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BioHiTech Global Reports First Quarter 2019 and Provides Business UpdateCHESTNUT RIDGE, N.Y., May 15, 2019 /PRNewswire/ -- BioHiTech Global, Inc. ("BioHiTech" or the "Company") (NASDAQ: BHTG), a technology and services company that provides cost-effective and sustainable waste management solutions, reported financial results for the first quarter of 2019 ended March 31, 2019.
Company Highlights Commenced Commercial Operations at the Nation's First HEBioT™ Resource Recovery Facility – The facility, located in Martinsburg, West Virginia (the "Martinsburg Facility"), commenced commercial operations on March 29, 2019. The Martinsburg Facility began ramping up operations in April and is already processing close to 200 tons of waste per day. It is expected to contribute meaningful revenue in the second quarter as it reaches planned production levels in the coming weeks. The company anticipates it will generate $7 million of high margin revenue by processing up to 110,000 tons of municipal solid waste per year while diverting as much as 80% of that waste from landfills. The 56,000-square foot Facility is completely enclosed and fully automated with no waste being exposed to the outside environment and no workers in direct contact to the waste processing. The Martinsburg Facility utilizes a patented high efficiency mechanical and biological treatment process ("HEBioT Process") that produces an EPA recognized solid recovered fuel ("SRF") that can be used as a partial replacement for coal in various applications. Signed a Food Waste Digester Distribution Agreement with a Leading Nationwide Provider of Environmental and Regulated Waste Management Solutions – The agreement enables this national waste services company to market BioHiTech's line of food waste digesters to its extensive nationwide customer base. By eliminating food waste at the point of generation, BioHiTech's Digester technology helps waste service providers improve margins through decreased logistics costs and landfilling expenses while achieving a substantial reduction in greenhouse gas emissions. The Company sees partnering with traditional waste industry companies to distribute its environmentally responsible food waste disposal technology as a cost-effective way to accelerate market penetration and grow recurring revenue from the digester business. Submitted Application for Final State Approval of Its Plan to Build a HEBioT Resource Recovery Facility in Rensselaer, New York – The Company is seeking final approval from the State of New York to construct and operate a 72,000-square foot HEBioT municipal waste resource recovery facility on 23 acres of land in the City of Rensselaer's southern industrial area. The planned facility is expected to generate approximately $12 million of high margin annual revenue. The Company is targeting a Q4 2020 completion date for the facility. The Rensselaer project is being launched in conjunction with Kinderhook Industries, a private investment firm that manages over $2.0 billion of committed capital. Continued the Rollout of its Revolution Series Digesters – The Company continued to expand its food waste digester footprint, including two installations of BioHiTech's Revolution Series™ Digester technology for a major operator of more than 25 hospitals and primary care facilities in the New York metropolitan area as well as an installation at Sprouts Farmers Market's first store in Philadelphia, Pennsylvania. BioHiTech's Digester technology has been adopted in 18 Sprouts locations coast to coast. The Company also completed development for the launch of its new Sapling Digester, a larger capacity addition to BioHiTech's line of Revolution Series™ Digesters. Each Sapling Digester is capable of diverting up to 800 pounds per day or 146 tons from landfills each year. "We continue to build on the momentum we drove in 2018, as we commenced operations at the Nation's first HEBioT resource recovery facility in Martinsburg, West Virginia," stated Frank E. Celli, CEO of BioHiTech Global. "This facility will drive significant high margin revenue, the effects of which will be evident in the second quarter and build further in the second half of the year. We are also confident that this operational facility will help accelerate our growth plan for this business as we have already had more than 100 people tour the facility, with interested parties including government officials, waste industry companies, Fortune 500 companies seeking to achieve sustainability goals, and members of the press. We are also making progress on our next planned facility in New York as we have made our application for state approval to build and operate a 75,000-square foot HEBioT facility in the City of Rensselaer." Mr. Celli continued, "Our digester business continues to build as our overall base of rental units is more than double that of the first quarter of last year, largely due to the growing market acceptance of our Revolution Series Digesters. During the quarter, we added a significant national waste management services company to our distribution network and our pipeline continues to grow in multiple unit opportunities in the 20 to 100-unit range. While sales cycles for these larger opportunities have been longer, we are confident that our distribution plan will lead to a greater acceleration of revenue from our digester business the second half of 2019. Additionally, the launch of our Sapling Digester gives us a broader range of sizes and processing capabilities to meet the needs of these multi-location opportunities. As we move through this year, we expect to see a marked increase in revenue beginning in the second quarter as our Martinsburg HEBioT facility ramps operations and further increases in the second half of 2019. We have numerous opportunities to significantly