Thermon Group Holdings, Inc. (THR) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 30, 2018

THERMON REPORTS FIRST QUARTER FISCAL 2019 RESULTS

SAN MARCOS, Texas, August 1, 2018 -- Thermon Group Holdings, Inc. (NYSE:THR) (the "Company," "Thermon," "we" or "our") today announced consolidated financial results for the first quarter ("Q1 2019") of the fiscal year ending March 31, 2019 ("Fiscal 2019").

Q1 2019 highlights, compared to the three months ended June 30, 2017 ("Q1 2018"), include:


•	Revenue of $88.9 million compared to $51.7 million, an increase of 72%


•	Fully diluted GAAP EPS was $0.09 per share compared to $0.01


•	Non-GAAP Adjusted EPS* was $0.24 per share, an increase of 200% compared to $0.08


•	Adjusted EBITDA as a percentage of revenue was 20% compared to 14%, an increase of 43%


*	Please note that the Company now presents Non-GAAP Adjusted EPS to take into account the impact of intangible amortization. See the table "Reconciliation of Net Income attributable to Thermon to Adjusted Net Income and Adjusted EPS" for an explanation of the adjustments.

"We are extremely pleased with the strong start to our fiscal year. We experienced growth in all geographies of our business and organic revenue growth of 36% over Q1 2018. The inorganic revenue contribution of $18.8 million from Thermon Heating Systems ("THS") was also solid, especially considering the lower seasonality. In view of our first quarter financial performance, we are updating our Fiscal 2019 guidance. We now expect that our organic revenue will increase approximately 7% to 10% in Fiscal 2019 and that the Company's consolidated revenues will grow approximately 20% to 24% in Fiscal 2019," said Bruce Thames, Thermon's President and Chief Executive Officer.

During Q1 2019, the Company generated revenue of $88.9 million versus $51.7 million in Q1 2018, an increase of $37.2 million or 72%. Organic revenue was $70.1 million and revenue from THS was $18.8 million in Q1 2019. During Q1 2019, organic Greenfield and MRO/UE (facility maintenance, repair and operations and upgrade or expansion) activity accounted for 45% and 55% of revenue, respectively. Substantially all of the revenue contributed by THS would be considered MRO/UE.

Gross margin during Q1 2019 was 44.7% compared to 46.0% in Q1 2018. Gross margin was negatively impacted by a higher mix of Greenfield project revenue relative to Q1 2018.

Order and backlog levels during Q1 2019 were as follows:


•	Total orders were $73.8 million versus $55.1 million in Q1 2018


•	Organic orders were $57.2 million compared to $55.1 million in Q1 2018, an increase of $2.1 million or 4%


•	Total backlog was $144.1 million compared to $110.2 million in Q1 2018


•	Organic backlog was $115.1 million compared to $110.2 million in Q1 2018, an increase of $4.9 million or 4%


•	THS backlog was $29.0 million

Q1 2019 net income attributable to Thermon and GAAP EPS were $3.0 million and $0.09 per fully diluted common share, respectively, compared to $0.5 million and $0.01 per fully diluted common share, respectively, in Q1 2018. After taking into account certain one-time charges related to the consolidation of our operating footprint in Canada and the impact of intangible amortization related to prior acquisition activities (see table, Reconciliation of Net Income attributable to Thermon to Adjusted Net Income and Adjusted EPS), the Company generated Adjusted Net Income in Q1 2019 of $7.8 million and Adjusted EPS of $0.24 per fully diluted common share compared to $2.6 million and $0.08 per fully diluted common share, respectively, in Q1 2018.

Adjusted EBITDA was $17.9 million in Q1 2019 as compared to $7.0 million in Q1 2018, an increase of $10.9 million or 156%.

As of June 30, 2018, the Company had $229.9 million gross outstanding debt and $31.1 million of cash representing net debt of $198.8 million. Based on the trailing twelve month Adjusted EBITDA of the combined businesses, our net debt to trailing twelve month Adjusted EBITDA ratio was 2.5 at June 30, 2018. At the time the THS acquisition closed on October 30, 2017, our net debt to trailing twelve month Adjusted EBITDA ratio was 3.4.

The following information was filed by Thermon Group Holdings, Inc. (THR) on Wednesday, August 1, 2018 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.

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