Slide 1: Earnings Call March 16, 2023 - FY 2022
OTCQX: TGEN EARNINGS CALL MARCH 16, 2023 FY 2022 1
Slide 2: Management
MANAGEMENT Abinand Rangesh – CEO & CFO Robert Panora – COO & President Roger Deschenes – CAO Jack Whiting – General Counsel & Secretary 2
Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation and accompanying documents contain “forward-looking statements” which may describe strategies, goals, outlooks or other non- historical matters, or projected revenues, Income, returns or other financial measures, that may include words such as "believe," "expe
Slide 4: Agenda
AGENDA 4Q 2022 Results FY 2022 Results Vision and 2023 Plan Competitive Advantage, Markets and Positioning Q&A 4
Slide 5: Revenue Segments
REVENUE SEGMENTS PRODUCT SALES SERVICES Sales of combined heat and We service most purchased power, and clean cooling Tecogen equipment in operation systems to building owners. through long term maintenance Key market segments include agreements through 11 service multifamily residential, health CLE
Slide 6: 4Q 2022 Results
4Q 2022 RESULTS Key Points $ in thousands 4Q'22 4Q'21 YoY Change % • Net loss of $0.06/share Q4 2022 Revenue • Net Loss $1.4m Products $ 1,000 $ 3,693 $ (2,694) Service 3,015 3,087 (72) • Cash and equivalents balance of $1.9 Energy Production 517 400 118 million Total Revenue 4,532 7,180 (2,648) -36
Slide 7: YE 2022 Results
YE 2022 RESULTS $ in thousands YE 22 YE 21 YoY Change % Key Points Revenue • Net Loss of $0.10/share YE 2022 Products $ 11,156 $ 10,133 $ 1,023 • Net Loss of $2.4m Service 12,060 12,526 (466) Energy Production 1,786 1,739 47 Total Revenue 25,002 24,398 604 2.5% Revenue = $25 million Gross Profit • C
Slide 8: 4Q 2022 Adjusted EBITDA Reconciliation
4Q 2022 ADJUSTED EBITDA RECONCILIATION Quarter Ended, Dec 31 Non-GAAP financial disclosure (in thousands) 2022 2021 EBITDA: Earnings Before Interest, Taxes, Net income (loss) attributable to Tecogen Inc. $ (1,424) $ 63 Depreciation & Amortization Interest expense, net - 1 EBITDA and adjusted EBITDA
Slide 9: YE 2022 Adjusted EBITDA Reconciliation
YE 2022 ADJUSTED EBITDA RECONCILIATION FY ended Dec 31 EBITDA: Earnings Before Interest, Taxes, Non-GAAP financial disclosure (in thousands) 2022 2021 Depreciation & Amortization Net income (loss) attributable to Tecogen Inc. $ (2,448) $ 3,696 EBITDA and adjusted EBITDA loss of Interest expense, net
Slide 10: 4Q 22 Performance by Segment
4Q 22 PERFORMANCE BY SEGMENT 4Q Revenues ($ thousands) 2022 2021 YoY Growth Revenues Cogeneration $ 604 $ 721 -16% Product revenue reduced 73% QoQ Chiller 47 2,794 -98% Engineered accessories 349 178 96% Total Product Revenues 1,000 3,693 -73% Service revenue declined 2% QoQ Service Contracts 3,034
Slide 11: YE 22 Performance by Segment
YE 22 PERFORMANCE BY SEGMENT YE 2022 Revenues ($ thousands) 2022 2021 YoY Growth Revenues Cogeneration 5,280 $ 3,264 62% Product revenue increased 10% YoY Chiller 5,035 5,723 -12% • 12% decrease in chiller shipments Engineered accessories 842 1,146 -27% Total Product Revenues 11,156 10,133 10% • 62%
Slide 12: Backlog and Cash
BACKLOG AND CASH Backlog by Customer Type Backlog has increased from year end to $7.58m from $6.6m Cash position $1.9m at quarter end and $2.2m presently Multi-Family Residential Other 48% No Debt 23% Controlled Environment Agriculture 29% 12
Slide 13: Units Shipped and Service Centers
Units Shipped Resiliency and energy efficiency solutions with a cleaner environmental Service footprint. Centers 13
Slide 14: Long Term Maintenance & Energy Asset Management
