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UGE Reports First Quarter 2017 Financial Results

Company Continues to Scale Rapidly, Posting its Highest Quarterly Revenue to Date

Toronto, Ontario--(Newsfile Corp. - May 26, 2017) - UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in renewable energy solutions for the commercial and industrial sector, reported its financial results for the three months ended March 31, 2017. UGE reports all amounts in US dollars.

First Quarter 2017 Highlights

  • Revenue for the quarter grew 903% to $5.5 million, the highest in UGE's history, while selling, general and administrative ("SG&A") expenses grew just 6%.

  • UGE generated positive cash flow from operations of $0.7 million in the quarter, and used the cash generated to repay debt, lowering future finance costs.

  • As a result, UGE recorded its smallest quarterly net loss in the past three years, at $0.4 million.

  • At the end of the quarter, UGE's backlog was $31.6 million. In addition, subsequent to the end of the quarter UGE announced a contract with Philippine Spring Water Resources Inc., as well as the acquisition of substantially all the assets of Carmanah Solar Power Corp. ("CSPC"), both of which further added to the Company's backlog.

Selected Financial Information

    Three months ended March 31,  
    2017     2016  
Revenue $  5,498,094   $  548,257  
Cost of sales   (4,910,895 )   (476,503 )
    11%     13%  
Gross profit   587,199     71,754  
Expenses            
   Selling, general and administrative   (792,486 )   (750,433 )
   Net finance costs   (103,361 )   (13,092 )
   Income tax recovery (expense)   (51,378 )   9,226  
             
Net loss from continuing operations   (360,026 )   (682,545 )
Loss from discontinued operations, net of income tax   -     (1,006,302 )
Net loss $  (360,026 ) $  (1,688,847 )
             
Loss per share from continuing operations - Basic and diluted            
 Basic and diluted $  (0.01 ) $  (0.03 )
Loss per share from net loss - Basic and diluted            
 Basic and diluted $  (0.01 ) $  (0.08 )

Analysis of Financial Results

During the three months ended March 31, 2017, UGE significantly grew revenues and reduced its net loss, bringing the Company much closer to profitability. Subsequent to the quarter end, further growth was shown with the acquisition of substantially all the assets of CSPC on April 3, 2017.

The Company would like to draw attention to the following points from its financial statements:

  • Revenue for the three months ended March 31, 2017 was $5.5 million, compared with $0.5 million in the same period of the prior year from continuing operations, an increase of 903% and the highest in UGE's history.

  • On March 31, 2017, UGE had backlog of $31.6 million, representing projects the Company expects will translate into significant revenue in future quarters. Subsequent to quarter end, UGE announced a contract with Philippine Spring Water Resources Inc., as well as the acquisition of the CSPC business, both of which further added to Company backlog.

  • The gross profit margin for the three months ended March 31, 2017 was 11%, largely due to this quarter's revenue being driven by a portion of a large project portfolio which was known to generate a gross margin lower than the Company's overall target.

  • SG&A expenses were $0.8 million for the three months ended March 31, 2017, compared with $0.8 million for the same period in the prior year from continuing operations, showing UGE's ability to scale revenues while maintaining expense levels.

  • As a result, UGE reduced its net loss to $0.4 million for the three months ended March 31, 2017, the smallest loss in the last three years, compared with a net loss of $1.7 million in the same period in the prior year.

"Our first quarter results further illustrate the progress we are making as a company to grow profitably in the commercial solar sector," said UGE's CEO, Nick Blitterswyk. "Our team continues to focus on growing and executing on our backlog, as our expectations for the future continue to grow as well."

Full financial results and Management's Discussion and Analysis are posted to SEDAR (www.sedar.com) and are available through the Company's website.

About UGE

UGE delivers immediate savings to businesses through cleaner electricity. We help commercial and industrial clients become more competitive through the low cost of distributed renewable energy. With over 330 MW of experience globally, we work daily to power a more sustainable world.

Visit us at www.ugei.com.

For more information, contact:

Jimmy Vaiopoulos
Chief Financial Officer
917-720-5685
investors@ugei.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release and the Company's Management Discussion and Analysis for the three months ended March 31, 2017 (the "MD&A") contain forward-looking information that involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such assumptions, risks and uncertainties include, without limitation, those associated with, loss of markets, expected sales, future revenue recognition, currency fluctuations, the effect of global and regional economic conditions, industry conditions, changes in laws and regulations, and changes in how they are interpreted and enforced, the lack of qualified personnel or management, fluctuations in foreign exchange or interest rates, demand for the Company's products, and availability of funding. The Company's performance could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if they do so, what benefits the Company will derive there from. The forward-looking information is made as of the date of this press release or the MD&A, as applicable, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Actual events or results could differ materially from the Company's expectations and projections.

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