001-34493 | 04-3569304 | |
(Commission File Number) | (IRS Employer Identification No.) | |
45 First Avenue | ||
Waltham, Massachusetts | 02451 | |
(Address of Principal Executive Offices) | (Zip Code) |
Date: | May 12, 2017 | AMERICAN DG ENERGY INC. |
By: /s/ Bonnie Brown | ||
Bonnie Brown, Chief Financial Officer |
• | Our revenues increased to $1,718,164 for the first quarter of 2017 compared to $1,514,449 for the same period in 2016, an increase of $203,715 or 13.5%. |
• | On-Site Utility Energy revenues in the first quarter of 2017 was $1,627,498 compared to $1,364,285 for the same period in 2016, an increase of $263,213 or 19.3%, due to the increase in production and demand billing. |
• | During the first quarter of 2017, our gross margins were 3.6% compared to 1.7% for the same period in 2016, an improvement of 118.5%, reflecting the ongoing benefit from reductions in fuel and maintenance costs as a percentage of sales. |
• | Costs associated with the sale of our energy revenues was $1,116,305 for the first quarter of 2017 and $1,020,713 for the first quarter of 2016. As a result, On-Site Utility Energy gross margins, excluding depreciation, were 31.4% in the first quarter of 2017, compared to 25.2% for the same period in 2016, an improvement of 24.6% quarter over quarter. |
• | Overall operating expenses increased to $599,077 for the first quarter of 2017 versus $559,164 for the same period in 2016, a 7.1% increase or $39,913 due to higher legal expense related to the planned merger with Tecogen Inc. |
• | As a result of our focused efforts to improve fleet operations, adjusted EBITDA cash flows (as defined below) improved by $66,211, reaching a positive "inflow" of $23,532 for the first quarter of 2017, versus an "outflow" of $42,679 for the same period in 2016. |
• | The loss from operations in the first quarter of 2017 was $536,852 compared to a loss of $534,057 for the same period in 2016, a slight increase of $2,795 or 0.5%. |
• | During the first quarter of 2017 certain inventory items amounting to $946,883 were sold to Tecogen Inc. to raise cash following the repayment of the convertible debt at the end of 2016. The net transaction, with income offset by carrying value had no impact on the Q1 2017 financial statements. |
• | Our GAAP cash flow from operations was a positive $1.047 million compared to a negative $893 thousand, a substantial improvement of $1.941 million, quarter over quarter, with the sale of inventory items to Tecogen Inc. accounting for about half of this improvement. |
• | Improved efficiencies resulted in a 5% reduction of maintenance costs for our fleet and a 1% reduction in fuel costs quarter over quarter. |
• | Overall energy production (thermal and electrical) for the first quarter of 2017 increased by 19% compared to the same period in 2016. |
• | The Company is continuing to implement its program to upgrade electrical metering such that we can accurately measure the CHP system’s benefit in reducing site peak electrical demand. By measuring this portion of site savings accurately, the company is eligible to collect revenue proportional to this savings. With eighty percent of the sites upgraded to date, the Company grew first quarter revenue attributed to demand savings by 74.3% over the prior year period, to $83,739 in the current year quarter as compared to $48,050 for the first quarter of 2016. We expect further site upgrade work to bring similar proportional growth in revenues. |
• | Electric rates, used as the basis for customer invoicing, increased on average 2.6% for the first quarter of 2017 when compared to the same period in 2016. Gas prices increased slightly by 0.5% quarter over quarter. This proportionally increases the value of our energy produced with a minimal negative offset relative to fuel costs. |
• | In total, as of March 31, 2017, we operated 92 systems totaling 5,445 kW of installed capacity. |
• | Revenue for the quarter was attributable to the following core markets: |
Fitness | 19 | % |
Hospitality | 12 | % |
Housing | 27 | % |
Education | 13 | % |
Healthcare | 22 | % |
Other | 7 | % |
Total | 100 | % |
• | The revenue was distributed by energy type as is outlined in the following table: |
Electricity | 58 | % |
Thermal | 42 | % |
Cooling | 0 | % |
Total | 100 | % |
March 31, 2017 | December 31, 2016 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,127,252 | $ | 338,627 | |||||
Accounts receivable, net | 778,044 | 815,748 | |||||||
Unbilled revenue | 17,079 | 18,797 | |||||||
Due from related party | 71,468 | 87,845 | |||||||
Inventory | 109,823 | 128,680 | |||||||
Assets held for sale | — | 946,883 | |||||||
Prepaid and other current assets | 356,496 | 299,667 | |||||||
Total current assets | 2,460,162 | 2,636,247 | |||||||
Property and equipment, net | 15,548,797 | 15,831,160 | |||||||
Investment securities | 519,568 | 637,651 | |||||||
TOTAL ASSETS | $ | 18,528,527 | $ | 19,105,058 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 257,100 | $ | 270,078 | |||||
Accrued expenses and other current liabilities | 635,238 | 522,525 | |||||||
Due to related party | 183,030 | 127,904 | |||||||
Total current liabilities | 1,075,368 | 920,507 | |||||||
Long-term liabilities: | |||||||||
Loan due to related party | 850,000 | 850,000 | |||||||
Total liabilities | 1,925,368 | 1,770,507 | |||||||
