American DG Energy Reports Third Quarter 2015 Financial Performance

North American operations improves Non-GAAP EBITDA cash outflows to $51,018

News provided by

American DG Energy Inc.

Nov 11, 2015, 09:00 ET

WALTHAM, Mass., Nov. 11, 2015 /PRNewswire/ -- American DG Energy Inc. (NYSE MKT: ADGE), On-Site Utility™, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and fitness facilities, reported total revenues of $1,956,544 in the third quarter of 2015, compared to $1,886,693 for the same period in 2014. Loss per share (EPS) was $(0.02) in the third quarter of 2015, compared with a loss per share of $(0.02) for the same period in 2014. Reflecting the Company's ongoing efforts to optimize its On-Site Utility production, gross margin without depreciation improved in the third quarter of 2015 to 37.5% from 35.3% in the same period a year ago.

Major Highlights:

Financials

  • Consolidated revenues increased by 3.7% for the third quarter of 2015 as compared to the third quarter of 2014.
  • As a result of our efforts to improve operations and efficiencies, general and administrative expenses have decreased to $558,821 for the third quarter of 2015 versus $780,744 for the same period in 2014, a 28.4% improvement. Overall operating expenses improved 8.3% with a reduction of $102,481.
  • Gross margin without depreciation improved by 2.3%, hitting 38.6% for the third quarter of 2015 versus 36.3% for the same period in 2014.
  • Consolidated EBITDA cash outflows improved by $21,277, reaching $397,186 in the third quarter of 2015, versus outflows of $418,463 in the third quarter of 2014.
  • As a result of our focused efforts to improve fleet operations, parent company American DG Energy's business in North America had Non-GAAP EBITDA cash outflows for the three months ended September 30, 2015 of $51,018 versus outflows of $168,152 in the third quarter of 2014, an improvement of over $117,134. See reconciliation of Non-GAAP EBITDA below.

Operations

  • Management appointed Bonnie Brown as Chief Financial Officer and Robert Panora as Acting Director of Operations.
  • Certain of the Company's directors and members of management have adopted SEC Rule 10b5-1 plans to purchase ADGE stock in the open market; the plans are active and ongoing.
  • As of September 30, 2015 we operated 120 energy systems and our current backlog consists of 19 energy systems.
  • Third quarter revenue was attributable to the following core markets:


Hospitality

24

%

Fitness

22

%

Housing

15

%

Health Care

9

%

Education

24

%

Other

6

%

TOTAL

100

%


  • The total number of systems now under contract is 139, totaling 9,988kW and 4,855 tons of cooling
  • In total, as of September 30, 2015, we operated 121 systems totaling 8,323kW of installed capacity with a total contract value of $261.1 million.

American DG Energy will hold its earnings conference call today, November 11, 2015 at 11:00 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 Thursday November 19, 2015.  To listen to the playback, call (877) 344-7529 within the U.S. (855) 669-9658 from Canada, or +1 (412)317-0088 from other international locations and reference Replay Access Code 10075343. 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.

AMERICAN DG ENERGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30,
 2015

December 31,
 2014

ASSETS


Current assets:


Cash and cash equivalents

$

6,836,273

$

11,825,915

Accounts receivable, net

1,028,910

1,140,811

Unbilled revenue

13,652

12,533

Due from related party

53,159

39,682

Inventory finished goods

1,088,097

1,153,927

Prepaid and other current assets

571,441

852,069

Total current assets

9,591,532

15,024,937

Property, plant and equipment, net

26,187,009

24,885,155

Accounts receivable, long-term

—

3,600

Other assets, long-term

63,609

92,148

TOTAL ASSETS

$

35,842,150

$

40,005,840




LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:


Accounts payable

$

757,666

$

605,530

Accrued expenses and other current liabilities

508,900

485,570

Due to related party

986,072

630,805

Note payable related party

2,000,000

—

Total current liabilities

4,252,638

1,721,905

Long-term liabilities:


Convertible debentures

1,600,309

1,645,444

Convertible debentures due related parties

16,729,795

15,864,215

Note payable related party

—

3,000,000

Warrant liability

2

6,780

Other long-term liabilities

—

2,227

Total liabilities

22,582,744

22,240,571

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 and
52,140,001 issued and outstanding at September 30, 2015 and December 31, 2014,
respectively.

50,684

52,140

Additional paid-in capital

49,636,284

49,854,998

Accumulated deficit

(38,639,539)

(35,232,411)

Total American DG Energy Inc. stockholders' equity

11,047,429

14,674,727

Noncontrolling interest

2,211,977

3,090,542

Total stockholders' equity

13,259,406

17,765,269

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

35,842,150

$

40,005,840

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

September 30,
 2015

September 30,
 2014

Revenues


Energy revenues

$

1,750,682

$

1,697,723

Turnkey & other revenues

205,862

188,970

1,956,544

1,886,693

Cost of sales


Fuel, maintenance and installation

1,202,289

1,201,003

Depreciation expense

521,276

464,296

1,723,565

1,665,299

Gross profit

232,979

221,394

Operating expenses


General and administrative

558,821

780,744

Selling

250,792

291,984

Engineering

327,712

167,078

1,137,325

1,239,806

Loss from operations

(904,346)

(1,018,412)




Other income (expense), net


Interest and other income

6,641

35,592

Interest expense

(320,337)

(350,892)

 Change in fair value of warrant liability

299

110,897

(313,397)

(204,403)




Loss before benefit (provision) for income taxes

(1,217,743)

(1,222,815)

Benefit (provision) for income taxes

(8,797)

(22,814)

Consolidated net loss

(1,226,540)

(1,245,629)

(Loss) income attributable to noncontrolling interest

207,907

75,977

Net loss attributable to American DG Energy Inc.

