MINNEAPOLIS, March 26, 2013 /PRNewswire/ -- Titan Energy
Worldwide, Inc. (OTC: TEWI), a leader in distributed power
generation products and intelligent energy management services,
today announced that it has released the following letter to its
shareholders.
Dear Shareholder of Titan Energy:
The need for backup power is as strong as it has ever
been. Our national power grid is being overtaxed, natural
disasters seem to be striking with ever increasing frequency and
unrelenting devastation. Titan Energy is poised in the center
of this opportunity. With our ability to respond quickly in
times of emergency, to find the right solution and to be an
effective power partner to our customers, we have established a
solid reputation for excellence and a growing national brand that
is beginning to rival companies many times our size.
Titan Energy began as a small regional distributor of generators
in the Midwest. Along the way we have leveraged our
technological expertise and our industry relationships to build a
highly skilled network that now allows us to operate on a national
scale. And today we have an opportunity to become a true
national player in the ever-growing energy marketplace.
2012 was a strong turnaround year for Titan Energy.
Overall sales increased 36% year over year. Growth in our service
business was more than 50%. We advanced from a negative
$1.4 million in adjusted EBITDA
in 2011 to a positive $350,000 in
adjusted EBITDA in 2012. Based on our current backlog, we are
on course to do $25 million in
overall sales in 2013, an increase of more than 25% over the
$19 million we achieved in
2012. We expect to surpass this current projection as new
potential opportunities are realized. I believe we have a
very good shot at ending the year profitable, and as a company we
are committed to that goal.
Market Outlook. Several factors point in Titan
Energy's favor as we head into 2013.
- The number of storms that have hit the country in the past few
years is exposing the weakness in our aging grid and highlighting
the need for companies to deploy their own onsite power resources.
Titan's ability to responds to the needs not only of our
customers but to other companies in the areas hit by Hurricane
Sally for example, have created many new opportunities for us in
the Northeast and other regions.
- We are beginning to see clear signs that new construction is on
the rise. With new business centers, hotels and healthcare
facilities, there will be the need for new onsite power
systems.
- The power equipment we sell is better and more
sophisticated. Generac Power Systems (www.generac.com), our
generator manufacturer in the Midwest, has shown significant
improvements in the capabilities, reliability and over all
acceptance of its brand among customers for industrial and
commercial onsite power generators.
- C&I generators are becoming more technically advanced while
being deployed in more demanding situations than in years
past. These onsite power systems require a highly skilled
service provider such as Titan Energy to best maintain and operate
them. Titan has led the industry in developing the latest
monitoring, auditing and other automated solutions which greatly
improve our ability to manage and maintain these power systems,
lower costs for our customers, improve our profitability and create
greater customer retention.
Financial Results for 2012. We will be publishing our
2012 Annual report (Form 10K) in the next few weeks. A
turnaround year, Titan Energy ended 2012 with a very strong fourth
quarter. We saw two $1 million
months in service buoyed largely by growth in our national accounts
business. Total sales revenues grew 36%, with equipment
sales growing by 28% and service revenues by 51% over
2011.
Combined with a 5% decrease in general and administrative
expenses and 60% decrease in corporate expenses, these strong
revenue numbers helped us generate a positive adjusted EBITDA of
nearly $350,000 for the year.
This represents a turnaround of nearly $2
million from 2011.
1st Quarter 2013. The first quarter of 2013 is not
quite finished, but we can project sales revenues that will be 40%
higher compared to the 1st q of 2012 with greatly
reduced losses. The first quarter is historically our most
difficult quarter as cold winter conditions in the Midwest can push
out new equipment installations and some of the our larger national
accounts do not complete their budgetary process or release new
work orders until March or later. Still we demonstrated not
only strong growth but continued improvement in our bottom
line.
Equipment Sales. Titan sales of generators
increased more than 36% in 2012. We believe a significant
reason for this increase is due to the greater awareness businesses
have acquired on the need for backup power after the last series of
devastating storms. At the same time, we believe the line of
generators we represent in the Midwest, Generac, is gaining
stronger acceptance among commercial and industrial contractors in
our territories.
Service Operations. I personally believe we have the
finest and most dedicated service department in the U.S. and
service continues to be the strongest performing segment of our
business. With margins that are in the 50% to 70% range, the
increase in our service business accounts for the majority of our
drive towards profitability. In 2013, we are looking to
increase service sales significantly in the Midwest, as well as in
the Southeast and Northeast. The Northeast in particular is a
tremendous market for Titan Energy and our service center in that
area has shown 100% growth since 2011 with even greater potential
ahead of us.
RICE NESHAP. The EPA, through a ruling called RICE
NESHAP, now requires many generators enrolled in peak shaving or
demand response programs to be mechanically modified so as to lower
their emissions. Titan has received more than $2 million in purchase orders to date for the
modification of generators in the Midwest and we believe that this
business will continue for us through 2013. RICE NESHAP also
requires these same generators to be monitored and report their
equipment's performance. Titan has been successful in placing
its own proprietary monitoring system on many of these
installations thereby creating ongoing recurring revenues and
providing us with the opportunity to be the service partner for
these customers as well.
