CHESTNUT RIDGE, N.Y., May 15, 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 first quarter of 2019 ended March 31, 2019. 

BioHiTech Global, Inc. (PRNewsfoto/BioHiTech Global, Inc.)

Company Highlights

Commenced Commercial Operations at the Nation’s First HEBioT Resource Recovery Facility – The facility, located in Martinsburg, West Virginia (the «Martinsburg Facility»), commenced commercial operations on March 29, 2019.  The Martinsburg Facility began ramping up operations in April and is already processing close to 200 tons of waste per day.  It is expected to contribute meaningful revenue in the second quarter as it reaches planned production levels in the coming weeks.  The company anticipates it will generate $7 million of high margin revenue by processing up to 110,000 tons of municipal solid waste per year 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 Martinsburg Facility utilizes a patented high efficiency mechanical and biological treatment process («HEBioT Process«) that produces an EPA recognized solid recovered fuel («SRF») that can be used as a partial replacement for coal in various applications. 

Signed a Food Waste Digester Distribution Agreement with a Leading Nationwide Provider of Environmental and Regulated Waste Management Solutions – The agreement enables this national waste services company to market BioHiTech’s line of food waste digesters to its extensive nationwide customer base.  By eliminating food waste at the point of generation, BioHiTech’s Digester technology helps waste service providers improve margins through decreased logistics costs and landfilling expenses while achieving a substantial reduction in greenhouse gas emissions. The Company sees partnering with traditional waste industry companies to distribute its environmentally responsible food waste disposal technology as a cost-effective way to accelerate market penetration and grow recurring revenue from the digester business. 

Submitted Application for Final State Approval of Its Plan to Build a HEBioT Resource Recovery Facility in Rensselaer, New YorkThe Company is seeking final approval from the State of New York to construct and operate a 72,000-square foot HEBioT municipal waste resource recovery facility on 23 acres of land in the City of Rensselaer’s southern industrial area. The planned facility is expected to generate approximately $12 million of high margin annual revenue.  The Company is targeting a Q4 2020 completion date for the facility. The Rensselaer project is being launched in conjunction with Kinderhook Industries, a private investment firm that manages over $2.0 billion of committed capital.

Continued the Rollout of its Revolution Series Digesters – The Company continued to expand its food waste digester footprint, including two installations of BioHiTech’s Revolution Series™ Digester technology for a major operator of more than 25 hospitals and primary care facilities in the New York metropolitan area as well as an installation at Sprouts Farmers Market’s first store in Philadelphia, Pennsylvania.  BioHiTech’s Digester technology has been adopted in 18 Sprouts locations coast to coast.  The Company also completed development for the launch of its new Sapling Digester, a larger capacity addition to BioHiTech’s line of Revolution Series™ Digesters.  Each Sapling Digester is capable of diverting up to 800 pounds per day or 146 tons from landfills each year.  

«We continue to build on the momentum we drove in 2018, as we commenced operations at the Nation’s first HEBioT resource recovery facility in Martinsburg, West Virginia,» stated Frank E. Celli, CEO of BioHiTech Global.  «This facility will drive significant high margin revenue, the effects of which will be evident in the second quarter and build further in the second half of the year.  We are also confident that this operational facility will help accelerate our growth plan for this business as we have already had more than 100 people tour the facility, with interested parties including government officials, waste industry companies, Fortune 500 companies seeking to achieve sustainability goals, and members of the press.  We are also making progress on our next planned facility in New York as we have made our application for state approval to build and operate a 75,000-square foot HEBioT facility in the City of Rensselaer

Mr. Celli continued, «Our digester business continues to build as our overall base of rental units is more than double that of the first quarter of last year, largely due to the growing market acceptance of our Revolution Series Digesters. During the quarter, we added a significant national waste management services company to our distribution network and our pipeline continues to grow in multiple unit opportunities in the 20 to 100-unit range.  While sales cycles for these larger opportunities have been longer, we are confident that our distribution plan will lead to a greater acceleration of revenue from our digester business the second half of 2019.  Additionally, the launch of our Sapling Digester gives us a broader range of sizes and processing capabilities to meet the needs of these multi-location opportunities.  As we move through this year, we expect to see a marked increase in revenue beginning in the second quarter as our Martinsburg HEBioT facility ramps operations and further increases in the second half of 2019.  We have numerous opportunities to significantly grow this business in the coming years while reducing the environmental impact of the waste management industry.  We look forward to building value for our stockholders through the execution of our strategic growth plan in the quarters and years to come.»

