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| 8-K - CURRENT REPORT - THERMOENERGY CORP | v338644_8k.htm |
News Release – March 19, 2013
Investor Relations Contact
Chris Camarra: 212-398-3487
ccamarra@allianceadvisors.net
Media Contact
Marc Bane: 978-443-2378
mbane@banemarketing.com
ThermoEnergy Corporation Announces 25% Revenue Increase for 2012
With Renewed Focus on Strong Technology Platform and Operational Excellence
Worcester, MA, March 19, 2013 - ThermoEnergy Corporation (OTCBB: TMEN), a diversified technologies company engaged in the development and sale of wastewater treatment and power generation technologies in global markets, today announced revenue increased 25% to $7.0 million for the fiscal year ended December 31, 2012. The company generated gross profit of $173,000 in 2012.
Mr. James F. Wood, Chairman and Chief Executive Officer of ThermoEnergy stated, “Since joining the company in January 2013 I have been working with the management team and board of directors in refocusing the company on its core competency – the manufacture and sale of systems that economically treat, recover for reuse, and capture the value in industrial wastewater.
“With more than 20 years of operation in the field at a variety of industrial sites, ThermoEnergy’s CAST® technology platform is a proven, cost-effective solution to treat and recover a wide range of challenging wastewater streams,” said Wood. “While we continue to build our sales pipeline in traditional industrial markets, we recognize the significant potential for our technology in the energy sector where growing shale oil and gas production, power generation, and biofuel production create tremendous demands on water resources. We are now focusing on these markets and have already made significant inroads with our TurboFrac, FracGen, and ARP wastewater recovery systems.”
Mr. Wood continued, “While the company will remain highly focused on building our sales pipeline in wastewater management systems, I am pleased to report that Unity Power Alliance (UPA), a joint venture between ThermoEnergy and Itea, is working together with MIT and Georgia Tech to complete the modeling, design, production, and testing of a bench scale unit utilizing UPA's POXC™ technology for the clean combustion of fossil fuels.”
Operational and Financial Highlights:
| · | Full year revenues increased to $7.0M compared to $5.6M in 2011. |
| · | Expanded sales and marketing organization to better develop top line growth opportunities. |
| · | Piloted combination of CAST™ and membrane technology into oil & gas market, resulting in sale of first system. |
| · | Sold first ARP system for removal and recovery of concentrated ammonia in wastewater. |
| · | Delivered full-scale demonstration unit to treat digestate for biogas applications. |
| · | Initiated cost reduction program during second half of fiscal year. |
| · | Recruited Itea, S.p.A. to join Unity Power Alliance, the company's vehicle to develop and commercialize the development of coal-fired emissions-free electricity generation. |
| · | Awarded a $1M down-select grant to Unity Power Alliance, resulting in $900K subcontract award to ThermoEnergy for construction and project management. |
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Financial Results for the Year Ended December 31, 2012
For the twelve month period ended December 31, 2012 the Company recorded revenues of $6,971,000, a 25% increase compared to revenues of $5,583,000 in 2011. In 2012, ThermoEnergy commercialized its first CAST™ ARP unit to remove ammonia from industrial wastewater, and field piloted FracGen and Turbofrac to treat waters in the oil and gas market resulting in the first sale of a FracGen unit to treat source water with high brine concentrations. The company continued production of the New York City DEP project through its termination on November 29th.
Gross profit for the fiscal year ended December 31, 2012 was $173,000 or 2.5% of revenues. Improvements achieved during the first three quarters were negatively affected by spending overruns on the Paiton ARP system.
General and administrative expenses totaled $4,751,000 in 2012, a decrease of $118,000 compared to 2011. The decrease is attributable to lower compensation and consulting expenses as part of our cost reduction program.
Engineering, research and development expenses totaled $460,000 in 2012, an increase of $161,000 compared to 2011.
Selling expenses totaled $2,855,000 in 2012, an increase of $407,000 compared to 2011. The increase is mainly due to increased business development activities in 2012 as we developed our FracGen technology for use in the oil and gas industries and performed significant pilot work for developing opportunities in the biogas industry.
Net loss for 2012 was $0.07 per share as compared to a loss of $0.30 per share for 2011. The weighted average shares outstanding for 2012 was 103,184,422.
The Company had cash on hand at December 31, 2012 of $4.7 million.
Investor Conference Call
The company will host a conference call and webcast tomorrow morning at 9:00 a.m. EDT. Management will make a brief presentation focusing on the company's results, strategies and operating plans. Those wishing to dial in to the call via telephone can do so at Toll Free: 1-877-941-1427. Toll/International: 1-480-629-9664 Conference ID: 4604670.
