UGE Reports Audited Fiscal Year 2017 Financial Results
2017 a Pivotal Year for the Company, as 261% Growth Highlights Huge Market Opportunity for Commercial Solar
Toronto, Ontario--(March 13, 2018)
UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in solar energy solutions for the commercial and industrial sector, reported its financial results for the year ended December 31, 2017. UGE reports all amounts in US dollars.
2017 and Fourth Quarter Highlights
- UGE grew more than 261% in 2017, as revenue from continuing operations increased to $20,934,836, from $5,807,119 in the prior year. The significant increase was primarily due to a strong market for commercial and industrial solar, as well as additional revenue from the acquisition of net assets from Carmanah Solar Power Corp (“CSPC”).
- For the three months ended December 31, 2017, the Company recognized the highest Adjusted EBITDA in its history of $237,784, showing progress towards sustainable profitability. This quarter also had the lowest net loss from continuing operations in the history of the Company, and showed strengthened gross margins, based on a continuing shift towards self-developed projects, as well as the recognition of higher gross margin on a portfolio of projects installed throughout 2017.
- Throughout 2017, the Company continued to take strategic steps to strengthen its position as one of the world’s leading companies in the commercial and industrial solar sector. This included the acquisition of net assets from CSPC on April 3, 2017, which added additional scale in the Canadian and US solar markets. The Company also won its largest project ever, in Peterborough, Ontario, as well as many additional key projects in all of its key markets, as UGE continues to gain market share in a rapidly expanding sector.
Selected Financial Information
Analysis of Financial Results
During 2017, the Company significantly grew revenues and improved its Adjusted EBITDA, both organically and through the acquisition of net assets from CSPC.
The Company would like to draw attention to the following points from its financial statements:
- Revenue from continuing operations for the year ended December 31, 2017 was $20.9 million, compared with $5.8 million in 2016, an increase of 261%. Revenue for the fourth quarter was $4.2 million as the Company ramped up project deployment after a slow down at the end of the third quarter.
- At the end of 2017, UGE had a backlog of $35.7 million, representing projects that are expected to translate into continued revenue growth in future quarters.
- The gross profit margin for the fourth quarter of 2017 was 36%, driven by both improved project margins, as the Company continues to shift towards self-developed projects, as well as the recognition of additional gross margin upon the completion of a portfolio of projects built throughout 2017. The gross profit margin for the year ended December 31, 2017 was 19%, roughly in line with UGE’s near term targets.
- Selling, general, and administrative expenses were approximately $5.6 million in 2017, including $0.4 million related to the depreciation of an intangible asset from the acquisition of net assets from CSPC. At the 2017 year-end, the CSPC business and its employees were fully integrated, with additional cost synergies recognized throughout the quarter.
- Adjusted EBITDA for 2017 was negative $431,887, compared with $1,980,373 in the prior year from continuing operations. The fourth quarter of 2017 had positive Adjusted EBITDA of $237,784, which is the highest in the Company’s history. We continue to see significant improvements towards sustained positive Adjusted EBITDA with two out of the most recent three quarters showing positive results.
- Due to significant improvements in all facets mentioned above, the Company reduced its net loss from continuing operations to $1,975,362 for 2017, compared with $2,998,347 in 2016.
"We are incredibly proud of the year we had in 2017, as our revenue growth broke out way beyond prior years' results. With a strengthened market position, a strong team, and a large backlog, we are set up for a great 2018 and beyond," said Nick Blitterswyk, CEO of UGE. "Our team worked incredibly hard to transform the business throughout the year and look forward to carrying the positive momentum into strong results for 2018."
Full financial results and Management's Discussion and Analysis are posted to SEDAR (www.sedar.com) and are available through the Company's website.