Tecogen Announces Fourth Quarter and Full Year 2015 Financial Results

WALTHAM, Mass., March 28, 2016 /PRNewswire/ -- Tecogen^® Inc. (NASDAQ: TGEN, the "Company"), a manufacturer and installer of high efficiency, ultraclean combined heat and power products including natural gas engine-driven cogeneration, cooling systems, and high-efficiency water heaters for industrial and commercial use, reported revenues of $21,442,657 for the year ended December 31, 2015 compared to $19,342,664 for the same period in 2014, an increase of 11%.  Gross profit increased to $7,633,226 for 2015 compared to $6,399,064, an increase of 19%.

Speaking about the quarter, co-CEO Benjamin Locke noted, "Although this wasn't our strongest fourth quarter ever, meaningful progress was made on a number of key long term growth initiatives, laying the foundation for future success. The announcement of our emissions joint venture, the recent gas company selling partnership, building traction in Ilios water heater sales pipeline, and robust product backlog set the stage for what we hope will be a successful 2016."

Additionally, the company is pleased to announce the planned acquisition of the minority interest in heat pump subsidiary Ilios Dynamics in exchange for Tecogen common stock. Management believes that sufficient numbers of Ilios shareholders will support the transaction such that Ilios will become a wholly owned subsidiary of Tecogen.

Major Highlights:

Financial

• Gross margin in the fourth quarter of 2015 rose to 37.4% from 35.7% in the third quarter of 2015, well above the Company's goal to deliver greater than 35% quarterly combined gross margin. Full year 2015 combined gross margin was 35.6% compared to 33.1% in 2014, delivering a 250 basis point year-on-year gross margin improvement.
• Total product revenue for the full year 2015 grew 16.6% to $10,055,237 versus just $8,625,034 in 2014. Product revenue growth was driven by strong sales of cogeneration equipment, posting over 45% growth in sales in this category over the prior year, more than offsetting a downturn in chiller and heat pump sales in the period. This growth in cogeneration sales demonstrates the strong market traction of our unique InVerde 100 kW CHP unit, similar strong sales results are expected from the newly launched InVerde e⁺.
• In 2015, product gross margin improved by 260 basis points to 29%, a result of ongoing cost saving initiatives and product price adjustments.
• Total service revenue for the full year 2015 was $11,387,420, 6.2% growth over the $10,717,630 in reported Service related revenues in 2014.
• In 2015, service gross margin improved by nearly 300 basis points to 41.4%. The improvement was partially driven by the increasing percentage of service sites that were Tecogen turnkey installation projects.
• Sales backlog of equipment and installations was $11.6 million at year end 2015 compared to $9.9 million at the end of the fourth quarter of 2014, a 17% increase over prior year end backlog. Current backlog stands at $12.2 million as of March 21, 2015, well ahead of the Company's stated goal of backlog above $10 million.

Sales & Operations

• Gas Company selling partnership formed to bring Ilios water heaters and Tecochill chillers to commercial and industrial gas company customers. The exclusive partnership includes a commitment to joint marketing, dedicated local sales resources from the Gas Company, qualified lead generation and specific project development milestones.
• Installation revenues for 2015 increased by 8% to $3,555,239, driven by further traction in turnkey initiatives.
• Emissions control success continues with highlights including -
  • Re-branding of emissions control technology as Ultera™
  • Successful retrofitting of a renewable biogas powered engine at a waste water treatment plant in Perris, California with an Ultera ultra-low emissions system.
  • Purchase of a retrofit kit by the Gage Canal Company in Riverside, California for use with a 15 liter natural gas powered Caterpillar engine at their water pumping facility.
  • Purchase of multiple retrofit kits by a Southern California customer for installation on natural gas powered standby generators; allowing them to run for non-emergency purposes.  The units were shipped in the fourth quarter and represent the largest purchase of Ultera retrofit kits to date.
  • Formation of joint venture for the development of Ultera for gasoline vehicle emissions control.
• Established a sales office in Florida to serve the southeastern United States and the Caribbean, bringing total sales offices to 4 and rounding out coverage of North America. 
• Ilios success -
  • Delivered revenue and unit sales that were both more than double any previous year.
  • Launch of the new Ilios split air sourced natural gas engine driven heat pump in February 2015.
  • Large Ilios order of 7 water source units to a major biomedical research laboratory in Florida, the first large sale of Ilios units into the medical market.
  • First sale of Ilios to the hospitality market for installation in a major 5-star hotel.
  • Ilios sales to new markets including the UK, Atlanta, Hawaii, New York City, and Puerto Rico.
  • Addition of new Ilios sales representatives and agents in multiple territories including Florida, Atlanta and Chicago.

Conference Call Scheduled for Today at 11:00 am ET

Tecogen will host a conference call today to discuss the fourth quarter and year end results beginning at 11:00 am ET.  To listen to the call dial (888) 349-0103 within the U.S., (855) 669-9657 from Canada, or (412) 902-0129 from other international locations.  Participants should ask to be joined to the Tecogen Inc. call.  We suggest call participants begin dialing at least 10 minutes before the scheduled starting time. Please note management will not be conducting a question and answer session following the presentation of prepared remarks. The conference call will be recorded and available for playback one hour after the end of the call.

The earnings press release and supplemental earnings call slides will be available on the Company website at www.Tecogen.com in the "Investor Relations" section under "About Us."  The earnings conference call will also be webcast live. To register for and listen to the webcast, go to http://investors.tecogen.com/webcast. Following the call, the webcast will be archived for 30 days.

About Tecogen
Tecogen manufactures, installs, and maintains high efficiency, ultra-clean combined heat and power products including natural gas engine-driven cogeneration, air conditioning systems, and high-efficiency water heaters for residential, commercial, recreational and industrial use. The company is known for cost efficient, environmentally friendly and reliable products for energy production that, through patented technology, nearly eliminate criteria pollutants and significantly reduce a building's carbon footprint. In business for over 20 years, Tecogen has shipped more than 2,300 units, supported by an established network of engineering, sales, and service personnel across the United States. For more information, please visit www.tecogen.com.

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.  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.

SOURCE Tecogen Inc.