grow this business in the coming years while reducing the environmental impact of the waste management industry. We look forward to building value for our stockholders through the execution of our strategic growth plan in the quarters and years to come." Financial Highlights for Q1 2019 Revenues: Total revenue in the first quarter of 2019 was $738,000, an increase of 14.2% from $646,000 in the first quarter of 2018. Recurring revenue derived from rental, service and maintenance increased 10.7% to $488,000 and accounted for 66% of total revenue compared to $440,000 or 68% of total revenue in the first quarter of 2018. Total rental units under contract increased by 37.5% to 176 units with the added units comprised mainly of its less expensive Revolution Series™ Digester. During the quarter, the Company focused on expanding its distribution network to include traditional waste management companies and expects these partnering efforts to accelerate growth of this business in the coming quarters. The growing market acceptance of BioHiTech's food waste digesters led to a 21.1% quarter over quarter increase in the Company's forward minimum contracted rental revenue. Revenue from management advisory fees related to its management services contract with Gold Medal rose by 79.4% to $250,000 and represented 34% of total revenue compared to $139,000 and 22% of total revenue in the first quarter of 2018. As a result of the Company's continued focus on the rental market, primarily in the US and Europe, the Company recorded no direct sales of digesters in the first quarter of 2019 compared to first quarter 2019 digester sales revenue of $66,000. The Company sees rental revenue increasing in 2019 as the Company adds additional units to its current installed base through its expanded distribution network and closes on its pipeline of multi-unit large customer opportunities beginning in the second quarter of 2019. Costs of Revenue: While recurring revenue derived from digester rental, service and maintenance increased by 14.2% from $440,000 to $488,000 in the first quarter of 2019, direct costs associated with that revenue decreased by 9.3% from $336,000 to $305,000. As a result, the contribution from rental, service and maintenance revenue increased by 75.1%, or $78,000, quarter over quarter to $183,000 as compared to $105,000 in the first quarter of 2018. Contribution margin from digester rental, service and maintenance rose to 37.5% in the first quarter of 2019 compared to 23.7% in the comparable 2018 period. The Company records no direct costs associated with its management services to Gold Medal as those services leverage the Company's existing management team and staff. Operating Expenses: Operating expenses in the first quarter of 2019 increased by 34.8% to $2.7 million compared to $2.0 million in the first quarter of 2018. Selling, general and administrative expenses increased by $746,000, primarily the result of $544,000 in other expenses, including the write down of costs associated with an MBT site and start-up costs at the Company's Martinsburg HEBioT facility. Personnel related expenses increased by $138,000, or 13.1% quarter over quarter. Stock based compensation (a non-cash expense) increased by $218,000 as a result of grants made in the second half of 2018. Base salaries and payroll decreased by $65,000, or 7.8%, due to staff reductions in late 2018, offset by increases in the first quarter of 2019 from the Company's Martinsburg HEBioT operations. Loss from Operations: The Company recorded an operating loss of $(1.9) million in the first quarter of 2019 compared to an operating loss of $(1.3) million in the first quarter of 2018. The Company recorded a net loss of $(2.3) million in the first quarter of 2019 compared to $(5.2) million in the first quarter of 2018, inclusive of $3.3 million in interest expense incurred in warrant valuation and conversions. Net loss per share in the first quarter of 2019 was $(0.14) on 14.8 million weighted average shares outstanding compared to a net loss of $(0.49) per share on 10.9 million weighted average shares outstanding. Select Balance Sheet Items: The Company had unrestricted cash of $1.4 million with shareholder equity of $8.8 million as of March 31, 2019 compared to unrestricted cash of $2.4 million and shareholder equity of $10.0 million as of December 31, 2018. "We are pleased with the underlying fundamentals of our digester business and how that is beginning to evidence itself in our financials," said Brian C. Essman, CFO of BioHiTech Global. "While first quarter revenue from our digester leasing business increased by 14.2%, costs related to that revenue declined leading to a 75.1% improvement in contribution margin. As our Revolution Series Digesters, including our new Sapling Digester, continue to gain acceptance in the market, we expect to see further favorable comparisons in the coming quarters. We expect our management services revenue related to Gold Medal to remain steady at this level for the remainder of the year. With our Martinsburg HEBioT Facility now in operation, we anticipate this business will generate meaningful revenue beginning in the second quarter and be EBITDA positive this year and enable us to achieve significant revenue growth for the remainder of 2019." Conference Call Information BioHiTech will host a conference call today, Wednesday, May 15th, at 4:30 p.m. Eastern Time to discuss these results and business outlook. The conference call information is as follows:
This call is being webcast and can be accessed at http://public.viavid.com/index.php?id=134596. The call will also be available for replay by accessing http://public.viavid.com/index.php?id=134596. About BioHiTech Global Forward Looking Statements Company Contact:
SOURCE BioHiTech Global, Inc. 
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