THERMON REPORTS THIRD QUARTER FISCAL 2019 RESULTS
Thermon Announces Record Revenues of $119 million

AUSTIN, Texas, January 30, 2019 -- Thermon Group Holdings, Inc. (NYSE:THR) (the "Company," "Thermon," "we" or "our") today announced consolidated financial results for the third quarter ("Q3 2019") of the fiscal year ending March 31, 2019 ("Fiscal 2019").

Q3 2019 highlights, compared to the three months ended December 31, 2017 ("Q3 2018"), include:

Record revenue of $119.4 million compared to $92.7 million, an increase of 29%
Fully diluted GAAP EPS of $0.29 per share compared to $0.02 per share
Adjusted EPS of $0.40 compared to $0.35, an increase of 14%
Adjusted EBITDA of $26.0 million compared to $21.6 million, an increase of 20%

"We are pleased to see strong growth in our installed base this quarter with Greenfield project revenues growing by 49% over the prior year.  This, combined with strong growth in our US and Latin American MRO/UE (facility maintenance, repair and operations and upgrade or expansion) business, generated top line growth of 29% in the third quarter and positions us well to capitalize on future MRO/UE revenue streams from the installed base.  Also, we are successfully leveraging our operating expenses on the incremental volume to drive EBITDA margin expansion within the business," said Bruce Thames, Thermon's President and Chief Executive Officer.

During Q3 2019, the Company generated revenue of $119.4 million versus $92.7 million in Q3 2018, an increase of $26.7 million or 29%. In Q3 2018, we acquired Thermon Heating Systems ("THS"). The contribution of revenue from our organic business and THS is as follows: organic (excluding THS) revenue was $95.8 million and $76.6 million in Q3 2019 and 2018, respectively, and THS revenue was $23.6 million and $16.1 million in Q3 2019 and 2018, respectively. Total revenues were negatively impacted by $2.2 million from foreign exchange translation.

During Q3 2019, organic Greenfield and MRO/UE activity accounted for 45% and 55% of revenue, respectively. This compares to an organic Greenfield and MRO/UE mix of 38% and 62%, respectively, in Q3 2018. Notably, our price realization in Q3 2019 improved over the prior period. Substantially all of the revenue contributed by THS would be considered MRO/UE.

Gross margins during Q3 2019 were 42.6% compared to 45.6% in Q3 2018. The high mix of Greenfield revenue was the key driver for the comparative gross margin decline. Greenfield sales include higher labor costs and third party buy-out components. While Greenfield projects deliver lower margins than MRO/UE product sales, the expanded installed base provides the opportunity for future MRO/UE revenue.

During Q3 2019, total orders were $105.7 million versus $105.3 million in Q3 2018, an increase of $0.4 million. Q3 2019 backlog was $135.9 million compared to $167.7 million in Q3 2018, a decrease of $31.8 million.

Q3 2019 net income attributable to Thermon and GAAP earnings per share ("EPS") were $9.7 million and $0.29 per fully diluted common share, respectively, compared to $0.6 million and $0.02 per fully diluted common share, respectively, in Q3 2018. After taking into account the impact of intangible amortization and costs related to the THS acquisition in Q3 2018 (see table, Reconciliation of Net Income attributable to Thermon to Adjusted Net Income and Adjusted EPS), the Company generated Adjusted Net Income in Q3 2019 of $13.3 million and Adjusted EPS of $0.40 per fully diluted common share compared to $11.5 million and $0.35 per fully diluted common share, respectively, in Q3 2018.

Adjusted EBITDA was $26.0 million in Q3 2019 as compared to $21.6 million in Q3 2018, an increase of $4.4 million or 20%.

During the first nine months of the fiscal year ending March 31, 2019 ("YTD 2019"), the Company generated revenue of $298.4 million compared to $206.0 million in the first nine months of the fiscal year ended March 31, 2018 ("YTD 2018"), an increase of $92.4 million or 45%. Organic revenue was $237.1 million and revenue from THS was $61.3 million in YTD 2019.

YTD 2019 orders were $275.3 million compared to $233.0 million in YTD 2018, an increase of $42.3 million or 18%.



The following information was filed by Thermon Group Holdings, Inc. (THR) on Wednesday, January 30, 2019 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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