Thermal Energy Reports Financial Results for the Fiscal Quarter ended August 31, 2011

OTTAWA, Nov. 28, 2011 /CNW/ - Thermal Energy International Inc. (TSXV:TMG) (www.thermalenergy.com) (the "Company" or "Thermal Energy") today announced its financial results for the fiscal quarter ended August 31, 2011.

Sales for the first quarter ended August 31, 2011 were $1,431,686, compared with $2,985,667 in the same quarter last year. Sales of GEM® condensate return systems increased 16% while sales of waste energy recovery systems decreased by $1,682,739. The decrease in sales of waste energy recovery systems is explained by the completion of the $4.0 million Kruger Products contract announced December 23, 2009 before any significant revenue is earned on either the $5.8 million Fibrek contract announced June 16, 2011 or the more than $2.7 million of additional projects discussed below. First quarter last year included $1,827,267 in revenue from the Kruger contract while first quarter this year included only $105,357 in revenue from the Fibrek contract. The Fibrek contract and the additional projects discussed below are now underway and are expected to be substantially completed by the end of this Fiscal year.

Gross profit for the first quarter ended August 31, 2011 was $803,012 compared to $1,203,660 for the same period last year. Gross profit expressed as a percentage of sales was 56% this year vs. 40% last year. The increase in gross profit as a percentage of sales is a result of a higher proportion of revenues coming from GEM® condensate return systems.

Administration and Selling, Marketing and Business Development expenses in the quarter ended August 31, 2011 totalled $1,150,153, a decrease of $123,240 or 10% from the $1,273,393 incurred in 2010. This decrease was primarily due to lower professional fees, staff costs and amortization of intangible assets.

Net loss for the period was $315,529 compared to a loss of $29,091 in the same quarter of the previous year. The main reason behind the greater loss for the current quarter was the lack of revenue in the waste energy recovery segment due to the timing of the Kruger, Fibrek and other heat recovery projects.

Liquidity and Solvency: The Company's working capital was $1,666,232 at August 31, 2011 compared to $1,870.934 as at May 31, 2011 and its net cash position (Cash and cash equivalents less Bank loans) was $824,965 compared to $972,163. Cash flow from operations (defined as net loss, plus items not involving cash, plus lease payments received) for the quarter ended August 31, 2011 was ($158,988). In addition to its net cash balance the Company also had an estimated $130,000 of unused borrowing capacity under its bank loans resulting in total cash balances and unused borrowing capacity of approximately $954,965.

Business Update:

  1. On December 23, 2010 and February 18, 2011 the Company announced it had received purchase orders totalling approximately $1.3 million from a major food manufacturer based in the UK, to provide GEM® condensate return systems for use at twelve of its manufacturing sites. Sales for the year ending May 31, 2011 included approximately $0.9 million related to these orders with a further $0.25 million earned in the first quarter of fiscal 2012.

  2. On April 11, 2011 the Company announced it had received a purchase order for approximately £246 thousand (approximately CDN $386 thousand) from Salisbury District Hospital Trust, a major hospital in South West England, to install a heat recovery system for use on its heating and hot water system. This system was largely completed in the first quarter of fiscal 2012.

  3. On May 6, 2011 the Company received a purchase order for approximately £208 thousand (approximately $334 thousand) from Frimley Park Hospital NHS Trust in the UK to provide to provide GEM® condensate return products and a heat recovery solution for use on its heating and hot water system. This project is now underway and is expected to be substantially completed over the next two quarters.

  4. On June 16, 2011 the Company announced it had signed a contract valued at approximately $5.8 million with Fibrek to provide a heat recovery solution for its pulp mill located in Saint-Félicien, Québec. This project is now underway and is expected to be substantially completed this fiscal year.

  5. On July 21, 2011 the Company received a purchase order for approximately $340 thousand from a major multi-national bakery company to provide a heat recovery solution for one of its United States based manufacturing facilities. This project is now underway and is expected to be substantially completed over the next two quarters.

  6. On August 5, 2011 the Company announced it had received a purchase order for approximately £1.29 million (approximately CDN $2.06 million) from St Georges Healthcare NHS Trust, a major hospital in London, UK to provide a heat recovery solution for use on its heating and hot water system. This project is now underway and is expected to be substantially completed this fiscal year.

  7. Subsequent to the quarter ended August 31, 2011, the Company amended and extended its distributor, licensing and patent purchase agreement with Mabarex Inc. related to the Dry- Rex™ technology. In exchange for minimum annual royalty payments of approximately $5,000, the agreement provides the Company with a sole and exclusive worldwide licence to the Dry-Rex™ technology for the next 10 years. The agreement also provides the Company the option to purchase the Dry-Rex™ technology at any time during the term of the agreement.

  8. The Company's order backlog, meaning purchase orders received but not yet fulfilled, as at August 31, 2011 was approximately $8.6 million compared to $2.7 million at the same time last year. As at November 25, 2011 the Company had $9.2 million in purchase orders that had not yet been reflected as revenue in the Company's published quarterly financial statements.

"While the first quarter of fiscal 2011 was impacted by the timing of the Kruger, Fibrek, and other heat recovery contracts, Thermal Energy is currently mobilized on an unprecedented number of significant projects all of which are expected to be substantially completed during the current fiscal year" commented William Crossland, President and CEO, adding "I am encouraged by the strength of our order backlog and by the fact that revenue earned to the end of the first quarter plus unfulfilled purchase orders received already total approximately $10.6 million."

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 International Inc. is an innovative cleantech company providing a variety of proprietary and proven energy efficiency, emission reduction, water efficiency, and bioenergy products and solutions to the industrial, commercial and institutional markets worldwide. Thermal Energy is also a fully accredited professional engineering firm, and can offer advanced process and applications engineering services. By providing a unique mix of proprietary products together with process, energy, environmental, and financial expertise Thermal Energy is able to deliver significant financial and environmental benefits to our customers.

Thermal Energy's products include; GEM® - Steam traps and condensate return systems, FLU- ACE® - Direct contact condensing heat recovery, and Dry RexTM - Low temperature biomass drying systems. These award winning products are effective in a wide variety of industries and application and have an excellent track record of longevity, proven reliability and performance providing significant energy savings, reduced GHG emissions, improved water efficiency, lower maintenance costs, improved product quality and increased production efficiency.

Thermal Energy International Inc. has offices in Ottawa, Canada as well as Bristol, UK, and China. To find out more about Thermal Energy International Inc. (TSX-V: TMG), visit our website at http://www.thermalenergy.com.

NOTE: This press release contains forward-looking statements relating to, and amongst other things, based on management's expectations, estimates and projections with respect to, timing of installation and implementation, and the revenues to be received by the Company from the projects and purchase orders described. These statements are not guarantees of future performance but, rather, reflect the Company's current expectations regarding future events. These forward looking statements are subject to a number of risks, uncertainties and assumptions. Many factors, some of which are outside of the Company's control, could cause events and results to differ materially from those stated. The Company disclaims any obligation to publicly update or revise any such statements except as required by law.

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:

Contact:
William Crossland
President and CEO
613-723-6776

Profil de l'entreprise

Thermal Energy International Inc.

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