EXHIBIT 99.1
Contact: Robert A. Lerman
860-683-2005
NEWS RELEASE OTCBB: TDYT
August 11, 2006
THERMODYNETICS' REVENUES INCREASE BY 25% TO A RECORD $5.7 MILLION
FOR ANY 3 MONTH PERIOD
WINDSOR, CT - August 11, 2006 - Thermodynetics, Inc. (TDYT: OTCBB)
The Company's sole operating subsidiary, independently managed Turbotec
Products, Plc (Turbotec), has generated record revenues for any 3-month period
in its 34-year history. Net sales for Turbotec for the three months ended June
30, 2006 increased by $1,147,000, or 25%, over the prior year period, to
$5,680,000. For the fiscal year ended March 2006, year-to-year revenues
increased 20%. Turbotec is primarily engaged in the design and manufacture of
energy saving heat transfer and heat reclamation products.
The increase in sales is due largely to increasing acceptance for our
energy-saving products in the housing market augmented by marine air
conditioning applications and commercial/industrial buildings' HVAC needs.
Although there has been some easing in residential construction during the past
few months, the overall demand for Turbotec's products has remained at
consistently higher levels than prior years. Further, Turbotec's special purpose
enhanced surface titanium tubing is being favorably received by swimming pool
and spa heat pump manufacturers who are ordering at increasing rates; the
Company is also beginning to experience interest from other market segments
needing extremely durable metal heat exchangers.
Despite the significant increase in metal costs over the prior year,
Turbotec has been able to maintain its overall gross profit percentage by
increasing efficiencies on the production floor through the implementation of
various cost reduction and quality directed programs such as lean manufacturing
and six sigma. A formal program has been established to train managerial and
supervisory employees in these techniques, which are expected to generate
savings in future periods.
Personnel were added in customer service, product engineering and other
support functions increasing selling, general and administrative expenses.
Further investments in marketing and engineering are planned for the balance of
the 2007 fiscal year as Turbotec continues to expand its product development in
heat reclamation and titanium based heat exchangers.
In May 2006 the Company completed the sale of a minority interest in
Turbotec (resulting in a net gain of $2,666,000 on the sale) in the United
Kingdom through a public offering of Turbotec's securities on the London Stock
Exchange's AIM market. Interest expense decreased by $37,000 in the quarter as
approximately $4.6 million of the proceeds from the London offering was used to
retire term and revolving debt.
Income from continuing operations for the current year was $2,751,000
compared to $153,000 for the prior year period. Excluding the gain from the sale
of equity in Turbotec and the minority interest, income before income taxes
increased by $76,000 or 39% over the prior year. The operations of a former
manufacturing subsidiary, Vulcan Industries, Inc., has been reflected as a
discontinued operation in the financial statements.
At June 30, 2006 consolidated working capital was $4,630,000 (including
$1.8 million in cash) compared to a negative $1,676,000 at March 31, 2006. Cash
reserves currently exist at both companies and Turbotec has retained its
revolving line of credit with more than $3 million of availability. Term debt
financing to fund capital expenditure programs is to be explored during the
coming months. The refinancing of the mortgage on the Company's primary facility
is currently being investigated and should be consummated during the next few
months.
ABOUT THERMODYNETICS
Through its subsidiary Turbotec Products, Plc, Thermodynetics is a manufacturer
of high performance, high quality heat exchangers, fabricated metal components
and flexible connector products for heat transfer, transportation, and plumbing
applications. The Company markets its tubing products to customers in the space
conditioning, refrigeration, automotive, biomedical, plumbing, appliance, water
heating and aerospace industries. Turbotec is quoted on AIM (a market operated
by the London Stock Exchange) under the symbol TRBO. Thermodynetics also owns a
nominal interest in a private placecountry-regionBelgium company that is engaged
in the nutraceutical industry that provides natural, bioactive chemical
compounds that have health promoting, disease preventing or medicinal
properties.
Figures in $000's, Except for Per Share Data
Three Months Ended June 30,
2006 2005
---- ----
Net Sales $ 5,680 $ 4,533
Operating Income $ 395 $ 310
Gain on placeCitySale of Stock of Subsidiary $ 2,666 $ 0
Minority Interest in Subsidiary $ 42 $ 0
Income from Continuing Operations
Before Income Taxes $ 2,893 $ 193
Provision for Income Taxes $ 142 $ 40
Income From Continuing Operations $ 2,751 $ 153
Income (Loss) from Discontinued
Operations, Net of Tax $ (9) $ (96)
Net Income $ 2,742 $ 57
Weighted Shares Outstanding-
Basic and Diluted 4,002,308 3,969,108
Earnings (Loss) Per Share-
Basic and Diluted
From Continuing Operations $ .69 $ .04
From Discontinued Operations $ .00 $ (.03)
Total Earnings Per Share $ .69 $ .01
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements regarding the Company's
business prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause their actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: the ability
to successfully and timely develop and finance new projects, the impact of
competition on revenues, changes in unit prices, and supply and demand for the
product lines in the markets served.
When used, words such as "believes," "anticipates," "expects," "continue",
"may", "plan", "predict", "should", "will", "intends" and similar expressions
are intended to identify forward-looking statements, but are not the exclusive
means of identifying forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this report. The Company undertakes no obligation to revise any
forward-looking statements in order to reflect events or circumstances that may
subsequently arise. Readers are urged to carefully review and consider the
various disclosures made in this report, news releases, and other reports filed
with the Securities and Exchange Commission that attempt to advise interested
parties of the risks and factors that may affect their respective businesses.