Tecogen Inc. (OTC:TGEN)

Tecogen Inc. (OTC:TGEN) ($0.76; $18.8M market cap) - Last week, we  highlighted the company’s Q4 2023 results which showed improvements on the top and bottom line and offered some bullish comments from management. We wanted to share the conference call link, which we thought also offered some intriguing comments on how data center demand could boost business moving forward. 

“Increased electrification efforts, data centers consuming exponentially more power and aging utility infrastructure leading to electrical capacity constraints nationwide. It is limiting customers' ability to expand the time of day charges are becoming punitive, and there are only a few options that allow customers to address the problem.

As a result, we are seeing more multiple unit cogeneration and chiller projects than ever before. In the case of our chillers, the customer completely avoids the need to connect to the utility grid. In the case of our electrical cogeneration product, the ease of interconnect with our modular inverter-based system is a huge benefit. These electrical capacity constraints are nationwide. So I believe we are just starting to see the beginning of this trend.”

We encourage you to read the entire transcript which talks about the company's goals to turn the company around into a profitable enterprise within the next two or three quarters.

We used to actively cover TGEN and will now try to re-engage with the new management team.

Tecogen Inc. (OTC:TGEN) ($0.70; $17.3M market cap), announced Q4 2023 results:

• Q4 sales of $5.9 million vs $4.5 million in the prior year
• Loss per share of $0.03 vs loss of $0.06

Last year around this time, we removed TGEN from our model portfolios based on weak financial results and a lack of traction on its restructuring efforts. Based on comments from management in today’s release, it seems they may finally be in position to begin benefitting from those initiatives.

"During the 4th quarter we had positive cash flow from operations and a recovery in gross margin for our Services segment. We continue to execute on our strategy of increasing recurring cash flow from Energy and Services to cover our fixed costs. This will allow us to be cash flow positive while we secure profitable large dollar value projects.

Unlike in the past where our sales were predominantly small cogeneration projects for residential buildings in New York City, we are now seeing the market shift to multiple unit chiller and cogeneration projects nationwide. We recently received a 6 unit (3 hybrid chillers and 3 Inverde cogeneration units) as well as a 12 unit cogeneration order. We are now focused on securing additional multiple unit product orders that we expect will result in sustained profitability and growth. In fact, we are specified on large chiller projects for some iconic facilities that are on track to close later this year”.

Tecogen Inc. (OTC:TGEN) ($1.28; $32.3M market cap),  designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products, announced Q3 2022 results:

• Sales of $6.6 million vs $5.0 million in the prior year
• Loss per share of $0.01 vs EPS of $0.06

“I'm encouraged by the year on year revenue growth. As electricity rates continue to rise, the need for customers to find alternative ways to reduce energy expenses is making our products increasingly attractive. The 40% investment tax credit (a 30% base and 10% bonus for domestic manufacturers) makes the climate favorable for energy efficient products such as ours. In particular the availability of the ITC direct pay option for non-profits makes the value proposition for our cogeneration and chillers incredibly compelling,"  commented Benjamin Locke, Tecogen's Chief Executive Officer. “

Tecogen Inc. (OTC:TGEN) ($1.45; $36.0M market cap), designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products announced Q4 2021 results:

• Sales of $7.2 million vs $5.7 million in the prior year
• EPS of $0.00 vs a loss of $0.05 in the prior year

“We had a significantly improved 4th quarter and year in 2021 compared to 2020,” commented Benjamin Locke, Tecogen's Chief Executive Officer. “As COVID effects recede, our business has started to rebound. We have also been seeing improved sales as a result of our strategic focus on key market segments such as controlled environment agriculture, healthcare and multifamily. Our chiller product in particular has seen significant penetration in the cannabis cultivation space. More than 45% of our current backlog is in this high growth market.” 

See all of our past coverage on TGEN here, our write up on the company here and a recent PodlCip here. 

Tecogen Inc. (OTC:TGEN) ($1.78; $44.2M market cap), designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products announced Q3 2021 results:

• Sales of $5.0 million vs $7.1 million in the prior year
• Non-GAAP net loss of $0.02 vs loss of $0.01 in the prior year

“This quarter was challenging due to the significant supply chain impacts on our Product Segment. We have mitigated a majority of these impacts, but were unable to ship some product during Q3 due to supplier constraints. As a result our Product Segment revenue was significantly impacted,” commented Benjamin Locke, Tecogen's Chief Executive Officer. “We expect Product sales to rebound in the fourth quarter of 2021 and further into 2022. We are pleased with the recent announcement of an order for 12 Inverde E+ units and 3 chillers which are scheduled to be shipped during Q4 2021 and Q1 2022. Our Energy Production assets are gradually returning to normal operation as COVID related closures and restrictions are eased, and our Service maintenance revenues continue to grow each quarter. Our board and management team are cautiously optimistic regarding anticipated improvements to product sales as evidenced by one Board member's decision to acquire an additional 150,000 shares of equity in the company on October 27, 2021 at the current market price." 

Tecogen Inc. (OTC:TGEN) ($1.83; $45.4M market cap), designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products announced Q2 2021 results:

• Sales of $6.1 million vs $7.4 million in the prior year
• Non-GAAP net loss of $0.01 vs net loss of $0.03

“Our core business areas continued to be negatively impacted by COVID-19, but despite the challenging economic environment, we achieved significant improvements in our gross margin and operations,” commented Benjamin Locke, Tecogen's Chief Executive Officer. “We expect Product sales to rebound as we move further into 2021. Our Energy Production assets are gradually returning to normal operation as COVID related closures and restrictions are eased, and our Service maintenance revenues continue to grow each quarter." 

