via NewMediaWire -- Tecogen Inc. (OTCQX:TGEN), a leading
manufacturer of clean energy products, reported net income of $0.4
million for the quarter ended June 30, 2021 compared to a net
loss of $0.7 million in 2020, an improvement of $1.1 million. For
the six months ended June 30, 2021, net income was $2.2 million
compared to a net loss of $1.9 million, an improvement of $4.1
million. The increase in net income for both periods was primarily
due to the benefit from the CARES Act payroll support programs, and
to a lesser extent, from lower operating expenses and improved
gross margin. Our gross margin increased to 47.5% in the six months
ended June 30, 2021 compared to 37.0% for the same period in 2020.
Key Takeaways
Earnings Per Share
- Net income (loss) per share, basic and diluted, was net income
of $0.09 per share in the six months ended June 30, 2021 compared
to a loss of $0.07 in the six months ended June 30, 2020.
- Net income (loss) per share, basic and diluted, was net income
of $0.02 in the second quarter of 2021 compared to a loss of $0.03
in the second quarter of 2020.
Revenues
- Revenues for the quarter ended June 30, 2021 were $6.1
million compared to $7.4 million for the same period in 2020, a
17.3% decrease.
- Product revenue was $2.4 million in Q2 2021 compared to $3.8
million in the same period in 2020, a decline of 35.4%, primarily
due to lower cogeneration unit volume.
- Services revenue was $3.3 million in Q2 2021 compared to $3.4
million in the same period in 2020, a decline of 1.3%, primarily
due to reduced lower margin installation activity. Services
contract revenue increased 25.6% to $3.1 million compared to $2.5
million in the second quarter of 2020.
- Energy Production revenue increased by $95 thousand, or 34.2%,
to $371 thousand compared to the same period in 2020 due to the
resumption of business operations at our energy production
sites.
- For the six months ended June 30, 2021 revenues were $12.2
million compared to $15.4 million for the same period in 2020, a
decrease of $3.2 million or 20.8% year over year.
- Product revenue was $4.6 million in the six months ended June
30, 2021 compared to $6.8 million in the same period in 2020, a
decline of 33.2%, primarily due to lower cogeneration unit
volume.
- Services revenue was $6.6 million in the six months ended June
30, 2021 compared to $7.5 million in the same period in 2020, a
decline of 12.3%, primarily due to reduced lower margin
installation activity. Services contract revenue increased 18.8% to
$5.8 million compared to $4.9 million in the same period in
2020.
- Energy production revenue in the six months ended June 30, 2021
was $1.024 million, compared to $1.027 million for the same period
in 2020, a decrease of $3 thousand, or 0.3%.
Gross Profit
- Gross profit for the second quarter of 2021 was $2.8 million
compared to $2.9 million in the second quarter of 2020. Gross
margin improved to 46.3% in the second quarter compared to 39.1%
for the same period in 2020 due to higher Product margin which
increased to 43.1% in Q2 2021 from 41.4% in Q2 2020 and Services
margin which improved to 49.5% in Q1 2021 from 37.7% in Q1
2020.
- Gross profit for the six months ended June 30, 2021 was $5.8
million compared to $5.7 million for the same period in 2020, an
increase of $0.1 million, or 1.7%. During the six months ended June
30, 2021 gross margin increased to 47.5% compared to 37.0% for the
same period in 2020 due to higher Product margin which increased to
43.9% from 41.2% and higher Services margin which increased to
51.3% from 33.8%.
Operating Expenses
- Operating expenses decreased by 7% to $3.2 million for the
second quarter of 2021 compared to $3.4 million in the same period
of 2020.
- For the six months ended June 30, 2021 operating expenses
decreased $1.1 million, or 14.7%, to $6.2 million compared to $7.3
million in the same period in 2020.
The decreased operating expenses in the quarter and six month
periods were 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.
Adjusted EBITDA(1) was $567 thousand for the second quarter of
2021 compared to negative $363 thousand for the second quarter of
2020. (Adjusted EBITDA is defined as net income or loss
attributable to Tecogen, adjusted for interest, income taxes,
depreciation and amortization, stock-based compensation expense,
unrealized gain or loss on equity securities, goodwill impairment
charges and other non-cash non-recurring charges or gains including
abandonment of intangible assets and extinguishment of debt. See
the table following the Condensed Consolidated Statements of
Operations for a reconciliation from net income (loss) to Adjusted
EBITDA, as well as important disclosures about the company's use of
Adjusted EBITDA).
