Fourth Quarter and Year End Financial Highlights:
- As of
April 28, 2023 , the Company has an aggregate Sales Pipeline1 and Sales Order Backlog2 of$16.16M . This represents a 46% growth from the previous disclosure onNovember 29 th, 2022 and is an indication of the accelerating momentum behind Wastewater Energy Transfer (“WET”) projects. - Revenue for the three months ended
December 31, 2022 (“Q4 2022”) is$0.81M compared to$0.98M from the three months endedDecember 31, 2021 (“Q4 2021”) while Revenue for the year endedDecember 31, 2022 (“YE 2022”) is$1.94M compared to$2.7M (“YE 2021”) for the year endedDecember 31, 2021 . It is anticipated that the volatility of Revenue will smooth out as the Company’s Sales Pipeline matures and as the Company diversifies its Revenue generating opportunities. - Gross margin for Q4 2022 and YE 2022 was 23.5% and 28.9%, respectively. This compared with Gross margin of 26.2% and 36.8% for Q4 2021 and YE 2021, respectively. The decline in Gross margin was due to one-time inventory write offs and true ups of costs which created margin pressure in the quarter. Furthermore, the Company earned lower margin on a higher percentage of Revenue where the Company acted as a general contractor managing the installation of a SHARC WET system. SHARC Energy foresees Gross margins will improve in 2023 to YE 2021 levels.
- The Company reported an Adjusted EBITDA3 loss of
$0.77M and$2.62M and a Loss of$1.27M and$4.82M for Q4 2022 and YE 2022, respectively. The Company continues to strategically balance its investment into Sales Pipeline growth, which would include increasing head count in Sales and Operations and marketing activities, while taking into consideration working capital commitments in the near term.
Hanspaul Pannu, CFO of SHARC Energy, said, "As we continue to pioneer the growth of the Wastewater Energy Transfer industry, our focus on a sales distribution model has driven significant market awareness and penetration across
Pannu added, "We remain committed to our objective of building a strong sales pipeline. We have strategically balanced spending and working capital, acknowledging the initial volatility in our revenue from 2021 to 2022. As our sales pipeline matures and we diversify our revenue-generating opportunities, we anticipate the volatility to smooth out."
He continued, "With our strategic partnerships, such as with Subterra Renewables and
Pannu concluded, "Since going public in 2015, SHARC Energy has invested less than
YE 2022 Highlights and Subsequent Events
- False Creek Neighbourhood Energy Utility (“NEU”) Expansion. During Q4 2023, the Company commenced 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. This project is expected to increase the capacity of the current 3.2MW WET system to 9.8MW, making it the largest operating WET project inNorth America upon completion, with an additional carbon emission reduction of an estimated 4,400 tonnes per year. The project is expected to be completed in Q2/Q3 2023. Snowmass Base Village ,Colorado installs PIRANHA. A PIRANHA T15 WET system will be installed in Aura’s 21 slope-side residences, powered 100% by renewable energy resources within the residential building. Aura’s team is led byEast West Partners , a developer of high-end mountain resort communities, and supported by SHARC Energy’sColorado distributor,LONG Building Technologies . It is anticipated this unit will ship in Q2 2023.
- PIRANHAs in Canada’s Capital. HTS Ontario, a representative of SHARC Energy products, has been selected to supply two PIRANHA T15 WET systems to be installed in
Ottawa . This deal is a key milestone as it marks the beginning of HTS’s growing SHARC Energy pipeline turning over and it validates the Company’s strategy to support and leverage its representative network to help grow awareness and sales for its products in key markets. These units shipped in Q1 2023.
- Partnership with Salas O’Brien. The Company has entered into an agreement with Salas O’Brien, an employee-owned engineering firm with 55 offices, 1,600+ team members and more than 360 registered professionals. Together, the companies intend to establish and cultivate a collaborative and strategic relationship that will support the market with turnkey solutions tailored to carbon reduction and energy efficiency goals. SHARC Energy anticipates that this relationship will help accelerate the growth of the WET industry and accordingly, generate accretive pipeline growth of SHARC Energy WET products.