You can reference a recent PodCllip we published on TGEN to understand why we are becoming more bullish on the company's prospects. 

Tecogen Inc. (OTC:TGEN) ($2.11; $52.4M market cap), designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products. The company announced an order for a cogeneration system for a large medical center. 

“Maintaining close relationships with our manufacturers’ representatives and collaborating on business development efforts will be a key element of Tecogen’s success,” noted Abinand Rangesh, CFO of Tecogen.  “We expect that continued collaborations with our manufacturers’ representatives will help us identify and develop compelling proposals for similar projects at other medical facilities in New Jersey and elsewhere.”

Tecogen Inc. (OTC:TGEN) ($1.81; $45.1M market cap), designs, manufactures, installs, and maintains high efficiency and ultra-clean cogeneration products. The company announced it has signed 25 long term contracts with a large housing provider in Canada.

“The 20-year contracts provide for the maintenance of 31 InVerde e+ cogeneration systems as well as ancillary components.  The systems will be serviced out of Tecogen’s Ontario service center, established in March 2020.”

“We are excited to start full time operation of these units which we shipped in 2020,” noted Benjamin Locke, Tecogen’s CEO.  “These units are expected to run with over 93% uptime, which maximizes the savings for our customer as well as our service revenues which are billed per run hour.  These units join our existing fleet of cogeneration systems and chillers already operating in our Toronto service area.” 

No financial details were given in the release.

Tecogen Inc. (OTC:TGEN) ($1.88; $46.7M market cap), a company that produces commercial and industrial natural gas fueled engine driven, combined heat and power products, announced it has filed a provisional patent application entitled, High Efficiency Hybrid Engine-Driven Variable Frequency Drive.”  

“The application describes a novel system for seamlessly blending multiple power sources in any combination through a single inverter. The system will allow building owners to energize loads such as a chiller plant from an engine generator system, the existing electric utility, and/or solar and battery storage.”

“Customers are looking to maximize savings and resiliency while choosing the greenest source of power,” noted Benjamin Locke, Tecogen’s CEO.  “As the electric grid becomes greener and renewable, and on-site power becomes more widespread, the natural gas engine input to the hybrid drive may be used primarily for backup power, with an integrated inverter and controls providing effective coordination of all connected energy sources, and the system providing power in normal operations from renewable or other available energy sources.”

We have been talking about how the company is moving up our research pipeline. We even discussed this sentiment in yesterday's open forum, basically trying to ascertain if the company is now ready to resume growth as natural gas conversion projects begin ramp up again now that the pandemic is passing.

If you were not able to attend the forum, don’t worry. We’ll have the replay uploaded soon.

Yesterday, Tecogen Inc. (OTC:TGEN) ($1.66; $39.3M market cap), a company that produces commercial and industrial natural gas fueled engine driven, combined heat and power products, announced Q1 2021 results:

• Sales of $3.0 million vs $2.8 million in the prior year
• Diluted loss per share of $0.07 vs loss of $0.05 in the prior year

“The first quarter saw the continued impact of COVID-19 on our core business areas. Despite the challenging economic environment, we saw significant improvements in our gross margin and further reductions in our operating expenses,” commented Benjamin Locke, Tecogen Chief Executive Officer. “Product sales were down for the quarter but are expected to rebound as we move further into 2021. Our energy production assets are gradually returning to operation as COVID related closures and restrictions are eased, and our service maintenance revenues continue to grow each quarter.  We are confident we will continue to see growth in our core business as we strive for profitability in 2021. I invite investors to read our shareholders letter on our website that provides more color on our vision for growth and establishing profitability from operations.”

See additional insights in shareholder letter

Tecogen Inc. (OTC:TGEN) ($2.33; $58.0M market cap) produces commercial and industrial natural gas fueled engine driven, combined heat and power products announced Q4 2020 results:

• Sales of $5.6 million vs $8.7 million in the prior year and below analyst estimates of $8.5 million
• Non-GAAP loss per share of $0.05 vs loss of $0.02 in the prior year and below analyst estimates of a loss of $0.01

The fourth quarter revenue was clearly TGEN's worst quarter of the year. The company is still experiencing the negative impacts of the pandemic on its operations as customers delay projects.  Although we highlighted this short term risk factor in our research on TGEN, we are surprised at the severity of how bad the quarter was. We plan to participate in the company's conference call at 11AM ET to see if the CEO will offer any color on the near term outlook for the company.

“2020 was a challenging year for many businesses," commented Benjamin Locke, Tecogen CEO.  "The COVID-19 pandemic had many negative impacts on our business with regard to facility closures and construction slowdowns.  We took the opportunity of a slower 2020 to reduce operational costs and strengthen our balance sheet. We reduced our receivable and unbilled revenue balances resulting in positive cash flows from operations.  We are beginning to see the return of normal business activities and are encouraged that our service maintenance agreement revenues continue to grow sequentially quarter over quarter despite the slowdown.  I am optimistic that our reduced operating costs combined with a strengthened balance sheet positions Tecogen for a rebound as the COVID-19 vaccine distribution progresses and normal business activities resume."