American DG Energy Reports 2010 Third Quarter Financial Performance

EBITDA was $213,217 and Gross Margins expanded to 37%

News provided by

American DG Energy Inc.

Nov 08, 2010, 09:00 ET

WALTHAM, Mass.,  Nov. 8, 2010 /PRNewswire-FirstCall/ -- American DG Energy Inc. (NYSE Amex: ADGE), a leading OnSite Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, reported overall revenues of $1,569,577 in the third quarter of 2010, compared to revenues of $1,992,079 in the third quarter of 2009. GAAP diluted loss per share (EPS) was $(0.00) in the third quarter of 2010, compared to $(0.01) for the same period in 2009, and GAAP operating income was a loss of $(61,015) in the third quarter of 2010, compared to a loss of $(161,407) for the same period in 2009.

Third Quarter 2010 Highlights:

  • Energy revenue increased by 11% compared to the third quarter of 2009.
  • Gross profit margin was 37% and energy gross margin without depreciation increased to 52% primarily due to the efficient operation of our energy systems, increased chilled water or cooling revenue and the lower price of natural gas. The natural gas pricing, a key component in calculating our thermal or hot water revenue, was again lower in the third quarter of 2010 compared to the same period of 2009.  
  • Non-GAAP adjusted EBITDA was $213,217.
  • We received $111,250 in rebates and incentives in the third quarter or $428,751 for the first nine months of 2010.
  • We added a new energy system during the third quarter bringing the total number of energy systems operating to 71 and redeployed one system to another site. The total value of our current On-Site Utility energy agreements is approximately $152 million.
  • Our backlog consists of 15 energy systems.
  • We finished the quarter with over $4.0 million in cash, cash equivalents and short-term investments.
  • We raised $1.4 million from the sale of common stock of EuroSite Power Inc., a subsidiary whose business focus is to introduce the On-Site Utility solution into the European market.
  • We raised $1.0 million from an accredited investor by selling common stock at $2.50 per share and granted the investor a two-year warrant to purchase 400,000 shares of common stock of EuroSite Power Inc. at $1.00 per share.
  • Mr. Frank Mlynarczyk was added as a new member to our Board of Directors.

Recent Highlights

  • We announced an agreement to supply clean energy to Doubletree Guest Suites Boston, a premier, all-suite hotel in Boston, Massachusetts using a 75 kW combined heat and power system.
  • We raised an additional $325,000 by selling to accredited investors common stock of EuroSite Power Inc. at $1.00 per share.

"We are pleased to have accomplished our goal of a positive EBITDA of $213,217. This makes us one of the few alternative energy companies that have achieved positive EBITDA, which bodes well for our company as we continue to grow," said John N. Hatsopoulos, Chief Executive Officer of American DG Energy.  

American DG Energy will hold its earnings conference call today, November 8, at 10:00 a.m. Eastern Time.  To listen, call (800) 8602442 within the U.S., or (412) 858-4600 from international locations.  Participants should reference American DG Energy to access the call.  Please begin dialing at least 10 minutes before the scheduled starting time.  The earnings press release will be available on the Company web site at www.americandg.com in the "Investors" section under "News Releases."  The earnings call will be available for playback through Monday, November 15, 2010.  To listen to the playback, call (877) 3447529 within the U.S. or (412) 317-0088 outside the U.S. and use Playback Code 445813.

The earnings conference call will be webcast live.  To register for and listen to the webcast, go to www.americandg.com/webcast.  Following the call, the webcast will be archived for 30 days.

About American DG Energy

American DG Energy supplies low-cost energy to its customers through distributed power generating systems.  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 local utilities – without any capital or start-up costs to the energy user – through its On-Site Utility energy solutions.  American DG Energy is headquartered in Waltham, Massachusetts.  More information can be found at www.americandg.com.

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 Securities and Exchange Commission filings. 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 STATEMENTS OF OPERATIONS

for the Three Months Ended September 30, 2010 and September 30, 2009

(Unaudited)


Three Months Ended


September 30,

September 30,


2010

2009





Revenues



Energy revenues

$         1,395,274

$         1,259,738

Turnkey & other revenues

174,303

732,341


1,569,577

1,992,079

Cost of sales



Fuel, maintenance and installation

763,653

1,120,868

Depreciation expense

226,006

189,021


989,659

1,309,889

Gross profit

579,918

682,190





Operating expenses



General and administrative

375,197

365,054

Selling

111,132

315,850

Engineering

154,604

162,693


640,933

843,597

Loss from operations

(61,015)

(161,407)





Other income (expense)



Interest and other income

11,779

21,009

Interest expense

(23,280)

(105,000)


(11,501)

(83,991)





Loss before income taxes

(72,516)

(245,398)

Provision for state income taxes

(5,360)

(1,800)

Consolidated net loss

(77,876)

(247,198)





Less: Income attributable to the noncontrolling interest

(57,148)

(62,941)

Net loss attributable to American DG Energy Inc.

