Mr. William Crossland reports

THERMAL ENERGY INTERNATIONAL REPORTS STRONG, PROFITABLE GROWTH IN FIRST QUARTER

Thermal Energy International Inc. has released its financial results for the first quarter ended Aug. 31, 2023.

Highlights:

• Revenue: $5.2-million, a 66-per-cent increase from the same quarter last year;
• Gross profit: $2.8-million, more than doubled from a year ago;
• EBITDA (earnings before interest, taxes, depreciation and amortization): $414,000 compared with a loss of $230,000 in the first quarter of last year;
• Net income: $162,000 compared with a loss of $509,000 a year ago;
• Order intake: $3.3-million for the quarter and $13.7-million for fiscal 2024 year-to-date (as at Oct. 24, 2023);
• Order backlog: $11.6-million as at Aug. 31, 2023, and $22-million as at Oct. 24, 2023.

Overview

"We are proud of the substantial growth in our revenue and gross profit during the quarter, as well as the strong turnaround in our bottom line compared to a year ago," said William Crossland, Thermal Energy's chief executive officer. "Subsequent to quarter-end, we received our largest heat recovery order in several years -- and our first turnkey heat recovery order from a pharmaceutical company. We also signed a global master services agreement with this customer and already have paid project development agreements (PDA) for two other sites active with them. Earlier this month, we received $1.9-million in repeat business from a global nutrition company and $2.6-million in repeat business from a multinational dairy company.

"Following our record order intake in fiscal 2023, we have already received orders totalling over $13.7-million just five months into fiscal 2024. Our order backlog is currently $22-million, and we have 27 active PDAs in place. Our strong order intake, order backlog and project development activity are clear indications of the strong demand for our proven energy efficiency solutions as our global customer base actively pursues their carbon emissions reduction targets."

First quarter 2024 financial review

First quarter revenue was $5.2-million, up 66 per cent from the same quarter the year before. The growth was mainly due to the higher revenues from both custom equipment and turnkey heat recovery projects due to the increase in sales orders received in fiscal year 2023. Gross profit increased by 105 per cent to $2.8-million, due to growth in revenues and improving margins across all key product categories. Operating expenses were $748,000 more than the same quarter last year, with $338,000 of the variance due to an increase in foreign exchange loss, and $410,000 due to recruitment of additional project engineers, sales staff, and investment in the digitalization and automation of the key business processes. Nonetheless, the higher revenues and gross profit led to increases of $670,000 and $644,000 for net income and EBITDA, respectively, compared with the first quarter of last year.

Quarter-end cash and working capital balances were around $4.1-million and $3.1-million, respectively.

Business outlook and order summary

Orders received (order intake) during the first quarter totalled $3.3-million. The company ended the quarter with an order backlog of $11.6-million, up 93 per cent from the $6-million at the end of the same quarter of the prior year.

The company has also received $10.4-million in new orders subsequent to the Aug. 31, 2023, quarter-end, bringing the current order backlog to $22-million as of Oct. 24, 2023. A list and description of recent order highlights is available on page 13 of the management's discussion and analysis filed today.

Full financial results, including management's discussion and analysis, and accompanying notes to the financial results, are available on SEDAR+ and the company's website.

About Thermal Energy International Inc.

Thermal Energy International provides energy efficiency and emissions reduction solutions to Fortune 500 and other large multinational companies. It saves its customers money by reducing their fuel use and cutting their carbon emissions. Thermal Energy's proprietary and proven solutions can recover up to 80 per cent of energy lost in typical boiler plant and steam system operations while delivering a high return on investment with a short, compelling payback.

Thermal Energy is a fully accredited professional engineering firm with engineering offices in Ottawa, Canada, Pittsburgh, United States, as well as Bristol, United Kingdom, with sales offices in Canada, the U.K., the U.S., Germany, Poland and Italy. By providing a unique mix of proprietary products together with process, energy and environmental engineering expertise, Thermal Energy can deliver unique, site-specific turnkey and custom-engineered solutions with significant financial and environmental benefits for its customers.

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