American DG Energy Reports Third Quarter 2011 Financial Performance

Energy Revenues Increased by 14% for the Nine Month Period

News provided by

American DG Energy Inc.

Nov 10, 2011, 09:00 ET

WALTHAM, Mass., Nov. 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 $1,418,411 in the third quarter of 2011, compared to $1,569,577 in the third quarter of 2010.  GAAP diluted loss per share (EPS) was $(0.02) in 2011, compared to $(0.00) in 2010 and GAAP operating income was a loss of $(1,132,620) in 2011, compared to a loss of $(61,015) in 2010.

Third Quarter 2011 Highlights:

  • Energy revenue remained relatively unchanged at $1,389,159 compared to $1,395,274 for the same period in 2010. The market price of electricity decreased by 7.8% and the price of natural gas, a key component in the calculation of hot water revenue decreased by 3.4%.
  • Energy gross profit margin without depreciation was 47.8% compared to 51.6% for the same period in 2010.  
  • Our total cash inflows, excluding our EuroSite Power subsidiary, for the last 18 months were $241,769 and year-to-date was $34,876.
  • Our installed base increased by 8 new energy systems from a year ago bringing the total number of energy systems operating to 79 compared to 71 in the third quarter of 2010.
  • Our installed base of combined heat and power (CHP) systems surpassed 5,460 KW.
  • Our backlog consisted of 8 energy systems.
  • We finished the quarter with approximately $12.1 million in cash.
  • 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 CHP systems, located at Stevens Central Plant, brought the total number of energy systems we own and operate at the university to nine.
  • In September we reached an agreement to provide an on-site energy solution with the first heat pump system to Sidney Albert Albany Jewish Community Center (Albany JCC), located in Albany, New York.
  • Since the beginning of the year and including EuroSite Power we have added 16 people to our team of sales, engineers and advisors to focus on growing our business.
  • In August we filed an initial Form 10 Registration Statement with the Securities and Exchange Commission for our EuroSite Power subsidiary.
  • In September we officially launched EuroSite Power Limited in the United Kingdom during The Energy Event and introduced our new Managing Director Mr. Paul J. Hamblyn.
  • We have started a major marketing effort to communicate our brand and increase lead generation via a multi-media offering.  

Recent Highlights:

  • After the end of the quarter we received approximately $160,000 in rebates and incentives.
  • In November we announced the operation of a 375 kW CHP system at Doral Arrowwood Hotel and Conference Center in Rye Brook, New York. The system is estimated to generate total revenue of approximately $10 million over the term of the 15 year agreement.
  • With the introduction of the heat pump system and low emissions technology we are preparing to expand our market reach in 2012.
  • In October we appointed Messrs. Adrian Fawcett, Ian Durant and Gary Parke to the EuroSite Power Advisory Board.
  • We have ordered 3 Inverter based CHP systems that will be shipped to the United Kingdom later this year for EuroSite Power.
  • The EuroSite Power registration statement on Form 10 became effective on October 17, 2011.

American DG Energy will hold its earnings conference call today, November 10, 2011 at 10:00 a.m. Eastern Time.  To listen, call (800) 8602442 within the U.S., (866) 605-3852 from Canada or (412) 8584600 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 call will be available for playback through Friday, November 18, 2011 at 9:00 a.m. Eastern Time.  To listen to the playback, call (877) 3447529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10006147.

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 September 30, 2011 and September 30, 2010


Three Months Ended


September 30,

September 30,


2011

2010


(unaudited)

(unaudited)

Revenues



Energy revenues

$         1,389,159

$         1,395,274

Turnkey & other revenues

29,252

174,303


1,418,411

1,569,577

Cost of sales



Fuel, maintenance and installation

716,806

763,653

Depreciation expense

318,903

226,006


1,035,709

989,659

Gross profit

382,702

579,918





Operating expenses



General and administrative

593,558

375,197

Selling

699,898

111,132

Engineering

221,866

154,604


1,515,322

640,933

Loss from operations

(1,132,620)

(61,015)





Other income (expense), net



Interest and other income

11,433

11,779

Interest expense

(142,772)

(23,280)

Change in fair value of warrant liability

125,668

-


(5,671)

(11,501)





Loss before income taxes

(1,138,291)

(72,516)

Benefit (provision) for state income taxes

41

(5,360)

Consolidated net loss

(1,138,250)

(77,876)





Income attributable to the noncontrolling interest

28,734

(57,148)

Net loss attributable to American DG Energy Inc.