- Partnership with Subterra Renewables. The Company and
Subterra Capital Partners Inc. (“Subterra Renewables”), a leading full-service geothermal drilling provider with a proprietary Energy-as-a-Service (“EaaS”) model known as Aura™, announced onApril 27, 2023 , a strategic partnership to revolutionize the renewable thermal energy transfer landscape acrossNorth America . By combining SHARC Energy's innovative WET technology with Subterra's geothermal exchange systems, the partnership aims to bring unparalleled solutions to the market, capturing a greater share for both companies. - First Bite of the Big Apple. SHARC Energy is supporting Egg Geo, LLC, a global leader in geothermal, in the first proposed combined WET and geothermal system in the world. This innovative and groundbreaking system will utilize thermal energy transfer from the ground and wastewater to provide 100 percent of the heating, hot water and cooling load for 316 affordable housing units in two - 20 story multi-family towers. This one-of-a-kind project will be located in the
Bronx, New York .
New York State Leverages SHARC.New York State Governor Kathy Hochul’s recent announcement that construction has begun for the transformative$1.2 billion redevelopment of the former 27-acre Brooklyn Developmental Center property inBrooklyn's East New York neighborhood. The initial$373 million phase will create 576 affordable homes, a new 15,000-square-foot outpatient medical clinic, and 7,000 square feet of ground floor retail space. The initial phase of the development is comprised of two buildings with the current design having one featuring a SHARC WET System and the other a PIRANHA WET System.
- Sustainable Living Innovations (“SLI”). SHARC Energy’s PIRANHA and PIRANHA HC T5, T10 and T15 WET Systems have been selected by SLI for six new projects in design or under construction. The Company has received a purchase order from
California-Columbia Hydronics Corporation ("CHC") for the first of six projects, which is a PIRANHA T5 HC for SLI's new project inSeattle at8601 Aurora Avenue . This was shipped in Q4 2022. The remaining five projects currently in the design phase are anticipated to use a mix of 7 PIRANHA and PIRANHA HC T10 and T15’s for the various project’s heating and cooling needs and have expected shipment dates in 2024. - Seattle SHARC WET System. SHARC Energy has received a purchase order from CHC for a SHARC WET system that will be installed in the heart of
Seattle , a few minutes from the Space Needle, marking the first SHARC WET system showcasing the power of wastewater in the heart of thePacific Northwest USA . The system shipped in Q4 2023. - National Western Center. The National Western Center in
Denver, Colorado , is pioneering the largest-scale wastewater district-energy innovation operating inNorth America to date. The National Western Center will rely on two SHARC™ wastewater recovery systems placed in the heart of its 3.8-megawatt (MW) district energy system, creating a low-carbon campus that is sustainable and regenerative. The first phase of development is expected to recover the thermal energy from 3,000 gallons of wastewater every minute, preventing 2,600 metric tons of carbon dioxide annually from being emitted into the atmosphere. The project was commissioned in Q1 2022.
- lelǝḿ. A
Vancouver, B.C. 1,200 residential unit master-planned development's heating and cooling needs will be met by utilizing a SHARC Energy low-carbon wastewater energy exchange system as part of a centralized energy facility. The system installation and commissioning completed in Q1 2022.
Wastewater Energy Transfer Industry Supporting Policy
The outlook for the Wastewater Energy Transfer industry is experiencing signs of scale-up due to new supportive regulations and funding in several key markets across
Both
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Furthermore, the
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This legislation will promote the development of thermal energy networks throughout the State, providing benefits by reducing fossil fuel usage for heating and cooling through community-scale infrastructure solutions, along with employment opportunities for existing utility workers and new workers. The enabling legislation will build on the progress of, and complement, NYSERDA’s active community thermal program, which to-date has funded feasibility studies, detailed design studies, and other advanced project construction incentives to more than three dozen sites across the state.
Finally,
These policies along with the growing number of cities across
For complete financial information for the year ended
About SHARC Energy
SHARC Energy is publicly traded in
Learn more about SHARC Energy: Website | Investor Page | LinkedIn | YouTube | PIRANHA | SHARC
ON BEHALF OF THE BOARD
Chairman and Chief Executive Officer
For investor inquiries, please contact: | For media inquiries, please contact: |
Hanspaul Pannu | |
Chief Financial Officer | Director of Marketing & IT |
SHARC Energy | SHARC Energy |
Telephone: (604) 475-7710 ext. 4 | Telephone: 778-846-5406 |
Email: hanspaul.pannu@sharcenergy.com | Email: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 as a result 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 YE 2022 MD&A.
2 Sales Order Backlog is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the YE 2022 MD&A.
3 Adjusted EBITDA is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the YE 2022 MD&A.
Source: SHARC Energy
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