Posts revenue growth of 39% over prior year & significant gross margin improvement
WALTHAM, Mass., March 29, 2016 /PRNewswire/ -- EuroSite Power Inc. (OTCQX: 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 total revenues of $2,198,721 for 2015, compared to $1,577,873 for 2014, an increase of 39.3%. GAAP diluted loss per share (EPS) was $0.02 for 2015, a meaningful improvement when compared with a loss per share of $0.04 for 2014.
Gross margin excluding depreciation and site impairments improved to 24.4% for full year 2015 compared with 18.9% in 2014. Overall gross margin improved by 8.7% to a loss of 5.3% for 2015, compared to a loss of 14.0% for 2014. More significantly, the fourth quarter 2015 saw adjusted gross margin improve to 31.5% versus just 18.6% in the prior year comparable period. Adjusted gross margin improvement reflects the benefits from introduction of in-house maintenance, lower gas prices, and other cost saving initiatives.
Eight new installations were commissioned in 2015 bringing total operational systems at year end to 29 with a total installed capacity of 2,878 kW and long term total contract value of operational systems of approximately $81 million. In addition, four new contracts were signed during the year and with the further contract win announced last week this now brings the total number of systems under contract (both operating and in backlog) to 37; totaling 4,098 kW of capacity for a combined lifetime contract value of approximately $105.95 million.
For the full year 2015 the Company generated 28,784,347 kWh of energy and delivered total customer savings of $414,338. The combined operational fleet reduced UK carbon emissions by 3,680 metric tons - equivalent to taking 775 cars off the road - delivering both financial and environmental savings.
Speaking about the full year results, EuroSite Power Chief Executive Officer Dr. Elias Samaras noted, "Not only have we delivered compelling financial results for the period, we have achieved a number of key milestones that have laid the foundation for strong future growth. The project financing agreements recently announced with Societe Generale and Macquarie set the stage for more rapid roll out of our On-Site Utility solution across the UK and Europe. Similarly, the arrangement with Corona Energy for purchase of natural gas at long term discounted rates reinforces our customer value proposition and ensures more predictable margins on our installed fleet going forward."
Paul Hamblyn, Managing Director of EuroSite Power, added, "2015 further established our position as a leading energy solutions provider while the fourth quarter also demonstrated the efficacy of our strategy to improve gross margin. We have already seen the success of our recent financing and energy purchase initiatives with the rapid announcement of our latest project, a 331 kW CHP system to be installed at The Dome Leisure Centre. Worth approximately $4.8 million over the full life of the contract, this large project is a solid argument for the value of the On-Site Utility business and validation of the initiatives we have been implementing over the past several months."
Total revenue increased by 39.3% to $2,198,721 for 2015, compared to $1,577,873 for 2014.
Energy revenue for the year grew by 44.3% to $2,144,248 compared to $1,486,154 for the year ended December 31, 2014.
Gross margin, excluding depreciation and site impairments, improved to 24.4% for 2015, versus18.9% for 2014. Overall gross margin improved by 8.7% to a loss of 5.3% for 2015, compared to a loss of 14.0% for 2014.
Total revenue value of all contracted On-Site Utility energy agreements as of December 31, 2015 was approximately $101.1 million using various market assumptions and estimates made by management, compared to $96.6 million at year end 2014. When including agreements signed to date during 2016, total contracted value currently stands at approximately $105.95 million.
We received $648,917 in Enhanced Capital Allowance (ECA) payments related to 2014 activities from the UK government during the year. We also filed for a further $358,780 ECA during 2015 and received payment in Q1 2016. ECA is a cash energy tax incentive for energy-saving plant and machinery, which includes combined heat and power systems.
Project financing agreements were executed with Societe Generale Equipment Finance and Macquarie during the first quarter of 2016. These agreements eliminate capital constraints on projects; any project which meets our return hurdles may now be pursued.
Sales and Operations
Total energy production for the full year 2015 of 28,784,347 kWh exceeds total generation for the whole of 2014 by 10,628,012 kWh, a 59% improvement over prior year results.
For the full year 2015 the Company brought into operation eight additional systems in the UK totaling 903 kW of additional operating capacity and reached agreements for a further 554 kW in new systems.