A live webcast will be available at: http://public.viavid.com/index.php?id=103738
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About ThermoEnergy
Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide development, sales and commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com.
THIS PRESS RELEASE INCLUDES STATEMENTS THAT MAY CONSTITUTE "FORWARD LOOKING" STATEMENTS, USUALLY CONTAINING THE WORDS "ESTIMATE", "PROJECT", "EXPECT" OR SIMILAR EXPRESSIONS. FORWARD LOOKING STATEMENTS INHERENTLY INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT EXPECTATIONS. BY MAKING THESE FORWARD LOOKING STATEMENTS, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE STATEMENTS FOR REVISIONS OR CHANGES.
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THERMOENERGY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
In thousands, except share and per share amounts
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue | $ | 1,351 | $ | 2,008 | $ | 6,971 | $ | 5,583 | ||||||||
| Less: cost of revenue | 1,560 | 1,859 | 6,798 | 5,179 | ||||||||||||
| Gross profit (loss) | (209 | ) | 149 | 173 | 404 | |||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | 800 | 1,213 | 4,751 | 4,869 | ||||||||||||
| Engineering, research and development | 97 | 22 | 460 | 299 | ||||||||||||
| Sales and marketing | 667 | 767 | 2,855 | 2,448 | ||||||||||||
| Total operating expenses | 1,564 | 2,002 | 8,066 | 7,616 | ||||||||||||
| Loss from operations | (1,773 | ) | (1,853 | ) | (7,893 | ) | (7,212 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Derivative liability income (expense) | 537 | (27 | ) | 1,637 | 3,936 | |||||||||||
| Other derivative expense | (2 | ) | — | (567 | ) | — | ||||||||||
| Loss on extinguishment of debt | — | — | — | (12,551 | ) | |||||||||||
| Equity in losses of joint ventures | (22 | ) | (3 | ) | (8 | ) | (389 | ) | ||||||||
| Interest expense, net | (174 | ) | (105 | ) | (529 | ) | (1,142 | ) | ||||||||
| Other expense | (3 | ) | (3 | ) | (22 | ) | (28 | ) | ||||||||
| Total other income (expense) | 336 | (138 | ) | 511 | (10,174 | ) | ||||||||||
| Net loss | (1,437 | ) | (1,991 | ) | (7,382 | ) | (17,386 | ) | ||||||||
| Net loss attributable to noncontrolling interest | 1 | — | 4 | 57 | ||||||||||||
| Net loss attributable to ThermoEnergy Corporation | $ | (1,436 | ) | $ | (1,991 | ) | $ | (7,378 | ) | $ | (17,329 | ) | ||||
| Net loss per share attributable to ThermoEnergy Corporation, basic and diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.30 | ) | ||||
| Weighted average shares used in computing loss per share, basic and diluted | 120,086,260 | 57,748,620 | 103,184,422 | 56,819,885 | ||||||||||||
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THERMOENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and par value amounts)
December 31, 2012 | December 31, 2011 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 4,657 | $ | 3,056 | ||||
| Accounts receivable, net | 1,246 | 4,228 | ||||||
| Note receivable - affiliate | 100 | — | ||||||
| Costs in excess of billings | 597 | 132 | ||||||
| Inventories | 53 | 167 | ||||||
| Deposits | 1,566 | 262 | ||||||
| Other current assets | 146 | 328 | ||||||
| Total Current Assets | 8,365 | 8,173 | ||||||
| Property and equipment, net | 668 | 544 | ||||||
| Other assets | — | 72 | ||||||
| TOTAL ASSETS | $ | 9,033 | $ | 8,789 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,143 | $ | 2,640 | ||||
| Short term borrowings | 4,191 | — | ||||||
| Convertible debt, current portion | 1,250 | 1,250 | ||||||
| Accrued payroll taxes | 399 | 599 | ||||||
| Billings in excess of costs | 4,922 | 5,131 | ||||||
| Derivative liability, current portion | 20 | 706 | ||||||
| Unbilled costs | 1,545 | 19 | ||||||
| Other current liabilities | 989 | 1,215 | ||||||
| Total Current Liabilities | 15,459 | 11,560 | ||||||
| Long Term Liabilities: | ||||||||
| Derivative liability | 2,214 | 101 | ||||||
| Convertible debt, net | 1,838 | 1,571 | ||||||
| Other long term liabilities | 133 | 160 | ||||||
| Total Long Term Liabilities | 4,185 | 1,832 | ||||||
| Total Liabilities | 19,644 | 13,392 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Deficiency: | ||||||||
