Ottawa-based Thermal Energy looks to strong backlog to offset stagnating revenue

Thermal Energy
Thermal Energy

Despite relatively flat revenues, Ottawa’s Thermal Energy International Inc. (TSX:TMG) believes its year-to-date and impending orders bode well for future growth.

The clean-tech company reported third-quarter results Tuesday that included revenues of $3.2 million in the three-month period that ended Feb. 28, virtually the same as in the same period a year ago.

While Thermal Energy saw a 9.7 per cent increase in sales of its heat recovery systems this past quarter, a 25 per cent drop in sales of its flagship GEM steam traps offset revenue gains.

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Gross profit also fell this quarter, representing 52 per cent of sales this year as opposed to 63 per cent in the third quarter of 2016. The company reported a net loss of $56,000, as compared to net income of $418,000 a year previous.

Despite the lacklustre quarter, Thermal Energy believes it will end the year on a high note. The company’s year-to-date profitability is trending higher than this time last year, and its current order backlog of $8 million represents a 70 per cent increase year-over-year. This backlog features $3.5 million in orders from three hospitals, as well as thousands of dollars more from ethanol producers, pulp and paper mills and repeat business from a Fortune 500 food and beverage company.

Thermal Energy is coming off a strong second quarter which saw a 23 per cent year-over-year revenue increase and a $1.7 million order earlier in the year which gave the company’s share price a major boost.

“Thermal Energy International is well-positioned to capitalize on the strong market conditions we are witnessing around the world,” CEO William Crossland said in a statement.

At the end of the third quarter, net cash on hand was approximately $2.6 million.

Shares of Thermal Energy showed little reaction to the quarter’s results yesterday, ending the day slightly below its opening price.

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