Total operational systems at December 31, 2015 was 29 with a total installed capacity of 2,878 kW and long term total contract value of approximately $81 million. This favorably compares with just 21 systems totaling 1,981kW of installed capacity with a total approximate contract value of $58 million at year end 2014.
The contracted project backlog as of December 31, 2015 was 7 systems for a total of 889 kW in capacity and approximately $20.0 million in future contract revenue. This compares with 2014 year end contracted project backlog of 11 systems for a total of 1,235 kW in capacity and approximately $38.6 million in total lifetime contract value. Current contracted project backlog is 7 systems totaling 1,020 kW (note this is not the same list of 7 systems as reported at year end 2015) with a total future contracted backlog value of $21.2 million.
EuroSite Power will host a conference call and webcast today at 10:00 am Eastern Time to discuss the fourth quarter and full year results in more detail. To listen to the audio portion, dial toll free (844) 492-3726 within the U.S., toll free (855) 669-9657 from Canada, or +1 (412) 542-4187 from other international locations. Participants should ask to be joined to the EuroSite Power earnings call. We suggest participants begin dialing at least 10 minutes prior to the scheduled starting time. Please note management will not be taking questions following the presentation of prepared remarks this quarter. Alternately, to register for and listen to the live webcast, please go to https://www.webcaster4.com/Webcast/Page/1022/13060.
The earnings conference call will be recorded and available for playback one hour after the end of the call through Tuesday, April 5, 2016. To listen to the playback, dial (877) 344-7529 within the U.S., (855) 669-9658 from Canada, or +1 (412) 317-0088 from other international locations and use Replay Access Code 10079917.
About EuroSite Power
EuroSite Power Inc. is a subsidiary of American DG Energy Inc. (NYSE MKT: ADGE). American DG Energy owns 48% of EuroSite Power and consolidates their financial results and P&L. The Company is committed to providing 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 - through On-Site Utility energy solutions. More information can be found at www.eurositepower.co.uk.
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 Securities and Exchange Commission filings, including its annual report on Form 10-K for the fiscal year ended December 31, 2014. 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.
CONSOLIDATED BALANCE SHEETS
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Common stock, $0.001 par value; 100,000,000 shares authorized; 65,747,100 issued and outstanding at December 31, 2015 and 2014
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Dr Elias Samaras is the founder, president and managing director of Digital Security Technologies S.A. He was also the founder and president of Plefsis Information Systems S.A. and City Messengers. Elias holds a Master of Science degree from MIT, a Doctor of Philosophy from Columbia University in New York, where he was also a professor for several years and an OPM from Harvard Business School.
Chief Operating Officer
Paul Hamblyn is Chief Operating Officer of EuroSite Power Ltd with responsibility for strategic and new business development of the business.Paul is highly experienced in the energy sector having built an enviable track record prior to joining EuroSite Power. This includes strategic level roles with Corona Energy and the ENER-G Group including 3 years as the Managing Director of ENER-G Efficiency.A leading expert on UK carbon regulation Paul is a regular speaker at major conferences including those organised by the Major Energy Users Council, the Local Government Association and the Westminster Energy Forum. He is also a formerCouncil Member of the Energy Services and Technology Association (ESTA). Paul is a CIBSE accredited Low Carbon Consultant and Energy Assessor as well as principal author of the award-winning CRC Toolkit developed for the London Energy Project.
UK General Manger
Chris Marsland is UK General Manger of EuroSite Power Ltd. He leads the UK operational company and directs its operational and administrative functions. Prior to joining Eurosite Power, Chris built up years of sector expertise in senior positions including the role of Technical Director at Centrica Business Solutions, formerly ENER-G Combined Power Limited. He also Chaired the Association for Decentralised Energy Commercial Forum and is an Association Board Member. Chris earned a first-class bachelor’s degree in electronic engineering and is both a Chartered Engineer and Fellow of the Institute of Engineering & Technology.
Financial Controller & Company Secretary
Laura Chambers is EuroSite Power Ltd’s Financial Controller and Company Secretary. An experienced finance professional, Laura has undertaken financial planning and analysis roles at number of blue-chip businesses including Astra Zeneca. She also spent 7 years at Kellogg’s European Finance Services Centre (EFSC). Qualified as a Chartered Accountant at KPMG’s Manchester office, Laura brings strong organisational skills and broad finance experience to the team.
