Thermal Energy - February 2014
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Thermal Energy - February 2014

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Corporate presentation for Thermal Energy International (TSX-V: TMG) - a global provider of energy efficiency solutions serving industrial, commercial and institutional markets.

Corporate presentation for Thermal Energy International (TSX-V: TMG) - a global provider of energy efficiency solutions serving industrial, commercial and institutional markets.

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  • Good morning everyone and thank you for joining us today. <br /> I would like to take the next 15 minutes or so to review some of our recent successes, our outlook and our growth plans. <br />
  • But before I continue with the presentation, I would like to draw your attention to our disclaimer with regards to forward-looking statements. [Pause] <br />
  • Moving on to the food and beverage industry… <br /> In the last month and a half we announced two heat recovery and four GEM orders totalling approximately $1.9 million from a leading Fortune 500 food and beverage company. <br /> These orders follow an initial heat recovery order for about $300 thousand from this customer back in December of last year. <br /> Importantly, we are continuing to develop additional energy efficiency projects for this important customer. <br />
  • Moving on to the food and beverage industry… <br /> In the last month and a half we announced two heat recovery and four GEM orders totalling approximately $1.9 million from a leading Fortune 500 food and beverage company. <br /> These orders follow an initial heat recovery order for about $300 thousand from this customer back in December of last year. <br /> Importantly, we are continuing to develop additional energy efficiency projects for this important customer. <br />
  • While our business is characterized by a long sales cycle, these recent orders and are growing project pipeline are evidence that the investment we made in sales and distribution in early fiscal 2013 is beginning to bear fruit. <br /> Furthermore, we currently have the largest order backlog in the company’s history. <br />
  • Moving on to the food and beverage industry… <br /> In the last month and a half we announced two heat recovery and four GEM orders totalling approximately $1.9 million from a leading Fortune 500 food and beverage company. <br /> These orders follow an initial heat recovery order for about $300 thousand from this customer back in December of last year. <br /> Importantly, we are continuing to develop additional energy efficiency projects for this important customer. <br />
  • On June 3 we announced a $3.6 million heat recovery order from a major North American pulp and paper company. <br /> The heat recovery system to be installed is expected to reduce carbon emissions by over 8,100 tonnes annually and reduce the <br /> facility’s oil consumption by over 25%. The energy savings alone are expected to pay for the capital cost of the project in just over a year, after application of available government support. <br /> This was our most recent of five heat recovery projects totalling $17 million in the pulp and paper industry since 2006. <br />
  • Moving on to the food and beverage industry… <br /> In the last month and a half we announced two heat recovery and four GEM orders totalling approximately $1.9 million from a leading Fortune 500 food and beverage company. <br /> These orders follow an initial heat recovery order for about $300 thousand from this customer back in December of last year. <br /> Importantly, we are continuing to develop additional energy efficiency projects for this important customer. <br />
  • The other industry I would like to highlight is healthcare. <br /> On June 13th we announced $800 thousand in heat recovery and GEM orders from a major publicly owned hospital. <br /> The heat recovery and GEM steam trap systems to be installed are expected to reduce this hospital’s annual fuel consumption by 29% and reduce the hospital’s total carbon emissions by approximately 10%. <br /> This project has an estimated payback period of [X] years. <br />
  • We have a global footprint, with a multinational management team and offices in Canada, the United Kingdom, the U.S., Italy and China. <br /> We have a growing international sales team with representation in 28 countries and serving an extensive list of multinational customers. <br />
  • We have a global footprint, with a multinational management team and offices in Canada, the United Kingdom, the U.S., Italy and China. <br /> We have a growing international sales team with representation in 28 countries and serving an extensive list of multinational customers. <br />
  • We have a global footprint, with a multinational management team and offices in Canada, the United Kingdom, the U.S., Italy and China. <br /> We have a growing international sales team with representation in 28 countries and serving an extensive list of multinational customers. <br />
  • We have a global footprint, with a multinational management team and offices in Canada, the United Kingdom, the U.S., Italy and China. <br /> We have a growing international sales team with representation in 28 countries and serving an extensive list of multinational customers. <br />
  • While our business is characterized by a long sales cycle, these recent orders and are growing project pipeline are evidence that the investment we made in sales and distribution in early fiscal 2013 is beginning to bear fruit. <br /> Furthermore, we currently have the largest order backlog in the company’s history. <br />
  • We have also been successful with our cross selling strategy, selling GEM orders to existing heat recovery customers and vice versa. <br /> In the last five months alone, we received eight GEM orders from six customers totalling close to $160 thousand, all of which was repeat business. <br /> And in the last 17 months, we have booked $377 thousand in GEM orders to existing customers. <br />
  • Good morning everyone and thank you for joining us today. <br /> I would like to take the next 15 minutes or so to review some of our recent successes, our outlook and our growth plans. <br />

Thermal Energy - February 2014 Thermal Energy - February 2014 Presentation Transcript

