American DG Energy Reports Third Quarter 2014 Financial Performance

Total Gross Margin without Depreciation is Over 36% for the Period

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Nov 13, 2014, 09:00 ET

WALTHAM, Mass., Nov. 13, 2014 /PRNewswire/ -- American DG Energy Inc. (NYSE MKT: ADGE), a leading On-Site Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and fitness facilities, reported total revenues of $1,886,693 in the third quarter of 2014, compared to $1,762,314 for the same period in 2013, an increase of $124,379. GAAP diluted loss per share (EPS) was $0.02 in the third quarter of 2014, compared with a GAAP diluted loss per share of $0.02 for the same period in 2013.

Major Highlights:

Financial

Total revenue increased by $124,379 to $1,866,693 in the third quarter of 2014, compared to $1,762,314 for the same period in 2013.
Total gross profit margin without depreciation was 36.3% in the third quarter of 2014.
Consolidated EBITDA cash outflows were $418,463 in the third quarter of 2014. EBITDA cash outflows were $168,151 for American DG Energy in North America and $250,312 for EuroSite Power.
We closed a common stock public offering with gross proceeds of $4 million.
EuroSite Power, the Company's European subsidiary, raised $3.0 million from John Hatsopoulos.
On October 3, 2014, we closed an arrangement saving $5.1 million of future American DG Energy cash outflows for interest on debt and eliminating $3.1 million of EuroSite Power convertible debt.
During October and November 2014 we secured an additional $1.5 million through a commitment and a placement of common stock.
As of September 30, 2014, we have $12.5 million of cash, net working capital of approximately $13.7 million and approximately $2.1 million of prepaid projects in process.
The total revenue value of our On-Site Utility energy agreements since inception is approximately $317 million using various market assumptions and estimates made by the Company.

Operations

Benjamin Locke began serving as Co-CEO of American DG Energy effective October 30, 2014, bringing a long history of industry experience and operation excellence to American DG Energy.
We currently operate 120 energy systems and our current backlog consists of 26 energy systems.
Total energy production was 29.3 million kWh in the third quarter of 2014.
The associated revenue was attributable to the following core markets:

Fitness	24%
Hospitality	22%
Housing	20%
Education	19%
Healthcare	11%
Other	4%
TOTAL	100%

The revenue was distributed by energy type as is outlined in the following table:

Electricity		47%
Cooling		28%
Thermal		25%
TOTAL		100%

We reached agreements with Green Hill Retirement Community in West Orange, New Jersey for a 75 kW CHP system.
We reached a partnership agreement with Community Works to promote energy systems to over 450 senior living facilities.
We began operations at a 75kW CHP system at a facility in Maryland.

American DG Energy will hold its earnings conference call today, November 13, 2014 at 10:00 a.m. Eastern Time. To listen, call (866) 364‑3819 within the U.S., (855) 669-9657 from Canada, or (412) 902-4209 from other 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 conference call will be recorded and available for playback one hour after the end of the call through Friday, December 5, 2014. To listen to the playback, call (877) 344‑7529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10055634.

The earnings conference call will also be webcast live. To register for and listen to the webcast, go to http://investors.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. We are 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 our On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. Learn more about how American DG Energy reduces energy costs at www.americandg.com or follow us on Facebook and Twitter.

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 BALANCE SHEET
As of September 30, 2014 December 31, 2013
(unaudited)

	Sep 30,	Dec 31,
	2014	2013
ASSETS
Current assets:
Cash and cash equivalents	$ 12,526,841	$ 9,804,291
Accounts receivable, net	1,233,078	988,420
Unbilled revenue	9,637	12,765
Due from related party	20,932	304,288
Inventory	1,702,176	2,246,335
Prepaid and other current assets	411,195	196,939
Total current assets	15,903,859	13,553,038
Property, plant and equipment, net	24,352,421	21,931,289
Accounts receivable, long-term	9,000	45,200
Other assets, long-term	106,746	54,768
TOTAL ASSETS	$ 40,372,026	$ 35,584,295

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$ 1,086,182	$ 871,079
Accrued expenses and other current liabilities	970,634	622,568
Due to related party	143,373	178,216
Total current liabilities	2,200,189	1,671,863
Long-term liabilities:
Convertible debentures	18,850,404	18,272,807
Convertible debt due to related parties	4,783,573	3,425,573
Warrant liability	30,380	132,265
Other long-term liabilities	5,670	15,876
Total liabilities	28,870,216	23,518,384

Stockholders' equity:
American DG Energy Inc. stockholders' equity:
Common Stock	52,691	49,818
Additional paid-in capital	44,299,508	40,110,305
Accumulated deficit	(33,454,677)	(29,343,517)
Total American DG Energy Inc. stockholders' equity	10,897,522	10,816,606
Non-controlling interest	604,288	1,249,305
Total stockholders' equity	11,501,810	12,065,911
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 40,372,026	$ 35,584,295

Reclassifications: certain prior period balances have been reclassified to conform to current period presentation.

