Tecogen Inc. · AMEX:TGEN
Tecogen — Investor Presentation (April 2018)
36 slides from Tecogen's investor presentation, Apr 12, 2018
Slide 1: Energy Efficiency Reimagined
Energy Efficiency Reimagined NASDAQ: TGEN Spring 2018 Investor Presentation
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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," "exp
Slide 3: John Hatsopoulos, Co-Founder, Chairman Emeritus, and Director
Retired President and Vice Chairman of the board of directors of Thermo Electron Corp. (now Thermo Fisher Scientific) Developed Thermo’s famous ‘spinout’ strategy, resulting in the spinout of 24 public companies from the parent Raised nearly $5B from 1990 – 1998 as Thermo’s CFO for the parent compan
Slide 4: Heat, Power, and/or Cooling that is Cheaper, Cleaner, More reliable
Heat, Power, and/or Cooling that is Advanced Modular Cogeneration Systems Cheaper Industry leading efficiency Cleaner Lower emissions thanks to efficiency and emissions technology More reliable Real time monitoring enables prompt service All of Tecogen’s equipment is powered by internal combustion e
Slide 5: Market Leading Products
Market Leading Products Cogeneration electricity and hot water Chillers hot and cold water Water Heaters up to 200% efficiency Energy Production On-site utility Emissions Reduction criteria pollutant elimination 5
Slide 6: Sustainable Competitive Advantage
Sustainable Competitive Advantage Proprietary and patented technology Ultera Emission control Inverter architecture Permanent magnet generator Natural gas engine optimization In-house engineering and installation Fully integrated on-site service and maintenance Creates value proposition for customer
Slide 7: Born to Innovate
Born to Innovate 2000: Investor group led by John and George Hatsopoulos acquires Tecogen 2003: First (and only) engine driven CHP module to obtain full California Electric Rule 21 Certification 2008: Roll out of original InVerde cogeneration unit 2013: Patent awarded for Ultera emissions technology
Slide 8: Deep and Diverse Customer Base
Deep and Diverse Customer Base Cogeneration 25% Chiller & Other Products 14% Service Contracts 26% Installations 23% Energy Production 12% 2017 Revenue by StreamInstalled Base at YE ‘17 Over 2,500 units installed to-date Two streams of stable revenue provide balance to faster growing and more volati
Slide 9: Substantial Growth Opportunities
Substantial Growth Opportunities Untapped potential for application of emissions technology to automotive and fork truck industriesEvolving market conditions encourage adaption Inexpensive and abundant natural gas Improving regulatory environment Direct cash incentives Federal investment tax credit
Slide 10: Cogeneration: Electricity and Heat
Cogeneration: Electricity and Heat Modular and scalable Best in class electrical efficiency 60-125 kW, scalable to 1MW+ Remote monitoring ✓ Proprietary inverter ✓ CERTS certified microgrid system ✓ Blackout protection ✓ Cost effective heat and power Ideal for • Locations with many beds and showers:
Slide 11: Chillers (Mechanical CHP): Heating and Cooling
Chillers (Mechanical CHP): Heating and Cooling Ideal for • Hospitals • Indoor agriculture • Light manufacturing and industrial facilities with both cooling and heating requirements • Sports facilities: Swimming pools, ice rinks The only natural gas engine driven chiller on the market 30-60% cheaper
Slide 12: Water Heaters: Up to 300% Efficiency
Water Heaters: Up to 300% Efficiency Ideal for • Customers with high natural gas prices • Food and beverage processing facilities • Nursing homes, spas, apartment buildings The world’s most efficient water heater 2-3x the efficiency of a conventional boiler cuts energy consumption and carbon dioxide
Slide 13: Energy Production: On-site Utility
