Heating up: Ottawa’s Thermal Energy hits record revenues in fiscal 2018

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Buoyed by strong sales of its heat recovery systems, Ottawa’s Thermal Energy International posted record revenues of more than $17 million in fiscal 2018, the company announced late last week.

The clean-tech firm said revenues for the fiscal year ended May 31 were $17.4 million, up 32 per cent from the previous record high of $13.2 million the company posted in fiscal 2017. The company’s gross profit jumped 12 per cent to a record $8.3 million, compared with $7.4 million a year earlier, while net income was up 58 per cent to $619,000.

Thermal Energy CEO William Crossland said the firm has “invested significantly” in its workforce over the past three years, adding employees in Ottawa, Britain, Texas, Poland and Germany.

“We have also expanded our product offerings and expertise, and these investments are now starting to pay off,” Crossland said in a statement.

“Growing our sales, marketing and technical capabilities and expanding our portfolio of complementary energy-efficiency solutions are key parts of a strategy that has resulted in our revenue almost tripling over the last three years.”

Thermal Energy (TSX-V:TMG) said sales of its heat recovery systems grew nearly 74 per cent compared with the previous year, thanks in large part to deals with two major hospitals and a Fortune 500 food and beverage customer.

The firm said that although the results also included revenues from its record $11-million deal with Canadian pulp and paper firm Resolute Forest Products that was announced late last year, “it is important to note that fiscal 2018 would have been a record revenue year even without the Resolute Forest Products order.”

The company now has an order backlog of $12.7 million, up from $9 million in September 2017.

Thermal Energy’s operating expenses increased by nearly $1 million in fiscal 2018 to $7.8 million, which the company attributed mainly to higher staff and marketing costs and one-time expenditures related to its $2.25-million acquisition of Pennsylvania-based Boilerroom Equipment this summer.

The firm’s fourth-quarter revenues of $7.4 million were the highest in its history. Thermal Energy’s gross profit for the quarter jumped 41.4 per cent to $3.4 million, while its net income was $888,000, up from $354,000 a year earlier.

The company said its cash and cash equivalents totalled $3.3 million as of May 31, a slight increase over the $3 million it had on hand in May 2017.

Thermal Energy sells equipment that captures and reuses heat from the exhaust and steam traps of large buildings, such as hospitals and industrial facilities. This helps cut its customers’ energy bills and reduces emissions.

Shares of Thermal Energy were up six percent to 8.5 cents in midday trading on the TSX Venture Exchange.