BHTG - Earnings call transcript Q3 2018 | Renovare Environmental, Inc.

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Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to the BioHiTech Global Third Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

are call that the prepared during contain statements the to I remarks turn and forward-looking listeners risks remind the that I over company, to want may uncertainties. Before to subject call management's Management your today. may to questions make statements response forward-looking additional in contained of company under XXXX. statements the Private Securities Harbor for the Therefore, the Safe Litigation claims forward-looking protection in Reform Act uncertainties from refer of may differ results the and you this more results and we discussed with Actual therefore filing discussions to detailed risks the in company's today SEC.

This provided by the no In XXth, of include projections market these XXXX webcast as addition, the change. November to obligations any company's Executive available and call to certain future today BioHiTech. in assumes performance President Investor represented as like projections in management and on update the would company are Galterio, the page. future the Please estimate to ahead turn conditions Galterio. the Richard www.bihitech.com Vice call Relations' Mr. at I now Mr. of go to financial over information

Richard Galterio

Global Difficulty] results call. XXXX quarter [Technical conference financial third BioHiTech

of will myself, providing to of overview more business XXXX. detailed an into call our the Officer. turn Brian over of we followed progress like Frank growth the Brian from to Financial E. the to the then provide remainder a by our off our addition Executive and overview and Officer; discussion of results strategy In us our Essman, year Frank, CEO for financial and our today Chief Essman, start to quarter, third I'd a Chief with brief by are Celli, in our

in year-over-year number in digester rental business direct overall food deployed. of revenue and During the third waste we quarter, growth, our units sales, seeing revenue, revenue, improving of XX.X% metrics achieved

management our generating margin across a Gross with this aware dollars businesses by aspects We of higher to margin services from Medal, stream as helped you our are revenue us revenue revenue all XXX%. year. margin gross to also Gold increase improved is probably growth which agreement new growth related benefited this and to

decrease us also last about enabled that a quarter. $XXX,XXX improve had net We results in our expenses by compared to year's operating operating third to

even the improve, growth While our we we as becoming anticipate performance future to excited digester business well about continues in steadily are business. the HEBioT of commercialization more our financial as our near-term

the efforts in We has for a this grocery, cycle, generated will on sales our our opportunities scale business sales in in have longer have led funnel, larger our call. focused of opportunities and later which sales digester recent we healthcare. size And to hospitality, Frank in increase significant while this discuss

We that also will third several build value the our XXXX milestones of key quarter for stockholders. us in help achieved

into HEBioT facility, entered in Virginia. Martinsburg, in XX,XXX with foot we recovery a three facility over to our square letter resource nation's West increase stake of First first excuse the intent -- a me located

in up As into that know, municipal XX% Northeast fuel burning landfill usage. that development you in to a rights approximately process reduction of an patented clean EPA-approved converts results this in XX% solid more probably we to exclusive or waste HEBioT alternative control overall the

in we QX to that XXXX mentioned a As last to expect result in call, our these in being complete definitive agreement will consolidate our we operations in financials. able our

an revenue of Second, area. southern foot land square New $XX generate plant we Rensselaer, facility of million in annual expected for QX to roadmap industrial the the in completion facility recently margin with received XX,XXX of of local approximately build high to The City York XXXX. anticipated permits is in acres XX

business Brewers. last, Delaware reasons partnerships as why win in -- offtake Initiative of this and add a North, environmental of in one validation one Sustainability our And the a revenue tailored about helps of billion for meet privately-held we're League me Concession. to state now the food later business. steady of companies revolution for excuse to award That installation HEBioT our and project needed at the to partnered to approval, largest is seed coming annual venue call. like the in a further products excited North its enabled Park, with the Major in In provide set business, of While with value hospitality This credibility the into Award in in roadmap years, Excellence found customers, there led Milwaukee stage the go that in are in in of we analysis our needs and the reducing final several of of impact to lifecycle digester which compared using feedstock to home composting the COX landfilling Delaware revenue food the digester business Frank independent resulted of the food our we conducted technology, food debt the the equivalents. that will waste, facility additional being accordance our with complete trucking standards. study world Baseball's solutions ISO University and to amount compared to which to and that service with Miller waste waste compost released double ramp our an The service and Delaware hospitality fine and over technology agreements, of digester steps food $X companies a financing, when installed from disposal including the our future including

turn us Brian equivalents. independent our food to trucking improve Chief landfills over financial results. Financial XXX% backs I helps COX effort This time, awareness, our directly helps call waste significantly. data and our like At discuss Officer While this unprocessed Essman, our marketing to claims, to more -- yielded to the would

