Tecogen Inc. (OTCQX:TGEN), a leading manufacturer of clean energy products, reported net income of $63.0thousand for the quarter ended December 31, 2021 and $3.7 million for the full yearcompared to a net loss of $4.1 million and $6.2 million, respectively, in 2020. This represents an improvement of $4.0 million and $9.8 million respectively. The increase in net income for the quarter was due to improved operations and for the year was helped significantly by the PPP loan forgiveness and Employee Retention Credit. Our gross margin increased to 47.5% for the year ended December 31, 2021 compared to 38.3% for the same period in 2020. The company also generated positive cash flow from operations of $465 thousand in 2021 compared to $1.4 million in 2020. The year end cash balance was $3.6 million.
Key Takeaways
Earnings Per Share
Income from Operations
Revenues
Gross Profit
Operating Expenses
Adjusted EBITDAwas a positive $284 thousand for the fourth quarter of 2021 compared to a loss of $929 thousand for the fourth quarter of 2020. For the year ended December 31, 2021 adjusted EBITDA was a positive $0.7 million compared to a negative $2.2 million for FY 2020. The FY 2021 adjusted EBITDA benefited from $1.2 million of Employee Retention Credit. (Adjusted EBITDA is defined as net income or loss attributable to Tecogen, adjusted for interest, income taxes, depreciation and amortization, stock-based compensation expense, unrealized gain or loss on equity securities, goodwill impairment charges and other non-cash non-recurring charges or gains including abandonment of intangible assets and the extinguishment of debt. See the table following the Condensed Consolidated Statements of Operations for a reconciliation from net income (loss) to Adjusted EBITDA, as well as important disclosures about the company's use of Adjusted EBITDA).
“We had a significantly improved 4th quarter and year in 2021 compared to 2020,” commented Benjamin Locke, Tecogen's Chief Executive Officer. “As COVID effects recede, our business has started to rebound. We have also been seeing improved sales as a result of our strategic focus on key market segments such as controlled environment agriculture, healthcare and multifamily. Our chiller product in particular has seen significant penetration in the cannabis cultivation space. More than 45% of our current backlog is in this high growth market.”
Conference Call Scheduled for March 10, 2022 at 11:00 am ET
Tecogen will host a conference call on March 10, 2022 to discuss the fourth quarter results beginning at 11:00 am eastern time. To listen to the call please dial (877) 407-7186 within the U.S. and Canada, or (201) 689-8052 from other international locations. Participants should ask to be joined to the Tecogen Fourth Quarter 2021 earnings call. Please begin dialing 10 minutes before the scheduled starting time. The earnings press release will be available on the Company website at http://www.Tecogen.com in the "News and Events" section under "About Us." The earnings conference call will be webcast live. To view the associated slides, register for and listen to the webcast, go to https://ir.tecogen.com/ir-calendar. Following the call, the recording will be archived for 14 days.
The earnings conference call will be recorded and available for playback one hour after the end of the call. To listen to the playback, dial (877) 660-6853 within the U.S. and Canada, or (201) 612-7415 from other international locations and use Conference Call ID#: 13672659.
About Tecogen
Tecogen Inc. designs, manufactures, sells, installs, and maintains high efficiency, ultra-clean, cogeneration products including engine-driven combined heat and power, air conditioning systems, and high-efficiency water heaters for residential, commercial, recreational and industrial use. The company provides cost effective, environmentally friendly and reliable products for energy production that nearly eliminate criteria pollutants and significantly reduce a customer’s carbon footprint.
In business for over 35 years, Tecogen has shipped more than 3,000 units, supported by an established network of engineering, sales, and service personnel across the United States. For more information, please visit www.tecogen.com or contact us for a free Site Assessment.
Tecogen, InVerde e+, Ilios, Tecochill, Tecopower, Tecofrost, Tecopack and Ultera are registered or pending trademarks of Tecogen Inc.
Forward Looking Statements
This press release and any accompanying documents, contain “forward-looking statements” which may describe strategies, goals, outlooks or other non-historical matters, or projected revenues, income, returns or other financial measures, that may include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "potential," "will," "should," "could," "likely," or "may" and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements.
