OTTAWA, ONTARIO – September 23, 2025 – Thermal Energy International Inc. (“Thermal Energy” or the “Company”) (TSX-V: TMG, OTCQB: TMGEF), a provider of innovative energy efficiency and carbon emission reduction solutions to major corporations around the world, today reported its financial results for the fourth quarter and year ended May 31, 2025. All figures are in Canadian dollars.
Q4 2025 Highlights:
(Compared to Q4 2024)
Overview
“While our revenue was down in the fourth quarter, our quarterly gross profit and Adjusted EBITDA margins improved, and we still achieved our highest fiscal year revenue ever,” said William Crossland, Thermal Energy CEO. “But the big story for us is that, after supressed levels of order intake throughout fiscal 2025, our order intake in the first quarter of fiscal 2026 reached $11.3 million – which is the highest first quarter intake in our history and four times what we had in the first quarter of last year. That $11.3 million includes previously announced orders totalling $5.1 million from one of the world's largest pharmaceutical companies, as well as a $1.4 million turnkey heat recovery project from a European food ingredients company, and a $1 million turnkey heat recovery contract from a leading multinational building materials manufacturer. Most of the revenue from these previously announced orders is expected to be earned in the second half of fiscal 2026 and we expect overall revenues in fiscal 2026 to be weighted more towards the back half of the year as a result.”
“We significantly reduced our bank debt, repaying $1.1 million in the quarter and $2 million in the fiscal year. Over the last three years we have repaid $3.6 million in acquisition and COVID related debt. The final $329 thousand is scheduled to be fully repaid by January 2026. This should not only help our bottom line going forward, but also give us more flexibility with our future growth.”
“While the significant reinvestments in our business over the last two plus years has impacted our profitability, those investments should now enable us to scale. In addition, we have identified a few additional strategic opportunities to drive profitable growth. These include: (1) developing and promoting higher-margin standardized equipment packages for smaller, less complex heat recovery projects; (2) adding a sales channel comprised of independent sales representatives for all of our key technologies, which will free up our internal sales team to focus on larger, more strategic opportunities; and, (3) expanding Boilerroom Equipment Inc. (“BEI”) into Europe – all of which can be leveraged by our new award-winning Carbon Reduction & Efficiency Scoping Tool (“CREST”), which can quickly and efficiently identify thermal energy savings and carbon reduction opportunities for both our own sales team and our new independent representative channel.”
Summary Financial Results
|
In thousand except % data |
Three months ended May 31, 2025 |
Three months ended May 31, 2024 |
Twelve months ended May 31, 2025 |
Twelve months ended May 31, 2024 |
|
Revenue |
$6,825 |
$7,529 |
$29,780 |
$25,880 |
|
Gross profit |
$3,679 |
$3,136 |
$ 12,344 |
$12,452 |
|
Gross margin |
54% |
42% |
41% |
48% |
|
Operating expenses |
$3,293 |
$2,663 |
$11,532 |
$10,818 |
|
Net income |
$224 |
$290 |
$158 |
$982 |
|
Adjusted EBITDA[1] |
$397 |
$422 |
$1,052 |
$1,988 |
|
Cash position |
$2,799 |
$6,965 |
$2,799 |
$6,965 |
|
Working capital |
$2,396 |
$3,509 |
$2,396 |
$3,509 |
|
Orders received |
$4,776 |
$5,052 |
$21,776 |
$29,460 |
|
Order backlog[2] as of May 31 |
$12,851 |
$18,672 |
$12,851 |
$18,672 |
Financial Review for the Fourth Quarter Ended May 31, 2025
Fourth quarter revenue decreased 9% year-over-year to $6.8 million mainly due to lower revenues from heat recovery projects and lower revenue from indirect contact heat recovery equipment sales, partially offset by higher revenues from GEM. Gross profit for the quarter increased by 17.3% to $3.7 million, mainly due to improved gross margins from heat recovery projects and higher GEM revenue.
Operating expenses were $630 thousand higher than the same quarter a year earlier, mainly due to the increase in foreign exchange loss of $345 thousand and the increase in general operating costs of $285 thousand due to team expansion. R&D expense decreased by $85 thousand due to lower R&D activities conducted in the quarter.
