SOURCE: ZBB Energy Corporation

ZBB Energy Corporation

February 09, 2012 08:30 ET

ZBB Energy Reports Second Quarter Results for Fiscal Year 2012

ZBB EnerStore and ZBB EnerSection Expected to Begin Commercial Production and Shipment in Q3 Fiscal Year 2012

MILWAUKEE, WI--(Marketwire - Feb 9, 2012) - ZBB Energy Corporation (NYSE Amex: ZBB), the leading developer of intelligent, renewable energy power platforms, today reported revenues of $440,921 and $2,078,778 for the three and six months ended December 31, 2011, respectively, representing increases of $206,240 and $1,844,097 compared to the corresponding fiscal 2011 periods. Net loss on the basis of accounting principles generally accepted in the United States (GAAP) was $4.4 million or $0.14 per share in the six months ended December 31, 2011, compared with $3.9 million or $0.22 per share in the six months ended December 31, 2010.

The increase in revenues of $1,844,097 for the six months ended December 31, 2011 was due primarily to the inclusion of $1,600,000 of revenue from our collaboration agreement with Honam Petrochemical and $389,410 of revenue from sales of Tier Electronics products. ZBB acquired Tier Electronics in January 2011 and commenced our collaboration agreement with Honam in April 2011. Due primarily to revenue from sales of Tier Electronic products, commercial product sales revenues increased by $417,286 in the six months ended December 31, 2011 as compared to the corresponding fiscal 2011 period. Due to revenue under the Honam collaboration agreement, engineering and development revenues increased by $1,426,811 in the six months ended December 31, 2011 as compared to the corresponding fiscal 2011 period.

Total costs and expenses for the six months ended December 31, 2011 and 2010 were $6,540,596 and $4,033,163, respectively. This increase of $2,507,433 was primarily due to the following:

  • Approximately $340,000 of costs of product sales during the fiscal 2012 period compared to approximately $79,000 of costs of products sales during the fiscal 2011 period;
  • Approximately $480,000 of costs of engineering and development revenues during the fiscal 2012 period compared to $0 of costs of engineering and development revenues during the fiscal 2011 period;
  • Increase in advanced engineering and development expenses of approximately $460,000 due to an increase in the Company's engineering and development activities for its next generation ZBB EnerStore™ energy storage system and ZBB EnerSection™ power and energy control center;
  • Increase in selling, general, and administrative expenses of approximately $742,000 due primarily to the inclusion of approximately $537,000 related to Tier Electronics in the fiscal 2012 period and an increase in stock based compensation of $323,000 partially offset by decreases in other expenses;
  • Increase in depreciation and amortization expenses of approximately $558,000 primarily due to the amortization of intangible assets related to the Tier acquisition beginning in January 2011.

Due to the above, our net loss for the six months ended December 31, 2011 was $4,405,758 compared to $3,872,575 net loss for the six months December 31, 2010.

Shareholders' equity increased during the second quarter to $4.29 million at December 31, 2011, exceeding the minimum NYSE AMEX requirement of $4.0 million. The Company also regained compliance with the continued listing standards of NYSE Amex in December 2011.

The Company's cash balance at the end of the quarter was $1.7 million. Current backlog exceeds $6.7 million including product backlog of $5.3 million and engineering contract backlog of $1.4 million.

During the three months ended December 31, 2011, the Company's major accomplishments include:

  • On-time completion of key milestones for the Honam $3 million collaboration agreement. The remaining task is to build and ship a ZBB EnerStore module to Honam, which is expected to be completed prior to March 31, 2012;
  • Completion of ETL certification to UL 1741 standard for the 25kW grid-tie inverter module of the ZBB EnerSection power and energy control center. The certification was completed on January 12, 2012;
  • Receipt of formal business license registration by China joint venture company (Meineng Energy) and commencement of China operations in December 2011;
  • Signed a joint development and license agreement and a stock purchase agreement with a major global technology company to jointly develop flow batteries. The strategic partner is investing $800,000 to fund the first phases of the joint development project and purchased $700,000 of ZBB common stock at market price;
  • Appointed James Ozanne and Charles Stankiewicz to the Company's Board of Directors. Mr. Stankiewicz is also the Executive Vice President - Operations;
  • Regained compliance with the continued listing standards of NYSE Amex;
  • Closed several key orders:
    • ZBB chosen for a smart grid commercial application
    • ZBB chosen by Facility Gateway for Lower Valley utility grid interactive energy storage
    • ZBB chosen by LEMA Construction for Florida solar park project

