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Classified in: Environment, Science and technology, Business
Subjects: ERN, CCA, RCY

BioHiTech Global Reports Third Quarter 2017 Results


CHESTNUT RIDGE, N.Y., Nov. 15, 2017 /PRNewswire/ -- BioHiTech Global, Inc. ("BioHiTech" or the "Company") (OTCQB: BHTG), a green technology company that develops and deploys innovative and disruptive waste management technologies, reported financial results for the third quarter of 2017 ended September 30, 2017.

BioHiTech Global, Inc. (PRNewsfoto/BioHiTech Global, Inc.)

Business Highlights

"We continue to make significant progress on all business fronts as we position BioHiTech to deliver significant future value for our stockholders," said Frank E. Celli, CEO of BioHiTech. "We are excited to have begun delivery of our Revolution Series Digesters and are working diligently to ramp up our operations to meet current and anticipated demand.  We are more confident than ever that we have unlocked a huge market opportunity with the Revolution Series and look forward to a progressive ramp up in revenue beginning in Q4 and the years to come.  We have also forwarded our IIoT and data analytics technology innovation to solidify our competitive advantage and open new potential revenue streams while we continue to advance the development work for our planned HEBioT facility in New York.  As we move through the remainder of 2017 and into 2018, we will continue to work toward our goal of establishing BioHiTech as the premier provider of cost effective and environmentally friendly technology solutions for waste management."

Q3 Financial Highlights
Revenue: Revenue in Q3 2017 reached $656,000, a 5% increase compared to revenue of $624,000 in Q3 2016, and a 20% increase compared to revenue of $549,000 in Q2 2017. Recurring rental, service and maintenance grew by 15.8% year over year to reach $415,000, accounting for 63.3% of total revenue.

Gross Profit: Q3 2017 gross profit was $155,000 compared to $191,000 in Q3 2016.  The decline in gross margin and profit was mainly attributable due to the change in mix of revenue between equipment sales and rental, service and maintenance, as well as a higher level of installation costs, partly due to the initial roll-out of the Revolution Series of digesters with trial periods with several large national chain stores.  The Company expects to see an improvement in installation costs and gross margin in Q4 2017.

Operating Expenses: Q3 2017 operating expenses were $1.9 million, a 19.7% increase compared to $1.6 million in Q3 2017, which was primarily driven by an increase in professional services and personnel related costs to support marketing and investor relations.

Operating Loss: Q3 2017 operating loss was $1.8 million compared to $1.6 million in Q3 2016. The increase in operating loss was primarily driven by the increase in operating expenses.

Net Loss: Q3 2017 net loss was $2.3 million compared to $1.4 million in Q3 2016, which was due to the increased loss from operations and increased interest expense.

Year to Date September 30, 2017
Revenue: In the first nine months, 2017 revenue was $1.8 million, a 16.8% increase from $1.5 million in 2016. Recurring rental, service and maintenance grew by 14.5% and represented 63.5% of total revenue. Revenue from sales of equipment increased by 21.1% and represented 36.5% of revenue in 2017.

Gross Profit: In the first nine months, 2017 gross profit was $525,000, a 32.8% increase from $395,000 in 2016. Gross margin was 29.2% in the first nine months, 2017, an increase of 350 basis points compared to gross margin of 25.7% in comparable 2016 period.

Operating Expenses: In the first nine months, 2017 operating expenses increased by 14.9% to $5.5 million compared to $4.8 million in 2016. The increase was primarily driven by a continued focus on professional services supporting investor relations and marketing.

Operating Loss: In the first nine months, 2017 operating loss increased by $586,000 to $5.0 million, primarily due to the increase in operating expenses described above.

Net Loss: In the first nine months, 2017 the net loss of $6.2 million increased by $1.2 million due primarily to a $715,000 increase in operating costs driven by professional fees, a $658,000 increase in other expenses primarily driven by interest expense, partially offset by a $130,000 improvement in gross profit.

Cash flows: In the first nine months, 2017 cash flow utilized in operations of $3.8 million increased by 4.9% from $3.7 million in 2016. Stock based compensation to employees and service providers increased from $512,000 in 2016 to $1,247,000 in 2017. Cash flows utilized in investing activities increased in 2017 to $1.2 million, from $4,000 in 2016 primarily due its MBT investment in West Virginia. Cash flow from financing activities increased from $3.7 million in 2016 to $5.1 million in 2017 due to increased borrowings to support operations and investing activities.