The Company had Adjusted EBITDA of $397 thousand and a net income of $224 thousand, compared to Adjusted EBITDA of $422 thousand and net income of $290 thousand in the fourth quarter a year earlier.
At the end of May 31, cash and working capital balances were approximately $2.8 million and $2.4 million, respectively.
Financial Review for the Fiscal May 31, 2025
For the year ended May 31, 2025, revenue was a record $ 29.8 million, up about 15% year-over-year, with higher revenues from heat recovery projects being partially offset by lower revenues from GEM traps due to the inclusion of a couple of record GEM orders in the prior year. Gross profit decreased by 1% to $12.3 million compared to $12.5 million from last year. The decrease in gross profit was mainly due to the decreased GEM revenues and lower gross margins on heat recovery projects.
Operating expenses amounted to $11.5 million, up $715 thousand compared to the prior year. The variance included an additional $813 thousand related to the growth in headcount, and inflation-related increases to regular operating costs and salaries. The increase was partially offset by a $99 thousand decrease in foreign exchange loss compared to prior year.
R&D expense increased by $137 thousand compared to prior year due to a higher amount of R&D activities conducted.
The Company achieved Adjusted EBITDA of $1.1 million and net income of $158 thousand for the year ended May 31, 2025.
Business Outlook and Order Summary
Orders received ("Order Intake") during the fourth quarter totalled $4.8 million. The Company ended the year with an order backlog of $12.9 million, down 31% from the $18.7 million at the end of the prior year.
The Company received $11.4 million in new orders subsequent to the year end, bringing the current order backlog to $24.3 million as of September 22, 2025. This includes order intake of $11.3 million in the first quarter of fiscal 2026, which was the highest order intake for any first quarter in the history of the Company and was four times the order intake achieved in the first quarter a year ago. A list and description of recent order highlights is available on page 15 and 16 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 www.sedarplus.ca and investors-thermalenergy.com/en/financial-overview.
Management of Thermal Energy will host an earnings call and webcast today, September 23, at 8:30 am ET. A question-and-answer session will follow management's prepared remarks, at which time qualified equity analysts will be able to submit questions via the webcast.
The live webcast will be available at https://tinyurl.com/TMG2025Q4. You may join the webcast via MS Teams on your computer, mobile app or room device. Please join the webcast approximately 15 minutes prior to the earnings call to ensure adequate time for registration and admittance to the webcast.
For more information, including dial-in information, refer to the Company's press release from September 16, 2025.
Readers are encouraged to subscribe to TEI News to receive strategic news and updates directly to their inbox.
[1] Adjusted EBITDA represents earnings before interest, taxation, depreciation, amortization, and share-based compensation expense. See note below about non-IFRS measures.
[2] Order backlog represents any purchase orders that have been received by the Company but have not yet been reflected as revenue in the Company’s published financial statements. See note below about non-IFRS measures.
ENDS
For media enquiries contact:
Thermal Energy International Inc.
Canada: 613-723-6776
UK: +44 (0)117 917 2179
Marketing@thermalenergy.com
For investor enquiries:
William Croslland
President and CEO
Thermal Energy International Inc.
613-723-6776
Investors@thermalenergy.com
About Thermal Energy International Inc.
Thermal Energy International Inc. provides energy efficiency and emissions reduction solutions to Fortune 500 and other large multinational companies. We save our customers money by reducing their fuel use and cutting their carbon emissions. Thermal Energy’s proprietary and proven solutions can recover up to 80% 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, USA, as well as Bristol, UK, with sales offices in Canada, UK, USA, Germany, Poland, France, 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 our customers.
Thermal Energy’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG and on the OTCQB under the symbol TMGEF. For more information, visit our investor website at https://investors-thermalenergy.com or company website at www.thermalenergy.com and follow us on Twitter at https://twitter.com/GoThermalEnergy.
