Thermal Energy International Inc.

Good morning, everyone. Thank you for joining our earnings call. I'm William Crossland, CEO of Thermal Energy International, and welcome to our fourth quarter and year-end earnings call. Earlier this morning, we reported our financial results for the fourth quarter and the year ended May 31st, 2024. Our news release financial statements and MD&A will be posted on our website and have been filed on CDAR. If you're joining us online, you should be able to see our slide presentation on your screen now.

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Before we go any further, I need to point out that today's earnings call may contain forward-looking statements within the meaning of applicable securities laws and forward-looking statements are subject to risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. For more information, please refer to our year-end financial statement and our management discussion analysis for the quarter and our other filings with the Canadian Securities Regulators. This morning, I'll provide an overview of the exceptional year we had in fiscal 2024, record revenue and EBITDA, despite the fact that our fourth quarter was comparing against our strongest quarter ever in the fourth quarter last year. I'll also discuss how we are well positioned for continued growth, as well as our favorable outlook for fiscal 2025 and beyond. After my prepared remarks, we will have a question and answer session, at which time qualified equity research analysts joining us on the call will be able to ask questions. So, as I said. We had record revenue in fiscal 2024. The full year revenue of almost $26 million was 23% higher than it was in fiscal 2023 and 63% higher than it was in 2022. So showing some very good growth. Importantly, we saw strength across the business in all product categories. So record revenue for both GEM and BEI. And in fact, BEI revenues have doubled since 2021. And our heat recovery revenue was the highest it's been in the last four years, so it's coming back stronger than ever. In terms of EBITDA, we also had record EBITDA for the year. Fiscal 2024 EBITDA of $2 million represented an increase. of $260,000 over fiscal 2023 and more than $2.7 million from two years ago. In 2024, we made significant reinvestments in our business to drive future top-line growth, and that obviously impacted EBITDA. I'll discuss those investments in a couple of minutes. However, I wanted to highlight that if we backed out, those additional growth expenses or EBITDA for fiscal 2024 would have been about $3.5 million. Net income for the year was almost $1 million, representing an increase of $262,000 from last year and more than $2.8 million from two years ago. Again, our net income would have been higher if we were to back out the investments that we're making to drive future growth. Now, looking at our fourth quarter results, as much as I would like to grow every single quarter, there's always been some lumpiness in our business due in part to our customers' budgets and mostly the timing of large orders. You know, depending on what quarter it happens to fit, our quarterly results can vary quite significantly. And that's why we always encourage you to look at, you know, an LTM type basis. In the fourth quarter of fiscal 2023, in particular, we benefited from that lumpiness because we posted our strongest quarter ever for revenue and gross profit, and that quarter included a lot of GEM revenue, revenues from a number of very large GEM orders that we happen to get. And so it was a challenging quarter to compare last fiscal quarter 2023, Q4 2023 with Q4 2020, sorry, Q4 2023 with Q4 2024, because of the great results that we had last year as a record quarter.