EuroSite Power Reports First Quarter 2017 Financial Performance

UK subsidiary achieves positive operating EBITDA cash flow

WALTHAM, Mass., May 16, 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 first quarter revenues increased to $830,849 compared to $687,032 in 2016, an improvement of 21%. Gross margin excluding depreciation improved to 40%, up from 37.2% reported in 2016. Together this enabled the Company's UK subsidiary to achieve a positive operating EBITDA cash flow for the first quarter, a first in the Company's history. In addition, the Company also achieved a positive non-GAAP adjusted EBITDA cash flow of $6,722 for the first quarter 2017 compared to a loss of $245,635 in the comparable prior year period. 

Commenting on the Company's results Dr. Elias Samaras, Chief Executive Officer said "As investors will know, the primary target for the year is to achieve a positive EBITDA cash flow position. The first step in reaching this goal was for our UK operating subsidiary to achieve a positive position which it did this quarter. At the same time reduced US corporate costs allowed us to significantly improve the adjusted EBITDA on consolidation to deliver a small positive cash flow of $6,722, a big improvement over last year's loss. While there is still a long way to go to achieve our ultimate aim we are greatly encouraged by the first quarter's result."

"Higher energy production and improved margins helped us achieve a positive cash position this quarter" said Paul Hamblyn, Managing Director when remarking on the UK company's performance. "The challenge now is to maximise cash generation through the spring and into the summer when it's been usual to see losses as thermal demand drops off. The team remains focused on managing our fleet to maximise income while also selling and installing more systems and continuing to control costs."

HEADLINES
Improved gross profit and positive cash flow

  • Gross profit for Q1 2017 increased to $199,623 compared to $142,640 for the same period on 2016, a 40% improvement
  • Gross profit excluding depreciation for the first quarter 2017 increased to $332,242 compared to $255,635 in the comparable prior year period, a 30% improvement
  • Gross margin improved to 24% for the first quarter 2017, compared with 20.7% for the first quarter of 2016, an increase of 3.3 percentage points
  • Gross margin excluding depreciation improved for Q1 2017 to 40% as compared to 37.2% in the same period of 2016
  • The Company achieved an adjusted Non-GAAP EBITDA profit for the first quarter of 2017 of $6,722 compared to a loss of $245,635 for the same period in 2016
  • UK operating subsidiary achieved a positive EBITDA cash flow for the quarter totalling £47,813 ($59,780) compared to a negative cash flow of £45,268 ($65,050) in Q1 2016. This represents a swing of over 200% or £93,081 ($124,830)

Financial and operational performance

  • Revenue increased by 21% to $830,849 (£671,013) for quarter ended March 31, 2017 as compared to $687,032 (£479,651) for quarter ended March 31, 2016. At functional GBP level revenues increased 40%
  • GAAP diluted loss per share (EPS) was $0.003 for the first quarter of 2017 as compared to a loss of $0.01 for the same period in 2016
  • Total energy production increased by 34% to 13,338 MWh for the period ended March 31, 2017 as compared to 2016, which equates to 35% of the total energy production achieved during the whole of 2016
  • Electricity generation increased 39% reflecting the improved overall electrical efficiency due to TEDOM equipment now making up 60% or 2,434kW of the Company's installed fleet
  • Brought the 400kW system at Celtic Manor Resort into operation during January
  • Operational fleet capacity at March 31, 2017 was 4,034kW compared to 3,078kW at the end March 2016
  • Current contracted backlog 5 systems, 534kW

Outlook

  • New Head of Business Development appointed and starts June 1, 2017
  • Sales pipeline now includes opportunities for a number of larger schemes including some capital sale projects. In addition, opportunities in continental Europe have also been added to the pipeline
  • Management continue to have confidence in increased energy production and revenue growth resulting from both the increased fleet size and improved availability
  • The Company's acquisition strategy continues

Future News Releases

In order to simplify and streamline news provided to investors all future financial results and news will, with effect from the date of this release, only be published on the Company's website (http://investors.eurositepower.co.uk/news-releases). Anyone wishing to receive notice of a news release should subscribe to the email alerts service provided within the investors pages (http://investors.eurositepower.co.uk/email-alerts).

Alternative Reporting Standard

The Company now files its financial statements under the Alternative Reporting Standard (ARS). Quarterly financial reports are prepared in accordance with US GAAP, are generally provided within 45 days of period end (90 days for fiscal year end results) and are reported to maintain the OTC Pink Limited Information tier.

Following corporate reorganisation and de-registration of the Company's common stock, with effect from January 1, 2017 foreign exchange gains/losses are reported in the cumulative translation adjustment (CTA) account on the Company's balance sheet. 

Fiscal year end financial reports for the operating 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.

Investor Contact:

Media Contact:

Dr Elias Samaras

Paul Hamblyn

EuroSite Power Inc.

