NEW YORK, NEW YORK -- (Marketwired) -- 05/30/16 -- UGE International Ltd. (the "Company" or "UGE") (TSX VENTURE: 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, 2016. UGE reports all amounts in US dollars, unless otherwise noted.
First Quarter 2016 Highlights
-- UGE completed the acquisition of Endura Energy Project Corp. ("Endura")
on February 22, 2016, adding significant scale and technical expertise
to its commercial solar platform. Endura had reported approximately CAD
$11 million of revenue and CAD $1 million in net income in its most
recent fiscal year ended October 31, 2015. Combined revenues will be
fully reflected in UGE's second quarter financial statements.
-- For the first quarter, revenue increased 47%, while selling, general and
administrative ("SG&A") expenses declined 18% as compared to the same
period in the prior year, despite the acquisition of Endura, as UGE
began to realize savings from cost synergies and operational
streamlining performed as part of its business strategy of focusing on
the commercial solar business.
Selected Financial Information
Three months ended March 31,
2016 2015
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Revenue $ 965,403 $ 657,527
Cost of sales 825,019 442,161
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15% 33%
Gross profit 140,384 215,366
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Expenses
Selling, general and administrative 1,281,415 1,563,920
Net interest expense 123,696 46,102
Net finance costs - non-cash related party
loan modifications 430,796 -
Income tax expense (recovery) (6,676) 2,672
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1,829,231 1,612,694
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Loss for the period $ (1,688,847) $ (1,397,328)
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Loss per share - Basic and diluted $ (0.08) $ (0.13)
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Analysis of Financial Results
The first quarter of 2016 saw UGE complete the acquisition of Endura, an important step in its efforts to strengthen its position in the commercial solar industry through organic and inorganic growth. The acquisition was coupled with efforts to streamline operations around key markets and its commercial solar offering, leading to increasing revenues, decreasing SG&A expenses, and a narrowing loss, exclusive of the non-cash finance costs.
Revenue for the three months ended March 31, 2016 was $1.0 million, an increase of 47% from the same period of the prior year. The gross profit margin for the three months ended March 31, 2016 was 15%; as mentioned in prior quarters, UGE's gross margins vary greatly on a quarterly basis depending on project mix, especially as it relates to stage of project completion and project composition. Each individual quarter may not be an accurate representation of average project margins, as projects are typically deployed over several quarters.
With the acquisition of Endura, UGE was able to achieve operational and cost synergies that resulted in its SG&A expenses decreasing 18% to $1.3 million from $1.6 million in the same period of the prior period. This was primarily due to decreases in employee compensation (including stock based compensation), and partly offset by an increase in professional fees attributable to the acquisition of Endura. UGE expects further cost synergies to be realized in the second quarter of 2016 as it works towards profitability through increased revenues and streamlined operations.
The net loss for the three months ended March 31, 2016 was $1.7 million, which included a one-time non-cash finance expense of $0.4 million, related to settlement of certain related party loans. Excluding the non-cash finance expense, UGE's loss would have decreased versus the comparable period from 2015.
"UGE is growing and maturing, as we continue to strengthen our market position and gain operational efficiencies at scale" stated Nick Blitterswyk, CEO of UGE. "We are looking forward to moving towards profitability throughout the balance of 2016."
Full financial results and Management's Discussion and Analysis are posted to SEDAR (www.sedar.com) and are available through the Company's website.
About UGE
UGE delivers immediate savings to businesses through cleaner electricity. We help commercial and industrial clients become more competitive through the low cost of distributed renewable energy. With over 300 MW of experience globally, we work daily to power a more sustainable world. Visit us at www.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, 2016 (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.
Contacts:
UGE International Ltd.
Ashley Fallon
Communications Manager
917-338-1668
press@ugei.com
