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BioHiTech Global Reports Second Quarter 2016 Financial Results
Second Quarter 2016 Revenue Increases 40% as Compared to Same Period 2015

CHESTNUT RIDGE, N.Y., Aug. 19, 2016 /PRNewswire/ -- BioHiTech Global, Inc. (OTCQB: BHTG), (the "Company") a green technology company that provides innovative data-driven solutions for food waste disposal, reported financial results for its second quarter and six months ended June 30, 2016.

BioHiTech Global, Inc.

Company Highlights

  • 57% growth in revenue from core waste digester business: Revenue derived from the Company's core organic waste digester business reached $451,281, a 57% increase from the comparable period in 2015. Recurring revenue from rental, service and parts ("RSP") represented 74% of total revenue and increased by 38% compared to Q2 2015.
  • Strong growth in new customer orders: The Company received 25 orders for new waste digester units, including 7 from a Fortune 100 warehouse retailer for certain locations in California, bringing its total order backlog to 99 units at the end of Q2 2016. The Company believes future domestic sales will be aided by the implementation of California's organic food waste laws in April 2016 requiring businesses that generate 8 or more cubic yards of organic waste per week to arrange for organic waste recycling services; in January 2017 the requirement will be lowered to 4 cubic yards.
  • International Sales Expansion: The Company entered into an exclusive multi-year agreement including minimum purchase requirements with its current distribution partner in Singapore and Malaysia. Additionally, the Company completed the first deployments of its digesters into the Australian marketplace to a major equipment distributor in Australia and New Zealand. The Company sees the Australian market as a significant growth opportunity and is currently in negotiations with that distributor to establish a long-term distribution agreement.
  • Alternative Energy Opportunity: In May 2016, the Company announced the formation of its wholly-owned subsidiary, Entsorga North America LLC, and its acquired exclusive distribution rights in 11 Northeastern and Mid-Atlantic states, to a technology solution related to large-scale mechanical biological treatment of municipal or regional waste. We believe this expands the Company's value proposition to include organic and inorganic waste streams and providing enterprise solutions to the residential and municipal marketplaces. Entsorga provides the Company with the opportunity to introduce this proven technology to the United States and to convert food and mixed solid waste into an EPA recognized alternative fuel source.
  • Technology Development: During the quarter the Company initiated the design of its next generation Eco-Safe Digester and released an enhanced version of its BioHiTech Cloud and Cirrus Mobile Application, including waste audit functionality. The Company also started the installation of the BioHiTech Cloud in 16 digesters that pre-dated the Cloud for a restaurant chain customer to enable data collection and analysis of food waste patterns.
  • Tusk Partnership: In July 2016, the Company partnered with Tusk Ventures, the nation's premier political, regulatory, and communications consulting firm. Tusk will provide both immediate and long-term guidance at the local, state and national level, focusing on leveraging BioHiTech's innovative technologies, domestically and across the globe.

 

Second Quarter 2016 Financial Results

Total revenue for Q2 2016 was $451,281, a 40% increase compared to revenue of $321,267 recorded in Q2 2015. Revenue from its core waste digester business increased by 57% in Q2 2016 with recurring RSP revenue increasing by 38% to $331,692 from $241,205 in Q2 2015 as a result of the Company's sales emphasis shift to a rental model leading to a greater number of rented units.  Equipment sales increased by 157% to $119,589 from $46,501. The increase in equipment sales was primarily attributable to an increase in international reseller activity in areas where the rental market is not as well recognized as the retail sales model. 

Gross margin rose to 20% in Q2 2016, a 15 percentage point increase compared to gross margin of 5% in Q2 2015. Gross profit in Q2 2016 totaled $89,967, a 424% increase compared to gross profit of $17,163 in Q2 2015. Gross margin for RSP increased to 23% from 2% in Q2 2015. The increased gross margin is primarily attributable to changes in demand, including contracted services, and improved utilization of fixed costs. 

Net loss for the period totaled $1.72 million or ($0.21) per basic and diluted share, compared to net loss of $722,073 or ($0.10) per basic and diluted share in the second quarter of 2015. The net loss was primarily due to increased operating expenses, which increased to $1.63 million from $617,910 in Q2 2015.  The increase in operating expenses was largely due to the addition of personnel to drive the strategic repositioning of the company and to support geographic expansion, and to a lesser extent by increase R&D spending and professional fees.

Cash at June 30, 2016, increased to $230,119 compared to $39,195 at December 31, 2015.

