• | Revenues were $7.87 million in the second quarter of 2019, a 7% decline from the same period in 2018. |
• | Revenue from energy production for the quarter was $578,299, a reduction from the previous year’s total by $929,923. This decline is due to the sales of certain of the Company’s energy producing assets and the seasonality of those assets that the company retained versus those sold as reported previously. |
• | Overall gross margin increased from 37% to 44%, resulting in gross profit of $3.4 million, an increase of 8% over the same period in 2018 resulting from an increase in service gross margin. |
• | Net loss for the three months ended June 30, 2019 was $357,129 compared to $754,350 for the same period in 2018, an improvement of $397,221, year over year. |
• | Net loss per share was $0.01 for the second quarter of 2019 compared to $0.03 for the comparative period in 2018. |
• | Adjusted EBITDA(1), excluding unrealized gain or loss on marketable equity securities, stock-compensation expense and merger related expenses, was negative $205,030 for the second quarter of 2019 compared to negative $329,541 for the second quarter of 2018, an improvement of $124,511. Adjusted EBITDA(1), excluding goodwill impairment, unrealized gain or loss on marketable equity securities, stock-compensation expense and merger related expenses, was positive $473,056 for the six months ended June 30, 2019 compared to negative $25,810 for the same period in 2018, an improvement of $498,866. |
• | Obtained order for 1 MW microgrid project for a large residential building under construction in New York City. |
• | Sold additional chillers to two different marijuana cultivation facilities located in Massachusetts, bringing total number of Tecochill chillers in Massachusetts cultivation facilities to 16. |
• | First sale of Tecochill to Nevada marijuana cultivation facility. |
• | First Tecofrost sale added to backlog with sale and installation planned for Massachusetts facility in the fourth quarter. |
• | Current sales backlog of equipment and installations as of August 9, 2019 is $28 million, comprised of $16 million of installation services and $12 million of products. |
• | Large 2-3 MW InVerde cogeneration order not currently in backlog expected to be decided in the third quarter of 2019 and would result in a new eleventh North American service center. |
• | Improvements in Tecochill design incorporated to improve heat recovery and wider range of outside temperature conditions. |
• | Ultera Emissions System - Forklift Truck Application. Following review of the testing from two engine tuning iterations designed to minimize emissions, Mitsubishi Caterpillar Forklift America Inc. (MCFA) and its parent company agreed to send emissions engineers to Tecogen’s facility in Massachusetts to pursue final optimization and certification as a near-zero emissions system. This collaboration is scheduled to begin during the last week of September 2019. |
• | Ultera Emissions System - Stationary Engines. The Company has received an order to complete the engineering of an upsized Ultera system for use in municipal water pumping in Southern California for an 800-horsepower Caterpillar natural gas engine. This system would have more than twice the capacity of the Company’s largest system to date. The engineering has been completed and will be submitted this week for review by the water district. Orders for two upsized systems are anticipated in early 2020. |
• | Ultera Emissions System - Automotive Catalyst Development. In the first phase of a program to advance the Ultera technology for mobile applications our research activities identified a promising catalyst material to improve performance of the Ultera process. Testing of the new catalyst is scheduled to conclude in September 2019. |
June 30, 2019 | December 31, 2018 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,087,970 | $ | 272,552 | |||||
Accounts receivable, net | 11,628,702 | 14,176,452 | |||||||
Unbilled revenue | 5,829,365 | 4,893,259 | |||||||
Inventory, net | 6,990,697 | 6,294,862 | |||||||
Due from related party | — | 9,405 | |||||||
Prepaid and other current assets | 640,516 | 722,042 | |||||||
Total current assets | 26,177,250 | 26,368,572 | |||||||
Property, plant and equipment, net | 3,763,500 | 11,273,115 | |||||||
Right of use assets | 2,421,581 | — | |||||||
Intangible assets, net | 1,554,634 | 2,893,990 | |||||||
