In a news release, UGE International Ltd. (UGE:TSX.V; UGEIF:OTCQB) announced its financial results for Q2/20, which ended June 30, 2020.
The company noted that the addition of new projects during the quarter took the solar energy company's backlog to $83 million from $72 million. "When fully deployed, the backlog represents almost $15 million of upfront revenue and over $8 million of annual recurring revenue to the company for 20-plus years," the release noted.
UGE reported revenue during the first half of 2020 was $1.1 million versus $0.5 million in H1/19, reflecting a year over year increase of 140%. Also during H1/20, UGE's gross margin of 58%, aided by one-time factors, was a company record. One driver was and will continue to be the discontinuation of its lower margin engineering, procurement and construction services business.
As far as costs, sales, general and administrative expenses were down 29% quarter over quarter in Q2/20 due to COVID-19. The company expects these expenses will increase again, however, as operations return to pre-coronavirus levels.
The New York-based company's net income for Q2/20 was ($0.3 million) and adjusted EBITDA was ($0.1 million), which compare to ($0.4 million) and ($0.3 million), respectively, a year earlier.
The company reported that after Q2/20 ended, UGE settled about $1.2 million in debt for $137,000. Also, the triggering of an acceleration clause on warrants with a strike price of CA$0.33 led to holders exercising all of the warrants before the Aug. 17, 2020, expiration, resulting in gross proceeds of $376,000.
"During the first half of 2020, COVID-19 disrupted the economy, bringing unprecedented delays to our customers, prospects, and some of UGE's business activities," CEO Nick Blitterswyk said in the release. "Such restrictions temporarily slowed UGE's construction activities from March through May, but our sales activities, project development, and contractor discussions were minimally disrupted. Our team's efforts during this difficult time resulted in record business development for UGE, with our backlog increasing over $11 million quarter-over-quarter to $83.3 million as of June 30, 2020. Our business activity is gradually returning to normal, and we're pleased with the progress we're making post quarter-end on increasing deployment of our turnkey solar projects."
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