RENOVARE ENVIRONMENTAL, INC. (RENO)·Q1 2021 Earnings Summary

Executive Summary

• Record quarter: revenue $3.04M (+21% q/q; +124% y/y), with contribution rate improving to 29% (from 20% in Q4’20 and 10% in Q1’20) and SG&A reduced to 54% of revenue (from 115% in Q4’20 and 141% in Q1’20). Loss from operations fell to 42% of revenue (from 120% in Q4’20 and 176% in Q1’20). This strength was driven by digesters sold to Carnival.
• Equipment sales surged to $2.27M (+602% y/y; +37% q/q), while HEBioT revenue was $0.35M and the plant remained loss-making as COVID-related kiln issues at the primary SRF customer constrained volumes; the HEBioT operating loss was $1.1M (vs $2.0M in Q4’20).
• Additional demand momentum: since the prior update, the company received approximately $2.3M of incremental digester orders; during Q1 it also highlighted $2.0M (Jan) and $1.8M (Mar) of Carnival-related orders expanding to Cunard and Costa.
• Liquidity/cash burn: unrestricted cash was $7.31M; net cash used in operating activities was $1.94M in Q1’21.
• No formal quantitative guidance and no retrievable S&P Global consensus for Q1’21; treat estimate comparisons as N/A. Company documents provide no guidance ranges.

Note: At the time of these results the company operated as BioHiTech Global, Inc. (NASDAQ: BHTG).

What Went Well and What Went Wrong

What Went Well

• Digesters drove the beat on execution metrics: “first quarter revenue of over $3 million… a new quarterly record high since [going] public in 2015,” largely from Carnival purchases; equipment sales rose 602% y/y to $2.3M.
• Cost discipline and mix lifted profitability metrics: contribution rate rose to 29% (from 10% y/y), SG&A fell to 54% of revenue (from 141% y/y), and operating loss as % of revenue improved to 42% (from 176% y/y).
• Pipeline signals: “we’ve received additional orders totaling approximately $2.3 million,” with active pursuits across healthcare, grocery, government and universities; management emphasized expanding into more industries.

What Went Wrong

• HEBioT plant remained a drag: revenue was $353K (down $138K y/y) with negative contribution; operating loss at the facility was $1.1M (vs $2.0M in Q4’20). COVID-related closure/refiring issues at the kiln of the primary SRF customer constrained intake.
• Consolidated P&L still loss-making: Q1’21 net loss was $(2.33)M; loss from operations $(1.28)M, despite improvements.
• Revenue concentration risk implied: growth “most recently… driven by sales to Carnival,” underscoring reliance on a single major customer for the current surge in equipment revenue.

Financial Results

Revenue, EPS, and Sequential Trend

Margin and Cost Ratios

Segment Revenue Breakdown

Additional KPIs

Guidance Changes

No formal quantitative guidance ranges (revenue, margins, opex, tax, or segment-level) were provided in the Q1’21 press release or call.

Earnings Call Themes & Trends

Management Commentary

• “Our first quarter revenue of over $3 million marked a new quarterly record high since BioHiTech became public in 2015. This growth was largely driven by digester purchases by Carnival Corporation.”
• “We’ve received additional orders totaling approximately $2.3 million… We’re actively pursuing others in the maritime industry and beyond.”
• “The overall contribution rate… increased to 29%… SG&A… decreased to 54%… loss from operations as a percentage of revenue decreased to 42%…” (efficiency focus).
• “We are exploring the development of further uses for our SRF such as fuel for gasification and as a feedstock for bioplastics.”
• On HEBioT headwinds: COVID-related closure and refiring difficulties at the kiln of the primary SRF customer “have only recently been partially resolved.”

Q&A Highlights

• Competition: Management views the environment as competitive but constructive; reopening creates “inflection points” for growth; the company “welcomes competition” and sees customers more focused on environmental solutions.
• Supply chain/inflation: No significant supply chain issues to date; some pricing pressure observed but manageable with current volume and planning; potential broader inflation to monitor beyond 2021.
• Tone: Supportive inbound commentary from participants regarding management execution; management emphasized team focus and continued momentum.

Estimates Context

• Street consensus (S&P Global) for Q1’21 revenue and EPS was unavailable for this ticker/period; the company did not reference consensus on the call or in the release, and provided no formal guidance ranges. Treat estimate comparisons as N/A.

Key Takeaways for Investors

• Digesters-led inflection: Record revenue ($3.04M) with strong y/y and q/q growth driven by Carnival orders; equipment momentum is the near-term driver.
• Quality of improvement: Mix and cost discipline lifted contribution rate to 29% and cut SG&A intensity to 54%—a clear positive for operating leverage potential.
• HEBioT is the swing factor: Still loss-making ($1.1M op loss), but Q1 showed improvement vs Q4 as SRF customer kiln issues began to resolve; further normalization could materially reduce drag.
• Concentration risk: Recent growth is “most recently… driven by sales to Carnival”; diversify end-markets (healthcare, grocery, government, universities) to sustain momentum.
• Liquidity runway: $7.31M unrestricted cash with $(1.94)M operating cash burn in Q1’21 supports execution on digesters and HEBioT optimization initiatives.
• Watch items: Inflation/pass-through, supply chain stability, and timing of SRF customer normalization; management currently sees manageable pressures.
• Near-term catalyst path: Additional maritime orders and cross-vertical wins, plus tangible progress on alternative SRF uses (gasification/bioplastics) may re-rate medium-term growth/margin expectations.

Appendix: Consolidated P&L detail (Q1’21)

• Total revenue $3,040,290; equipment sales $2,266,513; rental/service $421,229; HEBioT $352,548. Loss from operations $(1,276,502); net loss $(2,334,723); net loss/share $(0.07).

All figures reflect BioHiTech Global’s Q1 2021 results (the company now operates as Renovare Environmental).