CHESTNUT RIDGE, N.Y., Nov. 20, 2019 /PRNewswire/ -- BioHiTech Global, Inc. ("BioHiTech" or the "Company") (NASDAQ: BHTG), a technology and services company that provides cost-effective and sustainable waste management solutions, reported financial results for the third quarter of 2019 ended September 30, 2019. 

Company Highlights

Completed $3.38 Million Registered Direct Offering of Common Stock – The Company sold 1,877,666 shares of common stock at $1.80 per share.  The proceeds are being utilized to support the growth of the Company's proprietary technology solutions for sustainable waste management.

Continued to Ramp Revenue at the Nation's First HEBioT™ Resource Recovery Facility – During the third quarter, the Company continued to increase utilization rates at its first HEBioT (High Efficiency Biological Treatment) facility located in Martinsburg, West Virginia (the "Martinsburg Facility").  This progressive increase in utilization led to a 120% sequential increase in revenue from the second quarter where the Company began commissioning the facility early in April.  While revenue at the Martinsburg facility grew significantly, that growth was constrained by adjustments needed to improve the metals capturing process and fire suppression systems which required modifications to existing equipment and installation of additional equipment. These adjustments resulted in several weeks of downtime as well as reduced production levels of solid recovered fuel ("SRF").  The Company sees revenue from the Martinsburg Facility increasing in the fourth quarter as these start-up adjustments were largely completed early in November and its contracted buyer of SRF finishes the installation of a feed-line to accept the fuel at its cement manufacturing plant in Martinsburg.  The Company continues to expect that the Martinsburg Facility will generate $7 million of high margin revenue on an annual basis by processing up to 110,000 tons of municipal solid waste while diverting as much as 80% of that waste from landfills.  The 56,000-square foot Facility is completely enclosed and fully automated with no waste being exposed to the outside environment and no workers in direct contact to the waste processing. The Company's EPA recognized SRF can be used as a partial replacement for coal in various industrial applications.

Expanded Recurring Revenue and Improved Contribution from Digester Rental Business – The Company achieved 23.3% growth in revenue from digester rentals with contribution margins increasing to 63.9% in Q3 2019, up from 48.5% in Q3 2018.  The improvement in margin was mainly attributable to a decrease in billable service and parts that is the result of improved product design and quality of the Company's Revolution Series™ Digesters.  During the quarter, the Company announced orders for twelve digester units from four Northeastern universities and subsequent to the quarter's end, orders for an additional twenty units for delivery to several leading international hospitality companies.  While the Company has seen an increase in digester orders in the third quarter as well as a strong pipeline of larger multi-unit opportunities for its digester business, the sales cycles have been longer than expected. 

"We continued to make substantial progress in both our HEBioT and digester businesses in the third quarter of 2019," stated Frank E. Celli, CEO of BioHiTech Global.  "Revenue at our Martinsburg facility is ramping up and we believe the vast majority of necessary start-up adjustments that constrained the growth of utilization rates in the quarter have been completed.  We anticipate utilization rates will improve significantly during the fourth quarter and that improvement will become even more pronounced with the completion of the feed line installation at the cement manufacturer that is expected imminently. With the completion of that installation, we expect to have all of the feedstock and off-take necessary to operate at planned capacity as we head into 2020. We also believe we are in the late stages of the permitting process for our second planned facility in New York and remain confident in our ability to bring at least one to two facilities into production beginning in 2021."

Mr. Celli continued, "In our digester business, many important financial metrics have continued to improve, including recurring rental revenue and contribution margins as our Revolution Series Digesters, with smart technology, require less maintenance and service calls. We have recently received multi-unit orders in both the university and hospitality markets and have several other large potential opportunities in hospitality and government that we believe are moving close to the finish line.  We expect that a sequential increase in revenue from our Martinsburg Facility, coupled with an increase in fourth quarter digester deployments, will enable us to enter 2020 with significant revenue momentum.  As interest in our sustainable technologies continues to grow, we are working diligently to build on that momentum in the coming years in order to generate significant long-term value for our stockholders."