In addition to those factors described in our Annual Report on Form 10-K under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: fluctuations in demand for our products and services, competing technological developments, issues relating to research and development, the availability of incentives, rebates, and tax benefits relating to our products and services, changes in the regulatory environment relating to our products and services, integration of acquired business operations, and the ability to obtain financing on favorable terms to fund existing operations and anticipated growth.
In addition to GAAP financial measures, this press release includes certain non-GAAP financial measures, including adjusted EBITDA which excludes certain expenses as described in the presentation. We use Adjusted EBITDA as an internal measure of business operating performance and believe that the presentation of non-GAAP financial measures provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance by eliminating items that vary from period to period without correlation to our core operating performance and highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.
Tecogen Media & Investor Relations Contact Information:
Benjamin Locke
P: 781-466-6402
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
TECOGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2021 and 2020 (unaudited)
ASSETS | 2021 | 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 3,614,463 | $ 1,490,219 | |
Accounts receivable, net | 8,482,286 | 8,671,163 | |
Unbilled revenue | 3,258,189 | 4,267,249 | |
Inventory, net | 7,764,989 | 7,168,596 | |
Employee Retention Credit | 1,276,021 | — | |
Prepaid and other current assets | 578,801 | 597,144 | |
Total current assets | 24,974,749 | 22,194,371 | |
Property, plant and equipment, net | 1,782,944 | 2,283,846 | |
Right of use assets | 1,869,210 | 1,632,574 | |
Intangible assets, net | 1,181,023 | 1,360,319 | |
Goodwill | 2,406,156 | 2,406,156 | |
Other assets | 148,140 | 196,387 | |
TOTAL ASSETS | $32,362,222 | $30,073,653 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Current liabilities: | |||
Note payable, current | $ — | $ 837,861 | |
Accounts payable | 3,508,354 | 4,183,105 | |
Accrued expenses | 2,343,728 | 1,993,471 | |
Deferred revenue | 1,957,752 | 1,294,157 | |
Lease obligations, current | 641,002 | 506,514 | |
Unfavorable contract liabilities, current | 330,032 | 355,665 | |
Total current liabilities | 8,780,868 | 9,170,773 | |
Long-term liabilities: | |||
Deferred revenue, net of current portion | 208,456 | 115,329 | |
Note payable, net of current portion | — | 1,036,339 | |
Lease obligations, long-term | 1,315,275 | 1,222,492 | |
Unfavorable contract liability, long-term | 929,474 | 1,261,386 | |
Total liabilities | 11,234,073 | 12,806,319 | |
Stockholders’ equity: | |||
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,850,261 and 24,850,261 issued and outstanding at December 31, 2021 and 2020, respectively | 24,850 | 24,850 | |
Additional paid-in capital | 57,016,859 | 56,814,428 | |
Accumulated deficit | (35,833,621) | (39,529,621) | |
Total Tecogen Inc. stockholders’ equity | 21,208,088 | 17,309,657 | |
Noncontrolling interest | (79,939) | (42,323) | |
Total stockholders’ equity | 21,128,149 | 17,267,334 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $32,362,222 | $30,073,653 |
TECOGEN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 2021 and 2020
(unaudited)
2021 | 2020 | ||
Revenues | |||
Products | $ 3,693,349 | $ 1,923,400 | |
Services | 3,086,891 | 3,292,418 | |
Energy production | 399,702 | 441,295 | |
Total revenues | 7,179,942 | 5,657,113 | |
Cost of sales | |||
Products | 1,999,637 | 1,258,978 | |
Services | 1,450,945 | 1,773,767 | |
Energy production | 277,488 | 281,758 | |
Total cost of sales | 3,728,070 | 3,314,503 | |
Gross profit | 3,451,872 | 2,342,610 | |
Operating expenses | |||
General and administrative | 2,437,727 | 2,833,965 | |
