Tecogen Announces Third Quarter Earnings

Quarterly Revenue expands by 44% as compared to the same period in 2013

WALTHAM, Mass., Nov. 13, 2014 /PRNewswire/ -- Tecogen® Inc. (NASDAQ: TGEN), a manufacturer and installer of high efficiency, Ultra clean combined heat and power products including natural gas engine-driven cogeneration, air conditioning systems, and high-efficiency water heaters for industrial and commercial use, reported revenues of $4,175,863 in the three months ended September 30, 2014, compared to $2,893,240 for the same period in 2013, an increase of 44%.

Major Highlights:

Financial

  • Product and Installation revenue increased by 148% compared to same period in 2013.
  • Service revenue was comparatively flat as the company temporarily diverted service manpower in bringing new service center online in Brooklyn.
  • Sales backlog of equipment and installations was $14.2 million at quarter end, compared to $12 million at the end of the second quarter.
  • Gross profit for the three months ended September 30, 2014 was $1,089,471 compared to $1,092,632, respectively for the same period in 2013.
  • Gross margins decreased to 26% from 38% for the quarter ended September 30, 2014 compared to the same period in 2013. The margin decrease is attributed to a large chiller order requiring significant design and fabrication upgrades to modernize the model line for this and future sales. These upgrades related to emissions after-treatment and a newer refrigerant. The company also incurred warranty expenses to complete a component exchange in our cogeneration systems to extend its useful service life.
  • Research and development expenses for the year and the quarter were $889,240 and $329,524, respectively, as the Company continues to expand development of its technology and secure necessary intellectual property.
  • Net loss for the three months ended September 30, 2014 was $1,467,734 compared to $1,414,517 for the same period in 2013. Our goal is for operations to be profitable by year end.
  • Net loss per share was $0.09 and $0.11 for the three months ended September 30, 2014 and 2013.

Sales & Operations

  • Orders for gas fired chillers continue to grow with additional sales in the US and Mexico.
  • Received our first order for Tecogen Ultra Emission System applied to a renewable gas engine in Southern California.
  • Received our first order for Tecogen Ultra Emission System applied in a natural gas emergency generator requiring air permit for extended hours of operation in Southern California.
  • Steady growth in orders for Ilios Water Sourced Heat Pumps with backlog of 8 units at quarter end.
  • Closed the sale of a tri-generation energy system for a large New Jersey hotel.
  • Announced the promotion of Benjamin Locke to Co-Chief Executive Officer.
  • Announced the hiring of John Maloney as Manufacturing Manager.

Conference Call Scheduled for Today at 12:00 pm ET
Tecogen will host a conference call today to discuss the third quarter results beginning at 12:00 pm ET.  To listen to the call dial (877) 870 4263 within the U.S., (855) 669-9657 from Canada, or (412) 317-0790 from other international locations. Participants should reference Tecogen to access the call.  The conference call will be recorded and available for playback one hour after the end of the call through Thursday, December 4th.

The earnings conference call will also be webcast live. To register for and listen to the webcast, go to http://investors.tecogen.com/webcast. Following the call, the webcast will be archived for 30 days.

About Tecogen

Tecogen manufactures, installs and maintains high efficiency, Ultra-clean Combined Heat and Power products including natural gas engine-driven cogeneration, air conditioning systems, and high-efficiency water heaters for industrial and commercial use. Tecogen has shipped more than 2,000 units, supported by an established network of engineering, sales, and service personnel across the United States. For more information, please visit www.tecogen.com.

FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company's website and in Securities and Exchange Commission filings. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Tecogen Media Contact Information:
David A. Garrison
Tecogen Inc.
P: 781-466-6403
E: david.garrison@tecogen.com 

Tecogen Investor Contact Information:
John N. Hatsopoulos
P: 781-622-1120
E: jhatsopoulos@tecogen.com

 

CONSOLIDATED BALANCE SHEETS

As of September 30, 2014 and December 31, 2013

(unaudited)



September 30,
2014


December 31,
2013

ASSETS






Current assets:






Cash and cash equivalents

$

2,446,082



$

7,713,899


Short-term investments, restricted

585,038




Accounts receivable, net

4,519,544



3,740,885


Unbilled revenue

125,071



646,398


Inventory, net

4,907,435



3,343,793


Due from related party

125,069




Deferred financing costs, net



140,433


Prepaid and other current assets

338,257



340,013


Total current assets

13,046,496



15,925,421


Property, plant and equipment, net

631,181



638,026


Intangible assets, net

1,019,944



953,327


Goodwill

40,870



40,870


Deferred financing costs, net

111,843




Other assets

53,325



72,425


TOTAL ASSETS

$

14,903,659



$

17,630,069








LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Demand notes payable and line of credit, related party

$



$

2,950,000


Senior convertible promissory note, related party



3,000,000


Accounts payable

3,085,856



2,338,046


Accrued expenses

990,084



1,139,554


Deferred revenue

1,949,522



613,915


Due to related party



119,667


Interest payable, related party



198,450


Total current liabilities

6,025,462



10,359,632


Long-term liabilities:






