Thermal Energy International (TMG) investor relations material

Business model and market opportunity

• Proprietary, site-specific thermal-efficiency solutions serve large multinationals, often through sole-source partnerships; fuel savings alone typically support 1–5-year paybacks, excluding carbon credits.

• Industrial operations use ~90% thermal energy and lose ~50% of that heat; the full suite can recover up to 80% of lost heat, with theoretical efficiency gains from 50% to 90%.

• Complementary technologies recover and upgrade waste heat, reduce steam losses and improve efficiency, delivered as turnkey projects or customized equipment for customer installation.

• Top 10 customers have ~1,000 sites worldwide; solutions reach ~20% of sites, representing less than 10% of the potential opportunity.

• CREST identifies on-site energy-saving and carbon-reduction opportunities, supporting cross-selling, repeat business, shorter sales cycles and training.

Financial performance and balance sheet

• FY2026 revenue was $33.6M, up 12.7%; adjusted EBITDA was $1.9M, up 83.5%, and net income was $1.3M, up 749.4%.

• FY2026 order intake rose 37.6% to a record $30.0M; operating cash flow was $2.1M, up 35.5%, excluding working-capital changes.

• Q1 FY2027 revenue was $6.2M, down 9.2% YoY, due mainly to heat-recovery project delays from site readiness and GEM steam-trap shipment timing; adjusted EBITDA was -$80K.

• At August 31, 2026, cash was $4.5M, working capital $3.8M and bank debt $0.3M; operating cash flow over four years was $7.8M before working-capital changes, with cumulative net income above $3.4M.

• 2023–2024 growth investments added over $1M in SG&A for sales and engineering hires, a U.K. facility and CREST; profitability is recovering as investments begin to pay off.

Orders and scaling priorities

• Orders received since August 31 totaled $8M, including a $3.2M turnkey project for a new dairy and agricultural co-operative and a $2M 12th turnkey project for a global nutrition customer; backlog reached a record $21M on October 28, 2026.

• Standardized customized equipment packages generated $1.3M in YTD FY2027 orders; channel managers and manufacturer representatives are building indirect sales networks in North America and Europe.

• Simplified turnkey HeatSponge generated ~ $5M in orders over 18 months from two customers; simpler installation is intended to shorten sales cycles and improve margins, with European manufacturing planned.

• Growth plan uses blue-chip customer relationships, complementary products, broader teams and global reach for organic growth and accretive acquisitions; targets are expected to offer commercialized products and $2M–$20M revenue potential.

• Strategy is to realize returns on prior investments and scale revenue and profitability without adding costs or headcount; cash generation may fund acquisitions or buybacks, which are reviewed quarterly.