Goodwill | 5,281,867 | 8,975,065 | |||||||
Other assets | 557,544 | 393,651 | |||||||
TOTAL ASSETS | $ | 39,756,376 | $ | 49,904,393 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Revolving line of credit, bank | $ | — | $ | 2,009,435 | |||||
Accounts payable | 6,234,846 | 7,153,330 | |||||||
Accrued expenses | 2,061,601 | 1,528,014 | |||||||
Deferred revenue | 1,832,493 | 2,507,541 | |||||||
Lease obligations, current | 520,667 | — | |||||||
Total current liabilities | 10,649,607 | 13,198,320 | |||||||
Long-term liabilities: | |||||||||
Deferred revenue, net of current portion | 96,937 | 2,375,700 | |||||||
Lease obligations, long-term | 1,900,914 | — | |||||||
Unfavorable contract liability, net | 2,754,497 | 6,292,599 | |||||||
Total liabilities | 15,401,955 | 21,866,619 | |||||||
Commitments and contingencies (Note 11) | |||||||||
Stockholders’ equity: | |||||||||
Tecogen Inc. stockholders’ equity: | |||||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,840,806 and 24,824,746 issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 24,841 | 24,825 | |||||||
Additional paid-in capital | 56,525,590 | 56,427,928 | |||||||
Accumulated deficit | (32,307,301 | ) | (28,670,095 | ) | |||||
Total Tecogen Inc. stockholders’ equity | 24,243,130 | 27,782,658 | |||||||
Noncontrolling interest | 111,291 | 255,116 | |||||||
Total stockholders’ equity | 24,354,421 | 28,037,774 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 39,756,376 | $ | 49,904,393 |
Three Months Ended | |||||||
June 30, 2019 | June 30, 2018 | ||||||
Revenues | |||||||
Products | $ | 2,445,448 | $ | 2,483,657 | |||
Services | 4,843,649 | 4,461,283 | |||||
Energy production | 578,299 | 1,508,225 | |||||
Total revenues | 7,867,396 | 8,453,165 | |||||
Cost of sales | |||||||
Products | 1,546,752 | 1,491,810 | |||||
Services | 2,530,175 | 2,962,040 | |||||
Energy production | 364,554 | 839,721 | |||||
Total cost of sales | 4,441,481 | 5,293,571 | |||||
Gross profit | 3,425,915 | 3,159,594 | |||||
Operating expenses | |||||||
General and administrative | 2,683,252 | 2,750,705 | |||||
Selling | 704,700 | 635,396 | |||||
Research and development | 372,545 | 409,779 | |||||
Total operating expenses | 3,760,497 | 3,795,880 | |||||
Loss from operations | (334,582 | ) | (636,286 | ) | |||
Other income (expense) | |||||||
Interest income | 66 | 4,830 | |||||
Interest expense | (17,005 | ) | (9,802 | ) | |||
Unrealized gain (loss) on investment securities | 19,681 | (59,042 | ) | ||||
Total other income (expense), net | 2,742 | (64,014 | ) | ||||
Loss before provision for state income taxes | (331,840 | ) | (700,300 | ) | |||
Provision for state income taxes | 15,955 | 38,864 | |||||
Consolidated net loss | (347,795 | ) | (739,164 | ) | |||
Income attributable to the noncontrolling interest | (9,334 | ) | (15,186 | ) | |||
Net loss attributable to Tecogen Inc. | $ | (357,129 | ) | $ | (754,350 | ) | |
Net loss per share - basic and diluted | $ | (0.01 | ) | $ | (0.03 | ) | |
Weighted average shares outstanding - basic and diluted | 24,826,311 | 24,818,459 |
Non-GAAP financial disclosure (1) | ||||||||
Net income (loss) attributable to Tecogen Inc. | $ | (357,129 | ) | $ | (754,350 | ) | ||
Interest expense, net | 16,939 | 4,972 | ||||||
Income taxes | 15,955 | 38,864 | ||||||
Depreciation & amortization, net | 98,988 | 187,069 | ||||||
EBITDA | (225,247 | ) | (523,445 | ) | ||||
Stock based compensation | 39,898 | 38,062 | ||||||
Unrealized (gain) loss on investment securities | (19,681 | ) | 59,042 | |||||
Merger related expenses | — | 96,800 | ||||||
Adjusted EBITDA | $ | (205,030 | ) | $ | (329,541 | ) |
Six Months Ended | ||||||||
June 30, 2019 | June 30, 2018 | |||||||
Revenues | ||||||||
Products | $ | 5,469,974 | $ | 6,157,163 | ||||
Services | 8,754,945 | 9,180,669 | ||||||
Energy production | 1,819,108 | 3,290,760 | ||||||
Total revenues | 16,044,027 | 18,628,592 | ||||||
Cost of sales | ||||||||
Products | 3,490,214 | 3,900,925 | ||||||
Services | 5,004,708 | 5,744,894 | ||||||
Energy production | 1,164,431 | 1,985,376 | ||||||
Total cost of sales | 9,659,353 | 11,631,195 | ||||||
Gross profit | 6,384,674 | 6,997,397 | ||||||
Operating expenses | ||||||||
General and administrative | 5,338,663 | 5,540,255 | ||||||
Selling | 1,397,954 | 1,310,514 | ||||||
Research and development | 717,627 | 712,009 | ||||||
Gain on sale of assets | (1,081,049 | ) | — | |||||
Goodwill impairment | 3,693,198 | — | ||||||