National Accounts. National accounts revenues grew
from $400,000 to more than
$3 million in 2012. We are
projecting national account sales to surpass $5 million in 2013 based on our currently
contracted customers. We now service more than 2,000
generators nationwide and have multiyear contracts with one of the
major retailers in the nation and one of the largest owners of data
centers. We are actively seeking to expand this base of
national customers, focusing on the retail, property management and
health care markets.
Monitoring Technology. I am confident that Titan's
monitoring system for onsite power generators is the most robust
and advanced in the market. Having completed the beta test on
this system, this service is now operating with several clients
utilizing a robust, commercial grade cloud-based service.
Teamed with our 24/7 call center, we are now ready to begin
taking on additional commercial clients including a number of our
Fortune 500 service customers.
One unique aspect of our platform is that it is capable of
monitoring the EPA's required emissions modifications that were
imposed recently through RICE NESHAP in addition to the functions
of the generator itself. Titan is one of the few companies to
offer this valuable product for the tens of thousands of generators
enrolled in peak shaving programs that must meet both the EPAS
requirements as well as maintain their service schedules so as to
perform during peak shave events.
UPS Sales and Service. Last year we greatly enhanced our
ability to provide sales and service to an important part of the
most onsite power systems: Uninterruptible Power Supplies or
UPS. UPS is the vital back up component that provides
electricity during the seconds or even minutes before a generator
comes on during an event. We have hired a seasoned UPS
veteran experienced with over 25 makes and models of UPS to build
this program on a national level for Titan energy.
Highly profitable and growing in demand among many companies, we
see the potential for UPS sales and service as one that will rival
our equipment sales. At the same time, Titan will be one of
the few generator service companies that can seamlessly support UPS
and battery sales and maintenance, making us a truly complete
service partner for many companies nationwide.
Strong Growth in Northeast Segment. Our sales in
our Northeast operation continue to grow. The storms that
have recently hit the New York and
New Jersey areas have
significantly increased service work for us as well as improved
equipment sales as more companies are responding to the need to
avoid future power outages.
We realized $2.4 million in
equipment sales revenues in the Northeast in 2012. To date,
we have more than $4 million in
purchase orders for 2013. Another way to look at this is that
Northeast orders now represent 40% of Titan's entire
backlog.
Changes in Southeast segment. Last year, we made
the decision to discontinue the equipment sales division of our
southeast operations as poor sales and low margins were creating
losses for the company. Since reorganizing the operations in
August of 2012, the service division has been able to maintain a
profitable operation throughout most of those months and has
continued to service our national accounts in the
Southeast.
Challenges. We currently have about $3.5 million in convertible debt that comes due
in April of this year. We are hopeful that we can work out an
arrangement with these note holders to restructure their notes
thereby better positioning us with our vendors, customers and
financial partners, but there is the possibility the Company could
be in default on some or all of these notes. We will also
strive in 2013 to obtain a more versatile and cost effective line
of credit, thereby lowering our interest expenses
considerably.
All in all, we expect 2013 to be an exciting year for Titan, a
year of growth, opportunity and profitability. A year when
the Titan name achieves a new level of value. I wish to
extend my appreciation to all the shareholders who have supported
Titan Energy through the years.
More detailed information will be available in the Company Form
10K Annual Report which is forthcoming shortly and can be accessed
at www.sec.gov.
Respectfully,
Jeffrey Flannery
Chief Executive Officer/Chairman of the Board
About Titan Energy Worldwide, Inc.
Since its
founding, Titan Energy Worldwide has been dedicated to helping
companies meet their power generation and energy management
needs. To date we have focused on providing thousands of
customers with the most advanced power generation equipment to
enable their operations to continue uninterrupted during times of
power failures or disasters. We have also established a
professional service team that helps customers to maintain and
manage their power generations assets. From emergency and backup
power technologies, to demand response programs and Smart Grid
applications, Titan Energy is setting a path for the future in
energy management. For more information, please visit the company's
website at: www.titanenergy.com.
Forward-Looking Statements
Investors are cautioned that certain statements contained in
this document as well as some statements in periodic press releases
and some oral statements of TEWI officials are "Forward-Looking
Statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Act"). Forward-looking statements include
statements which are predictive in nature, which depend upon or
refer to future events or conditions, which include words such as
"believes," "anticipates," "intends," "plans," "expects," and
similar expressions. In addition, any statements concerning future
financial performance (including future revenues, earnings or
growth rates), ongoing business strategies or prospects, and
possible future TEWI actions, which may be provided by management,
are also forward-looking statements as defined by the Act.
Forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance or achievements of the Company to materially
differ from any future results, performance, or achievements
expressed or implied by such forward-looking statements and to vary
significantly from reporting period to reporting period. Although
management believes that the assumptions made and expectations
reflected in the forward-looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact,
prove to be correct or that actual future results will not be
different from the expectations expressed in this report. These
statements are not guarantees of future performance and TEWI has no
specific intention to update these statements.
For more information about Titan Energy Worldwide please
contact:
Jeffrey Flannery
Titan Energy Worldwide, Inc.
952-960-2371
jflannery@titanenergy.com
SOURCE Titan Energy Worldwide, Inc.