“Our core business areas continued to be negatively impacted by
COVID-19, but despite the challenging economic environment, we
achieved significant improvements in our gross margin and
operations,” commented Benjamin Locke, Tecogen's Chief Executive
Officer. “We expect Product sales to rebound as we move further
into 2021. Our Energy Production assets are gradually returning to
normal operation as COVID related closures and restrictions are
eased, and our Service maintenance revenues continue to grow each
quarter."
Operational Highlights:
- Qualified for Employee Retention Credit and recognized a $713
thousand benefit in the second quarter of 2021.
- Continued sales growth in the Controlled Environment
Agriculture (CEA) space with total capacity of Tecochill chillers
sold to cannabis cultivation facilities now in excess of 10,000
tons.
- Current sales backlog of equipment and installations as of
August 12, 2021 is $10.4 million, comprised of $10.2 million
of products and $0.2 million of installation services.
- Added two Manufacturers' Representatives to support Tecofrost
sales in parts of western United States and Canada.
- Filed a provisional patent application titled "High Efficiency
Hybrid Engine-Driven Variable Drive" with the United States Patent
and Trademark Office.
Conference Call Scheduled for Today at 11:00 am ET
Tecogen will host a conference call today to discuss the second
quarter results beginning at 11:00 am eastern time. To listen
to the call please dial (877) 407-7186 within the U.S. and
Canada, or (201) 689-8052 from other international
locations. Participants should ask to be joined to the
Tecogen Second Quarter 2021 earnings call. Please begin
dialing 10 minutes before the scheduled starting time. The
earnings press release will be available on the Company website at
www.Tecogen.com in the "News and Events" section under "About Us."
The earnings conference call will be webcast live. To view the
associated slides, register for and listen to the webcast, go to
https://ir.tecogen.com/ir-calendar. Following the call, the
recording will be archived for 14 days.
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 U.S. and Canada, or
(201) 612-7415 from other international locations and use
Conference Call ID#: 13672659.
About Tecogen
Tecogen Inc. designs, manufactures, sells, installs, and
maintains high efficiency, ultra-clean, cogeneration products
including engine-driven combined heat and power, air conditioning
systems, and high-efficiency water heaters for residential,
commercial, recreational and industrial use. The company provides
cost effective, environmentally friendly and reliable products for
energy production that, through patented technology, nearly
eliminate criteria pollutants and significantly reduce a customer’s
carbon footprint.
In business for over 35 years, Tecogen has shipped more than
3,000 units, supported by an established network of engineering,
sales, and service personnel across the United States. For more
information, please visit www.tecogen.com or contact us for a free
Site Assessment.
Tecogen, InVerde e+, Ilios, Tecochill, Tecopower, Tecofrost,
Tecopack and Ultera are registered or pending trademarks of Tecogen
Inc.
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 August 12, 2021, under “Risk Factors”, among the
factors that could cause actual results to differ materially from
past and projected future results are the following: fluctuations
in demand for our products and services, competing technological
developments, issues relating to research and development, the
availability of incentives, rebates, and tax benefits relating to
our products and services, changes in the regulatory environment
relating to our products and services, integration of acquired
business operations, and the ability to obtain financing on
favorable terms to fund existing operations and anticipated
growth.
