ThermoEnergy Corporation Announces Third Quarter 2013 Results

ThermoEnergy Corporation (OTCBB:TMEN), a diversified technologies company engaged in the development and sale of patented and/or proprietary wastewater treatment systems and the development of clean combustion technologies for power generation, today announced revenue of $532,000 for the three-month period ended September 30, 2013.

Mr. James Wood, President and Chief Executive Officer of ThermoEnergy, commented, "ThermoEnergy continues to make inroads into the growing market for water treatment and water recycling in the unconventional oil and gas production market segment. In addition, ThermoEnergy is seeing an increase in its traditional manufacturing and glycol recycling markets, due in part to industry consolidation and the demand for more robust, higher-capacity recycling systems.”

Operational Highlights:

• Recognized revenues from work related to the Unity Power Alliance grant with the U.S. Department of Energy and sales to industrial based projects;
• Completed installation and began commissioning of Unity Power Alliance’s bench scale reactor to demonstrate ThermoEnergy’s commercialization of POXC®;
• Installed and commissioned a domestic-based Ammonia Recovery (ARP™) system at a major specialty metals and chemicals company for nitrogen compliance and the reuse of ammonia in the manufacturing process;
• Continued growth in reestablishing parts and service business;
• Signed joint developmental agreement to promote and commercialize ThermoEnergy’s TurboFrac® and FracGen®™ technologies in Texas and New Mexico;
• Increased sales and marketing activity in glycol recycling market due to continuing sector consolidation.

Financial Results for the Three-Month Period Ended September 30, 2013

For the three-month period ended September 30, 2013 the Company recorded revenues of $532,000, compared to $2,032,000 in the third quarter of 2012. Unlike previous periods, ongoing revenues are no longer derived from the Company's NYCDEP contract and are fully attributable to the sale and production of the Company’s CAST®, RCAST® and ARP™ systems into industrial markets. The third quarter of 2013 benefited from ThermoEnergy’s work under Unity Power Alliance’s DOE contract to construct a bench scale unit to demonstrate Pressurized Oxy-Combustion (POXC®) using domestic coals.

Gross loss for the third quarter of 2013 was ($338,000) related to cost overruns on the Unity Power Alliance contract in the third quarter, as well as to unallocated overhead costs.

General and administrative expenses declined 33% in the third quarter of 2013 to $697,000 as compared to $1.035 million in the third quarter of 2012. The Company’s continued cost reduction efforts were supported by a decline in legal expenses related to our 2012 equity financing and lower non-cash stock expenses during the third quarter of 2013.

Third quarter engineering costs declined 57% compared to the third quarter of 2012. The $91,000 decrease is attributable to a lower headcount and non-cash stock expenses during the period.

Sales and marketing expenses for the third quarter of 2013 was $435,000, a decrease of 27% compared to the third quarter of 2012. The decrease was due to a reduction in non-core international business development efforts and reduced unbillable pre-sale expenses, partially offset by increased spending in domestic marketing as the Company continued to increase its participation in conferences, the aftermarket service business and increased promotion of its technology in the third quarter of 2013.

The Company reported a net loss for the three-month period ended September 30, 2013 of $655,000 ($0.00 per basic share), compared to a loss of $1.868 million ($0.02 per basic share) for the same period in 2012. The year-over-year improvement resulted primarily from higher mark-to-market derivative gains in the third quarter of 2013 and derivative expenses incurred in the third quarter of 2012 that did not repeat in 2013.

Please see the Company's Form 10-Q filed with the SEC this evening for additional details.

About ThermoEnergy Corporation

Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide development, sales and commercialization of patented and/or proprietary wastewater treatment and recovery systems. The Company has been a pioneer in the development of sustainable water treatment technologies that help customers operate more efficiently, save money, reduce their carbon footprints, and meet sustainability goals. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com.

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