EuroSite Power Inc.

+44 844 693 2848

+44 844 693 2848

elias.samaras@eurositepower.co.uk

paul.hamblyn@eurositepower.co.uk

 

 

EUROSITE POWER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


March 31,


December 31,


2017


2016

ASSETS




Current assets:




Cash and cash equivalents

$3,833,517


$3,734,526

Accounts receivable

446,062


270,199

Value added and other tax receivable



9,280

      UK energy tax incentives receivable

230,965


227,536

Inventory

124,460


158,833

Other current assets

228,034


233,351

Total current assets

4,863,037


4,633,725

Property and equipment, net

8,239,972


8,233,773

Other assets, long-term

6,403


8,143

TOTAL ASSETS

$13,109,411


$12,875,641





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$256,191


$388,616

Accrued expenses and other current liabilities

189,430


213,492

Due to related party

-


38,811

Note payable - bank, short-term

143,100


69,933

Total current liabilities

588,721


710,852

Long-term liabilities:




Convertible debentures

302,008


305,017

Convertible debentures Due to related parties



-

Note payable - bank

703,121


252,271

Note payable - related party

-


-

Total liabilities

1,593,850


1,268,140





Stockholders' equity:




Common Stock, $0.001 par value; 100,000,000 shares authorized; 82,265,056 and 65,747,100 issued at March 31, 2017 and December 31, 2016

82,265


82,265

Additional paid-in capital

22,380,406


22,243,742

Accumulated deficit

(10,997,343)


(10,718,506)

Cumulative translation adjustment (CTA)

50,235


-

Total stockholders' equity

11,515,563


11,607,501

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$13,109,411


$12,875,641

 

 

EUROSITE POWER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


Three Months Ended


March 31,


March 31,


2017


2016

Revenues




Energy revenues

$828,893


$685,716

Turnkey and other revenues

1,956


1,316


830,849


687,032

Cost of sales




Fuel, maintenance and installation

498,607


431,397

Site impairments

-


-

Depreciation expense

132,619


112,995


631,227


544,392

Gross profit (loss)

199,623


142,640

Operating expenses




General and administrative

283,561


300,092

Selling

89,349


132,929

Engineering

100,586


88,490


473,496


521,511

Loss from operations

(273,873)


(378,871)

Other income (expense)




Interest income



126

Interest expense, net of debt premium amortization

(5,173)


(12,716)

Debt conversion expense

-


-


(5,173)


(12,590)

Loss before income taxes

(279,046)


(391,461)

Benefit for income taxes

-


-

Net loss

$(279,046)


$(391,461)





Net loss per share - basic and diluted

$(0.003)


$(0.01)

Weighted-average shares outstanding - basic and diluted

82,265,056


65,747,100





Non-GAAP financial disclosure




Loss from operations

$(273,873)


$(378,871)

Depreciation expense

143,931


114,884

Site Impairments

-


-

Stock based compensation

136,664


18,352

Adjusted EBITDA

$6,722


$(245,635)

 

 

EUROSITE POWER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


Three Months Ended


March 31,


March 31,


2017


2016

CASH FLOWS FROM OPERATING ACTIVITIES:




Net loss

$(279,046)


$(391,461)

Adjustments to reconcile net loss to net cash used in operating activities:




      Non cash debt conversion expense

-


-

Depreciation

143,931


114,884

      Non cash interest expense

-


-

      Non-cash site impairments

-


-

      Amortization of convertible debt premium



(24,072)

Stock-based compensation

136,664


18,352

Changes in operating assets and liabilities




(Increase) decrease in:




Accounts receivable

(175,863)


(68,134)

Value added and other tax receivable

30,391


(32,053)

Accrued UK energy tax incentives



369,485

Inventory

34,373


(65,801)

Prepaid and other current assets

5,317


16,009

Other assets, long term

(1,480)


1,440

Increase (decrease) in:




Accounts payable

(132,425)


58,531

Due to related party

(38,811)


81,645

Accrued expenses and other current liabilities

(48,182)


(16,249)

Note payable - bank

-


-

Net cash used in operating activities

(325,131)


62,576





CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(150,130)


(211,453)

Net cash used in investing activities

(150,130)


(211,453)





CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from sale of Common Stock net of costs

-


-

Payments on note payable - related party

-


-

Proceeds from loan payable - bank

524,017


-

Net cash provided by (used in) financing activities

524,017


-





Effect of Exchange Rate on Cash and Cash Equivalents

50,235


-





Net increase (decrease) in cash and cash equivalents

98,991


(148,877)

Cash and cash equivalents, beginning of the period

3,734,526


587,819

Cash and cash equivalents, end of the period

$3,833,517


$438,942

 

 

SOURCE EuroSite Power Inc.


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