This press release contains forward-looking statements relating to, and amongst other things, based on management’s expectations, estimates and projections, the anticipated effectiveness of the Company’s products and services, the timing of revenues to be received by the Company, the expectation that orders in backlog will become revenue, the anticipated benefits of the Company’s current efforts at training and business improvement efforts, opportunities for growth, the Company’s belief that it can capitalize on opportunities, the size of markets and opportunities open to the Company and the impact of investments that the Company has made on the Company’s ability to scale. Information as to the amount of heat recovered, energy savings and payback period associated with Thermal Energy International’s products are based on the Company’s own testing and average customer results to date. Statements relating to the expected installation and revenue recognition for projects, statements about the anticipated effectiveness and lifespan of the Company’s products, statements about the expected environmental effects and cost savings associated with the Company’s products and statements about the Company’s ability to cross-sell its products and sell to more sites are forward looking statements. These statements are not guarantees of future performance and involve 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. Fulfilment of orders, installation of product and activation of product could all be delayed for a number of reasons, some of which are outside of the Company’s control, which would result in anticipated revenues from such projects being delayed or in the most serious cases eliminated. Actions taken by the Company’s customers and factors inherent in the customer’s facilities but not anticipated by the Company can have a negative impact on the expected effectiveness and lifespan of the Company’s products and on the expected environmental effects and cost savings expected from the Company’s products. Any customer’s willingness to purchase additional products from the Company and whether orders in the Company’s backlog as described above will turn into revenue is dependent on many factors, some of which are outside of the Company’s control, including but not limited to the customer’s perceived needs and the continuing financial viability of the customer. Volatility with respect to tariffs and trade regulation may continue and may impact the Company in ways not currently anticipated. The Company disclaims any obligation to publicly update or revise any such statements except as required by law. Readers are referred to the risk factors associated with the Company’s business as described in the Company’s most recent Management’s Discussion and Analysis available at www.sedarplus.ca.
Non-IFRS Financial Measures
The Company believes the following non-IFRS financial measures provide useful information to both management and investors to better understand the financial performance and financial position of the Company.
EBITDA and Adjusted EBITDA
Management believes that EBITDA (earnings before interest, taxation, depreciation and amortization) and Adjusted EBITDA (EBITDA plus share-based compensation expense) are useful performance measures. The Adjusted EBITDA approximates cash generated from operations, before tax, capital expenditures and changes in working capital. Adjusted EBITDA also assists comparison among companies as it eliminates the differences in earnings due to how a company is financed. EBITDA and Adjusted EBITDA do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures presented by other companies. There is no direct comparable IFRS measure for EBITDA or Adjusted EBITDA.
A reconciliation of net income to EBITDA and Adjusted EBITDA is shown below.
|
|
Three months ended |
Twelve months ended |
||
|
|
May 31, 2025 $ |
May 31, 2024 $ |
May 31, 2025 $ |
May 31, 2024 $ |
|
Total net income attributable to owners of the parent |
198,528 |
278,473 |
73,166 |
929,504 |
|
Total net income attributable to non-controlling interest |
25,446 |
11,875 |
85,316 |
52,664 |
|
Interest charge |
53,905 |
94,700 |
289,562 |
416,816 |
|
Interest revenue |
(11,367) |
(49,340) |
(63,267) |
(49,340) |
|
Income tax (recovery) expense |
(27,817) |
(95,126) |
21,634 |
16,981 |
|
Depreciation and amortization |
96,976 |
116,584 |
391,903 |
384,329 |
|
EBITDA |
335,671 |
357,166 |
798,314 |
1,750,954 |
|
Share based compensation |
61,636 |
65,306 |
253,886 |
237,251 |
|
Adjusted EBITDA |
397,307 |
422,472 |
1,052,200 |
1,988,205 |
Order Backlog
Order backlog is a useful performance measure that Management uses as an indicator of the short-term future revenue of our Company resulting from already recognized orders. The Company includes in “order backlog” any purchase orders that have been received by the Company but have not yet been reflected as revenue in the Company’s published financial statements. It is important to note that once an order or partial order is recorded as revenue, the order backlog is reduced by the amount of the newly reported revenue. Order backlog does not have a standardized meaning prescribed by International Financial Reporting Standards and therefore may not be comparable to similar measures presented by other companies.
For additional details on non-IFRS financial measures, please refer to the Company’s most recent Management’s Discussion and Analysis available at www.sedarplus.ca for more details about these non-IFRS financial measures.
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.