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American DG Energy Reports Fourth Quarter 2012 Financial Performance

March 12, 2013

Current backlog increases to 40 energy systems compared to 20 systems a year ago

WALTHAM, Mass., March 12, 2013 /PRNewswire/ — American DG Energy Inc. (NYSE MKT: ADGE), a leading On-Site Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, reported revenues of $1,549,580 in the fourth quarter of 2012, compared to $1,469,276 for the same period in 2011, an increase of 5.5%. Total revenues were $5,645,194 in 2012, compared to $6,022,868 in 2011.

GAAP diluted loss per share (EPS) was $(0.03) in the fourth quarter of 2012, compared with $(0.04) for the same period in 2011 and GAAP diluted loss per share (EPS) was $(0.14) in 2012, compared to $(0.08) in 2011.

Major Highlights:

Operations

  • We currently operate 92 energy systems.
  • Our current backlog consists of 40 energy systems compared to 20 at December 31, 2011.
  • We reached agreements with the following properties:
    • Luna Park Housing Corporation in Brooklyn, New York – to provide five 100 kW Combined Heat and Power (CHP) systems and five hot water heaters for their domestic hot water.
    • Cumberland County Jail, Portland, Maine – to provide two 75 kW CHP systems and produce space heat, hot water and electricity within the County Jail complex.
    • Doral Arrowwood Hotel Conference Center, Rye Brook, New York – to provide two 450-ton chillers for their central plant cooling systems.
    • The John Hopkins University in Baltimore, Maryland – to provide a 75 kW CHP system to Wolman Hall student housing.
    • DoubleTree by Hilton Hotel, Tarrytown, New York – to provide a 30-ton chiller.
    • Wentworth Club, Surrey, United Kingdom – to provide two 100 kW CHP systems at the Tennis & Health Club and at the main Clubhouse.
    • Best Western, Cedar Court Hotel, Harrogate, United Kingdom – to provide a 100 kW CHP system to produce electricity, heating and domestic hot water; Cedar Court Grand Hotel & Spa, York, United Kingdom – to provide a 100 kW CHP system to produce electricity, heating and domestic hot water.
    • Roko Health Clubs, in Chiswick, Gillingham, Nottingham and Portsmouth, United Kingdom – to provide four 100 kW CHP systems to produce electricity, heating and domestic hot water.
    • We entered into a partnership with DONG Energy Sales (formerly Shell Gas Direct) to improve energy efficiency and reduce carbon footprint for customers using CHP solutions.
  • We began operations at the following properties:
    • DoubleTree Hotel, Tarrytown, New York – started operating a 100 kW CHP system to supply electricity, space heat and domestic hot water.
    • Metro YMCA, Wayne, New Jersey – started operating 450-ton chillers to supply cooling.
    • Cumberland County Jail, Portland, Maine – started operating two 75 kW CHP systems and produce space heat, hot water and electricity within the County Jail complex.
    • Prospect Park Residencies, Brooklyn, New York – started operating a 100 kW CHP system with convenience back-up power.
    • Hilton Hotel, Liverpool, United Kingdom – started operating a 225 kW system to produce energy in the form of electricity, space heat and domestic hot water.
    • The Hampton by Hilton, Luton, United Kingdom – started operating a CHP system to supply clean energy.
    • London Syon Park, a Waldorf Astoria Hotel – started operating a 100 kW system for the hotel’s guest rooms, public areas and back-of-house.
    • Roko Health Club, Portsmouth, UK – started operating a 100 kW system.

Financial

  • Total energy production in the 4th quarter of 2012 increased to 20.4 million kWh, or a 7.2% gain compared to the same period 2011.
  • Utility rates for natural gas decreased 11.5% in the 4th quarter of 2012 compared to the same period in 2011, which lowered our energy revenue for the period.
  • EBITDA cash outflows in the 4th quarter of 2012 for American DG Energy were $110,798 and for EuroSite Power were $366,296. Our consolidated EBITDA cash outflow in the 4th quarter of 2012 was $477,094 primarily due to expenses at EuroSite Power and the expansion of sales and marketing activity at American DG Energy.
  • Energy gross profit margin without depreciation was 36.6% in 2012 compared to 36.1% in 2011.
  • We have received a total of $583,800 in rebates and incentives in 2012.
  • The total revenue value of our current On-Site Utility energy agreements is approximately $270 million.
  • We finished 2012 with approximately $13.4 million in cash.

