Renovare Environmental, Inc.

BioHiTech reported second-quarter 2021 total revenue of $3.5 million, up 14% from Q1 2021, up 38% from Q4 2020, and up 171% year over year. Digester and Corporate revenue rose 15% sequentially to $3.1 million and more than 700% year over year from $381,000, while HEBioT revenue increased 7% sequentially to $377,000 but fell 58% year over year from $893,000. Overall contribution, defined as revenues less direct costs, was 14% of revenue versus 8% a year ago and 29% in Q1; SG&A was 58% of revenue versus 54% in Q1 and 149% a year ago; loss from operations was 59% of revenue versus 186% a year ago and 42% in Q1. The company reported a consolidated net loss of $3.1 million, a consolidated loss from operations of $2.0 million, loss attributable to the parent of $2.4 million, and $4.2 million of net cash used in operating activities for the first six months. Unrestricted cash was $2.3 million at June 30, 2021. Management did not provide formal next-quarter or full-year financial guidance, but said the bulk of Carnival orders should be fulfilled in 2021 with some possible spillover into 2022, and expected better results in the second half of 2021 at Martinsburg as customer issues ease.

Tony Fuller framed the quarter as evidence that the company is executing across both of its waste technology lines, highlighting record revenue, the strength of the Carnival relationship, and improvements in plant operations. He emphasized the company’s sustainability mission, including landfill diversion, carbon reduction, and broader uses for SRF such as hydrogen, gasification, and bioplastics. His tone was confident and upbeat, while still acknowledging that Martinsburg’s second-quarter sales were held back by customer-side shutdowns rather than production problems.

Brian Essman focused on the financial bridge behind the quarter: revenue of $3.5 million, contribution margin of 14%, SG&A at 58% of revenue, and operating loss at 59% of revenue. He attributed weaker gross contribution versus Q1 to supply chain pressures and higher stainless steel prices, and said SG&A rose because of a $305,000 increase in HEBioT offset by a $190,000 decline in Digester and Corporate. He also noted $4.2 million of operating cash burn in the first half, $2.3 million of unrestricted cash at June 30, and explained that restricted cash tied to Entsorga West Virginia bonds consists of a noncurrent bond reserve fund and current operational amounts for taxes, insurance, interest, and principal.

Analysts pressed management on how much of the Carnival order book has been fulfilled, whether additional follow-on orders are likely, and what the near-term pipeline looks like beyond Carnival. Tony Fuller said the bulk of Carnival orders will be fulfilled in 2021, with only a little spillover possible, and said the relationship could still generate incremental demand as cruise capacity expands. Questions also focused on Martinsburg’s weak revenue and whether it could rebound; Fuller said the plant is operating consistently and that the issue was customer ability to take product, not BioHiTech’s production, and he expects better results in the back half of the year. On the balance sheet and SG&A, management said restricted cash is tied to West Virginia bonds and that SG&A should be kept controlled, helped by the elimination of the solid waste tax going forward.