Energy Production: On-site Utility Sells heat, power, and/or cooling directly to customer Stable source of revenue with robust margins Future contracted revenue of over $50 million (undiscounted) Acquired on May 18, 2017 Acquisition creates a vertically integrated clean technology company with a com
Slide 14: Emissions Reduction: Criteria Pollutant Elimination
Emissions Reduction: Criteria Pollutant Elimination Non-invasive emissions system Reduces criteria pollutants (Nox, NMOG, CO) to near zero fuel-cell equivalent levels Patent protected and insured Installed on virtually all Tecogen equipment Simple retrofit to existing engines with no performance los
Slide 15: Applying Ultera to Mobile Vehicles
Fork trucks that operate indoors must meet strict emissions standards Affordability, distribution network, and power profile make propane the fuel of choice Batteries and fuel cells greatly compromise performance Funded in part by the Propane education & research Council (PERC) Test of retrofitted f
Slide 16: Sustained Positive Financial Results
Sustained Positive Financial Results 16 Record annual revenue in 2017 of $33.2 million Sustained step change to profitability achieved in 3Q’16 Six consecutive quarters of positive operational results Adjusted EBITDA of $1.1 million for the year of 2017, $533K in 4Q’17 Non-GAAP Adjusted EBITDA is de
Slide 17: 4Q and FY'17 Results
4Q and FY’17 Results 4Q'17 4Q'16 YoY Chg FY'17 FY'16 YoY Chg Revenues 10,264,163 7,111,108 44% 33,202,666 24,490,386 36% Cost of sales 6,469,082 4,407,486 47% 20,248,262 15,189,708 33% Gross profit 3,795,081 2,703,622 40% 12,954,404 9,300,678 39% General and administrative 2,477,998 2,096,131 18% 9,
Slide 18: Company Information
Company Information Tecogen, Inc. 45 First Ave Waltham, MA 02451 NASDAQ: TGEN www.tecogen.comContact John Hatsopoulos, Chairman Emeritus 781.622.1120 John.Hatsopoulos@Tecogen.com Jeb Armstrong, Director of Capital Markets 781.466.6413 Jeb.Armstrong@Tecogen.com Contact Information Energy Efficiency R
Slide 19: Appendix and Tecogen Company Information
Management team Board of Directors Detailed financial information Cogeneration InVerde e+ data Cogeneration savings case study Tecochill chiller data Indoor agriculture Ilios water heater data Ultera emission technology diagram Emission reduction comparison chart Standby generator emissions test res
Slide 20: Management Team
Management Team 20 Benjamin Locke Chief Executive Officer • Co-CEO from 2014 to 2018 • Joined company as general manager in 2013 • Director of Business Development at Metabolix from 2001 to 2013 • Previously served as Vice President of Research at Innovative Imaging Systems Robert Panora President,
Slide 21: Board of Directors
Board of Directors 21 Angelina Galiteva Director, Board Chairwoman ▪ Chair of the Company since 2005 ▪ Founder and Chair of the Board for the Renewables 100 Policy Institute, a non- profit entity dedicated to the global advancement of renewable energy solutions since 2008 ▪ Chairperson at the World
Slide 22: Year-End 2017 Financial Metrics: Revenues, Margins, Growth
Year-End 2017 Financial Metrics: Revenues, Margins, Growth Four diverse revenue streams Record product sales Long term service contracts provide steadily improving cash flow Turnkey installation through Tecogen service operations facilitates both product sales and service revenue Energy production v
Slide 23: Consistent Financial Progress
Consistent Financial Progress *Adjusted EBITDA is defined as net income (loss) attributable to Tecogen Inc, adjusted for interest, depreciation and amortization, stock based compensation expense and one-time merger related expenses. Steady growth in the backlog translates directly to revenue and bot
Slide 24: Consistent Financial Progress
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 20 14 Q1 20 14 Q2 20 14 Q3 20 14 Q4 20 15 Q1 20 15 Q2 20 15 Q3 20 15 Q4 20 16 Q1 20 16 Q2 20 16 Q3 20 16 Q4 20 17 Q1 20 17 Q2 20 17 Q3 20 17 Q4 Revenues: Trailing 4 Quarters Products Services Energy Production (ADGE) $ thousands