Further details about the company's results in the second quarter of 2016 are available in its Quarterly Report Form 10-Q, accessible in the investor relations section of the company's website at www.biohitechglobal.com

Management Commentary

"We continue to make progress on multiple fronts as we gear up our operations to position the Company for sustainable future growth," stated Frank E. Celli, CEO of BioHiTech Global.  "The decision to emphasize our Eco-Safe Digester rental model has led to double-digit growth in recurring revenue and triple digit growth in gross profit in the quarter with our order backlog setting the stage for continued recurring revenue growth. We expanded our international distribution footprint to include Australia and New Zealand while strengthening our distribution agreement for parts of Southeast Asia. We continue to invest in technology to help us drive future growth through improved functionality and the addition of numerous value-added services to our clients in this rapidly expanding regulatory climate in the United States. We are excited to have begun working with Tusk Ventures to help us navigate the regulatory environment and have already made promising advances that we expect to report to shareholders in the third quarter of 2016."

Mr. Celli added, "We are also very excited to have added the Entsorga technology to our growing portfolio of disruptive technologies to deal with the growing issue of food waste diversion and zero waste initiatives. We believe this technology is a potential game changer for BioHitech. With Entsorga we now have the ability to expand our solutions to provide economically feasible alternatives for organic and inorganic waste disposal to all generators, including businesses and municipalities. We expect to promote this exciting technology in Q3 along with our Eco-Safe Digesters throughout the United States, providing a 'one stop' solution to our customers and solving the increasing problem of the lack of infrastructure capable of dealing with our country's zero landfill initiatives."

About BioHiTech Global
BioHiTech Global, Inc. (OTCQB: BHTG), the "Company" headquartered in Chestnut Ridge NY, develops and deploys innovative and disruptive waste management technologies. We provide waste management solutions to a global customer base encompassing a full suite of technology-based disposal options capable of having a significant impact on waste generation while providing a true zero landfill environment. With options for both on and off site biological treatment of waste, BioHiTech Global is a leader in zero waste solutions for businesses and municipalities of all sizes. For more information, please visit www.biohitechglobal.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.

(1) Backlog units represents unfilled contractual orders of digesters, which excludes purchase options and announced orders for which definitive contracts have not been executed, for either retail sales or leases in excess of one year. As many elements enter into the timing of delivery, many of which are solely under the control of customers, actual revenues from all backlog units may not be immediately recognized.


Media Contact:

Investor Relations Contact:

BioHiTech Global Contact:

Rubenstein Public Relations

Contact: Kristie Galvani

Tel: 212-843-9205

Kgalvani@rubensteinpr.com

MZ North America

Contact: Ted Haberfield

Tel: 760-755-2716

thaberfield@mzgroup.us

BioHiTech Global, Inc.

Contact: Lisa Giovannielli

Direct: 845-262-1081

lgiovannielli@biohitech.com

 

Financial Summary Tables
The following financial information should be read in conjunction with the condensed financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on August 12, 2016 in its Quarterly Report on Form 10-Q for the period ended June 30, 2016, and the annual financial statements filed by the Company with the Securities and Exchange Commission on March 29, 2016 in its Annual Report on Form 10-K for the year ended December 31, 2015 which can be viewed at www.sec.gov and also in the Investor Relations section of the company's website at www.biohitechglobal.com.

 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (UNAUDITED)




Three Months Ended June 30,


Six Months Ended June 30,





2016



2015


2016



2015



Revenue

















Rental, service and parts


$

331,692



$

241,205


$

637,555



$

454,117



Equipment sales



119,589




46,501



276,454




72,171



Other



-




33,561



-




76,605



Total revenue



451,281




321,267



914,009




602,893



Cost of revenue

















Rental, service and parts



254,617




237,303



505,727




436,428



Equipment sales



106,717




47,245



204,173




96,048



Other



-




19,556



-




34,938



Total Cost of revenue



361,334




304,104



709,900




567,414



Gross profit



89,947




17,163



204,109




35,479



Operating expenses

















Selling, general and administrative



1,159,598




537,884



2,188,248




1,047,336



Research and development



235,164




139,688



419,095




319,478



Professional fees



201,889




129,321



537,734




280,766



Gain on sales of QTAG



-




(227,355)



-




(227,355)



Depreciation and amortization



29,174




38,372



54,948




80,048



Total operating expenses



1,625,825




617,910



3,200,025




1,500,273



Loss from operations



(1,535,878)




(600,747)