Brian C. Essman, CFO commented, "We continue to achieve top line revenue growth, particularly in revenue derived from recurring rental, service and maintenance contracts.  While the Revolution Series Digester roll out has resulted in an initial increase in costs, we expect to see costs return to more normalized levels in the coming quarters as we benefit from a rapidly growing installed base.  We successfully raised capital to support our growth plan and continue to work to prudently manage our resources while we grow our business.  We expect our Revolution Series Digesters to begin contributing revenue in Q4 2017 and for that revenue to build progressively throughout 2018.  We remain committed to the implementation of our aggressive long-term growth plans to enable us to deliver substantial long-term value for our stockholders."

About BioHiTech Global
BioHiTech Global (OTCQB:BHTG), "The Company" headquartered in Chestnut Ridge NY, develops and deploys innovative and disruptive waste management technologies. The combined offerings of BioHiTech Global offer our customers a full suite of technology based disposal options capable of having a significant impact on waste generation while providing a true zero landfill environment. With options for both on and off site biological treatment of waste, BioHiTech Global is a leader in zero waste solutions for businesses and municipalities.  For more information, please visit www.biohitech.com.

Forward Looking Statements
Statements in this document contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of BioHiTech Global, Inc. to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. BioHiTech Global, Inc. assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as "Risk Factors" in our filings with the Securities and Exchange Commission ("SEC"). There may be other factors not mentioned above or included in the BioHiTech's SEC filings that may cause actual results to differ materially from those projected in any forward-looking statement. BioHiTech Global, Inc. assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by securities laws.

Company Contact:
BioHiTech Global, Inc.
Lisa Giovannielli
Director, Corporate Communications
Direct: 845-262-1081
[email protected]
www.biohitech.com

 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)




Three Months Ended

September 30,


Nine Months Ended

September 30,



2017



2016


2017



2016

Revenue















Rental, service and maintenance


$

415,402



$

358,625


$

1,140,751


$

996,179

Equipment sales



240,945




264,953



655,493



541,407

Total revenue



656,347




623,578



1,796,244



1,537,586

Cost of revenue














Rental, service and maintenance



348,862




256,107



880,559



761,834

Equipment sales



151,998




176,511



391,152



380,684

Total Cost of revenue



500,860




432,618



1,271,711



1,142,518

Gross profit



155,487




190,960



524,533



395,068

Operating expenses














Selling, general and administrative



1,090,003




983,725



3,211,855



3,171,973

Research and development



207,258




242,435



611,582



661,529

Professional fees



604,225




356,652



1,618,076



894,386

Depreciation and amortization



27,674




29,174



85,781



84,122

Total operating expenses



1,929,160




1,611,986



5,527,294



4,812,010

Loss from operations



(1,773,673)




(1,421,026)



(5,002,761)



(4,416,942)

Other expense (income)














Equity loss in affiliate



5,922




-



11,838



-

Loss on change in fair value of warrants



-




-



1,999



-

Interest income



(712)




-



(713)



(3,068)

Interest expense



528,608




222,142



1,199,040



556,867

Total other expense, net



533,818




222,142



1,212,164



553,799

Net loss



(2,307,491)




(1,643,168)



(6,214,925)



(4,970,741)

Other comprehensive (loss) income














Foreign currency translation adjustment



(15,891)




4,098



(44,395)



10,498

Comprehensive loss


$

(2,323,382)



$

(1,639,070)


$

(6,259,320)


$

(4,960,243)















Net loss per share - basic and diluted


$

(0.27)



$

(0.20)


$

(0.75)



$

(0.60)

Weighted average number of common shares
outstanding - basic and diluted



8,397,191




8,229,712



8,316,943




8,229,712























 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) 