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:
Benjamin LockeP: 781-466-6402E: Benjamin.Locke@tecogen.com
TECOGEN INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(unaudited)
|
June 30, 2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
3,185,478 |
|
|
$ |
1,490,219 |
|
Accounts receivable, net |
7,777,064 |
|
|
8,671,163 |
|
Unbilled revenue |
3,899,499 |
|
|
4,267,249 |
|
Employee retention credit |
713,268 |
|
|
— |
|
Inventories, net |
6,811,525 |
|
|
7,168,596 |
|
Prepaid and other current assets |
839,732 |
|
|
597,144 |
|
Total current
assets |
23,226,566 |
|
|
22,194,371 |
|
Property, plant and equipment, net |
2,025,334 |
|
|
2,283,846 |
|
Right of use assets |
2,168,100 |
|
|
1,632,574 |
|
Intangible assets, net |
1,244,373 |
|
|
1,360,319 |
|
Goodwill |
2,406,156 |
|
|
2,406,156 |
|
Other assets |
248,713 |
|
|
196,387 |
|
TOTAL
ASSETS |
$ |
31,319,242 |
|
|
$ |
30,073,653 |
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Note payable |
$ |
— |
|
|
$ |
837,861 |
|
Accounts payable |
2,597,737 |
|
|
4,183,105 |
|
Accrued expenses |
2,138,931 |
|
|
1,993,471 |
|
Deferred revenue |
1,119,943 |
|
|
1,294,157 |
|
Lease obligations, current |
617,540 |
|
|
506,514 |
|
Total current
liabilities |
6,474,151 |
|
|
8,815,108 |
|
Long-term
liabilities: |
|
|
|
Note payable, net of current portion |
1,874,269 |
|
|
1,036,339 |
|
Deferred revenue, net of current portion |
244,425 |
|
|
115,329 |
|
Lease obligations, long-term |
1,642,801 |
|
|
1,222,492 |
|
Unfavorable contract liability, net |
131,224 |
|
|
— |
|
Total
liabilities |
1,438,278 |
|
|
1,617,051 |
|
|
11,805,148 |
|
|
12,806,319 |
|
Commitments and
contingencies |
|
|
|
|
— |
|
|
— |
|
Stockholders’
equity: |
|
|
|
Tecogen Inc.
shareholders’ equity: |
|
|
|
Common stock,
$0.001 par value; 100,000,000 shares authorized; 24,850,261 and
24,850,261 issued and outstanding at June 30, 2021 and December 31,
2020, respectively |
24,850 |
|
|
24,850 |
|
Additional
paid-in capital |
56,908,194 |
|
|
56,814,428 |
|
Accumulated
deficit |
(37,363,283) |
|
|
(39,529,621) |
|
Total Tecogen
Inc. stockholders’ equity |
19,569,761 |
|
|
17,309,657 |
|
Non-controlling
interest |
(55,667) |
|
|
(42,323) |
|
Total
stockholders’ equity |
19,514,094 |
|
|
17,267,334 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
31,319,242 |
|
|
$ |
30,073,653 |
|
TECOGEN INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(unaudited)
|
Three Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
Revenues |
|
|
|
Products |
$ |
2,445,927 |
|
|
$ |
3,786,134 |
|
Services |
3,328,314 |
|
|
3,372,583 |
|
Energy production |
370,861 |
|
|
276,341 |
|
Total
revenues |
6,145,102 |
|
|
7,435,058 |
|
Cost of
sales |
|
|
|
Products |
1,390,725 |
|
|
2,220,456 |
|
Services |
1,679,386 |
|
|
2,102,735 |
|
Energy production |
232,353 |
|
|
205,876 |
|
Total cost of
sales |
3,302,464 |
|
|
4,529,067 |
|
Gross profit |
2,842,638 |
|
|
2,905,991 |
|
Operating
expenses |
|
|
|
General and administrative |
2,438,452 |
|
|
2,637,479 |
|
Selling |
580,871 |
|
|
602,383 |
|
Research and development |
132,883 |
|
|
166,027 |
|
Total operating
expenses |
3,152,206 |
|
|
3,405,889 |
|
Loss from
operations |
(309,568) |
|
|
(499,898) |
|
Other income
(expense) |
|
|
|
Interest and other income (expense), net |
(1,125) |
|
|
238 |
|
Interest expense |
(5,088) |
|
|
(56,253) |
|
Employee retention credit |
713,268 |
|
|
— |
|
Unrealized gain (loss) on investment securities |
18,749 |
|
|
(78,723) |
|
Total other
income (expense), net |
725,804 |
|
|
(134,738) |
|
Income (loss)
before provision for state income taxes |
416,236 |
|
|
(634,636) |
|
Provision for
state income taxes |
7,933 |
|
|
13,171 |
|
Consolidated net
income (loss) |
408,303 |
|
|
(647,807) |
|
(Income) loss
attributable to non-controlling interest |
(8,672) |
|
|
(6,081) |
|
Net income (loss)
attributable to Tecogen Inc. |
$ |
399,631 |
|
|
$ |
(653,888) |
|
Net income (loss)
per share - basic |
$ |
0.02 |
|
|
$ |
(0.03) |
|
Net income (loss)
per share - diluted |
$ |
0.02 |
|
|
$ |
(0.03) |
|
Weighted average
shares outstanding - basic |
24,850,261 |
|
|
24,850,261 |
|
Weighted average
shares outstanding - diluted |
25,125,210 |
|
|
24,850,261 |
|
Non-GAAP
financial disclosure (1) |
|
|
|
Net income (loss)
attributable to Tecogen Inc. |
$ |
399,631 |
|
|
$ |
