BioHiTech Global Reports Second Quarter 2016 Financial Results

CHESTNUT RIDGE, N.Y., Aug. 19, 2016 /PRNewswire/ -- BioHiTech Global, Inc. (OTCQB: BHTG), (the "Company") a green technology company that provides innovative data-driven solutions for food waste disposal, reported financial results for its second quarter and six months ended June 30, 2016.

Company Highlights

• 57% growth in revenue from core waste digester business: Revenue derived from the Company's core organic waste digester business reached $451,281, a 57% increase from the comparable period in 2015. Recurring revenue from rental, service and parts ("RSP") represented 74% of total revenue and increased by 38% compared to Q2 2015.
• Strong growth in new customer orders: The Company received 25 orders for new waste digester units, including 7 from a Fortune 100 warehouse retailer for certain locations in California, bringing its total order backlog to 99 units at the end of Q2 2016. The Company believes future domestic sales will be aided by the implementation of California's organic food waste laws in April 2016 requiring businesses that generate 8 or more cubic yards of organic waste per week to arrange for organic waste recycling services; in January 2017 the requirement will be lowered to 4 cubic yards.
• International Sales Expansion: The Company entered into an exclusive multi-year agreement including minimum purchase requirements with its current distribution partner in Singapore and Malaysia. Additionally, the Company completed the first deployments of its digesters into the Australian marketplace to a major equipment distributor in Australia and New Zealand. The Company sees the Australian market as a significant growth opportunity and is currently in negotiations with that distributor to establish a long-term distribution agreement.
• Alternative Energy Opportunity: In May 2016, the Company announced the formation of its wholly-owned subsidiary, Entsorga North America LLC, and its acquired exclusive distribution rights in 11 Northeastern and Mid-Atlantic states, to a technology solution related to large-scale mechanical biological treatment of municipal or regional waste. We believe this expands the Company's value proposition to include organic and inorganic waste streams and providing enterprise solutions to the residential and municipal marketplaces. Entsorga provides the Company with the opportunity to introduce this proven technology to the United States and to convert food and mixed solid waste into an EPA recognized alternative fuel source.
• Technology Development: During the quarter the Company initiated the design of its next generation Eco-Safe Digester and released an enhanced version of its BioHiTech Cloud and Cirrus Mobile Application, including waste audit functionality. The Company also started the installation of the BioHiTech Cloud in 16 digesters that pre-dated the Cloud for a restaurant chain customer to enable data collection and analysis of food waste patterns.
• Tusk Partnership: In July 2016, the Company partnered with Tusk Ventures, the nation's premier political, regulatory, and communications consulting firm. Tusk will provide both immediate and long-term guidance at the local, state and national level, focusing on leveraging BioHiTech's innovative technologies, domestically and across the globe.

 

Second Quarter 2016 Financial Results

Total revenue for Q2 2016 was $451,281, a 40% increase compared to revenue of $321,267 recorded in Q2 2015. Revenue from its core waste digester business increased by 57% in Q2 2016 with recurring RSP revenue increasing by 38% to $331,692 from $241,205 in Q2 2015 as a result of the Company's sales emphasis shift to a rental model leading to a greater number of rented units.  Equipment sales increased by 157% to $119,589 from $46,501. The increase in equipment sales was primarily attributable to an increase in international reseller activity in areas where the rental market is not as well recognized as the retail sales model. 

Gross margin rose to 20% in Q2 2016, a 15 percentage point increase compared to gross margin of 5% in Q2 2015. Gross profit in Q2 2016 totaled $89,967, a 424% increase compared to gross profit of $17,163 in Q2 2015. Gross margin for RSP increased to 23% from 2% in Q2 2015. The increased gross margin is primarily attributable to changes in demand, including contracted services, and improved utilization of fixed costs. 

Net loss for the period totaled $1.72 million or ($0.21) per basic and diluted share, compared to net loss of $722,073 or ($0.10) per basic and diluted share in the second quarter of 2015. The net loss was primarily due to increased operating expenses, which increased to $1.63 million from $617,910 in Q2 2015.  The increase in operating expenses was largely due to the addition of personnel to drive the strategic repositioning of the company and to support geographic expansion, and to a lesser extent by increase R&D spending and professional fees.

Cash at June 30, 2016, increased to $230,119 compared to $39,195 at December 31, 2015.

Further details about the company's results in the second quarter of 2016 are available in its Quarterly Report Form 10-Q, accessible in the investor relations section of the company's website at www.biohitechglobal.com. 

Management Commentary

"We continue to make progress on multiple fronts as we gear up our operations to position the Company for sustainable future growth," stated Frank E. Celli, CEO of BioHiTech Global.  "The decision to emphasize our Eco-Safe Digester rental model has led to double-digit growth in recurring revenue and triple digit growth in gross profit in the quarter with our order backlog setting the stage for continued recurring revenue growth. We expanded our international distribution footprint to include Australia and New Zealand while strengthening our distribution agreement for parts of Southeast Asia. We continue to invest in technology to help us drive future growth through improved functionality and the addition of numerous value-added services to our clients in this rapidly expanding regulatory climate in the United States. We are excited to have begun working with Tusk Ventures to help us navigate the regulatory environment and have already made promising advances that we expect to report to shareholders in the third quarter of 2016."

Mr. Celli added, "We are also very excited to have added the Entsorga technology to our growing portfolio of disruptive technologies to deal with the growing issue of food waste diversion and zero waste initiatives. We believe this technology is a potential game changer for BioHitech. With Entsorga we now have the ability to expand our solutions to provide economically feasible alternatives for organic and inorganic waste disposal to all generators, including businesses and municipalities. We expect to promote this exciting technology in Q3 along with our Eco-Safe Digesters throughout the United States, providing a 'one stop' solution to our customers and solving the increasing problem of the lack of infrastructure capable of dealing with our country's zero landfill initiatives."

About BioHiTech GlobalBioHiTech Global, Inc. (OTCQB: BHTG), the "Company" headquartered in Chestnut Ridge NY, develops and deploys innovative and disruptive waste management technologies. We provide waste management solutions to a global customer base encompassing a full suite of technology-based disposal options capable of having a significant impact on waste generation while providing a true zero landfill environment. With options for both on and off site biological treatment of waste, BioHiTech Global is a leader in zero waste solutions for businesses and municipalities of all sizes. For more information, please visit www.biohitechglobal.com.

Forward Looking StatementsStatements in this document contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of BioHiTech Global, Inc. to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. BioHiTech Global, Inc. assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as "Risk Factors" in our filings with the Securities and Exchange Commission ("SEC"). There may be other factors not mentioned above or included in the BioHiTech's SEC filings that may cause actual results to differ materially from those projected in any forward-looking statement. BioHiTech Global, Inc. assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by securities laws.

(1) Backlog units represents unfilled contractual orders of digesters, which excludes purchase options and announced orders for which definitive contracts have not been executed, for either retail sales or leases in excess of one year. As many elements enter into the timing of delivery, many of which are solely under the control of customers, actual revenues from all backlog units may not be immediately recognized.

 

Financial Summary TablesThe following financial information should be read in conjunction with the condensed financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on August 12, 2016 in its Quarterly Report on Form 10-Q for the period ended June 30, 2016, and the annual financial statements filed by the Company with the Securities and Exchange Commission on March 29, 2016 in its Annual Report on Form 10-K for the year ended December 31, 2015 which can be viewed at www.sec.gov and also in the Investor Relations section of the company's website at www.biohitechglobal.com.

 

 

 

 

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SOURCE BioHiTech Global, Inc.