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News Update

TICKERS: UGE; UGEIF

Solar Energy Firm Grows Project Sales
News Update

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UGE International reports a record gross margin of 58% in the second quarter.

In a news release, UGE International Ltd. (UGE:TSX.V; UGEIF:OTCQB) announced its financial results for Q2/20, which ended June 30, 2020.

The company noted that the addition of new projects during the quarter took the solar energy company's backlog to $83 million from $72 million. "When fully deployed, the backlog represents almost $15 million of upfront revenue and over $8 million of annual recurring revenue to the company for 20-plus years," the release noted.

UGE reported revenue during the first half of 2020 was $1.1 million versus $0.5 million in H1/19, reflecting a year over year increase of 140%. Also during H1/20, UGE's gross margin of 58%, aided by one-time factors, was a company record. One driver was and will continue to be the discontinuation of its lower margin engineering, procurement and construction services business.

As far as costs, sales, general and administrative expenses were down 29% quarter over quarter in Q2/20 due to COVID-19. The company expects these expenses will increase again, however, as operations return to pre-coronavirus levels.

The New York-based company's net income for Q2/20 was ($0.3 million) and adjusted EBITDA was ($0.1 million), which compare to ($0.4 million) and ($0.3 million), respectively, a year earlier.

The company reported that after Q2/20 ended, UGE settled about $1.2 million in debt for $137,000. Also, the triggering of an acceleration clause on warrants with a strike price of CA$0.33 led to holders exercising all of the warrants before the Aug. 17, 2020, expiration, resulting in gross proceeds of $376,000.

"During the first half of 2020, COVID-19 disrupted the economy, bringing unprecedented delays to our customers, prospects, and some of UGE's business activities," CEO Nick Blitterswyk said in the release. "Such restrictions temporarily slowed UGE's construction activities from March through May, but our sales activities, project development, and contractor discussions were minimally disrupted. Our team's efforts during this difficult time resulted in record business development for UGE, with our backlog increasing over $11 million quarter-over-quarter to $83.3 million as of June 30, 2020. Our business activity is gradually returning to normal, and we're pleased with the progress we're making post quarter-end on increasing deployment of our turnkey solar projects."

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: UGE International. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with UGE International. Please click here for more information.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of UGE International, a company mentioned in this article.




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