Thermal Energy slips into the red; says better times are ahead

Courtney Symons
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Despite lower revenues and a net loss, Thermal Energy International Inc. continues to expand its sales and distribution capabilities as it gears up for larger numbers down the pipeline, the company announced in its quarterly results published late Tuesday.

(Stock image)

In its second quarter of fiscal 2013, Thermal Energy brought in $1.3 million in revenues, compared to $4.7 million for the same period the year previous – a decrease of 72 per cent. It was no surprise this quarter didn’t match up, however, as the previous year’s high figure came from heat recovery revenue from two large contracts, the company stated. There were no equivalent contracts in the three month period ending Nov. 30, 2012.

The company recorded a net loss of $800,000 during the quarter, down from its net income of $500,000 for the corresponding period in fiscal 2012. But 63.5 per cent of its gross profit came from revenues, compared to 45.4 per cent the year previous. That was the result of a 53 per cent increase in sales for the company’s GEM steam traps during the quarter compared to the previous year, according to the company.

Operating expenses of $1.6 million were incurred during the quarter because of the addition of five new employees and increased investor relations costs.

Over the past two years, Thermal Energy says it has doubled its in-house sales and marketing team and trained approximately 200 sales agents employed by distributor partners.

“We continue to expand our sales and distribution network and focus on contracts of all sizes in a variety of key industries,” stated president and CEO William Crossland in a company release. “Over time this approach is expected to strengthen the company’s long term growth prospects, reduce our dependence on single large contracts and smooth out our revenue stream quarter-to-quarter.”

The quarter included a $330,000 purchase order from a major hospital for the installation of its GEM steam trap technology, and another $300,000 purchase order from a Fortune 500 food and beverage company to install a heat recovery system. It also included a $750,000 contract with a major hospital for the installation of a heat recovery system.

As of Jan. 29, the company has approximately $3.1 million in purchase orders in backlog, all of which are expected to be completed during this fiscal year.

Thermal Energy is an Ottawa-based clean-tech company providing a variety of proprietary energy efficiency, emission reduction, water efficiency and bioenergy products and solutions to international industrial, commercial and institutional markets.

Geographic location: Ottawa

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