SOURCE: ZBB Energy Corporation

ZBB Energy Corporation

February 17, 2015 16:00 ET

ZBB Energy Corporation Reports Second Quarter Fiscal Year 2015 Results

MILWAUKEE, WI--(Marketwired - Feb 17, 2015) - ZBB Energy Corporation (NYSE MKT: ZBB), a leading developer of intelligent, renewable energy power platforms and hybrid vehicle control systems, today announced its financial results for its second fiscal quarter ended December 31, 2014.

Second Quarter Highlights

The Company's major accomplishments during and subsequent to the end of the second quarter of fiscal year 2015 included:

  • The Company announced its GridStrong™ family of distribution grid control and power quality improvement products, and exhibited at the GreenBuild 2014 International Conference.
  • The Company announced a power purchase agreement (PPA) utilizing solar photovoltaics in conjunction with ZBB Energy technologies to provide electricity to a 350+ unit condominium complex in Honolulu. The multi-million dollar project is the first for the Company under the PPA structure, which provides significant benefits to the customer, ZBB and potential investors. ZBB is working on several additional PPA type agreements designed to allow a bundling of these investments that would be attractive to high-yield income investors.
  • The Company announced that it has completed field qualification of its enhanced EnerStore "V3.3" 50kWh flow battery. The product upgrade package, which includes modifications that enhance system reliability, life cycle, energy output and efficiency performance of the product, has been field qualified and is now shipping.
  • The Company announced that it will provide the world's first customer side of the meter integrated hybrid battery system utilizing ZBB's EnerStore® V3.3 zinc bromide flow batteries and a lithium ion energy storage module to provide elevator and common area back-up power for a multi-tenant residential building in Hawaii. The hybrid system allows commercial and industrial markets to benefit from both short-term power and intermittent "power" types of applications and provides building owners and operators numerous benefits, including the ability to monetize behind-the-meter assets, realize back-up power in the event of a grid outage, and the peace of mind that comes with knowing that the building is essentially "future proof," in that ZBB's systems are modular and scalable to easily accommodate future energy system and program considerations

Financial results for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 included:

  • Total revenue was $300,654 as compared to $961,456 during the same period last year.
  • Total costs and expenses increased 15% to $3,575,886 from $3,104,169.
  • Loss from operations was $3,275,232 as compared to $2,142,713 during the same period last year.
  • Net loss to common shareholders was $3,446,642 compared to $2,233,969.
  • Loss per share was ($0.09) versus ($0.13) during the same period last year.

Financial Position

The Company's backlog is currently $3.5 million versus $8.8 million at this time last year. Backlog does not include the anticipated revenue stream associated with the PPA discussed above. The Company ended the second quarter of fiscal 2015 with total assets of $27.7 million, including $17.7 million in cash and $263,157 in accounts receivable. The Company believes that cash and cash equivalents on hand at December 31, 2014, and other potential sources of cash, will be sufficient to fund current operations through the third quarter of fiscal year 2016.

"While near-term revenue is down relative to last year, we are very encouraged by the progress of our sales and product development initiatives that underpin our future revenue growth," said Eric C. Apfelbach, Chief Executive Officer. "As an example, we announced our first project where we have taken on the role of energy supplier through a PPA structure. This important strategic change is a reflection of ZBB's broad capability and we believe will help to accelerate growth. We are also encouraged by our previously announced wins in the commercial and industrial space and with the increased pipeline of activity that should translate into a meaningful ramp in revenue. Our GridStrong™ product continues to perform well and is being slotted into multiple new utility evaluations. Longer term, we believe our Megawatt-hour scale products will prove to be well suited to meet the needs for large scale projects in the utility market. Brad Hansen, our President and COO, and I will provide more detail during our conference call this afternoon. I hope you can join us," concluded Mr. Apfelbach.

Conference call - February 17, 2015 - 4:30 p.m. EST (3:30 p.m. CST)

The Company will hold a conference call later today, Tuesday, February 17, 2015 at 4:30 p.m. EST (3:30 p.m. CST) to discuss results for its second fiscal quarter ended December 31, 2014. To participate in the call, please dial 1-888-211-4439. The participant passcode is 6599111.

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 6599111. The conference call will also be available for replay via the investor relations section of the Company's website at www.zbbenergy.com until March 17, 2015.

