Tecogen Inc. · AMEX:TGEN
Tecogen — Q3 2018 Earnings Presentation
36 slides from Tecogen's earnings presentation, Jan 8, 2019
Slide 1: Energy Efficiency Reimagined: 3rd Quarter 2018 Investor Presentation
Energy Efficiency Reimagined NASDAQ: TGEN 3nd Quarter 2018 Investor Presentation
Slide 2: 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," "expec
Slide 3: John Hatsopoulos, Co-Founder, Chairman Emeritus
John Hatsopoulos Co- Founder, Chairman Emeritus 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 1
Slide 4: Benjamin Locke, CEO, Director
Benjamin Locke CEO, Director 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 Led Tecogen to full year profitability in 2017 Enhanced Tecogen Product Offerings Expan
Slide 5: Tecogen Advanced Modular Energy Systems
Tecogen Advanced Modular Energy Systems Heat, Power, and/or Cooling that is: Cheaper Industry leading efficiency and reduced exposure to expensive electricity Cleaner Proprietary near-zero emissions technology, GHG reductions More reliable Real-time monitoring, blackout protection, and improved grid
Slide 6: Clean Energy Products
Clean Energy Products Microgrid CHP Gas Chillers Efficient CHP Resiliency and Savings Hot and Cold Water Energy Savings Emissions Clean Energy and Energy Reduction Resiliency From Production Criteria Pollutant Elimination Central Electric Utility On-site utility 6
Slide 7: Sustainable Competitive Advantage
Sustainable Competitive Advantage Proprietary and patented Creates value proposition technology for customers that drives Ultera Emission control ✓ Revenue Growth Inverter microgrid architecture ✓ Robust Gross Margins ✓ Proprietary PMG technology Repeat Business Natural gas engine optimization In-ho
Slide 8: Born to Innovate
Born to Innovate 2013: Patent 2014: IPO and 2016: Roll out of 2017: Acquisition 2018: ETL certification dramatically awarded for Ultera listing on of American DG to ANSI/UL 1741 SA for emissions upgraded NASDAQ: Energy smart inverters technology TGEN InVerde e+ 2000: Investor 2003: First (and 2008:
Slide 9: Diverse Core Customer Base
Diverse Core Customer Base Installed Base at YE ‘17 2017 Revenue by Stream NOTE: Energy Production Broad Sales Pipeline revenue acquired in May, 2017 ✓ Health Care Energy Direct Sales Effort 10% Production ✓ 12% ESCOs Multi-Unit Cogeneration 25% ✓ Education Residential Building Management 15% 39% In
Slide 10: Substantial Core Business Growth Opportunities
Substantial Core Business Growth Opportunities Inexpensive and abundant natural gas $40+ billion market Grid Improving resiliency regulatory and blackout for clean, reliable environment protection Evolving CHP systems market conditions encourage adaption Demand response incentives Direct cash and de
Slide 11: Cogeneration (CHP): Electricity and Heat
Cogeneration (CHP): Electricity and Heat Modular and scalable Ideal for Best in class electrical efficiency 60-125 kW, scalable to 1MW+ • Locations with many beds and showers: hotels, Remote monitoring dormitories, apartment buildings, prisons • Light manufacturing and industrial facilities with hot
Slide 12: Chillers (Mechanical CHP): Heating and Cooling
Chillers (Mechanical CHP): Heating and Cooling The only natural gas engine Ideal for driven chiller on the market • Hospitals 30-60% cheaper to operate than equivalent electric • Indoor agriculture chillers • Light manufacturing and industrial 50-400 tons of cooling capacity facilities with both coo
Slide 13: Ultera Emissions Eliminates Criteria Pollutants
Ultera Emissions Eliminates Criteria Pollutants 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 loss Pr
Slide 14: Ultera Emissions Technology Expansion into Vehicle Markets
Ultera Emissions Technology Expansion into Vehicle Markets Significant upside for Ultera emissions technology to automotive, truck and fork truck industries 14
Slide 15: Ultera Emissions Development Status
Ultera Emissions Development Status Fork trucks must meet strict emissions standards Affordability, distribution network, and power profile make propane the fuel of choice Propane powered Batteries/ fuel cells greatly compromise performance fork trucks Funded in part by the Propane Council (PERC) Te
Slide 16: Sustained Positive Financial Results
Sustained Positive Financial Results T4Q Adjusted EBITDA 3Q ‘18 Revenues of $7.9 million Quarterly with T4Q Average (green line) - $Thousands T4Q revenue of $37 million $1,000 Revenue growth on T4Q basis year over year of $500 23% T4Q gross profit of $13.7 million $0 Sustained step change to profita
Slide 17: 3Q'18 Summary of Results
3Q’18 Summary of Results YoY Increase $ in thousands 3Q’18 3Q’17 Comments (Decrease) Revenue Products $ 2,765,094 $ 2,425,616 $ 339,478 14.0% Highlighted by chiller sales Service 3,713,770 4,519,467 (805,697) -17.8% Decrease in turnkey installations Energy Production 1,459,820 1,556,115 (96,295) -6.
