Net Income of $3.6 million YTD 2021 and $1.5 million for Q3 2021
Diluted earnings per share of $0.14/share YTD 2021 and $0.06/share for Q3 2021
Key Takeaways
Earnings Per Share
- Net income (loss) per share, basic and diluted, was net income of
$0.15 and$0.14 per share, respectively, in nine months endedSeptember 30, 2021 compared to a loss of$0.08 and$0.08 per share in the nine months endedSeptember 30, 2020 . - Net income (loss) per share, basic and diluted, was net income of
$0.06 in the third quarter of 2021 compared to a loss of$0.01 in the third quarter of 2020.
Revenues
- Revenues for the quarter ended
September 30, 2021 were$5.0 million compared to$7.2 million for the same period in 2020, a 30.3% decrease.- Product revenue was
$1.9 million in Q3 2021 compared to$2.7 million in the same period in 2020, a decline of 30.8%, primarily due to lower cogeneration and chiller unit volume. - Services revenue was
$2.8 million in Q3 2021 compared to$4.1 million in the same period in 2020, a decline of 31.4%, primarily due to reduced lower margin installation activity. Services contract revenue increased 5.9% to$2.8 million compared to$2.6 million in the third quarter of 2020. - Energy Production revenue decreased by
$53 thousand , or 14.5%, to$315 thousand in Q3 2021 compared to$369 thousand in the same period in 2020.
- Product revenue was
- For the nine months ended
September 30, 2021 revenues were$17.2 million compared to$22.6 million for the same period in 2020, a decrease of$5.4 million or 23.8% year over year.- Product revenue was
$6.4 million in the nine months endedSeptember 30, 2021 compared to$9.5 million in the same period in 2020, a decline of 32.5%, primarily due to lower cogeneration unit volume. - Services revenue was
$9.4 million in the nine months endedSeptember 30, 2021 compared to$11.7 million in the same period in 2020, a decline of 19.0%, primarily due to reduced lower margin installation activity. Services contract revenue increased 14.3% to$8.6 million compared to$7.5 million in the same period in 2020. - Energy production revenue in the nine months ended
September 30, 2021 was$1,339 thousand , compared to$1,396 thousand for the same period in 2020, a decrease of$56 thousand , or 4.0%.
- Product revenue was
Gross Profit
- Gross profit for the third quarter of 2021 was
$2.3 million compared to$2.8 million in the third quarter of 2020. Gross margin improved to 46.7% in the third quarter compared to 38.7% for the same period in 2020 due to higher Product margin which increased to 44.6% in Q3 2021 from 40.2% in Q3 2020 and Services margin which improved to 48.1% in Q3 2021 from 37.0% in Q3 2020. - Gross profit for the nine months ended
September 30, 2021 was$8.1 million compared to$8.5 million for the same period in 2020, a decrease of$0.3 million , or 4.1%. During the nine months endedSeptember 30, 2021 gross margin increased to 47.3% compared to 37.0% for the same period in 2020 due to higher Product margin which increased to 44.1% from 40.9% and higher Services margin which increased to 50.4% from 34.9%.
Operating Expenses
- Operating expenses increased by 8.6% to
$3.3 million for the third quarter of 2021 compared to$3.0 million in the same period of 2020. Operating expenses increased due to increased payroll and payroll related expenses and sales commissions compared to Q3 2020. - For the nine months ended
September 30, 2021 operating expenses decreased$0.8 million , or 7.9%, to$9.5 million compared to$10.3 million in the same period in 2020. The decrease in operating expenses in the nine month period was primarily due to cost controls, resulting in decreased payroll and payroll related expenses and reductions in other operating expenses compared to the same periods in 2020.
Loss from Operations
- Our loss from operations for the three months ended
September 30, 2021 was$0.9 million compared to a loss of$0.2 million for the same period in 2020, an increase of$0.7 million . The increase in our loss from operations is due primarily to the lower revenue for our Products and Services Segment and our Energy Production Segment and an increase in operating expenses. - For the nine months ended
September 30, 2021 , our loss from operations was$1.4 million compared to a loss of$1.8 million for the same period in 2020, a decrease of$0.5 million . The decrease in our loss from operations is due primarily to the$0.8 decrease in operating expenses.
