|By Marketwired .||
|November 5, 2012 11:00 PM EST||
MILWAUKEE, WI -- (Marketwire) -- 11/05/12 -- ZBB Energy Corporation (NYSE MKT: ZBB), a leading developer of intelligent, renewable energy power platforms, today announced its financial results for the first quarter ended on September 30, 2012.
Financial results for the first quarter ended September 30, 2012 as compared to the first quarter ended September 30, 2011 included:
- Product sales increased $1,379,031, or 610 percent, to $1,605,138
- Total revenues increased 11 percent to $1,823,321
- Net loss of $2,882,790 compared to $1,675,448
- Loss per share decreased to ($0.04) from ($0.05) per share
As of November 5, 2012, the Company's backlog was $5.3 million compared to backlog of $6.2 million on September 6, 2012. ZBB ended the quarter with total assets of $20.4 million including $4.6 million in cash. Inventory for current backlog expected to ship in the second and third quarters of this fiscal year has mostly been procured. Anticipated collections in the second and third quarters of this fiscal year associated with current backlog less any customer deposits approximate $3.7 million. Operating expenses continue to run just under $900,000 per month with the Company actively reducing non-essential cash expenses.
The Company is aggressively pursuing additional sales orders and other sources of funding. Sufficient cash and working capital through June 30, 2013 depends on closing additional sales orders and/or obtaining additional funding.
Highlights of the first quarter of fiscal year 2013
Total revenues increased during the first quarter to $1,823,321 from $1,637,857 in the prior year quarter. First quarter product sales increased $1,379,031 to $1,605,138 during the first quarter, due to successful commercialization and continued sales growth of the Company's EnerSystem platform and related products. This increase was offset by a decline in engineering and development revenues, which declined to $218,183, as compared to $1,411,750 in the prior year, due primarily to the completion of the Honam engineering and development agreement.
Total expenses for the first quarter were $4,719,380 compared with $3,334,339 in the prior year quarter. The increase in expenses was primarily related to an increase in the cost of product sales and other expenses as follows:
- $1,335,721 increase in cost of product sales was due to an increase in commercial product sales;
- $436,042 decrease in cost of engineering and development sales was due to diminished activities related to engineering and development agreements completed in the prior year;
- $460,536 increase in advanced engineering and development expenses was due to a shift from engineering contracts to product development and pilot plant operation for the Company's ZBB EnerStore and ZBB EnerSection products;
- $74,689 increase in total other expense primarily as a result of a $76,481 equity loss of investee company;
- $70,000 decrease in income tax benefits as a result of a R&D tax credit from Australia in the prior year's quarter.
During the first quarter, the Company's major accomplishments included:
- Shipped five ZBB EnerSystems and shipped twenty-five ZBB EnerStores to customers with a wide-range of applications.
- Completion of ETL Listing to UL 1741 standard for the ZBB EnerSection 125kW inverter.
- Senior level executive appointments of Chuck Stankiewicz as Chief Operating Officer and Tony Siebert as Vice President of Sales and Product Marketing.
- Installation and commissioning of a 500kWh energy management system, including ZBB EnerStore storage and ZBB EnerSection inverters on the Illinois Institute of Technology campus as part of their "Perfect Power" micro grid application.
- Follow-on orders from the Company's China joint venture of over $600,000.
Milestones achieved subsequent to the end of the first quarter:
- Signed a long-term OEM supply agreement with major vehicle/engine manufacturer for Hybrid electronics.
- Received from the major vehicle/engine manufacturer orders of $500,000 in the first quarter being delivered in the second quarter with an additional $860,000 of new orders booked in the second quarter.
- Received a development order to be followed by a prototype order for electronics to be applied to an innovative generator technology being applied to hydro generation.
- Shipment of an eight unit ZBB EnerStore and ZBB EnerSection power and energy control center system to the microgrid installation at the Joint Base Pearl Harbor Hickam (JBPHH) U.S. Military base in Honolulu, Hawaii.