Brian Essman

revenue a in achieved XXXX increase in sequentially. our direct Thank rental third growth Quarter-over-quarter good quarter overseas of strong for revenue has XXXX $XXX,XXX total third XX.X% you, to distribution digester compared analytics million and our approximately the the quarter increase Gold revenue network. from afternoon revenues including and new up of our everyone. and digester a sales Rich recurring growth from driven of as to and in We well of $XXX,XXX XX.X% data as as with XX.X% services $X.X management Medal platform

related to revenue the to lengthened -- shown our focusing cycle. has has business grown on consistent shift While digester sales larger growth, opportunities our

as As we our into this by percentage $XXX,XXX Medal incremental profit Gross substantially as percentage the cost; field. reach primary which quarter remain confident for resulted of our from existing which has rental multiple in margin digester point has gross in a of the revenue, increased team, third to well margin The Gold generating the a not and XX.X%. increase points include addition greater Rich of gross increase XXXX mentioned, a through our benefit XX.X drivers reached XXXX. our units revenue move unit lead gross and of increasing management growth XX services in that profit opportunities business, we we grown base XXX.X% to will by the management with from in pipeline to service significant XX.X% as for of the leveraging

expect and remain only We equipment from and our as conduct in XX% range margins maintenance continue of important internationally models percentage the is smarter rose sales are margins typically note require in common. It eight we as where mainly that XX% to to increase installed less our markets, certain point to not leasing line reselling direct digesters XX.X%. an to sales in which to revenue new base grows

principally expense modestly year's decreased by to decreasing decrease operating to expenses stock-based a related operating quarter $X.X million. $XXX,XXX by $XXX,XXX quarter, expenses, expenses mainly about to in by also. X% in fees; due personnel marketing last increase decrease in in $XXX,XXX offset and compared A was $XX,XXX professional The to sales compensation. Third partly

We equipment expect expenses maintenance software completed to cash our proven decline as extremely have to based reduce of during have as been projects we associated our in Revolution and be reliable. XXXX the first personnel quarter as largely headcount Digester development

same from Our loss by when period decreased million compared $X.X XX% in to about the XXXX. operations to

Now balance to sheet. our

in of million Frank additional our significant we’re debt $X.X now --for the XXXX. the was our of the will anticipated as deficit the into with at end, quarter second equity currently facility our conversion negative equity mandatory discuss well to XXst, to December as a million cash of as further first we a $XX stock to strategy of balance quarter. our increase upon negotiations debt shareholders balance digester to compares and increased cash I million in into growth. Our $XXX,XXX million. over in sheet to during conversion support the of XXXX. into we growth with approximately achieving a of leasing call end result of America to Subsequent common improvement NASDAQ April, $X.X facility with The This of as up $XXX,XXX shareholders' to $X move forward quarters listing our turn

Frank Celli

recognize but done reach that in this quarter milestones growth Thank achieved much for the there management that you, for work force is to waste stockholders. our XXXX, in to goal will We've order important a also significant be to build in industry stage some becoming of Brian. change that of set value we our needs

Gold our of insight the and and plan everyone with growth significantly So Medal some Technologies. business, to leverage as give our Board opportunity to action like to HEBioT I’d of our commercialize business our improve digester

the with digester business. start me Let

in the and First, we larger plus as quarters. coming the to enter learn Brian we funnel ability increased opportunities XXXX. on several and XX has we both of We’ve units, sales Rich believe opportunities focused our as to believe mentioned, into meaningfully have XXX we

examples ecosafe units deployed installations Series chain opportunity a for its hopeful QX we're for expanding the chain. national the already include, and begin of has testing in unit where Digesters national rollout full more digesters unit grocery system XXX our of XX A several our and Revolution for Some grocery progressive large in that northeast with opportunity XXXX, been a a for XXXX. another we're to XX that grocery rollout months our than very has XX beginning within digesters negotiating spring in

and the our to support While that we unit we're in Brian facility current of potential further opportunities alone gives with the our we've would contracts, you additional to idea so these anticipated In growth, support on expand three expanded double excited. portfolio almost have were just our to least looking why an in these closed of Bank investment facility growth which units conjunction as order of Comerica mentioned with size not we deployments.