(653,888) |
|
Interest expense,
net |
6,213 |
|
|
56,015 |
|
Income taxes |
7,933 |
|
|
13,171 |
|
Depreciation
& amortization, net |
117,404 |
|
|
103,485 |
|
EBITDA |
531,181 |
|
|
(481,217) |
|
Stock based
compensation |
54,681 |
|
|
39,494 |
|
Unrealized (gain)
loss on investment securities |
(18,749) |
|
|
78,723 |
|
Adjusted
EBITDA |
$ |
567,113 |
|
|
$ |
(363,000) |
|
TECOGEN INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(unaudited)
|
Six Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
Revenues |
|
|
|
Products |
$ |
4,568,649 |
|
|
$ |
6,837,894 |
|
Services |
6,609,458 |
|
|
7,532,673 |
|
Energy production |
1,024,156 |
|
|
1,027,191 |
|
Total
revenues |
12,202,263 |
|
|
15,397,758 |
|
Cost of
sales |
|
|
|
Products |
2,565,012 |
|
|
4,023,339 |
|
Services |
3,216,989 |
|
|
4,985,981 |
|
Energy production |
626,416 |
|
|
690,280 |
|
Total cost of
sales |
6,408,417 |
|
|
9,699,600 |
|
Gross profit |
5,793,846 |
|
|
5,698,158 |
|
Operating
expenses |
|
|
|
General and administrative |
4,892,305 |
|
|
5,326,941 |
|
Selling |
1,091,074 |
|
|
1,458,170 |
|
Research and development |
259,033 |
|
|
530,363 |
|
Total operating
expenses |
6,242,412 |
|
|
7,315,474 |
|
Loss from
operations |
(448,566) |
|
|
(1,617,316) |
|
Other income
(expense) |
|
|
|
Interest and
other income (expense), net |
(2,328) |
|
|
11,965 |
|
Interest
expense |
(9,728) |
|
|
(116,238) |
|
Gain on
extinguishment of debt |
1,887,859 |
|
|
— |
|
Employee
retention credit |
713,268 |
|
|
— |
|
Gain on sale of
investment securities |
6,046 |
|
|
— |
|
Unrealized gain
(loss) on investment securities |
56,246 |
|
|
(98,404) |
|
Total other
income (expense), net |
2,651,363 |
|
|
(202,677) |
|
Income (loss)
before provision for state income taxes |
2,202,797 |
|
|
(1,819,993) |
|
Provision for
state income taxes |
15,991 |
|
|
18,393 |
|
Consolidated net
income (loss) |
2,186,806 |
|
|
(1,838,386) |
|
(Income) loss
attributable to non-controlling interest |
(20,468) |
|
|
(17,889) |
|
Net income (loss)
attributable to Tecogen Inc. |
$ |
2,166,338 |
|
|
$ |
(1,856,275) |
|
Net income (loss)
per share - basic |
$ |
0.09 |
|
|
$ |
(0.07) |
|
Net income (loss)
per share - diluted |
$ |
0.09 |
|
|
$ |
(0.07) |
|
Weighted average
shares outstanding - basic |
24,850,261 |
|
|
24,850,256 |
|
Weighted average
shares outstanding - diluted |
25,102,470 |
|
|
24,850,256 |
|
|
Six Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
Non-GAAP
financial disclosure (1) |
|
|
|
Net income (loss)
attributable to Tecogen Inc. |
$ |
2,166,338 |
|
|
$ |
(1,856,275) |
|
Interest &
other expense, net |
12,056 |
|
|
104,273 |
|
Income taxes |
15,991 |
|
|
18,393 |
|
Depreciation
& amortization, net |
241,470 |
|
|
193,637 |
|
EBITDA |
2,435,855 |
|
|
(1,539,972) |
|
Gain on
extinguishment of debt |
(1,887,859) |
|
|
— |
|
Stock based
compensation |
93,766 |
|
|
81,730 |
|
Unrealized (gain)
loss on marketable securities |
(56,246) |
|
|
98,404 |
|
Gain on sale of
marketable securities |
(6,046) |
|
|
— |
|
Non-cash
abandonment of intangible assets |
7,400 |
|
|
179,944 |
|
Adjusted
EBITDA |
$ |
586,870 |
|
|
$ |
(1,179,894) |
|
(1) Non-GAAP Financial MeasuresIn addition to
reporting net income, a U.S. generally accepted accounting
principle (“GAAP”) measure, this news release contains information
about Adjusted EBITDA (net income (loss) attributable to Tecogen
Inc adjusted for interest, income taxes, depreciation and
amortization, stock-based compensation expense, unrealized gain or
loss on investment securities, goodwill impairment charges and
other non-cash non-recurring charges including abandonment of
certain intangible assets and extinguishment of debt), which is a
non-GAAP measure. The Company believes Adjusted EBITDA
allows investors to view its performance in a manner similar to the
methods used by management and provides additional insight into its
operating results. Adjusted EBITDA is not calculated
through the application of GAAP. Accordingly, it should
not be considered as a substitute for the GAAP measure of net
income and, therefore, should not be used in isolation of, but in
conjunction with, the GAAP measure. The use of any
non-GAAP measure may produce results that vary from the GAAP
measure and may not be comparable to a similarly defined non-GAAP
measure used by other companies.
