WALTHAM, Mass., March 31, 2017 /PRNewswire/ -- EuroSite Power Inc. (OTCPK: EUSP, the "Company") an On-Site Utility solutions provider, offering clean electricity, heat, hot water and cooling solutions to healthcare, hospitality, housing and leisure centers in the United Kingdom (UK) and Europe, reported a full year Gross profit of $287,355 for 2016 compared to a loss of $115,804 in 2015, an improvement of 348%. Total revenues increased to $2,476,186 for 2016 compared to $2,198,721 for 2015, an increase of 12.6%. Gross margin excluding depreciation improved by over 11.9 percentage points compared with 2015, to a strong 36.4%.

Commenting on the 2016 full year results Dr. Elias Samaras, Chief Executive Officer said "Our focus for 2016 was to improve gross margin and to implement our 'four pillar' strategy. We delivered these key objectives while also securing additional investment, all but eradicating debt and creating a platform for strategic expansion. Now fully independent and with an enhanced board, the recent decision to deregister our common stock further positions us for growth." He added, "While revenue grew strongly our new business activity was weak and will be a focus for 2017. Overall 2016 was a busy year for the team, but the foundations are now laid and EuroSite Power enters 2017 a stronger company with encouraging underlying momentum and positioned ready to deliver longer-term growth."

HEADLINES
Improved margin and implemented "four pillars"

• Gross margin excluding depreciation improved for the year ended December 31, 2016 to 36.4% as compared to 24.5% in 2015
• Project finance facilities executed with both Macquarie Energy Finance and Societe Generale Equipment Finance
• Hired and factory trained our in-house maintenance and operations team
• Formed collaboration with TEDOM to sell On Site Utility solutions through their European dealer network
• Secured first gas supply contracts in cooperation with Corona Energy
• Fully separated from American DG Energy and operating independently

Financial and operational performance

• Adjusted Non-GAAP EBITDA loss increased to $1,165,534 compared to a loss of $994,041 in 2015. This includes a $254,000 expense caused by foreign exchange variation following the fall in the value of the Pound after the Brexit vote in June 2016. Further adjusted to remove this expense the full-year 2016 Non-GAAP EBITDA loss was $971,534 compared to a loss of $994,041 in 2015.
• Overall gross margin improved to 11.6% for the year of 2016, compared with a loss of 5.3%, an increase of 16.9 percentage points and an improvement of over 300%
• Revenue increased by 12.6% to $2,476,186 (£1,822,073) for the year ended December 31, 2016 as compared to $2,198,721 (£1,464,541) for the year ended December 31, 2015. At functional GBP level revenues increased 24.4%.
• GAAP diluted loss per share (EPS) was $0.03 for the year of 2016 as compared to a loss of $0.02 in 2015
• The Company's management raised over $7 million in a series of private placements during the year
• A portion of the private placement funds were used to repay the $2 million related party loan
• After converting $2.1 million of the $2.4 million 4% Senior Convertible Debt, the Company is left with a small amount of debt of $300,000 as of December 31, 2016
• Net loss includes one off debt conversion expense of $233,572
• The operations team successfully delivered first Societe Generale funded project
• Our total energy production increased by 32% to 38,073MWh for the year ended December 31, 2016 as compared to 2015
• An additional 781kW of production was brought into operation during 2016
• New On Site Utility contracts totalling 801kW were secured during the year of 2016

Outlook and 2017 targets – positive EBITDA, strategic growth and focus on new sales

• UK operation was EBITDA cash flow positive for January & February 2017
• Cost reductions expected from deregistration aimed at delivering positive EBITDA cash flows
• Management has continued confidence in increased energy production and revenue growth, for example, January 2017 energy production was 23% higher than the same period in the prior year
• Celtic Manor's 400kW system was commissioned late January 2017, bringing our operating fleet to 35 systems totalling 4,034kW
• Strategic growth through acquisition is aimed at boosting both capacity and capability
• Restructured business development includes staff recruitment and a focus on projects larger than 200kW, multi-site customers and more complex systems up to 2MW
• Management plans to introduce alternate On Site Utility models and capital sale solutions to broaden market appeal while also aiming to secure our first continental European project

The changes and achievements during 2016 mean EuroSite Power enters 2017 an independent and arguably stronger company. With an operating fleet capable of delivering positive cash flows there is encouraging underlying momentum and the Company's primary target for the year is to achieve a positive EBITDA cash flow position.

Relative to 2016, the Company reports that there are however, a number of factors that could affect 2017 earnings. At a positive level these include the Company's larger operating fleet, its increasing use of larger electrically efficient TEDOM equipment and the positive effect of more units being maintained in-house. Less favourably there is some uncertainty around changes to the retail price spark spread through 2017 and the Company reports that any adverse pricing will likely adversely impact margins through the year.

Strategically, acquisitions remain a priority for the Company. While certain transactions proved unsuccessful in 2016 the Company has started the year with clear targets already in sight. These targets align the Company's overall aims of adding both capacity and capability to its existing operation.

Management recognises the weak performance of its new business development activity through 2016 together with the need to turn this situation around. Restructuring is already underway with the aim of creating a new business development team focused on larger systems. 

Alternative Reporting Standard

The Company now files its financial statements under the Alternative Reporting Standard (ARS). Fiscal year end financial reports for the functional company, EuroSite Power Limited are audited by a PCAOB registered firm and the Company provides current information for the purposes of SEC Rules 144(c)(2) and 10b-5 using the OTC Disclosure & News Service.

On-Site Utility

EuroSite Power sells the energy produced from an onsite energy system to an individual property as an alternative to the outright sale of energy equipment. On-Site Utility solution customers only pay for the energy produced by the system and receive a guaranteed discount rate on the price of the energy. All system capital, installation, operating expenses and support are paid by EuroSite Power.

About EuroSite Power

The Company provides institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by conventional energy suppliers – without any capital or start-up costs to the energy user. More information can be found at www.eurositepower.co.uk.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company's website and in financial statements held by OTC markets for the fiscal year ended December 31, 2016. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

SOURCE EuroSite Power Inc.