SOURCE: ZBB Energy Corporation

ZBB Energy Corporation

September 07, 2010 17:53 ET

ZBB Energy Reports Increased Annual Revenues

Product and Company Improvements

MILWAUKEE, WI--(Marketwire - September 7, 2010) - ZBB Energy Corporation (NYSE Amex: ZBB), a leading developer of intelligent, renewable energy power platforms, today reported increased annual revenues for the fiscal year ended June 30, 2010. Net loss on the basis of accounting principles generally accepted in the United States (GAAP) was $9.6 million or $0.74 per diluted share in the year ended June 30, 2010, compared with $5.6 million or $0.53 per diluted share in the year ended June 30, 2009. Net loss in the latest fiscal year was increased by advanced engineering and development expenses, selling, general and administrative expenses, and impairment expenses.

Our revenues for the years ended June 30, 2010 and 2009 were $1,545,980 and $1,156,792, respectively, an increase of $389,188 or 33.6%. This was the result of an increase in revenues of $899,460 from commercial product sales and revenues, and a $510,272 decrease in engineering and development revenues as compared to the year ending June 30, 2009. The increase in commercial product sales and revenues was primarily the result of the Company's sale of a 500 Kwh system shipped to Dundalk Institute of Technology, Ireland in the first quarter of 2010. The decrease in engineering and development revenues is due to the substantial completion of the Advanced Electricity Storage Technologies project ("AEST") with the Commonwealth of Australia in June 2010. Revenues include estimates of earned revenue based on the Company's performance on its engineering and development contracts.

Total costs and expenses for the year ended June 30, 2010 and 2009 were $11,057,919 and $6,667,934, respectively. This increase of $4,389,985 in the year ended June 30, 2010 was primarily due to the following:

--  increased costs of $572,891 related to the additional cost of product
    sales for the shipment to Dundalk
--  increases in advanced engineering and development expenses of
    $1,368,000 due to an increase in the Company's engineering and
    development activities for its next generation battery module and the
    PECC systems
--  legal and accounting fee increases of $258,249 related to the
    termination of the Company's CEO and restatements of the Company's
    financial statements
--  severance pay to the Company's former CEO of $390,000
--  increase in stock option expense of $188,575 for options issued to new
    employees and for accelerated vesting of directors options
--  increase in non-cash directors fees of $182,500 and cash director's
    fees of $38,584 due to an increase in the size of the Board of
--  fund raising expenses of $177,918 for government grant proposals,
    section 48c tax credit fees, and loan commitment fees
--  The increase in costs and expenses in the year ended June 30, 2010 also
    included equipment impairment expenses of $903,305 and an increase in
    depreciation of $146,401 over the prior year due to new equipment
    purchases in late fiscal year 2010.

Our net loss for the years ended June 30, 2010 and 2009 was $9,606,826 and $5,561,056, respectively, resulting in a $4,045,770 increase in net loss as compared to the year ended June 30, 2009. In summary, this increase in loss was primarily the result of increases in advanced engineering and development expenses, selling, general and administrative expenses, and impairment expenses, totaling $4,226,423, as described above.

"Management has adopted a plan with multiple financing upsides and is very confident that this plan will provide necessary funding for the next year. Although we have a comprehensive business and financing strategy in place, there is not absolute certainty, however, that the company can continue to finance its growth strategy. Therefore, we plan to include the going concern disclosure that was added in last quarter in our June 30, 2010 Form 10k filing until a greater margin of error can be realized in the balance sheet and burn rate of the company," said Eric Apfelbach, President and CEO.

"I'm more bullish on ZBB's future than ever. We've experienced a number of changes this past year that have been challenging. I believe, however, that we've now created a solid foundation on which to build the Company. We have funding vehicles in place to fund the Company for the next year. We have products under development that position ZBB uniquely in the energy storage and renewables markets. We are executing on a sales and marketing strategy that will allow us to realize the enormous market potential of the energy storage and renewables markets."

