Titan Energy Worldwide Reports First Quarter 2008 Financial Results
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MINNEAPOLIS--(BUSINESS WIRE)--
Titan Energy Worldwide, Inc. (OTC BB: TEWI.OB), a leader in the manufacturing, marketing and servicing of energy generation products and services, announced financial results for the first quarter ended March 31, 2008.
"During the first quarter we made significant progress on our plans to capitalize on the rapidly growing demand for back up and emergency power throughout the United States. Having raised additional capital in early January, we ended the quarter with a strengthened balance sheet and the resources to fund our accelerated growth objectives," said John Tastad, Titan's chief executive officer. "We signed a master distribution agreement for North America, establishing a nationwide sales and marketing program for the Sentry 5000 with Katolight, one of the largest suppliers of generation equipment in the U.S. We received our first significant orders for the Sentry 5000 and will begin shipping these units this summer. Throughout 2008, we will be aggressively marketing the Sentry 5000 in partnership with Katolight," added Tastad.
"Additionally we made progress in the development of the electric hybrid version of the Sentry 5000, through a joint venture between Titan Energy and Next Energy, a nonprofit organization which supports the research, development and manufacturing of alternative energy technologies. We plan to deliver the first electric hybrid system this summer and have been working with the U.S. Defense Logistics Agency to identify and develop sales opportunities. The hybrid Sentry 5000 incorporates photovoltaic (solar) panels and wind power to increase the run life of the diesel generator and allow the system to operate in more diverse environments. We believe we are creating a unique and timely emergency power solution by leveraging new alternative energy technologies to supplement traditional power sources." added Tastad.
"With regards to our sales of traditional generator systems, we have successfully reorganized our sales strategy and operations to drive higher gross margins on new sales. Although changing our sales strategy caused first quarter revenues to decline, we have built a strong backlog of orders for the remainder of 2008," continued Tastad. "At the same time, we have significantly increased our service sales, a high margin area of our business, while implementing a more aggressive marketing program for service contracts. Through these and other initiatives designed to increase sales revenues and improve our gross sales margins, we expect our sales of standby power equipment in 2008 to be comparable to 2007 levels while realizing a significant improvement in our overall gross margins."
"Finally, we have continued to explore the possibilities of extending our generator sales and distribution into other key regions of the US. To this end, acquisitions remain an important component of our growth strategy and we are pursuing a number of exciting prospects.
"In summary, the market for standby power, mission critical and emergency power systems continues to increase significantly and we are confident that Titan Energy will capitalize on these national and global opportunities. At the same time there is a growing emphasis on the role of alternative energy technologies in power generation, and our developmental efforts are helping to create future products that we believe will further enhance our company's position and shareholder value," concluded Tastad.
First Quarter 2008 Results
Revenue for the first quarter was $1.2 million compared to $2.6 million in the first quarter of 2007. The decline in revenue reflects lower equipment sales offset by a 16% increase in sales of services and parts. Gross margin in the first quarter of 2008 was 13 % up from 8% in the first quarter of 2007. The 500 basis point improvement reflects a favorable product mix, improved efficiencies and higher prices on service contracts. Total general and administrative expenses were $0.9 million compared to $0.7 million for the comparable period reflecting an increase in headcount and costs to launch the Sentry 5000.
The company reported a net loss of $0.7 million compared to $0.8 million for the three months ended March 31, 2007. The net losses for March 31 2008 and 2007 include non-cash charges of $58,352 and $455,655, respectively. Last year's non-cash charges reflect accounting treatment associated with the company's convertible securities.
As of March 31, 2008, the company had total assets of $6.3 million with cash and cash equivalents of $1.7 million, working capital of $1.6 million and stockholders' equity of $4.6 million. During the quarter, the company raised $2.2 million in net proceeds from the completion of its private placement of the Series D Preferred Stock
About Titan Energy Worldwide, Inc.
Titan Energy is a leader in the manufacturing, marketing and servicing of energy generation products and services, including development and support for new energy-related technology. Founded in 2005, Titan combines engineering expertise, established sales and distributorships, service operations and unique strategic partnerships to meet the growing global demand for clean, efficient, energy solutions. Titan serves disaster recovery first responders, relief agencies, homeland security, the department of defense and municipalities. For more information, visit the company's website at: www.titanenergy.com.
Forward Looking Statements
Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of TEWI officials are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "believes," "anticipates," "intends," "plans," "expects," and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future TEWI actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and TEWI has no specific intention to update these statements.
CONSOLIDATED BALANCE SHEETS
Titan Energy Worldwide, Inc.
March 31, Dec 31,
2008 2007
------------- -------------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 1,667,173 $ 742,564
Accounts receivable, less allowance for
doubtful accounts of $52,000 and
$50,000, respectively 684,285 1,089,845
Inventory 828,434 598,207
Other current assets 119,781 137,005
------------- -------------
Total current assets 3,299,673 2,567,621
Property and equipment, net 152,233 133,421
Customer and distribution lists 1,243,705 1,280,034
Goodwill 1,599,160 1,599,160
Other Assets 16,671 22,532
------------- -------------
Total assets $ 6,311,442 $ 5,602,768
=============-=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable-current portion $ 526,226 $ 544,425
Accounts payable 756,425 882,126
Accrued compensation 194,649 461,335
Accrued liabilities - other 192,006 383,295
Customer deposits and deferred revenue 35,101 72,903
------------- -------------
Total current liabilities 1,704,407 2,474,654
Notes payable, less current portion 1,283 3,670
Total liabilities 1,705,690 2,478,324
------------- -------------
Stockholders' equity
Common stock 1,900,000,000 shares
authorized, $.0001 par value, issued
and outstanding 15,438,167 and
15,398,205 1,544 1,540
Preferred Stock Series D, authorized
10,0000,0000 issued and outstanding
657 and 411, $.0001 par value 1 1
Additional paid in capital 26,974,084 24,169,118
Accumulated deficit (22,369,877) (21,046,215)
------------- -------------
Total stockholders' equity $ 4,605,752 $ 3,124,444
------------- -------------
Total liabilities and stockholders'
equity $ 6,311,442 $ 5,602,768
============= =============
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) Three months ended
March 31,
2008 2007
Sales of equipment $ 739,622 $ 2,185,493
Sales of service and parts 458,237 394,555
------------- -------------
Total sales 1,197,899 2,580,048
------------- -------------
Material cost and labor for equipment 653,238 1,963,321
Material cost and labor for service and
parts 390,311 433,574
------------- -------------
Total cost of sales 1,043,549 2,396,895
------------- -------------
Gross Profit 154,350 183,153
Salaries, wages and benefits 436,518 305,040
Consulting and professional fees 138,688 252,909
Other 286,281 108,653
------------- -------------
Total general and administrative
expenses 861,487 666,602
------------- -------------
Loss from operations (707,137) (483,449)
Interest expenses 15,175 38,475
Amortization of debt discount and
financing cost 8,188 361,943
------------- -------------
Net loss (730,500) (883,867)
Preferred dividend from beneficial
conversion feature Series D (593,162) -
------------- -------------
Net loss available to common shareholders $ (1,323,662) $ (883,867)
============= =============
Weighted average number of shares
outstanding 15,409,181 492,071
============= =============
Basic and Diluted Net Loss Per Common
Share $ (0.09) $ (1.80)
============= =============
Source: Titan Energy Worldwide
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