Record revenue of $23 million for fiscal year-to-date period
Ottawa, Ontario--(Newsfile Corp. - April 29, 2025) - Thermal Energy International Inc. (TSXV: TMG) (OTCQB: TMGEF) ("Thermal Energy" or the "Company"), a provider of innovative energy efficiency and carbon emission reduction solutions to major corporations around the world, today reported its financial results for the third quarter ended February 28, 2025. All figures are in Canadian dollars.
Q3 2025 Highlights:
Revenue decreased 4.1% to $5.8 million compared to Q3 2024.
Negative EBITDAi of $167 thousand and net loss of $403 thousand.
Cash position of $5.1 million and working capital of $2.4 million at quarter end.
Order intake was $6.9 million,
Order backlogii was $14.8 million as at February 28, 2025, and $17.1 million as at April 28, 2025.
Overview
"Our record revenue for the year-to-date period is in part a reflection of the increased capacity of our engineering team and their ability to successfully execute on our order backlog," said William Crossland, Thermal Energy CEO. "Over the past two years, we made significant reinvestments in our business, including growing our engineering and our sales and marketing teams. While this has lowered our profitability over this time, we remained EBITDA positive for the year-to-date and on a trailing four quarters basis. The focus for the next 12 months is to maximize the benefits from those investments. While we have already benefited from the increased capacity of our engineering team, it's time to redouble our focus on converting our already strong business development pipeline and growing our order intake again. As we said last quarter, in fiscal 2026 we expect to start seeing more benefits from the growth investments we made over the last two years, with higher revenues contributing proportionately more to profitability."
"While the tariff landscape remains subject to change, we do not anticipate significant disruptions to our operations due to tariffs or ongoing trade tensions between the U.S. and the countries in which we operate. Our supply chain is both diverse and adaptable; with most of our manufacturing outsourced, we are generally able to partner with manufacturers located in multiple jurisdictions and usually within the same country as our projects. As a result, we believe the tariffs already announced are unlikely to have a material negative impact on Thermal Energy."
Summary Financial Results
In thousand except % data
Three months ended Feb. 28, 2025
Three months ended Feb. 29, 2024
Nine months ended Feb. 28, 2025
Nine months ended Feb. 29, 2024
Revenue
$
5,815
$
6,063
$
22,955
$
18,352
Gross profit
$
2,267
$
3,061
$
8,665
$
9,317
Gross margin
39%
50%
38%
51%
Operating expenses
$
2,517
$
2,896
$
8,240
$
8,155
Net (loss) income
($403
)
$
44
($65
)
$
692
EBITDAi
($167
)
$
322
$
655
$
1,566
Cash position
$
5,143
$
7,536
$
5,143
$
7,536
Working capital
$
2,378
$
3,378
$
2,378
$
3,378
Orders received
$
6,931
$
8,320
$
17,000
$
24,408
Order backlogii as of February 28/29
$
14,800
$
20,400
$
14,800
$
20,400
Financial Review for the Third Quarter Ended February 28, 2025
Third quarter revenue decreased 4% year-over-year to $5.8 million mainly due to lower revenues from heat recovery projects, partially offset by higher revenues from equipment sales. Gross profit for the quarter decreased by 26% to $2.3 million, mainly due to less revenue and lower gross margin from heat recovery projects.
Operating expenses were $379 thousand lower than the same quarter a year earlier, mainly due to the increase in foreign exchange gains. R&D expense increased by $67 thousand due to higher R&D activities conducted in the quarter.
The Company had negative EBITDA of $167 thousand and a net loss of $403 thousand, compared to positive EBITDA of $322 thousand and net income of $44 thousand in the third quarter a year earlier.
At the end of February 28, cash and working capital balances were approximately $5.1 million and $2.4 million, respectively.
Financial Review for the Nine Months Ended February 28, 2025
For the nine months ended February 28, 2025, revenue was $ 23.0 million, up about 25% year-over-year, with higher revenues from heat recovery projects being partially offset by lower revenues from GEM traps. Gross profit decreased 7% to $8.7 million compared to $9.3 million in the same period a year ago. The decrease in gross profit was mainly due to the decreased GEM revenues and lower gross margin on heat recovery projects.
Operating expenses amounted to $8.2 million, up $85 thousand compared to same period a year ago. The variance included an additional $529 thousand related to the growth in headcount, increased travelling and business development costs, and inflation-related increases to regular operating costs and salaries, and was partially offset by a $444 thousand increase in foreign exchange gains.
R&D expense increased by $222 thousand compared to prior year due to a higher amount of R&D activities engaged.
The Company achieved EBITDA of $0.7 million and net loss of $65 thousand for the nine months ended February 28, 2025.
Business Outlook and Order Summary
Orders received ("Order Intake") during the third quarter totalled $6.9 million. The Company ended the quarter with an order backlog of $14.8 million, down 28% from the $20.4 million at the end of the same quarter in the prior year.
The Company received $2.3 million in new orders subsequent to quarter end, bringing the current order backlog to $17.1 million as of April 28, 2025. A list and description of recent order highlights is available on page 16 and 17 of the Management's Discussion and Analysis filed today.
Management of Thermal Energy will host an earnings call and webcast today, April 29, 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://bit.ly/TMG2025Q3. 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 April 17, 2025.
Readers are encouraged to subscribe to TEI News to receive strategic news and updates directly to their inbox.
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 Crossland President and CEO Thermal Energy International Inc. 613-723-6776 Investors@thermalenergy.com
Notes to editors
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.
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, expectations that order intake will bounce back, and the Company's expectations as to the impact of tariffs and ongoing trade tensions. 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. Statements about the Company's expectations as to the impact of tariffs and ongoing trade tensions are based on currently available information. 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
Management believes that EBITDA (earnings before interest, taxation, depreciation, amortization, impairment of intangible assets, and share-based compensation expense) is a useful performance measure as it approximates cash generated from operations, before tax, capital expenditures and changes in working capital, and excludes impairment of intangible assets. EBITDA also assists comparison among companies as it eliminates the differences in earnings due to how a company is financed. EBITDA does 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.
A reconciliation of net (loss) income to EBITDA is shown below.
Three months ended
Nine months ended
Feb 28, 2025 $
Feb 29, 2024 $
Feb 28, 2025 $
Feb 29, 2024 $
Total net (loss) income attributable to owners of the parent
(416,630)
29,011
(125,362)
651,031
Total net income attributable to non-controlling interest
13,994
15,440
59,870
40,789
Interest charge
70,211
94,213
235,657
322,116
Interest revenue
(7,962)
-
(51,900)
-
Income tax expense
14,440
17,115
49,451
112,107
Depreciation and amortization
96,815
100,488
294,927
267,745
Share based compensation
61,638
65,307
192,250
171,945
EBITDA
(167,494)
321,574
654,893
1,565,733
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.
i EBITDA represents earnings before interest, taxation, depreciation, amortization, impairment of intangible assets, and share-based compensation expense. See note below about non-IFRS measures. ii 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.
