Thermal Energy International (OTCPK:TMGE.F) 2025 Conference Transcript

Summary of Thermal Energy International Conference Call Company Overview - Company: Thermal Energy International (OTCPK:TMGE.F) - Industry: Energy efficiency and carbon emission reduction solutions - Core Business: Provides proprietary solutions primarily to large multinationals, including Fortune 500 companies, focusing on thermal energy efficiency and carbon emissions reduction [2][3][4] Key Highlights - Profitability: The company has been consistently profitable for the last three years, with a revenue growth of 41% over two years, reaching approximately $30 million in revenue [8][19] - Market Focus: Targets large, energy-intensive multinational companies, with 60% to 70% of business coming from the top 10 customers, who have around 1,000 sites worldwide [6][7] - Energy Efficiency: Claims to improve thermal energy efficiency from 50% to 90%, recovering about 80% of energy lost in typical steam or heat systems [5][4] Financial Performance - EBITDA: Experienced a slight dip in profitability in 2025 due to aggressive expansion costs, including a new manufacturing facility and the development of the Crest mobile app, costing about $800,000 [9][8] - Net Income: Remained positive at $160,000, with operating cash flow of $1.7 million for the last year and over $5 million generated in the last three years [9][10] - Debt Management: Successfully repaid approximately $4 million in long-term debt, with only $300,000 remaining as of May, expected to be cleared by January [10] Order Intake and Backlog - Record Orders: For Q1 ending August 31, the company reported $11.3 million in orders, four times the previous year and three times the average of prior years, leading to a record backlog of $24.5 million [11][19] Strategic Initiatives - Sales Strategy: Plans to develop indirect sales channels and promote standardized products through independent manufacturers' representatives, aiming to increase revenue and margins [12][13] - Crest Mobile App: Launched to streamline sales processes, enhance cross-selling opportunities, and improve data collection for better customer insights [16][18] - Manufacturing Expansion: Intends to establish Heat Sponge manufacturing in Europe to reduce shipping costs and improve efficiency [14] Market Opportunities - Global Reach: Identifies opportunities in various regions, including Asia, Africa, and Latin America, with a current focus on Europe and North America [23][24] - Customer Stability: 80% of business comes from food and beverage (60%) and pharmaceutical (20%) sectors, indicating a stable customer base with multiple projects per client [24][25] Future Outlook - Growth Potential: The company is in a strong position to continue growth with no debt, significant cash reserves, and a robust order backlog [19][10] - Acquisition Strategy: Open to acquiring complementary companies with revenues between $2 million to $20 million to enhance market presence and product offerings [31][32] Additional Insights - Sales Team Structure: Currently employs about 70 people, with 40% in sales, 40% in engineering, and 20% in administration and marketing [28] - Project Development: Larger projects typically have a longer sales cycle, with most revenue recognized in the second half of the fiscal year [29][30] This summary encapsulates the key points from the conference call, highlighting Thermal Energy International's business model, financial performance, strategic initiatives, and market opportunities.