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MARKETS LIVE BLOG:

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UGE Reports First Quarter 2018 Financial Results

Newsfile Corp.
Updated

Company Continues Strong Revenue Growth while Growing Backlog

Toronto, Ontario--(Newsfile Corp. - May 15, 2018) - UGE International Ltd. (the "Company" or "UGE") (TSXV: UGE) (OTCQB: UGEIF), a leader in renewable energy solutions for the commercial and industrial sector, reported its financial results for the three months ended March 31, 2018. UGE reports all amounts in US dollars.

First Quarter 2018 Highlights

  • Revenue for the quarter grew 10% to $6.1 million from the same period of the prior year. Revenue was driven by consistent progress on a large project in Peterborough as well as strong growth in the Philippines.

  • UGE recorded negative adjusted EBITDA of $69,000, compared with negative $183,000 in the same period of the prior year. The Company continues to improve its adjusted EBITDA and move towards sustained profitability.

  • At the end of the quarter, UGE's backlog was $41.2 million, with new projects totaling $11.3 million confirmed within the quarter.

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Selected Financial Information

 

 

 

Three months ended March 31, 

 




2018


2017



Revenue

$

6,059,933

$

5,498,094



Cost of sales

(4,977,509)


(4,910,895)



Gross profit


1,082,424


587,199



Gross profit margin


18%


11%



Expenses







    Selling, general, and administrative


(1,182,452)


(792,486)



    Project loss


(354,982)


-



    Net finance expense


(241,593)


(103,361)



    Income tax expense


(104,032)


(51,378)



Net loss for the period


(800,635)


(360,026)



Adjusted EBITDA

$

(68,548)

$

(183,030)



Adjusted EBITDA margin


-1%


-3%



Loss per share - basic and diluted


(0.02)


(0.01)



Analysis of Financial Results

During the three months ended March 31, 2018, UGE significantly grew revenues and backlog, as the Company continues to generate growth and move towards sustained profitability.

  • Revenue for the three months ended March 31, 2018 was $6,059,933, a 10% increase from the same period of the prior year of $5,498,094.

  • The gross profit margin for the three months ended March 31, 2018 was 18%, compared with 11% in the same period of the prior year, as we continue to focus more on self-developed projects which typically include higher gross margins.

  • On March 31, 2018, UGE had backlog of $41.2 million, which includes projects the Company expects will convert into significant revenue in future quarters. Growth in backlog was driven by $11.3 million of additional projects confirmed throughout the quarter, nearly all of which are being developed directly with our commercial clients.

  • SG&A expenses for the three months ended March 31, 2018 were $1,182,452, compared with $792,486 in the same period of the prior year, an increase of 49%, largely a result of the acquisition of the Carmanah Solar Power Corp. ("CSPC") business which closed in the second quarter of 2017. The first quarter's SG&A expenses were 8% lower than those for the fourth quarter of 2017, as final synergies from the acquisition were realized and as the Company continues to manage SG&A expenses carefully while gaining operating efficiency.

  • Adjusted EBITDA for the three months ended March 31, 2018 was negative $68,548, compared with negative $183,030 in the same period of the prior year, an improvement of 63%. As we continue to scale and move towards sustainably profitable operations, we have seen Adjusted EBITDA results improve significantly.

  • The Company recorded net loss for the three months ended March 31, 2018 of $800,635, compared with a loss of $360,026 in the same period of the prior year, an increase of 122%. This change was primarily due to a project loss relating to the delayed deployment schedule of a portfolio of projects in the US that were inherited through the acquisition of the CSPC business.

"Our first quarter results further illustrate the progress we are making as a company towards sustained profitability in the commercial solar sector," said UGE's CEO, Nick Blitterswyk. "Our team identified significant additional self-developed project opportunities throughout the quarter, as we continue to execute on our growth plan."

Full financial results and Management's Discussion and Analysis are posted to SEDAR (www.sedar.com) and are available through the Company's website.

Analyst and Investors Conference Call:

A conference call has been scheduled for analysts and investors to discuss the Company's results starting at 10:00am EDT. To join the conference, dial: 1 (888) 424-8151, Canada/US Toll Free, and confirmation number: 9688074# approximately five minutes prior to the start time. For a summary of call details and other freephone telephone numbers, click here.

About UGE

UGE delivers immediate savings to businesses through the low cost of solar energy. We help commercial and industrial clients become more competitive by providing distributed renewable energy solutions at no upfront cost, generating long term economic and environmental returns. With over 360 MW of global experience, we work daily to power a more sustainable world. Visit us at www.ugei.com.

For more information, contact:

Jimmy Vaiopoulos
Chief Financial Officer
917-720-5685
investors@ugei.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release and the Company's Management Discussion and Analysis for the three months ended March 31, 2018 (the "MD&A") contain forward-looking information that involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such assumptions, risks and uncertainties include, without limitation, those associated with, loss of markets, expected sales, future revenue recognition, currency fluctuations, the effect of global and regional economic conditions, industry conditions, changes in laws and regulations, and changes in how they are interpreted and enforced, the lack of qualified personnel or management, fluctuations in foreign exchange or interest rates, demand for the Company's products, and availability of funding. The Company's performance could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if they do so, what benefits the Company will derive there from. The forward-looking information is made as of the date of this press release or the MD&A, as applicable, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Actual events or results could differ materially from the Company's expectations and projections.