SHARC Energy Announces Q1 2024 Financial Results
May 16 2024 - 8:15AM
SHARC International Systems Inc. (CSE:
SHRC) (FSE: IWIA) (OTCQB: INTWF) ("SHARC Energy" or the
“Company”) announces it has filed financial results for
the three months ended March 31, 2024. All figures are in Canadian
Dollars and in accordance with IFRS unless otherwise stated.
First Quarter Financial Highlights:
- As of May 16, 2024, the Company has
a Sales Pipeline1 of $17.0 million (M) and Sales Order Backlog2 of
$2.3M. Sales Pipeline saw a marginal increase of 1% or $0.1M while
revenue recognition improved, drawing down Sales Order
Backlog by $0.7M since April 29, 2024
disclosure. The Company has hit an
inflection point in the maturity of its Sales Pipeline, giving
management confidence that 2024 will be a transformative year for
SHARC Energy.
- Revenue for the three months ended
March 31, 2024 (“Q1 2024”) is $0.8M,
representing ~50% of the full year revenue in
2023. On a year over year (YoY) basis, this represents a
6% increase versus the three months ended March 31, 2023
(“Q1 2023”).
- Gross margin for Q1 2024 stood at a
solid 38%, demonstrating our resilience despite a slight decrease
from the impressive 42% recorded in Q1 2023. Management remains
optimistic that these margins align well with our expectations for
the coming quarters.
- Working capital is $2.0M, which
includes $0.5M of cash, as of March 31, 2024. The Company does not
hold any debt, except for standard operating payables and
liabilities. The leadership team is currently in
discussions with working capital facility lenders to utilize the
expanding Sales Order Backlog as a strategic tool to facilitate the
funding required for the Company's ongoing growth
initiatives.
Hanspaul Pannu, CFO of SHARC Energy, said, "The
results of Q1 2024 confirms SHARC Energy’s pipeline has reached a
key maturity milestone with the delivery of revenue previously
reported as Sales Order Backlog on April 29, 2024. There are
several projects indicating signs of conversion from Sales Pipeline
to Sales Order Backlog which will supplement the Revenue recognized
in Q1 2024 and affirm continued stability and growth of revenue in
the near and long term. As the Company continues to balance our
working capital and our Sales Pipeline, SHARC Energy is now able to
leverage its Sales Order Backlog for access to working capital
facilities that will support the growth of SHARC Energy. Securing
these solutions will provide the Company with necessary balance
sheet flexibility while reducing the reliance on equity investment.
SHARC Energy is currently in the process of reviewing and
soliciting term sheets from lenders."
“TEN solutions for decarbonization of thermal
energy loads continue to grow in awareness and acceptance in North
America with SHARC learning of projects being planned across the
continent. In the Greater Vancouver, British Columbia region alone,
there are several municipal or utility supported TENs ranging in
size and scale, similar to the False Creek Neighborhood Energy
Utility or leləm̓ projects, in different stages of development that
will increase SHARC Energy's local footprint over the next few
years. In the United States, legislation allowing or mandating
utilities to develop thermal energy network demonstration projects
or pilots have been passed in four states including the State of
New York, where the Company has installations in progress, projects
in design and a growing list of leads looking to implement WET
TENs,” added Michael Albertson, President of SHARC Energy US.
Q1 2024 Highlights and Subsequent Events
- PIRANHA receives unanimous
approval from Massachusetts Plumbing and Gas Fitting
Board. Subsequent to Q1 2024, the Company received
unanimous approval from the Massachusetts Board of State Examiners
of Plumbers and Gas Fitters for ten PIRNAHA pilot sites in the
State. The Company is currently collaborating with a real estate
investment trust on a PIRANHA retrofit project, leveraging a 50%
cost share from Eversource Energy for a PIRANHA feasibility study
under the Massachusetts Save Technical Assistance Program.
- PIRANHA’s reach expands
into California. The Company received a purchase order for
four (4) PIRANHA T15 WET systems for a 26-storey mixed-use
development in Berkeley, California. This project marks the largest
individual PIRANHA project in the Company’s history to date and
marks the continued expansion of the Company into California. These
units expect to ship in 2024.