Head of Operations
Stephen Butler is EuroSite Power Ltd’s Head of Operations. Having joined the company in 2012 as Chief Engineer, Stephen has moved through the business into his current role. With an impressive resume that includes senior mechanical engineering roles at Thames Water and ENER-G Combined Heat and Power Ltd, Stephen brings strong operational, project management and technical experience to the team. He is a Technician Member of the Institution of Engineering and Technology (TMIET).
UK Sales Manager
Martin Evans is our UK Sales Manager. A well-known and seasoned energy sector specialist, he brings a wealth of commercial experience - from start-ups to corporate level engagement – to our team. With a career spanning over 30 years, he has spent much of his career in technology led businesses and manufacturing including aviation and automotive. Martin’s previous roles at cutting-edge low carbon businesses including Grid Beyond, WEMS International and EnergyQuote JHA have given him a unique insight into the challenges faced by many of the UK’s most intensive energy users. He has also amassed over 15 years direct experience in commercial asset finance. Martin studied Applied Chemistry at the University of Manchester.
Mark Brown is our Account Manager. An experienced energy sector professional - particularly in the fields of CHP and renewable technologies - Mark has worked in engineering and technical roles for over 20 years. This includes 11 years at Cogenco UK (now fully integrated into Veolia’s CHP business). A great communicator with a positive approach to creative problem solving and troubleshooting, Mark is a key member of our customer-facing team. He holds qualifications from the Institute of Leadership and Management.
Jacques de Saussure
Non-Executive Chairman of the Board
Jacques de Saussure was Senior Managing Partner of the Pictet Group from 2010 until June 2016 after being elected partner of Pictet in 1987. Founded in Geneva in 1805, Pictet Group is one of Europe’s leading independent wealth and asset managers with EUR 437 billion of assets under management and custody as of 31 December 2015. Jacques is a member of the board of the Swiss Bankers Association and has also served as Vice Chairman of the Swiss Stock Exchange, which merged into SIX group in 2008, where he remained member of the board until 2010. Jacques holds a Master’s degree from MIT’s Sloan School of Management.
Dr Ahmed F. Ghoniem
Dr. Ahmed F. Ghoniem has been a member of our Board of Directors since January 2011. He is the Ronald C. Crane Professor of Mechanical Engineering at the Massachusetts Institute of Technology (MIT). He is also the director of the Center for 21st Century Energy and the head of Energy Science and Engineering at MIT, where he plays a leadership role in many energy-related activities, initiatives and programs. Ahmed holds a Ph.D. in Mechanical Engineering from the University of California, Berkeley, and an M.S. and B.S. in Mechanical Engineering from Cairo University.
Joan Giacinti is the founder and Chief Executive Officer of Sofratesa Group with headquarters in Santo Domingo, Dominican Republic. Joan is also a founder of Aerodom, a concessionaire chosen by the Dominican government to develop, operate and manage airports in the Dominican Republic, which in 2008 was acquired by Advent International. He is the President of the Caribbean region of the French Trade Councils, “Conseillers du Commerce Exterieur” and the President for the Americas of the Forum Francophone des Affaires (FFA). He is also decorated with the Ordre national du Mérite by the President of the French Republic. Joan is a graduate from the École des Hautes Études Commerciales de Paris (HEC).
Marcel Cassard joined Deutsche Bank in 1997 where he is now a member of the Global Markets Executive Committee and Global Head of Fixed Income and Economics Research. Marcel also heads the Bank’s Global Macro Strategy Group, which advises the Board and clients on broad market risks and global economic and financial developments. Previously, Marcel spent five years at the International Monetary Fund. Previous to that, he was an Economist at the Council of Economics Advisers in the Executive Office of the U.S. President. Marcel holds a PhD in Economics from Columbia University.
Mr. Stelios Zavvos
Stelios Zavvos is the Founder and CEO of Zeus Capital Management, a private equity group. With over 35 years of corporate, finance and real estate experience, Stelios is also the Founder and CEO of Continental American Capital, an investment group that focused on real estate investment and financing in the USA. He has served as a Member of the Board of Directors of the NASDAQ listed Star Bulk Carriers Corp, serving on the Board’s Audit Committee. He has also held executive positions in blue-chip companies such as Citibank, Johnson & Johnson and Procter & Gamble. SteliosZavvos holds an MBA from Harvard Business School and an MSc in Civil Engineering.