American DG Energy Reports Second Quarter 2011 Financial Performance

Energy Revenues Increased by Over 32%

Cash Inflows were $218,876 excluding EuroSite Power; Consolidated Cash Inflows were $146,551

News provided by

American DG Energy Inc.

Aug 10, 2011, 09:00 ET

WALTHAM, Mass., Aug. 10, 2011 /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 revenues of $1,480,461 in the second quarter of 2011, compared to $1,239,267 in the second quarter of 2010.  GAAP diluted loss per share (EPS) was $(0.01) in 2011 and 2010 and GAAP operating income was a loss of $(522,761) in 2011, compared to a loss of $(448,687) in 2010.

Second Quarter 2011 Highlights:

  • Energy revenue increased by 32.4% to $1,435,025 compared to $1,083,598 for the same period in 2010 primarily due to the installation of additional energy systems and the improved efficiency of our fleet.
  • Energy gross profit margin without depreciation was 38.3% compared to 39.7% for the same period in 2010.  The natural gas price, a key component in calculating our hot water revenue, continues to be considerably lower this quarter compared to the same period in 2010.  
  • Our total cash inflows were $218,876 excluding our subsidiary EuroSite Power Inc. and our consolidated cash inflows were $146,551.
  • Our installed base of CHP systems surpassed 5,300 KW.
  • Our installed base increased by 6 new energy systems from a year ago bringing the total number of energy systems operating to 77 compared to 71 in the second quarter of 2010.  The total value of our current On-Site Utility energy agreements is approximately $152 million.
  • Our backlog consisted of 9 energy systems.
  • We received $219,589 in rebates and incentives.
  • In May we issued $12,500,000 of Senior Unsecured Convertible Debentures, Due 2018, to an existing European investor and to John N. Hatsopoulos, our Chief Executive Officer.  Mr. Hatsopoulos had a revolving line of credit agreement with the company with a balance of $2,400,000.  That balance was converted into the debentures and the revolving line of credit agreement was canceled.  
  • We finished the quarter with approximately $13.4 million in cash.
  • In June we reached an agreement to supply clean energy from a 100 kW combined heat and power system to Club Fit Jefferson Valley, a premier health and fitness facility located in Jefferson Valley, New York.
  • We hired Mr. William Beach as Vice President of Business Development.
  • We raised $300,000 from the sale of common stock of EuroSite Power Inc., our subsidiary whose business focus is to introduce the On-Site Utility solution to the United Kingdom and Europe.
  • We added Mr. Bruno Meier, the retired Chief Executive Officer of Rolex, S.A., as a new member to the EuroSite Power Inc. Board of Directors.
  • We hired Mr. Paul Hamblyn, as Managing Director of EuroSite Power Inc., to start our European operations in the United Kingdom.

Recent Highlights:

  • In August we announced the startup of two more energy systems at Stevens Institute of Technology, a premier technological university, located in Hoboken, New Jersey.  The addition of these two 75kW combined heat and power systems, located at Stevens Central Plant, brought the total number of energy systems we own and operate at the university to nine.

"We are excited that we were able to raise a significant amount of funds to further grow our business.  These funds are being used to build our sales and technical teams in the U.S. and Europe to aggressively pursue large customers," said John N. Hatsopoulos, Chief Executive Officer of American DG Energy.

American DG Energy will hold its earnings conference call today, August 10, 2011 at 11:00 a.m. Eastern Time.  To listen, call (800) 8602442 within the U.S., or (412) 858-4600 outside the U.S.  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 call will be available for playback through Wednesday, August 17, 2011.  To listen to the playback, call (877) 3447529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10002266.

The earnings conference call will be webcast live.  To register for and listen to the webcast, go to 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the Three Months Ended June 30, 2011 and June 30, 2010


Three Months Ended


June 30,

June 30,


2011

2010


(unaudited)

(unaudited)

Revenues



Energy revenues

$         1,435,025

$         1,083,598

Turnkey & other revenues

45,436

155,669


1,480,461

1,239,267

Cost of sales



Fuel, maintenance and installation

894,928

737,677

Depreciation expense

314,634

217,546


1,209,562

955,223

Gross profit

270,899

284,044





Operating expenses



General and administrative

523,503

352,008

Selling

104,296

204,418

Engineering

165,861

176,305


793,660

732,731

Loss from operations

(522,761)

(448,687)





Other income (expense), net



Interest and other income

8,622

13,477

Interest expense

(74,558)

(2,181)

Change in fair value of warrant liability

188,367

-


122,431

11,296





Loss before income taxes

(400,330)

(437,391)

Provision for state income taxes

(5,509)

(1,800)

Consolidated net loss

(405,839)

(439,191)





Less: Income attributable to the noncontrolling interest

(19,145)

(31,876)

Net loss attributable to American DG Energy Inc.