(1,109,516)

(135,024)





Net loss per share - basic and diluted

$                (0.02)

$                (0.00)





Weighted average shares outstanding -


basic and diluted

45,834,904

44,835,844





Non-GAAP financial disclosure



Loss from operations

$       (1,132,620)

$            (61,015)

Depreciation expense

332,368

236,807

Stock based compensation

186,960

37,425

Adjusted EBITDA

(613,292)

213,217

Grants from rebates and incentives

-

117,898

Total cash inflows (outflows)

$          (613,292)

$            331,115

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

for the Nine Months Ended September 30, 2011 and September 30, 2010


Nine Months Ended


September 30,

September 30,


2011

2010


(unaudited)

(unaudited)

Revenues



Energy revenues

$          4,270,336

$          3,744,862

Turnkey & other revenues

283,256

513,955


4,553,592

4,258,817

Cost of sales



Fuel, maintenance and installation

2,799,733

2,649,554

Depreciation expense

921,931

641,249


3,721,664

3,290,803

Gross profit

831,928

968,014





Operating expenses



General and administrative

1,618,181

1,062,556

Selling

933,848

496,079

Engineering

536,132

587,664


3,088,161

2,146,299

Loss from operations

(2,256,233)

(1,178,285)





Other income (expense)



Interest and other income

31,414

39,947

Interest expense

(246,376)

(96,085)

Change in fair value of warrant liability

509,663

-


294,701

(56,138)





Loss before income taxes

(1,961,532)

(1,234,423)

Provision for state income taxes

(17,071)

(10,710)

Consolidated net loss

(1,978,603)

(1,245,133)





Less: Income attributable to the noncontrolling interest

(34,808)

(136,936)

Net loss attributable to American DG Energy Inc.

(2,013,411)

(1,382,069)





Net loss per share - basic and diluted

$                 (0.04)

$                 (0.03)





Weighted average shares outstanding -


basic and diluted

45,647,265

43,030,344





Non-GAAP financial disclosure



Loss from operations

$        (2,256,233)

$        (1,178,285)

Depreciation expense

954,751

667,436

Stock based compensation

479,205

139,203

Adjusted EBITDA

(822,277)

(371,646)

Grants from rebates and incentives

327,138

428,751

Total cash inflows (outflows)

$           (495,139)

$               57,105

CONDENSED CONSOLIDATED BALANCE SHEETS

as of September 30, 2011 and December 31, 2010


September 30,

December 31,


2011

2010


(unaudited)

(unaudited)

ASSETS


Current assets:



Cash and cash equivalents

$        12,111,185

$         3,921,054

Restricted cash

-

65,790

Accounts receivable, net

1,216,674

661,435

Unbilled revenue

12,477

117,846

Due from related party

77,560

52,432

Inventory

517,329

487,724

Prepaid and other current assets

221,142

86,089

Total current assets

14,156,367

5,392,370





Property, plant and equipment, net

14,657,330

14,362,444

Accounts receivable, long-term

90,834

17,034

Other assets, long-term

40,397

-





TOTAL ASSETS

28,944,928

19,771,848





LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Accounts payable

486,911

482,917

Accrued expenses and other current liabilities

517,478

370,774

Due to related party

125,018

2,560,720

Capital lease obligations

3,365

3,365

Total current liabilities

1,132,772

3,417,776





Long-term liabilities:



Convertible debentures

12,500,000

-

Warrant liability

166,940

676,603

Capital lease obligations, long-term

4,206

6,730

Other long-term liabilities

46,454

-

Total liabilities

13,850,372

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 September 30, 2011 and December 31, 2010, respectively

45,901

45,598

Additional paid-in capital

30,280,646

28,905,660

Accumulated deficit

(16,160,524)

(14,147,113)

Total American DG Energy Inc. stockholders' equity

14,166,023

14,804,145

Noncontrolling interest

928,533

866,594

Total stockholders' equity

15,094,556

15,670,739





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$        28,944,928

$       19,771,848

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

for the Nine Months Ended September 30, 2011 and September 30, 2010



Nine Months Ended



September 30,

September 30,



2011

2010



(unaudited)

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss

$      (2,013,411)

$      (1,382,069)


Income attributable to noncontrolling interest

34,808

136,936

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




Depreciation and amortization

954,751

667,436


Provision for losses on accounts receivable

22,568

42,650


Amortization of deferred financing costs

2,256

6,395


Change in fair value of warrant liability

(509,663)

-


Stock-based compensation

479,205

139,203

Changes in operating assets and liabilities



(Increase) decrease in:






Restricted cash

65,790

-


Accounts receivable and unbilled revenue

(546,238)

(199,636)


Due from related party

(25,128)

94,312


Inventory

(29,605)

(114,945)


Prepaid and other current assets

(130,283)

13,540

Increase (decrease) in:






Accounts payable

3,994

(343,453)


Accrued expenses and other current liabilities

146,704

151,208


Other long-term liabilities

46,454

-


Due to related party

(35,702)

653,078

Net cash used in operating activities

(1,533,500)

(135,345)






CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(1,249,637)

(4,590,790)


Sale of short-term investments

-

561,847

Net cash used in investing activities

(1,249,637)

(4,028,943)






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 common stock, net of costs

-

999,952


Proceeds from sale of subsidiary common stock, net of costs

1,148,401

1,356,037


Proceeds from exercise of stock options

26,798

54,941


Proceeds from related party line of credit

-

2,400,000


Convertible debenture transaction costs

(47,423)

(21,556)


Principal payments on capital lease obligations

(2,524)

(2,524)


Cancellation of restricted stock

(20)

-


Distributions to noncontrolling interest

(251,964)

(200,573)

Net cash provided by financing activities

10,973,268

4,936,277






Net increase (decrease) in cash and cash equivalents

8,190,131

771,989

Cash and cash equivalents, beginning of the period

3,921,054

3,149,222

Cash and cash equivalents, end of the period

$      12,111,185

$        3,921,211

SOURCE American DG Energy Inc.

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