 Financial Highlights for Q1 2019  

Revenues: Total revenue in the first quarter of 2019 was $738,000, an increase of 14.2% from $646,000 in the first quarter of 2018. Recurring revenue derived from rental, service and maintenance increased 10.7% to $488,000 and accounted for 66% of total revenue compared to $440,000 or 68% of total revenue in the first quarter of 2018. Total rental units under contract increased by 37.5% to 176 units with the added units comprised mainly of its less expensive Revolution Series™ Digester.  During the quarter, the Company focused on expanding its distribution network to include traditional waste management companies and expects these partnering efforts to accelerate growth of this business in the coming quarters. The growing market acceptance of BioHiTech’s food waste digesters led to a 21.1% quarter over quarter increase in the Company’s forward minimum contracted rental revenue. Revenue from management advisory fees related to its management services contract with Gold Medal rose by 79.4% to $250,000 and represented 34% of total revenue compared to $139,000 and 22% of total revenue in the first quarter of 2018.  As a result of the Company’s continued focus on the rental market, primarily in the US and Europe, the Company recorded no direct sales of digesters in the first quarter of 2019 compared to first quarter 2019 digester sales revenue of $66,000. The Company sees rental revenue increasing in 2019 as the Company adds additional units to its current installed base through its expanded distribution network and closes on its pipeline of multi-unit large customer opportunities beginning in the second quarter of 2019. 

Costs of Revenue: While recurring revenue derived from digester rental, service and maintenance increased by 14.2% from $440,000 to $488,000 in the first quarter of 2019, direct costs associated with that revenue decreased by 9.3% from $336,000 to $305,000.  As a result, the contribution from rental, service and maintenance revenue increased by 75.1%, or $78,000, quarter over quarter to $183,000 as compared to $105,000 in the first quarter of 2018.  Contribution margin from digester rental, service and maintenance rose to 37.5% in the first quarter of 2019 compared to 23.7% in the comparable 2018 period.  The Company records no direct costs associated with its management services to Gold Medal as those services leverage the Company’s existing management team and staff.    

Operating Expenses: Operating expenses in the first quarter of 2019 increased by 34.8% to $2.7 million compared to $2.0 million in the first quarter of 2018.  Selling, general and administrative expenses increased by $746,000, primarily the result of $544,000 in other expenses, including the write down of costs associated with an MBT site and start-up costs at the Company’s Martinsburg HEBioT facility. Personnel related expenses increased by $138,000, or 13.1% quarter over quarter. Stock based compensation (a non-cash expense) increased by $218,000 as a result of grants made in the second half of 2018. Base salaries and payroll decreased by $65,000, or 7.8%, due to staff reductions in late 2018, offset by increases in the first quarter of 2019 from the Company’s Martinsburg HEBioT operations.

Loss from Operations:  The Company recorded an operating loss of $(1.9) million in the first quarter of 2019 compared to an operating loss of $(1.3) million in the first quarter of 2018. The Company recorded a net loss of $(2.3) million in the first quarter of 2019 compared to $(5.2) million in the first quarter of 2018, inclusive of $3.3 million in interest expense incurred in warrant valuation and conversions.  Net loss per share in the first quarter of 2019 was $(0.14) on 14.8 million weighted average shares outstanding compared to a net loss of $(0.49) per share on 10.9 million weighted average shares outstanding. 

Select Balance Sheet Items: The Company had unrestricted cash of $1.4 million with shareholder equity of $8.8 million as of March 31, 2019 compared to unrestricted cash of $2.4 million and shareholder equity of $10.0 million as of December 31, 2018.

«We are pleased with the underlying fundamentals of our digester business and how that is beginning to evidence itself in our financials,» said Brian C. Essman, CFO of BioHiTech Global.  «While first quarter revenue from our digester leasing business increased by 14.2%, costs related to that revenue declined leading to a 75.1% improvement in contribution margin.  As our Revolution Series Digesters, including our new Sapling Digester, continue to gain acceptance in the market, we expect to see further favorable comparisons in the coming quarters.  We expect our management services revenue related to Gold Medal to remain steady at this level for the remainder of the year.  With our Martinsburg HEBioT Facility now in operation, we anticipate this business will generate meaningful revenue beginning in the second quarter and be EBITDA positive this year and enable us to achieve significant revenue growth for the remainder of 2019.»

