Titan Energy Worldwide Releases Preliminary 2nd and 3rd Quarter 2014 Financials
MINNEAPOLIS, MN / ACCESSWIRE / November 11, 2014 / Titan Energy Worldwide, Inc. (OTC Pink:TEWI) (TEWI), a leader in distributed power generation products and intelligent energy management services, today announced that it has released preliminary financial statements for the quarters ended June 30, 2014 and September 30, 2014.
The company delayed the filing of financial statements due to an audit that is currently in process with the Company's independent accountants for the years 2011, 2012 and 2013. Preliminary information related to the audit was released in a Form 8K/A on November 3, 2014.
Until the audit is complete, investors should not rely on the Forms 10K for 2011, 2012 and 2013 or the Forms 10Q for 2012 and 2013 as previously filed. Amended Forms 10K and 10Q will be completed and filed as soon as practical. When that audit is complete, the Company will then proceed to file its completed and reviewed Forms 10Q for the periods ended June 30, 2014 and September 30, 2014 as soon as practical.
Preliminary financial information for the quarter ending September 30, 2014:
For the quarter ended September 30, 2014, the Company reports revenues of approximately $4.2 million compared to $5.3 million for the same quarter in 2013, a decrease of 21%. Service revenues were $2.3 million for the quarter compared to $3.2 million for 2013, a decrease of 28%. Equipment sales were $1.9 million in 2014 compared to $2.1 million in 2013, a decrease of 10%.
For the first nine months of 2014, revenues were approximately $13 million, down approximately 20% from 2013. Service sales were approximately $6.1 million, down 24%, while equipment sales were approximately $7 million, down 15% from the same period in 2013.
Gross profit margins were 34% for the quarter ended September 30, 2014, and 28% for the nine months ended September 30, 2014, compared to 31% and 29% for the same periods in 2013. EBITDA was approximately $72K for the 3rd quarter of 2014 and approximately -$376K for the nine months ended September 30, 2014, compared to EBITDA of $313K and $970K for the same periods in 2013.
A large portion of the decrease in service sales in the third quarter was due to the winding down of the Company's RICE NESHAP program. Most of these contracts, which provide EPA-mandated modifications on existing emergency generators, were due and completed in 2013. The work the Company has done in 2014 was primarily for customers which delayed their modifications beyond the EPA deadlines. The Company recorded approximately $2.2 million of RICE NESHAP work in 2013, while it expects to do less than $500 million in RICE NESHAP related revenue in 2014.
Equipment sales were up slightly compared to the same quarter in 2013, but at this time Management feels this is as much due to the cyclical nature of the equipment side of the business as any other factor, and the Company can experience large swings in sales revenue from equipment quarter by quarter.
Management has identified three trends that could indicate potentially higher future sales revenues and improved profitability:
1) Service sales in the Midwest region, where the Company has its largest base of business, increased 70% for the quarter ended Sept 30, 2014 compared to the quarter ended March 31, 2014. Midwest service sales for the 3rd quarter 2014 are up 15% compared to the same quarter in 2013. Based on new service contracts, management expects improved service sales to continue into 2015.
2) The Company has a backlog of more than $1.5 million in equipment projects that could be released between now and the end of the year. The release of these jobs, however, depends on a number of factors, including factory schedules, weather conditions and construction schedules – all of which could delay these jobs until 2015.
3) New equipment sales are at an all–time high for our Northeast operations. More than $4 million of new projects are booked and expected to roll out in 2015.
Preliminary financial information for the 2nd quarter 2014:
For the quarter ended June 30, 2014, the Company reported revenues of $4,061,377 compared to $6,434,283 for the same quarter in 2013. Service revenues were $1.8 million for the quarter compared to $3.2 million for 2013, a decrease of 43%. Equipment sales were $2.2 million in 2014 compared to $3.2 million in 2013, a decrease of 31%.
For the six months ending June 30, 2014, sales were $9,045,363 compared to $11,088,364 in 2013, a decrease of 18%. Equipment sales and service sales were $5.2 million and $3.8 million respectively for the first half of 2014, compared to $6.0 million and $5.1 million in 2013.
Gross profit margins for the quarter ended June 30, 2014 was 30% and for the six months was 27%, compared to 28% and 27% for the same periods in 2013. EBITDA was approximately -$100K for the quarter ended June 30, 2014 and -$440K for the first six months of 2014, compared to $577K and $654K for the same periods in 2013.
During the first three months of the year, service work was severely limited by the extreme cold and weather the Midwest experienced. This led to decreased service sales and an increase in unbillable technicians' time in the quarter ended March 31, 2014 and the first six months of 2014, which significantly impacted the Company's overall sales revenues, operating income and EBITDA. A large portion of the decrease in service sales was due to the delay in implementing a major service contract with one of the Company's retail customers. Normally, this customer initiates its contracted service work in March of each year, but the 2014 work schedule was delayed until July. Management believes this delay lowered service revenues for the quarter ended June 30, 2014 by $700K to as much as $900K.
Equipment sales decreased significantly in the 2nd quarter and first half of 2014 as compared to the same periods in 2013, but, as stated above, management feels this is as much due to the cyclical nature of the equipment side of the business as any other factor, and the Company can experience large swings in sales revenue from equipment quarter by quarter.