Slide 18: Contact Information
Contact Information Company Information Tecogen, Inc. 45 First Ave Waltham, MA 02451 NASDAQ: TGEN www.tecogen.com Contact Benjamin Locke, CEO Energy Efficiency Reimagined 781.466.6402 Benjamin.Locke@Tecogen.com John Hatsopoulos, Chairman Emeritus 781.622.1120 John.Hatsopoulos@Tecogen.com 18
Slide 19: Appendix
Appendix Management team Board of Directors Tecogen Inc Company Information Detailed financial information NASDAQ Ticker TGEN Cogeneration InVerde e+ data Cogeneration savings case study Recent Stock Price ~$3.85/sh Tecochill chiller data 52-week Range $2.30 - $4.00/sh Indoor agriculture Shares Outs
Slide 20: Management Team
Management Team Benjamin Robert Bonnie Jack Locke Panora Brown Whiting Chief Executive Officer President, COO Chief Accounting General Counsel • Joined company as general • General Manager of Officer • Prior to joining Tecogen in manager in 2013 Tecogen’s product group • CFO of American DG 2018, was
Slide 21: Board of Directors
Board of Directors Angelina Galiteva Charles Maxwell Deanna Peterson John Hatsopoulos Director, Board Chairwoman Director, Chair of Audit Committee Director Advisor to the board ▪ ▪ ▪ ▪ Chair of the Company since 2005 Company Director since 2001 Company Director since 2017 Chairmain Emeritus, Retire
Slide 22: 3Q'18 Financial Metrics: Revenues, Margins, Growth
3Q ‘18 Financial Metrics: Revenues, Margins, Growth Quarter Ended September Four diverse revenue streams providing a mix of YoY % of $ in thousands 2018 2017 transactional and annuity like revenue streams Growth Total Rev Revenue Product revenue grew 14%, with chillers gaining Cogeneration $ 1,664 $
Slide 23: Consistent Financial Progress: Adjusted EBITDA
Consistent Financial Progress ADJUSTED EBITDA* 3Q ‘18 Compared to 3Q ‘17 Backlog - Product and Installation Services Adjusted EBITDA 3Q'18 3Q'17 $ Millions $25.0 Non-GAAP financial disclosure $20.0 Net income (loss) attributable to Tecogen Inc. $ (603,037) $ 27,211 Interest expense & other expense,
Slide 24: Consistent Financial Progress
Consistent Financial Progress Trailing 4 Quarters (%) Revenue: Trailing 4 Quarters 50% 20,000 18,000 46% 16,000 Thousands 14,000 42% 12,000 G&A and Selling Costs as % of Revenue 10,000 38% Gross Margin 8,000 6,000 4,000 34% 2,000 - 30% 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017
Slide 25: InVerde e+ Data
InVerde e+ Data 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 monitoring I
Slide 26: Cogeneration Case Study
Cogeneration Case Study Electrciity Savings $18,000 Heat Savings $300,000 Cumulative Savings (RHS) $15,000 $250,000 Location: 205 West End Ave, New York City $12,000 $200,000 What: Two InVerde’s that went into service in $9,000 $150,000 April, 2016 $6,000 $100,000 Cumulative Savings: $300 thousand o
Slide 27: Tecochill Data
Tecochill Data 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 real
Slide 28: Indoor Agriculture
Indoor Agriculture 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 Tecochill natural gas attracting capital Typically located near urban centers powered chillers prov
Slide 29: Ilios Data
Ilios Data 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 29
Slide 30: Ultera Emission Technology
Ultera Emission Technology Fuel Cell Slayer: Enables internal combustion engine to achieve emissions similar to a fuel cell Design fits well Internal Engine tuned to within existing Combustion run slightly rich fork truck Engine architecture and does not require First Stage First stage significant C
Slide 31: Stationary Emissions Reduction Comparison
Stationary Emissions Reduction Comparison 30 NOx CO 70 ppm 25 20 15 Emissions Emissions [ppm 15% @ O2] 10 CARB CHP CO Standard4 5 CARB CHP NOx Standard4 (Note 5) (Note 5) 0 Tecogen Ultera Microturbine Fuel Cell Engine BACT 1) Tecogen emissions based upon actual third party source test data 2) Microt
Slide 32: AVL Automotive Emissions Test Results: CO
AVL Automotive Emissions Test Results 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 speed
Slide 33: AVL Automotive Emissions Test Results: NMHC
AVL Automotive Emissions Test Results 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 ve
Slide 34: Stand-By Generator Emissions Test Results
Stand-By Generator Emissions Test Results Ultera Performance on Caterpillar 15 Liter Natural Gas Generator 500.0 450.0 400.0 350.0 300.0 250.0 CO @ 15% 200.0 O2 (ppm) NOx @ 15% 150.0 O2 (ppm) 100.0 50.0 0.0 34
Slide 35: Forklift Truck Emissions Test Results: Heavy Lift
Forklift Truck Emissions Test Results Heavy Lift Test: Exceptional Results 99% CO reduction 58% THC reduction 24% NOx reduction 1000 100 400 F (204 C) Ultera Temperature Pre Ultera System 900 400 F (204 C) Ultera Temperature Pre Ultera System 90 Post Ultera System 800 Post Ultera System 80 700 70 60
Slide 36: Forklift Truck Emissions Test Results: Low NOx Tuning
Forklift Truck Emissions Test Results Low NOx Tuning Test (low loading) 100 2000 CO - Pre Ultera 90 1800 CO - Post Ultera 80 1600 NOx - Pre Ultera 70 1400 NOx - Post Ultera 1200 60 1000 50 CO [ppm] CO 800 40 NOx [ppm]NOx 600 30 400 20 200 10 0 0 1100 1160 1220 1280 1340 1100 1160 1220 1280 1340 Runt