(424,984)

(471,067)





Net loss per share - basic and diluted

$                (0.01)

$                (0.01)





Weighted average shares outstanding -


basic and diluted

45,578,201

44,353,367





Non-GAAP financial disclosure



Loss from operations

$          (522,761)

$          (448,687)

Depreciation expense

324,889

225,239

Stock based compensation

124,834

51,765

Adjusted EBITDA

(73,038)

(171,683)

Grants from rebates and incentives

219,589

155,000

Total cash inflows

$            146,551

$            (16,683)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the Six Months Ended June 30, 2011 and June 30, 2010


Six Months Ended


June 30,

June 30,


2011

2010


(unaudited)

(unaudited)

Revenues



Energy revenues

$          2,881,177

$          2,349,588

Turnkey & other revenues

254,004

339,652


3,135,181

2,689,240

Cost of sales



Fuel, maintenance and installation

2,082,927

1,885,901

Depreciation expense

603,028

415,243


2,685,955

2,301,144

Gross profit

449,226

388,096





Operating expenses



General and administrative

1,024,623

687,359

Selling

233,950

384,947

Engineering

314,266

433,060


1,572,839

1,505,366

Loss from operations

(1,123,613)

(1,117,270)





Other income (expense)



Interest and other income

19,981

28,168

Interest expense

(103,604)

(72,805)

Change in fair value of warrant liability

383,995

-


300,372

(44,637)





Loss before income taxes

(823,241)

(1,161,907)

Provision for state income taxes

(17,112)

(5,350)

Consolidated net loss

(840,353)

(1,167,257)





Less: Income attributable to the noncontrolling interest

(63,542)

(79,788)

Net loss attributable to American DG Energy Inc.

(903,895)

(1,247,045)





Net loss per share - basic and diluted

$                 (0.02)

$                 (0.03)





Weighted average shares outstanding -


basic and diluted

45,551,891

42,112,631





Non-GAAP financial disclosure



Loss from operations

$        (1,123,613)

$        (1,117,270)

Depreciation expense

622,383

430,629

Stock based compensation

292,245

101,778

Adjusted EBITDA

(208,985)

(584,863)

Grants from rebates and incentives

327,138

310,853

Total cash inflows

$             118,153

$           (274,010)

CONDENSED CONSOLIDATED BALANCE SHEETS

as of June 30, 2011 and December 31, 2010


June 30,

December 31,


2011

2010


(unaudited)

ASSETS


Current assets:



Cash and cash equivalents

$        13,407,346

$         3,921,054

Restricted cash

-

65,790

Accounts receivable, net

840,784

661,435

Unbilled revenue

142,488

117,846

Due from related party

79,234

52,432

Inventory

555,358

487,724

Prepaid and other current assets

142,423

86,089

Total current assets

15,167,633

5,392,370





Property, plant and equipment, net

14,757,803

14,362,444

Accounts receivable, long-term

96,234

17,034





TOTAL ASSETS

30,021,670

19,771,848





LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Accounts payable

518,875

482,917

Accrued expenses and other current liabilities

323,333

370,774

Due to related party

112,236

2,560,720

Capital lease obligations

3,365

3,365

Total current liabilities

957,809

3,417,776





Long-term liabilities:



Convertible debentures

12,500,000

-

Warrant liability

292,608

676,603

Capital lease obligations, long-term

5,048

6,730

Other long-term liabilities

49,856

-

Total liabilities

13,805,321

4,101,109





Stockholders' equity:


American DG Energy Inc. shareholders' equity:



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



 authorized; 45,901,404 and 45,598,029 issued and outstanding



 at June 30, 2011 and December 31, 2010, respectively

45,901

45,598

Additional paid-in capital

30,188,760

28,905,660

Accumulated deficit

(15,051,008)

(14,147,113)

Total American DG Energy Inc. stockholders' equity

15,183,653

14,804,145

Noncontrolling interest

1,032,696

866,594

Total stockholders' equity

16,216,349

15,670,739





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$        30,021,670

$       19,771,848

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

for the Six Months Ended June 30, 2011 and June 30, 2010



Six Months Ended



June 30,

June 30,



2011

2010



(unaudited)

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss

$         (903,895)

$  (1,247,045)


Income attributable to noncontrolling interest

63,542

79,788

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




Depreciation and amortization

622,383

430,629


Provision for losses on accounts receivable

1,712

36,886


Amortization of deferred financing costs

2,256

4,263


Change in fair value of warrant liability

(383,995)

-


Stock-based compensation

292,245

101,778

Changes in operating assets and liabilities



(Increase) decrease in:






Restricted cash

65,790

-


Accounts receivable and unbilled revenue

(284,903)

(182,976)


Due from related party

(26,802)

161,752


Inventory

(67,634)

(479,237)


Prepaid and other current assets

(58,590)

702

Increase (decrease) in:






Accounts payable

35,958

(250,890)


Accrued expenses and other current liabilities

(47,441)

13,784


Other long-term liabilities

49,856

-


Due to related party

(48,484)

561,442

Net cash used in operating activities

(688,002)

(769,124)






CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(1,017,742)

(2,109,075)


Proceeds from sale of short-term investments

-

109,146

Net cash used in investing activities

(1,017,742)

(1,999,929)






CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from issuance of convertible debentures

10,100,000

-


Proceeds from exercise of warrants

-

350,000


Proceeds from sale of subsidiary common stock, net of costs

1,238,401

-


Proceeds from exercise of stock options

26,798

37,441


Convertible debenture transaction costs

-

(21,556)


Principal payments on capital lease obligations

(1,682)

(1,682)


Cancellation of restricted stock

(20)

-


Distributions to noncontrolling interest

(171,461)

(131,181)

Net cash provided by financing activities

11,192,036

233,022






Net increase (decrease) in cash and cash equivalents

9,486,292

(2,536,031)

Cash and cash equivalents, beginning of the period

3,921,054

3,149,222

Cash and cash equivalents, end of the period

$     13,407,346

$       613,191

SOURCE American DG Energy Inc.

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