American DG Energy Reports Fourth Quarter and FY 2011 Financial Performance

Energy revenues increased 13% in 2011 and 21% compounded over a 6 year period

News provided by

American DG Energy Inc.

Mar 06, 2012, 09:00 ET

WALTHAM, Mass., March 6, 2012 /PRNewswire/ -- American DG Energy Inc. (NYSE Amex: ADGE), a leading OnSite Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, reported energy revenues of $1,435,082 in the fourth quarter of 2011, compared to $1,298,882 in the fourth quarter of 2010, total revenues of $1,469,276 in the fourth quarter of 2011, compared to $1,375,948 in the fourth quarter of 2010 and total revenues of $6,022,868 for the full year in 2011, compared to $5,634,765 in 2010. GAAP diluted loss per share (EPS) was $(0.08) in 2011, compared to $(0.04) in 2010, and GAAP operating loss including EuroSite Power Inc. was $(3,669,728) in 2011, compared to a loss of $(1,681,703) in 2010.

Major Highlights in the Fourth Quarter and FY 2011:

Operations

  • We received a significant order in December to supply 1,050 kW to residential buildings located in New York. The value of that agreement is $27.4 million over a 15 year period.
  • In October we reached an agreement to provide an on-site energy solution via our new ultra-high-efficiency water heater to Sidney Albert Albany Jewish Community Center in Albany, New York.
  • During the year we started the operation of a 75 kW combined heat and power system at Sterling Center YMCA, in Beverly Massachusetts, a 150 kW system at Stevens Institute of Technology, in Hoboken, New Jersey and a 375 kW system at Doral Arrowwood Hotel and Conference Center in Rye Brook, New York.
  • We entered into an agreement with Nexant, Inc., to monetize the energy efficiency credits for our fleet of combined heat and power systems operating in Massachusetts.
  • We entered into a strategic distribution agreement with Global Partners LP to sell our On-Site Utility solution to their energy customers.
  • We substantially expanded our sales and marketing effort by adding sales people, broadening our distribution and geographic reach and implementing direct marketing programs targeting potential customers, especially large property owners.
  • We introduced EuroSite Power's On-Site Utility energy solutions in the United Kingdom and Europe.  
  • We added one part time and ten full time employees to our staff including a Managing Director for EuroSite Power and a Vice President of Business Development in the US.

Financial

  • In the fourth quarter of 2011 energy revenue increased by 10.5% to $1,435,082 compared to $1,298,882 for the same period in 2010 and energy gross profit margin without depreciation was 28.1%, primarily due to the additional energy systems and the increased hours of operation of our energy systems fleet.
  • For the year, our energy revenue increased by 13.1%, although the natural gas price, a key component in calculating our hot water revenue was considerably lower in 2011 compared to 2010.
  • Our total energy production grew 23% to 19,049,272 kWh in the fourth quarter of 2011 compared to the same period in 2010, and 17% to 71,379,748 kWh for the entire year of 2011 compared to 2010.
  • Our energy gross profit margin without depreciation was 36.1% in 2011.  
  • Our total cash outflows in 2011 were $1,176,798, of which $907,060 were related to startup expenses at EuroSite Power and the remaining $269,738 were related to the expansion of sales and marketing activity at American DG Energy.
  • We added 7 new energy systems in 2011 bringing the total number of energy systems operating to 83 compared to 76 in 2010.
  • Our current backlog consists of 20 energy systems.
  • We received $510,069 in rebates and incentives in 2011.
  • We finished the year with approximately $17.8 million in cash.
  • In May and November we issued a total of $19.4 million in convertible debentures to a European investor and to John N. Hatsopoulos, our Chief Executive Officer.
  • We raised $1.3 million from the sale of common stock in our subsidiary, EuroSite Power, whose business focus is to introduce the On-Site Utility solution to the United Kingdom and Europe.

Recent Highlights:

  • We received our first EuroSite Power order to supply 100 kW to Haverhill Leisure Centre in Suffolk, United Kingdom.
  • We have shipped 3 additional 100 kW combined heat and power systems to the United Kingdom for EuroSite Power.
  • Due to demand in California for our On-Site Utility energy, we recently signed Accend Energy, Inc. as a strategic representative for that state.

"Our energy revenues have increased by 21% compounded over a six year period in a difficult economic environment and despite substantially lower gas prices which reduced our cooling and hot water sales" said John N. Hatsopoulos, Chief Executive Officer of American DG Energy.  "We began 2012 having booked the largest order in our history and our focus will continue to be revenue growth of our long-term energy agreements focusing on large property owners."

