Thermal Energy Comments on General Business Outlook, GEM Progress and Provides Update on Previously Announced Letter of Intent

    - Removal of previously announced Pulp and Paper LOI from forecast
    - Sales expectations reduced due to general economic conditions and
      fossil fuel prices
    - GEM Sales exceeding expectations and indicating future growth
    - Aggressively preserving strong cash balance

    OTTAWA, Feb. 16 /CNW Telbec/ - Thermal Energy International Inc.
(TSX-V:TMG) ( (the "Company" or "Thermal Energy") wishes
to provide an update on a number of general business items.
    "It has become obvious that the global economic crisis is now affecting
Thermal Energy's solutions business. The general attitude from many clients is
to conserve cash and not make any large capital acquisition decisions until
the full impact of the economic conditions and energy prices are understood,"
said Tim Angus, President & CEO. "The severe tightening of the credit markets
also makes funding projects under Thermal Energy's AUD program challenging" he
    The Company wishes to update the market regarding a news release issued
by the Company on December 1st, 2008. In that release, the Company announced
that it had scaled back expectations for a pending contract agreement with a
major North American integrated paper company for the development and delivery
of a green energy supply agreement with a value in the range of $10 million.
In light of feedback from the customer related to capital appropriation and
availability challenges under the current economic conditions, the Company no
longer anticipates this project proceeding in the foreseeable future and has
removed the project from the sales pipeline and forecast. A proposed project
with a different customer, identified in a news release dated April 23, 2008
is still expected to proceed later this fiscal year or early FY 2010 with the
scope as detailed in that release.
    "Despite these challenging times, the company is forging ahead and is
engaged in development of quality Flu-Ace(R) and Dry-Rex(TM) solutions with a
number of North American, Mexican, European and Chinese clients" said Angus.
    The Company is also proactively increasing focus on key institutional
markets which are anticipated to receive significant investment from the
federal governments in both the US and Canada. This includes a focus on
hospitals, universities and government facilities. In line with this strategy,
the Company is also focused on leveraging the current relationship with
Johnson Controls and building opportunities and relationships with other
Energy Service Companies which are expected to benefit greatly in the US by
the Obama Administration's spending plans to increase the energy efficiency of
institutional facilities.
    Despite challenges with the Solutions business, the Company is encouraged
by the performance of the GEM business line, which is showing strong growth
again this year in the range of 30% and on target with expectations from the
acquisition. The Company is enjoying success under a Global preferred supply
agreement with a major pharmaceutical manufacturer. Under that program which
was established last calendar year, orders for more than 1,000 GEM(R) venturi
orifice traps have already been received for installation at the client's
facilities across the Asia Pacific Region, Mainland Europe and UK, with
substantial quotes outstanding for additional sites. The prospects for FY2010
growth look strong for the GEM business in Europe, North America, Middle East
and Asia. Also in line with the expectations from the acquisition, the Company
has been maximizing the cross selling opportunities of Thermal's traditional
technology suite into GEM's customer accounts. With several Flu-Ace(R) and
Dry-Rex(TM) proposals in progress or submitted within GEM's customer base, the
Company is optimistic about securing some of these system sales in FY 2010.
    In response to the serious global economic conditions and in an effort to
greatly reduce cash burn rate, the company is undertaking aggressive measures
to cut non-core costs. Several actions have been taken already. "We are
fortunate to have a strong cash balance at this challenging time in the
economy but are also acutely aware of the need to manage cash aggressively so
that we are strategically positioned to continue with our growth plans as more
positive economic times return" said Angus. As announced in the release of Q2
financials on January 29, 2009, the Company had a cash balance of $5.5M, the
strongest in the company's history.

    NOTE: This press release may contain forward-looking statements relating
to, and amongst other things, based on management's expectations, estimates
and projections. Such statements including those about the Company's strategy
for growth, product development, market position, expected expenditures and
financial results are forward looking statements. These statements are not
guarantees of future performance and involve a number of risks, uncertainties
and assumptions. Many factors could cause results to differ materially from
those stated. The Company disclaims any obligation to publicly update or
revise any such statements, except as required by applicable securities laws.

    About Thermal Energy

    Thermal Energy International Inc. is an innovative technology company
providing custom energy and emission reduction, and bioenergy solutions.
Headquartered in Ottawa, Canada, TEI is a designer, design build developer,
fabricator, owner, operator and supplier of proprietary and patented energy
conservation, renewable energy and environmental technology solutions. Thermal
Energy is a fully accredited professional engineering firm, and offers
advanced process and applications engineering services. The Company is a proud
member of the Chicago Climate Exchange (CCX). FLU-ACE(TM), DRY-REX(TM),
THERMALONOx(TM), THERMAL AUD(TM) and GEM(R) are trademarks of Thermal Energy
    To find out more about Thermal Energy International Inc. (TSX-V: TMG),
visit our website at


For further information:

For further information: Tim Angus, President and CEO, (613) 723-6776
ext. 209

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