Slide 25: InVerde e+ Data
InVerde e+ Data 25 Best in class efficiency: 33% electrical, 94% overall (LHV) Ideal for markets with commercial electric rates over $0.12/kWh Variable speed operation from 10kW to 125 kW with superior part- load efficiency Fully scalable to multi-MW system Cloud-based real-time performance monitori
Slide 26: Cogeneration Case Study
Cogeneration Case Study 26 Location: 205 West End Ave, New York City What: Two InVerdes that went into service in April, 2016 Cumulative Savings: $300 thousand over first 24 months of operation Expected Payback Period: 4 to 6 years before NYSERDA rebate Total Electric Generation: 2,219 MW-Hours Aver
Slide 27: Tecochill Data
Tecochill Data 27 Only natural gas engine driven chiller available Widely deployed across North America Utilizes less than 1% of the electricity of competing electric chillers, which can be supplied by small retail generator (<3kW) Eliminates exposure to on-peak electric demand charges Cloud-based r
Slide 28: Indoor Agriculture
Indoor Agriculture 28 Tecochill natural gas powered chillers provide a unique value proposition for indoor farming Rapidly growing market poised for exponential growth To grow 5x over five years according to Agrilyst Cannabis is primary near-term driver Leafy greens, herbs, and tomatoes are also att
Slide 29: Ilios Data
Ilios Data 29 World’s most efficient water heater 2-3x the efficiency of a conventional boiler Can generate 15 to 25 tons of free cooling while producing hot water Dimensions: 5’x3’x6’ Weight: 3,200 lbs Air-source Heat Pump Water-source Heat Pump
Slide 30: Ultera Emission Technology
Ultera Emission Technology 30 Second Stage Catalyst Virtually Pure CO2 stream First stage eliminates NOx Second stage eliminates CO Lowering exhaust temperature prevents reformation of NOx in second stage Fuel Cell Slayer: Enables internal combustion engine to achieve emissions similar to a fuel cel
Slide 31: Stationary Emissions Reduction Comparison
Stationary Emissions Reduction Comparison 31 1) Tecogen emissions based upon actual third party source test data 2) Microturbine and Fuel Cell NOx data from California Energy Commission, Combined Heat and Power Market Assessment 2010, by ICF International 3) Stationary engine BACT as defined by SCAQ
Slide 32: AVL Automotive Emissions Test Results: CO
AVL Automotive Emissions Test Results 32 Ultera Reduction of CO Concentration – US06 Cycle Standard Vehicle Emission System With the addition of the Ultera System Graphs present the reduction of measured CO concentration where CO concentration (ppm) is represented by the red line and the vehicle spe
Slide 33: AVL Automotive Emissions Test Results: NMHC
AVL Automotive Emissions Test Results 33 Ultera Reduction of NMHC Concentration – US06 Cycle Standard Vehicle Emission System With the addition of the Ultera System Graphs present the reduction of NMHC (non-Methane hydrocarbons) where NMHC concentration (ppm) is represented by the black line and the
Slide 34: Stand-By Generator Emissions Test Results
Stand-By Generator Emissions Test Results 34 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 CO @ 15% O2 (ppm) NOx @ 15% O2 (ppm) Ultera Performance on Caterpillar 15 Liter Natural Gas Generator
Slide 35: Fork Truck Emissions Test Results
Fork Truck Emissions Test Results 35 0 100 200 300 400 500 600 700 800 900 1000 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000 CO [pp m ] Runtime [sec] Pre Ultera System Post Ultera System 400 F (204 C) Ultera Temperature 0 10 20 30 40 50 60 70 80 90 100 250 30 350 40 4 0 50 550 60
Slide 36: Fork Truck Emissions Test Results
Fork Truck Emissions Test Results 36 0 200 400 600 800 1000 1200 1400 1600 1800 2000 1100 1160 1220 1280 1340 CO [pp m ] Runtime [sec] CO - Pre Ultera CO - Post Ultera Low NOx Tuning Test (low loading) 0 10 20 30 40 50 60 70 80 90 100 1100 1160 1220 1280 1340 NO x [pp m ] Runtime [sec] NOx - Pre Ult