Selling | 723,971 | 571,141 | |
Research and Development | 161,015 | 125,707 | |
Gain on sales of assets | (400) | (32) | |
Long-lived asset impairment | — | 71,963 | |
Goodwill impairment | — | 2,875,711 | |
Total operating expenses | 3,322,313 | 6,478,455 | |
Income (loss) from operations | 129,559 | (4,135,845) | |
Other income (expense) | |||
Interest and other income | (6,533) | (14,432) | |
Interest expense | (655) | (4,741) | |
Unrealized loss on investment securities | (56,246) | — | |
Total other expense, net | (63,434) | (19,173) | |
Income (Loss) before income taxes | 66,125 | (4,155,018) | |
Income tax provision | 500 | 2,380 | |
Consolidated net income (loss) | 65,625 | (4,157,398) | |
(Income) loss attributable to the noncontrolling interest | (2,659) | 95,084 | |
Net income (loss) attributable to Tecogen Inc | $ 62,966 | $ (4,062,314) | |
Net income (loss) per share - basic | $ — | $ (0.16) | |
Weighted average shares outstanding - basic | 24,850,261 | 24,850,258 | |
Net income (loss) per share - diluted | $ — | $ (0.16) | |
Weighted average shares outstanding - diluted | 25,063,864 | 24,850,258 |
TECOGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 2021 and 2020
(unaudited)
Non-GAAP financial disclosure (1) | 2021 | 2020 | |
Net income (loss) attributable to Tecogen Inc | $ 62,966 | $ (4,062,314) | |
Interest expense, net | 655 | 4,741 | |
Provision for income taxes | 500 | 2,380 | |
Depreciation and amortization, net | 112,218 | 120,186 | |
EBITDA | 176,339 | (3,935,007) | |
Stock-based compensation | 51,775 | 58,632 | |
Unrealized loss on securities | 56,246 | — | |
Inventory write down | — | — | |
Long-lived asset impairment | — | 71,963 | |
Goodwill impairment | — | 2,875,711 | |
Adjusted EBITDA | $ 284,360 | $ (928,701) |
TECOGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2021 and 2020
(unaudited)
2021 | 2020 | ||
Revenues | |||
Products | $ 10,133,329 | $ 11,466,716 | |
Services | 12,525,594 | 14,950,682 | |
Energy production | 1,739,150 | 1,837,181 | |
Total revenues | 24,398,073 | 28,254,579 | |
Cost of sales | |||
Products | 5,601,046 | 6,899,942 | |
Services | 6,134,953 | 9,357,478 | |
Energy production | 1,074,421 | 1,169,645 | |
Total cost of sales | 12,810,420 | 17,427,065 | |
Gross profit | 11,587,653 | 10,827,514 | |
Operating expenses | |||
General and administrative | 9,795,823 | 10,311,086 | |
Selling | 2,471,929 | 2,593,168 | |
Research and development | 542,079 | 767,323 | |
Gain on sale of assets | (10,486) | (11,367) | |
Long-lived asset impairment | 7,400 | 251,906 | |
Goodwill impairment | — | 2,875,711 | |
Total operating expenses | 12,806,745 | 16,787,827 | |
Loss from operations | (1,219,092) | (5,960,313) | |
Other income (expense) | |||
Interest and other income | (23,746) | (2,479) | |
Interest expense | (14,238) | (125,824) | |
Gain on extinguishment of debt | 3,773,014 | — | |
Employee Retention Credit | 1,276,021 | — | |
Gain on the sale of investments | 6,046 | — | |
Unrealized loss on investment securities | (37,497) | (98,404) | |
Total other income (expense), net | 4,979,600 | (226,707) | |
Income (loss) before income taxes | 3,760,508 | (6,187,020) | |
State income tax provision | 19,491 | 30,171 | |
Consolidated net income (loss) | 3,741,017 | (6,217,191) | |
(Income) loss attributable to the noncontrolling interest | (45,017) | 66,684 | |
Net income (loss) attributable to Tecogen Inc. | $ 3,696,000 | $ (6,150,507) | |
Net income (loss) per share - basic | $ 0.15 | $ (0.25) | |
Weighted average shares outstanding - basic | 24,850,261 | 24,850,258 | |
Net income (loss) per share - diluted | $ 0.15 | $ (0.25) | |
Weighted average shares outstanding -diluted | 25,115,518 | 24,850,258 |
TECOGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2021 and 2020
(unaudited)
Non-GAAP financial disclosure (1) | 2021 | 2020 | |
Net income (loss) attributable to Tecogen Inc | $ 3,696,000 | $ (6,150,507) | |
Provision for income taxes | 19,491 | 30,171 | |
