WINDSOR, Conn.--(BUSINESS WIRE)--TDYN--
Thermodynetics, Inc. (OTCBB:TDYN)--

Net sales for the three and nine months ended December 31, 2003
totaled $4.6 and $11.8 million respectively compared to $2.6 and $8.3
million for the same periods of the prior year. Revenues are
anticipated to be $16 million plus for fiscal 2004, reflecting some
growth for the Company's Turbotec subsidiary and the remainder the
integration of the new Vulcan acquistion.
Applications for the Company's heat exchanger tubing used in
residential construction, boiler tubes and swimming pool heat pumps
exhibited strong sales during the first nine months of fiscal 2004,
accounting for the significant increase in revenues from the Company's
historical operations. Sales relating to automotive applications added
to the increased sales in both the December quarter and year to date
periods.
The Company's revenue base is expected to increase to the $22
million level (assuming no increases or decreases in other markets)
for the next fiscal year ending March 31, 2005 as a result of our
Vulcan subsidiary's new automotive business scheduled to begin in
early fiscal 2005.
Gross profit margins declined in the current period versus the
same period last year (25% vs. 29% of net sales) and for the
comparable year to date periods (26% vs. 28% of net sales). The
acquisition of Vulcan introduced the Company into new markets for its
tubing products, principally automotive and related applications.
These markets exhibit higher direct costs as a percentage of selling
price than the Company's historical product mix. Heat exchanger
applications have higher engineering and value added content, thereby
generating higher contribution margins. Further, commodity prices of
copper and nickel have risen sharply during the current quarter to
their highest levels in the past six years resulting in significant
increases in tubing costs; continued escalation in material costs
extending for much of calendar 2004 is expected thereby negatively
impacting contribution margins.
In addition to the inclusion of non-manufacturing overhead
expenses generated by Vulcan since its acquisition, the Company made
additions to staffing and plans on further additions to its marketing
and engineering staff. Consequently future period operating expenses
are expected to increase.
Interest expense increased during both the current and year to
date periods as a result of debt obligations incurred in conjunction
with the acquisition. Vulcan is acquiring machinery and equipment in
excess of $2 million to enable it to service the new business referred
to above.
Operating income for the three months ended December 31, 2003
increased to $267,000 as compared to $160,000 for the prior year and
for the year to date periods, was $856,000 in fiscal year 2004 and
$676,000 in fiscal year 2003.
At December 31, 2003 working capital was a negative $580,000
compared to a positive $358,000 at March 31, 2003, primarily resulting
from short term debt issued by the Company in conjunction with the
Vulcan acquisition. In addition, at the time of the purchase, Vulcan
had a negative working capital position.
A new website www.thermodynetics.com has been completed and
contains links to both Turbotec Products and Vulcan Industries.
-0-
*T

Three Months Ended Nine Months Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2003 2002 2003 2002

Net Sales $4,600,963 $2,550,470 $11,786,101 $8,307,786
Operating Income $266,611 $160,287 $856,466 $676,103
Income Before Income
Taxes $156,801 $65,698 $449,179 $351,490
Net Income $136,801 $55,698 $349,179 $341,490
Weighted Shares
Outstanding-
Basic 18,271,178 18,083,076 18,242,051 18,016,653
Weighted Shares
Outstanding-
Diluted 18,271,178 18,083,076 18,242,051 18,016,653
Earnings Per Share-
Basic $.01 $ NIL $.02 $.02
Earnings Per Share-
Diluted $.01 $ NIL $.02 $.02

*T

Thermodynetics, Inc. is a world leader in enhanced heat transfer
technology. This technology provides higher energy efficiencies for
applications in the biomedical, aerospace, automotive, boiler, marine,
food and beverage and residential/commercial heating and cooling
industries. The Company offers tubing products supporting a wide array
of automotive component and heat transfer needs, including
surface-enhanced tubing, single and double wall coaxial condenser and
evaporator coils and heat recovery systems.

FORWARD LOOKING STATEMENTS

This quarterly report contains certain forward-looking statements
regarding the Company, its business prospects and results of
operations that are subject to certain risks and uncertainties posed
by many factors and events that could cause the Company's actual
business, prospects and results of operations to differ materially
from those that may be anticipated by such forward-looking statements.
Factors that may affect such forward-looking statements include,
without limitation: the Company's ability to successfully and timely
develop and finance new projects, the impact of competition on the
Company's revenues, and changes in unit prices, supply and demand for
the Company's tubing product line especially in applications serving
the commercial, industrial and residential construction industries.
When used, words such as "believes," "anticipates," "expects,"
"continue", "may", "plan", "predict", "should", "will", "intends" and
similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date of this report. The Company undertakes no obligation to
revise any forward-looking statements in order to reflect events or
circumstances that may subsequently arise. Readers are urged to
carefully review and consider the various disclosures made by the
Company in this report, news releases, and other reports filed with
the Securities and Exchange Commission that attempt to advise
interested parties of the risks and factors that may affect the
Company's business.

KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: MANUFACTURING EARNINGS
SOURCE: Thermodynetics, Inc.

CONTACT INFORMATION:
Thermodynetics, Inc.
Robert A. Lerman, 860-683-2005 www.thermodynetics.com

TDYN - THERMODYNETICS (OTCBB)
Date Open High Low Last Change Volume % Change
02/06/04 0.30 0.32 0.30 0.30 unch 137400 unch%

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