of Technology. traditional a quarter with offering management bundled we Additionally, Medal waste services we mentioned BioHiTech service program provide with our last combined Gold where

Our initial grocery commercialization additional capitalize testing Beginning including HEBioT mentioned. customer the this our a in efforts unit technology follow about believe business, University Gold chain we're XXXX, market Martinsburg. to soon regional bundled companies as is of platform market test to help we and the that yielded others we begin quarters. to intend in suit will XX of waste facility at dedicated management Medal a also previously the inquiries up services other has this on from regarding waste number inbound and With growth. power two to beginning market excited showroom facilities of combined serve companies in the received will other a believe near-term drive very We've offering this opportunity which we the that management coming sales professionals building future. This also as the will us for Temple and will to

the quarter. Virginia facility touring West from inquiries media already last lead anticipated interested opening number about reports talked fact, is In getting attention and plastics recently State municipalities ban about as well from and parties. has delegation to a as the other the of to a China begun press facility Senate its This we with

The the close explore to more to enable the also Philadelphia in tipping fees and that larger which the and sighting facility plan Medal We've milestone years. operations in in with we us to hand. has QX meaningful our revenue coming and financials facility coming the for operations permit a in facility than in the another in Additionally, is on positions of permits Martinsburg in on solid profitable due waste where be Gold meaningful region. a the will growth higher provide parcel to larger the believe acquired has begun already us significant in years. for ownership stake Receiving continued Rensselaer consolidate condition us our will EBITDA

operations As ambitious require is financial which and and work planning, investment. combination will project can see, our through strategic plans financing you business, our have and In of we a ownership to majority partnerships. HEBioT in growth debt goal have facilities

value We potential as grow for will we're for enhance in plant for well maximize our that investments end, roadmap. as strategy ability stockholders. strategic go-forward Towards Rensselaer our believe this to our and negotiations

BioHiTech partner earlier. for more As our Comerica grows, help been which great has business gain to mentioned and support, digester the for line Gold the to a build growth cost with reductions both a improve continued our our with can Kinderhook strategic capital, flexibility along to foundation financial margin solid Medal we will of Brian believe Industries. bottom gross with expect as as dollars coupled has senior lender we plans in Capital, years their Michaelson come. for We

fluid As the becomes to are clearer, situations these weeks. business coming where we as the more expect as in many of the term, in in And very provide our see provide information we'll near we insight picture XXXX. additional to

to I to company term Before company. each I now I'd position investors in Operator, prepared you the concludes portion to this over employees of our for their can growth. like every open like thank for dollars long call our helping sustainable would for one to and a also questions, call entrusting our questions. remarks investment your their to in dedication the turn and us of thank the our

Operator

Group. is proceed Instructions] Our question first with Patrick your with Murphy questions. [Operator Maxim Please from

Patrick Murphy

on Congrats guys. Hey the quarter.

model I Medal this solution. spoke a know service opportunity a hold, to about providing guys Gold rental you into bit question taking guess full the I by First expand

you Just it opportunity it curious an how large how you and moving opportunity as? of view how approach to are you forward view going now and that

Frank Celli

most Hey is sustainable we look joining. the for for mean, Patrick, Frank. I cost disposal. how believe our organics digesters that as Yes, you. well Thanks that solution effective This as are are

pretty see has of a that moving far. would So, as for to kind kitchen so use ability as services continue Gold sort direction, bundled regulations I Medal our we say to test of been that successful in

a say first or our University. and was our -- disposal. to that I traditional waste for what selling means have are marketing that Temple mentioned, value trophy cases offer first over many savings opposed above we’re under customer customers to to as should to customer opposed now XX% able services I team bundled costs their using technology In dedicated as proposition. up towards by We like traditional So, as

bundled in might about qualify So, Medal this the we which we're represents think that suburban going about XXXX. has do great of larger potential Gold great geography, of what it the some so the waste representative marketplace as to -- nation. sample X,XXX Philadelphia in for traction small customers in to could itself identified think a a get small us we've we customers for of throughout X,XXX service, very national companies kind

inside so We Gold waste great a growth but just XXXX. Gold more think cookie size, opportunity great just growth the that based should Gold is it's an the some Medal for that prove not what the providers, for the do. we some base customer thousands as So cutter for these a as of portfolio providers but portfolio, it's example current regional waste catalyst in of on Medals the in of penetration other Medal larger and think not opportunity in can national