American DG Energy will hold its earnings conference call today, March 6, 2012 at 10:00 a.m. Eastern Time.  To listen, call (800) 8602442 within the U.S., (866) 605-3852 from Canada or (412) 858-4600 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 Tuesday, March 20, 2012 at 9:00 a.m. Eastern Time. To listen to the playback, call (877) 344-7529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10010162.

The earnings conference call will be webcast live.  To register for and listen to the webcast, go to http://www.americandg.com/webcast.  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. The Company is 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 its On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. More information can be found at www.americandg.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. 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended December 31, 2011 and December 31, 2010


2011

2010





Revenues



Energy revenues

$         1,435,082

$         1,298,882

Turnkey & other revenues

34,194

77,066


1,469,276

1,375,948

Cost of sales



Fuel, maintenance and installation

1,027,806

975,850

Depreciation expense

343,078

226,674


1,370,884

1,202,524

Gross profit

98,392

173,424





Operating expenses



General and administrative

721,843

424,484

Selling

562,916

106,518

Engineering

227,128

145,840


1,511,887

676,842

Loss from operations

(1,413,495)

(503,418)





Other income (expense), net



Interest and other income

8,820

11,438

Interest expense

(286,168)

(29,046)

Change in fair value of warrant liability

(82,621)

59,681


(359,969)

42,073





Loss before income taxes

(1,773,464)

(461,345)

Provision for state income taxes

(4,143)

(4,020)

Consolidated net loss

(1,777,607)

(465,365)





Income attributable to the noncontrolling interest

30,609

(60,569)

Net loss attributable to American DG Energy Inc.

$       (1,746,998)

$          (525,934)





Net loss per share - basic and diluted

$                (0.04)

$                (0.01)





Weighted average shares outstanding -


basic and diluted

45,879,469

44,994,322





Non-GAAP financial disclosure



Loss from operations

$       (1,413,495)

$          (503,418)

Depreciation expense

361,110

243,689

Stock based compensation

187,795

89,533

Adjusted EBITDA

(864,590)

(170,196)

Grants from rebates and incentives

182,931

22,852

Total cash outflows

$          (681,659)

$          (147,344)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ending December 31, 2011 and December 31, 2010


2011

2010





Revenues



Energy revenues

$          5,705,418

$          5,043,744

Turnkey & other revenues

317,450

591,021


6,022,868

5,634,765

Cost of sales



Fuel, maintenance and installation

3,827,539

3,625,404

Depreciation expense

1,265,009

867,923


5,092,548

4,493,327

Gross profit

930,320

1,141,438





Operating expenses



General and administrative

2,340,024

1,487,040

Selling

1,496,764

602,597

Engineering

763,260

733,504


4,600,048

2,823,141

Loss from operations

(3,669,728)

(1,681,703)





Other income (expense)



Interest and other income

40,234

51,385

Interest expense

(532,544)

(125,131)

Change in fair value of warrant liability

427,042

59,681


(65,268)

(14,065)





Loss before income taxes

(3,734,996)

(1,695,768)

Provision for state income taxes

(21,214)

(14,730)

Consolidated net loss

(3,756,210)

(1,710,498)





Income attributable to the noncontrolling interest

(4,199)

(197,505)

Net loss attributable to American DG Energy Inc.

$        (3,760,409)

$        (1,908,003)





Net loss per share - basic and diluted

$                 (0.08)

$                 (0.04)





Weighted average shares outstanding -


basic and diluted

45,705,793

43,525,374





Non-GAAP financial disclosure



Loss from operations

$        (3,669,728)

$        (1,681,703)

Depreciation expense

1,315,861

911,125

Stock based compensation

667,000

228,736

Adjusted EBITDA

(1,686,867)

(541,842)

Grants from rebates and incentives

510,069

451,603

Total cash outflows

$        (1,176,798)

$             (90,239)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ending December 31, 2011 and December 31, 2010


EuroSite Power Inc. ONLY (without American DG Energy Inc.)


2011

2010





Revenues



Energy revenues

$                           -

$                          -

Turnkey & other revenues

-

-


-

-

Cost of sales



Fuel, maintenance and installation

-

-

Depreciation expense

-

-


-

-

Gross profit

-

-





Operating expenses



General and administrative

854,502

39,805

Selling

527,253

-

Engineering

-

-


1,381,755

39,805

Loss from operations

(1,381,755)

(39,805)





Other income (expense)



Interest and other income

333

-

Interest expense

-

-


333

-





Loss before income taxes

(1,381,422)

(39,805)

Provision for state income taxes

-

-

Net loss

$             (1,381,422)

$                 (39,805)





Net loss per share - basic and diluted

$                      (0.03)

$                     (0.00)





Weighted-average shares outstanding -


basic and diluted

53,229,633

51,195,767





Non-GAAP financial disclosure



Loss from operations

$             (1,381,755)

