THERMON REPORTS FIRST QUARTER FISCAL 2018 RESULTS
Thermon Announces Fiscal 2018 First Quarter Revenue of $51.7 million and EPS of $0.01
SAN MARCOS, Texas, August 2, 2017 -- Thermon Group Holdings, Inc. (NYSE:THR) (the "Company," "Thermon," "we" or "our") today announced consolidated financial results for the first quarter of the fiscal year ending March 31, 2018 ("Q1 2018").
Financial summary for Q1 2018 compared to the three months ended June 30, 2016 ("Q1 2017"):
Revenue of $51.7 million, a decrease of 18%
Backlog of $110.2 million vs. $95.4 million, growth of 16%
Orders of $55.1 million, a 29% decrease
Gross margin of 46% vs. 41%
Fully diluted GAAP EPS of $0.01 vs. $0.08
"While we anticipated Q1 2018 revenues to be below the prior year, timing of project shipments to the Eastern Hemisphere had a more pronounced impact during the quarter than anticipated. We are encouraged by the improved gross margins which resulted from the higher mix of MRO/UE driven, in part, by an increase in the maintenance business in Canada. Conversely, Greenfield activity was down, particularly in the US, where visibility on long cycle capital projects is muted. Based on the revenue miss and low bookings in Q1 2018, we are revising our revenue guidance to a low to mid single-digit decline for the year. In addition, we recently completed certain cost reduction measures in the US and will continue to closely monitor our cost structure accordingly,” said Bruce Thames, President and Chief Executive Officer.
During Q1 2018, the Company generated revenue of $51.7 million versus $63.4 million in Q1 2017, a decrease of $11.7 million or 18%. On a comparative basis, foreign currency translation effects negatively impacted Q1 2018 revenue by $0.7 million or 1%. During Q1 2018, Greenfield and MRO/UE (facility maintenance, repair and operations and upgrade or expansion) revenue totaled 28% and 72% of revenue, respectively, compared to 43% and 57% in Q1 2017, respectively.
Gross margin during Q1 2018 was 46.0% compared to 41.2% in Q1 2017. Gross margin performance during the quarter was positively impacted by a higher concentration of MRO sales where margins are typically higher for Thermon's core manufactured products. Additionally, our Greenfield sales generated slightly stronger margins due to a combination of favorable pricing, cost control and execution of our projects.
Q1 2018 orders were $55.1 million versus $77.5 million in Q1 2017, a decrease of $22.4 million or 29%. Q1 2018 backlog of $110.2 million represents a 16% increase over Q1 2017 backlog of $95.4 million.
Q1 2018 net income attributable to Thermon and GAAP EPS was $0.5 million or $0.01 per fully diluted common share compared to $2.5 million or $0.08 per fully diluted common share in Q1 2017.
Based on the weaker than expected Q1 2018 performance, we are revising our full year fiscal 2018 revenue guidance to a low to mid single-digit decline as compared to fiscal 2017.
Conference Call and Webcast Information
Thermon's senior management team, including Bruce Thames, President and Chief Executive Officer and Jay Peterson, Chief Financial Officer, will discuss Q1 2018 results during a conference call today at 10:00 a.m. (Central Time), which will be simultaneously webcast on Thermon's Investor Relations website located at http://ir.thermon.com. Investment community professionals interested in participating in the question-and-answer session may access the call by dialing (877) 312-5421 from within the United States/Canada and (253) 237-1121 from outside of the United States/Canada. A replay of the webcast will be available on Thermon's Investor Relations website beginning two hours after the conclusion of the call.
The following information was filed by Thermon Group Holdings, Inc. (THR) on Wednesday, August 2, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.