Richard Galterio

Yes, I this think -- Rich. is

we provider well We and not that's to -- customer want our that waste benefit onto industry waste to management a add as embedded traditional the technology waste technology will the the management into how become the model. our to is Just as sort the utilizing company, overall, ultimate want environment. goal to of show

inside not to So, to the as sort we customers, a represents can do of companies to white make money. show only Medal think paper other itself, that their more waste how how also it, but that how management and we benefit Gold opportunity serves

goal. ultimate our really that's So,

Patrick Murphy

a very Virginia quarter. the update helpful. That's sounds you. the West Thank right. facility, positive All On it like to from

into about investment the You there think update quarter. that increase should fourth look look in and like you -- to How your XXXX? moving we in

Richard Galterio

think terms it's to do? In we going what of

Patrick Murphy

guys to up what's and revenue the timeline opportunity Yes, get it for like like of is running? and that you what sort

Richard Galterio

it's in that revenue said XXXX. publicly we opportunity million think We've a $X already

like throw facility additional going guys be we're acquisition margins XX%. EBITDA is stake, expect is it'll us certainly looking the Europe, that optimized, a million. new of we'll is until we as target that as becomes it the looking but dependent progress the still little little provide to -- around more complete the in that's -- but we when definitely we we'll this this Frank unfold, the That's expect at that as the a clearer the will bit and as of execute said, facility, that other first $X picture bottom-line, -- we are working commissioning and do will around flow coming as on it to things Now detail through operated this we now, We're but that these we weeks hopefully agreements. that definitive through the country, certainly in this what down -- when on

Patrick Murphy

solid then And anything what quarter, one. the to in about you. level unique of Thank due this Very one and one-time advisory this forward? nature going the during expect final or should for management was kind Okay. we fees quarter

Brian Essman

of That's this be Brian -- every a quarter. majority standing -- fees The the will were the is agreement. majority management month, it every

we individual will Medal acquisitive given and anticipate In addition grow. and to project likewise the in growth those fees their I continue that and fees nature, potentially to have Gold

Patrick Murphy

very you Thank much guys.

Richard Galterio

you. Thank

Operator

Our next question. your question proceed Eric [Indiscernible] from with Investor. is Please

Unidentified Analyst

Thank -- huge against on the the national especially, that like One, of has feel it I'd to least a parent the ORCA fairly you. market you at you company perception Couple to my seems job digester totally sales like good the Avendra and with the side, with research national regard agreements maybe and that done bringing signing or insight, side and/or of how questions. have of competition believe on a others who your would the that global up stack I like Frank aware BioHiTech to sales you most I'm assess want performance chains with buying caller Aramark the Aramark, heard well know of for hotel your anything national compare Aramark other of agent presence. Because I the Hyatt and be side when or Marriott to those? you as the don't and would Avendra for having on sure scale of I've just how are BioHiTech? is the with as as And with

Frank Celli

this Yes, Frank is speaking.

So, have well. those yes, those some we take as because do agreements sales caution of actually in place national in

that agreement agreements. we've that Avendra announced in account shows under had when you we doesn't past, a agreement with history an meaningful, execution Avendra, with necessarily which picking of which because can mean they're not place Some our on others that sales we've while those national have felt because Avendra haven't I'm we place be any there'll the in in

up to Hilton get meaningful sales about. something actual me is in don't excited an not agreements we say, So, announcing have that's place have where most International. Hilton probably that national probably do amounting with that I in one is We would mind end the for comes to we super agreement place, do some

Got deployments, We some we call don't master amount with sales actual with in other some the we day; was super pull guys used meaningless. about them. but come if them of some with frankly, excited it agreements quite you the end also trigger sales because the Avendra agreement We say and and would would until in get didn't services property-by-property, and agreements retailers, they to, place have large an at hey to Yahoo!