Adjusted EBITDA(1) was a negative
“This quarter was challenging due to the significant supply chain impacts on our Product Segment. We have mitigated a majority of these impacts, but were unable to ship some product during Q3 due to supplier constraints. As a result our Product Segment revenue was significantly impacted,” commented
Operational Highlights:
- Issued a press release on
November 10, 2021 announcing an order for 12 InVerde E+ units and 3 Tecochill chillers which are scheduled to be shipped during Q4 2021 and Q1 2022. - Recognized Employee Retention Credits of
$0.6 million and$1.3 million , respectively, in the third quarter and in the nine months of 2021. - Paycheck Protection Program Second Draw Loan forgiven in full on
September 8, 2021 . - Sales backlog as of
November 10, 2021 is$11.4 million , comprised of$11.2 million of products and$0.2 million of installation services.
Conference Call Scheduled for
The earnings conference call will be recorded and available for playback one hour after the end of the call. To listen to the playback, dial (877) 660-6853 within the
About
In business for over 35 years,
Forward Looking Statements
This press release and any accompanying documents, contain “forward-looking statements” which may describe strategies, goals, outlooks or other non-historical matters, or projected revenues, income, returns or other financial measures, that may include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "potential," "will," "should," "could," "likely," or "may" and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements.
In addition to those factors described in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and on our Form 8-K filed on
In addition to GAAP financial measures, this press release includes certain non-GAAP financial measures, including adjusted EBITDA which excludes certain expenses as described in the presentation. We use Adjusted EBITDA as an internal measure of business operating performance and believe that the presentation of non-GAAP financial measures provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance by eliminating items that vary from period to period without correlation to our core operating performance and highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.
Tecogen Media & Investor Relations Contact Information:
P: 781-466-6402
E: Benjamin.Locke@tecogen.com
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,351,231 | $ | 1,490,219 | |||
Accounts receivable, net | 7,728,737 | 8,671,163 | |||||
Unbilled revenue | 3,842,282 | 4,267,249 | |||||
Employee retention credit | 1,276,021 | — | |||||
Inventories, net | 7,922,044 | 7,168,596 | |||||
Prepaid and other current assets | 572,783 | 597,144 | |||||
Total current assets | 24,693,098 | 22,194,371 | |||||
Property, plant and equipment, net | 1,917,483 | 2,283,846 | |||||
Right of use assets | 2,019,166 | 1,632,574 | |||||
Intangible assets, net | 1,234,047 | 1,360,319 | |||||
2,406,156 | 2,406,156 | ||||||
Other assets | 210,800 | 196,387 | |||||
TOTAL ASSETS | $ | 32,480,750 | $ | 30,073,653 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Note payable | $ | — | $ | 837,861 | |||
Accounts payable | 3,546,950 | 4,183,105 | |||||
Accrued expenses | 2,216,673 | 1,993,471 | |||||
Deferred revenue | 1,850,371 | 1,294,157 | |||||
Lease obligations, current | 628,950 | 506,514 | |||||
Total current liabilities | 8,242,944 | 8,815,108 | |||||
Long-term liabilities: | |||||||
Note payable, net of current portion | — | 1,036,339 | |||||
Deferred revenue, net of current portion | 250,981 | 115,329 | |||||
Lease obligations, long-term | 1,479,495 | 1,222,492 | |||||
Deferred payroll tax liability, net of current portion | 131,224 | — | |||||
Unfavorable contract liability | 1,348,892 | 1,617,051 | |||||
Total liabilities | 11,453,536 | 12,806,319 | |||||
Commitments and contingencies | — | — | |||||
Stockholders’ equity: | |||||||
Common stock, | 24,850 | 24,850 | |||||