Conference Call Information

BioHiTech will host a conference call today, Wednesday, May 15th, at 4:30 p.m. Eastern Time to discuss these results and business outlook.  The conference call information is as follows:

  • Direct Dial-in number for US/Canada/International: (201) 689-8562
  • Toll Free Dial-in number for US/Canada: (877) 407-0789
  • Participants will ask for the BioHiTech Global Q1 2019 Financial Results Call

This call is being webcast and can be accessed at http://public.viavid.com/index.php?id=134596

The call will also be available for replay by accessing http://public.viavid.com/index.php?id=134596.

About BioHiTech Global
BioHiTech Global, Inc. (NASDAQ: 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 cost-effective technology platforms can virtually eliminate landfill usage through real-time data analytics to reduce waste generation, biological disposal of food waste at the point of generation, and the processing of municipal solid waste into 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
rgalterio@biohitech.com
www.biohitech.com

 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Three Months Ended

March 31,

2019

2018

Revenue

Rental, service and maintenance

$

487,701

$

440,493

Equipment sales

65,850

Management advisory and other fees (related party)

250,000

139,383

Total revenue

737,701

645,726

Operating expenses

Rental, service and maintenance

304,705

335,962

Equipment sales

26,547

Selling, general and administrative

2,326,362

1,579,990

Depreciation and amortization

27,937

30,716

Total operating expenses

2,659,004

1,973,215

Loss from operations

(1,921,303)

(1,327,489)

Other expenses

Equity loss in affiliate

45,413

Interest expense, net

339,864

554,276

Interest expense incurred in warrant valuation and conversions

3,293,613

Total other expenses, net

339,864

3,893,302

Net loss

(2,261,167)

(5,220,791)

Net loss attributable to non-controlling interests

(311,701)

Net loss attributable to Parent

(1,949,466)

(5,220,791)

Foreign currency translation adjustment

1,253

(33,442)

Comprehensive loss

$

(1,948,213)

$

(5,254,233)

Net loss per common share – basic and diluted

$

(0.14)

$

(0.49)

Weighted average number of common shares outstanding – basic and diluted

14,816,734

10,940,183

 

 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

March 31,

December 31,

2019

2018

(Unaudited)

Assets

Current Assets

Cash

$

1,374,564

$

2,410,709

Restricted cash

2,137,456

4,195,148

Accounts receivable, net

342,276

403,298

Inventory

430,417

499,848

Prepaid expenses and other current assets

126,585

66,425

Total Current Assets

4,411,298

7,575,428

Restricted cash

2,532,933

2,520,523

Equipment on operating leases, net

1,655,963

1,748,887

Equipment, fixtures and vehicles, net

43,544

49,028

HEBioT facility under construction

35,899,019

33,104,007

Operating lease right of use assets

1,021,190

Intangible assets, net

61,383

83,933

Investment in unconsolidated affiliates

1,687,383

1,687,383

MBT facility development and license costs

8,076,353

8,475,408

Goodwill

58,000

58,000

Other assets

13,500

13,500

Total Assets

$

55,460,566

$

55,316,097

Liabilities and Stockholders’ Equity

Current Liabilities:

Line of credit, net of financing costs of $29,168 and $30,670 as of March 31, 2019 and
December 31, 2018, respectively

$

1,470,832

$

1,469,330

Advance from related party

150,000

Accounts payable

4,391,816

1,310,998

Accrued interest payable

501,871

959,927

Accrued expenses and liabilities

878,356

3,354,124

Deferred revenue

112,292

98,596

Customer deposits

12,034

7,683

Note Payable

100,000

Long-term debt, current portion

8,362

9,165

Total Current Liabilities

7,625,563

7,209,823

Note payable

100,000

Junior note due to related party, net of discounts of $112,928 and $118,266 as of March 31,
2019 and December 31, 2018, respectively

931,548

926,211

Accrued interest (related party)

