WALTHAM, Mass., Aug. 10, 2016 /PRNewswire/
-- Tecogen® Inc. (NASDAQ: TGEN), a leading
manufacturer of clean energy products which, through patented
technology, nearly eliminate criteria pollutants and significantly
reduce a customer's carbon footprint, reported revenues of
$5,687,308 for the quarter ended
June 30, 2016 compared to $6,383,831 for the same period in 2015.
Backlog of products and installations was $14.1 million as of second quarter end and
currently stands at $15.9 million (as
of August 5, 2016), over 70% growth
in backlog when compared to the second quarter ended 2015.
Speaking about the backlog, Benjamin
Locke, Tecogen Co-Chief Executive Officer noted, "The sales
team has been executing well and closing orders, this strong
backlog sets us up to deliver what we expect to be compelling
results over the next several quarters."
Cost of sales improved dramatically in the period to
$3,584,414, delivering a 15.5% cost
reduction over the prior year. This improvement generated
10.4% combined gross margin improvement in the quarter, bringing
gross margin up to 37.0% compared to 33.5% in second quarter
2015. Gross profit was $2,102,894 for the quarter ended June 30,
2016 compared to $2,140,890, a
decrease of 1.8% versus the prior year. Despite the decline
in revenues, this small decrease in gross profit is a testament to
the effectiveness of management's ongoing expense control
initiatives.
Revenue results were helped by 7.9% growth in Services related
revenues over the prior year period. That improvement was
partially offset by a year-on-year decline in product sales,
although product sales improved sequentially when compared to first
quarter 2016. This positive Services momentum was primarily
driven by improvements in installation related revenues as expected
project delays abated. Total Services revenue growth
continues to steadily benefit from increasing penetration in
service contracts and favorable operating metrics for the installed
fleet.
Product sales revenues were lower in the period, with a 28.0%
reduction over the prior year comparable quarter. This
decline in total Product revenue was impacted by lower cogeneration
sales that were partially offset by a 39.0% improvement in
chiller and heat pump sales versus second quarter 2015.
Variations in product mix are typical from quarter to quarter as
customer orders for different products are not entirely
predictable.
On a combined basis, operating expense was up 1.9% to
$2,488,924 for the second quarter
2016 from $2,443,205 in the second
quarter of 2015. Despite the small increase, operating
expense remains in line with management's goal to hold full year
operating expense near $10
million.
Speaking about the results, Mr. Locke added, "The sales team had
some notable wins in the quarter and is making material progress on
building lasting relationships with partners that can produce long
term repeat business for Tecogen. Launched in May, TTcogen,
our joint venture with Czech CHP manufacturer TEDOM a.s., is
already seeing strong interest in the expanded product portfolio -
as demonstrated by our recent announcement of the first sale of a
Micro T35. Taken as a whole, with the new expanded product
portfolio of TTcogen alongside Tecogen's expert installation and
long term service offerings, the sales team is well positioned to
succeed. On the downside, product margins were impacted by
one-time transitional costs of closing out the first generation
InVerde product line and introducing our new, more robust InVerde
e+ product. In the long term, the newer cogeneration product
will deliver excellent margins for the company. We have made
great progress with current and new material suppliers to improve
margins even further. In addition, we continue to execute
well on our cost control initiatives. Looking ahead, we
expect trends in energy efficiency, emissions control, and building
resiliency all to grant significant competitive advantage to our
portfolio of clean energy technologies and act as long term growth
tailwinds."
Major Highlights:
Financial
- Gross profit for the second quarter of 2016 was $2,102,894 compared to $2,140,890, a near flat result when compared to
the same period in 2015 as margin improvement offset the decline in
revenues.
- Gross margin in the second quarter 2016 increased to 37.0%
compared to 33.5% in 2015. Margins benefited from a revenue
mix shift and strong improvement in Services gross margin,
partially offset by a decline in Product gross margin.
- Services gross margin improved to 44.6% in the period compared
to the 33.6% Services gross margin reported in second quarter
2015. Services gross margin was helped by a pick-up in
Installation activity and installation efficiency
improvements.
- Product gross margin was 26.6% for second quarter 2016 compared
to 33.5% in second quarter 2015. Product gross margin was primarily
impacted by the write-down of inventory and associated
supplier-termination charges related to the retirement of the first
generation InVerde.
- On a combined basis, operating expense grew to $2,488,924 for the first quarter 2016 from
$2,443,205 in the first quarter of
2015, a 1.9% change but still in line with management's goal to
deliver full year operating expense near $10
million.