Additional paid-in capital | 56,965,083 | 56,814,428 | |||||
Accumulated deficit | (35,896,586) | (39,529,621) | |||||
21,093,347 | 17,309,657 | ||||||
Non-controlling interest | (66,133) | (42,323) | |||||
Total stockholders’ equity | 21,027,214 | 17,267,334 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 32,480,750 | $ | 30,073,653 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended | |||||||
Revenues | |||||||
Products | $ | 1,871,332 | $ | 2,705,422 | |||
Services | 2,829,244 | 4,125,590 | |||||
Energy production | 315,292 | 368,695 | |||||
Total revenues | 5,015,868 | 7,199,707 | |||||
Cost of sales | |||||||
Products | 1,036,396 | 1,617,626 | |||||
Services | 1,467,019 | 2,597,729 | |||||
Energy production | 170,518 | 197,608 | |||||
Total cost of sales | 2,673,933 | 4,412,963 | |||||
Gross profit | 2,341,935 | 2,786,744 | |||||
Operating expenses | |||||||
General and administrative | 2,473,190 | 2,318,789 | |||||
Selling | 656,885 | 563,857 | |||||
Research and development | 122,031 | 111,253 | |||||
Total operating expenses | 3,252,106 | 2,993,899 | |||||
Loss from operations | (910,171) | (207,155) | |||||
Other income (expense) | |||||||
Interest and other income (expense), net | (4,798) | (12) | |||||
Interest expense | (3,855) | (4,845) | |||||
Gain on extinguishment of debt | 1,885,655 | — | |||||
Employee retention credit | 562,253 | — | |||||
Unrealized gain (loss) on investment securities | (37,497) | — | |||||
Total other income (expense), net | 2,401,758 | (4,857) | |||||
Income (loss) before provision for state income taxes | 1,491,587 | (212,012) | |||||
Provision for state income taxes | 3,000 | 9,397 | |||||
Consolidated net income (loss) | 1,488,587 | (221,409) | |||||
Income attributable to the non-controlling interest | (21,890) | (10,511) | |||||
Net income (loss) attributable to | $ | 1,466,697 | $ | (231,920) | |||
Net income (loss) per share - basic | $ | 0.06 | $ | (0.01) | |||
Net income (loss) per share - diluted | $ | 0.06 | $ | (0.01) | |||
Weighted average shares outstanding - basic | 24,850,261 | 24,850,261 | |||||
Weighted average shares outstanding - diluted | 25,154,905 | 24,850,261 |
Three Months Ended | |||||||
Non-GAAP financial disclosure (1) | |||||||
Net income (loss) attributable to | $ | 1,466,697 | $ | (231,920) | |||
Interest expense, net | 8,653 | 4,857 | |||||
Income taxes | 3,000 | 9,397 | |||||
Depreciation & amortization, net | 116,166 | 100,304 | |||||
EBITDA | 1,594,516 | (117,362) | |||||
Gain on extinguishment of debt | (1,885,655) | — | |||||
Stock based compensation | 56,889 | 50,582 | |||||
Unrealized loss on investment securities | 37,497 | — | |||||
Adjusted EBITDA | $ | (196,753) | $ | (66,780) |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Nine Months Ended | |||||||
Revenues | |||||||
Products | $ | 6,439,981 | $ | 9,543,316 | |||
Services | 9,438,702 | 11,658,263 | |||||
Energy production | 1,339,448 | 1,395,886 | |||||
Total revenues | 17,218,131 | 22,597,465 | |||||
Cost of sales | |||||||
Products | 3,601,408 | 5,640,965 | |||||
Services | 4,684,008 | 7,583,710 | |||||
Energy production | 796,933 | 887,888 | |||||
Total cost of sales | 9,082,349 | 14,112,563 | |||||
Gross profit | 8,135,782 | 8,484,902 | |||||
Operating expenses | |||||||
General and administrative | 7,365,495 | 7,645,729 | |||||
Selling | 1,747,959 | 2,022,027 | |||||
Research and development | 381,064 | 641,616 | |||||
Total operating expenses | 9,494,518 | 10,309,372 | |||||
Loss from operations | (1,358,736) | (1,824,470) | |||||
Other income (expense) | |||||||
Interest and other income (expense), net | (7,127) | 11,953 | |||||
Interest expense | (13,583) | (121,084) | |||||
Gain on extinguishment of debt | 3,773,014 | — | |||||
Employee retention credit | 1,276,021 | — | |||||
Gain on sale of investment securities | 6,046 | — | |||||
Unrealized gain (loss) on investment securities | 18,749 | (98,403) | |||||
Total other income (expense), net | 5,053,120 | (207,534) | |||||