TECOGEN INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(unaudited)
|
Six Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Consolidated net
income (loss) |
$ |
2,186,806 |
|
|
$ |
(1,838,386) |
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
Depreciation and amortization |
241,470 |
|
|
193,637 |
|
Gain on extinguishment of debt |
(1,887,859) |
|
|
— |
|
Employee retention credit |
(713,268) |
|
|
— |
|
Stock-based compensation |
93,766 |
|
|
81,730 |
|
Gain on sale of investment securities |
(6,046) |
|
|
— |
|
Unrealized (gain) loss on investment securities |
(56,246) |
|
|
98,404 |
|
Abandonment of intangible assets |
7,400 |
|
|
179,944 |
|
Non-cash interest expense |
— |
|
|
50,775 |
|
Changes in
operating assets and liabilities |
|
|
|
(Increase) decrease in: |
|
|
|
Accounts receivable |
894,100 |
|
|
6,405,936 |
|
Unbilled revenue |
367,750 |
|
|
538,032 |
|
Inventory |
357,072 |
|
|
(890,868) |
|
Prepaid assets and other current assets |
(242,588) |
|
|
(6,382) |
|
Other assets |
(537,197) |
|
|
532,293 |
|
Increase (decrease) in: |
|
|
|
Accounts payable |
(1,585,368) |
|
|
(1,197,576) |
|
Accrued expenses and other current liabilities |
290,342 |
|
|
284,506 |
|
Deferred revenue |
(45,118) |
|
|
(1,671,239) |
|
Other liabilities |
531,335 |
|
|
— |
|
Net cash provided
by (used in) operating activities |
(103,649) |
|
|
2,760,806 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
(47,504) |
|
|
(53,674) |
|
Proceeds from the sale of investment securities |
11,637 |
|
|
— |
|
Purchases of intangible assets |
(5,682) |
|
|
(123,254) |
|
Payment of stock issuance costs |
— |
|
|
(802) |
|
Distributions to non-controlling interest |
(33,812) |
|
|
(23,070) |
|
Net cash used in
investing activities |
(75,361) |
|
|
(200,800) |
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Proceeds from note payable |
1,874,269 |
|
|
1,874,200 |
|
Proceeds (payments) on revolving line of credit, net |
— |
|
|
(2,453,159) |
|
Proceeds from exercise of stock options |
— |
|
|
1,200 |
|
Net cash provided
by (used in) financing activities |
1,874,269 |
|
|
(577,759) |
|
Net increase in
cash and cash equivalents |
1,695,259 |
|
|
1,982,247 |
|
Cash and cash
equivalents, beginning of the period |
1,490,219 |
|
|
877,676 |
|
Cash and cash
equivalents, end of the period |
$ |
3,185,478 |
|
|
$ |
2,859,923 |
|
Supplemental
disclosures of cash flows information: |
|
|
|
Cash paid for interest |
$ |
— |
|
|
$ |
36,326 |
|
Cash paid for
taxes |
$ |
15,991 |
|
|
$ |
5,222 |
|
Tecogen (NASDAQ:TGEN)
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