THERMON REPORTS SECOND QUARTER FISCAL 2019 RESULTS

SAN MARCOS, Texas, October 31, 2018 -- Thermon Group Holdings, Inc. (NYSE:THR) (the "Company," "Thermon," "we" or "our") today announced consolidated financial results for the second quarter ("Q2 2019") of the fiscal year ending March 31, 2019 ("Fiscal 2019").

Q2 2019 highlights, compared to the three months ended September 30, 2017 ("Q2 2018"), include:

Revenue of $90.2 million compared to $61.6 million, an increase of 46%
Fully diluted GAAP EPS was $0.10 per share compared to $0.15 per share
Adjusted EPS of $0.22, unchanged
Non-GAAP adjusted EBITDA increased 32%
Positive book to bill ratio* of 1.06

* New orders (bookings) over revenue (billings)

"We are pleased with our second quarter results. The positive book to bill ratio and healthy backlog position us well as we enter the seasonally strong winter months. Results from our Thermon Heating Systems ("THS") acquisition continue to meet our expectations. Based on our strong performance for the first half of Fiscal 2019, we are increasing our previously reported Fiscal 2019 revenue guidance," said Bruce Thames, Thermon's President and Chief Executive Officer.

During Q2 2019, the Company generated revenue of $90.2 million versus $61.6 million in Q2 2018, an increase of $28.5 million or 46%. Organic (excluding THS) revenue was $70.8 million and revenue from THS was $19.4 million in Q2 2019. During Q2 2019, organic (excluding THS) Greenfield and MRO/UE (facility maintenance, repair and operations and upgrade or expansion) activity accounted for 31% and 69% of revenue, respectively. Substantially all of the revenue contributed by THS would be considered MRO/UE.

Gross margins during Q2 2019 were 44.8% compared to 50.2% in Q2 2018. Although the percentage of MRO/UE was relatively high, Greenfield and UE projects negatively impacted our overall gross margins. Greenfield gross margins declined due to a higher labor component and MRO/UE gross margins declined due to a higher mix of UE projects. Gross margins for our core heat tracing products were improved despite recent inflationary pressure.

Order and backlog levels during Q2 2019 were as follows:
Total orders were $95.8 million versus $72.6 million in Q2 2018
Organic orders were $78.3 million compared to $72.6 million in Q2 2018, an increase of $5.7 million or 8%
Total backlog was $149.6 million compared to $121.1 million in Q2 2018
Organic backlog was $122.8 million compared to $121.1 million in Q2 2018, an increase of $1.7 million or 1%
THS backlog was $26.8 million and THS orders were $17.5 million

Q2 2019 net income attributable to Thermon and GAAP earnings per share ("EPS") were $3.2 million and $0.10 per fully diluted common share, respectively, compared to $4.8 million and $0.15 per fully diluted common share, respectively, in Q2 2018. GAAP EPS was negatively impacted by $2.4 million or $0.07 of additional interest expense, net of tax, related to the THS acquisition. GAAP EPS was also negatively impacted by $0.02 related to changes in U.S. tax law. After taking into account the impact of intangible amortization and costs related to the THS acquisition in Q2 2018 (see table, Reconciliation of Net Income attributable to Thermon to Adjusted Net Income and Adjusted EPS), the Company generated Adjusted Net Income in Q2 2019 of $7.4 million and Adjusted EPS of $0.22 per fully diluted common share compared to $7.3 million and $0.22 per fully diluted common share, respectively, in Q2 2018.

Adjusted EBITDA was $17.9 million in Q2 2019 as compared to $13.5 million in Q2 2018, an increase of $4.4 million or 32%.

During the first six months of the fiscal year ending March 31, 2019 ("YTD 2019"), the Company generated revenue of $179.1 million compared to $113.4 million in the first six months of the fiscal year ended March 31, 2018 ("YTD 2018"), an increase of $65.7 million or 58%. Organic revenue was $140.9 million and revenue from THS was $38.2 million in YTD 2019.

YTD 2019 orders were $169.7 million compared to $127.7 million in YTD 2018, an increase of $42.0 million or 33%.



The following information was filed by Thermon Group Holdings, Inc. (THR) on Wednesday, October 31, 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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