BioHiTech Global, Inc. (NASDAQ: BHTG), a technology and services company that provides cost-effective and sustainable waste management solutions, reported financial results on August 14, 2020 for the second quarter of 2020 ended June 30, 2020.
Company Highlights
Entered Into an Agreement to Distribute Altapure High-Level Disinfectant Technology That Can Effectively Kill Bacteria, Fungus, C.Difficile Spores, and Viruses Such as Coronavirus 2 (SARS-CoV-2) – The Company entered into an agreement with Altapure, LLC ("Altapure"), a technology developer and manufacturer of ultrasonic based disinfecting products, to distribute its patented line of environmentally-friendly, high-level disinfecting products. Altapure's newest product, the AP-4™, was launched in 2017, and is an enhanced, automated and touchless high-level disinfection sub-micron aerosol system providing a safe process and rapid kill of spores, viruses, and vegetative bacteria, such as but not limited to: COVID-19, Acinetobacter baumannii, Pseudomonas aeruginosa, VRE, MRSA, Bacillus atrophaeus, Geobacillus stearothermophilus, Polio virus, C. auris and Clostridium difficile (C. difficile).
Partnered with Crestmark and US Equity Funding to Offer Customers Equipment Lease Financing for the Altapure Products and Began Live Product Demonstrations of the Altapure-AP4 – The Company entered into a financing arrangement to offer lease financing through Crestmark, a leading business to business lender, and US Equity Funding, a full service commercial financing firm, for potential customers of its Altapure high-level disinfection technology distribution business. The Company began conducting product demonstrations of the Altapure-AP4 high-level disinfection system in June of 2020 as it seeks to actively ramp up distribution efforts for this new product category.
Achieved 21% Quarter over Quarter Revenue Growth Despite the Business Disruptions Caused by the COVID-19 Pandemic – Revenue from the Company's HEBioT business increased significantly quarter over quarter as the Company continued to increase utilization rates at its Martinsburg resource recovery facility. That increase in revenue was partially offset by a slowdown in its food waste digester business largely related to the COVID-19 pandemic and a decline in consulting revenue as the Company transitioned from providing those services.
Subsequent to the End of the Second Quarter
Received Purchase Orders from Carnival Cruise Lines as it Reinitiated the Installation Program of the Company's Revolution Series Food Waste Digesters on its Ships in Preparation for the Resumption of Cruising – The Company received purchase orders from Carnival Cruise Lines ("Carnival") valued at approximately $1 million.The purchase orders are part of a previously announced purchase contract between the two companies with an estimated value of up to $14 million.
Completed an $8.2 Million Underwritten Offering of Common Stock – The Company completed the sale of $8.2 million of common stock at a price of $1.81 per share in July. The Company intends to use the capital to support operations and the growth of its environmentally responsible technology solutions businesses.
"We continue to position BioHiTech for growth as we navigate through the uncertain business environment arising from the COVID-19 pandemic," stated Frank E. Celli, CEO of BioHiTech. "Our facility in Martinsburg achieved significant growth both sequentially and year over year and our digester business is poised for a substantial rebound in the second half of 2020 as Carnival has resumed its installation program. We have also expanded our business into high-level disinfection through our distribution agreement with Altapure and are pleased with the progress we are making in sales demonstrations and discussions for potential product deployments. We are confident that our new lease finance arrangement for the Altapure-AP4 machine with Crestmark and USA Funding will serve to enhance those efforts. While we still face challenges related to this uncertain environment that may intermittently affect our business, the recent infusion of equity capital has placed us on solid financial ground moving forward. We are also continuing to see improving business activity in our digester business as companies emerge from COVID-related business interruptions. As we move through the second half of 2020, we are focused on maintaining lean operations, growing our revenue streams, and seeking to opportunistically grow our business. We are confident that this strategy will enable us to achieve significant long-term value for our stockholders."
Financial Highlights for Q2 2020
Revenues: Total revenue in the second quarter of 2020 was $1.3 million, an increase of 21.2% compared to revenue from $1.1 million in the second quarter of 2019. The increase in revenue was due to revenue of $892,889 at the Company's Martinsburg HEBioT facility, a more than threefold year-over-year increase in compared to revenue of $277,041 in the second quarter of 2019 when the facility initiated the commissioning process. This growth HEBioT revenue was partially offset by decreases in digester rental, service and maintenance resulting from lower service and maintenance revenue, digester equipment sales and management advisory fees as the Company reduces the level of support provided under the agreement in order to maintain adequate focus on the Company's core services.
Operating Expenses: Operating expenses in the second quarter of 2020 increased by $662,298 or 22.2% to $3,639,178, mainly due to a $526,731 increase in HEBioT facility costs related to the increase in activity at the facility. Professional fees also increased by $117,790, or 43.2%, to $390,663 for the second quarter of 2020 as compared to the second quarter of 2019, primarily related to fund raising and strategic activities.
Loss from Operations: The Company recorded an operating loss of $(2,365,246) in the second quarter of 2020 compared to an operating loss of $(1,925,668) in the second quarter of 2019. The Company recorded a net loss attributable to parent of $(2,664,881) in the second quarter of 2020 compared to ($2,068,641) in the second quarter of 2019. Net loss per share in the second quarter of 2020 was $(0.16) on 17.4 million weighted average shares outstanding compared to a net loss of $(0.15) per share on 14.9 million weighted average shares outstanding.
Select Balance Sheet Items: Prior to the completion of its $8.2 million common equity offering in July of 2020 and the underwriter's $1.1 million exercise of its overallotment option in August of 2020, the Company had unrestricted cash of $342,182 with total stockholders equity of $2.8 million as of June 30, 2020 compared to unrestricted cash of $1,847,526 and total stockholders equity of $7.4 million as of December 31, 2019
"With the onset of the COVID-19 pandemic we have taken extensive measures to manage cash including reducing executive cash compensation and temporarily reducing head count, without sacrificing the ability to forward our business opportunities," said Brian C. Essman, CFO of BioHiTech. "Now, having completed our financing, and with Carnival resuming its digester deployment coupled with the opportunities presented by our Altapure distribution business, we believe we are poised to forge a new growth track as we head toward 2021. We continue to make progress at our Martinsburg HEBioT facility despite certain business dislocations related to the COVID-19 pandemic and we are confident in our ability to reach planned capacity in the future. With our newly strengthened balance sheet, we believe we are in the best position in our corporate history to capitalize on the opportunities in front of us for the benefit of our company and its stockholders."
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.
