Third Quarter and Year to Date Fiscal 2020 Financial Review
Quarterly revenue was $5.8 million, delivering a gross profit of $2.4 million - up 111% compared to the same quarter last year. This resulted in a gross margin of 41.6%. Quarterly EBITDA is reported at $709 thousand this year compared to a negative $734 thousand last year, an increase of $1.4 million.
Net income for the nine months ending February 29, 2020 was $1.1 million, compared to a net loss of $1.1 million for the same period the year prior. Operating Expenses for the Year to Date total $6.2 million.
Working capital increased by $759 thousand to $2.8 million at February 29, 2020 compared to $2.0 million at May 31, 2019. The Company’s net cash position was $3.8 million as of February 29, 2020, compared to $4.2 million at May 31, 2019.Business Outlook and Order Backlog Summary
The Company ended the quarter with an order backlog of $3.4 million compared to $10.6 million last year. The Company defines its order backlog as the value of projects for which purchase orders have been received, but that have not yet been fully reflected as revenue in the Company’s published quarterly financial statements. Given the Covid-19 pandemic, many of our projects under development and some of those already in progress have been delayed. Projects already in progress that have been delayed include:
- A project to improve energy efficiency for a leading multinational animal nutrition and agricultural products company, announced in March 2019;
- A project to implement an extensive HeatSponge heat recovery project for a US dairy group, announced in March 2019; and
- A project to install a high-efficiency heat recovery system for a leading European brewer announced August 2019.
Also, on October 16, 2019, the Company announced a $738,000 order from a meat processing company. After work started on the project the customer decided to make some major modifications to its boiler plant which made the planned project with Thermal Energy not practical at this time. As a result, the customer elected to cancel the order, paying Thermal Energy for the work done to date. This order has therefore been removed from the order backlog, but the Company continues to work with the customer to develop alternate projects.
Full financial results including Management’s Discussion and Analysis and accompanying notes to the financial results are available on www.SEDAR.com