Financial Highlights for Q3 2019  

Revenues: Total revenue in the third quarter of 2019 was $1,426,775, an increase of 31.1% from $1,088,082 in the third quarter of 2018 and a sequential increase of 35.7%. Recurring revenue derived from rental, service and maintenance increased 4.2% to $490,000 with rental revenue increased by 23.3% or $69,900 between the third quarter of 2019 and 2018. The increase in rental revenue was partially offset by a decrease in service and maintenance revenue largely due to the efficiency of its Revolution Series Digesters requiring less onsite servicing.  The Company recorded $62,565 in digester equipment revenue in the third quarter of 2019 compared to $282,246 in the third quarter of 2018 resulting from our strategic decision to not aggressively market direct sales of digesters to smaller deployment customers.  The Company continues to see an increase in direct sales opportunities with several large prospective customers that may lead to a significant increase in direct sales of units in the coming quarters. Management advisory services revenue was $264,750, consistent with the first two quarters of 2019 but down from $335,858 in the third quarter of 2018.

Operating Expenses: Operating expenses in the third quarter of 2019 increased by 34.3% to $3.04 million compared to $2.27 million in the third quarter of 2018.  The increase in expenses was mainly a result of $1.52 million in HEBioT related expenses.  Comparable operating expenses related to the Company's digester and management advisory businesses decreased by 33.0% to $1.52 million. Comparable expenses decreased across all categories including a 31.0% or $541,051 decline in selling, general and administrative expenses, mainly due to reduced personnel compensation and stock-based compensation. Expenses related to digester sales decreased by $137,875 resulting from reduced marketing activity, and rental, service and maintenance expenses decreased by $65,224 reflecting improved economies of scale resulting from the increase in the number of units under rental and lower recurring maintenance costs associated with the Revolution Series Digesters. The product contribution from rental, service and maintenance in the third quarter of 2019 increased by $84,801 or 37.2% as a result of improved margin rates of 63.9% compared to 48.5%. The product contribution from equipment sales decreased by $81,806 or 64.6% in the third quarter of 2019 as a result of decreased sales offset by improved margins of 71.6% compared to 44.9% the third quarter of 2018.  

Loss from Operations:  The Company recorded an operating loss of $(1.6) million in the third quarter of 2019 compared to an operating loss of $(1.2) million in the third quarter of 2018. The Company recorded a net loss attributable to common shareholders of $(1.3) million in the third quarter of 2019 compared to $(2.0) million in the third quarter of 2018.  Net loss per share in the third quarter of 2019 was $(0.13) on 15.6 million weighted average shares outstanding compared to a net loss of $(0.15) per share on 14.6 million weighted average shares outstanding. 

Select Balance Sheet Items: The Company had unrestricted cash of $3.4 million with shareholder equity of $10.1 million as of September 30, 2019 compared to unrestricted cash of $2.4 million and shareholder equity of $10.0 million as of December 31, 2018.

"We continue to focus on managing costs as we work to reach planned production capacity at our Martinsburg facility and pursue larger scale opportunities for our digester business," said Brian C. Essman, CFO of BioHiTech Global.  "Revenue from our digester business was up modestly despite a sharp decline in direct sales.  Recurring rental revenue from our digester business was strong, growing at 23% with margin rates improving by 15 percentage points to over 63% and we are excited about recent discussions we are having with customers seeking potential large-scale unit deployments.  Our recent capital raise has also placed us on more solid financial ground as we work to accelerate the growth of our business. Nevertheless, with the equipment adjustment delays at the Martinsburg Facility through October and the longer than expected digester sales cycles associated with larger orders, we now see full year 2019 revenue ranging from $4.8 to $5.0 million, up from $3.4 million in 2018."

About BioHiTech Global
BioHiTech Global, Inc. (NASDAQ: BHTG), is changing the way we think about managing waste.  Our cost-effective technology solutions include the patented processing of municipal solid waste into a valuable renewable fuel, biological disposal of food waste on-site, and proprietary real-time data analytics tools to reduce food waste generation. Our unique solutions enable businesses and municipalities of all sizes to lower disposal costs while having a positive impact on the environment.  When used individually or in combination, our solutions lower the carbon footprint associated with waste transportation and can reduce or virtually eliminate landfill usage. For more information, please visit www.biohitech.com.

Forward Looking Statements
Statements in this press release 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. Without limiting the foregoing, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "project," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These statements are also based on many assumptions and estimates and are not guarantees of future performance. These statements are estimates, based on information available to management as of the date of this release, and are subject to further changes. 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 in these forward-looking statements, even if new information becomes available in the future. Further, the Company has only recently begun operations at its HEBioT Facility and there can be no assurance that the Company will be able to meet the projections contained in this release. 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.