Tecogen Inc. (TGEN)

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Tecogen Inc. (TGEN)

Q4 2017 Earnings Conference Call

March 21, 2018 11:00 AM ET


Bonnie Brown - Chief Accounting Officer

John Hatsopoulos - Co-Chief Executive Officer

Ben Locke - Co-Chief Executive Officer

Robert Panora - President and Chief Operating Officer

Jeb Armstrong - Director of Capital Markets


James Jang - Maxim Group

Amit Dayal - Rodman and Renshaw

Roger Liddell - Clear Harbor Asset Management

Michael Zuk - Oppenheimer and Co

Alex Blanton - Clear Harbor Asset Management

Joe Vidich - Manalapan Oracle Capital



Greetings, and welcome to the Tecogen Fourth Quarter and Year End 2017 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-session will follow formal presentation [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Bonnie Brown, Chief Accounting Officer. Thank you, you may begin.

Bonnie Brown

Thank you, Michelle. Good morning, and thank you all for joining our year end 2017 earnings call. On the call with me today are, John Hatsopoulos and Ben Locke, our co-CEOs; Robert Panora, our President and Chief Operating Officer; and Jeb Armstrong, our Director of Capital Markets.

Before we begin, I'd like to read our Safe Harbor statement. This conference call and any accompanying documents containing forward-looking statements, which may describe strategy, goals, outlooks or other non-historical matters or projected revenues, income, return or other financial measures that may include words such as believe, expect, anticipate, intent, plan, estimate, project, target, potential, will, should, could likely or may and similar expressions intended to identify forward-looking statements.

These statements are only predictions and involve known and unknown risk, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made and we undertake no obligation to update or revise any forward-looking statements.

In addition to those factors described in our annual report on Form 10-K and our quarterly reports on Form 10-Q under risk factors among the factors that could cause actual results to differ materially from past and projected future results, are the following; fluctuations in demand for our products and services; competing technological developments; issues relating to research and development; the availability of incentives, rebate and tax benefits relating to our products and services; changes in the regulatory environment relating to our products and services; integration of acquired business operations and the ability to obtain financing on favorable terms to fund existing operations and anticipated growth.

In addition to GAAP financial measures, this presentation includes certain non-GAAP financial measures, including adjusted EBITDA, which exclude certain expenses as described in the presentation. We use adjusted EBIT as a internal measure of business operating performance and believe that the presentation of non-GAAP financial measures provide a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and perspective operating performance by eliminating items that vary from period-to-period without correlation to our core operating performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.

I'll now turn the call over to John Hatsopoulos for some opening remarks.

John Hatsopoulos

Good morning, ladies and gentleman. As you probably know, by now that this is my last conference call since I’m retiring by an annual meeting from both the board and as CEO of the Company. But I wanted to take couple of minutes to; number one, assure that I’m not leaving the company, I’m going to be there as we file with the SEC for the next three years; I have an agreement after our annual meeting to be there for next three years; and my job will be mostly to advice if asked on financial matters and also answer any questions some investors might have. So my office with Ann Marie Pacheco and myself will be there for at least another three years.

I also want to take one minute to thank the three teams that made this record quarter possible and hopefully a tremendous future for our company. Number one our investors. As you all know, our investors suffered for a while and there wasn’t much we can do other than try and make the company a huge success that I hope will be. The second group I want to thank is management team headed by Ben Locke, Bonnie Bell and Bob Panora. They made it all possible. I was there to advise them and help them but Ben and his team and the other two people seems they have been responsible for the success that we had. Last but not least I want to thank our Board of Directors headed by Angelina Galiteva who’s chair person for the support and tremendous amount of work that they’ve done in creating the stability and future of the company.

With that, I would like to pass it on to Ben Locke. Now you see, well he will become CEO for another few weeks. But after that, he’ll be the exclusive CEO of the company as he deserves. Thank you.

Ben Locke

Thank you, John. And on behalf of the company, we want to really extend our thanks to John for taking the company through the years to where we are today as successful. It really is a page out of the success of the Thermo Electron book, which is root the company and found engineering science, good people with strong financial acumen and that leads to success. And I thank John guiding the company to where we are today, we’ve demonstrated that. So for that, I think our management team and I hope the investors will thank John for that.

So turning to the earnings call as the agenda indicates on Slide 4. I’ll start by reviewing the company’s performance and financial results for the quarter along with recent achievements and accomplishments. Bob will then give an overview of our emissions technology development, followed by Bonnie with more detail on the financials. I’ll then have some final remarks on future opportunities we expect to see as we move forward into 2018. Then we'll take questions.

As always, I’d like to start off reminding those who may be new to our company about Tecogen's core business model shown on Slide 5; heat, power and cooling that is cheaper, cleaner and more reliable. Our proprietary technology for improving efficiency, emissions and grid resiliency is truly disruptive to the traditional methods of heating, cooling and powering buildings and infrastructure.

Turning to Slide 6. 2017 was a record year for the company in terms of financial performance. Our 2017 revenue was $33.2 million and almost 36% increase over 2016. And more importantly, our adjusted EBIT of $533,000 in the fourth quarter was not only a record, it also marked the sixth consecutive quarter in the first full calendar year of positive operational results with adjusted EBITDA for the full year 2017 coming in at $1.1 million.

Read the rest of this transcript for free on seekingalpha.com