American DG Energy will hold its earnings conference call today, March 12, 2013 at 10:00 a.m. Eastern Time. To listen, call (800) 860-2442 within the U.S, (866) 605-3852 from Canada or (412) 858-4600 from other international locations. Participants should reference American DG Energy to access the call. Please begin dialing at least 10 minutes before the scheduled starting time. The earnings press release will be available on our web site at www.americandg.com in the “Investors” section under “News Releases.”

The earnings conference call will be recorded and available for playback one hour after the end of the call through Friday, April 12, 2013. To listen to the playback, call (877) 344-7529 within the U.S. or (412) 317-0088 outside the U.S. and use Conference Number 10025430.

The earnings conference call will be webcast live. To register for and listen to the webcast, go to www.americandg.com/webcast. Following the call, the webcast will be archived for 30 days.

About American DG Energy
American DG Energy supplies low-cost energy to its customers through distributed power generating systems. We are committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user – through our On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. More information can be found at www.americandg.com.

FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in Securities and Exchange Commission filings. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

CONSOLIDATED STATEMENT OF OPERATIONS
For the years ended December 31,

                             2012                      2011
                             ----                      ----

    Revenues

    Energy revenues                 $5,388,395                $5,705,418

    Turnkey & other
     revenues             256,799                   317,450
                          -------                   -------

                        5,645,194                 6,022,868

    Cost of sales

    Fuel, maintenance
     and installation   3,487,223                 3,827,539

    Depreciation
     expense            1,698,014                 1,265,009
                        ---------                 ---------

                        5,185,237                 5,092,548
                        ---------                 ---------

    Gross profit          459,957                   930,320
                          -------                   -------

    Operating
     expenses

    General and
     administrative     2,770,535                 2,384,774

    Selling             1,919,075                 1,496,764

    Engineering         1,165,286                   763,260
                        ---------                   -------

                        5,854,896                 4,644,798
                        ---------                 ---------

    Loss from
     operations       (5,394,939)               (3,714,478)
                       ----------                ----------

    Other income
     (expense), net

    Interest and
     other income          62,322                    40,234

    Interest expense  (1,270,694)                  (532,544)

    Change in fair
     value of warrant
     liability           (139,893)                  427,042
                         --------                   -------

                      (1,348,265)                   (65,268)
                       ----------                   -------

    Loss before
     provision for
     state income
     taxes            (6,743,204)               (3,779,746)

    Benefit
     (provision) for
     state income
     taxes                (24,550)                        -
                          -------                       ---

    Consolidated net
     loss             (6,767,754)               (3,779,746)
                       ----------                ----------

    (Income) loss
     attributable to
     the
     noncontrolling
     interest             241,967                    (4,199)

    Net loss
     attributable to
     American DG
     Energy Inc.                   $(6,525,787)              $(3,783,945)
                                   ===========               ===========

    Net loss per
     share -basic
     and diluted                        $(0.14)                   $(0.08)
                                        ======                    ======

    Weighted average
     shares
     outstanding -
     basic and
     diluted           47,108,980                45,705,793
                       ==========                ==========

    Non-GAAP
     financial
     disclosure
    -----------

    Loss from
     operations                    $(5,394,939)              $(3,714,478)

    Depreciation
     expense            1,754,279                 1,315,861

    Stock based
     compensation         810,285                   667,000
                          -------                   -------

    Adjusted EBITDA   (2,830,375)               (1,731,617)

    Grants from
     rebates and
     incentives
     (reduction on
     basis of
     property)            583,800                   510,069

    Total cash
     outflows                      $(2,246,575)              $(1,221,548)
                                   ===========               ===========

CONSOLIDATED BALANCE SHEETS

                                        December 31, 2012              December 31, 2011
                                        -----------------              -----------------

    ASSETS

    Current assets:

    Cash and cash equivalents                              $13,362,919                         $17,801,025

    Accounts receivable, net                      761,678                              879,630

    Unbilled revenue                               19,492                               18,825

    Due from related party                         18,372                               21,140

    Inventory                                   2,920,444                              634,120

    Prepaid and other current
     assets                                       308,164                              322,276
                                                  -------                              -------

    Total current assets                       17,391,069                           19,677,016

    Property, plant and
     equipment, net                            17,253,648                           14,690,117

    Accounts receivable, long-
     term                                          46,800                               82,664

    Other assets, long-term                        47,216                               53,504
                                                   ------                               ------

    TOTAL ASSETS                                           $34,738,733                         $34,503,301
                                                           ===========                         ===========

    LIABILITIES AND
     STOCKHOLDERS' EQUITY

    Current liabilities:

    Accounts payable                                          $765,618                            $520,608

    Accrued expenses and other
     current liabilities                          532,420                              589,032

    Due to related party                           41,812                              313,847