- False
Creek Neighbourhood Energy Utility (“NEU”)
Expansion. The Company continued work on
the supply and maintenance agreement with the City of Vancouver for
the provision and maintenance of five SHARC systems for the False
Creek NEU Expansion. During the period, the Company completed and
billed milestone 3 of 5 of the agreement, where all components have
been delivered to site. The project is expected to be completed
before the end of 2024.
- Purchase order received for
Whitney Young retrofit featured in NYSERDA Empire Building
Challenge. The Company received a purchase order for a
SHARC 660 WET system for the Whitney Young Manor recapitalization
project in Yonkers, New York. The Whitney Young Manor will undergo
a $22 million renovation, with nearly $12 million allocated to the
project’s decarbonization effort, inclusive of all energy
efficiency measures. The retrofit project will highlight how to
leverage a recapitalization opportunity to comprehensively retrofit
energy systems and modernize an affordable housing complex. The
system shipped in Q1 2024.
- Purchase Order received for
Phase 1 of transformative $1.2B development to create 2,400
affordable homes, a medical clinic, and retail in Brooklyn, New
York. The Company received a purchase order for a SHARC
660 WET system to be included in the first phase of a
transformative $1.2 billion redevelopment in Brooklyn’s East New
York neighborhood led by Apex Building Company, L+M Development
Partners, RiseBoro Community Partnership, and Services for the
Underserved. The system shipped Q1 2024.
For complete financial information for the three
months ended March 31, 2024, please see the Condensed Consolidated
Interim Financial Statements and Management Discussion and Analysis
(“MD&A”) filed on SEDAR at www.sedar.com.
About SHARC
Energy
SHARC International Systems Inc. is a world
leader in energy recovery from the wastewater we send down the
drain every day. SHARC Energy's systems recycle thermal energy from
wastewater, generating one of the most energy-efficient and
economical systems for heating, cooling & hot water production
for commercial, residential, and industrial buildings.
SHARC Energy is publicly traded in
Canada (CSE: SHRC), the United States (OTCQB: INTWF) and Germany
(Frankfurt: IWIA) and you can find out more on our SEDAR
profile.
Learn more about SHARC Energy: Website |
Investor Page | LinkedIn | YouTube | PIRANHA | SHARC
ON BEHALF OF THE BOARD
Lynn MuellerChairman and Chief Executive Officer |
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For investor inquiries, please
contact:Hanspaul PannuChief Financial OfficerSHARC
EnergyTelephone: (604) 475-7710 ext. 4Email:
hanspaul.pannu@sharcenergy.com |
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For media inquiries, please contact:Mike
TanyiDirector of Marketing & ITSHARC EnergyTelephone:
778-846-5406Email: mike.tanyi@sharcenergy.com |
The Canadian Securities Exchange does not accept
responsibility for the adequacy or accuracy of this release.
Forward-Looking
Statements
Certain statements contained in this news
release may constitute forward-looking information. Forward-looking
information is often, but not always, identified using words such
as “anticipate”, “plan”, “estimate”, “expect”, “may”, “will”,
“intend”, “should”, and similar expressions. Forward-looking
information involves known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. SHARC Energy’s actual results could differ
materially from those anticipated in this forward-looking
information because of regulatory decisions, competitive factors in
the industries in which the Company operates, prevailing economic
conditions, and other factors, many of which are beyond the control
of the Company. SHARC Energy believes that the
expectations reflected in the forward-looking information are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking information
should not be unduly relied upon. Any forward-looking information
contained in this news release represents the Company’s
expectations as of the date hereof and is subject to change after
such date. The Company disclaims any intention or obligation to
update or revise any forward-looking information whether because of
new information, future events or otherwise, except as required by
applicable securities legislation.
1 Sales Pipeline is a non-IFRS measure. Please see discussion of
Alternative Performance Measures and Non-IFRS Measures in the Q1
2024 MD&A.2 Sales Order Backlog is a non-IFRS measure. Please
see discussion of Alternative Performance Measures and Non-IFRS
Measures in the Q1 2024 MD&A.