WORCESTER, Mass.--(BUSINESS WIRE)--ThermoEnergy Corporation (TMEN:OTCBB), a diversified technologies company engaged in the development and sale of patented and/or proprietary wastewater treatment systems, today announced revenue of $202,000 for the three-month period ended March 31, 2014.
- Recognized $202,000 in parts and service revenues.
- Completed manufacturing and factory testing of a CAST® glycol recovery system using a revised platform resulting in improved manufacturing margins.
- Provided information on technical and economic feasibility of reclaiming produced water for agricultural use to state regulators in California and Texas.
- Achieved 18% year-over-year savings in operating expenses, bringing the annualized reductions achieved in the Company’s restructuring and cost reduction programs to $2.99 million.
- Completed initial testing of Pressurized Oxy-Combustion on the UPA bench-scale pilot at Georgia Tech.
Three-Month Financial Results for the Period Ended March 31, 2014:
For the three-month period ended March 31, 2014, the Company recorded revenues of $202,000, compared to $1,009,000 for the first quarter of 2013. Revenues in the first quarter of 2014 were limited to spare parts orders and service for existing customers. During the first quarter of 2013, revenues were driven by two industrial projects utilizing our Ammonia Recovery Process (“ARP”) technology. As stated in the 10-K for the period ending December 31, 2013, the Company is now recognizing revenue upon shipment to better reflect changes in our operations emphasizing standardized systems and manufacturing processes. Equipment orders in the backlog will begin to be recognized through revenue starting in the second quarter of 2014.
Gross loss for the first quarter of 2014 was $50,000 compared to $166,000 in the first quarter of 2013. Gross loss is mainly attributable to unabsorbed overhead costs of approximately $186,000 and $192,000 in the first quarter of 2014 and 2013, respectively.
General and administrative expenses decreased 15% during the first quarter of 2014 to $841,000 compared to $986,000 for the first quarter of 2013, a decrease of $145,000. The decrease is due to lower professional and consulting expenses in a continuing effort to reduce our cost structure.
Engineering, research and development expenses totaled $25,000 for the first quarter of 2014 compared to $195,000 for the first quarter of 2013, a decrease of $170,000 or 87%. The decrease is attributable to the allocation of engineering resources to pre-sales activity as well as increased utilization of our remaining engineering team during the first quarter of 2014 compared to 2013. Engineering costs directly related to our projects are charged directly to Cost of Revenues.
Sales and marketing expenses totaled $417,000 for the first quarter of 2014 compared to $382,000 for the first quarter of 2013, an increase of $35,000 or 9%. The increase is attributable to expanding sales activities and the transfer of previously defined engineering services to pre-sales activity.
Based on the assumptions used to determine the fair value of our derivative liabilities, we recorded mark-to-market expense of $245,000 in the first quarter of 2014 compared to mark-to-market income of $907,000 in the first quarter of 2013.
The Company recognized losses in Unity Power Alliance (UPA), our joint venture, totaling $128,000 in the first quarter of 2014 compared to losses of $54,000 in the first quarter of 2013.
Interest expense totaled $280,000 for the first quarter of 2014, an increase of $91,000 compared to the first quarter of 2013. This increase is due to higher interest rates on existing debt in the first quarter of 2014 as well as accruing for interest on certain of our sales tax liabilities.
Other income of $361,000 was recorded in the first quarter of 2014 compared to other expense of $7,000 in the first quarter of 2013. Other income in 2014 is derived from the reduction of our estimated legacy payroll tax liabilities as we determine actual amounts due through discussions with the various state tax authorities. The Company expects to fully resolve these payroll tax issues in the second quarter of 2014.
The Company reported a net loss of $1.625 million ($0.01 per share) for the three month period ended March 31, 2014 compared to a net loss of $1.072 million ($0.01 per share) for the same period in 2013.
As of March 31, 2013 the Company had cash on hand of $1.295 million.
Please see the Company’s Form 10-Q filed with the SEC on May 15th for additional details.
About ThermoEnergy Corp.
Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide development, sales and commercialization of patented and/or proprietary wastewater treatment and power generation technologies. The Company has been a pioneer in the development of sustainable water treatment technologies that help clients operate more efficiently, save money, reduce their carbon footprints, and meet sustainability goals. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com.
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