CHESTNUT RIDGE, N.Y., April 2, 2018 /PRNewswire/ -- BioHiTech Global, Inc. ("BioHiTech" or the "Company") (OTCQB: BHTG), a technology and services company that provides cost-effective and sustainable waste management solutions, reported financial results for the full year ended December 31, 2017. 

Company Highlights

Launched its Revolution Series Digesters - The Company completed the successful marketing launch of its new Revolution Series™ Digesters designed to meet the needs of lower volume food waste generators.  The new Revolution Series™ Digesters are built in the US, economically competitive with traditional disposal, take up minimal space, and are as easy to install as a standard dishwasher. The Company ordered an initial production run of 100 units and began shipments to customers late in Q3 2017. The Company believes this expands its target market by more than 1.5 million potential customers including full and quick service restaurants, coffee shops, hospitality companies and other specialty food service providers.

Enhanced Its Data Analytics Software Platform with BHTG Smart Mode – In Q3 2017, the Company launched BHTG Smart Mode, a new technology for its Eco-Safe Digester® and Revolution Series™ Digester lines of on-site food waste disposal equipment.  Smart Mode leverages cloud computing, machine learning, and the on-board internet-connected computer in the digester to intelligently drive the equipment in order to optimize performance and reduce servicing downtime. The new software enhances performance of the Company's waste data analytics software platform designed to improve supply chain management and reduce waste generation. 

Secured 12 Acre Site for Planned HEBioT Facility in New York State - In Q2 2017, the Company entered into an agreement to acquire a site in the town of New Windsor, located approximately 60 miles north of New York City, for $1.1 million, subject to certain terms and conditions. The Company intends to build a HEBioT renewable waste facility capable of processing approximately 130,000 tons of municipal solid waste annually. The HEBioT process recovers approximately 80% of municipal solid waste by producing an EPA recognized solid recovered fuel.

Purchased First HEBioT Facility License for $6.1 Million - In Q4 2017, the Company completed the acquisition of its first HEBioT renewable waste facility license from Ensorgafin S.P.A ("Entsorga") in exchange for a combination of approximately 1,036,000 shares of BioHiTech common stock and $840,000 in cash. BioHiTech controls the exclusive U.S. development rights for Entsorga's patented HEBioT solid waste processing technology in 11 northeastern states and the District of Columbia and can pay a one-time or annual license fee for each facility the Company develops. 

Acquired Equity Stake in Gold Medal Services with Kinderhook Industries - In January 2018, the Company partnered with Kinderhook Industries, LLC ("Kinderhook"), a private investment firm that manages over $2 billion of committed capital, to create a "next generation" environmental services platform company through the acquisition of Gold Medal Services, a leading provider of waste collection and recycling services in the Eastern Pennsylvania and Southern New Jersey markets. The new Gold Medal Group ("Gold Medal") plans to integrate BioHiTech's technology solutions with its traditional services to create a cost-effective sustainable waste management services company operating at a high margin.  BioHiTech owns a 9.2% stake in Gold Medal with a one year option to purchase a total of up to $5 million in additional equity. The Company also entered into a management agreement that provides BioHiTech a minimum of $750,000 in revenue on an annual basis. 

"In 2017, we made substantial progress in forwarding our cost-effective technology solutions for sustainable waste management," stated Frank E. Celli, CEO of BioHiTech Global.  "We enhanced our proprietary state-of-the-art data analytics platform with smart mode to create better efficiencies for our digester customers and launched our new Revolution Series, opening up a vast new market opportunity for BioHiTech.  In addition, we secured a site for our planned HEBioT facility in New York State and obtained a fully paid plant license from our technology partner in Italy."

Mr. Celli continued, "With our suite of technology solutions now firmly in place and commercialization moving forward in earnest, we took the next step in our corporate evolution, integrating our technology directly with traditional waste management service providers.  Through our recent transaction with Kinderhook, we can now seamlessly incorporate our solutions into Gold Medal's sales and traditional services network to create a vertically integrated sustainable waste management company driven by our technology.  With Gold Medal's service area including the Philadelphia and Southern New Jersey markets, BioHiTech gains immediate access to a significant existing customer base for its digesters as well as potential feedstock for a future HEBioT plant, and Gold Medal can expand its margins by providing cost-effective solutions that bundle traditional services with technology.  This creates a win-win scenario for both companies and provides Gold Medal's customers with a cost-effective end-to-end solution for sustainable and even Zero Waste' disposal.  We are confident that this is a business model that can be replicated in many similar markets throughout the US enabling us to position BioHiTech as the critical sustainable technology component for traditional waste management services companies." 