- Consolidated net loss, attributable to Tecogen, for the three
months ended June 30, 2016 was $415,539 compared to $362,839 for the same period in 2015.
- Net loss per share was $0.02 and
$0.02 for the three months ended
June 30, 2016 and 2015, respectively.
Sales & Operations
- Current sales backlog of equipment and installations as of
Friday August 5, 2016 was
$15.9 million, driven by strong
traction in the InVerde product line and Installation
services. For the quarter ended June
30, 2016, backlog was $14.1
million, significant growth over both the $11.5 million in backlog reported in the earnings
release dated May 11, 2016 and well
above the $9.3 million in backlog at
second quarter-end 2015 - in line with the Company's goal of
consistently delivering quarter-end product backlog greater than
$10 million.
- Although total revenues were down on a year-on-year basis,
sequentially revenues posted 12% growth over first quarter 2016;
driven by a 6.3% improvement in Product revenue and Services
revenue growth of 16.6%.
- In May Tecogen and TEDOM a.s. launched TTcogen LLC, a 50/50
joint venture that utilizes Tecogen's sales and service
capabilities to bring TEDOM's efficient and versatile CHP products
to the United States. The new product portfolio quadruples
Tecogen's potential addressable market for cogeneration and allows
the sales team to offer efficient equipment powered by renewable
biofuel, an important new market with significant growth
potential.
- Chiller orders rebounded in the quarter helped by growing sales
momentum in the indoor agriculture segment as well as by a repeat
order from Stanley Black &
Decker for their manufacturing facility in Mexico.
- Emissions development progress continued with rigorous analysis
of ULTRATEK's Phase 1 automotive emissions testing results proving
Ultera effective at delivering substantial emissions reductions in
excess of currently available commercial automotive
technology. The ULTRATEK team has scheduled a second round of
vehicle tests beginning later this month that will utilize a more
refined design of the system applied to other gasoline powered
models. These models were selected as representing very
advanced, high mileage models for which our industry assessment
indicates are vehicle types of high importance but with inherent
emissions challenges.
- The sales team continued to demonstrate progress toward
management's plan to develop ongoing customer relationships with
high level targets likely to produce repeat orders. Repeat
orders were won from several ESCO partners as well as a notable
New Jersey property
developer.
Conference Call Scheduled for Today at 11:00 am ET
Tecogen will host a
conference call today to discuss the first quarter results
beginning at 11:00 am eastern
time. To listen to the call dial (888) 349-0103 within
the U.S., (855) 669-9657 from Canada, or (412) 902-0129 from other
international locations. Participants should ask to be joined
to the Tecogen Inc. call. Please begin dialing at least 10
minutes before the scheduled starting time. The earnings press
release will be available on the Company website at www.Tecogen.com
in the "News and Events" section under "About Us." The
conference call will be recorded and available for playback one
hour after the end of the call. The earnings conference call
will also be webcast live. To view the associated slides, register
for and listen to the webcast, go to
http://investors.tecogen.com/webcast. Following the call, the
webcast will be archived for 30 days.
The earnings conference call will be recorded and available for
playback one hour after the end of the call through Wednesday, August 17th, 2016. To
listen to the playback, dial (877) 344 7529 within the U.S.,
(855) 669-9658 from Canada, or
(412) 317-0088 outside the U.S. and use Replay Access
Code 10090426.
About Tecogen
Tecogen Inc. designs, manufactures, sells, installs, and
maintains high efficiency, ultra-clean, cogeneration products
including natural gas engine-driven combined heat and power, air
conditioning systems, and high-efficiency water heaters for
residential, commercial, recreational and industrial use. The
company is known for cost efficient, environmentally friendly and
reliable products for energy production that, through patented
technology, nearly eliminate criteria pollutants and significantly
reduce a customer's carbon footprint.
In business for over 20 years, Tecogen has shipped more than
2,300 units, supported by an established network of engineering,
sales, and service personnel across the
United States. For more information, please visit
www.tecogen.com or contact us for a free Site Assessment.
Tecogen, InVerde, Ilios, Tecochill, Ultera, and e+,
are registered trademarks or trademark pending registration of
Tecogen Inc.
Forward Looking Statements
This press release contains forward-looking statements under the
Private Securities Litigation Reform Act of 1995 that involve a
number of risks and uncertainties. Important factors could
cause actual results to differ materially from those indicated by
such forward-looking statements, as disclosed on the Company's
website and in Securities and Exchange Commission filings.
The statements in this press release are made as of the date of
this press release, even if subsequently made available by the
Company on its website or otherwise. The Company does not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made.
