THERMON REPORTS FIRST QUARTER FISCAL 2020 RESULTS

AUSTIN, Texas, August 8, 2019 -- Thermon Group Holdings, Inc. (NYSE:THR) (the "Company," "Thermon," "we" or "our") today announced consolidated financial results for the first quarter ("Q1 2020") of the fiscal year ending March 31, 2020 ("Fiscal 2020").

Q1 2020 highlights, compared to the three months ended June 30, 2019 ("Q1 2019"), include:

Revenue of $91.7 million, an increase of 3% compared to $88.9 million
Fully diluted GAAP earnings per share ("EPS") was $0.04 per share, a decrease of $0.05 compared to $0.09
Non-GAAP Adjusted EPS was $0.15 per share, a decrease of $0.09 compared to $0.24

"We continue to grow our business and are focused on executing our strategic plan for the year. We are already generating positive results within the market from our eight new product launches last year, and we continue to invest in both new product developments and additional commercial resources to globalize the Thermon Heating Systems ("THS") business. While the increased Greenfield business mix continues to negatively impact our margins, the additions to our global installed base will enable higher value MRO/UE revenue in the future, and our record pipeline of opportunities gives us confidence in achieving our Fiscal 2020 financial objectives," said Bruce Thames, Thermon's President and Chief Executive Officer.

During Q1 2020, the Company generated revenue of $91.7 million versus $88.9 million in Q1 2019, an increase of $2.8 million or 3%. Revenue from our legacy heat tracing business was $73.8 million and revenue from THS was $17.9 million in Q1 2020. During Q1 2020, Greenfield and MRO/UE (facility maintenance, repair and operations and upgrade or expansion) activity accounted for 49% and 51% of revenue, respectively. Substantially all of the revenue contributed by THS would be considered MRO/UE.

Gross margin during Q1 2020 was 40.5% compared to 44.7% in Q1 2019. While this is a decline over the prior year period, it represents a sequential improvement of 110 basis points relative to the fourth quarter of the fiscal year ended March 31, 2019. Gross margin in the current quarter was negatively impacted by a higher mix of Greenfield project revenue relative to Q1 2019. The Company has implemented global price increases in Q1 2020, and in combination with cost reduction initiatives, expects gross margin performance to improve during Fiscal 2020.

Q1 2020 total orders were $82.8 million versus $73.8 million in Q1 2019, an increase of $9.0 million or 12%. Q1 2020 backlog of $111.5 million represents a $32.6 million, or 23%, decrease as compared to Q1 2019 backlog of $144.1 million.

Q1 2020 net income attributable to Thermon and GAAP EPS were $1.5 million and $0.04 per fully diluted common share, respectively, compared to $3.0 million and $0.09 per fully diluted common share, respectively, in Q1 2019. 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 2020 of $4.8 million and Adjusted EPS of $0.15 per fully diluted common share compared to $7.8 million and $0.24 per fully diluted common share, respectively, in Q1 2019.

Adjusted EBITDA was $13.1 million in Q1 2020 as compared to $17.9 million in Q1 2019, a decrease of $4.8 million or 27% (see table, Reconciliation of Net Income attributable to Thermon to Adjusted EBITDA).

As of June 30, 2019, the Company had $220.4 million of gross outstanding debt and $35.3 million of cash representing net debt of $185.1 million. Based on the trailing twelve month Adjusted EBITDA of the combined company, our net debt to trailing twelve month Adjusted EBITDA ratio was 2.4 at June 30, 2019. 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 Thursday, August 8, 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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