AMERICAN DG ENERGY INC - FORM 8-K - EX-99.1 - November 10, 2011

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EXHIBIT 99.1
press release

For further information contact:
John Hatsopoulos, American DG Energy
Telephone: 781.522.6020

American American DG Energy Reports Third Quarter 2011 Financial Performance

Energy Revenues Increased by 14% for the Nine Month Period

WALTHAM, Mass. – November 10, 2011 – American DG Energy Inc. (NYSE Amex: ADGE), a leading On-Site Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, reported revenues of $1,418,411 in the third quarter of 2011, compared to $1,569,577 in the third quarter of 2010.  GAAP diluted loss per share (EPS) was $(0.02) in 2011, compared to $(0.00) in 2010 and GAAP operating income was a loss of $(1,132,620) in 2011, compared to a loss of $(61,015) in 2010.

Third Quarter 2011 Highlights:

 
·
Energy revenue remained relatively unchanged at $1,389,159 compared to $1,395,274 for the same period in 2010. The market price of electricity decreased by 7.8% and the price of natural gas, a key component in the calculation of hot water revenue decreased by 3.4%.
 
·
Energy gross profit margin without depreciation was 47.8% compared to 51.6% for the same period in 2010.
 
·
Our total cash inflows, excluding our EuroSite Power subsidiary, for the last 18 months were $241,769 and year-to-date was $34,876.
 
·
Our installed base increased by 8 new energy systems from a year ago bringing the total number of energy systems operating to 79 compared to 71 in the third quarter of 2010.
 
·
Our installed base of combined heat and power (CHP) systems surpassed 5,460 KW.
 
·
Our backlog consisted of 8 energy systems.
 
·
We finished the quarter with approximately $12.1 million in cash.
 
·
In August we announced the startup of two more energy systems at Stevens Institute of Technology, a premier technological university, located in Hoboken, New Jersey. The addition of these two 75kW CHP systems, located at Stevens Central Plant, brought the total number of energy systems we own and operate at the university to nine.
 
·
In September we reached an agreement to provide an on-site energy solution with the first heat pump system to Sidney Albert Albany Jewish Community Center (Albany JCC), located in Albany, New York.
 
·
Since the beginning of the year and including EuroSite Power we have added 16 people to our team of sales, engineers and advisors to focus on growing our business.
 
·
In August we filed an initial Form 10 Registration Statement with the Securities and Exchange Commission for our EuroSite Power subsidiary.
 
·
In September we officially launched EuroSite Power Limited in the United Kingdom during The Energy Event and introduced our new Managing Director Mr. Paul J. Hamblyn.
 
·
We have started a major marketing effort to communicate our brand and increase lead generation via a multi-media offering.

Recent Highlights:

 
·
After the end of the quarter we received approximately $160,000 in rebates and incentives.

- more -


 
 
 

American DG Energy Reports Third Quarter 2011 Financial Performance, page 2 of 6

 
·
In November we announced the operation of a 375 kW CHP system at Doral Arrowwood Hotel and Conference Center in Rye Brook, New York. The system is estimated to generate total revenue of approximately $10 million over the term of the 15 year agreement.
 
·
With the introduction of the heat pump system and low emissions technology we are preparing to expand our market reach in 2012.
 
·
In October we appointed Messrs. Adrian Fawcett, Ian Durant and Gary Parke to the EuroSite Power Advisory Board.
 
·
We have ordered 3 Inverter based CHP systems that will be shipped to the United Kingdom later this year for EuroSite Power.
 
·
The EuroSite Power registration statement on Form 10 became effective on October 17, 2011.
 
American DG Energy will hold its earnings conference call today, November 10, 2011 at 10:00 a.m. Eastern Time.  To listen, call (800) 860-2442 within the U.S., or (412) 858-4600 outside the U.S.  Participants should reference American DG Energy to access the call.  Please begin dialing at least 10 minutes before the scheduled starting time.  The earnings press release will be available on the Company web site at www.americandg.com in the “Investors” section under "News Releases.”   The earnings call will be available for playback through Friday, November 18, 2011.  To listen to the playback, call (877) 344-7529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10006147.

The earnings conference call will be webcast live.  To register for and listen to the webcast, go to www.americandg.com/webcast.  Following the call, the webcast will be archived for 30 days.

About American DG Energy
American DG Energy supplies low-cost energy to its customers through distributed power generating systems.  The Company is committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user – through its On-Site Utility energy solutions.  American DG Energy is headquartered in Waltham, Massachusetts.  More information can be found at www.americandg.com.