Deferred revenue, net of current portion

184,371



204,544


Senior convertible promissory note, related party

3,000,000




Total liabilities

9,209,833



10,564,176


Commitments and contingencies (Note 5)












Stockholders' equity:






Tecogen Inc. shareholders' equity:






Common stock, $0.001 par value; 100,000,000 shares authorized; 15,809,306 and 15,155,200 issued and outstanding at September 30, 2014 and December 31, 2013, respectively

15,809



15,155


Additional paid-in capital

24,927,880



22,463,996


Accumulated deficit

(18,924,762)



(15,209,212)


Total Tecogen Inc. stockholders' equity

6,018,927



7,269,939


Noncontrolling interest

(325,101)



(204,046)


Total stockholders' equity

5,693,826



7,065,893


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

14,903,659



$

17,630,069


 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and nine months ended September 30, 2014 and 2013

(unaudited)






Three months ended September
30,


Nine months ended September
30,


2014



2013



2014



2013


Revenues












Products

$

1,094,529



$

779,455



$

5,047,231



$

3,639,974


Services

3,081,334



2,113,785



7,884,246



6,103,044


Total revenues

4,175,863



2,893,240



12,931,477



9,743,018



Cost of sales












Products

1,052,199



571,803



4,043,783



2,793,743


Services

2,034,193



1,228,805



5,023,324



3,930,806


Total cost of sales

3,086,392



1,800,608



9,067,107



6,724,549



Gross profit

1,089,471



1,092,632



3,864,370



3,018,469



Operating expenses












General and administrative

1,751,080



1,437,068



5,424,143



4,358,569


Aborted public offering costs



320,924





320,924


Selling

476,601



488,895



1,303,329



1,054,366


Research and development

329,524



260,262



889,240



809,746


Total operating expenses

2,557,205



2,507,149



7,616,712



6,543,605



Loss from operations

(1,467,734)



(1,414,517)



(3,752,342)



(3,525,136)



Other income (expense)












Interest and other income

17,763



7,256



35,927



13,793


Interest expense

(30,666)



(45,072)



(122,818)



(104,836)


Total other expense, net

(12,903)



(37,816)



(86,891)



(91,043)



Consolidated net loss

(1,480,637)



(1,452,333)



(3,839,233)



(3,616,179)


Less: Loss attributable to the noncontrolling interest

32,839



64,654



123,683



277,627


Net loss attributable to Tecogen Inc.

$

(1,447,798)



$

(1,387,679)



$

(3,715,550)



$

(3,338,552)



Net loss per share - basic and diluted

$

(0.09)



$

(0.11)



$

(0.25)



$

(0.25)


Weighted average shares outstanding -
basic and diluted

15,447,726



13,212,894



15,160,041



13,212,894


 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2014 and 2013

(unaudited)




September 30,


2014


2013

CASH FLOWS FROM OPERATING ACTIVITIES:






Consolidated net loss

$

(3,839,233)



$

(3,616,179)


Adjustments to reconcile net loss to net cash used in operating activities:






Depreciation and amortization

250,655



194,260


Change in provision for allowance on accounts receivable

18,000



(34,700)


Stock-based compensation

120,972



(8,105)


Changes in operating assets and liabilities






(Increase) decrease in:






Accounts receivable

(796,659)



433,931


Unbilled revenue

521,327



(140,081)


Inventory, net

(1,563,642)



(961,185)


Due from related party

(125,069)



55,837


Prepaid expenses and other current assets

1,756



(127,673)


Other assets

19,100



(33,000)


Increase (decrease) in:






Accounts payable

747,810



1,746,631


Accrued expenses

(149,470)



283,355


Deferred revenue

1,315,434



270,954


Due to related party

(119,667)



396,328


Interest payable, related party

(198,450)



72,553


Net cash used in operating activities

(3,797,136)



(1,467,074)


CASH FLOWS FROM INVESTING ACTIVITIES:






Purchases of property and equipment

(148,833)



(163,824)


Disposal of property and equipment

7,569




Purchases of intangible assets

(130,905)



(332,862)


Cash paid for asset acquisition



(497,800)


Purchases of short-term investments, restricted

(585,038)



(202)


Maturities of short-term investments, restricted



182,061


Net cash used in investing activities

(857,207)



(812,627)


CASH FLOWS FROM FINANCING ACTIVITIES:






Payments for debt issuance costs

(9,668)




Payments made on demand notes payable and line of credit to related party

(2,950,000)



1,200,000


Proceeds from sale of common stock and restricted common stock, net

2,340,194




Proceeds from the exercise of stock options

6,000




Purchase of unvested restricted stock



(350)


Net cash (used in) provided by financing activities

(613,474)



1,199,650


Net decrease in cash and cash equivalents

(5,267,817)



(1,080,051)


Cash and cash equivalents, beginning of the period

7,713,899



1,572,785


Cash and cash equivalents, end of the period

$

2,446,082



$

492,734


Supplemental disclosures of cash flows information:






Cash paid for interest

$

294,219



$

7,235


Cash paid for asset acquisition:






  Inventory

$



$

17,400


  Property and equipment

$



$

199,530


  Intangible assets

$



$

240,000


  Goodwill

$



$

40,870


 

SOURCE Tecogen Inc.