, CEO of Thermal Energy. "Both revenue and gross profit are at all time highs, up 21% and 11% respectively compared to last year. The final quarter of 2019 also proved to be our most successful to date in terms of GEM(TM) Steam Trap revenue, as well as generating record levels of quarterly gross profit and EBITDAS. All of which is reflective of a successful growth strategy that has contributed to the Company's revenue more than tripling since 2015, equivalent to a compound annual growth rate of 33%." "We began the new financial year with a record $14.0 million's worth of confirmed orders with revenue yet to be recognized - 41% higher than the previous year. Now, in September, we have already increased our order backlog by another 30% to $18.2 million." "This growing order backlog is a particularly useful measure of future revenue trajectory. Considering that 70% of last year's order backlog was represented by the single Resolute Forest Products "mega" order (announced December 2017), the Company's ability to not only maintain but actually grow revenue levels beyond the one-time Resolute order showcases the robust nature of our strategy." "Over the last 24 months we have been investing aggressively in all areas of the business including sales, engineering, operations and marketing. We have also been proactive in expanding our geographical footprint to include key markets such as Germany, Poland, Texas and the US Gulf Coast. Furthermore, in June 2018 we acquired Boilerroom Equipment Inc. (BEI). This acquisition not only added new distribution channels but is also an integral part of our objective to become a single point of contact for all our clients' thermal energy efficiency and heat recovery needs." "Investing heavily in the future growth of the business over the last two years has added approximately $1.3 million to operating expenses, which has in turn had a short-term impact on profitability. However, this investment strategy is already delivering results, as evidenced by our growing revenue and order backlog with a diverse range of clients, sectors and territories." "Now, with much of our short to medium term strategic growth initiatives already underway, over the next financial year we'll be seeking to fully optimize the significant investment we have made, maximizing its benefit to further grow revenues, strengthen profit margins and deliver a solid ROI." For additional details see our Fourth Quarter and Fiscal 2019 Financial Summary presentation here: http://www.thermalenergy.com/presentations.html
Fourth Quarter and Fiscal Year 2019 Financial Review: The fourth quarter generated the strongest quarterly GEM(TM) stem trap revenue in the Company's history. It was also the second strongest quarter for total revenue since the Company begin, surpassed only by the final quarter of 2018 when more than half of the Company's total revenue for the quarter was represented by the single Resolute 'mega' order. Yearly revenue was $21.1 million a 21% increase compared to the same period last year. The decrease in gross margin for the full year was the result of a change in product and project mix, the inclusion of the BEI results and lower than anticipated GEM(TM) steam trap revenue for the year. However, the final quarter delivered an increase in gross margin to 58% as a result of strong GEM steam trap revenues. With the majority of our short to medium term strategic growth initiatives already commenced Operating Expenses for the fourth quarter were largely unchanged from the previous year. Operating Expenses for the year totaled $9,439,498. This is compared to $7,732,044 for year prior and is an increase of $ 1,707,454, or 22%. The main increases in Operating Expenses relate to:
Business Outlook and Order Backlog Summary The Company ended the year with an order backlog of $14.0 compared to $9.9 million last year. This means Thermal Energy is starting the new fiscal year 2020 with an order backlog 41% better than last year. By September 30, 2019, the order backlog had increased to a record $18.2 million compared to only $12.7 million at the same time last year. The Company defines its order book as the value of projects for which purchase orders have been received, but have not yet been fully reflected as revenue in the Company's published quarterly financial statements. These include:
In addition to these announced commissions, the Company also received a number of GEM(TM) trap orders. These include two from a leading Petrochemical company totalling $251,000 and one from a textile and fabric mill of over 200 traps with a value of over $176,400. Full financial results including Management's Discussion and Analysis and accompanying notes to the financial statements have been filed and made available on www.SEDAR.com and www.thermalenergy.com/financial-reports.html.
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