Ex 99.1
Contact: Robert A. Lerman
860-683-2005
NEWS RELEASE OTCBB: TDYT
February 13, 2007
THERMODYNETICS REPORTS RECORD SALES AND A 109% INCREASE IN INCOME FROM
CONTINUING OPERATIONS IN THE 3 MONTHS ENDED DECEMBER 31, 2006
WINDSOR, CT - Tuesday, February 13, 2007 - Thermodynetics, Inc. (TDYT: OTCBB)
The Company generated record net sales of $5,767,000 and $17,312,000
for the three and nine month periods ended December 31, 2006 representing a 27%
increase over both prior year periods. Comparing the periods ended December 31,
2006 and 2005, the three month 27% revenue increase generated a 17% increase in
gross profit. For the nine months, these comparisons yielded a 27% revenue
increase and a 9% gross profit increase.
Income from continuing operations after income tax provisions for the
current quarter was $370,000 compared to $177,000 for the prior year period (a
109% increase) and for the nine month period was $534,000 compared to $515,000
(a 4% increase) for the prior year (excluding the gain on the sale of Turbotec
equity in May 2006).
The majority of the revenue increase resulted from the pass through of
material cost increases to customers while unit shipments also increased
slightly from the prior year, coupled with a shift in product mix towards
larger, higher priced coils. The overall demand for condenser/evaporator coils
has remained high despite the weakening in residential construction. Concerns
over rising costs and the future availability of energy sources have helped to
create market opportunities for "green" heating and cooling products, such as
geothermal technology, and other high efficiency systems that use the Company's
heat exchangers. Enhanced surface titanium tubing for the swimming pool heater
market continues to exhibit overall growth.
Cost of sales weakened to 78% and 79% of net sales in the current
quarter and nine months of this fiscal year compared to 76% and 75% in fiscal
2006. The cost of copper rose sharply between March and May 2006, peaking above
$4.00 per pound, retreating to close at $2.85 per pound at the end of December
2006; the cost of nickel continues its rise to record levels. The net impact has
been a significant reduction in gross margin from the prior year.
The increase in metal prices resulted in higher inventory values as
higher priced tubing was purchased to satisfy customer demand and the shift to
larger capacity coils requiring more expensive tubing; increased quantities of
titanium tubing (principally used in swimming pool heater applications) and
overall higher levels of coil and surface enhanced tubing production all
contributed to the increase in inventory levels. The Company has recently
instituted price increases and pricing formula changes which is expected to
improve gross profit margins.
Selling, general and administrative costs increased because of added
corporate governance costs and related expenses incurred as a result of the
public offering of Turbotec's securities in London. The expansion of the sales
base was augmented by staff additions in sales and engineering; the full effect
of these expenses are reflected in the current fiscal year results.
In May 2006 the Company completed the sale of a 43.68% interest in its
Turbotec subsidiary through a public offering raising a net of $6.8 million.
In November 2006, the Company settled a dispute resulting in
extinguishing notes
payable and accrued interest aggregating $606,000 relating to the acquisition of
Vulcan.
In December 2006 the Company refinanced a mortgage for $900,000 and
also received a two year revolving line of credit with a maximum availability of
$1,100,000. A separate line of credit of $500,000 to fund capital expenditure
programs has also been established for Turbotec. The Company had a net
consolidated cash position of $946,000 at December 31, 2006 over and above the
credit facilities.
Figures in $000's, Except for Per Share Data
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
---- ---- ---- ----
Net Sales $ 5,767 $ 4,531 $ 17,312 $ 13,596
Operating Income $ 208 $ 297 $ 874 $ 1,020
Income from Continuing
Operations Before Income Taxes $ 710 $ 177 $ 3,755 $ 670
Provision for Income Taxes $ 340 $ -0- $ 555 $ 155
Income From Continuing Operations $ 370 $ 177 $ 3,200 $ 515
Income (Loss) from Discontinued
Operations, Net of Tax $ 0 $ (142) $ (9) $ (1,211)
Net Income (Loss) $ 370 $ 35 $ 3,191 $ (696)
Weighted Shares Outstanding-
Basic and Diluted 4,027,361 3,983,782 4,023,261 3,978,873
Earnings (Loss) Per Share-
Basic and diluted
From Continuing Operations $ .09 $ .04 $ .79 $ .13
From Discontinued Operations $ 0 $ (.0 $ 0 $ (.30)
Total Earnings (Loss) Per Share $ .09 $ .01 $ .79 $ (.17)
ABOUT THERMODYNETICS
Through its Turbotec Products, Plc subsidiary, Thermodynetics
manufactures high performance, high quality heat exchangers, fabricated metal
components and flexible connector products for heat transfer and transportation
applications. The Company serves customers in the space conditioning,
refrigeration, automotive, biomedical, plumbing, appliance, water heating and
aerospace industries. Turbotec is quoted on the AIM market in London under the
symbol TRBO. Thermodynetics also owns a nominal interest in a private Belgium
company that is engaged in the nutraceutical industry by providing natural,
bioactive chemical compounds that have health promoting, disease preventing or
medicinal properties. A small investment was recently made in a US company that
offers a specialized approach to the RFID (radio frequency identification)
industry, with an orientation to medical facilities. The Company continues to
seek acquisition candidates.
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements regarding the
Company, its business prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause the Company's 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 Company's ability to successfully and timely develop and finance new
projects, the impact of competition on the Company's subsidiary's revenues,
changes in unit prices, and supply and demand for the Company's tubing 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 by the Company 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 the Company's business.