POWER LONG TERM GENERATION + MAINTENANCE & RESILIENCY ENERGY ASSET Modular microgrids for MANAGEMENT energy savings, Helping customers achieve greenhouse gas (GHG) predictable energy savings with reductions and resiliency comprehensive maintenance to grid outages services CLEAN COOLING Hybrid and En
Slide 15: Current status of Tecogen's offering
Current status of Tecogen’s offering Demand for products & services Fast Sales Growth Faster sales growth, higher margin Tecogen Service Slow Sales Current Tecogen Products Growth Substitutes & Low Pricing High Pricing Barriers to Power Power competition 15
Slide 16: Tecogen Growth Plan
Tecogen Growth Plan • Phase 1 – Stabilize existing business • Cost control measures and focus on key markets By Aug 2023 • Free up cash from inventory and NYSERDA rebates • In process of assuming service agreements for 202 cogeneration units • Obtain PO for first air-cooled chillers sites • Phase 2
Slide 17: Market Segments
Market Segments Recreational Nursing Home Lab Office 1% 2% 0% 7% ✓ Focus sales efforts on Hotel segments with 4% Multi-unit residential largest advantages 29% against competing Hospital offerings 8% ✓ Indoor Agriculture Industrial ✓ Education 1% ✓ Multi-Family ✓ Healthcare Indoor growing Education 2
Slide 18: Competitive Landscape Cogeneration
Competitive Landscape Cogeneration Easy to Install, Quiet and fits in tight spaces ✓ Tecogen has an advantage in buildings that need a quiet, easy to Easy fit cogeneration system ✓ Higher efficiency large industrial cogeneration systems won’t fit in most high-rise buildings and are too noisy ✓ 75 KW
Slide 19: Competitive Landscape Chillers
Competitive Landscape Chillers Cost of Operation ✓ Tecogen has advantages in High buildings that have electrical capacity constraints or have better uses for the electrical capacity ✓ Best ROI in buildings that cool and dehumidify at the same time ✓ Focus on indoor agriculture, healthcare, industria
Slide 20: Addressable Market Size in New England, NY, NJ, FL, CA
Addressable Market Size in New England, NY, NJ, FL, CA Multifamily (NY, NJ, NewE), $194,541,760 Education , $208,208,000 ✓ Addressable market is still large in present geographies ✓ Utility rates are going up in our core markets Fitness, $105,168,000 Food, $86,520,000 ✓ Addressable Market >$1Bn Beve
Slide 21: Conditions Necessary for Partners To Sell Tecogen's Products
Conditions Necessary for Partners To sell Tecogen’s Products ✓ Pick the right reps that have experience with ROI based sales Easy to sell/install ✓ Owner direct through developers and contractors ✓ New Build through HVAC Reps ✓ Change incentive structure ✓ Improve support documentation and Compensat
Slide 22: Increasing the Sales Pipeline
Increasing the sales pipeline 16 ✓ For increased sales, assuming a fixed 14 conversion ratio, the sales pipeline size needs to increase 12 Value of new deals added ✓ AHR 2023 and re-engaging sales 10 partners since Jan 2023 is already showing a significant increase in the 8 number of new potential p
Slide 23: Air Cooled Chiller Update
Air Cooled Chiller Update ✓ Successful AHR 2023 launch ✓ Working on obtaining POs from beta customers ✓ Outreach to existing Tecogen customers with older equipment completed ✓ Gas company outreach to identify more customers via gas account reps ✓ Preliminary testing starting May at Tecogen and on- s
Slide 24: Summary and Q&A
SUMMARY AND Q&A ✓ Free up cash and stabilize business Company Information ✓ Grow service division Tecogen, Inc 45 First Ave ✓ Make products easier to install and sell Waltham, MA 02451 www.Tecogen.com ✓ Put in a sales distribution system via the right channel partners & developers Contact informatio