Investor Conference Call -- 4:00 p.m. Central time, Tuesday, September 7, 2010

A conference call to discuss the financial and operating results and company's outlook will be held on Tuesday, September 7, 2010, at 4:00 p.m. US Central (5:00 p.m. Eastern). The conference call will be hosted by Eric Apfelbach, President and CEO. A brief presentation by Mr. Apfelbach will be followed by a question and answer period. To participate in the conference call, callers from within the United States and Canada, dial the toll free number 888-428-7458 and then reference "ZBB Earnings Call" (no pin number required). For all international callers, dial 201-604-517.

The presentation materials will be posted on the Company's web site at following the conference call.

About ZBB Energy Corporation

ZBB Energy Corporation (NYSE Amex: ZBB) provides distributed intelligent power management platforms that directly integrate multiple renewable and conventional onsite generation sources with rechargeable zinc bromide flow batteries and other storage technology. This platform solves a wide range of electrical system challenges in global markets for various types of sites with utility, governmental, commercial, industrial and residential end customers. A developer and manufacturer of its modular, scalable and environmentally friendly power systems ("ZESS POWR™"), ZBB Energy was founded in 1998 and is headquartered in Wisconsin with offices also located in Perth, Western Australia.

Safe Harbor Statement

Certain statements made in this press 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 of 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
                  Consolidated Balance Sheets (Unaudited)

                                            June 30, 2010   June 30, 2009
                                            --------------  --------------
Current assets:
  Cash and cash equivalents                 $    1,235,635  $    2,970,009
  Bank certificate of deposit                            -       1,000,000
  Accounts receivable                                7,553         614,154
  Interest receivable                                    -          19,746
  Inventories-net of $304,200 and $145,301
   allowance                                       702,536       1,587,113
  Prepaids and other current assets                149,098         143,173
                                            --------------  --------------
    Total current assets                         2,094,822       6,334,195
                                            --------------  --------------
Long-term assets:
  Property, plant and equipment, net             3,568,823       4,578,180
  Goodwill                                         803,079         803,079
                                            --------------  --------------
    Total assets                            $    6,466,724  $   11,715,454
                                            ==============  ==============

Liabilities and Shareholders' Equity
Current liabilities:
  Bank loans                                       395,849         416,558
  Accounts payable                                 869,179         827,001
  Accrued expenses                                 539,100          25,765
  Deferred revenues                                325,792       1,128,539
  Accrued compensation and benefits                765,106         151,841
                                            --------------  --------------
    Total current liabilities                    2,895,025       2,549,704
                                            ==============  ==============
Long-term liabilities:
  Bank loans                                     2,120,421       2,399,915
                                            --------------  --------------
    Total liabilities                       $    5,015,446  $    4,949,619
                                            ==============  ==============

Shareholders' equity
  Common stock ($0.01 par value);
  150,000,000 authorized 14,915,389 and
  10,618,297 shares issued and outstanding         149,155         106,183
  Additional paid-in capital                    49,770,988      45,549,079
  Treasury stock - 13,833 shares                   (11,136)              -
  Accumulated other comprehensive (loss)        (1,563,052)     (1,601,576)
  Accumulated (deficit)                        (46,894,678)    (37,287,851)
                                            --------------  --------------
    Total shareholders' equity              $    1,451,277  $    6,765,835
                                            --------------  --------------
    Total liabilities and shareholders'
     equity                                 $    6,466,722  $   11,715,454
                                            ==============  ==============

See accompanying notes to consolidated financial statements

                          ZBB ENERGY CORPORATION
            Consolidated Statements of Operations (Unaudited)

                                                  Year ended June 30,
                                                 2010            2009
                                            --------------  --------------
  Product sales and revenues                $      967,455  $       67,995
  Engineering and development revenues             578,525       1,088,797
                                            --------------  --------------
    Total Revenues                               1,545,980       1,156,792