(135,024)

(310,139)





Net loss per share - basic and diluted

$                (0.00)

$                (0.01)





Weighted average shares outstanding -


basic and diluted

44,835,844

36,513,672





Non-GAAP financial disclosure



Loss from operations

$            (61,015)

$          (161,407)

Depreciation expense

236,807

192,506

Stock based compensation

37,425

57,103

Adjusted EBITDA

213,217

88,202

Grants from rebates and incentives

111,250

17,830

Total cash inflows

$            324,467

$            106,032

CONSOLIDATED STATEMENTS OF OPERATIONS

for the Nine Months Ended September 30, 2010 and September 30, 2009

(Unaudited)


Nine Months Ended


September 30,

September 30,


2010

2009





Revenues



Energy revenues

$          3,744,862

$          3,703,719

Turnkey & other revenues

513,955

771,822


4,258,817

4,475,541

Cost of sales



Fuel, maintenance and installation

2,649,554

2,873,494

Depreciation expense

641,249

575,064


3,290,803

3,448,558

Gross profit

968,014

1,026,983





Operating expenses



General and administrative

1,062,556

1,071,639

Selling

496,079

681,440

Engineering

587,664

415,775


2,146,299

2,168,854

Loss from operations

(1,178,285)

(1,141,871)





Other income (expense)



Interest and other income

39,947

64,725

Interest expense

(96,085)

(329,744)


(56,138)

(265,019)





Loss before income taxes

(1,234,423)

(1,406,890)

Provision for state income taxes

(10,710)

(5,650)

Consolidated net loss

(1,245,133)

(1,412,540)





Less: Income attributable to the noncontrolling interest

(136,936)

(157,959)

Net loss attributable to American DG Energy Inc.

(1,382,069)

(1,570,499)





Net loss per share - basic and diluted

$                 (0.03)

$                 (0.04)





Weighted average shares outstanding -


basic and diluted

43,030,344

35,017,951





Non-GAAP financial disclosure



Loss from operations

$        (1,178,285)

$        (1,141,871)

Depreciation expense

667,436

585,267

Stock based compensation

139,203

218,320

Adjusted EBITDA

(371,646)

(338,284)

Grants from rebates and incentives

428,751

99,274

Total cash inflows

$               57,105

$           (239,010)

CONSOLIDATED BALANCE SHEETS

as of September 30, 2010 and December 31, 2009

(Unaudited)


September 30,

December 31,


2010

2009

ASSETS


Current assets:



Cash and cash equivalents

$          3,921,211

$         3,149,222

Short-term investments

117,074

678,921

Accounts receivable, net

669,748

518,379

Unbilled revenue

135,523

146,940

Due from related party

151,977

370,400

Inventory

494,248

379,303

Prepaid and other current assets

84,184

104,119

Total current assets

5,573,965

5,347,284





Property, plant and equipment, net

13,425,700

9,502,346

Accounts receivable, long-term

17,034

-





TOTAL ASSETS

19,016,699

14,849,630





LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Accounts payable

397,021

740,474

Accrued expenses and other current liabilities

546,256

453,536

Due to related party

3,070,609

17,531

Capital lease obligations

3,365

3,365

Total current liabilities

4,017,251

1,214,906





Long-term liabilities:



Convertible debentures

-

5,320,000

Capital lease obligations, long-term

7,571

10,095

Total liabilities

4,024,822

6,545,001





Stockholders' equity:


American DG Energy Inc. shareholders' equity:



Common stock, $0.001 par value; 100,000,000 shares



 authorized; 45,098,029 and 37,676,817 issued and outstanding



 at September 30, 2010 and December 31, 2009, respectively

45,098

37,677

Additional paid-in capital

27,796,204

19,725,793

Common stock subscription

5,000

-

Accumulated deficit

(13,621,179)

(12,239,110)

Total American DG Energy Inc. stockholders' equity

14,225,123

7,524,360

Noncontrolling interest

766,754

780,269

Total stockholders' equity

14,991,877

8,304,629





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$        19,016,699

$       14,849,630

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the Nine Months Ended September 30, 2010 and September 30, 2009

(Unaudited)



Nine Months Ended



September 30,

September 30,



2010

2009






CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss

$      (1,382,069)

$  (1,570,499)


Income attributable to noncontrolling interest

136,936

157,959

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




Depreciation and amortization

667,436

585,267


Provision for losses on accounts receivable

42,650

242,537


Amortization of deferred financing costs

6,395

6,395


Stock-based compensation

139,203

218,320






Changes in operating assets and liabilities



(Increase) decrease in:






Accounts receivable and unbilled revenue

(199,636)

(652,178)


Due from related party

94,312

(14,489)


Inventory

(114,945)

(40,425)


Prepaid assets

13,540

(201)

Increase (decrease) in:






Accounts payable

(343,453)

193,332


Accrued expenses and other current liabilities

151,208

209,758


Due to related party

653,078

(35,321)

Net cash used in operating activities

(135,345)

(699,545)






CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(4,590,790)

(1,777,457)


Sale (purchases) of short-term investments

561,847

94,465

Net cash used in investing activities

(4,028,943)

(1,682,992)






CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from issuance of restricted stock

-

1


Proceeds from issuance of warrants

-

45,500


Proceeds from exercise of warrants

350,000

-


Proceeds from sale of common stock, net of costs

999,952

5,715,423


Proceeds from sale of subsidiary common stock, net of costs

1,356,037

-


Proceeds from exercise of stock options

54,941

-


Proceeds from related party line of credit

2,400,000

-


Convertible debenture transaction costs

(21,556)

-


Principal payments on capital lease obligations

(2,524)

(2,524)


Distributions to noncontrolling interest

(200,573)

(237,821)

Net cash provided by financing activities

4,936,277

5,520,579






Net increase in cash and cash equivalents

771,989

3,138,042

Cash and cash equivalents, beginning of the period

3,149,222

1,683,498

Cash and cash equivalents, end of the period

$       3,921,211

$    4,821,540






Supplemental disclosures of cash flows information:




Cash paid during the period for:


Interest

$            12,880

$       342,245

Income taxes

$            24,518

$         35,460






Non-cash investing and financing activities:


Conversion of convertible debentures to common stock

$       5,320,000

$       550,000

SOURCE American DG Energy Inc.

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