Canadian cleantech company, Thermal Energy International, reported revenue growth of 31% for its first half of fiscal 2018 ended November 30, 2017. Even more impressive, the Ottawa-based company’s reported order backlog reached a record high $17.5 million, which is approximately 133% of the company’s annual revenue in fiscal 2017.
For the first half of fiscal 2018 the company had revenue of $6.8 million, compared with $5.2 million for the first half of fiscal 2017. Sales of the company’s FLU-ACE® heat recovery systems increased by $2.4 million, or 132%, compared to the first six months of fiscal 2017. Heat recovery revenue in the first half of fiscal 2018 included revenue from five major ongoing projects.
“Fiscal 2018 is shaping up to be a banner year for Thermal Energy International,” said William Crossland, CEO of Thermal Energy. “We are experiencing strong demand for our proprietary energy efficiency solutions and our reported order backlog is at an all-time high. Heat recovery revenue in particular was up 132.4% in the first half of the year and we received our largest order on record – an $11 million energy efficiency project with Resolute FP Canada – subsequent to the end of the second quarter. We’ve also had several recent GEM™ orders, including four from two multinational consumer products companies, both of whom are part of our corporate account development strategy.”
Despite the higher revenue for the period, gross profit was on par with the first half of last year at approximately $3.4 million. This was the result of a larger portion of the sales mix being comprised of heat recovery systems versus the company’s higher margin venturi steam traps.
As a result of costs associated with additional sales and technical staff, and other costs related to strategic growth initiatives, Thermal Energy’s operating expenses were higher in the first half of the year. Despite these additional costs, operating expenses as a percentage of revenue decreased to 51.5% from 61% for the same period last year. However, the higher operating expenses in dollars resulted in a net loss of $110 thousand for the current period compared to net income of $95 thousand a year ago.
Subsequent to the end of the first half, back in December, Thermal Energy International received its largest order on record, an $11 million energy efficiency project with Resolute FP Canada Inc. The project included the installation of two FLU-ACE® Heat Recovery Systems and the conversion of the mill’s steam traps to Thermal Energy’s proprietary GEM Steam Trap system. The project is expected to be substantially completed and revenue earned over the next 17 months.
Including the $11 million project with Resolute FP Canada, Thermal Energy had an order backlog of approximately $17.5 million as at January 25, 2018, compared to $7.1 million when it reported its financial results for the first half a year earlier. Thermal Energy includes in “order backlog” the value of projects in respect of which purchase orders have been received but have not yet been reflected as revenue in the company’s published quarterly financial statements.
Thermal Energy International Inc. has offices in Ottawa, Canada as well as Bristol, U.K., United States, Germany, Italy and China. The Company’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG.