Interest expense, net | 14,238 | 125,824 | |
Depreciation and amortization, net | 469,854 | 414,127 | |
EBITDA | 4,199,583 | (5,580,385) | |
Stock-based compensation | 202,431 | 190,944 | |
Gain on extinguishment of debt | (3,773,014) | — | |
Unrealized loss on investment securities | 31,451 | 98,404 | |
Goodwill impairment | — | 2,875,711 | |
Asset impairment | 7,400 | 251,906 | |
Adjusted EBITDA (2) | $ 667,851 | $ (2,163,420) |
(1) Non-GAAP Financial Measures
In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, this news release contains information about Adjusted EBITDA (net income (loss) attributable to Tecogen Inc adjusted for interest, income taxes, depreciation and amortization, stock-based compensation expense, unrealized gain or loss on investment securities, goodwill impairment charges and other non-cash non-recurring charges including abandonment of certain intangible assets and extinguishment of debt), which is a non-GAAP measure. The Company believes Adjusted EBITDA allows investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results. Adjusted EBITDA is not calculated through the application of GAAP. Accordingly, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.
(2)Employee Retention Credit
The adjusted EBITDA in 2021 benefits from $1.2 million of Employee Retention Credit.
TECOGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021 and 2020
(unaudited)
2021 | 2020 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Consolidated net income (loss) | $ 3,741,017 | $ (6,217,191) | ||
Adjustments to reconcile net income (loss) to net cash used provided by activities: | ||||
Depreciation, accretion and amortization, net | 469,854 | 414,127 | ||
Gain on the extinguishment of debt | (3,773,014) | — | ||
Employee Retention Credit | (1,276,021) | — | ||
Long-lived asset impairment | 7,400 | 251,906 | ||
Gain on sale of assets | (10,486) | (11,367) | ||
Provision for losses on accounts receivable | 131,206 | 656,397 | ||
Gain on the sale of investments | (6,046) | — | ||
Provision for inventory reserve | — | 86,000 | ||
Unrealized loss on investment securities | 37,497 | 98,404 | ||
Stock-based compensation | 202,431 | 190,944 | ||
Goodwill impairment | — | 2,875,711 | ||
Non-cash interest expense | — | 51,190 | ||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in: | ||||
Accounts receivable | 57,618 | 5,555,235 | ||
Inventory, net | (596,393) | (849,367) | ||
Unbilled revenue | 1,009,060 | 1,154,562 | ||
Prepaid expenses and other current assets | 18,343 | 37,889 | ||
Other non-current assets | (231,478) | 825,817 | ||
Increase (decrease) in: | ||||
Accounts payable | (674,750) | (1,088,651) | ||
Accrued expenses and other current liabilities | 602,073 | (524,358) | ||
Deferred revenue | 756,722 | (2,100,011) | ||
Net cash provided by operating activities | 465,033 | 1,407,237 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property and equipment | (91,451) | (59,952) | ||
Proceeds on sale of property and equipment | 10,486 | 26,335 | ||
Purchases of intangible assets | (63,097) | (123,252) | ||
Proceeds from sale of investments | 11,637 | — | ||
Distributions to non-controlling interest | (82,633) | (60,896) | ||
Net used in investing activities | (215,058) | (217,765) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Payments on revolving line of credit, net | — | (2,452,329) | ||
Proceeds from note payable | 1,874,269 | 1,874,200 | ||
Proceeds from exercise of stock options | — | 1,200 | ||
Net cash provided by (used in) financing activities | 1,874,269 | (576,929) | ||
Change in cash and cash equivalents | 2,124,244 | 612,543 | ||
Cash and cash equivalents, beginning of the year | 1,490,219 | 877,676 | ||
Cash and cash equivalents, end of the year | $ 3,614,463 | $ 1,490,219 |
Last Trade: | US$1.51 |
Daily Change: | -0.08 -5.03 |
Daily Volume: | 28,177 |
Market Cap: | US$37.520M |
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