WILSONVILLE, OR--(Marketwire - May 27, 2011) - XZERES Corp. (OTCBB: XPWR), designer, developer and producer of distributed generation, wind power systems for the small wind market (2.5kW-100kW) and power management devices for the commercial and light industrial market, announced today its financial results for its fiscal fourth quarter and full year ended February 28, 2011.
Revenue for the fourth quarter was $648,000, a 38% sequential increase as compared to the third quarter. Revenue for the fiscal year 2011 ended February 28, 2011, which consisted of the Company's first 3 full quarters of operation, was $1.48 million; with no comparable prior year comparison. Revenue by channel for the year end was 18.3% direct and 81.7% indirect and for the fourth quarter was 32.8% direct and 67.2% indirect.
"During the fourth quarter we saw continued growth as we apply significant resources to develop our sales and marketing capabilities from both a tactical and strategic perspective. In addition, our industry is continuing to expand rapidly. Combining our sales and marketing efforts with the rapid expansion of the wind power market, positions us well to become a market leader for small wind power systems and renewable and clean energy solutions," said Frank P. Greco, CEO and President.
Quarterly Business Highlights
- Introduced new Micro-Generation Utility Model and signed first 3 customer contracts in the amount of $1.1 million
- Achieved MCS certification in the United Kingdom becoming 1 of only six small wind turbine companies globally to achieve this certification and thereby permission to sell our systems in the UK.
- Launched UK-based direct sales program and released WindRx renewable energy software to provide economic value proposition to customers for the UK market
- Signed first European Order (5 units), as well as acquired CE Mark certification, and formed European subsidiary to capitalize on the European market.
- Released the company's next generation 10-kilowatt turbine small wind power system, the XZERES 442SR, possessing a dynamic, intelligent controller to boost annual energy output by up to 20 percent and improve overall system reliability
Sales by Geography and New Target Markets
Since inception through the fourth quarter and full year ended February 28, 2011 (the Company's first three full quarters of operation), the Company shipped its small wind power systems to the following states: Oregon; California; Colorado; Iowa; Kansas; Massachusetts; Michigan; New Jersey; New York; Oklahoma and Texas. During the first quarter of fiscal year 2012 (the quarter ending May 31, 2011), we expect to ship to additional states as well as internationally, including the countries of United Kingdom, Australia and India. During the course of calendar and FY 2012 we expect to ship to many more states and countries as we continue to aggressively expand our sales and marketing efforts domestically and internationally. In terms of target markets, during the first 3 full quarters of operation, we focused on the small business market, farms and ranches. During FY 2012, in addition to these markets, we will begin to actively pursue the Federal market, including civil and military opportunities. While contracts for sales to these markets possess long lead times, sales are often for multiple unit quantities and therefore relatively large as compared to non-project based sales. The Federal market consists of what is potentially the largest segment of purchasers of renewable and clean energy in the world. We expect to see this business begin to be realized during our fiscal fourth quarter ending February 28, 2012 with full year impact during FY 2013.
XZERES is developing a new generation of distributed generation small wind power systems to complement our 2.5kW and 10kW devices. We will not disclose the respective device sizes of this product family until we release these units for production and such will remain highly confidential until that time, for competitive reasons. In addition, despite just recently acquiring the Rochester Power Saver Inc. line of power management and power efficiency products, we have already begun developing new and innovative technology for this entire product family, which we believe will materially improve the benefits and value proposition to our largely commercial and light industrial customers and will be superior to that of most, if not all of our competitors within our target market place. As is the case for the Company's small wind power systems business, the power management and power efficiency sales model utilizes both direct (sold by XZERES) and indirect (via dealers) channels.
Business Model Approach
XZERES has taken a system integrator approach to its business combined with a service-centric vertical integration program in order to provide complete solutions to our customers. We design, develop, manufacture, test, assemble and market our systems. In addition, we provide site assessment, customer financing, assistance with government-based financial incentives and local permitting, application engineering, installation, support and maintenance. And now we will begin to offer "tip-to-tower" insurance to our wind turbine customers to enable them to protect their valuable energy producing investment over the 20 year useful life of their system. This is what makes XZERES a solutions provider and enables us to provide the highest value to our customers. We have made this progress within the 1st year of operations and expect even more significant accomplishments during the 2012 fiscal year, as we crusade to become the market leader in the small wind industry and provide substantial shareholder value for our stakeholders.