"We're very excited about the final commercial launch for both the ZBB Enerstore and the ETL certified ZBB EnerSection that we expect during this current quarter. The process to commercialization has been tough with many foreseen and unforeseen pitfalls. Our team, however, has met every challenge. Our progress to commercialization has been and is a measured and structured course. Key milestones including ETL certification to UL 1741 and V3 design validation were met early this quarter that were essential for our expected upcoming commercial launch. Our backlog grew to $6.7 million with the addition of several key orders and our sales funnel continues to expand with solid prospects. Our near-term goal is, of course, to begin converting the $6.7 million of backlog into revenue as quickly as possible and to continue to close orders," said Eric Apfelbach, President and CEO.

Investor Conference Call - 10:00 a.m. Central time, Thursday, February 9, 2012

A conference call to discuss the financial and operating results and company's outlook will be held on Thursday, February 9, 2012, at 10:00 a.m. US Central (11:00 a.m. Eastern). The conference call will be hosted by Eric Apfelbach, President and CEO, joined by Chuck Stankiewicz, EVP - Operations, and Will Hogoboom, Chief Financial Officer. Brief presentations by Mr. Apfelbach, Mr. Stankiewicz, and Mr. Hogoboom 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) 359-3624. For international callers, dial the toll number (719) 325-2217. The conference call participant code is 8047693.

For support during the call press *0 on your phone and a conferencing coordinator will assist you.

The conference call will be simulcast live on the internet at www.zbbenergy.com, then click on 'Investor Relations' and then 'Investor Presentations' or through this link. A replay will be available for 90 days.

A telephonic replay of the presentation will be available following the conference call through March 9, 2012. For callers within the United States and Canada dial the toll free number (888) 203-1112. For international callers, dial the toll number (719) 457-0820. The replay pass code is 8047693.

About ZBB Energy Corporation
ZBB Energy Corporation (NYSE Amex: 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 1998, 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: http://www.zbbenergy.com