$

(1,018,633)

$

(1,169,652)




Net loss per share - basic and diluted

$

(0.02)

$

(0.02)

Weighted average shares outstanding - basic and diluted

50,687,355

51,690,714




Non-GAAP financial disclosure


Loss from operations

$

(904,346)

$

(1,018,412)

Depreciation expense

534,236

469,636

Stock based compensation

(27,076)

130,313

Adjusted EBITDA

(397,186)

(418,463)

Grants from rebates and incentives (reduction in basis of property)

—

—

Total cash outflows*

$

(397,186)

$

(418,463)


*    Non-GAAP EBITDA cash outflows for the third quarter of 2015 and 2014 were $51,018 and $168,152, respectively, for American DG Energy in North America and EBITDA outflows of EuroSite were $346,168 and $250,311 respectively.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Nine Months Ended

September 30,
 2015

September 30,
 2014

Revenues


Energy revenues

$

6,012,139

$

5,846,521

Turnkey & other revenues

539,272

639,194

6,551,411

6,485,715

Cost of sales


Fuel, maintenance and installation

4,297,426

4,394,238

Depreciation expense

1,549,591

1,358,173

5,847,017

5,752,411

Gross profit

704,394

733,304

Operating expenses


General and administrative

2,065,250

2,330,702

Selling

899,913

800,458

Engineering

713,159

629,526

3,678,322

3,760,686

Loss from operations

(2,973,928)

(3,027,382)




Other income (expense), net


Interest and other income

193,074

57,940

Interest expense

(950,443)

(1,084,215)

Loss on extinguishment of debt

—

(533,177)

Change in fair value of warrant liability

6,778

101,885

(750,591)

(1,457,567)




Loss before provision for income taxes

(3,724,519)

(4,484,949)

Provision for income taxes

(13,965)

(32,694)

Consolidated net loss

(3,738,484)

(4,517,643)

Loss attributable to noncontrolling interest

331,356

406,483

Net loss attributable to American DG Energy Inc.

$

(3,407,128)

$

(4,111,160)




Net loss per share - basic and diluted

$

(0.07)

$

(0.08)

Weighted average shares outstanding - basic and diluted

50,691,472

50,484,304




Non-GAAP financial disclosure

$

(2,973,928)

$

(3,027,382)

Loss from operations

1,586,410

1,394,201

Depreciation expense

253,813

$

338,790

Stock based compensation

$

(1,133,705)

$

(1,294,391)

Adjusted EBITDA

$

668,859

$

0

Grants from rebates and incentives (reduction in basis of property)

$

(464,846)

$

(1,294,391)

Total cash outflows


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)

Nine Months Ended

September 30,
 2015

September 30,
 2014


CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss attributable to American DG Energy, Inc.

$

(3,407,128)

$

(4,111,160)

Loss attributable to noncontrolling interest

(331,356)

(406,483)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:


Depreciation and amortization

1,586,410

1,394,201

    Gain attributable to distribution of nonmonetary assets to noncontrolling interest

(157,870)

—

Loss on extinguishment of debt

—

533,177

Amortization of deferred financing costs

40,096

2,567

Amortization of convertible debt premium

(72,216)

9,997

Increase (decrease) in fair value of warrant liability

(6,778)

(101,885)

Non-cash interest expense

867,329

624,368

Stock-based compensation

253,813

338,790

Changes in operating assets and liabilities:


(Increase) decrease in:


Accounts receivable and unbilled revenue

114,382

(231,417)

Due from related party

(13,378)

283,356

Inventory

65,830

544,159

Prepaid and other current assets

269,071

(326,378)

Increase (decrease) in:


Accounts payable

152,136

215,103

Accrued expenses and other current liabilities

48,662

348,066

Due to related party

355,267

(34,843)

Other long-term liabilities

(2,227)

(10,206)

Net cash used in operating activities

(237,957)

(902,501)




CASH FLOWS FROM INVESTING ACTIVITIES:


Purchases of property and equipment

(3,312,452)

(3,899,360)

Partial purchase of noncontrolling interest

(100,000)

—

Net cash used in investing activities

(3,412,452)

(3,899,360)




CASH FLOWS FROM FINANCING ACTIVITIES:


Proceeds from issuance of convertible debentures

—

1,450,000

Proceeds from sale of common stock, net of costs

—

3,242,957

Purchases of common stock, net of costs

(152,377)

—

Payment on related party note payable

(1,000,000)

3,000,000

Distributions to noncontrolling interest

(186,856)

(168,546)

Net cash (used in) provided by financing activities

(1,339,233)

7,524,411




Net decrease in cash and cash equivalents

(4,989,642)

2,722,550

Cash and cash equivalents, beginning of the period

11,825,915

9,804,291

Cash and cash equivalents, end of the period

$

6,836,273

$

12,526,841




Supplemental disclosures of cash flows information:


Cash paid during the period for:


Interest

$

90,871

$

80,000

Income taxes

$

35,838

$

54,974

Non-cash investing and financing activities:


Distribution of nonmonetary assets

$

340,069

—

SOURCE American DG Energy Inc.