Costs and Expenses
  Cost of product sales                            899,287          56,468
  Cost of engineering and development
   revenues                                      1,836,299       2,051,803
  Advanced engineering and development           2,239,139         807,291
  Selling, general, and administrative           4,755,592       3,474,476
  Depreciation                                     424,297         277,896
  Impairment and other equipment charges           903,305               -
                                            --------------  --------------
    Total Costs and Expenses                    11,057,920       6,667,934

                                            --------------  --------------
Loss from Operations                            (9,511,940)     (5,511,142)

Other Income (Expense)
  Interest income                                   60,193         145,088
  Interest (expense)                              (149,521)       (182,074)
  Other income (expense)                            (5,559)        (12,928)
                                            --------------  --------------
    Total Other Income (Expense)                   (94,887)        (49,914)

                                            --------------  --------------
Loss before provision for Income Taxes          (9,606,826)     (5,561,056)

Provision for Income Taxes                               -               -
                                            --------------  --------------
Net Loss                                    $   (9,606,826) $   (5,561,056)
                                            --------------  --------------

Net Loss per share-
                                            --------------  --------------
  Basic and diluted                         $        (0.74) $        (0.53)
                                            --------------  --------------

Weighted average shares-basic and diluted:
  Basic                                         12,924,362      10,547,621
                                            --------------  --------------
  Diluted                                       12,924,362      10,547,621

ZBB Energy Corporation                              Year ended June 30,
Consolidated Statements of Cash Flows
 (Unaudited)                                        2010          2009
                                                ------------  ------------
Cash flows from operating activities
Net loss                                        $ (9,606,826) $ (5,561,056)
Adjustments to reconcile net loss to net cash
 (used) in operating activities:
  Depreciation                                       424,297       277,896
  Change in inventory allowance                      158,899       (88,699)
  Equipment costs reclassified to expenses                 -       372,855
  Impairment and other equipment charges             903,305             -
  Payments applied to note receivable for
   consulting fees                                         -       200,000
  Stock based compensation                           527,439       338,864
(Increase) decrease in operating assets:
  Accounts receivable                                606,601      (609,987)
  Inventories                                        725,678      (185,530)
  Prepaids and other current assets                   (5,925)      (41,799)
  Other receivables-interest                          19,746        61,083
Increase (decrease) in operating liabilities:
  Accounts payable                                    42,178       247,500
  Accrued compensation and benefits                  613,265        22,092
  Accrued expenses                                   544,551        25,765
  Deferred revenues                                 (802,747)      717,539
                                                ------------  ------------
  Net cash (used) in operating activities         (5,849,541)   (4,223,477)
                                                ------------  ------------
Cash flows from investing activities
  Capital expenditures                              (318,246)     (889,658)
  Bank certificate of deposit                      1,000,000    (1,000,000)
                                                ------------  ------------
  Net cash provided (used) in investing
   activities                                        681,754    (1,889,658)
                                                ------------  ------------
Cash flows from financing activities
  Proceeds from bank loan                            156,000     1,070,000
  Repayments of bank loans                          (456,203)     (306,984)
  Proceeds from stock issuance - net of fees
   and costs                                       3,737,442             -
  Purchase of treasury stock                         (11,136)            -
                                                ------------  ------------
  Net cash provided by financing activities        3,426,103       763,016
                                                ------------  ------------
Effect of exchange rate changes on cash and
 cash equivalents                                      7,307      (131,192)
                                                ------------  ------------
Net (decrease) in cash and cash equivalents       (1,734,376)   (5,481,311)
Cash and cash equivalents - beginning of year      2,970,009     8,451,320
                                                ------------  ------------

Cash and cash equivalents - end of year         $  1,235,633  $  2,970,009
                                                ============  ============

Contact Information

  • Contact Information:
    Helen Brown
    Investor Relations
    ZBB Energy Corporation
    T: 262.253.9800
    Email: Email Contact