$                 (39,805)

Depreciation expense

-

-

Stock based compensation

474,695

-

Adjusted EBITDA

(907,060)

(39,805)

Grants from rebates and incentives

-

-

Total cash outflows

$                (907,060)

$                 (39,805)

CONSOLIDATED BALANCE SHEETS

For the years ending December 31, 2011 and December 31, 2010


2011

2010





ASSETS


Current assets:



Cash and cash equivalents

$        17,801,025

$         3,921,054

Restricted cash

-

65,790

Accounts receivable, net

879,630

661,435

Unbilled revenue

18,825

117,846

Due from related party

21,140

52,432

Inventory

634,120

487,724

Prepaid and other current assets

345,812

86,089

Total current assets

19,700,552

5,392,370





Property, plant and equipment, net

14,690,117

14,362,444

Accounts receivable, long-term

82,664

17,034

Other assets, long-term

53,504

-





TOTAL ASSETS

$        34,526,837

$       19,771,848





LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Accounts payable

$             520,608

$            482,917

Accrued expenses and other current liabilities

589,032

370,774

Due to related party

313,847

2,560,720

Capital lease obligations

3,365

3,365

Total current liabilities

1,426,852

3,417,776





Long-term liabilities:



Convertible debentures

19,400,000

-

Warrant liability

249,561

676,603

Capital lease obligations, long-term

3,365

6,730

Other long-term liabilities

43,052

-

Total liabilities

21,122,830

4,101,109





Stockholders' equity:


American DG Energy Inc. shareholders' equity:



Common stock, $0.001 par value; 100,000,000 shares



 authorized; 46,001,404 and 45,598,029 issued and outstanding



 at December 31, 2011 and 2010, respectively

46,001

45,598

Additional paid-in capital

30,399,370

28,905,660

Accumulated deficit

(17,907,522)

(14,147,113)

Total American DG Energy Inc. stockholders' equity

12,537,849

14,804,145

Noncontrolling interest

866,158

866,594

Total stockholders' equity

13,404,007

15,670,739





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$        34,526,837

$       19,771,848

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ending December 31, 2011 and December 31, 2010



2011

2010






CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss

$      (3,760,409)

$      (1,908,003)


Income attributable to noncontrolling interest

4,199

197,505

Adjustments to reconcile net loss to net cash used in operating activities:




Depreciation and amortization

1,315,861

911,125


Provision for losses on accounts receivable

110,229

57,576


Amortization of deferred financing costs

2,256

8,526


Change in fair value of warrant liability

(427,042)

(59,681)


Stock-based compensation

667,000

228,736

Changes in operating assets and liabilities



(Increase) decrease in:






Restricted cash

65,790

(65,790)


Accounts receivable and unbilled revenue

(295,033)

(188,572)


Due from related party

31,292

193,857


Inventory

(146,396)

(108,421)


Prepaid and other current assets

(247,819)

9,504

Increase (decrease) in:






Accounts payable

37,691

(257,557)


Accrued expenses and other current liabilities

218,258

(24,274)


Other long-term liabilities

43,052

-


Due to related party

153,127

143,189

Net cash used in operating activities

(2,227,944)

(862,280)






CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(1,643,534)

(5,771,223)


Sale of short-term investments

-

678,921

Net cash used in investing activities

(1,643,534)

(5,092,302)






CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from issuance of convertible debentures

17,000,000

-


Proceeds from issuance of warrants

-

736,284


Proceeds from exercise of warrants

-

350,000


Proceeds from sale of common stock, net of costs

-

1,286,855


Proceeds from sale of subsidiary common stock, net of costs

1,148,401

2,226,019


Proceeds from exercise of stock options

33,838

54,775


Proceeds from related party line of credit

-

2,400,000


Convertible debenture transaction costs

(67,664)

(21,556)


Principal payments on capital lease obligations

(3,365)

(3,365)


Cancellation of restricted stock

(20)

-


Distributions to noncontrolling interest

(359,741)

(302,598)

Net cash provided by financing activities

17,751,449

6,726,414






Net increase in cash and cash equivalents

13,879,971

771,832

Cash and cash equivalents, beginning of the year

3,921,054

3,149,222

Cash and cash equivalents, end of the year

$      17,801,025

$        3,921,054






Supplemental disclosures of cash flows information:




Cash paid during the year for:


Interest

$           343,750

$           114,116

Income taxes

$             91,931

$             31,329






Non-cash investing and financing activities:


Conversion of convertible debentures to common stock

$                      -

$        5,320,000

Conversion of due to related party to convertible debentures

$        2,400,000

$                      -

Forgiveness of related party debt in exchange for reduction in noncontrolling interest

$                      -

$           124,111

SOURCE American DG Energy Inc.

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