# # #

FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in Securities and Exchange Commission filings. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.


 
 
 

American DG Energy Reports Third Quarter 2011 Financial Performance, page 3 of 6

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the Three Months Ended September 30, 2011 and September 30, 2010
 
   
Three Months Ended
  
   
September 30,
    
September 30,
  
   
2011
    
2010
  
   
(unaudited)
    
(unaudited)
  
Revenues
            
Energy revenues
   $ 1,389,159     $ 1,395,274  
Turnkey & other revenues
     29,252       174,303  
      1,418,411       1,569,577  
Cost of sales
                
Fuel, maintenance and installation
     716,806       763,653  
Depreciation expense
     318,903       226,006  
      1,035,709       989,659  
Gross profit
     382,702       579,918  
                 
Operating expenses
                
General and administrative
     593,558       375,197  
Selling
     699,898       111,132  
Engineering
     221,866       154,604  
      1,515,322       640,933  
Loss from operations
     (1,132,620 )     (61,015 )
                 
Other income (expense), net
                
Interest and other income
     11,433       11,779  
Interest expense
     (142,772 )     (23,280 )
Change in fair value of warrant liability
     125,668       -  
      (5,671 )     (11,501 )
                 
Loss before income taxes
     (1,138,291 )     (72,516 )
Benefit (provision) for state income taxes
     41       (5,360 )
Consolidated net loss
     (1,138,250 )     (77,876 )
                 
Income attributable to the noncontrolling interest
     28,734       (57,148 )
Net loss attributable to American DG Energy Inc.
     (1,109,516 )     (135,024 )
                 
Net loss per share - basic and diluted
   $ (0.02 )   $ (0.00 )
                 
Weighted average shares outstanding - basic and diluted
     45,834,904       44,835,844  
                 
Non-GAAP financial disclosure
                
Loss from operations
   $ (1,132,620 )   $ (61,015 )
Depreciation expense
     332,368       236,807  
Stock based compensation
     186,960       37,425  
Adjusted EBITDA
     (613,292 )     213,217  
Grants from rebates and incentives
     -       117,898  
Total cash inflows (outflows)
   $ (613,292 )   $ 331,115  


 
 
 

American DG Energy Reports Third Quarter 2011 Financial Performance, page 4 of 6

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the Nine Months Ended September 30, 2011 and September 30, 2010

   
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2011
    
2010
  
   
(unaudited)
    
(unaudited)
  
Revenues
            
Energy revenues
   $ 4,270,336     $ 3,744,862  
Turnkey & other revenues
     283,256       513,955  
      4,553,592       4,258,817  
Cost of sales
                
Fuel, maintenance and installation
     2,799,733       2,649,554  
Depreciation expense
     921,931       641,249  
      3,721,664       3,290,803  
Gross profit
     831,928       968,014  
                 
Operating expenses
                
General and administrative
     1,618,181       1,062,556  
Selling
     933,848       496,079  
Engineering
     536,132       587,664  
      3,088,161       2,146,299  
Loss from operations
     (2,256,233 )     (1,178,285 )
                 
Other income (expense)
                
Interest and other income
     31,414       39,947  
Interest expense
     (246,376 )     (96,085 )
Change in fair value of warrant liability
     509,663       -  
      294,701       (56,138 )
                 
Loss before income taxes
     (1,961,532 )     (1,234,423 )
Provision for state income taxes
     (17,071 )     (10,710 )
Consolidated net loss
     (1,978,603 )     (1,245,133 )
                 
Less: Income attributable to the noncontrolling interest
     (34,808 )     (136,936 )
Net loss attributable to American DG Energy Inc.
     (2,013,411 )     (1,382,069 )
                 
Net loss per share - basic and diluted
   $ (0.04 )   $ (0.03 )
                 
Weighted average shares outstanding - basic and diluted
     45,647,265       43,030,344  
                 
Non-GAAP financial disclosure
                
Loss from operations
   $ (2,256,233 )   $ (1,178,285 )
Depreciation expense
     954,751       667,436  
Stock based compensation
     479,205       139,203  
Adjusted EBITDA
     (822,277 )     (371,646 )
Grants from rebates and incentives
     327,138       428,751  
Total cash inflows (outflows)
   $ (495,139 )   $ 57,105  


 
 
 

American DG Energy Reports Third Quarter 2011 Financial Performance, page 5 of 6

CONDENSED CONSOLIDATED BALANCE SHEETS
as of September 30, 2011 and December 31, 2010

   
September 30,
    
December 31,
  
   
2011
    
2010
  
   
(unaudited)
    