Safe Harbor
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,
2011 2010 2011 2010
Revenues
Product sales $ 240,921 $ 49,742 $ 467,028 $ 49,742
Engineering and development 200,000 184,939 1,611,750 184,939
Total Revenues 440,921 234,681 2,078,778 234,681
Costs and Expenses
Cost of product sales 187,620 79,058 344,291 79,058
Cost of engineering and development - - 481,107 -
Advanced engineering and development 1,186,352 586,582 1,885,735 1,425,855
Selling, general, and administrative 1,421,690 1,278,261 3,099,687 2,356,989
Depreciation and amortization 410,595 85,178 729,776 171,261
Total Costs and Expenses 3,206,257 2,029,079 6,540,596 4,033,163
Loss from Operations (2,765,336 ) (1,794,398 ) (4,461,818 ) (3,798,482 )
Other Income (Expense)
Equity in loss of investee company (58,710 ) - (58,710 ) -
Interest income 3,279 2,420 9,968 4,210
Interest expense (58,823 ) (46,869 ) (118,491 ) (78,876 )
Other income 250 573 4,263 573
Total Other Income (Expense) (114,004 ) (43,876 ) (162,970 ) (74,093 )
Loss before provision (benefit) for Income Taxes (2,879,340 ) (1,838,274 ) (4,624,788 ) (3,872,575 )
Provision (benefit) for Income Taxes (111,800 ) - (181,800 ) -
Net loss (2,767,540 ) (1,838,274 ) (4,442,988 ) (3,872,575 )
Net loss attributable to noncontrolling interest 37,230 - 37,230 -
Net Loss Attributable to ZBB Energy Corporation $ (2,730,310 ) $ (1,838,274 ) $ (4,405,758 ) $ (3,872,575 )
Net Loss per share-
Basic and diluted $ (0.08 ) $ (0.09 ) $ (0.14 ) $ (0.22 )
Weighted average shares-basic and diluted:
Basic 33,681,776 20,196,322 32,089,356 17,803,353
Diluted 33,681,776 20,196,322 32,089,356 17,803,353
ZBB ENERGY CORPORATION
Condensed Consolidated Balance Sheets
December 31, 2011 (Unaudited) June 30, 2011
Assets
Current assets:
Cash and cash equivalents $ 1,680,543 $ 2,910,595
Accounts receivable, net 361,238 171,622
Inventories 2,737,483 1,662,850
Prepaid and other current assets 144,358 56,462
Refundable income tax credit 117,190 164,640
Total current assets 5,040,812 4,966,169
Long-term assets:
Property, plant and equipment, net 5,725,411 4,766,871
Investment in investee company 1,582,017 -
Intangible assets, net 1,508,119 1,811,507
Goodwill 803,079 803,079
Total assets $ 14,659,438 $ 12,347,626
Liabilities and Equity
Current liabilities:
Bank loans and notes payable $ 909,560 $ 779,088
Accounts payable 1,865,752 961,221
Accrued expenses 471,830 695,273
Deferred revenues 1,836,998 1,528,482
Accrued compensation and benefits 120,862 289,996
Total current liabilities 5,205,002 4,254,060
Long-term liabilities:
Bank loans and notes payable 3,654,717 3,937,056
Total liabilities 8,859,719 8,191,116
Equity
Series A preferred stock ($0.01 par value, $10,000 face value)
10,000,000 authorized, 575.1280 and 355.4678 issued, preference in liquidation of $6,133,947 and $3,715,470 as of December 31, 2011and June 30, 2011, respectively 6,133,947 3,715,470
Common stock ($0.01 par value); 150,000,000 authorized
36,623,476 and 29,912,415 shares issued 359,324 299,124
Additional paid-in capital 65,268,044 60,777,286
Notes receivable - common stock (6,124,890 ) (3,707,799 )
Treasury stock - 13,833 shares (11,136 ) (11,136 )
Accumulated deficit (59,749,441 ) (55,343,683 )
Accumulated other comprehensive loss (1,584,961 ) (1,572,752 )
Total ZBB Energy Corporation Equity 4,290,887 4,156,510
Noncontrolling interest 1,508,832 -
Total equity 5,799,719 4,156,510
Total liabilities and equity $ 14,659,438 $ 12,347,626
ZBB ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended December 31,
2011 2010
Cash flows from operating activities
Net loss $ (4,442,988 ) $ (3,872,575 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property, plant and equipment 349,388 171,261
Amortization of intangible assets 380,388 -
Stock-based compensation 644,640 310,788
Equity in loss of investee company 58,710 -
Changes in assets and liabilities
Accounts receivable (189,616 ) 6,879
Inventories (1,151,633 ) (69,854 )
Prepaids and other current assets (87,896 ) (180,463 )
Refundable income taxes 47,450 -
Accounts payable 904,531 143,363
Accrued compensation and benefits (169,134 ) (221,153 )
Accrued expenses (206,541 ) (79,034 )
Deferred revenues 308,516 214,511
Net cash used in operating activities (3,554,185 ) (3,576,277 )
Cash flows from investing activities
Expenditures for property and equipment (1,307,927 ) (318,310 )
Investment in investee company (1,640,728 ) -
Net cash used in investing activities (2,948,655 ) (318,310 )
Cash flows from financing activities
Proceeds from bank loans and notes payable - 1,300,000
Repayments of bank loans and notes payable (151,867 ) (219,501 )
Proceeds from issuance of debenture notes payable - 517,168
Proceeds from issuance of Series A preferred stock 2,197,240 490,000
Proceeds from issuance of Common Stock 1,887,398 1,174,187
Common stock issuance costs (176,934 ) -
Proceeds from noncontrolling interest 1,546,062
Net cash provided by financing activities 5,301,899 3,261,854
Effect of exchange rate changes on cash and cash equivalents (29,111 ) 8,587
Net decrease in cash and cash equivalents (1,230,052 ) (624,146 )
Cash and cash equivalents - beginning of period 2,910,595 1,235,635
Cash and cash equivalents - end of period $ 1,680,543 $ 611,489

Contact Information

  • Contact Information:
    Dilek Wagner
    Financial Reporting Analyst
    Investor Relations
    ZBB Energy Corporation
    T: 262.253.9800, extension 122
    Email: Email Contact