About ZBB Energy Corporation

ZBB Energy Corporation (NYSE MKT: ZBB) designs, develops, licenses and manufactures advanced energy storage and power electronics systems, as well as engineered custom and semi-custom products targeted at the growing global need for distributed renewable energy, energy efficiency, power quality, and grid modernization. ZBB's portfolio includes integrated power management platforms that combine advanced power and energy controls plus energy storage to optimize renewable energy sources and conventional power inputs for grid connected and off-grid applications. ZBB's innovative platforms solve a wide range of electrical system challenges in global markets for utility, governmental, commercial, industrial and residential customers. In addition, the platforms ensure optimal efficiencies today, while offering the flexibility to adapt and scale to future requirements. ZBB's corporate offices, engineering and development, and production facilities are located in Menomonee Falls, WI, USA with a research facility also located in Perth, Western Australia. ZBB has a joint venture with Meineng Energy, a provider of leading-edge energy storage systems and solutions to the greater China market. 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.

   
ZBB ENERGY CORPORATION  
Condensed Consolidated Statements of Operations  
(Unaudited)  
                         
    Three months ended December 31,     Six months ended December 31,  
    2014     2013     2014     2013  
Revenues                                
  Product sales   $ 114,177     $ 761,456     $ 663,518     $ 1,830,578  
  Engineering and development     186,477       200,000       201,997       200,000  
    Total Revenues     300,654       961,456       865,515       2,030,578  
                                 
Costs and Expenses                                
  Cost of product sales     171,683       554,458       507,646       1,151,858  
  Cost of engineering and development     59,982       43,636       169,145       43,636  
  Advanced engineering and development     1,480,813       1,094,892       2,778,396       2,304,729  
  Selling, general, and administrative     1,704,234       1,068,004       3,763,787       2,553,495  
  Depreciation and amortization     159,174       343,179       313,690       685,759  
    Total Costs and Expenses     3,575,886       3,104,169       7,532,664       6,739,477  
                                 
Loss from Operations     (3,275,232 )     (2,142,713 )     (6,667,149 )     (4,708,899 )
                                 
Other Income (Expense)                                
  Equity in loss of investee company     (225,471 )     (130,590 )     (307,973 )     (248,482 )
  Gain on investment in investee company     -       -       1,257,407       -  
  Interest income     7,879       1,000       11,490       1,509  
  Interest expense     (26,270 )     (45,777 )     (53,850 )     (97,515 )
  Other income (expense)     -       -       -       896  
    Total Other Income (Expense)     (243,862 )     (175,367 )     907,074       (343,592 )
                                 
Loss before benefit for Income Taxes     (3,519,094 )     (2,318,080 )     (5,760,075 )     (5,052,491 )
                                 
Benefit for Income Taxes     -       (28,521 )     -       (48,250 )
  Net loss     (3,519,094 )     (2,289,559 )     (5,760,075 )     (5,004,242 )
  Net loss attributable to noncontrolling interest     143,508       130,590       226,010       248,482  
  Gain attributable to noncontrolling interest     -       -       (481,870 )     -  
Net Loss Attributable to ZBB Energy Corporation     (3,375,586 )     (2,158,969 )     (6,015,935 )     (4,755,760 )
Preferred Stock Dividend     (71,056 )     (75,000 )     (118,865 )     (77,499 )
Net Loss Attributable to Common Shareholders   $ (3,446,642 )   $ (2,233,969 )   $ (6,134,800 )   $ (4,833,259 )
                                 
Net Loss per share                                
  Basic and diluted   $ (0.09 )   $ (0.13 )   $ (0.18 )   $ (0.27 )
                                 
Weighted average shares-basic and diluted     39,051,379       17,709,413       34,835,949       17,708,422  
                                 
                                 
   
ZBB ENERGY CORPORATION  
Condensed Consolidated Balance Sheets  
   
    (Unaudited)        
    December 31, 2014     June 30, 2014  
Assets                
Current assets:                
  Cash and cash equivalents   $ 17,710,385     $ 10,360,721  
  Restricted cash on deposit     68,752       69,901  
  Accounts receivable, net     263,157       1,051,024  
  Inventories, net     1,451,298       1,352,970  
  Prepaid expenses and other current assets     246,429       295,814  
  Refundable income tax credit     80,283       91,191  
  Note receivable     153,156       -  
    Total current assets     19,973,460       13,221,621  
Long-term assets:                
  Property, plant and equipment, net     4,371,793       4,382,203  
  Investment in investee company     2,595,674       1,646,240  
  Goodwill     803,079       803,079  
    Total assets   $ 27,744,006     $ 20,053,143  
                 