Total operating expenses | 10,066,393 | 7,562,778 | ||||||
Loss from operations | (3,681,719 | ) | (565,381 | ) | ||||
Other income (expense) | ||||||||
Interest income | 598 | 3,758 | ||||||
Interest expense | (45,031 | ) | (22,815 | ) | ||||
Unrealized loss on investment securities | (19,680 | ) | (78,723 | ) | ||||
Total other expense, net | (64,113 | ) | (97,780 | ) | ||||
Loss before provision for state income taxes | (3,745,832 | ) | (663,161 | ) | ||||
Provision for state income taxes | 7,786 | 38,864 | ||||||
Consolidated net loss | (3,753,618 | ) | (702,025 | ) | ||||
(Income) loss attributable to the noncontrolling interest | 116,412 | (31,567 | ) | |||||
Net loss attributable to Tecogen Inc. | $ | (3,637,206 | ) | (733,592 | ) | |||
Net loss per share - basic and diluted | $ | (0.15 | ) | $ | (0.03 | ) | ||
Weighted average shares outstanding - basic and diluted | 24,822,555 | 24,811,034 |
Non-GAAP financial disclosure (1) | |||||||||
Net loss attributable to Tecogen Inc. | $ | (3,637,206 | ) | $ | (733,592 | ) | |||
Interest & other expense, net | 44,433 | 19,057 | |||||||
Income taxes | 7,786 | 38,864 | |||||||
Depreciation & amortization, net | 267,232 | 386,250 | |||||||
EBITDA | (3,317,755 | ) | (289,421 | ) | |||||
Stock based compensation | 77,933 | 78,478 | |||||||
Unrealized (gain) loss on marketable securities | 19,680 | 78,723 | |||||||
Merger related expenses | — | 106,410 | |||||||
Goodwill impairment | 3,693,198 | — | |||||||
Adjusted EBITDA | $ | 473,056 | $ | (25,810 | ) |
Six Months Ended | |||||||||
June 30, 2019 | June 30, 2018 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Consolidated net loss | $ | (3,753,618 | ) | $ | (702,025 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation, accretion and amortization, net | 267,232 | 386,250 | |||||||
Gain on contract termination | — | (124,732 | ) | ||||||
Provision on inventory reserve | — | 1,000 | |||||||
Stock-based compensation | 77,933 | 78,478 | |||||||
Goodwill impairment | 3,693,198 | — | |||||||
(Gain) loss on sale of assets | (1,081,049 | ) | 13,343 | ||||||
Provision for losses on accounts receivable | 29,849 | 4,395 | |||||||
Non-cash interest expense | 12,087 | — | |||||||
Changes in operating assets and liabilities, net of effects of acquisitions | |||||||||
(Increase) decrease in: | |||||||||
Accounts receivable | 2,517,901 | (1,732,029 | ) | ||||||
Unbilled revenue | (936,106 | ) | (345,324 | ) | |||||
Inventory | (695,835 | ) | (403,785 | ) | |||||
Due from related party | 9,405 | 585,492 | |||||||
Prepaid expenses and other current assets | (15,282 | ) | (83,840 | ) | |||||
Other non-current assets | 59,683 | 74,424 | |||||||
Increase (decrease) in: | |||||||||
Accounts payable | (918,484 | ) | (1,017,610 | ) | |||||
Accrued expenses and other current liabilities | (380,351 | ) | 529,325 | ||||||
Deferred revenue | (966,776 | ) | 247,669 | ||||||
Interest payable, related party | — | (52,265 | ) | ||||||
Net cash used in operating activities | (2,080,213 | ) | (2,541,234 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Purchases of property and equipment | (52,444 | ) | (149,453 | ) | |||||
Proceeds from sale of assets | 5,000,000 | 3,606 | |||||||
Purchases of intangible assets | (22,738 | ) | (149,264 | ) | |||||
Cash acquired in asset acquisition | — | 442,786 | |||||||
Expenses associated with asset acquisition | — | (900 | ) | ||||||
Payment of stock issuance costs | (1,011 | ) | — | ||||||
Distributions to noncontrolling interest | (27,413 | ) | (34,300 | ) | |||||
Net cash provided by investing activities | 4,896,394 | 112,475 | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Payments on revolving line of credit, net | (2,021,519 | ) | 2,702,828 | ||||||
Payments for debt issuance costs | — | (145,011 | ) | ||||||
Proceeds from the exercise of stock options | 20,756 | 63,305 | |||||||
Payment on loan due to related party | — | (850,000 | ) | ||||||
Net cash provided by (used in) financing activities | (2,000,763 | ) | 1,771,122 | ||||||
Change in cash and cash equivalents | 815,418 | (657,637 | ) | ||||||
Cash and cash equivalents, beginning of the period | 272,552 | 1,673,072 | |||||||
Cash and cash equivalents, end of the period | $ | 1,087,970 | $ | 1,015,435 | |||||
Supplemental disclosures of cash flows information: | |||||||||
Cash paid for interest | $ | 23,551 | $ | 79,079 | |||||
Cash paid for taxes | $ | 28,524 | $ | 38,864 |