    Capital lease obligations                       3,365                                3,365
                                                    -----                                -----

    Total current liabilities                   1,343,215                            1,426,852

    Long-term liabilities:

    Convertible debentures                     19,400,000                           19,400,000

    Warrant liability                             389,454                              249,561

    Capital lease obligations,
     long-term                                          -                                3,365

    Other long-term liabilities                    29,444                               43,052
                                                   ------                               ------

    Total liabilities                          21,162,113                           21,122,830
                                               ----------                           ----------

    Stockholders' equity:

    American DG Energy Inc.
     stockholders' equity:

    Common stock, $0.001 par
     value; 100,000,000 shares
     authorized; 48,490,733 and                    48,491                               46,001
           46,001,404 issued and
            outstanding at December 31,
            2012 and 2011, respectively

    Additional paid-in capital                 37,001,439                           30,399,370

    Accumulated deficit                       (24,456,845)                        (17,931,058)
                                              -----------                          -----------

    Total American DG Energy
     Inc. stockholders' equity                 12,593,085                           12,514,313

    Noncontrolling interest                       983,535                              866,158
                                                  -------                              -------

    Total stockholders' equity                 13,576,620                           13,380,471
                                               ----------                           ----------

    TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY                                  $34,738,733                         $34,503,301
                                                           ===========                         ===========

CONSOLIDATED STATEMENT OF CASH FLOWS
For the years ended December 31,

                              2012                      2011
                              ----                      ----

    CASH FLOWS FROM
     OPERATING
     ACTIVITIES:

    Net loss                        $(6,525,787)              $(3,783,945)

    Income (loss)
     attributable to
     noncontrolling
     interest             (241,967)                    4,199

    Adjustments to
     reconcile net
     loss to net cash
     used in operating
     activities:

    Depreciation and
     amortization        1,754,279                 1,315,861

    Provision for
     losses on
     accounts
     receivable            123,880                   110,229

    Amortization of
     deferred
     financing costs        20,448                     2,256

    Increase
     (decrease) in
     fair value of
     warrant liability     139,893                  (427,042)

    Noncash interest
     expense             1,237,470

    Stock-based
     compensation          810,285                   667,000

    Changes in
     operating assets
     and liabilities:

    (Increase)
     decrease in:

    Restricted cash              -                    65,790

    Accounts
     receivable and
     unbilled revenue       29,269                  (295,033)

    Due from related
     party                   2,768                    31,292

    Inventory          (2,286,324)                  (146,396)

    Prepaid and other
     current assets            (48)                 (224,283)

    Increase
     (decrease) in:

    Accounts payable       245,010                    37,691

    Accrued expenses
     and other current
     liabilities           (56,612)                  218,258

    Due to related
     party                (272,035)                  153,127

    Other long-term
     liabilities           (13,608)                   43,052
                           -------                    ------

    Net cash used in
     operating
     activities        (5,033,079)               (2,227,944)
                        ----------                ----------

    CASH FLOWS FROM
     INVESTING
     ACTIVITIES:

    Purchases of
     property and
     equipment         (4,211,402)               (1,643,534)
                        ----------                ----------

    Net cash used in
     investing
     activities        (4,211,402)               (1,643,534)
                        ----------                ----------

    CASH FLOWS FROM
     FINANCING
     ACTIVITIES:

    Proceeds from
     issuance of
     convertible
     debentures                  -                17,000,000

    Proceeds from
     issuance of
     warrants                7,500                         -

    Proceeds from sale
     of common stock,
     net of costs        3,535,038                         -

    Proceeds from sale
     of subsidiary
     common stock, net
     of costs            2,139,293                 1,148,401

    Proceeds from
     exercise of stock
     options               200,923                    33,838

    Purchases of
     common stock, net
     of costs             (750,000)                        -

    Convertible
     debenture
     transaction costs           -                   (67,664)

    Principal payments
     on capital lease
     obligations            (3,365)                   (3,365)

    Cancellation of
     restricted stock          (40)                      (20)

    Distributions to
     noncontrolling
     interest             (322,974)                 (359,741)
                          --------                  --------

    Net cash provided
     by financing
     activities          4,806,375                17,751,449
                         ---------                ----------

    Net (decrease)
     increase in cash
     and cash
     equivalents       (4,438,106)                13,879,971

    Cash and cash
     equivalents,
     beginning of the
     period             17,801,025                 3,921,054
                        ----------                 ---------

    Cash and cash
     equivalents, end
     of the period                  $13,362,919               $17,801,025
                                    ===========               ===========

SOURCE American DG Energy Inc.


Source: PR Newswire