Commitments and contingencies (Note 8) | |||||||||
Stockholders' equity: | |||||||||
American DG Energy Inc. stockholders’ equity: | |||||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 50,684,095 issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 50,684 | 50,684 | |||||||
Additional paid-in capital | 58,852,221 | 58,823,704 | |||||||
Accumulated other comprehensive loss-investment securities | (254,931 | ) | (136,848 | ) | |||||
Accumulated deficit | (42,025,342 | ) | (41,381,221 | ) | |||||
Total American DG Energy Inc. stockholders’ equity | 16,622,632 | 17,356,319 | |||||||
Noncontrolling interest | (19,473 | ) | (21,768 | ) | |||||
Total stockholders' equity | 16,603,159 | 17,334,551 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 18,528,527 | $ | 19,105,058 |
Three Months Ended | |||||||||
March 31, 2017 | March 31, 2016 | ||||||||
Revenues | |||||||||
Energy revenues | $ | 1,627,498 | $ | 1,364,285 | |||||
Turnkey & other revenues | 90,666 | 150,164 | |||||||
1,718,164 | 1,514,449 | ||||||||
Cost of sales | |||||||||
Fuel, maintenance and installation | 1,131,104 | 1,051,261 | |||||||
Depreciation expense | 524,835 | 438,081 | |||||||
1,655,939 | 1,489,342 | ||||||||
Gross profit | 62,225 | 25,107 | |||||||
Operating expenses | |||||||||
General and administrative | 442,795 | 377,638 | |||||||
Selling | 1,704 | 20,524 | |||||||
Engineering | 154,578 | 161,002 | |||||||
599,077 | 559,164 | ||||||||
Loss from operations | (536,852 | ) | (534,057 | ) | |||||
Other income (expense), net | |||||||||
Interest and other income | 4,716 | 12,715 | |||||||
Interest expense | (13,215 | ) | (324,332 | ) | |||||
(8,499 | ) | (311,617 | ) | ||||||
Loss from continuing operations before provision for income taxes | (545,351 | ) | (845,674 | ) | |||||
Provision for income taxes | (87,365 | ) | (66,427 | ) | |||||
Loss from continuing operations | (632,716 | ) | (912,101 | ) | |||||
Income attributable to the noncontrolling interest | (11,405 | ) | (1,036 | ) | |||||
Loss attributable to American DG Energy Inc. from continuing operations | (644,121 | ) | (913,137 | ) | |||||
Loss from discontinued operations (Note 4) | — | (188,058 | ) | ||||||
Net loss attributable to American DG Energy Inc. | (644,121 | ) | (1,101,195 | ) | |||||
Other comprehensive loss - unrealized loss on securities | (118,083 | ) | — | ||||||
Comprehensive loss | $ | (762,204 | ) | $ | (1,101,195 | ) | |||
Loss per share from continuing operations attributable to American DG Energy Inc. - basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | |||
Loss per share from discontinued operations attributable to American DG Energy Inc. - basic and diluted | $ | — | $ | — | |||||
Net loss per share - basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | |||
Weighted average shares outstanding - basic and diluted | 50,684,095 | 50,684,095 |
Non-GAAP financial disclosure | |||||||||
Loss from operations | $ | (536,852 | ) | $ | (534,057 | ) | |||
Depreciation | 531,867 | 449,075 | |||||||
Stock based compensation | 28,517 | 42,303 | |||||||
Adjusted EBITDA from continuing operations | $ | 23,532 | $ | (42,679 | ) |
Three Months Ended | |||||||||
March 31, 2017 | March 31, 2016 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net loss attributable to American DG Energy, Inc. | $ | (644,121 | ) | $ | (1,101,195 | ) | |||
Income attributable to noncontrolling interest | 11,405 | 1,036 | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation | 531,867 | 449,075 | |||||||
Loss from discontinued operations | — | 188,058 | |||||||
Amortization of deferred financing costs | — | 10,141 | |||||||
Non-cash interest expense | — | 282,072 | |||||||
Stock-based compensation | 28,517 | 42,303 | |||||||
Changes in operating assets and liabilities: | |||||||||
(Increase) decrease in: | |||||||||
Accounts receivable and unbilled revenue | 39,422 | (249,147 | ) | ||||||
Due from related party | 16,377 | (1,104 | ) | ||||||
Inventory | 18,857 | 110,633 | |||||||
Assets held for sale | 946,883 | — | |||||||
Prepaid and other current assets | (56,829 | ) | (71,153 | ) | |||||
Increase (decrease) in: | |||||||||
Accounts payable | (12,978 | ) | (4,306 | ) | |||||
Accrued expenses and other current liabilities | 112,713 | 92,226 | |||||||
Due to related party | 55,126 | (641,982 | ) | ||||||
Net cash provided by (used in) operating activities | 1,047,239 | (893,343 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Purchases of property and equipment | (249,504 | ) | (529,251 | ) | |||||
Net cash used in investing activities | (249,504 | ) | (529,251 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Distributions to noncontrolling interest | (9,110 | ) | (13,258 | ) | |||||
Net cash used in financing activities | (9,110 | ) | (13,258 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 788,625 | (1,435,852 | ) | ||||||
Cash and cash equivalents, beginning of the period | 338,627 | 4,999,709 | |||||||
Cash and cash equivalents, end of the period | $ | 1,127,252 | $ | 3,563,857 | |||||
Supplemental disclosures of cash flows information: | |||||||||
Cash paid during the period for: | |||||||||
Income taxes | $ | 1,800 | $ | 48,824 | |||||
Non-cash investing and financing activities: | |||||||||
Distribution of nonmonetary assets | $ | — | $ | 340,069 |