We are now seeing a dramatic increase in demand for our small wind power systems, as compared to the first three full quarters of operations. In addition, initial sales in the UK for these systems is beginning to accelerate. Moreover, we have meaningful opportunities in Asia, which we hope and expect to exploit over the course of this current fiscal year (FY 2012) and beyond. Of most immediate interest is our recent activity in Vietnam where we are actively pursuing some large micro-grid island electrification projects and desalination projects powered by small wind turbines. Our goal [not a guarantee] for FY 2012 ending February 28, 2012, is to significantly more than quadruple our revenues, as compared to the recently completed fiscal year 2011. During FY 2012 we expect that the revenue by channel ratio of direct compared to indirect business to continue to increase and potentially be predominantly direct business with a minority indirect, as we continue to provide a systems integrator approach to our customers. Finally, despite potential quarterly fluctuations, on an annual basis, we expect gross margins to rise substantially from current levels over the next two fiscal years, as we develop, acquire and deploy new products, services and business models.
For more information about XZERES or any of its products, please visit www.xzeres.com and www.xzeresenergy.com
XZERES Corp designs, develops, manufactures and markets distributed generation, wind power systems for the small wind (2.5kW-100kW) market as well as power management solutions. Our grid connected and off grid wind turbine systems, which consist of our 2.5kW and 10kW devices and related equipment, are utilized for electrical power generation for applications and markets such as residential, micro-grid based rural and island electrification, agricultural, small business, rural electric utility systems, as well as other private, corporate infrastructure and government applications. Our wind power systems are focused on distributed energy, where a specific machine's energy output is largely or entirely used on-site where the equipment is installed, as well as grid connected applications. While many of our customers take advantage of their local net-metering rules within the United States and Feed In Tariffs that are often available in Europe and Internationally (to sell power back to the grid), our wind power systems are not dependent on transmission needs to carry the energy produced to another location and are therefore well suited for remote electrification, available with or without a battery coupled solution. Our power management solutions are deployed primarily for commercial and light industrial applications, and secondarily residential usage and target both urban and rural customers. For more information please see the Company's web site at www.xzeres.com and www.xzeresenergy.com
Forward Looking Statements and Safe Harbor Statement:
The information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. XZERES Corp. claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These "Forward-looking statements" are largely based on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Such forward-looking statements include, in particular, projections about our future results included in our Exchange Act reports, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. These forward-looking statements may be identified by the use of terms and phrases such as "anticipates", "believes," "can," "could," "estimates," "expects," "goals," "forecasts," "hopes," "intends," "may," "plans," "projects," "targets," "will," and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters such as new business models, new products, product enhancements, new technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, regulatory and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements.
These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: (a)new business models may be more difficult and/or take longer than anticipated, may be more costly than anticipated and may have unanticipated adverse effects relating to the Company's business; (b) the challenge of compensating and retaining key employees; (c) the impact on the Company and our customers from the current domestic and international economic, geo-political and financial market conditions; (d) the success of our new products and new business models in achieving their expected benefits; (e) to perform as expected without material defects; (f) to be qualified and accepted by our customers, (g) to successfully compete with products, systems, technologies and services offered by our competitors; (h) we may not be successful in undertaking the steps currently planned in order to further develop the business; and (i) other risks and uncertainties described in our filings with the Securities and Exchange Commission.
Neither XZERES Corp. management nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of the date hereof, and subsequent facts or circumstances may contradict, obviate, undermine, or otherwise fail to support or substantiate such statements. We caution you not to rely on these statements without also considering the risks and uncertainties associated with these statements and our business that are addressed in our filings with the Securities and Exchange Commission that are available on the SEC's web site located at www.sec.gov. Certain information included in this press release may supersede or supplement forward-looking statements in our other Exchange Act reports filed with the SEC. We assume no obligation to update any forward-looking statement to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation.