CHESTNUT RIDGE, N.Y., May 26, 2020 /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 full year ended December 31, 2019 on May 22, 2020. 

Company Highlights

Commenced Operations at the Nation's First HEBioT™ Resource Recovery Facility – The Company commenced operations at its Martinsburg, West Virginia HEBioT facility (the "Martinsburg Facility") in April 2019. The 56,000-square foot Martinsburg Facility underwent an extensive commissioning process and ramp up throughout 2019. The Martinsburg Facility is capable of processing 110,000 tons of municipal solid waste annually utilizing a patented high efficiency mechanical and biological treatment process that produces an EPA recognized renewable solid recovered fuel ("SRF"). The SRF is currently being used as a partial replacement for coal by cement manufacturers and is being tested as feedstock for renewable thermolplastics. The Company expects the facility to reach planned capacity in 2020. The facility is completely enclosed and fully automated with no unprocessed waste being exposed to the outside environment and no workers in direct contact to the waste processing. During the year, the Martinsburg Facility helped several companies achieve Zero Waste goals by diverting their previously non-recyclable waste from landfills.

Raised $5.26 Million in Equity Capital to Further the Growth of Its Sustainable Disposal Solutions – In September 2019, the Company sold 1,877,666 shares of common stock through a registered direct offering in September at a fixed price of $1.80 per share for gross proceeds of $3,380,000.  The Company also raised $1,885,000 in an offering of units during the first and second quarter consisting of Series D Preferred Shares and warrants. The proceeds from the two transactions are being utilized to support the growth of the Company's proprietary technology solutions for sustainable waste management.

Completed the Sale of Its 2.2% Stake in Gold Medal Equity for $2.25 million and Increased Its Ownership Stake in the Martinsburg Facility to 51.7% – Completed the sale of its 2.2% equity interest back to Gold Medal Equity LLC ("Gold Medal") in July of 2019 to enable the Company to focus its financial resources on the rollout of its waste disposal technologies, including its HEBioT development rights.  The Company invested $2.1 million of the proceeds from that sale to increase its ownership interest in the Martinsburg Facility to approximately 89% at the subsidiary level and 53.2% at the corporate level. 

Continued the Expansion of Its Food Waste Digester Business – The Company continued the deployment of its Revolution Series™ Digesters that cost-effectively and safely dispose of food waste on-site, eliminating many of the greenhouse gases associated with traditional disposal methods. In March, the Company entered into a distribution agreement with a leading nationwide provider of environmental and regulated waste management solutions and in April, the Company launched its new Sapling Digester that is capable of diverting up to 800 pounds of food waste from landfills per day or as much as 146 tons each year. Examples of the growing market penetration of this business include orders for a total of twelve digesters to four universities with a combined enrollment of more than 100,000 students, and orders for twenty digesters for delivery to several leading international hospitality companies. 

Received a Purchase Contract for Its Revolution Series Digesters from Carnival Corp with a Potential Value of up to $14 Million – After an extensive evaluation conducted in the fourth quarter, the Company received a purchase contract from Carnival Corporation ("Carnival") in January 2020, whereby Carnival can potentially acquire several hundred Revolution Series Digesters along with the Company's patented data analytics platform for its fleet of ships. The digesters will help Carnival meet its sustainability goals while the data analytics platform will provide real-time supply chain transparency to help in Carnival's food waste reduction efforts. While the COVID-19 pandemic has delayed the deployment plan in the first quarter, the Company expects to begin delivery of its digesters in the second half of 2020 as restrictions on travel are eased.

"2019 was a year of significant progress for BioHiTech as we commenced operations at the Nation's first HEBioT resource recovery facility in Martinsburg, West Virginia and made substantial inroads to drive growth in our digester business in the coming years," stated Frank E. Celli, CEO of BioHiTech Global.  "The COVID-19 pandemic has affected most aspects of our lives in the past several months and our thoughts and prayers go out to everyone who has been affected by this virus.  Our business and that of many of our customers have been impacted by the virus as well, including restaurant, food service and hospitality companies that have been temporarily closed or operating in a limited capacity over the past few months.  Uncertainties created by this pandemic have delayed deployment of expected orders and slowed new business activity in our digester business in these sectors.  Other sectors, including grocery, education, and healthcare have been more active.  Recently, however, we have seen signs of an increase in overall business activity as customers are beginning to prepare for the reopening of the economy and a return to business. Based on our discussions with several key customers, we expect our digester business will begin to recover in the coming months and gain significant momentum in the back half of 2020 and into 2021.  In the meantime, we have taken significant actions to reduce costs including workforce reductions, executive salary reductions and deferrals, and used stock-based compensation in lieu of cash for certain employees and vendors.  We believe these measures, along with others, will help us navigate through this period of uncertainty and enable us to reaccelerate growth as the economy reopens and the pandemic subsides."

Mr. Celli continued, "We are excited about the significant progress we have made in our HEBioT resource recovery business, especially with the launch of our Martinsburg Facility.  As waste collection services have been classified by the government as an essential service, the Martinsburg Facility has continued to ramp up operations thus far in 2020.  Bringing a new technology to the United States is a difficult undertaking, but we have now proved it can be done and we are confident that as we build a roadmap to grow this business for the future, we will be smarter, faster and more efficient in doing so.  While the pandemic has slowed the State approval process for our proposed facility location in New York State, we remain confident that we will receive the necessary permitting to break ground this year.  We expect to move forward with additional opportunities in 2020 and the years to come that will create a path for sustainable future growth.  We also expect to add additional technology solutions for our current and future customers to help them meet the new business challenges resulting from this pandemic in ways that make sense for the environment.  We believe this will enable our company to continue to grow revenue in 2020 and build lasting value for our shareholders."

Financial Highlights for the Full Year 2019

Revenues: Total revenue in 2019 was $4.2 million, an increase of 25.6% from $3.4 million in 2018. Recurring revenue derived from rental, service and maintenance increased 8.1% to $1,947,000 compared to $1,801,000 in 2018 with rental revenue increasing by $309,000 or 26.3%. 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 product contribution from rental, service and maintenance increased by $245,000 or 26.7% in 2019 as a result of increased revenue and margin rates rising to 59.7% in 2019 compared to 50.9% in 2018.  The Company recorded $187,000 in digester equipment revenue in 2019 compared to $548,000 in 2018 resulting from our strategic decision to not aggressively market direct sales of digesters to smaller deployment customers. The product contribution from equipment sales decreased by $71,000 (49.2%) as a result of decreased sales offset by improved margins of 39.5% and 26.5% in 2019 and 2018, respectively. Equipment sales revenue is expected to increase significantly in 2020 as a result of the January 2020 purchase contract.  The Company recorded $1,111,000 in revenue from its Martinsburg facility which commenced operations in the second quarter of 2019, Management advisory services revenue of $975,000 in 2019 was fairly consistent with 2018.

Operating Expenses: Operating expenses in 2019 increased by 38.3% to $11,755,000 compared to $8,497,000 in 2018.  The increase in expenses was mainly a result of $4,264,000 in HEBioT related expenses.  Comparable operating expenses related to the Company's digester and management advisory businesses decreased by 11.2% to $7,491,000. The decrease in comparable expenses was mainly a result of an 8.7% or $580,000 decline in selling, general and administrative expenses, mainly due to a reduction of $784,000 or 20.7% in personnel compensation, a $317,000 decrease in sales and marketing expenses, and a $108,000 decrease in professional fees, partially offset by a one-time impairment expense of $347,000 and a $270,000 increase stock-based compensation. Expenses related to digester sales decreased by $290,000 resulting from reduced marketing activity, and rental, service and maintenance expenses decreased by $100,000 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.

Loss from Operations: The Company recorded an operating loss of $(7,535,000) in 2019 compared to an operating loss of $(5,137,000) in 2018. The Company recorded a net loss attributable to parent of $(7,623,000) in 2019 compared to ($14,670,000) in 2018.  Net loss per share in 2019 was $(0.56) on 15.7 million weighted average shares outstanding compared to a net loss of $(1.11) per share on 13.6 million weighted average shares outstanding. 

Select Balance Sheet Items: The Company had unrestricted cash of $1,848,000 with shareholder equity of $7.4 million as of December 31, 2019 compared to unrestricted cash of $2,411,000 and shareholder equity of $10.0 million as of December 31, 2018

"We made significant progress in our efforts to better align our cash expenditures and costs with revenue," said Brian C. Essman, CFO of BioHiTech Global.  "We also achieved significant improvement in margins from our digester business through improvements in the reliability of our Revolution Series Digesters. While the commissioning process at our Martinsburg Facility was lengthier than expected, the operations continue to progress towards planned capacity thus far in 2020 and we are confident that this business will drive significant revenue growth in 2020 and beyond.  As the COVID-19 pandemic has brought about new challenges and uncertainties to our business, we have taken measures to further reduce costs during this business interruption.  We are optimistic regarding the recent uptick in business activity in our digester business as businesses prepare to reopen and look forward to capitalizing on our pipeline of business in the coming quarters and years."

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.