UPDATE: BioHiTech Global, Inc. (BHTG) Reports Q1 Loss of $0.49

BioHiTech Global, Inc. (NASDAQ: BHTG) reported Q1 EPS of ($0.49). Revenue for the quarter came in at $646 thousand.

Q1 Financial Highlights

• Revenue: Revenues in Q1 2018 were $646,000, a 9.3% increase compared to revenues of $591,000 in Q1 2017. Recurring revenue from rental, services and maintenance grew by 22.9% to reach $440,000 or 68.2% of total revenue. The increase in rental, service and maintenance is primarily the result of a larger overall number of deployed units that led to a 42.1% increase in pure rental revenues. Recurring revenue from management advisory fees related to its new management services contract with Gold Medal in 2018 totaled $139,000. These increases in revenue were partially offset by a 71.6% decline in revenue from equipment sales which totaled $66,000 compared to $232,000 in Q1 2017. This decline in equipment sales was a reflection of the Company's focus on its rental model and to a lesser extent, a decrease in retailer activity from certain international markets in the quarter. The Company expects a significant sequential increase in equipment sales as reseller orders have increased thus far in the second quarter.
• Gross Profit: Q1 2018 gross profit was $283,000, a 42.1% increase compared to gross profit of $199,000 in Q1 2017. Gross profit margin increased by 10.2 percentage points to reach 43.9%. The increase in gross margin was driven by 100% margin from management advisory fees as the Company is providing the services with its existing management team without incurring any additional variable costs as part its mission to cost effectively reduce the environmental impact of waste management services. Rental, service and maintenance gross margin increased by 4.4 percentage points to 32.2%, primarily as the Company achieved improved economies of scale. The aforementioned improvements in gross margin were partially offset by a 40.0 percentage point decline in gross margin from equipment sales gross margin due to the sale of older inventory and previously used equipment at very low margin.
• Operating Expenses: Q1 2018 operating expenses decreased by $321,000 or 16.7% to $1.6 million compared to $1.9 million in Q1 2017. The decrease in operating expenses was mainly due to a $363,000 decrease in professional fees related to marketing and investor relations. Total expenses for SG&A and R&D remained fairly consistent year over year.
• Operating Loss: Q1 2018 operating loss narrowed to $(1.3) million compared to $(1.7) million in Q1 2017. The improvement in the operating result was due to the reduction in operating expenses coupled with an increase in gross profit.
• Net Loss: The Company recorded a Q1 2018 net loss of $(5.2) million or $(0.49) on 10.9 million shares versus a net loss of ($2.0) million or $(0.25) on 8.2 million shares in Q1 2017. The increase in net loss was attributable to a $3.3 million non-cash interest expense recorded in Q1 2018 related to the valuation of certain warrants outstanding.
• Select Balance Sheet Items: The Company had cash and cash equivalents of $3.2 million with total assets of $15.5 million as of March 31, 2018 compared to $901,000 and $10.5 million as of December 31, 2017. Total liabilities as of March 31, 2018 $14.2 million compared to $21.0 million as of December 31, 2017.

Brian C. Essman, CFO commented, "We made significant progress during the quarter on several fronts including the strengthening of our balance sheet and improvement in our operating results. We added a high margin revenue stream through our Gold Medal relationship and continued to grow recurring revenue from digester rentals, service and maintenance. Our new senior secured debt and Comerica credit facility, coupled with several other financial transactions in the quarter, have greatly improved working capital and stockholder's equity. We are now in a much stronger position to grow our cost-effective food waste disposal business, prudently invest in our data analytics technology, and move forward with the commercialization efforts for our HEBioT MBT business. We look forward to continued progress over the course of 2018 as we continue to execute on our long-term growth plans to create significant value for the benefit of our stockholders."

For earnings history and earnings-related data on (BHTG) click here.

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