| Preferred Stock, $0.01 par value: authorized: 30,000,000 shares at December 31, 2012 and 2011: | ||||||||
| Series A Convertible Preferred Stock, liquidation value of $1.20 per share: designated, issued and outstanding: 208,334 shares at December 31, 2012 and 2011 | 2 | 2 | ||||||
| Series B Convertible Preferred Stock, liquidation preference of $2.40 per share: designated: 12,000,000 shares at December 31, 2012 and 2011; issued and outstanding: 11,664,993 shares at December 31, 2012 and 2011 | 117 | 117 | ||||||
| Common Stock, $.001 par value: authorized – 425,000,000 shares at December 31, 2012 and 2011; issued: 120,588,372 shares at December 31, 2012 and 85,167,098 shares at December 31, 2011; outstanding: 120,454,575 shares at December 31, 2012 and 85,033,180 shares at December 31, 2011 | 120 | 85 | ||||||
| Additional paid-in capital | 110,062 | 108,727 | ||||||
| Accumulated deficit | (120,892 | ) | (113,510 | ) | ||||
| Treasury stock, at cost: 133,797 shares at December 31, 2012 and 2011 | (18 | ) | (18 | ) | ||||
| Total ThermoEnergy Corporation Stockholders’ Deficiency | (10,609 | ) | (4,597 | ) | ||||
| Noncontrolling interest | (2 | ) | (6 | ) | ||||
| Total Stockholders’ Deficiency | (10,611 | ) | (4,603 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | $ | 9,033 | $ | 8,789 | ||||
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THERMOENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Year Ended December 31, | ||||||||
| 2012 | 2011 | |||||||
| (Unaudited) | ||||||||
| Operating Activities: | ||||||||
| Net loss | $ | (7,382 | ) | $ | (17,386 | ) | ||
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock option expense | 755 | 1,002 | ||||||
| Common stock issued for services | 88 | 114 | ||||||
| Loss on extinguishment of debt | — | 12,513 | ||||||
| Loss on disposal of equipment | 131 | 62 | ||||||
| Equity in losses of joint ventures | 8 | 389 | ||||||
| Derivative liability income | (1,637 | ) | (3,936 | ) | ||||
| Other derivative expense | 567 | — | ||||||
| Non-cash interest added to debt | 90 | 245 | ||||||
| Depreciation | 119 | 89 | ||||||
| Amortization of discount on convertible debt | 154 | 687 | ||||||
| Increase (decrease) in cash arising from changes in assets and liabilities: | ||||||||
| Accounts receivable | 2,982 | (3,185 | ) | |||||
| Costs in excess of billings | (465 | ) | (132 | ) | ||||
| Inventories | (125 | ) | (102 | ) | ||||
| Deposits | (1,304 | ) | (262 | ) | ||||
| Other current assets | 350 | (45 | ) | |||||
| Accounts payable | (497 | ) | 1,918 | |||||
| Billings in excess of costs | (209 | ) | 3,251 | |||||
| Unbilled costs | 1,526 | (369 | ) | |||||
| Other current liabilities | (503 | ) | (934 | ) | ||||
| Other long term liabilities | (27 | ) | (20 | ) | ||||
| Net cash used in operating activities | (5,379 | ) | (6,101 | ) | ||||
| Investing Activities: | ||||||||
| Investment in joint ventures | (100 | ) | (400 | ) | ||||
| Issuance of note receivable to affiliate | (100 | ) | — | |||||
| Purchases of property and equipment | (135 | ) | (135 | ) | ||||
| Net cash used in investing activities | (335 | ) | (535 | ) | ||||
| Financing Activities: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs of $349 in 2012 and $196 in 2011 | 3,124 | 2,436 | ||||||
| Proceeds from issuance of short term borrowings | 4,191 | 5,760 | ||||||
| Payments on convertible promissory notes | — | (2,803 | ) | |||||
| Net cash provided by financing activities | 7,315 | 5,393 | ||||||
| Net change in cash | 1,601 | (1,243 | ) | |||||
| Cash, beginning of year | 3,056 | 4,299 | ||||||
| Cash, end of year | $ | 4,657 | $ | 3,056 | ||||
| Supplemental schedule of non-cash financing activities: | ||||||||
| Conversion and tender of convertible debt and accrued interest to Series B Convertible Preferred Stock and warrants | $ | — | $ | 14,138 | ||||
| Debt premium recognized on convertible debt | $ | — | $ | (131 | ) | |||
| Accrued interest added to debt | $ | 23 | $ | 153 | ||||
| Recognition of derivative liabilities | $ | 3,064 | $ | — | ||||
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