Tecogen Media
& Investor Relations Contact Information:
|
Ariel F. Babcock, CFA
|
John N.
Hatsopoulos
|
P: (781)
466-6413
|
P:
781-622-1120
|
E:
Ariel.Babcock@tecogen.com
|
E:
John.Hatsopoulos@tecogen.com
|
TECOGEN
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
As of June 30,
2016 and December 31, 2015
(unaudited)
|
|
|
June 30,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
4,069,660
|
|
|
$
|
5,486,526
|
|
Short-term
investments
|
—
|
|
|
294,802
|
|
Accounts receivable,
net
|
6,241,054
|
|
|
5,286,863
|
|
Unbilled
revenue
|
1,214,218
|
|
|
1,072,391
|
|
Inventory,
net
|
4,940,315
|
|
|
5,683,043
|
|
Due from related
party
|
391,443
|
|
|
1,177,261
|
|
Prepaid and other
current assets
|
487,138
|
|
|
353,105
|
|
Total current
assets
|
17,343,828
|
|
|
19,353,991
|
|
Property, plant and
equipment, net
|
560,868
|
|
|
543,754
|
|
Intangible assets,
net
|
1,046,812
|
|
|
1,044,611
|
|
Goodwill
|
40,870
|
|
|
40,870
|
|
Other
assets
|
58,425
|
|
|
58,425
|
|
TOTAL
ASSETS
|
$
|
19,050,803
|
|
|
$
|
21,041,651
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
2,618,285
|
|
|
$
|
3,311,809
|
|
Accrued
expenses
|
1,036,782
|
|
|
1,066,860
|
|
Deferred
revenue
|
808,832
|
|
|
996,941
|
|
Total current
liabilities
|
4,463,899
|
|
|
5,375,610
|
|
Long-term
liabilities:
|
|
|
|
Deferred revenue, net
of current portion
|
296,085
|
|
|
273,162
|
|
Senior convertible
promissory note, related party
|
3,124,061
|
|
|
2,951,011
|
|
Total
liabilities
|
7,884,045
|
|
|
8,599,783
|
|
Commitments and
contingencies (Note 6)
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Tecogen Inc.
stockholders' equity:
|
|
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized; 19,161,579 and 18,478,990
issued and outstanding at June 30, 2016 and December 31,
2015
|
19,162
|
|
|
18,479
|
|
Additional paid-in
capital
|
34,203,702
|
|
|
34,501,640
|
|
Accumulated
deficit
|
(23,056,106)
|
|
|
(21,682,437)
|
|
Total Tecogen Inc.
stockholders' equity
|
11,166,758
|
|
|
12,837,682
|
|
Noncontrolling
interest
|
—
|
|
|
(395,814)
|
|
Total stockholders'
equity
|
11,166,758
|
|
|
12,441,868
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
19,050,803
|
|
|
$
|
21,041,651
|
|
TECOGEN
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six
months ended June 30, 2016 and 2015
(unaudited)
|
|
|
Three months ended
June 30,
|
|
Six months ended June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
Products
|
$
|
2,408,860
|
|
|
$
|
3,345,571
|
|
|
$
|
4,675,008
|
|
|
$
|
6,883,446
|
|
Services
|
3,278,448
|
|
|
3,038,260
|
|
|
6,087,815
|
|
|
5,603,819
|
|
Total
revenues
|
5,687,308
|
|
|
6,383,831
|
|
|
10,762,823
|
|
|
12,487,265
|
|
Cost of
sales
|
|
|
|
|
|
|
|
Products
|
1,767,052
|
|
|
2,224,415
|
|
|
3,319,768
|
|
|
4,778,053
|
|
Services
|
1,817,362
|
|
|
2,018,526
|
|
|
3,620,817
|
|
|
3,343,347
|
|
Total cost of
sales
|
3,584,414
|
|
|
4,242,941
|
|
|
6,940,585
|
|
|
8,121,400
|
|
Gross
profit
|
2,102,894
|
|
|
2,140,890
|
|
|
3,822,238
|
|
|
4,365,865
|
|
Operating
expenses
|
|
|
|
|
|
|
|
General and
administrative
|
2,002,172
|
|
|
1,890,503
|
|
|
3,894,392
|
|
|
4,077,632
|
|
Selling
|
335,089
|
|
|
324,384
|
|
|
850,121
|
|
|
818,058
|
|
Research and
development
|
151,663
|
|
|
228,318
|
|
|
370,621
|
|
|
404,481
|
|
Total operating
expenses
|
2,488,924
|
|
|
2,443,205
|
|
|
5,115,134
|
|
|
5,300,171
|
|
Loss from
operations
|
(386,030)
|
|
|
(302,315)
|
|
|
(1,292,896)
|
|
|
(934,306)
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest and other
income
|
2,770
|
|
|
685
|
|
|
5,661
|
|
|
9,788
|
|
Interest
expense
|
(44,053)
|
|
|
(30,351)
|
|
|
(86,434)
|
|
|
(60,410)
|
|
Total other expense,
net
|
(41,283)
|
|
|
(29,666)
|
|
|
(80,773)
|
|
|
(50,622)
|
|
Loss before income
taxes
|
(427,313)
|
|
|
(331,981)
|
|
|
(1,373,669)
|
|
|
(984,928)
|
|
Consolidated net
loss
|
(427,313)
|
|
|
(331,981)
|
|
|
(1,373,669)
|
|
|
(984,928)
|
|
Less: (Income) loss
attributable to the noncontrolling interest
|
11,774
|
|
|
(30,858)
|
|
|
64,962
|
|
|
4,625
|
|
Net loss attributable
to Tecogen Inc.