Liabilities and Equity                
Current liabilities:                
  Current maturities of bank loans and notes payable   $ 356,065     $ 351,142  
  Accounts payable     467,060       589,642  
  Accrued expenses     2,063,037       2,621,479  
  Customer deposits     455,095       741,145  
  Accrued compensation and benefits     228,791       195,181  
    Total current liabilities     3,570,048       4,498,589  
Long-term liabilities:                
  Bank loans and notes payable, net of current maturities     1,866,222       2,045,127  
    Total liabilities     5,436,270       6,543,716  
                 
Commitments and contingencies (Note 12)                
                 
Equity                
  Series B redeemable convertible preferred stock ($0.01 par value, $1,000 face value) 3,000 shares authorized and issued, 2,575 shares outstanding, preference in liquidation of $5,488,375 and $5,347,994 as of December 31, 2014 and June 30, 2014, respectively    
26
     
26
 
  Common stock ($0.01 par value); 150,000,000 authorized, 39,073,084 and 25,651,389 shares issued and outstanding as of December 31, 2014 and June 30, 2014, respectively    
1,099,045
     
964,828
 
  Additional paid-in capital     116,695,781       102,286,450  
  Accumulated deficit     (95,804,176 )     (89,788,242 )
  Accumulated other comprehensive loss     (1,592,167 )     (1,599,875 )
    Total ZBB Energy Corporation Equity     20,398,509       11,863,187  
  Noncontrolling interest     1,909,227       1,646,240  
    Total equity     22,307,736       13,509,427  
    Total liabilities and equity   $ 27,744,006     $ 20,053,143  
                 
                 
   
ZBB ENERGY CORPORATION  
Condensed Consolidated Statements of Cash Flows  
(Unaudited)  
   
    Six months ended December 31,  
    2014     2013  
Cash flows from operating activities                
Net loss   $ (5,760,075 )   $ (5,004,242 )
Adjustments to reconcile net loss to net cash used in operating activities:                
  Depreciation of property, plant and equipment     313,690       421,760  
  Amortization of intangible assets     -       369,045  
  Amortization of discounts and debt issuance costs on notes payable     -       14,566  
  Stock-based compensation, net     853,811       106,024  
  Equity in loss of investee company     307,973       248,482  
  Gain on investment in investee company     (1,257,407 )     -  
  Interest accreted on note receivable     (3,156 )     -  
Changes in assets and liabilities                
  Accounts receivable     787,867       163,874  
  Inventories     (98,328 )     446,780  
  Prepaids and other current assets     49,385       55,229  
  Refundable income taxes     10,908       84,964  
  Accounts payable     (122,582 )     161,296  
  Accrued expenses     (556,073 )     (21,671 )
  Customer deposits     (286,050 )     199,411  
  Accrued compensation and benefits     33,610       (478,503 )
Net cash used in operating activities     (5,726,427 )     (3,232,985 )
Cash flows from investing activities                
  Change in restricted cash     1,149       (9,356 )
  Expenditures for property and equipment     (303,280 )     (39,956 )
  Investment in note receivable     (150,000 )     -  
Net cash used in investing activities     (452,131 )     (49,312 )
Cash flows from financing activities                
  Repayments of bank loans and notes payable     (173,982 )     (113,035 )
  Proceeds from issuance of preferred stock and warrants     -       3,000,000  
  Preferred stock issuance costs     -       (96,967 )
  Proceeds from issuance of common stock     14,837,760       -  
  Common stock issuance costs     (1,148,023 )     -  
  Proceeds from noncontrolling interest     7,127       -  
Net cash provided by financing activities     13,522,882       2,789,998  
Effect of exchange rate changes on cash and cash equivalents     5,340       (3,820 )
Net increase in cash and cash equivalents     7,349,664       (496,119 )
Cash and cash equivalents - beginning of period     10,360,721       1,096,621  
                 
Cash and cash equivalents - end of period   $ 17,710,385     $ 600,502  
                 
                 
Supplemental disclosures of cash flow information:                
  Cash paid for interest   $ 49,577     $ 95,606  
  Cash received from foreign income tax credit     -       133,996  
  Assets held for lease transferred to inventory     -       112,500  
                 
                 

Contact Information

  • Investor Relations Contact:

    David Mossberg
    Three Part Advisors, LLC
    817-310-0051