Turbotec Products Plc 

("Turbotec" or "the Company")

First Quarter Results for the Three Months to 30 June 2009

Turbotec Products Plc (TRBO.L), the designer and manufacturer of high performance, high quality heat exchangers and Tru-Twist® heat transfer tubing, provides the following trading statement for the three month period ended 30 June 2009 ("Q1").

Overview

Q1 FY2010 sales of $4.9 million (Q1 FY2009: $7.4 million) were in line with the board's expectations, with shipments to all major market segments remaining weak. This is in line with sales of $4.7 million in Q4 FY2009. The deep recession along with tight credit markets lowered the unit demand for all air-conditioning products including heat pumps and this, combined with lower commodity prices, resulted in the lower sales revenue.

Gross margin increased to 29.6% in Q1 compared to 27.9% for the same period last year and 28% for the full fiscal year ended 31 March 2009. Earlier this year and as previously notified, the Company implemented cost reduction programs in light of weaknesses in the overall economy and the housing market. As a result of such measures, along with continued implementation of lean manufacturing techniques and operating cost efficiencies, the Company generated pre-tax profit of $0.52million (Q1 FY 2009: $0.822 million) despite the lower sales.

Commenting on the results, Sunil Raina, Managing Director of Turbotec, said:

"We are pleased to report that the Company remains profitable with a solid cash position in a time of very negative economic sentiment. We are continuing with the execution of our exciting plans for our Hickory (NC) facility and have recently moved a major manufacturing cell to support our southern customer base. Whilst the Company is working hard to combat short term market negativity, we will not let these conditions alter our strategic goals, which are built on confidence in the long term market opportunity for the Company."

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TURBOTEC PRODUCTS PLC 

CONSOLIDATED INCOME STATEMENT 

For the THREE MONTHS ended 30 JUNE

The accompanying notes are an integral part of these consolidated financial statements.

TURBOTEC PRODUCTS PLC

CONSOLIDATED BALANCE SHEETS AT

The accompanying notes are an integral part of these consolidated financial statements 

  TURBOTEC PRODUCTS PLC

cONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED 30 JUNE

The accompanying notes are an integral part of these consolidated financial statements 

NOTES TO THE FINANCIAL STATEMENTS

1.    BASIS OF PREPARATION

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30 June 2009 or 30 June 2008. 

         2.      TAXATION

Analysis of charge in period:

Tax reconciliation:

The effective tax rates for the periods are different than the standard rate of corporate tax in the UK (28% for the three month period ended 30 June 2009 (30%: 2008). The differences are attributable to the following:

3.      BASIC EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE 

The calculations of basic and diluted earnings per ordinary share are based on the profit for the financial year and the weighted average number of equity voting shares in issue and dilutive shares during the period.

4.      INTANGIBLE FIXED ASSETS

Goodwill relates to the acquisition of a technology company acquired by the US parent company in 1985. The operations of that company were subsequently integrated into the Company's primary manufacturing facility. The technology acquired continues to be used by the Company as an integral part of the engineering and manufacturing of its current product line. As this asset is deemed to have an indefinite future benefit no amortization has been recognized in fiscal years 2009 and 2010.  Commencing in fiscal 2009 the deferred development costs are being amortized over the expected lives of the related products. 

5. FIXED ASSET INVESTMENTS

The following companies are subsidiary undertakings of the Company at 30 June, 2008 and have consolidated into the Company's results:

6. CALLED UP SHARE CAPITAL

Called up share capital for the three month periods ended 30 June is as follows:

Turbotec Products Plc (or "the Company") was incorporated on 14 October 2005 in the UK and re-registered as a public company on April 11, 2006 and is the parent company of a wholly owned subsidiary, Turbotec Products, Inc.

 On May 8, 2006, Thermodynetics, Inc. ("Thermodynetics"), formerly the sole shareholder of the Company, completed the sale of a minority interest of the Company, whereby approximately 43.68% of the Company's shares was sold or issued to institutional investors pursuant to a placing on the AIM Market of the London Stock Exchange. Pursuant to the placing, Thermodynetics sold and the Company issued 2,797,183 shares each (a total of 5,594,366 ordinary shares in the Company) at the price of 85 pence per ordinary share. Thermodynetics now owns 56.32% of Turbotec Products Plc, with the balance owned by institutional investors.

9. ULTIMATE PARENT COMPANY

The ultimate parent undertaking is Thermodynetics, Inc, a company incorporated in the United States. This is largest and smallest group into which the Company's results are consolidated.

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