Income (loss) before provision for state income taxes | 3,694,384 | (2,032,004) | |||||
Provision for state income taxes | 18,991 | 27,791 | |||||
Consolidated net income (loss) | 3,675,393 | (2,059,795) | |||||
Income attributable to non-controlling interest | (42,358) | (28,400) | |||||
Net income (loss) attributable to | $ | 3,633,035 | $ | (2,088,195) | |||
Net income (loss) per share - basic | $ | 0.15 | $ | (0.08) | |||
Net income (loss) per share - diluted | $ | 0.14 | $ | (0.08) | |||
Weighted average shares outstanding - basic | 24,850,261 | 24,850,257 | |||||
Weighted average shares outstanding - diluted | 25,131,165 | 24,850,257 |
Nine Months Ended | |||||||
Non-GAAP financial disclosure (1) | |||||||
Net income (loss) attributable to | $ | 3,633,035 | $ | (2,088,195) | |||
Interest & other expense, net | 20,710 | 109,131 | |||||
Income taxes | 18,991 | 27,791 | |||||
Depreciation & amortization, net | 357,636 | 293,941 | |||||
EBITDA | 4,030,372 | (1,657,332) | |||||
Gain on extinguishment of debt | (3,773,014) | — | |||||
Stock based compensation | 150,655 | 132,312 | |||||
Unrealized (gain) loss on marketable securities | (18,749) | 98,403 | |||||
Gain on sale of marketable securities | (6,046) | — | |||||
Non-cash abandonment of intangible assets | 7,400 | 179,944 | |||||
Adjusted EBITDA | $ | 390,618 | $ | (1,246,673) |
(1) Non-GAAP Financial Measures
In addition to reporting net income, a
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Consolidated net income (loss) | $ | 3,675,393 | $ | (2,059,795) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 357,636 | 293,941 | |||||
Gain on extinguishment of debt | (3,773,014) | — | |||||
Employee retention credit | (1,276,021) | — | |||||
Stock-based compensation | 150,655 | 132,312 | |||||
Provision for doubtful accounts | 52,000 | — | |||||
Gain on disposal of assets | (9,787) | — | |||||
Gain on sale of investment securities | (6,046) | — | |||||
Unrealized (gain) loss on investment securities | (18,749) | 98,403 | |||||
Abandonment of intangible assets | 7,400 | 179,944 | |||||
Non-cash interest expense | — | 51,190 | |||||
Changes in operating assets and liabilities | |||||||
(Increase) decrease in: | |||||||
Accounts receivable | 890,374 | 5,683,941 | |||||
Unbilled revenue | 424,967 | 51,389 | |||||
Inventory | (753,447) | (737,570) | |||||
Prepaid assets and other current assets | 24,361 | 117,109 | |||||
Other assets | (387,847) | 532,293 | |||||
Increase (decrease) in: | |||||||
Accounts payable | (636,156) | (1,455,881) | |||||
Accrued expenses and other current liabilities | 378,970 | 145,848 | |||||
Deferred revenue | 691,867 | (1,619,696) | |||||
Other liabilities | 379,440 | — | |||||
Net cash provided by operating activities | 171,996 | 1,413,428 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (84,160) | (59,952) | |||||
Proceeds from the sale of investment securities | 11,637 | — | |||||
Purchases of intangible assets | (56,349) | (123,252) | |||||
Proceeds from sale of assets | 9,787 | — | |||||
Payment of stock issuance costs | — | (1,951) | |||||
Distributions to non-controlling interest | (66,168) | (41,740) | |||||
Net cash used in investing activities | (185,253) | (226,895) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from note payable | 1,874,269 | 1,874,200 | |||||
Payments on revolving line of credit, net | — | (2,452,329) | |||||
Proceeds from exercise of stock options | — | 1,200 | |||||
Net cash provided by (used in) financing activities | 1,874,269 | (576,929) | |||||
Net increase in cash and cash equivalents | 1,861,012 | 609,604 | |||||
Cash and cash equivalents, beginning of the period | 1,490,219 | 877,676 | |||||
Cash and cash equivalents, end of the period | $ | 3,351,231 | $ | 1,487,280 | |||
Supplemental disclosures of cash flows information: | |||||||
Cash paid for interest | $ | — | $ | 62,007 | |||
Cash paid for taxes | $ | 18,991 | $ | 27,791 |
Source:
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