(2,995,916)




(1,464,794)



Other (expense) income

















Interest income



(2,713)




-



(3,068)




-



Interest expense



185,566




122,788



334,725




228,162



Change in fair value of warrant liability



-




(1,462)



-




(1,462)



Total other expense



182,853




121,326



331,657




226,700



Net loss



(1,718,731)




(722,073)



(3,327,573)




(1,691,494)



Other comprehensive income

















Foreign currency translation adjustment



(1,506)




-



6,400




-



Comprehensive loss


$

(1,720,237)



$

(722,073)


$

(3,321,173)



$

(1,691,494)




















Net loss per share - basic and diluted


$

(0.21)



$

(0.10)


$

(0.40)



$

(0.24)



Weighted average number of common shares
outstanding - basic and diluted



8,229,712




6,975,000



8,229,712




6,975,000



 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (UNAUDITED)




June 30,

2016



December 31,

2015


Assets









Current Assets









Cash


$

230,119



$

39,195


Accounts and note receivable, net



194,572




316,299


Inventory



682,111




274,304


Prepaid expenses and other current assets



50,668




67,136


Total Current Assets



1,157,470




696,934


Equipment on operating leases, net



962,945




844,494


Equipment, fixtures and vehicles, net



59,563




61,688


Intangible assets, net



316,040




365,038


Other assets



13,500




51,600


Total Assets


$

2,509,518



$

2,019,754











Liabilities and Stockholders' Deficit









Current Liabilities:









Line of credit


$

2,463,736




2,488,753


Accounts payable



1,468,030




1,222,167


Accrued interest payable



182,736




287,888


Accrued expenses



457,164




548,522


Deferred revenue



83,469




48,103


Notes payable



100,000




100,000


Notes payable - related party



100,000




300,000


Advance from related party



178,027




710,000


Customer deposits



163,054




29,657


Long-term debt, current portion



8,391




8,260


Total Current Liabilities



5,204,607




5,743,350


Promissory note - related party



2,500,000




1,710,000


Long term accrued interest



95,667




-


Unsecured subordinated convertible notes, including related parties of
$2,250,000, net of deferred financing costs of $132,391



3,117,609




-


Long-term debt, net of current portion



15,344




19,573


Total Liabilities



10,933,227




7,472,923











Commitments and Contingencies


















Stockholders' Deficit









Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none
issued



-




-


Common stock, $0.0001 par value, 20,000,000 shares authorized; 8,229,712
shares issued and outstanding as of June 30, 2016 and December 31, 2015



823




823


Additional paid in capital



9,231,222




8,880,589


Accumulated deficit



(17,654,353)




(14,326,780)


Accumulated other comprehensive loss



(1,401)




(7,801)


Total Stockholders' Deficit



(8,423,709)




(5,453,169)


Total Liabilities and Stockholders' Deficit


$

2,509,518




2,019,754


 

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (UNAUDITED)




For the six months ended June 30,




2016



2015


Cash flows from operating activities:









Net loss:


$

(3,327,573)



$

(1,691,494)


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









Depreciation and amortization



205,268




183,937


Provision for (recovery of) bad debts



61,743




(17,743)


Gain on sale of QTAG



-




(227,355)


Change in fair value of warrant liability



-




(1,462)


Stock based compensation



350,632




-


Changes in operating assets and liabilities



(269,317)




130,846


Net cash (used in) provided by operations



(2,979,247)




(1,623,271)











Cash flow from investing activities:









Proceeds from sale of QTAG



-




75,000


Capitalization of website development costs



-




4,273


Purchases of equipment, fixtures and vehicles



(3,825)




(47,491)


Net cash (used in) provided by investing activities



(3,825)




31,782











Cash flows from financing activities:









Net change in line of credit



(25,017)




14,033


Proceeds from long-term debt



-




21,506


Proceeds from convertible notes



3,250,000




-


Convertible notes deferred financing costs



(132,391)




-


Repayments of long-term debt



(4,097)




-


Related party:









(Repayment) increases of advances



(531,973)




355,000


Proceeds from promissory notes



790,000




-


Proceeds from convertible notes



-




1,200,000


Repayment of promissory notes



(200,000)




-


Net cash provided by financing activities



3,146,522




1,590,539


Effect of exchange rate on cash



27,473




-


Net change in cash



190,923




(950)


Cash - beginning of period



39,196




40,207


Cash - end of period


$

230,119



$

39,257


 

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SOURCE BioHiTech Global, Inc.


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