  • A more sustainable future... Today! TSX-V: TMG | Corporate Presentation | February 2014 1
  • Forward looking statements Certain written and oral statements included in this presentation constitute “forward-looking information”. For example, statements about the opportunities for repeat business, additional orders, entry into new markets and growth of recurring revenue streams; energy savings and payback period experienced by customers; growth of pipeline, order backlog; introduction of new products and services and growth opportunities and strategies are all forward looking information. Such forward looking information reflects Thermal Energy International’s current expectations with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from those that may be expressed or implied by such forwardlooking information. Fulfillment of orders, installation and activation of product could all be delayed for a number of reasons, some of which are outside of the company’s control, which would result in anticipated revenues from such projects being delayed or in the most serious cases eliminated. Orders in the company’s backlog may not turn into revenue due to many factors, some of which are outside of the company’s control, including but not limited to the company’s ability to deliver products on time and in accordance with specifications and the continuing financial viability of the customer. Introduction of new products and services, entry into new markets, repeat business and growth opportunities will all be subject to company resources and market acceptance and may not be achieved as anticipated by the company or at all. Information as to amount of heat recovered, energy savings and payback period associated with Thermal Energy International’s products are based on Thermal Energy International’s own testing and average customer results to date. Actual results of Thermal Energy International’s products will vary by installation. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this presentation. Readers should not place undue reliance on forwardlooking information. The forward-looking information is made as of the date of this presentation and Thermal Energy International does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law. 2
  • Who we are Global provider of energy efficiency & emission reduction solutions Industrial Commercial Institutional 3
  • Highlights 1 Large, fast growing global market with strong fundamentals 2 Proprietary & proven energy efficiency solutions provide high ROI 3 Strong track record of growth 4 Growing global footprint 4
  • Large, fast-growing market North American market >$90B 1 Global market >$450B 1 Calculations based on data from U.S. Dept. of Energy, 2012 Energy Outlook 1 Global energy consumption to grow by 56% from 2010 to 2040 Source: U.S. EIA, International Energy Outlook 2013 5
  • Strong market fundamentals  Energy efficiency retrofits represent significant cost reduction opportunities  WHY? Because ~60% of all energy used is lost due to inefficiency  Global targets to reduce emissions 6
  • Proprietary, proven solutions FLU-ACE® 80% Direct contact condensing heat recovery We can recover ~ of energy lost in typical boiler plant and steam system operations GEM® High ROI with short, compelling payback Condensate return systems (steam trap) 16 year track record 7
  • FLU-ACE® heat recovery – Recovery of waste heat from process exhaust 37 – Return hot water for use in production or heating 90%rate 10-30% 2-5 YEARS Recovery Reduction in Payback period energy costs Worldwide Installations Cool Air Cool Water Hot Air Hot Water 8
  • GEM® steam trap – Condensate return system – Reduce steam loss and improve efficiency vs. traditional mechanical steam traps – No moving parts – never needs replacing 10-30% Reduction in energy costs 65,000 Traps installed worldwide 1-2 year Payback period 9
  • Proven across a number of industries Pharmaceutical Significant repeat business 8 customers with 42 of >350 sites penetrated Food & Beverage 16 customers with 50 of >1,600 sites penetrated Hospitals >25 different hospitals Pulp & Paper 11 customers with >40 of 500+ sites penetrated Chemical / Petrochemical 11 customers with 18 of >500 sites penetrated 10
  • Strength in pulp & paper industry June 3, 2013: $3.6 million heat recovery project $17 million > in heat recovery and GEM® business from multiple customers since 2006 11 11
  • Repeat business in food & beverage Sept./Oct. 2013: $1.9 million in heat recovery & GEM® orders from leading Fortune 500 food & beverage company  Working towards additional heat recovery and GEM® orders at multiple sites with the same customer  7 orders to date 12
  • Cross selling to hospitals November 14, 2013: $1.2 million heat recovery order from a major hospital $3.0 million > in heat recovery & GEM® orders from major hospitals FY 2014 YTD 13
  • Our impact to date $530M Equivalent to: 7,300MW Fuel savings Cost of $15B 3.5M TONS Cost of $39B Greenhouse gas reductions 15,600MW 700,000 Cars off the road 2,600,000 Acres of forest (Carbon captured) 14
  • Growing global footprint Multinational management team International sales team (representation in 28 Extensive list of multinational customers countries) 15
  • Growing salesforce Today 2011 8 agents (N.A.) Sales 201 Sales agents (N.A.) 17 self-sufficient distributors 17 Small, Small, self-sufficient distributors 8 & marketing staff Sales 6 Large professional multi-line distributors 17 Sales & marketing staff Actively looking for 4 additional sales & marketing staff 16
  • Strong track record of growth  Ranked 36th  5-year revenue growth of 1,502% (2007 to 2012) 17
  • A challenging fiscal 2013 ($000’s) FY 2013 FY 2012 Revenue 8,210 13,152 Gross profit 4,977 5,648 Net income (loss) (2,825) 101 Operating cash flow (1,244) 903 FY 2013 impacted by: $2.3M non-cash charge for goodwill impairment related to GEM® business Temporary delay of major heat recovery projects Maturation of 2 large GEM® accounts 18
  • A strong start to fiscal 2014 ($000’s) H1 2014 H1 2013 Change  Heat recovery sales up ~$2.9M Revenue 5,536 2,122 +3,414  GEM® sales up >$0.5M Gross profit 2,845 1,325 +1,520 Net income (loss) (121) (1,634) +1,513  Received largest GEM® order to date 279 (1,205) +1,484 Operating cash flow 19
  • Outlook Investment in sales and distribution starting to bear fruit Growing pipeline Strong order backlog $7.1M (January 28, 2014) 20
  • Immediate growth opportunities  Grow sales & distribution capabilities in key markets  North America, Europe & the Middle East  Established foothold in North America, U.K. and Italy, otherwise key markets are largely untouched  Search firms on retainer for adding sales and marketing staff  Develop additional corporate accounts  Cross selling 21
  • Growth strategies  Introduce new products & services  Grow recurring revenue streams  Enter new markets  Acquire complementary products and businesses 22
  • Summary 23
  • Listing summary TSX-V: Recent Price: 52-Week Range: # of Shares: Market Cap: Cash: Total Debt: TMG $0.055 $0.03 to $0.065 161.6 million $8.9 million $2.5 million Nil Share data as at January 31, 2014 Balance sheet data as at November 30, 2013 24
  • A more sustainable future. Today. www.thermalenergy.com 25