- We achieved a 30% EnerStore product cost reduction that we expect to begin to realize on orders shipped in the third quarter.
"The first quarter increase in product sales met our plan objectives of quarter over quarter increases in revenues," said Eric C. Apfelbach, President and CEO. "These shipments provide field-proven references for repeat orders from existing customer and for new customer orders. While our sales funnel continues to grow the key to our growth and achieving our 2013 fiscal year targets is accelerating the near-term bookings of orders in the funnel. In addition, our initial penetration in these key segments is leading to strategic partnership opportunities that we believe could offer significant leverage in our market channels, product offering and access to capital."
Conference call - November 6, 2012 - 11:00 a.m. Eastern Standard Time (10:00 a.m. CST)
The Company will hold a conference call on Tuesday, November 6, 2012 at 11:00 a.m. Eastern Standard Time (10:00 a.m. Central Standard Time) to discuss results for its first fiscal quarter ended September 30, 2012. To participate in the call, please dial 1-888-510-1765, for domestic callers, and 1-719-325-2402, for international callers. The participant passcode is 7203641.
The call will be available for replay at 1-888-203-1112, for domestic callers, and 1-719-457-0820, for international callers. The replay passcode is 7203641. The conference call will also be available for replay via the investor relations section of the Company's website at www.zbbenergy.com until December 6, 2012.
ZBB ENERGY CORPORATION Condensed Consolidated Statements of Operations (Unaudited) Three months ended September 30, -------------------------------- 2012 2011 --------------- --------------- Revenues Product sales $ 1,605,138 $ 226,107 Engineering and development 218,183 1,411,750 --------------- --------------- Total Revenues 1,823,321 1,637,857 --------------- --------------- Costs and Expenses Cost of product sales 1,492,392 156,671 Cost of engineering and development 45,065 481,107 Advanced engineering and development 1,159,739 699,383 Selling, general, and administrative 1,681,552 1,677,997 Depreciation and amortization 340,632 319,181 --------------- --------------- Total Costs and Expenses 4,719,380 3,334,339 --------------- --------------- Loss from Operations (2,896,059) (1,696,482) --------------- --------------- Other Income (Expense) Equity in loss of investee company (76,481) - Interest income 389 6,689 Interest expense (47,563) (59,668) Other income - 4,013 --------------- --------------- Total Other Income (Expense) (123,655) (48,966) --------------- --------------- Loss before provision (benefit) for Income Taxes (3,019,714) (1,745,448) Provision (benefit) for Income Taxes - (70,000) --------------- --------------- Net loss (3,019,714) (1,675,448) Net loss attributable to noncontrolling interest 136,924 - --------------- --------------- Net Loss Attributable to ZBB Energy Corporation $ (2,882,790) $ (1,675,448) =============== =============== Net Loss per share Basic and diluted $ (0.04) $ (0.05) Weighted average shares-basic and diluted 77,319,009 30,496,936 ZBB ENERGY CORPORATION Condensed Consolidated Balance Sheets September 30, 2012 (Unaudited) June 30, 2012 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 4,637,014 $ 7,823,217 Accounts receivable, net 1,189,722 480,563 Inventories 3,831,728 2,912,207 Prepaid and other current assets 343,643 187,448 Refundable income tax credit 192,643 185,545 ------------- ------------- Total current assets 10,194,750 11,588,980 Long-term assets: Property, plant and equipment, net 5,416,108 5,484,545 Investment in investee company 3,007,408 3,083,889 Intangible assets, net 958,618 1,143,122 Goodwill 803,079 803,079 ------------- ------------- Total assets $ 20,379,963 $ 22,103,615 ============= ============= Liabilities and Equity Current liabilities: Bank loans and notes payable $ 993,821 $ 1,022,826 Accounts payable 1,917,790 1,899,029 Accrued expenses 1,332,418 1,289,138 Customer deposits 915,183 1,315,309 Accrued compensation and benefits 271,099 335,369 ------------- ------------- Total current liabilities 5,430,311 5,861,671 Long-term liabilities: Bank loans and notes payable 2,802,986 2,915,134 ------------- ------------- Total liabilities 8,233,297 8,776,805 ------------- ------------- Equity Series A preferred stock ($0.01 par value, $10,000 face value) Common stock ($0.01 par value); 150,000,000 authorized, 77,568,535 and 72,977,248 shares issued and outstandingas of September 30, 2012 and June 30, 2012, respectively 775,686 729,773 Additional paid-in capital 82,155,435 80,363,519 Accumulated deficit (71,936,699) (69,053,909) Accumulated other comprehensive loss (1,584,680) (1,584,921) ------------- ------------- Total ZBB Energy Corporation Equity 9,409,742 10,454,462 Noncontrolling interest 2,736,924 2,872,348 ------------- ------------- Total equity 12,146,666 13,326,810 ------------- ------------- Total liabilities and equity $ 20,379,963 $ 22,103,615 ============= ============= ZBB Energy Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) Three months ended September 30, -------------------------------- 2012 2011 --------------- --------------- Cash flows from operating activities Net loss $ (3,019,714) $ (1,675,448) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property, plant and equipment 156,128 137,907 Amortization of intangible assets 184,504 176,757 Stock-based compensation 236,150 300,228 Changes in assets and liabilities Accounts receivable (709,159) (1,271,909) Inventories (919,521) (166,161) Prepaids and other current assets (156,195) 5,029 Refundable income taxes (7,098) (56,710) Accounts payable 18,761 661,880 Accrued compensation and benefits (64,270) (81,088) Accrued expenses 20,465 111,823 Customer deposits (400,126) 263,233 --------------- --------------- Net cash used in operating activities (4,583,594) (1,594,459) --------------- --------------- Cash flows from investing activities Expenditures for property and equipment (87,691) (601,804) --------------- --------------- Net cash used in investing activities (87,691) (601,804) --------------- --------------- Cash flows from financing activities Repayments of bank loans and notes payable (141,153) (75,501) Proceeds from issuance of Series A preferred stock - 1,447,240 Proceeds from issuance of common stock 1,744,688 - Common stock issuance costs (143,009) (65,304) Proceeds from noncontrolling interest 1,500 - --------------- --------------- Net cash provided by financing activities 1,462,026 1,306,435 --------------- --------------- Effect of exchange rate changes on cash and cash equivalents 23,056 (52,399) --------------- --------------- Net decrease in cash and cash equivalents (3,186,203) (942,227) Cash and cash equivalents - beginning of period 7,823,217 2,910,595 --------------- --------------- Cash and cash equivalents - end of period $ 4,637,014 $ 1,968,368 =============== =============== Cash paid for interest $ 46,753 $ 59,668 Supplemental non-cash investing and financing activities: Issuance of common stock for discounted notes receivable - $ 1,440,960
About ZBB Energy Corporation
ZBB Energy Corporation (NYSE MKT: ZBB) designs, develops, and manufactures advanced energy storage, power electronic systems, and engineered custom and semi-custom products targeted at the growing global need for distributed renewable energy, energy efficiency, power quality, and grid modernization. ZBB and its power electronics subsidiary, Tier Electronics, LLC, have developed a portfolio of integrated power management platforms that combine advanced power and energy controls plus energy storage to optimize renewable energy sources and conventional power inputs whether connected to the grid or not. Tier Electronics participates in the energy efficiency markets through their hybrid vehicle control systems, and power quality markets with their line of regulation solutions. Together, these platforms solve a wide range of electrical system challenges in global markets for utility, governmental, commercial, industrial and residential end customers. Founded in 1986, ZBB's platforms ensure optimal efficiencies today, while offering the flexibility to adapt and scale to future requirements. ZBB's corporate offices and production facilities are located in Menomonee Falls, WI, USA with offices also located in Perth, Western Australia. For more information, visit: www.zbbenergy.com.
Safe Harbor Statement
Certain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Lewis W. Kreps
Three Part Advisors, LLC
Three Part Advisors, LLC
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