CONSOLIDATED STATEMENT OF OPERATIONS
For three months ending September 30, 2014 and September 30, 2013
(unaudited)
	Three Months Ended
	Sep 30,	Sep 30,
	2014	2013
Revenues
Energy revenues	$ 1,697,723	$ 1,652,565
Turnkey & other revenues	188,970	109,749
Total Revenues	1,886,693	1,762,314
Cost of sales
Fuel, maintenance and installation	1,201,003	1,034,775
Depreciation expense	464,296	328,949
	1,665,299	1,363,724
Gross profit	221,394	398,590
Operating expenses
General and administrative	780,744	706,448
Selling	291,984	258,456
Engineering	167,078	226,565
	1,239,806	1,191,469
Loss from operations	(1,018,412)	(792,879)
Other income (expense)
Interest and other income	35,592	21,631
Interest expense	(350,892)	(346,778)
Loss on extinguishment of debt	-	-
Change in fair value of warrant liability	110,897	(46,934)
	(204,403)	(372,081)
Loss before provision for income taxes	(1,222,815)	(1,164,960)
Provision (benefit) for income taxes	(22,814)	(3,690)
Consolidated net loss	(1,245,629)	(1,168,650)
(Income) loss attributable to the non-controlling interest	75,977	40,335
Net loss attributable to American DG Energy Inc.	$ (1,169,652)	$ (1,128,315)

Net loss per share - basic and diluted	$ (0.02)	$ (0.02)
Weighted average shares outstanding - basic and diluted	51,690,714	49,015,891

Non-GAAP financial disclosure
Loss from operations	$ (1,018,412)	$ (792,879)
Depreciation & other non-cash expense	469,636	359,400
Stock based compensation	130,313	155,831
Adjusted EBITDA	(418,463)	(277,648)
Grants from rebates and incentives	-	5,625
Total EBITDA cash outflows *	$ (418,463)	$ (272,023)

* EBITDA cash outflows, for the second quarter of 2014, were $168,151 for American DG Energy in North America and $250,312 for EuroSite Power.

CONSOLIDATED STATEMENT OF OPERATIONS
For nine months ending September 30, 2014 and September 30, 2013
(unaudited)
	Nine Months Ended
	Sep 30,	Sep 30,
	2014	2013
Revenues
Energy revenues	$ 5,846,521	$ 5,399,499
Turnkey & other revenues	639,194	191,910
Total Revenues	6,485,715	5,591,409
Cost of sales
Fuel, maintenance and installation	4,394,238	3,555,360
Depreciation expense	1,358,173	985,939
	5,752,411	4,541,299
Gross profit	733,304	1,050,110
Operating expenses
General and administrative	2,330,702	2,189,291
Selling	800,458	948,642
Engineering	629,526	782,721
	3,760,686	3,920,654
Loss from operations	(3,027,382)	(2,870,544)
Other income (expense)
Interest and other income	57,940	87,919
Interest expense	(1,084,215)	(906,124)
Loss on extinguishment of debt	(533,177)	-
Change in fair value of warrant liability	101,885	272,072
	(1,457,567)	(546,133)
Loss before provision for income taxes	(4,484,949)	(3,416,677)
Provision (benefit) for income taxes	(32,694)	(45,329)
Consolidated net loss	(4,517,643)	(3,462,006)
(Income) loss attributable to the non-controlling interest	406,483	116,148
Net loss attributable to American DG Energy Inc.	$ (4,111,160)	$ (3,345,858)

Net loss per share - basic and diluted	$ (0.08)	$ (0.07)
Weighted average shares outstanding - basic and diluted	50,484,304	48,710,600

Non-GAAP financial disclosure
Loss from operations	$ (3,027,382)	$ (2,870,544)
Depreciation & other non-cash expense	1,410,476	1,046,730
Stock based compensation	338,790	439,191
Adjusted EBITDA	(1,278,116)	(1,384,623)
Grants from rebates and incentives	-	151,943
Total EBITDA cash outflows *	$ (1,278,116)	$ (1,232,680)

CONSOLIDATED STATEMENT OF CASH FLOWS
For nine months ending September 30, 2014 and September 30, 2013
(unaudited)
			Nine Months Ended
			Sep 30,	Sep 30,
			2014	2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$ (4,111,160)	$ (3,345,858)
		Income (loss) attributable to non-controlling interest	(406,483)	(116,148)
Adjustments to reconcile net loss to net cash provided (used in) operating activities:
		Depreciation and amortization	1,394,201	1,046,730
		Loss on extinguishment of debt	533,177	-
		Provision for losses on accounts receivable	26,087	64,134
		Amortization of deferred financing costs	2,567	20,671
		Amortization of convertible debt premium	9,997	-
		Increase (decrease) in fair value of warrant liability	(101,885)	(272,072)
		Noncash interest expense	624,108	528,489
		Stock-based compensation	338,790	439,191
Changes in operating assets and liabilities
	(Increase) decrease in:
		Accounts receivable and unbilled revenue	(231,417)	(425,574)
		Due from related party	283,356	(414,866)
		Inventory	544,159	251,254
		Prepaid and other current assets	(326,378)	(25,859)
	Increase (decrease) in:
		Accounts payable	215,103	(14,634)
		Accrued expenses and other current liabilities	348,066	404,479
		Due to related party	(34,843)	16,154
		Other long-term liabilities	(10,206)	(10,206)
Net cash provided by (used in) operating activities			(902,761)	(1,854,115)

CASH FLOWS FROM INVESTING ACTIVITIES:
		Purchases of property and equipment	(3,899,360)	(4,473,759)
Net cash used in investing activities			(3,899,360)	(4,473,759)

CASH FLOWS FROM FINANCING ACTIVITIES:
		Proceeds from issuance of convertible debentures	1,450,000	2,900,000
		Proceeds from sale of common stock, net of costs	3,243,217	965,001
		Proceeds from sale of subsidiary common stock, net of costs	-	(4,558)
		Convertible debenture transaction costs	-	(12,222)
		Proceeds from related party loan	3,000,000	-
		Principal payments on capital lease obligations	-	-
		Cancellation of restricted stock	-	(2,495)
		Distributions to non-controlling interest	(168,546)	(243,903)
Net cash provided by financing activities			7,524,671	3,601,823

Net decrease in cash and cash equivalents			2,722,550	(2,726,051)
Cash and cash equivalents, beginning of the period			$ 9,804,291	$ 13,362,919
Cash and cash equivalents, end of the period			$ 12,526,841	$ 10,636,868