Tecogen Reports 2020 Results

Press Release

Waltham, MA – (NewMediaWire) – March 11, 2021 – Tecogen Inc. (OTCQX:TGEN, the “Company”), a leading manufacturer of clean energy products, reported revenues of $28.3 million for the year ended December 31, 2020 compared to $33.4 million for 2019, a 15.5% decrease. All segments were adversely impacted by business interruptions resulting from the COVID-19 pandemic. Product revenues decreased to $10.5 million in 2020 from $13.0 million in 2019, and service revenues were $15.9 million in 2020 compared to $17.3 million for the same period in 2019 due to a decline in installation activity. Energy Production revenue decreased to $1.8 million in 2020 from $3.1 million in 2019.Key Takeaways:Gross profit was $10.8 million for the year ended December 31, 2020 compared to $12.5 million for the prior year. Gross margin for 2020 improved to 38.3% compared to 37.3% for 2019.Operating expenses for the 4th quarter, excluding one-time adjustments for bad debt, goodwill impairment, and patent write-downs, decreased 23% as compared to Q4 2019. Net loss was $6.2 million versus a loss of $4.7 million in 2019 primarily due to one-time goodwill impairments in both years and increased reserves for bad debt. Net loss, exclusive of goodwill and long-lived assets impairment and other one-time adjustments for the year ended December 31, 2020 was $2.4 million compared to a loss of $1.0 million for the same period in 2019.Cash flows provided by operations for 2020 were $1.4 million compared to cash flows used in operations of $4.5 million in 2019, representing a $5.9 million improvement in operating cash flows.Cash and cash equivalents were $1.5 million at December 31, 2020 compared to $0.9 million at December 31, 2019, an increase of $0.6 million.Executed a license agreement with Origin Engines relating to the use of our Ultera emissions reduction technology with engines supplied by Origin to a range of customers.Added U.S. Patents 10,774,720 and 10,774,724 to our intellectual property portfolio.Adjusted EBITDA(1) was a loss of $0.9 million and $2.2 million for the quarter and year ended December 31, 2020, respectively, compared to a loss of $0.3 million and $0.2 million for the quarter and year ended December 31, 2019, respectively. This reduction in Adjusted EBITDA was due to reduced margin on lower revenues and increased provisions for bad debt. (Adjusted EBITDA is defined as net income or loss attributable to Tecogen, adjusted for interest, income taxes, depreciation and amortization, stock-based compensation expense, unrealized gain or loss on equity securities, goodwill impairment charges. See table following the statements of operations for a reconciliation from net loss to Adjusted EBITDA as well as important disclosures about the company’s use of Adjusted EBITDA.)On January 19, 2021, we received a letter dated January 12, 2021 from Webster Bank, NA confirming that the Paycheck Protection Program Loan granted to us on April 17, 2020 pursuant to the CARES Act in the original principal amount of $1,874,200 together with all accrued interest thereon was forgiven in full as of January 11, 2021. The loan forgiveness amount which aggregates to $1,886,933, including $12,733 of accrued interest, will be recognized in the first quarter of 2021 and will be accounted for as debt extinguishment in our consolidated statements of operations.On February 5, 2021, we obtained a Paycheck Protection Program Second Draw unsecured loan through Webster Bank in the amount of $1,874,269 pursuant to the CARES Act. We intend to use the loan proceeds for payroll, rent, utilities and other operating expenses, and expect to apply for forgiveness of the loan balance as permitted under the CARES Act.”2020 was a challenging year for many businesses,” commented Benjamin Locke, Tecogen CEO.  “The COVID-19 pandemic had many negative impacts on our business with regard to facility closures and construction slowdowns.  We took the opportunity of a slower 2020 to reduce operational costs and strengthen our balance sheet. We reduced our receivable and unbilled revenue balances …