(unaudited)
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 12,111,185     $ 3,921,054  
Restricted cash
     -       65,790  
Accounts receivable, net
     1,216,674       661,435  
Unbilled revenue
     12,477       117,846  
Due from related party
     77,560       52,432  
Inventory
     517,329       487,724  
Prepaid and other current assets
     221,142       86,089  
Total current assets
     14,156,367       5,392,370  
                 
Property, plant and equipment, net
     14,657,330       14,362,444  
Accounts receivable, long-term
     90,834       17,034  
Other assets, long-term
     40,397       -  
                 
TOTAL ASSETS
     28,944,928       19,771,848  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
     486,911       482,917  
Accrued expenses and other current liabilities
     517,478       370,774  
Due to related party
     125,018       2,560,720  
Capital lease obligations
     3,365       3,365  
Total current liabilities
     1,132,772       3,417,776  
                 
Long-term liabilities:
                
Convertible debentures
     12,500,000       -  
Warrant liability
     166,940       676,603  
Capital lease obligations, long-term
     4,206       6,730  
Other long-term liabilities
     46,454       -  
Total liabilities
     13,850,372       4,101,109  
                 
Stockholders’ equity:
                
American DG Energy Inc. shareholders’ equity:
                
Common stock, $0.001 par value; 100,000,000 shares authorized; 45,901,404 and 45,598,029 issued and outstanding at September 30, 2011 and December 31, 2010, respectively
     45,901       45,598  
Additional paid-in capital
     30,280,646       28,905,660  
Accumulated deficit
     (16,160,524 )     (14,147,113 )
Total American DG Energy Inc. stockholders’ equity
     14,166,023       14,804,145  
Noncontrolling interest
     928,533       866,594  
Total stockholders’ equity
     15,094,556       15,670,739  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 28,944,928     $ 19,771,848  


 
 
 

American DG Energy Reports Third Quarter 2011 Financial Performance, page 6 of 6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the Nine Months Ended September 30, 2011 and September 30, 2010

   
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2011
    
2010
  
   
(unaudited)
    
(unaudited)
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
             
Net loss
   $ (2,013,411 )   $ (1,382,069 )
Income attributable to noncontrolling interest
     34,808       136,936  
Adjustments to reconcile net loss to net cash used in operating activities:
                
Depreciation and amortization
     954,751       667,436  
Provision for losses on accounts receivable
     22,568       42,650  
Amortization of deferred financing costs
     2,256       6,395  
                 
Change in fair value of warrant liability
     (509,663 )     -  
Stock-based compensation
     479,205       139,203  
Changes in operating assets and liabilities
                
(Increase) decrease in:
                
Restricted cash
     65,790       -  
                 
Accounts receivable and unbilled revenue
     (546,238 )     (199,636 )
                 
Due from related party
     (25,128 )     94,312  
                 
Inventory
     (29,605 )     (114,945 )
                 
Prepaid and other current assets
     (130,283 )     13,540  
Increase (decrease) in:
                
                 
Accounts payable
     3,994       (343,453 )
Accrued expenses and other current liabilities
     146,704       151,208  
Other long-term liabilities
     46,454       -  
                 
Due to related party
     (35,702 )     653,078  
                 
Net cash used in operating activities
     (1,533,500 )     (135,345 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
                 
Purchases of property and equipment
     (1,249,637 )     (4,590,790 )
Sale of short-term investments
     -       561,847  
                 
Net cash used in investing activities
     (1,249,637 )     (4,028,943 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Proceeds from issuance of convertible debentures
     10,100,000       -  
Proceeds from exercise of warrants
     -       350,000  
Proceeds from sale of common stock, net of costs
     -       999,952  
Proceeds from sale of subsidiary common stock, net of costs
     1,148,401       1,356,037  
Proceeds from exercise of stock options
     26,798       54,941  
Proceeds from related party line of credit
     -       2,400,000  
                 
Convertible debenture transaction costs
     (47,423 )     (21,556 )
                 
Principal payments on capital lease obligations
     (2,524 )     (2,524 )
                 
Cancellation of restricted stock
     (20 )     -  
                 
Distributions to noncontrolling interest
     (251,964 )     (200,573 )
Net cash provided by financing activities
     10,973,268       4,936,277  
                 
Net increase (decrease) in cash and cash equivalents
     8,190,131       771,989  
Cash and cash equivalents, beginning of the period
     3,921,054       3,149,222  
Cash and cash equivalents, end of the period
   $ 12,111,185     $ 3,921,211  


 
 
 

AMERICAN DG ENERGY INC Reports