Thermal Energy Reports Financial Results for the Fiscal Quarter and Nine Months ended February 28, 2011

OTTAWA, April 29 /CNW/ - Thermal Energy International Inc. (TSX-V:TMG) (www.thermalenergy.com) (the "Company" or "Thermal Energy") today announced its financial results for the fiscal quarter and nine months ended February 28, 2011.

Sales for the third quarter ended February 28, 2011 were $1,863,635, an increase of 43% compared with $1,306,548 in the same quarter of 2010.  Included in sales for the quarter was $317,925 for partial fulfilment of approximately $1.3 million in orders for GEM® Condensate return systems received from a major food manufacturer in the UK, as announced December 23, 2010 and February 18, 2011. Also included in sales for the quarter was $397,678 for a heat recovery system at the Royal National Orthopaedic Hospital in the UK as announced July 12, 2010.

For the nine months ended February 28, 2011 total sales were $7,787,433, up 86% compared to $4,176,011 in Fiscal Year 2010. In addition to the items noted in the above paragraph, sales for the nine months ended February 28, 2011 also included $3,499,241 related to the $4 million Kruger Products Limited heat recovery system announced December 23, 2009 and $483,721 related to the Kings College Hospital, UK heat recovery system announced March 12, 2010.

Gross profit for the third quarter ended February 28, 2011 was $1,140,077 (61%) up $327,755 or 40% compared with $812,322 (62%) in 2010. For the nine months ended February 28, 2011 gross profit was $3,619,581 (46%), up $937,293, or 35%, compared to $2,682,288 (64%) from the same period in 2010. The lower gross profit percentage in the nine months ended February 28, 2011 over the same period in the previous year was due to the higher proportion of sales from waste energy recovery products, which carry a lower margin than GEM® Condensate return systems.

Administration and Selling, Marketing and Business Development expenses in the third quarter ended February 28, 2011 totalled $1,056,212, a decrease of $139,911 or 12% from the $1,196,123 incurred in 2010. This decrease was due to cost cutting measures that the Company undertook towards the end of last year. For the nine months ended February 28, 2011 Administration and Selling, Marketing and Business Development expenses totalled $3,205,129, a decrease of $802,795 from the $4,007,924 incurred in the same period last year. Administration and Selling, Marketing and Business Development expenses for the nine months ended February 28, 2010 included $370,000 of non-cash provisions taken in the second quarter and $646,000 of expenses that were eliminated going forward as a result of cost cutting measures implemented during the year.

Profit before income taxes and non-controlling interest for the third quarter ended February 28, 2011 was $46,545, an improvement of $674,269 over the same period in the previous year. The year to date profit of $19,782 to February 28, 2011 was an improvement over the same period last year of $2,105,012 due to a combination of increased sales (up 86%) and reduced expenses (down 23%) compared to the same period in the previous year.

Liquidity and Solvency: The Corporation's working capital has increased steadily since May 31, 2010 and as at February 28, 2011 was $1,773,841. This represents an increase of $163,192 and $604,978 respectively for the three and nine months ended February 28, 2011. The increase in working capital is primarily the result of positive cash flow from operations defined as "Net loss" plus "Items not involving cash", plus "Lease payments received". Cash flow from operations totalled $167,807 and $500,740 respectively for the three and nine months ended February 28, 2011.

Business Update: The Company would like to highlight the following business activities from the last several months.

  1. As discussed above under "Sales" the heat recovery project at King's College Hospital in the UK that was announced March 12, 2010 was installed and commissioned during the nine months ending February 28, 2011 and is operating in line with expectations.

  2. Also as discussed above under "Sales" the heat recovery project at the Royal National Orthopaedic Hospital in the UK that was announced by the Corporation July 12, 2010 was installed and commissioned during the three months ending February 28, 2011 and is operating in line with expectations.

  3. On December 17, 2010 the Company signed a Letter of Intent with a major North American pulp and paper company outlining the two parties' intent to develop and, subject to financing and approval by the pulp and paper company's board of directors, implement on an exclusive basis heat recovery projects at three of the customer's locations.

  4. On January 24, 2011 the Company signed an agreement for approximately $129,000 with a second major North American pulp and paper company pursuant to which Thermal Energy will identify, develop and design the optimum heat recovery project for one of the customer's mills.

  5. On February 7, 2011 the Company received an order from an Ontario Hospital for approximately $126,000 to enhance and update a heat recovery system previously installed at the hospital.

  6. The Company is currently installing and commissioning a heat recovery project with a value of approximately $220,000, for a pharmaceutical company in China. This is the second heat recovery system installed in China by the Company. The first system, valued at approximately $68,000, was sold to one of the Company's UK based pharmaceutical customers and installed at its China based facility in the fourth quarter of last year.

"Thermal Energy continues to make solid progress in growing its revenue base, controlling expenses and generating positive cash flow. This marks the third straight quarter the company has generated positive cash flow from operations." commented William Crossland, President and CEO.

All figures are in Canadian dollars.  Full financial results including Management's Discussion and Analysis and accompanying notes to the financial results, are available on www.SEDAR.com and www.thermalenergy.com.

About Thermal Energy

Thermal Energy is an innovative clean technology company providing a variety of proprietary and proven energy and water efficiency, emission reduction, and bioenergy products and solutions to the industrial, commercial and institutional markets worldwide. Thermal Energy International Inc. is headquartered in Ottawa, Canada, with offices in the UK and China. Thermal Energy markets, sells, engineers, fabricates, constructs, installs and supports a number of complementary product lines including FLU-ACE® waste energy recovery solutions  and GEM® condensate return system solutions. Thermal Energy is also a fully accredited professional engineering firm, and offers advanced process and applications engineering services. FLU-ACE®, DRY-REX™, THERMALONOx™, THERMAL AUD™ and GEM® are trademarks of Thermal Energy International.

To find out more about Thermal Energy International Inc. (TSX-V: TMG), visit our website at http://www.thermalenergy.com.

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

 

SOURCE Thermal Energy International Inc.

For further information:

William Crossland
President and CEO
613-723-6776

 

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Thermal Energy International Inc.

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