would marketplace. I in them. far the go, competitors What So, I of is won't we that the our say are as as any knock leader

the We have marketplace. leader always the been in

data any to have our what believe and any patents in that Our are that understand level we violation potentially the claiming of is technology far analytics competitors and are I to very one we important in be of that think of to is place. is that of existing superior things have

of unique. us is from we've the have that on you stainless do day microorganisms hours day our with better technology. is because not and patented of something digester that out efficient? end of at box? who the could and countless all analytics frankly, some a imagine cocktail what over our a Whose data pleased developing that differentiates steel copycats is component dollars can argue is there concept and the that not competitors really Quite spent long a is the of exactly and the concept So, We more component. millions we're But all we really as builds

end the intellectual process of we property we'll ourselves fit. differentiated our We with technology. the patented So, see own day, a at protect our and where do we

Unidentified Analyst

any being you're if that against said, potential vendors litigation they're these do have So unfriendly? you saying

Frank Celli

litigation There's in no place now. right current

Richard Galterio

that and -- to announcement of actually We about our talked some first call. patents not received an of about one we just that I -- summer this some the those we in think made

for looking not have not anything at lines we company We do that's to business done great value is not itself. believe We together to after itself. anyone; we're the that a we out traction getting the believe point speaks say that and believe we litigious that equipment how We in a won't our that's for going operating proposal we're have speaking yet. That's really working other make time. anything. be We're this

We So, into going any believe We some to product our believe sure competition we in makes patented have a is be model there's we believe better. that our business. model is advantages evolving and sense.

how that's moving So, forward. are we

Unidentified Analyst

CEOs I they with, response. much thing of are ORCA say, agreeing counter product exact pretty and leading. totally that saying is [Indiscernible] and appreciate the their same would the have with let's I to the of

so of total relapse technology the -- or say a from the say the global standpoint leader, not, numbers technology a referring a I standpoint, are I you global you a in be units leader huge number I'm when and I'm asking So, just you're in three would not are from claiming you you operation? a but to all number, average, number saying to that guess you're have from of

Richard Galterio

only aren't transparency we in some business. reporting we will a stand that do technology to leader to you tell from it's I sure is have most where some a we to makes advantages sure or think a that's in what of is argument place a something their little else me believe don't we're generally competitors a -- not into if I have disconcerting there's in the too. make the deal nobody say the great there except ones digester that global favorable have think that to And we because be there's of that aren't might were they nobody do very and call believes and want a you. this difficult financials business companies they product What to the this compare competitive great the I'm it think I'm versus public standpoint. business that's a don't yourself I they and they and about business Well,

are there a and where head-to-head are they yes, We So, as Yes, private that in financial yes, of industry. we're competitors. compare in believe them companies, the -- they really are are from can't on a better ourselves standpoint we position basis. to we a

implementing So, strategy quarters. now, in have coming believe are that's forward, excited we the but on to where right we We're Thanks. are we report we're moving strategy. where the and right that we

Operator

next Investor. Please [Operator is [ph], with Instructions] Williams your question proceed Our question. Anthony from

Unidentified Analyst

Tony its Williams. Frank,

Frank Celli

Hey are how Tony, you?

Unidentified Analyst

Good. Congratulations on a very solid quarter.

Frank Celli

you. Thank

Richard Galterio

you. Thank

Unidentified Analyst

a the the you didn't giving the revenue can on quarter; us Brian topline of of I the business? for $X.X missed give hear Would bottom-line us in he each the it, of lines million or said I it. mind breakdown third you if and

Brian Essman

all we has our we equipment equipment and I retail is incur of the file the of was in on rental; of digesters; not do comprised growth just management $XXX,XXX pull up which which At company from on them. by the those additional topline level, And we gross mentioned obviously, $XXX,XXX the but just $XXX,XXX the Q, contracts $XXX,XXX; the the let from totaled margin my $XXX,XXX and to management digester the that, because the me Gold gross company contracts $XXX,XXX; sales the sales as the doing -- $X.X costs profit contracts. for On saw at $XXX,XXX. side, numbers the rental -- did Medal that,

Unidentified Analyst

you Okay. much. very Thank

Operator

and conference. this concluded this has Ladies question-and-answer concludes today's session. And gentlemen, our

You may disconnect and time your for participation. lines thank your at this you

Renovare Environmental (RENO) 14 Nov 182018 Q3 Earnings call transcript