|
$
|
(415,539)
|
|
|
$
|
(362,839)
|
|
|
$
|
(1,308,707)
|
|
|
$
|
(980,303)
|
|
Net loss per share -
basic and diluted
|
$
|
(0.02)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.06)
|
|
Weighted average
shares outstanding - basic and diluted
|
19,088,828
|
|
|
16,338,909
|
|
|
18,783,909
|
|
|
16,282,027
|
|
TECOGEN
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months
ended June 30, 2016 and 2015
(unaudited)
|
|
|
June 30,
|
|
2016
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Consolidated net
loss
|
$
|
(1,373,669)
|
|
|
$
|
(984,928)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and amortization
|
131,941
|
|
|
138,828
|
|
Provision (recover) for inventory reserve
|
(40,000)
|
|
|
23,000
|
|
Stock-based compensation
|
88,177
|
|
|
51,497
|
|
Non-cash
interest expense
|
23,050
|
|
|
24,899
|
|
Loss
(gain) on sale of assets
|
640
|
|
|
(5,073)
|
|
Changes in
operating assets and liabilities
|
|
|
|
(Increase)
decrease in:
|
|
|
|
Short
term investments
|
294,802
|
|
|
291,047
|
|
Accounts
receivable
|
(954,191)
|
|
|
237,989
|
|
Unbilled
revenue
|
(141,827)
|
|
|
(896,001)
|
|
Inventory, net
|
782,728
|
|
|
280,480
|
|
Due from
related party
|
785,818
|
|
|
(372,570)
|
|
Prepaid
expenses and other current assets
|
(134,033)
|
|
|
(160,964)
|
|
Other
non-current assets
|
—
|
|
|
(5,100)
|
|
Increase (decrease)
in:
|
|
|
|
Accounts
payable
|
(693,524)
|
|
|
915,942
|
|
Accrued
expenses
|
(30,078)
|
|
|
331,447
|
|
Deferred
revenue
|
(165,186)
|
|
|
(712,759)
|
|
Net cash used in
operating activities
|
(1,425,352)
|
|
|
(842,266)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of property and equipment
|
(100,925)
|
|
|
(12,935)
|
|
Proceeds
from sale of assets
|
—
|
|
|
16,874
|
|
Purchases of intangible assets
|
(50,970)
|
|
|
(95,086)
|
|
Net cash used in
investing activities
|
(151,895)
|
|
|
(91,147)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds
(payments) on demand notes payable and line of credit to related
party
|
150,000
|
|
|
—
|
|
Payment
of stock issuance costs
|
(8,544)
|
|
|
—
|
|
Proceeds
from sale of restricted common stock, net
|
—
|
|
|
996,874
|
|
Proceeds
from the exercise of stock options
|
18,925
|
|
|
360,225
|
|
Net cash provided by
financing activities
|
160,381
|
|
|
1,357,099
|
|
Net increase
(decrease) in cash and cash equivalents
|
(1,416,866)
|
|
|
423,686
|
|
Cash and cash
equivalents, beginning of the period
|
5,486,526
|
|
|
1,186,033
|
|
Cash and cash
equivalents, end of the period
|
$
|
4,069,660
|
|
|
$
|
1,609,719
|
|
Supplemental
disclosures of cash flows information:
|
|
|
|
Cash paid for
interest
|
$
|
72,199
|
|
|
$
|
60,410
|
|
Stock exchange for
non-controlling interest in Ilios
|
330,852
|
|
|
—
|
|
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SOURCE Tecogen Inc.