Financial Highlights for the Full Year 2017

Revenues: Total revenue in 2017 was $2.4 million, an increase of 7.9% from $2.2 million in 2016. Recurring revenue derived from rental, service and maintenance increased 18.3% to $1.6 million and accounted for 67% of total revenue compared to $1.4 million or 61% in 2016. The Company's forward single upcoming year's minimum contracted rental revenue increased by 40.6% year over year primarily due to the commencement of shipping of its Revolution Series™ Digesters late in Q3 2017. Revenue from equipment sales was $800,000, an 8.4% decline compared to 2016 revenue of $872,000. The shift in revenue mix towards recurring rental, service in maintenance revenue is a result of the Company's continued focus on the rental market, primarily in the US and Europe, and, to a lesser extent, a decrease reseller activity in certain international markets. The Company sees rental revenue increasing in 2018 as the Company adds additional units to its current installed base through the continued marketing efforts for its new Revolution Series™ Digesters as well as its Eco-Safe Digester® Series. 

Gross Profit and Margin: Gross profit rose to $735,000 in 2017, a 28.1% increase compared to gross profit of $574,000 in 2016. Rental, service and maintenance accounted for 56% of gross profit dollars compared to 50% in 2016. Gross margin percentage rose by 4.8 percentage points to 30.4% in 2017.  Rental, service and maintenance gross margin increased by 4.7 percentage points to 25.6% in 2017, mainly due to increased contracted services and improved utilization of fixed costs.  Gross margin percentage from equipment sales increased by 7.1 percentage points to 40.0% primarily driven by a change in the mix of models sold and a reduction in the manufacturing costs of the equipment. 

Operating Expenses: Operating expenses in 2017 increased by 12.3% to $7.3 million compared to $6.5 million in 2016.  The increase in operating expenses is mainly attributable to a $1.0 million increase in professional fees which totaled $2.3 million in 2017 compared to $1.3 million in 2016.  Approximately $1.2 million of those professional fees were non-cash in nature, related to investment banking, investor relations, and market consulting.  The increase in professional fees in 2017 was partially offset by a 3.6% decrease in selling general and administrative expenses and an 8.9% decrease in research and development costs.

Loss from Operations:  The Company recorded an operating loss of $6.6 million in 2017 compared to an operating loss of $5.9 million in 2016. In 2017 the Company recorded a net loss of $(8.4 million) or $(0.98) per share on 8.5 million weighted average shares outstanding compared to a net loss of $(6.7 million) or $(0.82) per share on 8.2 million weighted average shares outstanding. 

"We are pleased with our performance in 2017 as we continued our effort to build lasting value for our stockholders by establishing BioHiTech as a leading technology solutions company in sustainable waste disposal.  We delivered improving gross margins and substantial rental unit growth in our food waste digester business and continued to forward our plans to establish a HEBioT facility in New York State," said Brian C. Essman, CFO of BioHiTech Global. "We also made several substantial improvements to our balance sheet through our HEBioT license purchase and Gold Medal transaction, as well as through our fixed price convertible debt and preferred equity financings.  Early in 2018, we made further balance sheet improvements through a series of non-convertible debt and fixed price convertible equity financing transactions that now place our Company on more solid financial footing to achieve our growth plans and improve our corporate visibility through an uplisting to a national stock exchange."

About BioHiTech Global

BioHiTech Global, Inc. (OTCQB: BHTG), is changing the way we think about managing waste.   Our innovative waste management services combined with our disruptive technologies provide sustainable waste disposal and supply chain management solutions for businesses and municipalities of all sizes.  Our technology platform, including the on and off-site biological treatment of waste, is designed to reduce overall waste generation and virtually eliminate landfill usage while creating a valuable renewable fuel.  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.
Richard Galterio
Executive Vice President
Direct: 845.367.0603
[email protected]
www.biohitech.com

SOURCE BioHiTech Global, Inc.