1,381,914

1,305,251

WV EDA Senior Secured Bonds payable, net of financing costs of $1,930,163 and
$1,914,098 as of March 31, 2019 and December 31, 2018, respectively

31,069,837

31,085,902

Senior Secured Note, net of financing costs of $148,665 and $160,017 and discounts of
$924,951 and $988,678, as of March 31, 2019 and December 31, 2018, respectively

3,926,384

3,851,305

Non-current lease liabilities

919,713

Long-term debt, net of current portion

11,345

12,806

Total Liabilities

45,866,304

44,491,298

Series A redeemable convertible preferred stock, 333,401 shares designated and issued, and
163,312 outstanding as of March 31, 2019 and December 31, 2018

816,553

816,553

Commitments and Contingencies

Stockholders’ Equity

Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 3,179,120 and 3,159,120
designated as of March 31, 2019 and December 31, 2018, 1,918,753 issued and 1,170,331
outstanding as of March 31, 2019 and 1,903,753 issued and 1,155,333 outstanding as of
December 31, 2018:

Series B Convertible preferred stock, 1,111,200 shares designated: 428,333 shares issued,
no shares outstanding as of March 31, 2019 and December 31, 2018

Series C Convertible preferred stock, 1,000,000 shares designated, 427,500 shares issued
and outstanding as of March 31, 2019 and December 31, 2018

3,050,142

3,050,142

Series D Convertible preferred stock, 20,000 shares designated: 7,500 shares issued and
outstanding as of March 31, 2019 and no shares issued and outstanding as of December 31,
2018

750,000

Series E Convertible preferred stock, 714,519 shares designated: 714,519 shares issued, and
564,519 outstanding as of March 31, 2019 and December 31, 2018

1,490,330

1,490,330

Common stock, $0.0001 par value, 50,000,000 shares authorized, 14,822,956 and 14,802,956
shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively

1,482

1,480

Additional paid in capital

43,750,710

43,452,963

Accumulated deficit

(46,562,223)

(44,594,385)

Accumulated other comprehensive income

6,274

5,021

Stockholders’ equity attributable to Parent

2,486,715

3,405,551

Stockholders’ equity attributable to non-controlling interests

6,290,994

6,602,695

Total Stockholders’ Equity

8,777,709

10,008,246

Total Liabilities and Stockholders’ Equity

$

55,460,566

$

55,316,097

 

 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended
March 31,

2019

2018

Cash flows from operating activities:

Net loss

$

(2,261,167)

$

(5,220,791)

Adjustments to reconcile net loss to net cash used in operations:

Depreciation and amortization

129,435

115,752

Amortization of operating lease right of use assets

24,565

Provision for bad debts

15,000

11,734

Share based employee compensation

297,749

77,640

Interest resulting from amortization of financing costs and discounts

109,793

287,512

Equity loss in affiliate

45,413

Interest resulting from warrants valued upon conversion of host debt instruments

3,293,613

Loss resulting from abandonment of MBT site

346,654

Changes in operating assets and liabilities

125,322

(611,400)

Net cash used in operating activities

(1,212,649)

(2,000,527)

Cash flow from investing activities:

Purchases of construction in-progress, equipment, fixtures and vehicles

(2,794,824)

(1,602)

MBT facility development costs incurred

(13,600)

(92,764)

MBT facility development costs refunded

66,000

Net cash used in investing activities

(2,742,424)

(94,366)

Cash flows from financing activities:

Proceeds from issuance of senior secured credit facility and common stock

5,000,000

Repayment of line of credit facility

(2,463,736)

Proceeds from new line of credit facility

1,000,000

Proceeds from the sale of Series D convertible preferred stock units

750,000

Deferred financing costs incurred

(43,941)

(237,187)

Repayments of long-term debt

(2,264)

(2,192)

Proceeds from the subscription of Series B convertible preferred stock and warrants

1,125,000

Related party advance

150,000

Net cash provided by financing activities

853,795

4,421,885

Effect of exchange rate on cash

19,851

(4,657)

Net change in cash (restricted and unrestricted)

(3,081,427)

2,322,335

Cash – beginning of period (restricted and unrestricted)

9,126,380

901,112

Cash – end of period (restricted and unrestricted)

$

6,044,953

$

3,223,447

 

 

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SOURCE BioHiTech Global, Inc.