September 30,



December 31,



2017



2016

Assets








Current Assets








Cash


$

480,329



$

325,987

Accounts receivable, net



234,669




140,130

Inventory



346,160




706,017

Prepaid expenses and other current assets



101,093




21,865

Total Current Assets



1,162,251




1,193,999

Equipment on operating leases, net



1,255,409




1,023,404

Equipment, fixtures and vehicles, net



45,096




54,356

Intangible assets, net



196,683




267,042

Investment in Entsorga West Virginia, LLC



1,022,190




-

MBT facility development costs



139,313




-

Other assets



23,500




13,500

Total Assets


$

3,844,442



$

2,552,301

Liabilities and Stockholders' Deficit








Current Liabilities:








Line of credit


$

2,463,736



$

2,463,736

Accounts payable



921,129




1,197,277

Accrued expenses



624,856




522,727

Accrued interest



925,790




411,917

Deferred revenue



109,183




61,879

Notes payable, including related party of $275,000



-




375,000

Convertible note, net of deferred financing cost of $6,320 and discounts of $22,648



191,032




-

Convertible notes, including related party of $450,000, net of discounts of $310,814



939,186




-

Advance from related party



544,777




1,213,027

Customer deposits



87,830




36,131

Long-term debt, current portion



6,282




8,525

Total Current Liabilities



6,813,801




6,290,219

Promissory note, related party



4,500,000




2,500,000

Long-term debt, net of current portion



6,922




11,048

Notes payable, including related party of $275,000



375,000




-

Accrued interest, payable in cash or common stock



615,468




253,000

Unsecured subordinated mandatorily convertible notes, including related parties of
$4,625,000 and $3,800,000, net of deferred financing costs of $51,539 and $118,866 as of
September 30, 2017 and December 31, 2016, respectively



7,673,461




4,956,134

Total Liabilities



19,984,652




14,010,401

Commitments and Contingencies








Stockholders' Deficit








Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued



-




-

Common stock, $0.0001 par value, 50,000,000 shares authorized, 8,446,849 shares issued
and outstanding as of September 30, 2017; 20,000,000 shares authorized, 8,229,712
shares issued and outstanding as of December 31, 2016



845




823

Additional paid in capital



11,181,512




9,604,324

Accumulated deficit



(27,287,091)




(21,072,166)

Accumulated other comprehensive (loss) gain



(35,476)




8,919

Total Stockholders' Deficit



(16,140,210)




(11,458,100)

Total Liabilities and Stockholders' Deficit


$

3,844,442



$

2,552,301

 


BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)




Nine Months Ended

September 30,



2017



2016

Cash flows from operating activities:








Net loss:


$

(6,214,925)



$

(4,970,741)

Adjustments to reconcile net loss to net cash used in operations:








Depreciation and amortization



299,021




331,807

Provision for bad debts



89,630




70,467

Stock based employee compensation



375,508




512,318

Fees paid in stock and warrants



871,531




-

Interest resulting from amortization of financing costs and discounts



223,718




55,076

Equity loss in affiliate



11,838




-

Change in fair value of warrant liability



1,999




-

Changes in operating assets and liabilities



505,650




343,326

Net cash used in operations



(3,836,030)




(3,657,747)









Cash flow from investing activities:








Sale of used machinery and equipment



13,530




-

Investment in Entsorga West Virginia, LLC



(1,034,028)




-

Increase in MBT facility development costs



(139,313)




-

Purchases of equipment, fixtures and vehicles



(6,057)




(3,825)

Net cash used in investing activities



(1,165,868)




(3,825)









Cash flows from financing activities:








Net change in line of credit



-




(25,017)

Proceeds from convertible notes with warrants and beneficial conversion feature



200,000




-

Proceeds from series convertible notes with warrants and beneficial conversion
feature



2,259,000




3,400,000

Deferred financing costs incurred



(23,000)




(165,230)

Repayments of long-term debt



(6,369)




(6,170)

Related party:








Net increase (decrease) in advances



1,120,756




203,027

Proceeds from promissory notes



786,973




526,973

Repayments of promissory notes



-




(200,000)

Proceeds from series convertible notes



800,000




-

Net cash provided by financing activities



5,137,360




3,733,583

Effect of exchange rate on cash



18,880




64,897

Net change in cash



154,342




136,908

Cash - beginning of period



325,987




39,195

Cash - end of period


$

480,329



$

176,103

 

 

SOURCE BioHiTech Global, Inc.


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